The marketing committee of Paradise Foods decided against national rollout of Sweet Dream, the company's new premium frozen dessert. They feared Sweet Dream would take away market share from LaTreat, the company's first, and still successful, entry in frozen specialty desserts. Bill Horton, Sweet Dream's product manager, who had spent 18 months evaluating the new product and strongly favored the launch, doubted LaTreat's long-term market strength, believing that the company was protecting a product that was already tiring. Four executives - Jerry Della Femina, chairman and CEO of Della Femina, McNamee WCRS, Inc.; William H. Moult, executive vice president of SAMI/Burke; John M. Keenan, executive vice president of General Foods Worldwide; and Richard F. Chay, director of marketing research for NutraSweet Co. - evaluate Bill Horton's performance and examine whether Paradise Foods should reconsider its no-launch decision.
Reebok executives are reviewing the company's advertising and promotion programs for the second half of 1988. These include sponsorship of the 1988 Summer Olympics and a rock concert tour organized by Amnesty International. In addition, Reebok is launching a new advertising campaign with the slogan "Reeboks Let U.B.U."
Describes four kinds of selling: 1) transaction, 2) systems, 3) major account management, and 4) strategic account relationships. Explains the advantages, disadvantages, and risks of each. The second half is devoted to a discussion of strategic account relationships which embody importance, intimacy, and longevity for both the vending and the buying companies.
Explores the issue of measuring and improving service quality and productivity by examining the radically different approaches of Northern Telecom and United Parcel Service.
Dunkin' Donuts is exploring various methods of increasing distribution. Possibilities involving new outlets include area development contracts, subfranchising, regional rollout strategies, and an increase in company owned stores. Possibilities focusing on existing shops include sales of branded products through convenience stores and satellite (non-producing) retail outlets. The case provides consumer data and detailed information about regional differences, franchise relations, and shop operations. Raises issues relating to both strategy formulation and implementation in a franchise system and requires the student to analyze the interaction between the structure and management of a franchise system, and how they both relate to the market.
Texas Instruments implements a Cost of Quality (COQ) system as part of a company-wide "Total Quality Thrust." After several years of operation, group management questions whether or not the COQ system should be updated to make it more useful in identifying areas for quality improvement. The case documents the current system and asks students to analyze the role it played in the quality control process and areas in which it could be improved.
Norton, a once famous motorcycle manufacturer, soundly beaten by Japanese competition, turns its attention to developing rotary engines. The company is acquired by Norton Group PLC, which is headed by a dashing entrepreneur. The new management must decide what direction to give the company and what projects to concentrate on, especially since the financial resources at the company's command are limited.
Outlines the decisions taken by the company's management team in response to the challenges posed in Norton Group PLC (A). For each such decision, further data is provided for students to ponder the effectiveness of the action steps undertaken.
Software for note (9-380-175). Spreadsheet model helps students assess potential risks and returns of achieving a viable market position. Calculates the capital requirements for entering the diaper industry under different scenarios. Requires Windows and Excel.
In 1988, Optical Distortion, Inc. was ready to reintroduce its only product, contact lenses for chickens. Tests had shown that the lenses significantly reduced bird aggression and feed costs, leading to potentially huge cost savings for egg producers. In the years since the (A) case, margins for egg producers had become so small that if a large producer could sustain a significant cost advantage, many small producers could be forced out of business. In this case the company's only salesperson must decide whether to concentrate on closing a sale to an aggressive major producer who may demand all the company's capacity for the next year, or to spend time spreading the word to smaller more vulnerable producers. In doing so, he faces the difficulty of convincing the farmers that cost savings which appear "too good to be true" are, in fact, real. The case is short and can be used in conjunction with Optical Distortion, Inc. (A). In addition to the ethical issues, it also raises issues of sales strategy and the diffusion of innovations, and can be used to examine negotiation strategies.
Senior management of General Motors must select a site for a new assembly plant to replace two plants located in Detroit. The economics strongly favor a site in an adjacent state. However, a relocation would have substantial, negative impact on the existing work force, the City of Detroit, and suppliers in the Detroit area. Selection of a Detroit site would result in higher costs and would require the taking by eminent domain of 1,200 homes in the community of Poletown. The case raises issues of corporate responsibility, business-government relations, and stakeholder analysis.
Colt Industries is a conglomerate that is considering undertaking a leveraged recapitalization. The deal would involve a large one-time dividend to stockholders, which would be financed by over $1 billion in new debt. Unlike in an leveraged buyout, however, public shareholders would still retain an equity interest in the company. Shareholders in the company's employee savings plan would not receive the dividend, but instead would see their percentage ownership in the company substantially increased.
Describes Du Pont's attempt to follow a "small is beautiful" type approach toward implementing expert systems technology. Intended to illustrate that there is no "one right way" to implement expert systems and that the small systems approach can be a viable strategy provided that it fits the organization's culture, knowledge profile, and resource structure. Can also be used to illustrate the more general issues associated with end user adoption of new technology.
A shop owner has limited shelf space for display of impulse purchase products near the cash register. He must select only nine to display. Exercise shows the relevance of opportunity cost or resource pricing. By setting an appropriate charge for the shelf space the products self-select for the appropriate shelves.
Forecasting total market demand can be crucial to creating a smart marketing strategy. Some companies--and even whole industries--have learned the hard way that a product's historical demand curve doesn't necessarily predict future demand. An accurate total market demand forecast can yield clues about future product performance. Here are the four steps to creating one: 1) define the market, 2) divide total industry demand into segments, 3) find out what drives demand in each segment and project how those drivers might change, and 4) assess the risks to the forecast and decide which assumptions are most critical to success. Just going through this process can help managers better understand the real world in which they operate.
Gray markets may be the result of natural forces like maturity in a product life cycle (when price emerges as the key factor in purchases) or dislocations in foreign exchange rates. Gray markets are also convenient channels for distributors and producers, and so represent opportunities.
Capital markets now demand that CEOs monitor the "value gap" between what their company's shareholders realize now and what they might be able to get. As the pool of available funds grows and the number of easy targets declines, acquirers will turn their attention to companies with smaller and smaller value gaps. CEOs must measure the value gap and track it periodically. To manage the gap, CEOs can choose one or more of three basic options: improve operations, leverage the company's capital structure, or sell business units to the "best buyers."
Most fears about guaranteeing service are groundless. But offering a weak guarantee won't lead to success. The best guarantee is unconditional, meaningful, and easy to understand, invoke, and collect. Properly implemented, a strong guarantee boosts performance; sets clear-cut, customer-defined goals; creates a customer-oriented work force; and generates error data needed for improvement. A strong service guarantee can also boost marketing. It leads to more satisfied customers who generate higher sales and profits. McKinsey Award Winner.