NORTHWESTERN UNIVERSITYJ.L. KELLOGG GRADUATE SCHOOL OF MANAGEMENT

Marketing D30-62 Alice M. TyboutFall Quarter 1998 Phone: 847.491.2723Office: Leverone 468 e-mail: amtybout@nwu.edu

COURSE OVERVIEW

Course Objectives

This is a survey course and, as such, is designed to provide students with an overview of marketing concepts and tools. While effort has been devoted to finding teaching materials that represent a variety of industries and employ a variety of media, the primary goal is to help provide you with concepts and tools that will be broadly applicable. More specifically, the course has two primary objectives:

To develop your marketing decision-making skills. You should leave the course with a well-developed ability to:

- analyze the marketing and business environment in which an organization is operating and identify the primary marketing problems facing the firm,

- prioritize these problems and select the key issue to be addressed, - develop compelling and creative strategies for solving these problems, and - make tactical decisions that will achieve the strategy that you have selected and, thereby,

solve the problems you have identified.

To provide you with a set of concepts and tools that can support your decision-making. Fundamental concepts of marketing (such as marketing disciplines, segmentation, targeting, and positioning, customer satisfaction, perceived value, etc.) will be presented to assist you in both identifying problems and developing strategies. In addition, tools that are useful in making a number of specific decisions (e.g., laddering to achieve a stronger positioning in consumers’ minds) will be presented.

As we pursue these objectives, you will become acquainted with a range of institutional marketing knowledge, practice, and terminology. I will alert you to articles in the popular business press that relate to topics we are discussing in class and I also encourage you to share your observations with me and with the class.

Class Sessions

Class sessions will blend lectures with case discussions. There are two types of cases. One type of case is a summary of a situation that will be used to illustrate some specific concepts that will be

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discussed in a lecture format (e.g., WANG). These cases, which are identified as “Case Illustrations” on the course syllabus, should be read in advance of the appropriate class session and you should be prepared to answer the specific questions at the end of the case.

Other cases, which are labeled as “Discussion Cases”, will be the focus of an entire class session and require more detailed preparation. In order to get the maximum benefit from our detailed case discussions, it is essential that you thoroughly prepare the case prior to coming to class. This requires much more than simply reading the case or having answers to the questions posed at the end of the case. In preparing for class, I recommend that you read a case at least three times. The first reading should be a quick run-through of the text in the case. It should give you a general sense of the issues facing the company and the type of data that are available.

Your second reading should go deeper. At this point you may wish to highlight information that seems especially important and organize this information using devices such a SWOT analysis (i.e., an analysis of strengths, weaknesses, opportunities and threats) and/or an assessment of the 4Cs (company, competitors, customers/consumers, and collaborators). It is generally true that the case writer has included exhibits because they convey relevant information, so be sure to examine this information. Often you will need to apply some analytical technique to the exhibit in order to make meaningful inferences.

On your third reading you should have a good idea of the fundamentals of the case. Now you must decide what the key problem is and, thus, what the goal of the firm should be. If you correctly diagnose the problem the rest of the analysis is relatively easy! The challenge is to understand the root causes of some unsatisfactory situation and to do so at a level that is actionable for the marketing manager. While the culture of the firm or the general state of the economy may well be contributing to a problem, it is unlikely that the marketing manager can implement a strategy to address this problem at this level. Once you have defined the problem, you should develop a strategy for solving the problem. A well-defined problem often implies a particular strategy. However, if multiple courses of action are viable you should debate the merits of each and select the most compelling option. The Week 2 reading entitled “Defining Marketing Problems” provides a more detailed discussion of how to identify marketing problems.

The goal of the larger, more complex cases is to develop your ability to analyze complex, amorphous, marketing situations. Cases often lack pieces of information that you may feel are key in formulating a strategy. This may make you uncomfortable and you may feel reluctant to argue for a particular course of action -- other than collecting more information. However, this situation parallels ones that you will face both in when asked to analyze a case during a job interview and when making decisions in the real world. Rarely will it be possible to delay decisions until you obtain all the relevant information. Thus, you should be willing to make assumptions that are reasonable in light of the information that is provided and be prepared to defend these assumptions.

When conducting a major case discussion I will occasionally ask one or more students to begin the class by answering a specific question or series of questions. Anyone who has thoroughly prepared the case should be able to perform this task effectively. After the case introduction, we will develop a more detailed analysis of the situation and address the problems and issues in the case. In these discussions, each person should be prepared to share his or her views with the class.

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Written Cases

You will be randomly assigned to groups and each group will submit three written case analyses. The written cases are Calyx & Corolla (due 10/14), Black and Decker (due 11/1), and Land Rover North America Inc (due 12/2). These cases will be due at noon on the day assigned and late papers will not be accepted. In your initial group meeting, please agree on a meeting schedule that will enable all of you to do your fair share on these group projects. If necessary, submit your paper early. E-mail submissions are encouraged (MS Word 95/98).

The case format utilized in this course is designed to help you focus on the key case issues. It is described in detail in the attached note, “Writing a Case Analysis,” and it will be illustrated when we discuss the Hyatt versus Marriott case in Week 3. Please read this note carefully. All written cases must adhere to this rigorous format. Deviations from the format will adversely affect your grade.

PharmaSim: A Brand Management Simulation

PharmaSim is a computer simulation based on the over-the-counter cold medicine industry. The exercise focuses primarily on marketing activities and is designed to teach marketing concepts in an active and stimulating environment. As a member of a marketing management team, you will make decisions regarding product mix, pricing, distribution, advertising, and promotion. These decisions will then be incorporated into a computer-simulated market to reveal how both you and your competition performed. Decisions cover a time-span of 10 simulated years, allowing you to observe both the short-term and long-term effects of your decisions.

Competing in the PharmaSim market place will require complex analysis and decision making. As you work through the simulation and become familiar with the program, new issues and problems will arise to challenge you. These will include reformulating your product and introducing new brands. Along with having to manage new brands you will also be given more control over marketing mix decisions as the game progresses. You will cover issues such as targeting advertising and consumer promotion to particular customer segments, offering trade promotion and sales force to different distribution channels, and using volume-pricing discounts. Of course, the competition will be following their own strategies and reacting to your decisions. Although the simulation always starts from the same position, each game will proceed on a unique course depending on the strategy that each player chooses. This will allow competitive comparisons and illustrate how markets can evolve differently.

We will use PharmaSim as follows:

- PharmaSim software will be available for download on Monday November 9th.

- As a group exercise, you will play 5 periods of the game. This is intended to encourage a discussion of alternative viewpoints and actions. Each group will submit a printout of the results (automatically compiled by the simulation program), as well as a 500 word summary of (1) their actions, (2) the rationale for these actions, (3) what you have learned

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from the simulation. These initial reports will not be graded, but will serve as a basis for class discussion.

- Following class discussion, you will play an additional 10 periods of the game on an individual basis at a slightly more complex level than the group exercise. During this second round of play you may replay some of the periods, but you may not restart the simulation. The maximum number of replays allowed is 3 per period and may not exceed 10 for the entire simulation. As in the initial round, you will submit a printout of your results, accompanied by a 500-word summary report, which is due on 11/19. This time your performance will be graded. You are allowed to consult with member of your group should a technical problem arise. However, during the individual exercise, no substantive issues (e.g., the validity of a given assumption, the viability of a particular strategy), should be discussed either within or outside your group.

Marketing Excellence Survey

As part of the course, I will be administering a survey entitled the “Marketing Excellence Survey.” This survey was developed to assist firms and individuals in understanding their relative strengths and weaknesses in their marketing knowledge and market-oriented attitudes. It has been carefully validated and scores are benchmarked against the responses of more than 5000 managers and students worldwide.

You will complete the survey in the first class. The surveys will be sent to the testing company, which will prepare a confidential, personal feedback report explaining your performance against a variety of benchmarks. I will not view the individual reports, but I will receive a summary of the class performance so that I can adjust my lectures to emphasize topics where the class performance was weak.

In the tenth week, I will administer the survey again. You will receive a second, confidential report analyzing how your performance changed (improved!) during the quarter. At this point, I will receive a summary report of the before and after scores for each student and this information will be one component in determining your course grade. The emphasis will be on how much you improved during the quarter rather than on your absolute score. However, I recognize that those who scored higher at the outset of the course are more constrained in their potential improvement. Anyone who receives an outstanding score on the initial survey, should see me about waiving (or teaching!) the course.

Student’s Grade

Each student’s overall course grade will be based on the following inputs:

Contributions to Class Discussion and to 10%Group Performance (peer evaluation)

Group Written CasesCalyx & Corolla 15%Black & Decker 10%

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Land Rover 20%PharmaSim Individual Performance 10%Final Exam (Individual) 30%Change Score on Marketing

ExcellenceSurvey 5%

Final grades will be assigned on the basis of students’ performance relative to their peers and no more than 50% of the class will receive an “A” in the course.

Because contributions to class discussion are an important factor in determining your final grade, some comment on how these contributions will be judged is appropriate. First, you are expected to attend class and to notify me in advance if it is impossible for you to do so. Missing more than two classes will adversely affect your grade. Further, when in class, your comments should not simply consume scarce “air time”. Rather, they should enhance the class experience. While evaluation of this is necessarily subjective, it is not difficult to identify key characteristics of effective participators:

1. They are well prepared, and their comments reflect it. They come to class with an informed opinion about the problem and a solution to it.

2. The listen effectively. Their comments are linked to previous discussion in the class.

3. They are succint.

4. They have a sense of process in the class. That is, they understand where the class has been and where the discussion is going, and their comments facilitate that process.

5. When the occasion demands, they can tie their comments to concepts or analytic tools developed in earlier classes, in other courses, or in the reading materials.

6. They are enjoying the process, and their tone of expression and body language indicate it (They tend to be awake in class and not playing computer games or answering their e-mail—or they are masters of disguise!).

Asking good questions of either the instructor or your fellow students is one way to make a positive contribution to the class discussion. However, be sure that your questions are ones that are of general interest and that they are relevant to the discussion at hand. If you have questions about something that is not likely to be of interest to the entire class or you feel you are not understanding a concept that your classmates seem to have grasped, please drop by during my office hours or make an appointment to see me. I will be happy to talk with you.

Honor Code

The honor code will be applied to the course in the following manner:

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1) Discussion cases may be prepared either with your group members or individually unless you are specifically instructed otherwise.

2) Written cases and the PharmaSim group exercise are to be prepared by group members only. The cases are not to be discussed with anyone who is not a member of the group, regardless of whether they are in the class.

3) The PharmaSim individual exercise should be done seeking only technical assistance from group members.

Course Materials

1) Course Packet 2) Textbook: Philip Kotler, Marketing Management: Analysis, Planning, and Control,

9th Edition, Prentice Hall International Editions, 1997. This book will provide background material. It is not required that you purchase a copy, but it is recommended.

3) PharmaSim: A Brand Management Simulation (distributed in class)

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COURSE OUTLINE

Week Dates Topic Assignment

Week 1 9/24 The Marketing Concept Kotler, Ch. 1-3, 24 (optional)Marketing MyopiaMarketing is EverythingSpend a Day in the Life of Your CustomerQuantitative Analysis for Marketing

(reference)Pricing Predicament Case Illustration

Week 2 9/28, 10/1 Identifying Opportunities in the Marketplace

Kotler, Ch. 5, 8, 9

Competing on ResourcesHow Market Leaders Keep Their EdgeNote on Segmentation, Targeting, and

PositioningDefining Marketing ProblemsWANG Case IllustrationRogers Communications Inc.,: The Wave

Discussion Case

Week 3 10/5,10/8 Understanding Potential Targets and Kotler, Ch. 6, 7Their Decision Processes Get Closer to Your Customers by Under-

standing How They Make ChoicesTyranny of ChoiceThe Science of ShoppingHyatt versus Marriott Discussion Case

Week 4 10/12, 10/15 Selecting Targets and Developing a Kotler, Ch. 10Strong Positioning Realize Your Customers' Full Profit

PotentialThe Four Ds of Effective PositioningThe Experience EconomyMotorola Envoy Case IllustrationCalyx and Corolla Written Case - due 10/14

Week 5 10/19, 10/22 The Role of Research in Marketing Kotler, Ch. 4Decisions The New Mantra MVT

Virtual Shopping: Breakthrough in Marketing Research

Summary of Marketing Research Data and Techniques

Clover Valley Dairy Discussion Case

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Week 6 10/26, 10/29 Designing and Branding the Product Kotler, Ch. 11, 12, 15Extend Profits Not Product LinesBrands versus Private LabelsGallo Branding Debate (TBD)Black and Decker (A) Discussion Case

Week 7 11/2, 11/5 Delivering the Offering: Service Quality Kotler, Ch. 16, 18And Channel Partners Black and Decker Positioning

Assignment Due 11/1Learning From Customer DefectionsEmpowering Service EmployeesThe Complaining Customer Discussion

CaseMake Your Dealers Your Partners

Week 8 11/9, 11/12 Capturing the Value Created: Pricing Kotler, Ch. 17Decisions How Do You Know When the Price is

Right?Good-Bye to Fixed Pricing?Kamikaze PricingPenrod versus Prentice Machine Tools

Discussion CasesIntroduction to PharmaSim

Week 9 11/16, 11/19 Promoting the Offering: Communication Kotler, Ch. 20, 21 Decisions PharmaSim Presentations 11/16

PharmaSim Individual Reports due 11/20Building Brands without Mass MediaAll Europeans Are Not Alike

Week 10 11/23 Communication Decisions Cont. Intel Discussion Case (CD ROM)Marketing Excellence Survey

Week 11 11/30, 12/3 Developing an Integrated Plan in a Dynamic,

Kotler, Ch. 14, 19

Global Marketplace Revolution in RetailingFood World Supermarkets in India

Discussion CaseLand Rover Case Due 12/2 (TBD)Take Home Final Exam Distributed

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Week 1 The Marketing Concept

Goals

There are several goals for the first week of the course. Specifically, we will:

1) Discuss the marketing concept and the domain of marketing, noting how Marketing D30 relates to and differs from other courses, such as Management and Strategy D31 and Organization Behavior D30,

2) Identify key goals and decisions within the marketing domain, and3) Illustrate the role marketing has played in the successful turn-around of

several corporations.4) Assess your marketing knowledge and attitude using the Marketing

Excellence Survey.

Preparation

To prepare for class, you should:

1) Read “Marketing Myopia”, “Marketing is Everything,” and “Spend a Day in the Life of Your Customer.”

2) Read the Pricing Predicament case and be prepared to answer the following questions:

a) What is the key problem facing Standard Machine Corporation at the time of the case?

b) Will Tony accept one of the proposals outlined in Scott’s memo? If so, which proposal and why? If not, why not and what will the company do instead? What will be the consequences of the action that you predict the company will take?

c) What should the company do? (Note that this may be quite different from what you think it will do?

The other readings (the Kotler chapters and “Quantitative Analysis for Marketing”) are for general reference and can be skimmed at your leisure.

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Week 2 Identifying Opportunities in the Marketplace

Goals

During the second week in the course, we will be focusing on identifying and assessing opportunities in the marketplace. In this macro-level assessment, marketers work with and sometimes act as strategic planners. Thus, there is overlap between the material that we will discuss and material that is covered in Management & Strategy D31. It is hoped that this overlap will enhance learning. However, occasionally terms are used differently in Marketing D30 and M & S D31. I’ll try to alert to terms that have somewhat different meanings in the two areas and I encourage you to ask for clarification if you experience any confusion.

The specific goals for Week 2 are:

1) Outline the overarching framework for marketing decisions, 2) Introduce tools for assessing the marketing environment in terms of the

company, the competition, customers/consumers, and collaborators (often referred to as the four Cs),

3) Discuss criteria for evaluating opportunities, and4) Illustrate the need to update strategy as the market evolves.

Preparation

To prepare for class you should:

1) Read “Competing on Resources” and be able to explain the concept of resources or core competencies,

2) Read “How Market Leaders Keep Their Edge” and relate this reading to the WANG Case. Specifically, what discipline did WANG practice historically? What discipline should it adopt as it emerges from bankruptcy and why?,

3) Read “Note on Segmentation, Targeting, and Positioning,” and think about the various ways in which a company that makes shavers (e.g., BIC or Gillette), might segment the market. In doing this, you may wish to visit the web sites of some shaving companies (e.g., http://www.bicworld.com/, http://www.schick.com/, http://www.gillette.com/), and

4) Be prepared to answer the following questions related the Roger Communications, Inc.: The Wave Case:

a) What is meant by the “convergence” of television, telephone, and computing and how does it affect the future of cable television? How does it affect Rogers?

b) Consider this convergence from the perspective of the consumer. How will convergence deliver benefits to consumers? How rapidly are

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consumers likely to embrace these benefits? What impediments exist to their adoption?

c) What is your assessment of Rogers’ new product development process with respect to high speed Web access?

d) What is the likely size of the market for high speed Web access in the Newmarket suburb of Toronto over the next three years? On what factors does your estimate depend?

e) How should Rogers design its launch offering of the WAVE?

The Kotler chapters will serve as a reference for the specific tools that we discuss in class and can be read either before or after our class sessions. The “Defining Marketing Problems” is a general reading that should be helpful as you prepare discussion cases and your written case analyses. It should be read this week, but referred to throughout the course.

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Week 3Understanding Potential Targets and Their Decision Processes

Goals

Once a broad opportunity has been identified in the marketplace, focus centers on segmentation, targeting, and positioning (STP). These are the key strategic decisions made by the marketer and the are the subject of discussion in weeks 3 and 4.

The specific goals for week 3 are:

1) To understand the bases for segmentation and to identify criteria determining the appropriateness of a particular segmentation scheme,

2) To explore the ways in which segments of consumers (i.e., potential targets for a marketing program) make decisions.

Preparation

To prepare for class you should:

1) Read the Kotler chapters and the articles in the packet (“Get Closer to Your Customers by Understanding How They Make Choices,” “The Tyranny of Choice,” and “The Science of Shopping”),

2) Visit the VALS web site at http://future.sri.com/vals/valshome.html, complete the survey, and assess how accurately it predicted your behavior (be prepared to report on this in class), and

3) Adopt the perspective of either Hyatt or Marriott in the Hyatt versus Marriott Case and be prepared to answer the following questions:

a) What is the most critical problem facing your hotel chain? What should the primary goal of that chain be?

b) Which segment will you target in order to achieve your goal?c) How do members of the segment you will target choose a hotel for a

particular trip (be specific and outline the process that they go through step by step)? How does this decision process differ from the decision process employed by a segment that is NOT being targeted? (For example, if you are targeting frequent business travelers, how is their decision process different from the one that infrequent travelers or leisure travelers go through?)

d) How will you position your chain to the target that you have selected?

If you have time, you may wish to visit the Hyatt and Marriott websites.

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Week 4 Selecting Targets and Developing a Strong Positioning

Goals

In Week 4 we will continue our discussion of STP, with an emphasis on positioning.

Specific goals for this week are:

1) To discuss targeting strategies, such as following a “path of least resistance”,2) To learn how to right a clear, compelling, positioning statement, and 3) To illustrate common errors in positioning.

Preparation

To prepare for class you should:

1) Read Kotler and the packet articles (the one on “The Four Ds of Effective Positioning is especially good and beautifully written…though I may be biased!),

2) Translate your positioning strategy for Hyatt or Marriott (developed last week) into a formal positioning statement that employs the following format:

To (Target Description):

Hyatt/Marriott is the (Frame of Reference):

That (Point of Difference):

Because (Reason to Believe):

3) Read the Motorola Envoy Case Illustration and think about how the company might have successfully positioned this product.

Also note that your first written case assignment, the Calyx and Corolla Case is due at noon on 10/14.

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Week 5The Role of Research in Marketing Decisions

Goals

To this point, marketing research has played a background role in our case discussion. Each case has presented some form of research that has been used in our decision making. In Week 5, we pause and turn the spotlight on marketing research.

The specific goals in Week 5 are:

1) To understand the broad range of marketing research techniques that marketers use and the strengths and weaknesses of these techniques, and

2) To practice matching the research technique with the type of question that needs to be answered.

Preparation

1) Read Kotler and the packet articles (“The New Mantra MVT,” “Virtual Shopping: Breakthrough in Marketing Research,” and the Summary of Marketing Research Techniques and Tools), and

2) Read the Clover Valley Dairy Case and be prepared to answer the following questions:

a) Did the package change (defined as ALL the changes that occurred in June 1977 when the smaller plastic container was introduced) cause the increase in sales?

b) If you believe that the package change caused the increase in sales, why do you think this occurred?

c) Should the new multipak carrier be tested?d) If the multipak is tested, what should be the criteria for success or

failure?e) How useful is the proposed test in addressing the problem the

company faces? What changes, if any, would you recommend?

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Week 6 Designing and Branding the Product

Goals

We are now half way through the course (yipee!). In the remaining weeks, we turn our attention to how the strategic decisions, which have been our focus to date, guide more tactical decisions related the Four Ps (product, price, promotion and place) that make up the marketing mix. We begin by focusing on decisions related to the physical product and how it is branded.

The specific goals for Week 6 are:

1) To understand the distinction between a new product, a product improvement, a product line extension, and a brand extension, and to determine when each type of product introduction is appropriate, and

2) To explore tradeoffs associated with alternative branding strategies (e.g., focusing on a corporate level brand versus a product brand).

Preparation

To prepare for class you should:

1) Focus on the packet readings (“Extend Profits Not Product Lines” and “Brands versus Private Labels”), and only skim the Kotler chapters,

2) Review background information for the debate of the Gallo branding strategy (these materials will be distributed in class), and

3) Read the Black and Decker (A) Case and be prepared to discuss the following questions:

a) How do you explain Black and Decker’s small share in the Professional-Tradesmen segment of the market as compared with its leadership or strength position in the other segments?

b) What are the pros and cons of the proposed strategic options? Which would you recommend that the company adopt?

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Week 7 Delivering the Offering: Service Quality and

Channel PartnersGoals

In week 7, we continue our discussion of the mix by focusing on issues related to how the product or service offering is delivered to the consumer. The process of delivering the offering may involve both employees of the firm that produces the product/service and independent intermediaries or collaborators. Regardless of who delivers the offering, the quality of service experience has a significant impact on the customer acquisition and retention. Our discussion will begin by concluding our discussion of Black and Decker case and noting the role of dealers in its strategy for the professional/tradesman segment of the market.

The specific goals for Week 7 are:

1) To emphasize the value of customers and the recognize the role that service quality plays in customer retention and, hence, profitability,

2) To outline procedures to selecting the level of service quality that the firm will offer, and

3) To understand the linkage between employee/channel member satisfaction and customer satisfaction.

Preparation To prepare for class, you should:

1) Read Kotler and the three packet articles (“Learning From Customer Defections,” “Empowering Service Employees,” and “Make Your Dealers Your Partners”),

2) Reflect on your own service experiences and identify one very positive service encounter and one miserable service encounter. What are the key characteristics that distinguish the two experiences? How might the company have salvaged the miserable experience?, and

3) Read the Complaining Customer Case and be prepared to answer the following questions:

a) What is Mr. Shelton’s value to Presto Cleaners?b) Can Presto Cleaners make Mr. Shelton a satisfied customer once

again? Should it try to do so?c) Assuming that Presto Cleaners wants to satisfy Mr. Shelton, what

actions should it take?

Note that your Black and Decker Positioning Statement assignment is due at noon on 11/1.

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Week 8 Capturing the Value Created: Pricing Decisions

Goals

In Week 8, we will focus on capturing the value that has been created through designing and delivering the offering through pricing decisions.

Specific goals for Week 8 are:

1) To understand the linkage between the positioning of the offering and pricing strategy and examine alternative pricing strategies,

2) To explore the various ways in which consumers use price information in their decision making, and

3) To practice making pricing decisions that are consistent with both the positioning of the offering and consumers’ use of price information in their decision making.

I will also provide a brief introduction to the PharaSim Case (which will be played in Week 9). This will be your chance to ask any questions of clarification about this assignment.

Preparation

To prepare for class you should:

1) Read Kotler and the packet articles (“How Do You Know When the Price is Right?” “Good-Bye to Fixed Pricing,” and “Kamikaze Pricing”),

2) Try shopping for an item on the web (you don’t need to actually order anything!), and reflect upon how you used price information in making a choice,

3) Read the Penrod and Prentice Machine Tools cases and be prepared to discuss the following questions:

a) How does a typical consumer go about shopping for a solar heating unit for a swimming pool? What role does price play in the decision process?

b) What is the key problem that Penrod faces at the time of the case?c) Should Penrod make any changes in either it’s pricing strategy or

pricing tactics to solve the problem that you identified? Are changes in the other elements of the marketing mix needed?

d) What is similar and what is different from Penrod in the Prentice Machine Tools case?

e) What, if any, strategic or tactical changes in pricing should Prentice make?

4) Read the PharaSim Case (which will be distributed in class during Week 7).

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Weeks 9-10 Promoting the Offering: Communication Decisions

Goals

In Week 9 we will focus on the PharmaSim exercise. The goal of this dynamic exercise is to allow you to observe the marketplace response to a variety of marketing mix decisions and to update your actions on the basis of this response. A detailed description of how the simulation will be used (duplicated from the course overview) appears below for convenient reference:

PharmaSim: A Brand Management Simulation

PharmaSim is a computer simulation based on the over-the-counter cold medicine industry. The exercise focuses primarily on marketing activities and is designed to teach marketing concepts in an active and stimulating environment. As a member of a marketing management team, you will make decisions regarding product mix, pricing, distribution, advertising, and promotion. These decisions will then be incorporated into a computer-simulated market to reveal how both you and your competition performed. Decisions cover a time-span of 10 simulated years, allowing you to observe both the short-term and long-term effects of your decisions.

Competing in the PharmaSim market place will require complex analysis and decision making. As you work through the simulation and become familiar with the program, new issues and problems will arise to challenge you. These will include reformulating your product and introducing new brands. Along with having to manage new brands you will also be given more control over marketing mix decisions as the game progresses. You will cover issues such as targeting advertising and consumer promotion to particular customer segments, offering trade promotion and sales force to different distribution channels, and using volume-pricing discounts. Of course, the competition will be following their own strategies and reacting to your decisions. Although the simulation always starts from the same position, each game will proceed on a unique course depending on the strategy that each player chooses. This will allow competitive comparisons and illustrate how markets can evolve differently.

We will use PharmaSim as follows:

- PharmaSim software will be available for download on Monday November 9th.

- As a group exercise, you will play 5 periods of the game. This is intended to encourage a discussion of alternative viewpoints and actions. Each group will submit a printout of the results (automatically compiled by the simulation program), as well as a 500 word summary of (1) their actions, (2) the rationale for these actions, (3) what you have learned

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from the simulation. These initial reports will not be graded, but will serve as a basis for class discussion on November 16th.

- Following class discussion, you will play an additional 10 periods of the game on an individual basis at a slightly more complex level than the group exercise. During this second round of play you may replay some of the periods, but you may not restart the simulation. The maximum number of replays allowed is 3 per period and may not exceed 10 for the entire simulation. As in the initial round, you will submit a printout of your results, accompanied by a 500-word summary report, which is due on 11/19. This time your performance will be graded. You are allowed to consult with member of your group should a technical problem arise. During the individual exercise, no substantive issues (e.g., the validity of a given assumption, the viability of a particular strategy), should be discussed either within or outside your group.

During the second session in Week 9 and the single session in Week 10 we also will focus specifically on sales promotion and advertising decisions. The goals of these sessions are:

1) To understand the linkage between the positioning of an offering and the choice of media and the content of communications,

2) To explore the ways in which consumers use alternative sources of information in their decision making, and

3) To practice making promotion decisions that are consistent with both the positioning of the offering and consumers’ reliance of various sources of information.

I will also be administering the Marketing Excellence Survey again so that you may assess the progress that you have made during the quarter.

Preparation

To prepare for class you should:

1) Play the PharmaSim game and prepare a report as per the guidelines described above,2) Skim Kotler and read the two packet articles (“Building Brands Without Mass Media” and

“All Europeans Are Not Alike”),3) Do the Intel Advertising Exercise following instructions in the packet and on the CD ROM.

Please be prepared to report on the advertising strategy and specific ad executions that you recommend in our session on November 23rd . (This exercise may be done either as a group or individually, as your schedules permit.)

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Week 11 Developing an Integrated Plan in a Dynamic, Global Marketplace

Goals

It’s the home stretch….! In our final week, the focus is on developing an integrated marketing plan in a dynamic, global marketplace.

The specific goals for Week 11 are:

1) To discuss how marketing in general and retailing in particular is changing, and 2) To consolidate the concepts discussed throughout the course, and

Preparation

To prepare for class you should:

1) Skim the assigned Kotler chapters and read the “Revolution in Retailing”2) Read the FoodWorld Supermarkets in India Case and be prepared to discuss the following

issues:

a) What is your evaluation of the FoodWorld concept? Is it viable?b) What is your interpretation of the results for the first store? Based on these results,

what changes should be made in FoodWorld’s strategy and tactics? How many stores would you suggest be opened in Madras?

c) If you were a consultant, how would you advise FoodWorld regarding it’s roll out plan?

d) What competitive response do you anticipate?e) In general, what aspects of marketing benefit from a global versus a local

perspective and are these changing over time?

Also note that your written analysis of the Land Rover North America Case is due on 12/2.

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WRITING A CASE ANALYSISWRITING A CASE ANALYSISThe case analyses should be typewritten and single-spaced. Please do not include a cover page with your case. There is a word limit of 1200 words. Exhibits count toward the word limit at a rate of 150 words per exhibit. Please provide a word count at the end of your analysis.

STRUCTURE

The case write up is comprised of four parts: executive summary, goal analysis, impediment analysis, and solution analysis.

Executive summary: The executive summary consists of a goal, an impediment, and a solution. The goal is the objective you believe is paramount given the facts of the case. The goal

emerges from a careful analysis of the problem (s) that the firm is facing. Selecting the right goal is one of the most important tasks in the case write-up. Be as specific as you can in defining your goal.

The impediment is the major factor(s) preventing you from reaching your goal. This impediment should be actionable; that is, you should be able to remove it with your solution (e.g., “the economy is in a recession is not an impediment).

Once you have your goal and impediment in place, your solution should fall out fairly easy - it is the action(s) you will take to remove your impediment.

Goal analysis: Why is this the most important goal? How does it fit with other company goals?

Impediment analysis: Given your goal, why is this impediment the most important impediment?

Solution analysis: The solution analysis consists of three parts: solution, argument, and counter-argument: The solution part should provide your logic for the proposed solution. What are the

advantages of your solution? Why is this the best solution given your impediment? The argument part should provide arguments (if any) against the proposed solution (i.e.,

what are the disadvantages of the proposed solution) The counter-argument part should provide counter-arguments for your solution (i.e., why the

disadvantages of your solution can be ignored).

Avoid giving executional details here, and focus instead on supporting your type of solution that you recommend.

Note on exhibits: Exhibits provide support for your arguments. Choosing which exhibits to develop is a often challenge. In general, one exhibit should make one point. Each exhibit should contain:

A title A conclusion which reiterates the key points demonstrated in the exhibit A source of any factual information used in the exhibit Any assumptions made in the developing the exhibit

CONTENT

This case approach is deliberately not comprehensive. You must pick what you believe to be the most important problem, and analyze it. The packet reading entitled “Defining Marketing Problems” (week 2), should help you understand how to find the right level of problem definition. If you can define the primary problem, one can reasonably assume that if asked to analyze the secondary problem, you could do that as well.

There are four ingredients to any case analysis: fact, assumption, logic, and opinion.

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Facts are obviously your most powerful tools, but you will find that they are in limited supply in the cases. This is deliberate, to simulate a natural marketing environment where information is scarce (costly) and imperfect. Do not seek outside information when analyzing the case. Also, you may assume the reader knows the case well. There is no need to repeat facts verbatim from the case except to explicitly support a conclusion.

Assumptions are necessary to fill in the missing facts. It is perfectly reasonable to use assumptions - just make sure they are clearly articulated, well-supported, and sensible. If you are unsure about a particular assumption (e.g., what the industry growth rate will be), consider presenting a sensitivity analysis with aggressive, conservative, and best-guess assumptions.

Logic will tie your fact and assumptions together to support your argument. Focus on identifying cause-and-effect relationships here: if I increase advertising spending then brand awareness will increase. Be sure that the logic of the situation is clear not only to you, but also to the reader of the case.

The opinions you submit are only as strong as the fact, assumption, and logic you have presented. Do not include statements that are opinions not supported by fact, assumption, and/or logic.

The most common error in case preparation is the misallocation and ineffective use of time. Your two most important tasks are finding the right problem and convincing me that it is the right problem. Don’t get caught up in selling the solution, especially by giving me lots of executional details—if you have the wrong problem the execution won’t matter. I am looking for solid, strategic problem solving, and am much less interested in what the headline in your ad campaign will be. It is also a very good idea to finish the case early, leave it be for a day, and then come back to it and look for holes in your logic that need filling in. Assume the reader will challenge each and every point you are trying to make.

Apply the “elevator test” to your case: You get in the elevator with your boss on the first floor. She presses the button for the 4th floor and then asks you what, in your opinion, should the company do to increase profitability. You have just enough time to give a strong recitation of your executive summary. On the strength of this alone you should impress her enough to ask you to walk with her to her office to discuss the case further. In the hall you give her your goal/impediment analysis, which gets you into her office. In her office you can take the time to present your solution analysis. By the time you leave she believes you are clear-thinking, strategic, smart marketer. At this point she begins to worry that you will take her job. Good luck!

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CASE WRITE-UP TEMPLATECASE WRITE-UP TEMPLATE

Section # Group/Individual [GROUP NAME/SSN NUMBER]

[CASE NAME]

Executive SummaryAt present, the most important goal for [company X] is to [proposed goal].

The main impediment for achieving this goal is [describe the impediment].

To achieve the above goal, [company X] should [propose a solution]

Goal Analysis[proposed goal] is the most important goal for [company X] because:

………………

………………

Impediment Analysis[impediment] is the most important impediment for [company X] to achieve the above goal

because:

………………

………………

Solution AnalysisSolution

[proposed solution] is the best course of action for [company X] because:

………………

………………

Argument

One can argue, however, that [company X] should not [proposed solution] because:

………………

………………

Counter-argument

Despite the above disadvantages, the proposed solution is reasonable because:

………………

………………

The above analysis demonstrates that the proposed solution is the best course of action for

[company X]

Format: Arial 10; single-spaced; 1” margins on each side; use color only if necessary and in Exhibits.

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