strategy has focused primarily on responding to inquities and bringing in GCT’s technical people as the situation seems to require. Potential customers with technical questions are some- times referred to other noncompeting customers already using the materials or to a GCI plant—to be sure that all questions are answered, But basically, all producer-customers are treated ‘more o less alike. The sales reps make ealls and try to find ‘good business wherever they ean. Each GCT sales rep usualy has a geographic area. If an area like Detroit needs more than one rep, each may specialize in ‘one or several similar industries. But GCI uses the same basic approach—call on present users of plastic products and try to find opportunities for getting a share (or bigger share) of exist- ing purchases or new applications. The sales reps are supposed to be primarily order getters rather than technical specialists ‘Technical help can be brought in when the customer wants it, ‘or sometimes the sales rep simply sets up a conference call between GCT's technical experts, the buyer, andthe users atthe buyer's facility Kenneth sees that some of his major competitors are be- ‘coming more aggressive. They are seeking to affect specfica- tions and product design from the start rather than after a product design is completed. This takes a lot more effort and resources, but Kenneth thinks it may get better results. A major problem he sees, however, is that he may have to drastically change the nature of GCT's promotion Instead of focusing pri= ‘marily on buyers and responding to questions it may be neces- sary 0 ty to contact ail the multiple buying influences and not ‘only answer their questions but help them understand what {questions to raise—to find solutions. Such a process may even require more technically tained sales reps. In fact, it may re- {quite that people from GCTs other depariments—engineering, design, manufacturing, R&D, and distribution—get actively involved in discussions with their counterparts in customer firms. Further, use of e-mail and a website might make ongo- ing contacts faster and easier. ‘While Kenneth doesn’t want to miss the boat if changes are nceded, he also doesn’t want to go off the deep end. After all, ‘many of the firm's customers don't seem to want GCI to do anything very different from what it’s been doing. Tn fact, some say that they're very satisfied with their current supply ar. rangements and really have no interest in investing in a close relationship with a single supplier. Even with the Flex project, Ford wasn't 100 percent dedicated to the tearn approach. For example, when Ford's research showed thatthe target matket viewed quiet and comfortable seats as an especially important {actor in purchases, Ford didn't turn to @ supplier for help but rather assigned a team ofits own design engineers to develop and test them in-house. Now some of what was learned on the Flex project is going to be used in redesigning other models. Contrast Ford's previous approach of designing and pro ducing cars to Flex’s program management approach, espe cially as it might affect suppliers’ promotion efforts. Given that ‘many other major producers have moved inthe program man ‘agement direction, what promation effort should Kenneth Shi bata develop for Geonove Chemical? Should every producer in every geographic area be treated alike, regardless of size? Explain 22. Bright Light Innovations: The Starlight Stove* ‘The top management team of Bright Light Innovations is preparing to meet and review its market situation, The team is a combination of students and faculty from Colorado State University’s (CSU) Colleges of Business and Engi- neering: Dr. Bryan Wilson, Paul Hudnut, Ajay Jha, Sachin Joshi, Katie Lucchesi, Dan Masthergen, Ryan Palmer, and ‘Chaun Sims. ‘They are excited about the Starlight Stove product they have developed—and passionate about the op- portunity that it provides to improve the quality of life for some of the world’s poorest people. They know they have a ‘great technology, but they need a marketing plan to bring this product to market. Every day, more than 2.4 billion people—more than one~ third of the world’s popwdation—burn solid biomass fuel (wood, charcoal, dung, and coal) for cooking and heating. ‘These fuel sources are usually burned indoors in open pits or traditional cook stoves. About two-thirds of the people using ‘biomass fuel also have no electricity, so the open fires often ‘burn into the night to provide light. These fires create indoor air pollution, which is a leading contributor to respiratory diseases. U.N. Secretary General Kofi Annan has called for This ass based on a sings plan writen by Ajay Tha, Sahin Yoshi. ‘Ke Luceesi Dan Mastergen, Ran Pale, and Chau Sis eater energy efficiency and noted that “indoor air poll tion has become one of the top 10 eatises of mortality and premature death.” ILis estimated tha this source of pollution contributes each year to the deaths of 1 million children younger than the age of 5, and itis a leading cause of mis ‘carriage and women’s health problems Hoping to address these consumers’ needs for safe cooking and eleeticty, CSU’s Engines and Energy Conversion Labo: ratory developed the Starlight Stove, The Starlight Stove's im: proved technology requires 50 to 70 percent less biomass fuel than traditional stoves. I also has a thermoelectric generator that converts heat from the stove ino electicity that can power 1 small lightbulb or be stored in a rechargeable battery for later use. The technology has been refined, and the team believes it is ready to go to market. ‘There are other competing enclosed cookstoves, but none produce electricity. Solar panels can provide electricity, but they are expensive—costing $360 each, Micro-hydropower allows households to convert the power from streams and rivers into clectcity, but homes must be clase toa river, and water flow in ‘many areas of the country is seasonal. These technologies — solar panels and hydropower—are understood by many con. sumers and are alzeady in use in some areas. The Starlight Stove, on the other hand, offers a new technology, and that may slow its adoption.‘The management team decided on Nepal asthe intial target market forthe Starlight Stove, Several factors made this market particularly attractive. The climate is relatively cold, and only 11 percent of the households have access to electricity, so the hheat and electricity production of the stove are particularly beneficial. Eighty-eight percent of the population uses firewood as their main source of energy. In addition, deforesta- tion creates environmental problems in Nepal because it con- tributes to erosion and flooding. So the social benefits of the Starlight Stove will be particularly appealing to the Nepalese ‘government and aid organizations “There are approximately 9.2 million households in Nepal, but, the gross national income per capita is only about $400, with ‘most adults making betwoen $1 and S3 per day. Nepalis largely rural, with only 17 percent of the population living in urban at- cas, The country is divided into 75 districts, Each district is fur- ther divided into about 60 village development committees (8 sox of local government) consisting of about 450 households ‘The similar characteristics of northern India—immediately south of Nepal—make ita logical follow-up market ‘The Starlight Stove offers several benefits to this popula- tion. For example, the longer hours with light—thanks to the electticity—and less time requited to collect wood or other fuel could allow families to eam money by weaving, farming, ‘or producing other crafts, Family productivity could increase 20 pervent or more per day. Or the added hours with light ‘might allow children to gain an education. Ifthe product were ‘manufactured locally, it could provide jobs for the population and help them learn the benefits of technology. 23. Schmidt Furniture Rosann Schmidt, owner of Schmidt Furniture, is discour- aged with her salespeople and is even thinking shout hiring some new blood. Schmid has been running Schmidt Purniture {or 10 years and has slowly built the sales to $3.5 million a ‘year. Her store is located on the outskitts of a growing city of 275,000 people. This is basically a factory city, and she has doliberately selected blue-collar workers as her larget market, She cazzies some higher-priced furniture lines but emphasizes ‘budget combinations and easy credit terms, Schmid is concerned that she may have reached the limit of her sales growth—her sales have not been increasing during the last two years even though (otal furniture sales have been increasing inthe city as new people move in. Her local cable ‘TV spots, newspaper advertising, and some ads on the local newspaper website seem to attract her target market, bul many ‘of these people come in, shop around, and leave. Some of them ‘comie back—but most do not. She thinks her product selections are very suitable for her target market and is concerned that het salespeople dos't close more sales with potential customers Several times, she has discussed this matter with her 10 sales- people. Her staff feels they should treat customers the way they personally want to be treated, They argue that their role is to answer questions and be helpful when asked—not to make suggestions or help customers make decisions. They think this would be too “hard sel, 646 With obvious benefits for such a large number of people, the Bright Light Innovations team could look to donations to subsidize the Starlight Stove for the Nepalese people, But the team has concerns about this traditional form of aid, Financing in the form of grants, government relief, or donations is unrel able. If it is not renewed, projects wallow or die. Further, grants often fail to teach disadvantaged people skills and re sponsibility. So the team wants to create a sustainable venture that provides benefits for all—and has set up Bright Ligh In ovations as a for-profit business. “The management team has to make a number of marketing decisions, For example, it has to decide how to price the Star light Stove. It estimates that the stove will cost about $60 to ‘manufacture after setting up a plant in Nepal and expects that ‘microfinancing organizations will provide loans for families. IE units are sold for $80, the loan can be financed at 20 percent interest for three years with payments of $0.68 per week (ri crofinancing institutions typically collect on a weekly, or sometimes daily. basis). The team thinks that it will be easy to find a microfinancing institution to provide these loans. But the team is sil unsure about whether this price will provide adequate margins for distributors ‘The team also has to decide how to promote the stove to a population where less than half the adults can read. However, the (eam does have contacts with some business leaders, gov ernment officials, and nongovernmental organizations that may be able to provide advice and help Whar should be she marketing strategy of the Bright Light Innovations team for the Starlight Stove? Why? ‘Schmidt says their behavior is interpreted as indifference by the customers attracted to the store by her advertising. She has tied lo convince her salespeople that customers must be tweated on an individual basis and that some customers need ‘more help in looking and deciding than others. Moreover, ‘Schmidt is convinced that some customers would appreciate ‘more help and suggestions than the salespeople themselves ‘ight want. To support her views, she showed her staff the data from a study of furniture store customers (see Tables I and 2) that she found on the Internet website for a furniture trade association, She tried to explain the differences in demo- ‘graphic groups and pointed out that her store was definitely luying to aim at specific people. She argued that they (the salespeople) should cater to the needs and attitudes of their teustomers and think less about how they would like to be lueated themselves. Further, Schmidt announced that she is considering changing the sales compensation plan ot hiring new blood if the present emplayees can't do a better job, Cur rently, the sales reps are paid $26,000 per year plus 2 5 percent ‘commission on sales. Contrast Renee Carson's strategy and shoughts about her salespeople with their apparent view of her strategy ‘and especially their role in it, What should she do now? Explain