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aspects given the context of the research. They are very good first steps to take, to gain an overview and understand the problems from a multi dimensional perspective and propose the hypothesis for market research. In addition to that, expert opinions and study of the target can be performed in a detailed and exploratory manner, using open ended and structured questioning to gain deep insights to the research. The disadvantages of qualitative measurements are that it can be performed only on much smaller sample, and might not be representative of the entire population. Also given time and resource constraints, it cannot be applied on a larger scale that would be required for higher reliability.
2. (TCO B) Your colleague has been tasked to do market research for your company. Management is complaining that sales have not been where the company would like them to be (the sales are about 8% behind the projected goal). Senior management wants your colleague to find out why. At a team meeting, your colleague shares that he has defined the problem, a critical "first step" towards doing market research. Specifically, he announces the Definition of the Problem as "Sales are down."
Comment on the Definition of the Problem, as shared by your colleague. Do you agree or disagree with his Definition of the Problem? How would you restate the Definition of the Problem.
(Points: 20) Answer ± Defining the problem is indeed one of the most critical steps in the entire research process, as that would lay down the direction of the future course of action. By stating that µSales are down¶, the colleague is stating the consequence that led to the market research being requested for, and however that is not the problem, as it does not state what the goal of the marketing research is. I would restate the definition of the problem as ³Identifying reasons and symptoms for not meeting sales target´
3. (TCO C) The United States has been a "services" economy since the late 1980's, at which time our GNP was focused more on providing services than the manufacture of physical products. Marketers recognize that the marketing of services is different than the marketing of a product because of the different characteristics that distinguish them from physical products.
List these characteristics and demonstrate your understanding of what each means relative to services marketing. What are some marketing strategies that might be employed with services to ensure positive results? In your answer, provide an example of a service to which your strategies would be utilized.
Answer ± The major differences between marketing products and marketing services are listed below
The market is dominated by Nokia (22%). what is the strategic reality of the situation in which Fujiwama finds itself? What strategic direction might it take with its product lines? To what risks might Fujiwama expose itself were it to go all out to gain that #5 market share position? Answer ± Given that the market described in the scenario is an extremely competitive one. which could lead to a short term price wars. "What do you suggest we do? The Board of Directors thinks we should be #5 by 2009. As you go back to your desk to contemplate a strategy. experiences of other customers and references are a major component of services marketing Difficult to compare between services ± When a buyer has to make a choice between different service providers. Your CEO has personally approached you and asked you to provide your personal counsel about how Fujiwama might capture greater market share with its product line. an electronics company (fictitious) that specializes in cellular telephones. CEO Takano Chun is under the gun from the Board of Directors to show better profits. with Samsung coming up fast from behind. visualize or experience it before buying it. and Motorola (19%). customer testimonials. Should it decide to directly compete with the top players. For this it has to leverage its inherent . it cannot be returned as compared to a physical product Some marketing strategies that can be used for services marketing include going through user references. Therefore it is not suggested that it goes all out directly. they would go all out to retaliate and ensure they do not lose market share. In addition to that employing direct sales people who are able to build relationships with customers also can play an important role for effective marketing. (TCO C) You are the marketing manager for Fujiwama Corporation.1% and you are listed as the #9 cell phone manufacturer in terms of overall percentage of the market. Your company's share of the cell phone market is 3." says Chun. which has 11% of the market. Is that doable? Come to my office next Monday with your recommendations. which makes it difficult to present the value proposition than when compared to a physical product Branding and reputation plays a huge role ± As customers cannot see the actual product. The strategic direction that it should evaluate would be to find a gap that exists in the market which can be profitably exploited and in which it can obtain an unique positioning.y y y y Intangible purchases ± In services marketing. 4. buyer cannot touch. These strategies can be very effectively utilized when providing knowledge based services such as an IT service provider or a provider of consulting services. Ericssen (20%). the marketing and branding. presenting the pre and post scenarios by which a customer may be able to judge the value that they are receiving. which could be detrimental to the future of the company. and which is made by large and well established global players. he cannot actually compare them and therefore the role of the sales person and the relationship that the company has with the customer plays a big role in closing the sale Buyer cannot return the service ± Once a service has been delivered. it would be a very difficult task for a relatively smaller player like Fujiwama to get into direct competition with them. You are considerably behind Samsung (#5).
and aim for a profitable sub segment where it can profitably grow.60$ Discussion ± Pricewise. These diapers sell to the retail store for 55¢ each. In this example. an infant's diaper must be changed eight (8) times in a 24-hour period. 5. for final exam purposes. A comparison of the diaper manufacturing cost is as follows: "Baby High Dry" diapers cost 40¢ each to manufacture and market. we are looking at the MATH. (TCO D) You are the product manager for a new disposable infant diaper ("Baby High Dry") that absorbs better than any other diaper on the market. a retailer would be interested in promoting the new diapers if he is getting more than $1. as well as a suggested price they should charge their customers.60 per day¶s stock of diapers and a customer would see value in the new product if they are able to procure the diapers for less than $6 a day . and they sell them to customers for 75¢ each. It can also try to move into international markets that are growing fast or need to be developed and establish it as a major player there..). how does that strategy consider that which is important to your retailers?) Answer ± Price Analysis of Competing Diapers assuming customers buy for a day at a time Cost ± 25¢ Selling price to retailer ± 55¢ Margin for Company ± 30¢ Selling price to Customer ± 75¢ Retailer Margin . You estimate competing diapers cost about 25¢ each to manufacture and market. What price would you recommend charging the retail store for your diapers? What would you suggest be the "list price" per diaper to the customer? WHY did you select the prices that you did for "Baby High Dry" What factors influenced your decision to set the prices that you did to the retailer and to the customer? (Remember that your channel members are in a position to promote your product.capability such as technology superiority or better design. based on the above. Your new diapers must be changed only four (4) times in a 24-hour period (We're making some assumptions here. You need to determine a price that you would charge the retail store. As you look at your pricing strategy..20¢ Cost per day to the customer ± 8*75 = 6$ Retailer margin per day ± 8*20 = 1. Normally.
The summer season is traditionally a "slow" season for windshield wiper replacement blades. they would get an additional 5% margin. where the intermediary achieving the highest sales would get a vacation or an attractive prize that would make them want to move the products.e. where the intermediaries are incentivized for pushing its products. For this. the list price for 4 diapers would be $5 or $1. over other competing products. there could be extra µkicker margins¶ that would be given to the intermediary if they sell above a given number of units.75¢ to the retailer. (TCO E) As the Marketing Manager for Cleanwipe Windshield Wipers.40¢.60 from the $5. . from their current spends. For example. the most effective strategy would be to go in for trade promotions. a manufacturer of replacement windshield wipers for automobiles and trucks. since they would want at least $1. The company might also want to hold a competition among the intermediaries.Assuming a price saving of $1 or 16% per day to the customer.25 per diaper. if we give them an incentive of .25 to customer 6. 0. What are some of the PROMOTIONAL "P" considerations on which you would reflect as you prepare for the upcoming summer season to help your intermediaries (i. for sales of more than 100 units. channel members) move Cleanwipe products? Answer ± As the goal in this context is to motivate intermediaries to move Cleanwipe products. price to retailer..75¢ per diaper and price per diaper is $1. which would want them achieve the goal. For the retailer. This would mean that the company is selling the diapers at $3 per day or 0. Therefore. you are tasked with working with your channel members to help them promote your product. to make them promote the new diaper.
Annual sales have been averaging a 3-5% increase each year over the past five years. since they operate out of regional centers and are away from the corporate that designs the products. the company should evaluate and include technical personnel as well. The instruments. for can be better organized to ensure better profits in an industry where customer requirements are exacting and the sales cycle if knowledge intensive. sixteen in total. all of whom possess at least a B. Many have Master's Degrees. if any. Sales teams operate out of the same office.g. and blood. Analyze the sales force structure. The company should also establish channels by which data can flow into the company from the customer for them to make products that meet their demands. . the sales rep may cover two states.. Sales rep turnover has been 15% annually the past few years and Smeets sees it as imperative that he do something about this. etc).. are used to analyze gases. To the existing sales force structure. Smeet's sales reps sell highly complex instrumentation systems that are used to analyze a variety of different materials in a variety of laboratory environments. in a scientific field. but the corporate president wants more. located in a major metropolitan area (e. which is required for high end products. In addition to that. He has just come aboard to head up a sales force of seventy sales professionals. complaining that your competition has been averaging 6-8% sales growth increases in revenue each year. and there could be a huge communication gap between the end customer and the company. Boston. all of whom call on a variety of customers. San Francisco. In some cases. they may be lacking in product knowledge as well. but 80% of the sales reps are within a two-hour drive of their home. The limitation of the current sales structure is that the sales people might not be well versed with the customer requirements and not able to play a consulting role. who could make calls to major customer. The sales team has been divided into twelve teams around the country. liquids.Second page 1. would you suggest that Smeets consider to the sales force structure to effect increased sales? Answer ± Currently Grunwald has an in house sales team where around seventy qualified sales people reporting into sales managers who in turn report into a sales head at the corporate.S. and help in closing deals by bringing in their expertise.. with each team having its own sales manager and five to nine sales reps. Atlanta. What is the current sales force structure that is being used and what might be the limitation of the sales force structure that is currently employed? What changes. that would work for smaller sized or products that are common. (TCO F) Edward Smeets is the new sales manager for Grunwald Instrumentation. This is a simple structure. Each product is very technical and customers expect their Grunwald sales rep to be very knowledgeable about the technical applications of their product to their analysis requirements of their laboratories. Each sales professional covers an assigned territory which usually comprises about onehalf of a state. Dallas.
Your price to your wholesaler distributor is $71.634. Your Fixed Costs (FC) for running your plant are $1. What is your Unit FC per DVD player? Your Unit VC per DVD Player? How many DVD Players do you need to sell each month to "break even"? Answer - . often greater than 75%. could be incorrect Weak Positioning ± Due to the huge clutter that exists in the market. but has targeted the incorrect market segment. (TCO H) New products fail at a very high rate. etc.300.g. Best Buy.g. promotional programs. (TCO I) You have just become the marketing manager for a new line of DVD players. insurance. shipping. Your suggested list price for consumers for the DVD Player at the retail store.. and other variable costs. Best Buy) from the wholesale distributor is $94. to what should marketers be sensitive when introducing a product that is new to the market? (Points: 20) Answer ± There can be many reasons for new product failure. e. Your Variable Costs (VC) per unit will. the marketers should ensure that they have a huge customer focus. The retailer's price (e. the initial advertising that is responsible for raising the awareness levels was not successful y y y Therefore.000 per month. such as a customer¶s need and the price that they would be ready to pay for the product. your raw materials used to make your DVD player.99. and might not be in line with customer expectations Unsuccessful advertising ± Due to lower budgets or incorrect campaign. rent.. vary. due to which the product failed Incorrect assumptions and analysis ± The basis on which the company came out with the product.2. of course. 3. and position it in a manner that ensures the product creates a unique positioning in the market. and do proper study as to how the product is a solution o customer needs. Demonstrate a graduate-level response that communicates your indepth rationale that accounts for why so many products fail upon their introduction.70. some of which are discussed below y y Incorrect targeting ± The company has come out with a good product.000 DVD players each month (30 days per month). These Variable Costs (VC) average $1.25. is $129. your utilities usage. the new product could get lost and not reach the intended target audience if it is not positioned well Incorrect pricing strategy ± The company priced the product too high or too low. Your plant is able to produce 76. as can be seen from the multiple reasons that could affect product success. Based on this.000 a month. You have looked at your hourly salaries. amortized capitalization of equipment. This includes salaries.
21.Unit FC per DVD player = FC/Units = 1300000/76000 = 17. you have limited funds with which to advertise. were you to begin anew. . A critical promotional campaign is about to get underway and you are looking to maximize your advertising's effectiveness.5 Break Even Units = Fixed Costs/(Revenue per unit . what would you have done differently insofar as your efforts to segment your TARGET MARKET and your efforts to reach that TARGET MARKET via your promotional mix? What would you have done differently? Be sure to refresh your instructor's mind by providing one sentence that communicates what your Marketing Plan brought to market Answer ± 6. what would be some things that you would want to consider to ensure that your Marketing Audit was well-structured and was "all inconclusive?" Answer ± The things that would be required to make a marketing audit all inclusive and well structured that would meet the objective of its design are given below y If the marketing plan met its objectives using various financial and non financial criteria including customer elated criteria y The extent to which the various assumptions taken for formulating the marketing plan were actually true y Customer and value chain satisfaction including various intermediaries such as distributors. especially as a means to ensure that companies are seen as "above board" and "ethical" in their marketing practices. (TCO A) Now that you have completed your Final Draft of your Marketing Plan. Were you tasked with creating a Marketing Audit.5) = 26130.25 .65 ~ 26131 units 4. (TCO J) The concept of a Marketing Audit is gaining acceptance within marketing circles.Variable costs per unit) = 1300000/(71. sales force. (TCO G) As the advertising manager. promotion.10 Unit VC per DVD player = VC/Units = 1634000/76000 = 21. and marketing research programs in terms of return on investment y Effect on branding and the positioning that that company was able to achieve y Perception of brand portfolio y Perception of community on the company and the strategies used by the company 5. retailers etc y The performance of advertising.
000. In which magazine would you advertise? Using that which you learned in your course. the cost per paid readership is 0. A full-color ad in Forbes magazine sells for $35.000 paid subscribers. as it could be that they would be reading the magazine more seriously and there are better chances for the advertising being more effective.036 for Fortune and 0.e.035 for Forbes. Both will deliver the target market that you seek. which is almost the same.16M. Answer ± Given that we can advertise in only one of the two magazines. The cost for pass along readership for Fortune is 0. i. and working for a Fortune 1000 company.014 and for Forbes is 0. A full-color ad in Fortune will run $31. Money is tight. defend your decision and share how you came to your conclusion.300. but its pass-along readership is estimated at only 1. operations management or financial management.000 readers. .You are considering two publications: Fortune magazine and Forbes magazine.. the business professional. Forbes magazine has a higher readership of 988. with both of them delivering the target audience that is required. with pass-along readership estimated at 2.8M readers. Fortune magazine has a paid subscriber list of 842.000 for publication in the edition that will hit the newsstand in two months. If the goal of the company is to achieve more visibility in people with paid subscriptions. average income $90.019. the advertisement should be placed in Forbes. college educated.