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This exercise serves to help students understand the proper role and use of costs in a firm's pricing decisions. The exercise is designed such that the learning of students evolves across a classroom session, starting from understanding which costs are relevant when setting the price of a product, progressing to a discussion on the wisdom of the traditional "cost-plus" approach to pricing, and ending with a demonstration of how to leverage cost information to construct an iso-profit curve-which, in turn, serves as a useful benchmark to assess possible price changes. These topics emerge as the result of hands-on calculations, where students make recommendations based on the data provided in the exercise, and in-class discussion, where students defend their preferred course of action and reflect on the biases and heuristics that may lead managers to misuse costs in pricing decisions.

Could these dots be connected? Dozens of Israeli startups and Multinational Corporations (MNCs) thought that they could, and were employing 700 Palestinian engineers, in part through outsourcing companies, and in part directly by opening local R&D centers. In conjunction, the Palestinian tech ecosystem was benefiting and developing a promising entrepreneurship sector. Both the joint work and the independent Palestinian ecosystem had important geopolitical implications, first by supporting the Palestinian economy, and second in the potential implications it could have on the relationship between Israelis and Palestinians, two peoples who have been in conflict for decades. While the opportunities were clear, various challenges facing an emergent tech sector, coupled with sensitivities surrounding cooperation between long-time 'enemies', created complications. Paradoxically, Palestinians realized that working with Israeli tech companies was highly promising, but the reality was that any relationship with Israel was politically sensitive for them and created a dilemma. The same applied for Israelis motivated but concerned about working with Palestinian engineers. Given the tremendous benefits, MNCs, governments, non-profits, and international organizations decided to promote co-operation between Israeli and Palestinian tech companies and to support the creation of a sustainable Palestinian tech sector; by mitigating the challenges both sides faced. Still, it remained to be determined whether these efforts would bear fruits, or whether tech cooperation between Israelis and Palestinians would remain anecdotal. Moreover, it was as yet unclear what big-picture implications such initiatives could have on the Palestinian economy and on the relationship between the two peoples. Recent developments, including the global pandemic and the peace agreement signed between Israel and the UAE provided their own sets of challenges and opportunities.

Chris Down, Global Brand General Manager for Hot Wheels, and his team from the Advanced Play Group within Mattel, Inc., had developed an entirely new "mixed play" product experience that blended familiar Hot Wheels play in the physical world with breakthrough play in the digital world. The technology underlying the product was an NFC chip embedded in the physical Hot Wheels die-cast car that could be scanned to add a digital version of the car into a virtual domain, where users could see their stats and play video games with the car. The goal for the new mixed play experience was to extend the age of the Hot Wheels customer, as children were observed to be moving on from physical toys to digital play at a younger and younger age. The mixed play concept had received unprecedented investment and support, since it represented a whole new approach to play that could set the stage for the future of Hot Wheels and other Mattel brands. In early 2019, the product development phase was nearly complete and plans were being set for the launch. Key decisions needed to be made around positioning, naming, pricing, channel, promotion, and launch timing. Given the high expectations for the innovative mixed play platform, it was critical to get these go-to-market decisions right.

In 2017, Chris Down, Global Brand General Manager for Hot Wheels, and his team from the Advanced Play Group within Mattel, Inc., were considering which innovation path to pursue in order to "future proof" the Hot Wheels franchise going forward. Hot Wheels was the number one selling toy in the world (by unit volume), however, play patterns among children were rapidly changing and children were moving on from physical toys to digital play at a younger and younger age. Hot Wheels needed to determine how to respond. One option considered was the development of a new "mixed-play" product that blended physical and digital play. While the mixed play idea was still at an early conceptual stage, it would likely involve embedding a chip into the Hot Wheels die-cast car, turning it into a "smart car" with its own unique identification. Users could play with the smart car in the physical world and on an app, thus offering an opportunity to also appeal to Hot Wheels consumers who were intrigued by digital play. Hot Wheels had made a number of forays into the digital space over the years, through licensing the brand to app and game developers and developing toys with some digital elements. The licensing strategy was low risk, low reward, and Mattel's own digital development had produced varied results, creating a culture hesitant to take big risks in the digital space. Down knew that a mixed play innovation would require a significant investment in time and resources. However, Hot Wheels parent company, Mattel Inc. had seen revenues and operating income drop for the past three years. It was unclear if Mattel's new CEO, Margo Georgiadis, would be supportive of the mixed play direction as the cornerstone of Hot Wheels' growth plan.

Since its launch in 1998 as "the Amazon.com of DVDs," Netflix had evolved from a DVD rental company to a video streaming platform and producer of original films and television shows. As the company matured, it regularly increased prices and adjusted its product offerings while continuing to add new subscribers. However, between late 2019 and mid-2020, competition within the streaming industry intensified with the launch of new entrants such as Disney+, Apple TV+, and HBO Max, jeopardizing Netflix's position as the industry leader. In spite of the heightened competition in the streaming industry, some analysts and customer willingness-to-pay surveys suggested that Netflix had the opportunity to implement another rate hike in the near future. By May 2020, Netflix must decide whether to increase prices again, or whether it should consider a different pricing model altogether.

In March 2020, direct-to-consumer (DTC) company Pattern Brands needed to decide how to allocate resources across its different brands. Pattern Co-Founders Nick Ling and Emmett Shine hoped to avoid the pitfalls faced by some DTC companies-such as inability to scale and lack of competitive differentiation-by relying on their previous experience running a successful branding and marketing agency. Rather than focusing on a single brand, they conceived Pattern as a "DTC 2.0" model-a portfolio of 5 to 10 brands that shared a common theme of activities related to the home and a common mission of helping millennials enjoy daily life. Since its founding in August 2019, Pattern had launched cookware brand Equal Parts and home organization brand Open Spaces. Although Pattern's team still believed strongly in the benefits of a multi-brand strategy, Open Spaces' sales and unit economics had significantly outperformed Equal Parts' to date. Pattern's leadership wanted to build on Open Spaces' early momentum with new product colors and product lines, but they debated whether to act on the results of a recent customer survey indicating a positive response to an Equal Parts product redesign. Ling and Shine now had several decisions to consider. How should they allocate resources between repositioning Equal Parts and continuing to grow Open Spaces? How and when should they continue building Pattern's portfolio by developing a third brand? How much should they invest in marketing parent brand Pattern? More broadly, did Pattern's model represent the future of DTC brands?

The digital revolution has allowed companies to amass considerable amounts of data on their customers. Using this information to generate actionable insights is fast becoming a critical skill that firms must master if they wish to effectively compete and win in today's data-driven marketplace. This note explains the value of examining customer metrics, such as retention rate, revenues, and social influence (k-factor), on an ongoing basis by conducting a cohort analysis. Such an analysis segments customers using one or more criteria, and tracks the behavior and performance of each of these segments over time. Using several instructive examples, the presentation highlights the benefits of running a cohort analysis for deriving a deep understanding of customer trends. Moreover, the examples expose the pitfalls that arise from not accounting for segment characteristics (such as when a customer joined, from what media vehicle they were acquired, how heavily they use the product, etc.) and not paying attention to the evolution of customer metrics over time. The implications of conducting a cohort analysis for firm strategy and for determining customer lifetime value (CLV) are discussed.

An examination of the strategic marketing challenges facing Thinx as it tries to grow in the face of menstruation taboos and competition from large incumbents.

This case focuses on Purple Innovation Inc. (Purple), a company that started out in the Direct to Consumer (DTC) mattress space. After a successful launch and IPO, with sales predominantly originating from its website, in late 2018 Purple was looking to sustain its growth momentum by partnering with traditional bricks & mortar players, such as Mattress Firm and Bed Bath and Beyond. Although the move had the promise of expanding the relevant customer base, it presented a marketing challenge: Could the company continue to rely on its previous digital advertising approach to drive offline sales? If so, how, and, if not, what other media outlets and messaging should be considered? The case forces students to analyze the digital strategy the company had previously used to generate hundreds of millions of dollars in online sales, and then propose a communication plan for generating 30% of sales offline. In doing so, students grapple with delineating the customer journey for buying a mattress online and in stores. The case can also serve as a vehicle to discuss the scaling challenges many disruptor DTC brands face.

In 2019, Chinese smartphone maker and telecommunications empire Huawei was preparing to launch its new flagship smartphone series, the Mate 30. After years of explosive growth, the previous 18 months had been a challenge for the company. In early 2018, Huawei's planned smartphone launch in the U.S. had failed due to pressure from regulators who cited concerns about the company facilitating Chinese spying. Over the following months, a trade war between the U.S. and China had broken out, with Huawei at its epicenter. By mid-2019, after months of U.S. pressure and restrictions, Huawei found its supply chain for computer parts and software under siege and several governments around the world threatened to ban its 5G network equipment from their countries. In this unpredictable climate, Huawei founder Ren Zhengfei and his management team had to figure out not only how to successfully launch Mate 30 phones in the upcoming fall, but how to ensure the company's long term viability.

Launching its first products in the fall of 2016 in New York, insurtech startup Lemonade was on a mission to disrupt the insurance market by using AI and behavioral economics principles. The company offered renters, homeowners and condo insurance and mainly targeted millennial, tech-savvy individuals with relatively few assets- customers who were less attractive to traditional insurers who had costly, labor-intensive, operations. By offering a delightful, bot-driven consumer experience, embracing a model that removed any incentive to deny claims and that let customers pick causes to donate leftover money to, building a loveable brand, and employing creative digital advertising - the company was able to grow at an impressive pace. By the end of 2018, Lemonade was active in 24 U.S. states, had insured 425,000 customers and was expecting sales (gross premiums) of over $57 million. In an effort to sustain the spectacular growth momentum, the co-founders sought to pursue ambitious plans in 2019, including the launch of new insurance product lines as well as international expansion. But limited resources and scarce management bandwidth suggested that taking on both moves simultaneously could be highly risky. In deciding which path to take, the leadership team had to consider whether it was more important at this stage to scale globally with the current product lineup or to cover a breadth of insurance categories and stay in the U.S. for now. Assessing the relevance of the business model and the role of AI for each of these moves, understanding the nature of consumers in different markets, and foreseeing competitive pressures from both incumbents and startups were key in making the right call.

In early 2019, transportation was set to undergo a major transformation with the advent of autonomous vehicles (AVs), also referred to as driverless cars, which were nearing completion from an R&D and testing phase. Yet many questions remained open regarding exactly how and when that transformation would occur. The case lays out key issues to consider with respect to the marketplace penetration of AVs and delineates several predictions for how things might play out. The case further describes the motivations and potential courses of action of the multiple stakeholders involved (firms, consumers, government). Students are tasked with examining the various factors that will likely impact the future success and widespread acceptance of AVs, identify potential barriers to customer adoption, describe how a number of industries will be impacted, and propose effective business-models for firms to embrace. Students should also suggest what role they believe government (local and federal) should play in regulating AVs. The case provides relevant information for conducting both qualitative and quantitative analyses.

Spreadsheet supplement for case 519097.

In 2018, Mustafa Koita, Founder and CEO of Dubai-based organic milk company Koita has to decide whether or not to pursue an investment from a potential competitor who is coming into his local market.

In the spring of 2018, Israel was set to celebrate its 70th anniversary. While there was much to rejoice in reaching this milestone, the country's brand image internationally was far from ideal. Past efforts to impact perceptions of Israel, spearheaded by the Ministry of Foreign Affairs as well as various Jewish organizations, were mainly aimed at "explaining" Israel's political position and convincing the world that the country was acting in a just manner. However, a series of seminal market research studies revealed that many people in the U.S. and Europe primarily associated Israel with military imagery, held views of the country as steeped in conflict, and believed its people were devoutly religious and unwelcoming. Making matters worse, many expressed an indifferent attitude towards the country and felt that Israelis were dissimilar to them. In an attempt to change the situation, several individuals and entities embarked on various initiatives aimed at branding Israel differently and "broadening the conversation" about the country. These efforts included: generating a brand book for Israel that suggested a guiding brand position of "creative energy"; inviting social media influencers to partake in trips focused on lifestyle interests; generating appealing, non-conflict related content linked to Israel and attracting online viewers to the content; appointing a goodwill ambassador to communicate the culture and day-to-day life in Israel; and multiple measures to draw in more tourists (Jewish and non-Jewish) to the country. Taking stock of these efforts revealed a mixed picture at best, and it was unclear whether Israel's brand image among international audiences was indeed shifting in the intended direction. Several observers were further worried that the younger generation was finding Israel even less relevant and urged for devising a new approach.

The brand management of places, such as countries, cities and regions, has received increasing attention in recent years. The associations, impressions and reputations that people have of a certain place can have a big impact in a number of areas - from tourism, to exports, to drawing talent, to securing foreign investment, to public diplomacy, and to political leadership. Consequently, a number of stakeholders may attempt to influence the perceptions that people have about a place in a way that is conducive to their goals. This background note lays the ground for instructors to expose students to the concept of a place brand, allow examining the ways in which it may be influenced, and examine the motivations of the various actors. The note provides ample examples of countries and cities that have actively tried to shape their brand identity and further exposes students to recent trends and vehicles (such as social media) relevant for the branding of places. The note raises a set of issues on this topic that can serve as the basis for a rich classroom discussion.

In mid 2010 the Sealed Air Corporation has to decide on next steps for its novel video tracking technology (called VTID) after unsuccessful attempts to market it in three different industry settings. The company must determine whether its most recent target market, the quick-serve restaurant segment, is still worth pursuing or whether the company should look for a different application and market altogether. The company could also revisit the previous two applications, tracking and tracing processed meat and tracking employee safety practices. At the other extreme, after seven years of R&D and marketing efforts and millions of dollars in expenses, the company could cease attempts to commercialize VTID.

Riku Nakamura relocated six years ago with his family from Tokyo to San Mateo, California, to spearhead the launch of Kenko USA, the first foreign subsidiary of a Japanese cracker company. However, Kenko USA hasn't taken off as hoped, and his family is ready to return home. Riku now ponders which course to recommend to Kenko's executive team: a lucrative private-label deal that would quickly drive revenue growth or a new branded marketing push that would better position the division for the long term. This fictional case study by Elie Ofek feature expert commentary by Tetsuya Fujisaki and Carlos Canals.

Riku Nakamura relocated six years ago with his family from Tokyo to San Mateo, California, to spearhead the launch of Kenko USA, the first foreign subsidiary of a Japanese cracker company. However, Kenko USA hasn't taken off as hoped, and his family is ready to return home. Riku now ponders which course to recommend to Kenko's executive team: a lucrative private-label deal that would quickly drive revenue growth or a new branded marketing push that would better position the division for the long term. This fictional case study by Elie Ofek feature expert commentary by Tetsuya Fujisaki and Carlos Canals.