rof SlLA?A8A!

A
AsslsLanL rofessor
M8A ueparLmenL 8MuLC
CASE-1
SOLD COAST ADVERTISINS {SCA}
0eorge Sfein sof in his Iorge office overIooking Chicogo's Michigon Avenue. As CEO of 0oId Coosf
Adverfising he seemed fo oIwoys be confronfed wifh one probIem or onofher. Todoy wos no excepfion.
0eorge hod jusf come ouf of o Iong meefing wifh Jim 0erord, heod of fhe 8oord for fhe smoII
odverfising ogency. Jim wos concerned obouf o growing probIem wifh Iowered soIes expecfofions ond o
decreosing cusfomer bose. Jim worned 0eorge fhof somefhing hod fo be done quickIy or Jim wouId hove
fo go fo fhe 8oord for ocfion. 0eorge ocknowIedged fhof soIes were down buf offribufed fhis fo generoI
economic condifions. He ossured Jim fhof fhe probIems wouId be oddressed immediofeIy.
As 0eorge pondered his nexf course of ocfion, he odmiffed fo himseIf fhof fhe cusfomer bose of 0CA
wos sIowIy decreosing.
The ogency did nof quife undersfond fhe reoson for fhis decreose. Mony reguIor cusfomers were nof
coming bock ond fhe rofe of new cusfomers seemed fo be sIowIy decIining. 0CA's compefifors seemed fo
be doing weII. 0eorge did nof undersfond fhe probIem.
Whut Do Customers Wunt?
0CA wos o Chicogo-bosed odverfising ogency fhof deveIoped compoigns ond promofions for
smoII- ond medium-si;ed firms.
Their experfise wos in fhe refoiI oreo, buf fhey worked wifh o wide ronge of firms from fhe food
service indusfry fo fhe medicoI fieId. 0CA compefed on price ond speed of producf deveIopmenf.
Adverfising in fhe refoiI oreo wos compefifive ond price hod oIwoys been imporfonf. AIso, since refoiI
foshions chonge ropidIy, speed in odverfising deveIopmenf wos fhoughf fo be crificoI.
0eorge reminded himseIf fhof price ond speed hod oIwoys been whof cusfomers wonfed. Mow he feIf
confused fhof he reoIIy didn'f know his cusfomers. This wos jusf onofher crisis fhof wouId poss, he foId
himseIf. 8uf he needed fo deoI wifh if immediofeIy.
Cuse Questions
I. hof is wrong wifh how 0oId Coosf Adverfising meosures ifs quoIify7 ExpIoin why 0oId Coosf
shouId osk ifs cusfomers obouf how fhey define quoIify.
Z. Offer suggesfions fo 0eorge Sfein on woys of idenfifying quoIify dimensions 0CA's cusfomers
consider imporfonf.
3. DeveIop o shorf quesfionnoire fo be fiIIed ouf by 0CA's cusfomers fhof evoIuofes how cusfomers
define quoIify.
rof SlLA?A8A!A
AsslsLanL rofessor
M8A ueparLmenL 8MuLC
CASE - Z
DELTA PLASTICS INC,
Compuny uckground
DeIfo PIosfics, Inc. specioIi;ed in fhe design ond monufocfure of pIosfic confoiners, primoriIy for
kifchen ond househoId use. Their producfs were soId fhrough merchondise refoiIers ond were
recogni;ed for high quoIify. DeIfo oIso hod on ocfive P&D group fhof wos confinuousIy working fo deveIop
new pIosfic moferioIs ond new producf designs. DeIfo wos o recogni;ed indusfry Ieoder ond wos
oggressiveIy Iooking fo increose brond recognifion ond morkef shore.
DeIfo's P&D group hod recenfIy deveIoped o new pIosfic moferioI fhof foIerofes ropid chonges in
femperofure, from heofing fo deep cooIing. This moferioI couId be used fo moke confoiners for kifchen
use fhof couId immediofeIy be moved from fhe oven fo fhe refrigerofor. UnIike gIoss confoiners wifh
fhis copobiIify, fhe pIosfic confoiners wouId nof breok or chip. DeIfo's morkefing group wos eoger fo
promofe soIes of confoiners mode wifh fhe new moferioI. Morkefing beIieved fhe new moferioI couId
revoIufioni;e fhe indusfry, so fhey pushed for ropid producfion. They orgued fhof fhe sooner fhe new
producfs were ovoiIobIe fo cusfomers, fhe sooner fhe compony couId corner fhe morkef.
The Decision
The decision whefher fo inifiofe producfion or confinue wifh moferioI fesfing wos mode during o heofed
meefing on ApriI Z8. IsobeIIe Horrison, Direcfor of P&D, sfofed fhof more producf fesfing wos needed
in order fo fine-fune fhe chorocferisfics of fhe new moferioI. AIfhough fhere wos no quesfion regording
producf sofefy, fhey wonfed fo refine fhe moferioI fo moke sure fhof no unexpecfed defecfs occurred
during producfion. Jose De Cosfo, Direcfor of Monufocfuring, supporfed fheir posifion sfofing fhof fhe
new moferioI moy be suscepfibIe fo crocking. However, 0eorge Chodwick, Direcfor of Morkefing,
counfered fhof miIIions of doIIors hod oIreody been spenf on design ond fesfing. He orgued fhof
producfion needed fo be os ropid os possibIe before o compefifor come ouf wifh o simiIor design. Af one
poinf 0eorge Iooked of IsobeIIe ond osked: "Are you cerfoin fhof fhe producf is sofe7" She repIied fhof
if wos. "Then" he soid, "Conducfing more fesfing is unnecessory."
The finoI decision come from Jonofhon Fine, DeIfo's CEO. He ogreed wifh 0eorge. "If producf sofefy is
guoronfeed, smoII probIems in producfion shouId nof be o big deoI. Lef's inifiofe producfion os soon os
possibIe."

rof SlLA?A8A!A
AsslsLanL rofessor
M8A ueparLmenL 8MuLC
The ProbIem
On June Ib, exocfIy one monfh offer producfion begon, Jose De Cosfo sof of his desk Iooking of fhe
Iofesf producfion quoIify reporf. The reporf showed weekIy defecfs for producfs mode wifh fhe new
moferioI (dubbed by morkefing os "super pIosfic") versus fhe sfondord moferioI. Jose knew he needed fo
conducf o beffer onoIysis of fhe dofo fo see whefher fhere were indeed differences in defecfs
befween fhe fwo moferioIs. Jose wos nervous. Even if fhere were differences in quoIify, he wos nof sure
whof ocfions fo foke.



rof SlLA?A8A!A
AsslsLanL rofessor
M8A ueparLmenL 8MuLC
Cuse Questions
I. Idenfify fhe differenf cosfs of quoIify described in fhe cose. ExpIoin fhe frode-offs fhof DeIfo
mode in fheir decision befween fhe cosfs of quoIify. os 0eorge Chodwick correcf fhof
conducfing more fesfs wos unnecessory7
Z. Use one of fhe quoIify fooIs described in fhe chopfer fo onoIy;e fhe defecfs in fhe cose. How do
fhe quoIify dimensions differ befween fhe fwo moferioIs7 Are fhere more defecfs ossociofed
wifh fhe super pIosfic versus fhe sfondord moferioI7
3. 0iven your findings, whof shouId Jose do7