978-0077861049 Case Part 3

Unlock access to all the studying documents.

View Full Document

Comments on Cases in Essentials of Marketing

Instructor’s Manual to Accompany Essentials of Marketing V-21

Should the firm increase the number of sales reps?

Since sales reps are a marginal expense, there is very real advantage from increasing the number of

sales reps. However, at present they do not seem to be very effective. They are only selling one unit a

day. Doing a better job of identifying prospects, improving sales presentations, etc. to get a higher unit

sales rate might be even more productive. Adding sales reps would probably require additional sales

management effort (perhaps a few managers on a salary). Each sales rep “contributes” about $95 per

unit x 120 units per year or $22,800 a year, so the expenses could be covered easily. It would probably

make sense to expand promotion of other types. For example, direct mail promotion in neighborhoods

where the PURITY II had sold well (i.e., toward other people who at least in terms of geographic area and

likely lifestyle, income, etc. were homogeneous with current customers). Simply Pure H2O4U could

encourage word of mouth among existing customers by offering an incentive for referral sales – such as a

discount on a filter or a free filter or the like. Advertising could help inform customers and bring in

requests for more information. However, a large scale advertising effort would increase fixed costs and so

the trade–off would need to be considered carefully.

Case 18: Whistler Township Volunteer Fire Department (WTVFD)

The Whistler Township Volunteer Fire Department case allows students to explore marketing strategy

planning, and more specifically Promotion planning, in a non–traditional context. The case allows for

discussion of a number of different issues around Promotion, including promotion objectives, integrated

marketing communications, publicity, promotion methods, and media. The context of the case allows

discussion in a situation where financial resources are limited.

An instructor might start the case by asking. “Is anyone here a volunteer firefighter?” or “Do any of you

know a volunteer firefighter?” This allows the discussion to become more personalized, and also lets the

instructor know right away if there are students that might have personal experiences relevant to the

case. Typically, at least one or two students will know a firefighter – and because the situation described

here is quite common, they may validate the situation described in the case.

An instructor wanting to cover the case very quickly might skip questions about customers, competitors,

company, and context – but these provide a solid foundation for discussing the case and reminding

students that marketing strategy decisions should flow from this analysis. So we recommend at least a

quick discussion of these background topics.

This might be handled with a directed question, “Before we start into the promotion issues at the heart of

this case, let’s make sure we understand the market situation. Are there any issues in the external market

environment?” Prompt students to assume the case takes place in the current year – making it easier for

them to relate to the current environment. Attitudes toward volunteering and community service may be

relevant – as the case notes a surge of interest following the terrorist attacks of 2001. In general, these

values have made a bit of a comeback among the younger generation. The economy might also influence

how potential recruits feel about volunteering as a firefighter.

Ask, “What competes with volunteer firefighting?” This question may help students better understand the

nature of competition. The scarce resource might be time. So anything that takes up a potential recruit’s

time – other volunteer activities, school, family, social life, or a job – could be a potential competitor.

Competition might be other activities that fill the same need – serving one’s community, learning a new

profession, or other thrill–providing activities.

The instructor might ask, “What do we know about our potential customers?” The case does not provide a

lot of detail about Whistler Township’s firefighters – except that they come from a variety of backgrounds.

WTVFD’s firefighters include professionals, blue–collar workers, and students. The conclusion here might

be that there are many different types of people who could be interested. Obviously, this affects the

choice of target market. Students may be asked, “Who do you think would be most attracted to volunteer

firefighting?” Perhaps young single people in their 20s might be a good target market – if they get

interested they are likely to stick with it for a long time. We might also want to find people who have

Part V

community–minded values. A lively discussion might center on who these people are and where we might

find them.

“What are the demands placed on firefighters? What are the qualifications for someone to do this job?” As

noted in the case, there are physical demands to the job, firefighters must live or work near Whistler

Township, be 18 years old with a driver’s license, and they have to be able to attend WTVFD’s biweekly

drills (on Tuesday evenings).

An instructor might use the following question to move discussion toward aspects of the company: “Are

there any particular strengths or weaknesses for WTVFD?” WTVFD has been around for a long time and

has 48 members who seem highly devoted to its cause. A couple of weaknesses include not having a

long–term marketing strategy and very limited financial resources for marketing efforts.

To shift the discussion to Promotion, an instructor might ask, “What do you think Nolan Fenwick should

use as promotion objectives?” The case makes it clear that awareness of WTVFD is quite low – most

members of the community think that the town’s firefighters are full–time paid staff. So the primary

objective may be informing – to generate awareness that then leads to interest. “What can WTVFD do to

generate awareness?” While students might jump to advertising activities, it should be noted that financial

resources are limited.

Some organizations in town might support a good cause like volunteer firefighting. For example, the

author has found that McDonald’s restaurants sometimes allow nonprofit organizations to use tray liners

for promotional purposes. And males in their 20s are a large market for McDonald’s. Instructors should be

open to suggestions, but ask the class – “Does this method work with our target market?” WTVFD might

be able to get public service announcements on local radio programs – “What types of stations might

work best?”

If the case is used with Chapter 15, the instructor might ask, “What copy thrust should be used?” It’s

important to grab recruits’ attention, but it’s also important to set expectations so that they stick around.

Nonprofit organizations like WTVFD can also benefit from publicity. But keep in mind, publicity can be

difficult to foster and control. The instructor should make sure students realize that it still takes effort to

get a story in the local newspaper or on a radio program; and that this effort may not yield the desired

media coverage. It is also difficult to control the message that comes out of publicity – though when

awareness is the primary goal, any kind of positive coverage could be very helpful. It is also important to

remind students that promotion activities need to provide interested “customers” with a way to get in

After a smaller group of interested recruits has been identified, WTVFD should still have a process for

turning interested people into volunteer firefighters. Currently these interested people come to one of

WTVFD’s Tuesday night drills. It is not clear if there is an organized process for converting these

interested parties into actual volunteers. Nolan might try to recruit colleagues to take roles in helping

interested parties become more educated about firefighting. Perhaps at one drill per month, there should

be a focus on more active recruiting. This may bring personal selling into the promotion blend – does

Comments on Cases in Essentials of Marketing

Part V

V-24 Perreault, Cannon, & McCarthy

provides special services such as gift–wrap, personalized gift cards, and delivery direct to the

recipient. Even local customers respond well to mail order, catalog, and specialty retailers in

distant locations when those retailers provide a value–added product. . Simply focusing on

retailers or service providers in the local area to generate website listings and advertising revenue

may not make sense. Similarly, there is little reason that the registry service should be limited to

local couples – a user of the Internet usually doesn’t know or care whether the base operation for

It’s useful to think about the marketing mix that Jessica offers each of these target markets. For each

group:

What is the specific product (and what are its benefits)?

What is the price of obtaining those benefits?

The benefits for engaged couples seem pretty clear. The $20 price to register is not a big investment if it

saves time and leads to the desired gifts rather than things that are not of interest. It is unlikely that price

sensitivity should be a big concern unless other services appear that will provide the service (and/or other

superior benefits) for free. And this is certainly a possibility because revenue from advertisers could pay

for the services provided–if enough advertisers and customers can be attracted. It’s a chicken and egg

situation in that regard.

This is typical of many products that are unsought goods. If the couple doesn’t know about the service

and doesn’t know to look for it, they won’t sign up. There is also some evidence for this diagnosis

because the main flurry of activity came after Jessica finally got some attention with publicity. That

attention and interest simply wasn’t forthcoming from her limited advertising. Jessica should work harder

to get more publicity. There also seems to be a very important role for word–of–mouth referrals here. For

example, there is no explicit discussion in the case about how “friends and family” of the couple are

The relationship with couples who do sign up needs to be a close one–even if for only a short time.. Most

couples are not going to be repeat customers! On the other hand, couples who are about to get married

often know others who are at the same life stage (especially among younger “first–marrieds”). Jessica

needs to think about how to stimulate word–of–mouth referrals so that people who do sign up help to bring

in additional customers. Since she doesn’t have a lot of money, one way to do this is to think in terms of

marginal revenue from new customers and what it might cost her to acquire those customers. It might be

Jessica has not done a particularly good job of giving advertisers a reason to buy into her service. She is

basically selling a professional service to them, but most of them can’t evaluate it in advance and they are

unclear about its benefits. The comparison with the cost of a Yellow Pages ad is interesting because it

provides a sort of reference price for the advertiser. Yet, the advertiser probably sees some sort of Yellow

Pages listing as a “must buy.” Perhaps this sort of website advertising will become a must buy, but

probably not until more of these firms’ target customers think of the web as “the” place to look for this sort

Comments on Cases in Essentials of Marketing

Instructor’s Manual to Accompany Essentials of Marketing V-25

Jessica is also being a bit production–oriented in the way she is thinking about her product. She designs

web pages in her other job, and so she is thinking about potential advertisers who need a web page. But

firms that already have a good web page might be more interested in something else, like a banner ad or

Jessica also might think about the pricing arrangement for advertisers. She currently bundles the price of

the on–time service of preparing the web page and the ongoing online web page. She might want to

charge separately for the preparation of the web page and/or allow customers to have something more

elaborate than a single page.

Jessica’s service in many ways operates with the same approach as a magazine – attracting an audience

and advertisers who want to reach that audience. Yet, most firms that sell advertising media time and

trying to find someone who would sell advertising space on her website on a straight commission basis.

That way, she would not have much expense until she had revenues. Of course, the salesperson would

still need to have a good story to tell, and that might depend on having a way to establish better the link

between the advertiser’s sales and visits to the websites. For example, if Jessica could convince

advertisers to offer a small discount to customers who purchased because of the website, she might be

While it is not hard to think about different things that Jessica could do, what is perhaps more relevant is

what is she willing to do. The case portrays her as a doer not as a planner. She had an idea but doesn’t

have a detailed plan for what needs to be done – she hasn’t yet really made the investment of time and

money to give her idea a chance to work. What she needs to do is give up her full–time job or really cut

back on her social life – and she doesn’t seem willing to do either now. This can turn into some good

class discussion on the need for disciplined implementation to help turn strategies (or at least ideas!) into

Jeffery Mauro is in a very competitive – almost purely competitive – market situation. Some of the

products he is selling are in the market growth stage – but most have reached the market maturity stage

where there are relatively small differences among products and all of the producers are trying to

out–promote each other and find more outlets. Blue Lagoon Marine & Camp happens to be one of the

many outlets that have been “sold” on selling these essentially homogeneous products. Price cutting is

typical in these situations and Jeffery is being naïve – attempting to obtain the full price markup. He may

homogeneous shopping products category).

Part V

V-26 Perreault, Cannon, & McCarthy

Jeffrey’s new lawn mower line appears to be like all of the other products that he is carrying and he

probably cannot expect significantly different results. The manufacturer’s sales rep may try to encourage

outlets. Many of these manufacturers are very production–oriented and are continually trying to “push”

more goods on their retailers. Very aggressive sales reps can be quite “successful” – because many of

the retailers are relative newcomers and quite naive. “Hope springs eternal” in the minds of some new

businesspeople and they eagerly take on new lines as long as they have the capital or borrowing power.

Then when things do not go well, they have “close–out” sales – or sell out to optimistic newcomers like

The outlook need not be all black, however, because Jeffery may be able to find a new product that is just

going into the market growth stage. Snowmobiles, for example, helped many such retailers have a few

profitable years. Similarly, the recent boom in bicycles was very profitable for some bicycle retailers who

had just bumbled along for years. However, in each of these cases, other firms (producers and/or

retailers) inevitably enter these markets and price cutting and declining profits follow. This is probably the

case for mountain bikes, and he is properly concerned about taking on mountain bikes. It may be “too

The “program management” approach is quite different in that it expects reliable suppliers to participate

much earlier in the process, thus reducing the number of potential suppliers to those few with “serious

commitment.” This may result in oligopoly conditions if all the serious suppliers can meet the same

specifications. The process does raise the possibility of some suppliers developing “monopolies” if they

develop superior products (goods and/or services.) Or monopolistic competition is possible if different

suppliers develop slightly different systems or are stronger on some feature.

Regardless of the nature of competition that develops, it is clear that the buying situation has changed.

Kenneth Shibata should develop a different promotion effort – probably a team of order getters and

supporting people who can work with the multiple buying influences while products in the design phase..

This means that lead times of one to five years will become more common than order–by–order bidding in

the short run. This also means that Kenneth will have to build a team and organize GCI’s efforts so the

company’s “serious commitment” is evident to all.

The program management approach has already led to more plastic producers’ people locating in the

Detroit area – for auto–related business. In addition, some firms have created auto–related research labs

to facilitate ongoing commitment to the auto industry. This work may be coordinated out of the Detroit

area, but it will require travel to the many “Big Three” plants across the country (and world!) and also to

the growing number of “foreign” U.S. producers and their influencers. This is a much bigger and more

complicated promotion job! It may mean that producers like GCI will have to choose their target

Comments on Cases in Essentials of Marketing

Instructor’s Manual to Accompany Essentials of Marketing V-27

Case 22: Bright Light Innovations: The Starlight Stove

Bright Light Innovations is a real situation – the names, dates, and plans were correct at the time the case

was written. The case is based on an award winning business plan created by a team of students (mostly

The case allows a discussion of several important issues. At a broad level, the case deals with selling a

relatively technical breakthrough that could have tremendous social value in a developing country. It

shows how marketing principles can be used to help a less–fortunate population.

Marketing a product in a developing country can be a real challenge. Channels of distribution are often

limited. Consumer incomes are low – and the Starlight Stove might cost one third of the average annual

The case may work best later in the course because it offers an opportunity to discuss many elements of

the marketing strategy planning process model. Let’s briefly walk through some of these elements and

possible discussion points.

• External environment An instructor might discuss the impact of cultural values on aid for

developing countries. Traditionally, most aid to impoverished nations was in the form of grants,

• Competition The case provides some information about competing technologies – though the

technologies are not identical. The lack of a similar technology can make the job of selling the

Starlight Stove both easier and harder. While the product offers significant advantages to its

target market, these consumers do not have a direct basis of comparison and may not

understand how they will benefit.

• Demographics The customer market in Nepal should be discussed. An instructor might suggest

that students go to Michigan State University’s globalEdge (described in an Internet Exercise in

experience – which is very limited.

• Marketing strategy The target market is pretty much defined by the case, but the marketing mix

is left wide open.

• 4Ps There can be a strategic discussion about pricing, margins for distributors, and how to

promote more rapid adoption of the product.

Rogers’ framework may help students to think about how to market the Starlight Stove in Nepal. Rogers

notes five characteristics of an innovation that influence its speed of adoption:

Part V

V-28 Perreault, Cannon, & McCarthy

1) the relative advantage it offers,

2) its compatibility with existing values and past experiences of adopters,

3) the complexity or difficulty of understanding how a new product works or how the consumer will realize

value,

4) triability, or the degree to which adopters can experiment with the product, and

5) observability or the extent to which the results of the innovation can be seen by others.

An instructor could briefly introduce these five concepts and ask the class, “How does the Starlight Stove

score on each of these factors?” The product appears to offer a strong relative advantage as compared to

alternatives. Although the health benefits may be difficult for users to immediately appreciate, the

potential economic value generated by spending less time collecting fuel and having longer working days

should be more apparent. The stove’s features fit with existing values and experiences, but the

production of electricity does not fit well. These closely correlate with complexity. How the product

actually works and the benefits it offers may not be understood without further explanation. The product is

not something with which users can easily experiment.. Observability might be moderate – possibly

depending upon the extent to which Nepalese invite others into their homes.

Interestingly, using these same criteria, marketing managers may be able to make the product more

appealing. For example, they could provide a sample stove in the center of a village – where people could

view and test it – increasing its triability and observability. This experience may also reduce confusion

about how it could produce electricity. Perhaps guarantees could make it easier for people to try the

product. Personal selling may be necessary to explain the benefits.

Another way to stimulate discussion would be to remind students of the adoption process introduced in

Chapter 5. The six–step process involves:

1) Awareness Would demonstrations or a traveling road show help generate awareness and interest?

2) Interest How could BLI or its distributors stimulate interest?

3) Evaluation Where and how do consumers evaluate how the product might help them?

4) Trial See paragraph above

5) Adoption Would explaining microfinancing terms help overcome objections?

6) Confirmation How would buyers be reminded about the value of the process?

Simply putting the steps of the adoption process on the board might help to stimulate discussion about

specific marketing activities that could help guide customers through these steps.

Case 23: Carson Furniture

This case gives students an opportunity to analyze some marketing research data that makes use of

social class. Renee Carson is obviously aiming at Groups C and D, while her salespeople are probably in

Group B or even in Group A – because salespeople selling heterogeneous shopping products have to be

good at their jobs. If target customers are in Group A or B, then it is obvious that they have different

attitudes than their target markets. In particular, their target markets probably do less informal shopping

than they would and, therefore, might appreciate more sales help. Secondly, these target markets seem

to have less interest in returning to the stores where they shop and, therefore, the salespeople should try

to close the sale while the customer is there. In other words, more aggressive order getting (than the

salespeople would like to have used on themselves) may be needed.

As usual, a company’s marketing strategy should focus on its target market. Here this means that the

salespeople should give the customers what they want. This might even mean pushing a decision

because these customers might prefer to get the shopping task over as soon as possible. For Carson, it

means that she must get her advertising and personal selling efforts in tune. This means either changing

her basic strategy to fit her salespeople’s preferences (probably not recommended) or obtaining

salespeople who are willing to implement the strategy she has developed. If the present salespeople

resist retraining, then new ones are needed. And maybe they need more motivation for aggressive order

getting, like increasing the commission (and cutting the salary).

Comments on Cases in Essentials of Marketing

Case 24: Wireway

This company now produces component parts, but it wants to go into the seemingly profitable consumer

products market after experience with a product that it made for another company. The products they are

considering would be impulse or heterogeneous shopping products. Good products coupled with

The students should pass over the “pricing problem” and suggest (and evaluate) alternative strategies.

The possibilities are numerous (including door–to–door, conventional retailers, discounts to the

price–conscious, etc.). The case doesn‘t provide any data on these possibilities, so the logic and

completeness of alternative strategies should be used to evaluate their answers. Simplistic price–oriented

(only) answers should be “pounced upon.” Break–even analysis can be used to evaluate some

alternatives – given some assumptions about prices, markups, and marketing costs for Wireway

Part V

A production–oriented manufacturer of staples in market maturity has been selling the bulk of its output as

dealer brands (in almost pure competition) through food brokers to wholesalers and retailers outside its

local area. Abundant Harvest does use its own brand locally, but this is a minor part of total volume.

Declining profits have led to a “desperation” move – trying to bypass the food broker. This move helps

reinforce the judgment that Abundant Harvest is production–oriented, because it did not appreciate one of

the important roles being filled by the brokers – that is, to combine the output of several packers (such as

In the short run, they probably should return to working through the food brokers to buy time to determine

whether there is(are) a strategy(ies) that can improve profits. Perhaps they can build their own “Abundant

Harvest” brand outside the local market. Perhaps they can offer price–oriented brands to mass–

merchandisers. Alternatively, maybe they can develop a “quality” label. Any of these moves will require

new marketing personnel, however, because the present family members have no competence or interest

in selling or marketing. Therefore, any decision to go beyond returning to the former food brokers should

Case 27: Advanced Molding, Inc.

Anya Winrow‘s major problem is whether this new company can develop marketing strategies that will be

more profitable than those now being implemented.. Her salary will not rise by changing jobs, so she

The present management seems to be running a production–oriented operation in highly competitive –

almost purely competitive – markets. They are producing component parts and miscellaneous consumer

products that are convenience–impulse and/or shopping products. They are willing to make anything that

sells. This seems to be the nature of the industry.. Many other small firms do the same thing. The buyers

of the component parts request bids from several similar producers – so there is little hope for much profit

with this strategy..