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Danny Wegman, president of Wegmans Food Markets, is trying to decide how to evaluate the success of a nutrition-counseling program for diabetics, and whether and how to expand the program beyond the two stores currently involved. Wegmans, with 57 stores and $2.3 billion in revenues, implemented the program in conjunction with a local hospital and a disease-management company. Initially intended to stem the erosion of pharmacy margins due to managed care plans, the program filled a genuine social need--diabetes can be inexpensively controlled through diet if caught early. In addition to discussing how the program has been established, the case presents financials for the supermarket industry and Wegmans' competitors. The new role of supermarkets in addressing disease, health, and preventive medical needs is also presented.

An Israeli high-tech start-up has developed an innovative simulator which makes possible non-patient training in medical ultrasound. The marketing function moves to the United States, the largest market, while other functions remain in Israel. The case describes a number of options for further growth.

In this article, authors James Anderson, professor at the Kellogg Graduate School, Northwestern University, and James Narus, associate professor at the Babcock Graduate School, Wake Forest University, illustrate several ways in which suppliers can figure out exactly what their offerings are worth by creating and using what they call customer value models. Field value assessments--the most commonly used method for building customer value models--call for suppliers to gather data about their customers firsthand whenever possible. Through these assessments, a supplier can build a value model for an individual customer or for a market segment, drawing on data gathered from several customers in that segment. Suppliers can use customer value models to create competitive advantage in several ways. First, they can capitalize on the inevitable variation in customers' requirements by providing flexible market offerings. Second, they can use value models to demonstrate how a new product or service they are offering will provide greater value. Third, they can use their knowledge of how their market offerings specifically deliver value to craft persuasive value propositions. And fourth, they can use value models to provide evidence to customers of their accomplishments. Doing business based on value delivered gives companies the means to get an equitable return for their efforts. Once suppliers truly understand value, they will be able to realize the benefits of measuring and monitoring it for their customers.

This fictitious case written by Andy Blackburn, a Boston Consulting Group vice president based in San Francisco, explores the question of how PC companies can make money in the increasingly price-competitive consumer market. The senior staff of Praxim, a multibillion-dollar maker of desktop computers, face some tough questions: Is it possible to make money selling personal computers to consumers? And if so, how? What resources need to be mustered? Where should they be directed? After years of strong profits, Praxim is being dragged down by increasing competition in the consumer segment of the PC market. In response, CEO Jack Thompson has hired a new manager for the consumer division, Linda Marcus, luring her away from a leading packaged-goods company. Linda wants to make Praxim into a trusted brand by putting Praxim's people into retail stores at peak selling times, setting up an 800 number to answer consumers' technical questions in plain English, and bundling extensively. But the other members of the senior staff are skeptical. The vice president of the commercial division argues that PCs are a commodity and urges Linda to concentrate on cutting costs. The chief technology officer wants Praxim to concentrate on developing the next killer app so that it can charge consumers a premium for new technology. The CFO thinks Praxim should cut its losses and mostly give up on the consumer segment. Mindful that continued losses in the consumer segment will pull down Praxim's share price and put his top executives' stock options at risk, Jack is at a loss. Should he try to make money selling PCs to consumers? Can he keep the doubters on his staff from defecting if he goes ahead with Linda's plan? In 98603 and 98603Z, Geoff Moore, Donna Dubinsky, Larry Keeley, George Quesnelle, Scott Ward, and Philip Pifer give Jack their advice.

This fictitious case written by Andy Blackburn, a Boston Consulting Group vice president based in San Francisco, explores the question of how PC companies can make money in the increasingly price-competitive consumer market. The senior staff of Praxim, a multibillion-dollar maker of desktop computers, face some tough questions: Is it possible to make money selling personal computers to consumers? And if so, how? What resources need to be mustered? Where should they be directed? After years of strong profits, Praxim is being dragged down by increasing competition in the consumer segment of the PC market. In response, CEO Jack Thompson has hired a new manager for the consumer division, Linda Marcus, luring her away from a leading packaged-goods company. Linda wants to make Praxim into a trusted brand by putting Praxim's people into retail stores at peak selling times, setting up an 800 number to answer consumers' technical questions in plain English, and bundling extensively. But the other members of the senior staff are skeptical. The vice president of the commercial division argues that PCs are a commodity and urges Linda to concentrate on cutting costs. The chief technology officer wants Praxim to concentrate on developing the next killer app so that it can charge consumers a premium for new technology. The CFO thinks Praxim should cut its losses and mostly give up on the consumer segment. Mindful that continued losses in the consumer segment will pull down Praxim's share price and put his top executives' stock options at risk, Jack is at a loss. Should he try to make money selling PCs to consumers? Can he keep the doubters on his staff from defecting if he goes ahead with Linda's plan? In 98603 and 98603Z, Geoff Moore, Donna Dubinsky, Larry Keeley, George Quesnelle, Scott Ward, and Philip Pifer give Jack their advice.

This fictitious case written by Andy Blackburn, a Boston Consulting Group vice president based in San Francisco, explores the question of how PC companies can make money in the increasingly price-competitive consumer market. The senior staff of Praxim, a multibillion-dollar maker of desktop computers, face some tough questions: Is it possible to make money selling personal computers to consumers? And if so, how? What resources need to be mustered? Where should they be directed? After years of strong profits, Praxim is being dragged down by increasing competition in the consumer segment of the PC market. In response, CEO Jack Thompson has hired a new manager for the consumer division, Linda Marcus, luring her away from a leading packaged-goods company. Linda wants to make Praxim into a trusted brand by putting Praxim's people into retail stores at peak selling times, setting up an 800 number to answer consumers' technical questions in plain English, and bundling extensively. But the other members of the senior staff are skeptical. The vice president of the commercial division argues that PCs are a commodity and urges Linda to concentrate on cutting costs. The chief technology officer wants Praxim to concentrate on developing the next killer app so that it can charge consumers a premium for new technology. The CFO thinks Praxim should cut its losses and mostly give up on the consumer segment. Mindful that continued losses in the consumer segment will pull down Praxim's share price and put his top executives' stock options at risk, Jack is at a loss. Should he try to make money selling PCs to consumers? Can he keep the doubters on his staff from defecting if he goes ahead with Linda's plan? In 98603 and 98603Z, Geoff Moore, Donna Dubinsky, Larry Keeley, George Quesnelle, Scott Ward, and Philip Pifer give Jack their advice.

In this article, University of California at Berkeley professors Carl Shapiro and Hal Varian explain how a "versioning" strategy can enable a company to distinguish its products from the competition and protect its prices from collapse. This insightful article will be essential reading for any executive competing in the information economy. Many producers of information goods assume that their products are exempt from the economic laws that govern more tangible goods. But that's just not so. Information goods are subject to the same market and competitive forces that govern the fate of any product. And their success, too, hinges on traditional product-management skills: gaining a clear understanding of customer needs, achieving genuine differentiation, and developing and executing an astute positioning and pricing strategy. What makes information goods tricky is their "dangerous economics." Producing the first copy of an information product is often very expensive, but producing subsequent copies is very cheap. In other words, the fixed costs are high and the marginal costs are low. Because competition tends to drive prices to the level of marginal costs, information goods can easily turn into low-priced commodities, making it impossible for companies to recoup their up-front investments and eventually bringing about their demise. The best way to escape that fate, the authors say, is to create different versions of the same core of information by tailoring it to the needs of different customers. The authors draw on a wide range of examples to illustrate how companies use different versioning strategies to appeal to customers with different needs. The power of versioning is that it enables managers to apply tried-and-true product-management techniques in a way that takes into account both the unusual economics of information production and the endless malleability of digital data.

This note develops a variety of approaches to sensitivity analysis within the context of a promotional decision regarding a consumer product. Analyses include the development of optimistic/pessimistic scenarios, one-at-a-time sensitivity analysis with a presentation in the format of a tornado diagram, and threshold (break-even) values.

Chai-Na-Ta (Asia) Ltd. is the Hong Kong-based operating arm of Canada's Chai-Na-Ta Corporation, an integrated ginseng firm. The decision has been made to enter the mainland China market and the general manager must make decisions on the entry city, target market(s), product(s) focus, distribution and pricing. Although he has significant knowledge of the Hong Kong market, he is unsure of the degree to which this can be transferred to the mainland markets. The case pushes the student to develop a marketing strategy in a situation in which there is imperfect market information.

Lexmark Canada is the Canadian arm of Lexmark Inc., the global manufacturer of computer printers and related products. Lexmark Canada had reorganized its salesforce into teams of salespeople to manage regions of Canada. This was a fairly dramatic shift from an individual-based structure and compensation system. There was mixed reaction to the change with the Quebec team recently losing two of its three team members. The case addresses salesforce organization and deployment issues, and the factors that need to be considered in making these decisions. It also demonstrates the linkages between sales management decisions, since in this situation reward and recognition, recruitment and selection, and training all needed to be revisited. Finally, it highlights the current shift to team selling in many industries.

P&G has rapidly gained market leadership in Russia with the Always feminine protection brand. The distinctive emerging market strategies employed by P&G are discussed. In planning further market development, the management team faces three decisions: 1) whether to maintain the price premium of Always or to attempt to develop the mid-market through lower priced brands; 2) whether the different marketing strategies employed in different countries in Central and Eastern Europe should be harmonized, especially in light of current parallel importing problems; and 3) whether the feminine protection portfolio should be extended by launching either Alldays pantiliners and/or Tampax Tampons.

The United Way of Massachusetts Bay held the monopoly on workplace giving for 50 years. In the 1990s it has experienced a dramatic change in the workplace itself and in donor attitudes toward giving and toward the United Way organization. This case investigates the implications of these changes on the United Way and explores the tools and messages it can use to market itself, in particular, how to use direct mail and the Internet to create one-to-one relationships with donors.

The steps in the ZMET interview are listed and defined as well as information on using the data.

Palm Computing appears to be the first to have gotten it "right" in the PDA (personal digital assistant) market. Palm Computing has designed a radically new product which will appeal to certain market segments. However, it is unclear how Palm Computing will fare against industry giant, Microsoft.

From a strategic perspective, the Bank of Montreal, a major Canadian bank, has committed to entering the 'virtual banking' marketplace in Canada. There is also the potential to launch later in the USA and Mexico. They plan to do this in a preemptive fashion to gain first mover advantage. This means no extensive pilots and a short time to launch. The decision makers are charged with developing a complete launch strategy. They have two years of tentative ideas to work with, but a number of major decisions on product line, pricing, communications, salesforce, etc. are still to be made. The purpose of the case is to introduce students to the entire scope of marketing decisions to be made in such a situation, including fundamental decisions around targeting and positioning. It also drives students to make decisions in the face of incomplete information and short time horizons. To date, the case has been successfully used to set the stage for marketing management courses, and to kick off marketing management modules in executive development programs. (A nine-minute video can be purchased with this case, video 7A98A025.)

Supplements the (A) case.

A South African health insurance company grapples with designing a financially viable coverage solution for a new prescription drug treatment for male impotence.

Costco Companies, one of the major players in the wholesale club industry, has developed a new class of membership that offers discounted services--auto, health, and home insurance, business credit card processing, real estate services--in exchange for a higher annual fee ($100 vs. $40). The case poses two questions: 1) how should the new membership be marketed, to whom, and how much should be spent on the effort? and 2) what are the potential risks and benefits for Costco, which generated $22 billion in 1997 selling products in bulk, in offering services? Which question is emphasized depends on whether the case is taught in a marketing or a retailing course.

SADAFCO has long enjoyed a dominant position in the milk and ice cream markets in Saudi Arabia. In the mid-1990s, this dominance was under threat as Nestle, Unilever, and Mars all entered the ice cream market. The case outlines the Saudi Arabian ice cream wars.

Robert Bennett, who has a Master's degree in engineering, wants to exploit his idea to combine a refrigerator, freezer, and 500-watt microwave into an 87-pound, 4-foot-high appliance to sell to college students. Bennett must decide which markets to serve, which competitors he must contend with, with whom to collaborate, and what core capabilities to build.