Professional Documents
Culture Documents
PART IV
A. Visit the websites of fashion clothing companies Zara (www.zara.com) and H&M
(www.hm.com). What do these sites tell you about the targeting and positioning strategies
being pursued by these companies?
Interestingly, while they are apparently quite similar fashion apparel retailers, examination of their
strategies suggest some interesting differences in their strategies. The two companies share an
increasingly global perspective in their international chains of stores, considerable supply chain
strength and a focus on “fast fashion” at low cost. However, Zara apparently targets a slightly older
and more fashion conscious consumer, while H&M targets a younger fashion market. Both firms
have prospered by maintaining this positioning relative to each other. However, as both firms
expand there is a risk that they will end up in head-on competition for all younger fashion buyers.
The issue will then become which firm has the greater appeal across age-groups and fashion-
orientation.
B. What does Google’s website (www.Google.com) tell us about the company’s ability to
collect information about individuals and businesses? What privacy issues arise, and how can
they be resolved?
It is clear from Google’s own descriptions of its operations and more general commentary on the
Web that the search engine business has the capacity to store search behavior characteristics for all
Google users. It is the patterns in those search behaviors that provide the ability to target online
advertising and other communications to relevant buyers. However, the business is also surrounded
by some controversy regarding whether it is appropriate to collect and store information which is
revealing of the behavior of individuals and businesses and which they may prefer not to have
collected, stored and used to identify them for commercial purposes. Indeed, Google has itself
imposed some limitations on the time for which it will retain such data. However, considerable
concerns also surround the ability of Google’s processes to share information about online behavior
with others. Information sharing for commercial uses (online advertising and promotion) may be
broadly acceptable. However, sharing information regarding individual behavior with government
agencies or law enforcement may pose ethical dilemmas for many people—particularly, for
example, if information is shared with government agencies in non-democratic states. Such
dilemmas can only be resolved by Google itself, as it responds to the concerns of society.
C. Review the McKinsey & Co. website. Are there indications that the consulting company is
market-oriented?
The website is www.mckinsey.com. There are several indications of this company’s efforts to
provide customers with superior value. For example, customer focus is evidenced by the extensive
use of reference sites (successful) projects, to reassure users of the firm’s credibility. The site
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Part IV – Internet Application Guidelines
provides much information about leading consultants. Two major concerns of consultancy clients
relate to the firm’s experience and the quality of its people. The company’s mission is to help its
clients make distinctive’ lasting, and substantial improvements in their performance and to build a
great firm that attracts, develops, excites, and retains exceptional people. The projects described on
the site emphasize the cross-functional nature of McKinsey projects. The site provides an extensive
intelligence and news service for clients. While it is not possible to exactly evaluate McKinsey’s
cross-functional working and their competitive intelligence capabilities, the website is strongly
suggestive of a total business perspective that focuses on offering superior value to clients.
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Part IV – Internet Application Guidelines
CHAPTER 2
This site provides numerous examples of the new types of research and market tests which are
becoming available to evaluate the effectiveness of alternative Web strategies and website
developments. The current phase of this innovative program includes a large online consumer
panel, a virtual laboratory, a demonstration e-commerce site, and the analysis of clickstream data
sets of Web navigation behavior, as part of the researchers’ eLab work. In addition, the eLab offers
an extensive list of research papers available for download. This site is an exciting demonstration
of the research challenges and resources faced by Web-based marketing strategies.
More generally, it is clear that the Web is incredibly rich in information about markets and
competitors, much available free of cost. Students can list types and examples if marketing
information is available. The list might include:
• Competitors’ websites—choose any market and compare several of the market leaders in
strategy and performance
• International markets—go to the CIA website https://www.cia.gov/library/publications/the-
world-factbook/index.html for up-to-date economic and market data on countries throughout
the world
• Market characteristics—select a product-market and search it through Google to uncover
press and analyst commentaries.
Hoover’s online portal affords its paying users many options to conduct competitive, industry and
market analysis. Information is obtainable on most major companies in the world, including their
subsidiaries. Financial data is available for quarterly and annual performances. In addition, one can
obtain benchmark information on each company’s competitors and learn about the industry.
Investment reports published by the major investment houses of the world can be retrieved as well
as information on products and operations, key people, news and other items of interest.
The information provided on www.hoovers.com is useful for a beginning understanding of a
company to be analyzed. In many cases this might suffice, especially when one only needs a high
level understanding of the business, industry, or market. However, in other instances the
information has to be supplemented with data retrieved from other databases, Securities and
Exchange Commission (SEC) filings, information from corporate intelligence findings etc.
Nevertheless, www.hoovers.com is a valuable starting point for any type analysis on companies,
industries and markets.
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Part IV – Internet Application Guidelines
C. Johnson & Johnson is currently competitive in the surgical stent market (a device inserted
surgically in an artery to enable blood flow). Perform an Internet analysis of the stent market
indicating past and current unit sales levels and forecasts for 2006-2010.
The stent market consists of the regular stent and the newer drug-coated version. Initially, sales
shifted toward drug-coated stents but the publicity associated with potential risks with the drug-
coated version had negative impacts on sales of Boston Scientific Corp. and Johnson & Johnson.
One study based a two-year analysis of 2,300 patients in 14 countries stimulated concerns about the
safety of drug-coated stents (see “Drug-Coated Stents are Questioned,” WSJ, 09/05/07, D7;
http://online.wsj.com/article/SB118895132186017540.html). Interestingly, a Swedish study of
35,000 patients found no differences in the risks for coated and regular stents. Boston Scientific’s
sales in the first quarter of 2007 were $468 million, down 26% from Q1 2006 (see Value Line
Investment Survey). Students should separate forecasts into regular stents and drug-coated stents. It
is also important to forecast U.S. domestic sales and international sales. Sales in Europe and Japan
are substantial.
D. Samsung Electronics is one of the top producers of cell phones. Draw from Internet
sources to prepare an analysis of the global cell phone market.
The top three global producers of cell phones in 2010 were Nokia, Samsung, and LG. Nokia’s
market share was around 28% world wide in 2010. China was Nokia’s top market, followed by
India, Germany, Russia, and United States. Nokia’s net sales in 2010 were 53 billion USD.
Industry sources should have available data on industry sales and growth projections. Nokia’s
website has company sales data, which can be projected to industry sales using the market share
estimate (http://www.nokia.com/global/about-nokia/investors/financials/financials/).
The students may visit the following link to get Samsung’s performance:
http://www.samsung.com/in/aboutsamsung/corporateprofile/ourperformance/samsungprofile.html
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Part IV – Internet Application Guidelines
CHAPTER 3
The traditional concept of market segmentation, specifically companies gaining vast access to
consumer data and using it as a competitive advantage, may quickly become obsolete. Information
from the Web, specifically from the above sites, is becoming more readily accessible to consumers
and could replace traditional venues such as articles and advertisements in newspapers and
magazines. Whereas information from these traditional sources are presented in one dimensional,
black and white ads, the Internet offers colorful, multimedia, and interactive advertisements. Using
the Internet, customers can more effectively search for goods and services. Sites can be customized
for specific users. Thus, Internet advertisers and companies can gain much information quickly
about customers using their site. They have access to their customers’ unique interests by viewing
which sites they visit most frequently. Because of the ease and speed of use, consumers may prefer
searching for information on the Internet rather than looking through a magazine or newspaper.
For example, www.autosite.com offers to consumers a variety of information concerning the
purchase of a new or used car. The site has pictures of models of different cars, used car reports,
and classifieds built into the site. The site also offers a loan/lease calculation function where
customers can figure out their payments on a new or used car. Consumers have access to book
value reports and advice on owning a car such as repairs, maintenance, insurance quotes, financing,
and warranties. When customers use this site, the company gains information on the customers’
desired product, preferred features, as well as demographic information.
Thus, such Internet marketers alter the traditional market segmentation process. Internet marketers
can gain a larger amount of information than the traditional marketers can in less time. This
eliminates the traditional marketer’s previous competitive advantage. In order to compete with the
Internet, traditional marketers will have to collaborate or partner with Internet marketers to gain
their previous wealth of knowledge.
B. Evaluate the following site for additional ideas and material concerned with market
segmentation and the types of support that can be provided for companies:
www.marketsegmentation.co.uk.
This webpage has been designated a “Cool Site” by the Open Directory because of its clarity and
free downloads. The site provides an extremely pragmatic operational approach to segmentation
developed from a consultancy perspective. It provides a number of pages relating to how to define
markets, market mapping and market segmentation to enhance company strategy and profitability.
The site is also popular because it is possible to download a free presentation on market
segmentation.
This site can achieve two things: it can reinforce the practical issues to be addressed in developing
market segmentation strategies for companies, but it also underlines the growing availability of
resources on the Web to support strategic development in companies and executive education.
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Part IV – Internet Application Guidelines
CHAPTER 4
A. Visit the website of SalesForce.com. Based on the information provided discuss how can
SalesForce.com contribute to a company’s CRM.
SalesForce.com has displayed strong revenue growth with $51 million in 2002 to nearly $1 billion
in 2008. It is the leading producer of on-demand CRM services. SalesForce’s business model
provides customers management software over the net which can be used by salespeople. The
service is sold on a subscription basis to companies, enabling them to avoid the high fixed costs of
software development. The Internet information technology contributes to salespeople’s
capabilities. The worldwide services are probably more attractive to smaller and medium-size
companies, providing them CRM software at attractive prices. Of course, the standardized software
does not provide the features of software designed for a company’s specific needs.
B. Visit one of the websites discussed in Exhibit 4.3. Discuss how the website may be useful to
a company in its CRM initiatives.
The brief descriptions in Exhibit 4.3 provide an overview of what each website offers. Another
useful information source is E-Commerce News: CRM Industry News. The service provides
articles and news that should be of interest to professionals and managers involved in CRM
activities. The August 20, 2007 Industry News included an article on “Where Is the Industry
Headed?” Included were interviews with six of the top CRM software firms, including the director
of product marketing at Salesforce.com [www.ecommercetimes.com].
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Part IV – Internet Application Guidelines
CHAPTER 5
A. Revisit the list of major marketing research agencies in Exhibit 5.3. Visit several of the
websites listed. Examine the major types of information provided both as standardized
services and special study capabilities. List these and identify the ways in which such
resources can impact on marketing decisions.
The purpose of this exercise is to build some familiarity with the resources provided by leading
marketing research agencies both in standardized services—panels, market reports, etc.—and in the
capabilities for undertaking special studies to address particular issues. The exact listing will
depend on which sites are selected, but the tabulation should have the following structure:
A number of interesting issues are raised about the quality of information in the context of making
strategic decisions rather than just the technical quality of data collected, and the likely costs of
information to be balanced against benefits.
B. Select a well-known company or brand and use a search engine to find Web pages that
include its name. Review the content of blogs and online reviews, and examine the lessons
that the company should learn from this feedback. Discuss the impact of Internet-based
information on traditional ideas about confidentiality and privacy.
This exercise provides the chance for creative trawling through the diverse Web information and
opinion concerning a company and its brands. Results should encompass: performance and news
from the company’s own website; financial analysis from services like Hoovers capsules and other
collation services; up-to-date stories from the financial press and journals; distributors associating
themselves with the company or brand in question; competitive and price comparisons; customer
chat rooms and bulletin boards; and, in some cases even customer pages that criticize the company
or its products—XYXCorpSucks.com and the like. Formal online reviews may be informative, but
blogs are likely to be even more insightful into customer perceptions.
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Part IV – Internet Application Guidelines
The goal of this exercise is to demonstrate the amazing amount that can be learned about a
company by a simple Web search. There are fewer and fewer hiding places! Reports based on Web
searches can be enormously revealing about companies that may be competitors or potential
alliance partners, or suppliers or major customers. They also underline how much other
organizations can learn about our own company. They frequently dispel many traditional views
about what is confidential in business and about issues of privacy. These last questions can be the
subject of an interesting discussion about changing behavioral standards driven by technological
revolution, contrasted with the possible need to control technology to preserve integrity.
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Part IV – Internet Application Guidelines
CHAPTER 6
A. PepsiCo competes in the United States and many other countries. Consider how Pepsi may
utilize maps in analyzing and selecting market targets (see www.nationalgeographic.com).
A large and diverse company such as PepsiCo that operates all around the world needs to carefully
plan and execute its market targeting strategies. A thorough analysis of different population
segments is necessary to determine specifically with whom to communicate and whom to select for
special type promotions and other marketing initiatives designed to best place products and service
offerings in the marketplace. Maps as available online can help to divide a population, nationally or
globally, according to various criteria. For example, the Census data provide information on
household income, racial and ethnical background, education level, and many other categories
useful for the marketer. PepsiCo, over the course of its history has collected valuable information
on customer habits and preferences that it can use to supplement the information retrieved from
demographic data sources, such as the Census. It may know that less affluent population segments
prefer the usage of a special type of carbonated beverage or chip snack and then, utilizing maps,
devise its marketing communication strategies accordingly (e.g. run promotional ads on regional
TV stations where appropriate). Very often, multi-nationals such as PepsiCo, find that people in
different countries desire products to be localized and adapted to their particular tastes. Here, Pepsi
can use country maps to determine where there is overlap (e.g. Germany, Austria, and German-
speaking Switzerland may require a similar product mix) and where there are differences.
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In 2007, McDonalds’ positioning initiatives in the U.S. included a few new/modified products,
advertising and sales promotion, and Internet initiatives. Price was not being used as an active
competitive component, although specials such as $1.00 hamburgers were offered. In 2003
McDonald’s launched major positioning initiatives designed to strengthen consumers’ brand
preferences. Advertising and sales promotion played a key role in moving the fast-food chain
toward higher sales and profits. The product SnackWrap was also a contributor as well as expanded
breakfast products.
Important positioning issues that are relevant to McDonald’s in the decade ahead include:
• Product strategy changes.
• Possible sale of Boston Market.
• Brand building initiatives.
• International expansion.
• Increasing gasoline prices for customers.
Cisco Systems is the leading supplier of high-performance networking products for linking local-
area and wide-area computer systems networks. Sales were expected to reach $39 billion in 2008
and profits were strong. Product strategy is a core positioning component for Cisco’s targeting of
its business customers. The large business-to-business salesforce is also a key positioning
component. Sales to phone companies are essential to Cisco and industry consolidation has
presented challenges. Innovation relevant to the phone companies has been emphasized.
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Part IV – Internet Application Guidelines
CHAPTER 7
Strategic Relationships
A. Visit the website www.alliancestrategy.com and review the presentations and material
available at the site. Summarize what factors should be considered in making alliances
between organizations effective.
This site provides an extensive array of supplementary materials concerning the effectiveness of
strategic alliances from numerous sources. There are a variety of downloads—articles, reports and
presentations; an up-to-date news service around prominent alliances; web-cast seminars on
alliances issues, and descriptions of consulting projects completed in the alliance strategy area.
These resources provide a basis for developing a view of the rationale for alliances (market,
resource, capabilities or technology access, etc.) and the commonest problems faced in making
alliances effective (common interests, balance, liaison mechanisms, control measures, etc.)
There are many interesting elements in the Amazon.com business model, but one of the most
critical is the evolving set of relationships that the company must manage as it extends its
operations. At the outset, Amazon set out to sell books without incurring the costs of inventory by
sourcing books from third parties in response to customer orders. The partnering with “Amazon
Associates” involved other websites providing links to Amazon for their site visitors, and receiving
a commission on any sales made by Amazon to those customers. Founder, Jeff Bezos, is quoted as
saying that the future for Amazon is in being a broker who helps people find things on the Web,
and takes a commission from sellers as a reward for putting them in touch with buyers. For
example, zShops and the Amazon Commerce Network allow space for smaller suppliers to sell on
the Amazon.com website, in return for a 1-5% commission on sales. Important new alliances are
extending the business model further.
Considering which of these relationships—which include customers, suppliers, and collaborators—
is the most critical is an interesting debate. Managing suppliers is critical to operating the business
model with minimum inventory costs and effective fulfillment of customer orders. Collaborations
are critical to extending the product range, geographical coverage and building the scale of the
operation. However, the relationship with the customer probably remains the most important on the
grounds that only by maintaining the strength of that relationship can customers be retained and
become the marketplace for the new extended ventures.
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Part IV – Internet Application Guidelines
CHAPTER 8
A. Visit the website of the Gap (www.gap.com). Discuss how the web can be used in new-
product planning for a bricks-and-mortar retailer such as the Gap.
The Gap can utilize the Internet in several ways for its new product planning efforts. Customer
purchases realized through Gap’s online store could be much easier tracked and valuable marketing
data derived from transactions occurring online. New promotional programs and product offerings
could be potentially test-marketed online to gauge consumer interest and adoption before incurring
the expense of launching these initiatives in the brick-and-mortar stores. Mass customization can
be easier realized using specific customer data retrieved from user input and fed to manufacturing
outlets. Direct online customer feedback forms could provide a valuable tool for the Gap to query
the end-consumer.
Moreover, online customers are enabled to specify the design of the clothes they wish to buy from
Gap. Here the company has the opportunity to use mass customization technology in order to
personalize clothing for its customers. Further, the Internet allows Gap to announce new product
innovations faster than through any other medium. Customers can essentially be included in the
idea generation process for new products through online panels and the like.
Virgin offline as well as online sticks its name on virtually any conceivable enterprise. The
Virgin.com website merely serves as a portal for several of the existing businesses under the Virgin
umbrella. Virgin’s online businesses are poised to support the company’s brick-and-mortar
ventures by allowing customers easier access and the comfort of being able to conduct their
business at home. However, just as with Virgin’s myriad of ‘physical undertakings’, the online
world of Virgin is beginning to look a bit too cluttered and the company might be in danger of
losing its focus. While it is commendable to offer one’s clientele a wide variety of products and
services a concentration on what one does best has still often proven superior over an all-inclusive
strategy. Amazon.com in the United States was often bashed for going into too many directions at
once. Virgin might run the risk of becoming the Amazon of the UK.
A key issue concerning the Virgin Group’s entry into new business areas is evaluating the
company’s distinctive capabilities. While the brand is familiar to a huge population base, the
identity does not logically extend to a diverse range of product categories. The danger, of course, is
possible weakening of the core brand equity.
C. Dell Inc. is expanding its product portfolio. Go to www.dell.com and describe the product
categories in which Dell competes.
Dell Inc. lists its products around its key market targets: for home; for small and home office; for
small and medium business; for education, government, and healthcare; and for large enterprise.
For the major traditional Dell sectors, products consist of:
• Personal computers—work stations, desktops, laptops and handheld machines
• Servers, storage and networking products
• Printers, projectors and other peripherals
• Software
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Part IV – Internet Application Guidelines
However, the home and small and home office category shows radical changes to the Dell product
portfolio:
• Laptops and Ultrabooks
• Desktops and All-in-Ones
• Alienware
• HDTVs and Home Theater
• Electronics, Software, Printers and Ink
• Monitors
• Laptops, Ultrabooks and Tablets
• Desktops, Workstations and Thin Clients
• Servers, Storage and Networking
• Printers, Ink and Toner
• Electronics, Software and accessories
This analysis raises several important questions about Dell’s capabilities for marketing and
servicing products in the home and small and home office marketplace, as well as the issue of
relationships with suppliers like Sony (a minor player in PCs but a major player for televisions and
media products where Dell is now competing. It is interesting to attempt to reconstruct the strategic
logic which has led Dell to expand its product portfolio in this direction, and to evaluate whether
the Dell direct business model has good fit with this new direction.
D. Visit the Hennes & Mauritz website and compare H&M’s product offerings with those
offered by Gap (www.gap.com).
The Hennes & Mauritz website is www.hm.com. On the face of things both H&M and Gap very
similar retailers—both are fashionable apparel sellers, both are international, and both rely heavily
on supply chain expertise to deliver customer value. But, the differences between H&M and Gap
are clear in their product offerings—both in functionality and design. There is some small overlap
in terms like the “updated classics”, although here H&M is substantially cheaper. While Gap has
moved up the market towards the position previously held by Banana Republic—i.e., smart casual
wear—H&M has moved to dominate the younger, “cheap chic” marketplace. Interestingly, H&M’s
performance with its “cheap chic” concept in the young fashion marketplace globally has been very
effective, at a time when Gap has been struggling with its competitive position and financial
performance.
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Part IV – Internet Application Guidelines
CHAPTER 9
A. Examine the Fortune Brands website (www.fortunebrands.com). Analyze and evaluate the
strategic initiatives used by Fortune Brands in their strategic brand management.
B. Visit the website of lastminute.com (www.LastMinute.com). Map the business model used
by this Web brand. Review the strengths and weaknesses of the model, and consider how the
brand has been established and how it may be extended.
A tour of the LastMinute.com website reveals the company’s ethos to be: a five-star lifestyle for
three-star cash. The products and services on offer are organized into Hotels, City breaks, Flights,
Holidays (including luxury and budget travel, car rental), Car hire, Spa, Theatre, Restaurants
(including takeaway food), Entertainment, and Experiences.
The LastMinute.com business model could not operate without the Web, which provides the last-
minute marketplace linking buyers and sellers, but with no involvement in fulfillment. The
business is genuinely a “Web brand”, providing information and customer service and taking a
commission from suppliers. The business model can be mapped very simply:
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Part IV – Internet Application Guidelines
Consumers
Information
Order
Fulfilment
LastMinute.com
Information Commission
Suppliers
The history of this company and its Web-based operation also illustrates the requirements for
building a Web brand to be similar to those for any successful brand. LastMinute.com used all the
conventional means of advertising and publicity in the press and elsewhere to establish brand
awareness and the values associated with its brand. There was never any question that because it
was a Web brand it would only advertise on the Web. The company’s history shows the potential
for brand extension in the move from travel and theater tickets into a range of services for the “cash
rich, time poor” consumer.
C. Go to www.e4m.biz, operated by the U.K.’s Marketing Council. Register at the site and
choose the Business-to-Consumer area, and the Brand Consistency option under Strategy
Area. Review several of the short cases describing how major companies are striving for
consistency in their brand identification while using multiple channels including the Internet.
What conclusions can you draw regarding the requirements for brand consistency across
multiple channels?
This website is a free service offered by the Marketing Council in the U.K. There are a variety of
cases and links to other websites for further information, covering both Business-to-Business and
Business-to-Consumer cases. There are pages concerned with several important aspects of e-
marketing, such as customer retention and building customer loyalty, but the focus here is on
managing a consistent brand experience across multiple channels.
Under the topic of brand consistency, the site offers a group of 12 company examples, each with a
synopsis, a downloadable summary, and links to other websites for further information. These
cases are extremely up-to-date, and reflect the experiences of well-known companies. The owners
of the site promise to update and extend the cases available.
This material provides the basis for a discussion of how the consumer’s experience of the brand
may be different across different channels (particularly the Internet channel compared to the
conventional) and the problems that this poses for companies who rely on a consistent brand
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Part IV – Internet Application Guidelines
identification as perceived by the consumer. The cases from the site provide examples of how
different companies have faced up to this challenge.
Yahoo! is widely recognized as a premier online brand globally and is seen by some as a prototype.
The Yahoo! products are listed on the website. Yahoo! developed through a focused brand strategy
built around a family of media products. Initially a portal with search facilities, Yahoo! invested in
building a credible, sustainable and likeable brand. Initially, extensions were close to the original
Yahoo! Concept—for example, localized versions of Yahoo! for overseas countries, or even cities
like San Francisco; Yahooligans!, a web guide for children; and, My Yahoo!, a web guide
customized around individual preferences. More recent additions to the portfolio have included
ventures like Yahoo Platinum—a premium online video and audio service—and Yahoo! web
hosting. More recent extensions to the family of media products have been consumer electronics
(through an alliance with the manufacturer) including home theater systems and DVD players.
Yahoo! is an interesting example of the development and extension of an online brand.
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Part IV – Internet Application Guidelines
CHAPTER 10
Value-Chain Strategy
The Body Shop’s distribution network is concentrated on retail outlets owned by The Body Shop.
There are around 2400 shops in 61 countries, although 70 percent of them are franchised. They also
offer a catalog, and in the U.S.A., U.K., and Australia offer an in-home sales facility for
consumers. Aveda distributes its products primarily through intermediaries or free-standing Aveda-
owned stores selling only Aveda products. These intermediaries are hair care salons designated as
either an Aveda Concept Salon or an Aveda Distributor. The free-standing stores are Aveda
Lifestyle Stores. Both The Body Shop and Aveda offer a range of products from hair care to
cosmetics. However, Aveda must zealously protect its distribution network from unauthorized
distribution by intermediaries. Aveda is concerned that these intermediaries will not uphold the
image and standards of the brand. Aveda even maintains strict regulations for use of the Aveda
name in websites by authorized distributors. Aveda provides extensive education and training for
its re-sellers. The Body Shop sells direct to end-users and avoids much of the conflict with
intermediaries. However, The Body Shop has experienced problems in maintaining its share price
and is facing more intense competition and challenges in management of its retail outlets. The
Body Shop exited from manufacturing to concentrate on retailing but has lost substantial ground to
competitors like Bath & Body Works and more general pharmacy/drug store chains with imitative
products.
B. Go to the site of the Agentrix (www.agentrix.com) and review the public pages describing
the history, membership and operation of this international online exchange for retailers
(combining the earlier online exchanges the Global Exchange Network and the Worldwide
Retail Exchange). Identify and list the ways in which the exchange alters distribution strategy
for suppliers, and the impact on consumers.
Online exchanges have demonstrated mixed success in actually performing in several sectors.
Nonetheless, they remain an extremely significant potential for radically altering buyer-seller
relationships in the value chain with some major effects. Retailer online exchanges like Agentrix
represent many of the world’s largest retail groups with very substantial sales revenue.
Touring the site provides insight into the history and membership, but also the growing range of
added-value services provided to members, e.g., collaboration software for suppliers to plan private
label production with retailer customers; reverse and forward auctions and negotiation facilities;
group buying facilities to pool demand among members and buy together; supplier catalog
searching; assistance with logistics and international trade controls; and a framework for
collaborative planning.
There are a number of clear impacts of this type of online exchange already apparent. The
exchange consolidates the buying power of major retailing groups—they can source products
globally, compare prices and specifications, and negotiate on the basis of that knowledge.
Suppliers, particularly of unbranded products, must compete with competitive sources of those
products throughout the world—for example, with producers enjoying lower local wage-rates and
cost structures in overseas countries. In addition, the online exchange provides the framework for
the retailer not just to negotiate lower prices from suppliers, but also to intervene more directly in
the upstream part of the value chain—e.g., locating cheaper sources of raw materials and packaging
for its suppliers, to exert further leverage on prices.
Part IV-17
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Part IV – Internet Application Guidelines
Effects on consumers are less clear. There is the potential for lower prices of goods where the
online exchange provides a mechanism for retailers to cut costs further in the value chain. There is
also the possibility of greater product choice, since the retail assortment reflects the global
availability of new products. There may, however, also be concerns about product quality as more
components and packaging are sourced internationally, and that consumer choice will be restricted
as retailers prefer to reduce assortment size to reduce costs and avoid low-volume products.
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Part IV – Internet Application Guidelines
CHAPTER 11
Pricing Strategy
A. Explore the web site of British Airways (www.ba.com). Consider how the website can
facilitate price discrimination.
Price discrimination, especially in the airline market will become increasingly difficult in the
future, considering the rising transparency and availability of online booking options. There are a
myriad of sites offering travel related services, most prominently flight reservation and booking
services. However, airlines have increasingly re-directed traffic to their own websites by making
special deals and discounts available only there. British Airway’s loyalty program is called the
Executive Club, featuring multiple tiers, has benefits such as access to special lounges and
dedicated ‘fast’ queues. BA also invites its top corporate accounts to join a “Premier” incentive
programme. British Airways operates airside lounges for passengers travelling in premium cabins
and these are available to certain tiers of Executive Club members. First class passengers, as well
as Gold Executive Club members, are entitled to use First Class Lounges. Business class
passengers (called Club World or Club Europe in BA terms) as well as Silver Executive Club
members may use Business lounges. Often, at airports in which BA does not operate a departure
lounge, a third party lounge is usually provided for premium/status passengers
(http://en.wikipedia.org/wiki/British_Airways). These indirectly facilitate price discrimination.
Further, the British Airways website has the facility for potential customers to sign up for British
Airways’ Executive Club programme. This allows British Airways to specially target these
customers with fare promotions suited to individual needs. The information gained through the
online sign-up procedure will allow British Airways to complement its database and intelligently
plan promotions and special discount deals and individualize its offerings. It is important to be very
careful about charging different prices, however, so as to not offend customers who might learn
about the different prices offered.
B. Visit the website of Amazon.com. Evaluate Amazon’s pricing strategy. How do its prices
compare to those of “brick and mortar” retailers? Critically evaluate the company’s product
offering and identify potential market segments.
Amazon.com is one of the largest online retailers in the world, offering a vast array of products and
services either on its own or in conjunction with one of its strategic alliance partners.
Amazon.com’s expansion out of its core business, online book selling, allowed the company to
capture a larger share of the whole e-commerce pie than before. The company’s pricing strategy
compared to brick and mortar establishments was initially to offer low prices for premium
products, providing fast and reliable service. In the beginning of its corporate history, Amazon
even subsidized the shipment of its products to ensure timely delivery. The online retail giant made
profits for the first time in Q4 of 2001. However, recently the company has begun to up its prices
for the extra convenience afforded to online buyers. Amazon targets virtually every online shopper,
from the United States and all around the world. The company’s second largest market is Germany,
closely followed by the United Kingdom. Its portfolio of products offered on its website is largest
in America, something that is poised to change after Amazon realized in the US that it can make
profits selling such unrelated items as a Shakespeare play and a lawnmower. Some segments that
may be worthwhile targeting with special promotions are university students (books, music,
computers, home electronics etc.), housewives (books, gifts, accessories, household goods) etc.
The company needs to be aware of the fact that brand extension into too many unrelated areas
harbors great risk for the established brand equity and should be conducted very carefully.
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C. Visit the Oracle.com website. Discuss how Oracle considers price in the information
provided for its business process software suite.
The emphasis on the Oracle website is on the technical excellence of its products and the user
benefits they provide. Prices are not emphasized. The price lists are published but they are at the
back of the site. They are also complex. For example, there are separate lists for U.S. Oracle
Technology Commercial Price List; U.S. Oracle Applications Commercial Price List; U.S.
Commercial Price List for Oracle on Demand; Oracle Fusion Applications Global Price List;
Application Licensing Table; Oracle Engineered Systems Price List; and Business Intelligence
Application Pricelist. Within each price list there is a choice of a named user plus or a processor
license, and within these categories there are additional costs for software update license and
support. While price is not the primary selling device for Oracle, they have designed price lists to
allow business users to make choices in the type of license they buy, and to opt in or out of
additional services, to fit different budgets.
Numerous attributes of the Starbucks website are designed to build an image and reality of quality,
choice and user experience, such that price is a relatively minor issue. Indeed, there is no mention
of prices on the site. Instead, the site is about fine coffee—coffee by profile; coffee by form;
Starbucks Reserve® coffee. Information on the Menu tab features drinks; food; and nutrition
information. The Coffeehouse tab features information about the entertainment; Wi-Fi; store
design; mobile applications; and online community. The Responsibility tab talks about the
community; wellness; ethical sourcing; global responsibility report; environment; and diversity.
The Starbucks card tab informs the visitor about how to buy a card; how to manage a card; and
what kinds of Starbuck rewards is the customer entitled for. The Starbucks’ Card has the effect of
pre-paying for coffee to make the consumer less aware of the costs incurred. The site does an
impressive job in avoiding the issue of price, and indeed building the expectation that such fine
products in such outstanding stores would naturally come at a high price, and that may even be part
of the attraction in providing the consumer with the opportunity for self-indulgence.
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Part IV – Internet Application Guidelines
CHAPTER 12
Godiva’s website is designed to reflect the brand’s image of upscale, luxury chocolates providing
the ultimate in satisfaction for the chocolate connoisseur. The layout and design correspond to the
product wrappings and promotional displays used in retail stores and partner outlets (e.g. Barnes
and Noble bookstores). Gold, a precious metal, conveys the notion of expensive and exclusive.
Godiva chocolates are not to be confused with a Hershey bar, although their substance may be
quite similar. However, Godiva is satisfying not merely the craving for chocolate but also the
desire to be different, to appear as tasteful, affluent and perhaps somewhat sophisticated—an Old
World characteristic. Godiva may be regarded as the Mercedes in the chocolate world, at least in
America. In Europe the brand fights against Lindt, which is equally a luxury chocolate brand but
sold in ordinary grocery stores, a distribution channel Godiva largely avoids. On its website,
Godiva is heavily promoting its business gift giving initiatives, targeting executives who wish to
make a difference with their gift giving. Chocolates are almost always a perfect gift, appreciated by
a broad spectrum of otherwise very diverse people. The Web seems ideal for promoting such a
program because most executives find themselves pressed on time and may thus be more likely to
resort to a quick online solution.
B. Go to the websites of NBC and the BBC (www.nbc.com and www.bbc.co.uk). Contrast the
ways NBC and the BBC promote their daily TV programs online. Which similarities and
differences do you detect? Suggest ways of improvement considering the respective cultural
frame of reference and target market for NBC and the BBC?
While NBC’s homepage is clearly all about television, the British Broadcasting Co’s website
appears more like a regular Internet portal (e.g. Yahoo), offering news, sport, weather, travel,
future etc. NBC is content to only provide information on its programming and also offers NBC
merchandise on sale at its online store. The BBC may have chosen the more effective method of
driving traffic to its site as users may visit it in order to read the news, manage their portfolio of
stocks, search for topics of interest, communicate with friends etc. NBC also offers news and
financial services but not on its nbc.com site but rather on affiliate web pages (MSNBC, CNBC)
which one can click on nbc.com. The availability of TV program channels is much more limited in
the UK compared to the US. The differences in the competitive environments may help to explain
the NBC and BBC Internet initiatives.
C. Discuss how Apple’s (www.apple.com) marketing strategy for iPod Mini is enhanced by a
Web-based approach.
The Apple marketing strategy for the iPod has two essential elements: to dominate supply of the
hardware for legal music downloads from the Web, and to operate the most successful download
site (effectively acting as a wholesaler for music companies).
The Web-based strategy shows a constant stream of product innovations to fend off other hardware
suppliers like Sony. The original iPod led to the smaller iPod Mini (a much smaller, lighter
machine, with an innovative click wheel control, and available in five colors). The iPod Mini was
officially discontinued in 2005 and was replaced by the iPod Nano line
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(http://en.wikipedia.org/wiki/IPod_Mini). Apple followed the iPod Mini with the iPod photo—
carrying music and 25,000 photographs, and product variants like the USiPod Special Edition (in
black with a red click wheel, and with engraved signatures from the US rock stars). The site also
offers an iPod store for iPods and accessories.
However, in addition to the hardware innovations, the Apple strategy relies on success in
dominating the supply of downloads and other related services. The iTunes download site is the
largest legal source of music downloads, but this position must be defended. Innovations include
free single downloads for users of the site, and the addition of audiobooks.
The Web-based strategy offers Apple the opportunity to bring innovative product and service offers
around the iPod/iTunes to their target market faster than any other channel and with greater control
over prices and market access. The key to success is probably the download service itself, so
attracting large volumes of consumers to sample and adopt iTunes is vital. The time-frame within
which Apple has strategic freedom is limited—new hardware from competitors is reaching the
market rapidly; supermarket retailers and launching their own download sites; Starbucks is offering
download facilities in its stores; and Microsoft will inevitably target this market.
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Part IV – Internet Application Guidelines
CHAPTER 13
A. Examine the website of Salesforce.com. Discuss how the Internet service provider can
assist sales managers in their sales force management activities.
Salesforce.com with 100,000+ customers and 195,000 subscribers is a leading supplier of on-
demand Customer Relationship Management software. Leading applications are salesforce
automation, customer support, marketing automation, analytics, document management and
contract management. The site offers free access to video demonstrations of the key applications.
Specifically in the salesforce automation application, the product offers facilities for lead and
opportunity management, territory management, team selling, account management, and key
analytical metrics.
The advantages for the sales manager lie in the enhanced access to information about salesperson
activities and results—including key metrics like business in the pipeline and up-to-date forecasts.
The system provides a full set of analytical metrics available instantly and at any level of
aggregation required. Moreover, the CRM technology provides salespeople with superior flows of
information about the results they are achieving with their own accounts and the ability to react
quickly to adverse changes, while understanding which of their activities are most productive with
different types of customer. There is also a potentially substantial reduction in the time needed for
record-keeping and reporting, since much is automated. Although not replacing the critical
interface between sales manager and salesperson, the CRM technology is a very promising
approach to assisting managers in enhancing salesforce productivity.
B. Visit Nokia’s U.S. website (www.nokiausa.com). Evaluate Nokia’s sales approach online.
How does Nokia enhance its direct marketing strategy through Web-based offerings? How
could the company increase traffic to its online sales platform without creating channel
conflict?
Nokia is clearly the world’s number one in the cellular phone and accessories market. The
company has developed long-standing relationships with cellular phone services providers (e.g.
AT&T, Vodafone, Deutsche Telekom/VoiceStream etc.). Online it offers a wide array of new
phones and other cellular devices. The Web accords Nokia the opportunity to carry all of its
manufactured items in one central, though virtual, store. Brick-and-mortar retailers lack the shelf
space and mail order catalogs will not include the newest model, a serious drawback in a
tumultuous, fast-changing industry. The Web also allows Nokia to respond quickly to price
changes in the industry and thus fend off possible competitive threats. Moreover, Nokia will be
able to directly learn important information from its customers (e.g. demographics, usage behavior
etc.). This will be beneficial when creating new cellular solutions. Nokia can use the web to better
interact with the end-consumer, offer its newest products at updated prices, and sell direct without
intermediary channels. However, the company needs to be careful not to offend its existing
channels (e.g. should Nokia decide to sell a particular phone model cheaper online than through the
brick and mortar stores).
C. Review the website of Merrill Lynch (www.ml.com). How does Merrill Lynch leverage its
global position to adjust to local markets through the Internet? Why is the Internet
particularly relevant for firms in the financial services industry?
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Part IV – Internet Application Guidelines
Merrill Lynch, the global investment powerhouse, is present in virtually every major financial
center in the world. Its Internet portal is designed for global customers, as well as two primary
country markets (USA and Japan). The company offers a myriad of research capabilities, account
handling, online financial services, advice and other items online. Since the global money market
virtually never sleeps, firms in the financial services industry find the Internet especially useful to
secure a 24-hour service to its worldwide clients ( account access, transfer etc.). Nowhere are
purchases and sales handled at such mind-boggling speeds as in the financial services industry.
Money changes hands in a matter of nanoseconds and the Internet plays a pivotal role in enabling
these transactions. Through the Internet one can conduct business effectively from anywhere where
a telephone or cellular connection is accessible. Thus, being present online and offering wide-
ranging services on the Internet allows Merrill Lynch to capture more business than before,
enhance its customer service initiatives, and communicate better to its clients.
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Part IV – Internet Application Guidelines
CHAPTER 14
The Strategic Account Management Association (SAMA) is the professional body focused on
major, national, key, or strategic account management approaches. It is committed to a very broad
view of strategic account management:
“Installing a comprehensive strategic account management approach within a company requires
significant financial investment, long-term focus and multi-functional capabilities along with
substantial restructuring of the sales organization. Critical success factors for SAM include
organizational alignment, senior management commitment, processes and systems for
communications and knowledge management, selecting strategic accounts, account planning,
relationship and program metrics and the potential to realize the benefits of a mutually
profitable strategic account relationship.
A strategic account manager (also titled major account manager, key account manager,
national/global account manager) is the guardian of the strategic customer relationship,
orchestrating the deployment of corporate-wide resources to provide comprehensive product,
service and solutions to the strategic account. This position is overseen by a VP / director of
strategic accounts (also titled manager of strategic accounts, VP of sales) and senior executive
sponsors, all of whom support and empower the strategic account manager in their respective
roles. Other support personnel may include account teams of varying composition.”
The SAMA website offers a range of research reports and studies for sale, but also Knowledge
Resources, providing access to downloads of articles, white papers, presentation material, research
papers, and lists of other resources in the field.
The strategic account approach positions the SAM as an individual with a general management-
type of responsibility for the strategic account. Activities include collaborating with the customer
to plan the customer’s own end-market business, and developing joint decision making
mechanisms and other approaches to integration between buyer and seller organizations. This is the
basis on which it is suggested that strategic account management goes beyond a senior sales role.
Nonetheless, it is clear that in practice many individuals with job titles like strategic/key account
manager are actually senior salespeople with a portfolio of major accounts. This diversity in
practice suggests that organizational positioning will depend on the type of strategic account
management being adopted. The full-blown SAMA-style strategic account management is a new
business model, and may require structures which are cross-functional and not located in
conventional sales or marketing organizations.
The Coke website is extremely interesting and diverting. The Coco-Cola Heritage page highlights
the history of Coca-Cola since its birth (http://www.thecoca-
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Part IV – Internet Application Guidelines
C. Consultants Booz Allen and the Association of National Advertisers have an online tool for
assessing the “DNA” of marketing organizations—www.marketingprofiler.com. Visit this site
and consider if the questions asked in the diagnostic provide a good basis for evaluating a
marketing organization. Use the profiling diagnostic to evaluate a marketing organization
that you know.
This website is particularly interesting for a number of reasons: it is revealing of the current
thinking about organizational issues of a major consultancy which works with many major
companies, and it identifies a number of criteria for evaluating the effectiveness of marketing
organization. However, having identified the organizational/performance criteria used by the model
on the website, an extremely interesting debate is whether those criteria are truly the most relevant,
either in general or for a particular company. This debate can be linked back to the coverage of
newer organizing concepts.
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Part IV – Internet Application Guidelines
CHAPTER 15
A. Visit the web site for 1-800-flowers (www.1800flowers.com). How does this company
employ its web site to adapt to a constantly changing environment?
1-800-flowers is an online flower shop that does $300 million a year in business. The company
takes orders through an 800 number and provides delivery through 2,500 local flower shops,
including company-owned stores, franchisees, and independent florists. Telephone sales are now
complemented by electronic shopping on the company’s web site. The interactive ordering will
contribute $30 million to the company’s revenues.
1-800-flowers can respond rapidly to a changing environment. The company can immediately
remove flowers that are not available from the website. In contrast to print catalogs, surplus flowers
or new varieties can be added immediately. Traditional catalog merchants can inform customers of
supplements or special sales over the phone when the order is made. However, the web-based
approach allows the customer to view the product and any specials before placing the order.
Photographic images of the flowers on the web also help to minimize customer concerns about the
appearance of unfamiliar flowers. In these ways, the company responds to a changing environment
and boosts company sales.
B. Enter the phrase “marketing implementation” into your search engine and review the first
20 sites indicated. View several of those representing consultants and agencies offering
products and services to support marketing implementation. Which sound likely to be
effective? What role, if any, can external agencies play in developing effective marketing
strategy implementation initiatives?
Exactly what is found by this search will depend on when it is done and which search engine is
utilized. However, the general finding will likely be that the following types of websites are
identified:
• PowerPoint presentations on marketing implementation
• Sites that explain the concept of marketing implementation
• Consultancy companies offering their views on how external agencies can improve
implementation performance. Some will be marketing consultants specializing in strategy
issues, while others will take a general or human relations management perspective and offer
advisory services in change management.
• Software suppliers offer various products for planning and managing change programs,
which are mainly record-keeping mechanisms.
• Some sites will actually be concerned with specific technologies or projects and approaches
to their implementation, e.g., most searches will identify e-business and e-CRM products and
companies claiming expertise in their management (e.g., Cisco, IBM).
• Search normally finds a range of articles and reports, and some case studies concerned with
implementation.
The materials located through this kind of search are usually topical and interesting. However, the
different resources available need to be matched closely to what type of implementation is being
considered—there is a vast difference between implementing a CRM project and a program of
customer value enhancement. Many of the support resources available are little more than tools for
systematic planning. These tools can be extremely useful, but do not really get to grips with the
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Part IV – Internet Application Guidelines
management of change at the level of structure and process in the organization. They can be
compared on this basis and views taken about their likely effectiveness in different situations.
The more general point for discussion is the advantages and disadvantage of external support in
implementing marketing strategies. While external support provides objectivity and frees resource
and expertise to concentrate on implementation, against this must be balanced the rejection of
externally-directed change initiatives by people inside the company and questions about the long-
term effectiveness of change programs that are not rooted in the culture and processes of the
company.
C. Identify suppliers of marketing dashboard software on the Web. Does this type of decision
support system replace management judgment on the most appropriate performance criteria
for their businesses?
As with any new formulation of a decision aid, there are a large number of suppliers of software
and support services offering their wares on the Web. Reviewing some of these sites provides good
insight into what is on offer to companies as possible purchases. This is interesting on its own, but
the debate becomes far more relevant if it is placed in the context of the choice of appropriate
performance criteria and the role of qualitative judgment in selecting criteria and interpreting the
measurements. There is a danger apparent in some of the sales efforts being put behind dashboard
software and systems suggesting that a small set of metrics can be used on “automatic pilot” to
monitor and evaluate marketing performance. Important issues remain for executives concerning
the choice of dashboard metrics, the revision of metric choices in the light of changing
circumstances and the interpretation of dashboards. While the dashboard is an appealing and
convenient approach to presenting metrics to managers, the broader aims of building learning
processes should not be neglected or displaced. This is an important and relevant debate.
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Another random document with
no related content on Scribd:
It was still well short of supper-time, and so they stopped at Bob’s
to see the tennis-court. The surface layer was almost finished, and
two sturdy posts for the net, startlingly, shiningly green, had been
sunk. While they admired, Mr. Starling joined them from the house,
and Laurie thanked him for his assistance with the quarry company.
“Glad to have helped, Laurie,” replied Bob’s father. “And that
reminds me. Seen the pear-trees?”
“Pear-trees? No, sir. Not to—to notice them.”
“Come and look at them.” Mr. Starling led Laurie around the corner
of the new court and along the further walk to where a few fruit-trees,
their branches still bare, occupied one corner of the garden. Laurie
viewed the trees interestedly, but failed to note anything remarkable,
and he turned to his guide for enlightenment. Mr. Starling was
selecting two bills from a long black wallet, keeping his back to the
others. He thrust the bills into Laurie’s hand.
“We’d like to help a little, my sister and I,” he said. “Use that in any
way you like, Laurie, but you needn’t say where it came from. If you
need more, let me know.”
“But we don’t really need it, sir,” protested the boy. “We’ve got
twelve dollars, and I don’t believe—”
“Put it in your pocket,” insisted Mr. Starling. “You can find some
way of using it for Miss Comfort’s—er—comfort!” He raised his voice.
“Look promising, don’t they? Lots of fruit this year, I guess. Thomas
is quite a gardener, if you take his word for it.” He turned Laurie
about with a hand on his shoulder and paced back toward the
others. “We feel sort of sorry for that little woman,” he added,
lowering his voice again. “Hard to pull up stakes at her age, I guess.
Ought to do what we can for her, Laurie. Come to me again if you
need some more.”
At supper Dr. Hillman asked the twins to come to his study, and
there he produced a pink slip of paper from a desk drawer and
handed it to Laurie. “My sister and I have wanted to help ever since
we first learned of Miss Comfort’s—ah—embarrassment, but have
been somewhat at a loss to know how to do so. She is greatly
averse to anything resembling charity, as you probably know. To-day
we heard of your interest in the matter, Laurence, and of your—ah—
ingenious solution of the lady’s problem, and it occurred to us that if
we handed a small contribution to you you would doubtless be able
to use it to advantage and at the same time—ah—consider it
confidential.”
“Twenty-five more!” exclaimed Laurie when they were back in No.
16. “Forty from Mr. Starling. Seventy-seven in all! What’ll we do with
it?”
“Blessed if I know!” replied Ned, “unless we install steam heat and
open plumbing!”
CHAPTER XVIII
MISS COMFORT COMES ABOARD