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Spreadsheet supplement for case 376-028.

Executives who wish to avoid being caught off guard when speaking to the press or to the public need a sound attitude (one that is neither arrogant nor falsely humble) and they need thorough preparation. Ten specific guidelines to remember include: talk from the viewpoint of the public's interest, not the company's, speak in personal terms, avoid "off-the-record" statements, state the most important fact at the beginning, avoid arguing with the reporter or losing your cool, avoid repeating or denying questions containing offensive language, provide direct answers to a reporter's direct question, offer to find out the answer to a question if you do not know the answer, avoid "playing dumb," tell the truth, and do not exaggerate facts.

A research technique, called conjoint measurement, evaluates consumers' judgments to determine the nature of a product and the available market. This technique is especially useful when choosing between multiattribute products. Studies of various complex product choices illustrate how conjoint measurement indicates customer preference and the number of prospective orders. Conjoint measurement also shows consumers' evaluations of new product formulations; effective packaging, brand name, and promotional copy combinations; pricing and brand alternatives; verbalized descriptions of new products and services; and alternative service designs.

In a service organization, quality control of employee attitudes and performance is comparable to product quality control in manufacturing. The Marriott Corp. pursues an elaborate 'rescue' operation to keep good management people after recruitment and training. This rescue operation which provides employees with challenge, satisfaction and growth in their jobs, consists of eight programs including: Individual Development; Management Training; Manpower Planning; and Career Progression. Other programs include: annual Opinion Surveys; Fair Treatment; and Profit Sharing.

Presents the results of a computer simulation of aircraft hull insurance. Discussion will focus on the interpretation of the results described. Designed to be handed out in class. Rewrite of an earlier supplement by P. Vatter.

Judy and John DeRight, looking to diversify their investment portfolios, have retained Angus Cartwright, Jr. to identify prospective real estate acquisitions. Mr. Cartwright has four potential properties that he feels merit an in-depth financial analysis. The case provides an opportunity to examine the various components of real estate return--cash flow, tax benefits, and futures--and measure the profitability of a proposed investment through the calculation of net present value, internal rate of return, and capitalization rate.

Southwest Airlines, a small intrastate carrier, has just completed its first year of operations in June 1972 and management is debating what advertising and promotional strategy to adopt for the future. Southwest has successfully broken into a market dominated by two larger airlines and gained a significant market share through improved quality service, lower prices and other innovations, supported by heavy advertising and other promotions. However, it is still not making money. Illustrates development and introduction of a new consumer service and advertising and promotional strategy. Exhibits emphasize advertising copy, including a centerfold. Another version of this case, Southwest Airlines (A), takes the action up through February 1973, includes more details on pricing, and is designed for teaching marketing programs.

Test marketing has proper uses and serious limitations. It provides a measure of sales performance and the opportunity to identify and correct any weaknesses in the product or in the marketing plan. It is, however, costly and laborious. Four factors to weigh in determining the efficacy of test marketing are: the cost and risk of product failure against the profit and probability of success; the difference in scale of investment between a test and a national launch; the likelihood of being copied and preempted by the competition; and the costs in money and reputation of a product failure.

Overhead value analysis identifies structural cuts that will reduce overhead costs by 15% to 30%. Overhead value analysis requires delegating to every manager in the company, plus a small, high-level task force, the responsibility to cut overhead costs. The target should be a 40% reduction in costs. This program may have the undesirable side effects of hurting employee morale and of terminating a disproportionate share of minority employees. A company should apply the program when it has an acute short-term need to improve profits, or badly needs to gain a competitive edge by improving its economic structure.

A survey of 19 companies indicates that performance appraisal is still in use even though it is difficult to carry out. It is useful in identifying employee weaknesses, assessing management potential, justifying salaries, and forcing bosses to relate employee behavior to results. Systematic and behavioral barriers hinder successful performance appraisal. Four simple procedures can help performance appraisal work: keep it simple; keep it separate; keep it contained; and keep it participative.

Financial vice president is expected to prepare a financing plan for Bio-Tech matching the most recent long-range plans of three operating groups. The latter, however, must be adjusted to take account of recommendations to be made on plant investment of one product group and possible sale of a major division.

Spreadsheet Supplement for case 275124

A large integrated oil company is debating whether to switch from a single hurdle rate to multiple hurdle rates for project analysis purposes. Raises questions on: 1) determination of the cost of equity; 2) the usefulness of multiple hurdle rates to adjust for project risk; 3) differences between a project's risk and its impact on overall corporate risk; and 4) the limitations of project analysis and capital budget systems.

Faced with large external financing needs and a low stock price, Con Ed management must decide whether to pay a cash dividend in April 1974. Based on Consolidated Edison by G.C. Lodge.

Concerns the settlement of an automobile insurance claim. A woman, blinded in an accident, alleges that approximate cause of the accident was failure by Sorensen Chevrolet to connect the left headlight of her car. The student is asked for a strategy for settling the case, to decide who is to negotiate, and to assess the handling of the case to date.

Pricing of meals for exclusive French restaurant.

Covers events between February 1974 and September 1974.

Covers events between September and December 1974.

Focuses on a relevant cost decision. Which costs are relevant for the decision? How should they be taken into account?

Describes designing an advertising or promotion program to sustain the momentum on L'eggs successful market entry.