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Article Summary Michael Phillips mentions that the World Bank will start a new AIDS campaign in Africa.

Although the World Bank has been involved in AIDS projects since mid-1980's, its wrong recognition of what to do led to poor results. Now, after realizing the severity of African, it will offer African countries low-interest loans. In order to support the countries quickly, the bank will also shorten the process to make decisions. However, some problems simultaneously arise. One is the policy gap between International Monetary Fund and the bank. Another is that some high-infection-rate countries would not be qualified to obtain bargain-rate loans. Introduction In the summer of 2000, Starbucks was ranked 72nd of all valuable brands in the world by Interbrand, the world-respected brand research organization, also it was voted the number-one coffee shop chain in Tokyo. Furthermore, Howard Schultz, the chairman of Starbucks, was awarded 2000 Botwinck Prize in Business Ethics by Columbia Business School. All of these mean that Starbucks became one of genuine brand companies all over the world. A lot of reports and research mention that in order to gain and improve the recognition, Starbucks has been trying to succeed in its primary business, make continuous contributions to the communities where Starbucks does business, and well treat the employees and customers. However, why is it so important for not only Starbucks but also other companies to build and enhance their brand images? Before that, what is genuine brand? Knapp (2000) defines genuine brand as the sum of the factors that make customers differentiate a particular company or product from other competitors, based on their perceived benefits and images. In other words, genuine brand can make customers perceive that one company or product is more valuable or beneficial to them than other similar ones. While differentiated advantage makes many profits to the company, other advantages are also available to the company, once it has established the brand image over its customers' mind. According to Kazue (1997), there are 7 merits of the brand builders: for example, customers' loyalty, regal protection, and premium pricing. Therefore, companies try to build their brand images to gain those advantages. Although many researchers mention these advantages that influence on customers and competitors, it has been little argued the influence of the brand image on other companies in different

markets. However, I believe that the higher the brand image, the bigger business chances the company can gain. For example, Starbucks made an exclusive contract with the New York Times in August 2000. In this contract, while Starbucks sell the newspaper at its shops over the U.S., the New York Times exclusively advertises Starbucks on not only its papers and magazines but also its electrical sources such as TV, radio, and Internet (Gulick, 2000). It is no doubt that this contract helps Starbucks enhance customers' awareness of Starbucks brand and becomes a huge support to increase the sales revenues. Therefore, I will analyze, in this study, more detail about the influence of brand image on new business chances, since the influence can be another important advantage of the brand builders. To develop my argument, I will first describe Starbucks' achievements in its primary business, contributions to society, and responsibility to its employees and customers, because all of them involve Starbucks' brand strategies that help Starbucks be recognized one of the genuine brands, the most valuable brands in the world. Next, the importance of building a brand image for a company will be argued, followed by well-known advantages of brand image over its competitors. Finally, I am going to introduce another advantage which expands new business chances, by using the sample of Starbucks. IM 571 A Marketing Management Case Study Goodyear The Aquatred Launch Published by Harvard Business School 1. Assess the Aquatred's strategic role and the marketing program. 2. Should Goodyaer offer the Aquatred to mass merchandisers? Why not?


September 26, 2000

Assessment of Aquatred's strategic role and the marketing program

Market analysis The U.S. passenger tire market is mature and stagnant, also very competitive (pg. 1-3). Moreover, the feature of tire products seems to be standardized product. This is the reason companies in the market depend on price promotions (pg.2,10) , also the reason private labels are expanding their shores (pg.5). Under this situation, it is important for Goodyear to increase the market share by attracting existing customers who now perchasing other brands, and also important to establish the brand image among its customers by offering differential advantages: quality-based and brand-based advantages. The Aquatred's strategic role and the marketing program While Goodyear has a strong brand image among price-oriented buyers, Michelin, the first rival of Goodyear, has a strongest image among value-oriented and quality-oriented buyers (Exhibit 7). Accordingly, Michelin gains higher customers' loyalty for its products than Goodyear, as shown in Exhibit 8. Furthermore, according to Exhibit 4, the quality-based buyers account for the 2nd highest percentage (23%) of the customers in the market. Therefore, the main strategic role of the Aquatred should be to increase Goodyear's brand image, and then attract the qualitybased customers from other brands (especially from Michelin). Exhibit 9 shows the success of Aquatred's strategic role and marketing program in the test market. The 1st question means that Aquatred makes customers change their tires form other brands (at least 42%, 17% of this from Michelin). The 2nd shows that a variety of advertising strategies has been successful, in addition to TV commercials. The 3rd and 4th question demonstrate that the buyers in the test market choose Aquatred because of its brand, and that 84% of them are value-oriented and quality-oriented buyers. These answers for the four questions mean that Aquatred's strategic role and marketing program succeed and help enhance Goodyear's brand image. As extra finding, 8th question implies that salespersons consistently tell customers the feature of Aquatred, which coordinates and integrates the way of sales promotion. Should Goodyear offer Aquatred to mass merchandisers ? As mentioned on page 8, mass merchandisers own much more outlets than any other channel. This means that Goodyear will be able to sell its products at more places, and give customers more opportunities to buy the products. However, as mentioned on page 9, the owners of Goodyear owned dealers and the owners of independent dealers feel unpleasant that mass merchandisers deal with Goodyear's products. Also, on page14, it is said that selling tires in lower-service outlets can erode the brand image, cannibalize sales of existing outlets, and may cause dealers to

take on additional lines of tires. Since it is important for Goodyear to keep good relationship with present distributors, Goodyear should avoid the strategy which invades the relationship. Furthermore, while the mass merchandisers' share in the replacement tire market decreases to 12% in 1991 from 28% in 1976, the share of manufacturer-owned outlets and independent dealers are increasing to 72% in 1991. Therefore, it is not good idea that Goodyear offers Aquatred to mass merchandisers. What has been learned? Project Comet 1. The advertising goal of the research project is to enhance Heineken's brand image as "the world's leading premium beer", by means of focusing on the "Good taste" of the Heineken's product. 2. The project team concludes that the brand's good taste image would be built on 5 core brand values: Taste, Premiumness, Tradition, Winning spirit, and Friendship. 3. Taste and Premiumness are the minimum requirement. The members think that communicating the other 3 values with customers is key to make Heineken establish the unique and differentiated brand in beer market. They, therefore, try to mix up the 5 values in every advertising. 4. They also think that Heineken should be the brand of people who prefer premium beer which has true value to mass-gathering beer. 5. The casting and tone of voice in their commercials should carefully chosen Because the effective communication of Winning spirit and Friendship depend on the persons in the commercials who are self-confident, warm, winners and also on a small group of these people who really enjoy their relationship. Project Mesa The project team collects the information to find answers the following two questions: a) which expressions of taste Heineken should use in their advertising, and b) which expressions of friendship Heineken should us. The team researches and gathers data from 8 focus groups in each country which Heineken is interested in as their target market. Four of the groups consist of 21-27-year- old people and the others consist of 28-35-year-old people (it seems to be relatively small range, though). a) Which expressions of Taste should Heineken use in their advertising? In Exhibit 4, here is an example of expressions of Taste, in which Heineken tries to show their brand vision, pride for the brand's quality, and brewing skills Exhibit 6 demonstrates that almost all of the focus groups regard taste experience, balanced taste, and foam as important. Another

finding is that Netherlands, Germany, and average 8 countries have similar preferences in Product category. Next finding is German is most interested in Taste when drinking beer. Final one is the USA seems to pay most attentions to Marketing promotion of all researched countries. According to exhibit 8, all of the countries think of all items in Quality category as important, also all except Italy consider Tradition has positive meaning. On the other hand, although domestic brands dominate national market in Germany, the data means they positively evaluate Heineken, like the US. b) Which expressions of Friendship should Heineken use in their commercials? Exhibit 5 gives examples which illustrate how to express "Always count on Heineken" and "True friend" Project Mosa can find out, in exhibit 7, the difference between Standard beer and Premium beer. Premium beer has the tendency to be drunk in special occasions and for social communication as well as self-esteem, etc. Exhibit 9 means that "Always count on Heineken" and "True Friend" are best expressions of Friendship. However, they should not use Respect in advertising. A suggested Plan of How Heineken brand can be developed In order to succeed in the integrated marketing communication, Heineken has to consider the consistent and coordinated massages in their commercials. The massages should also generate positive effects in their customers. The data collected by Project Mesa has shown more concrete items, therefore the following plan will be based on the Mesa's data but consistent with 5 values Comet suggests. There are some massages which people in all the target countries positively evaluate: Quality, Tradition, Taste Experience, Balanced Taste, Premiumness (in special occasions), True Friend and Always counting on Heineken. Therefore, the company has to try to integrate these messages into each of their advertising. Heineken also need to consider what and how much time they should broadcast their commercials, not only because their main communication channel is TV and the target customers are decided, also because advertising by mass media often is ignored. On the other hand, Heineken should also create different strategies to meet the different features of each country. For example, Netherlands, Germany, and the other 4 target countries show in Exhibit 6 similar indications of beer taste: they are interested in Manufacturing and Product categories. Nevertheless, as shown in Exhibit 2, Heineken's position and objective are different among these countries. This means that each country

requires different marketing mix from the other, which appears in Marketing category. Especially, since Germany is the biggest beer market (p.g2), Heineken should try to establish the brand image and increase the market share from 7th to upper place. As another example, USA particularly evaluates marketing promotion (Exhibit 6): bottling in USA would make American people recognize Heineken's efforts to improve its quality and cost performance. Therefore, Heineken can confirm their position in USA by fulfilling people's needs. In conclusion, especially in trying to enhance their brand image via mass media, Heineken should integrate customers' world-common interests with the different interests in each country as well as choices of effective broadcasting time. If Heineken practice the suggested plan, they will effectively enhance their brand image in the world.

IM 571 A Marketing Management Case Study Heineken N V Global Branding and Advetising Published by Harvard Business School 1. Evaluate the research: What has been learned?

2. Suggest a plan that describe how the Heineken brand can be developed through marketing communication. September 26 , 2000

IM 571 A Marketing Management Case Study Calyx & Corolla Published by Harvard Business School 1. Strengths and Weakness of Calyx & Corolla 2. What steps should be taken by CEOs of Calyx & Corolla ?

September 26 , 2000

From Exhibit 1, we find out that while Calyx & Corolla earned $10,259,000 in 1990, its expenses in the same fiscal period, it still exceeded the revenues, then net income was -$427,000. The reason generated from the huge amount of the Sales and Marketing Expense ($7,021,000), especially from the cost of Catalogs ($5,201,600 excluding postal rates or mailing list rental fees). It means that the cost of Catalogs itself accounted for 49% of the entire expenses of the company and expensed 51% of the sales revenue in the year, while the cost of Goods sold represented only 23% and 24%, respectively. Therefore, in analyzing Calyx & Corolla's marketing strategies, I would like to suggest that the company targeted its customers from other potential customers. I will introduce basic and another step both of which the company should have taken to become a more profitable company. The material shows that although Calyx & Corolla depended its revenue on the catalogs , the cost of the catalogs itself simultaneously was equal to 51% of the revenue. The company mailed over 16 million catalogs but received orders from 5-10 % of the frequent customers and only 1-2 % of the other customers. It simply means that $5- 5.1 million of the publishing cost itself was dismissed without any profits. Therefore, I believe that while start-up ventures should emphasize on its promotion as a marketing theory, Calyx & Corolla had to have decreased the cost of Catalogs for the infrequent customers. Here is an example: The company could mail their catalogs to the frequent customers at the same rate (1 catalog per month), but decrease the rate (from 6 to 2 per year) to infrequent ones and questioners and also decrease by 50% of catalogs to unknown customers. That means the firm saved $2.6 million plus the cost of postal service at the same time. However, before the management of the company decided how much and which parts they should cut down, they needed to do research for all the customers including the unknown ones, because it also is important for start-up venture to increase a number of

new customers in order to succeed. Although the survey also cost the researchers first, the data would continuously have helped them to avoid ineffective and wasteful distribution of their advertisements (the survey would be helpful when the firm discover ideal marketing mix.). For example, if many of those who were beyond the targeted customers, like under 30 women, were familiar with Internet, the company could emphasize on its On-line order system by printing ads on the catalog they mailed twice a year and offer some special discounts like the coupons on newspapers. Once the company finished collecting sufficient information about its customers, the management team had to carefully make the decision for how much and which parts of the cost should be cut and how the saved money should be used. As the alterative strategy Calyx & Corolla could have taken, Tie-ins program would be the most effective and profitable, because of some reasons. Firstly, as drawn from the income statement, Tie-ins program had better earning rates than the catalog mailing because of its low expenses, less seasonality of which also would give the company stable revenue. Next, tie-up business could increase potential customers' awareness from different markets, enhance the company brand by doing business with other famous firms, and then obtain other tie-ins. Finally, the company could draw the special attentions from the employees hired by organizational partners each of whom would be the future customers. Thus, those three reasons convince me that expanding Tie-ins program was the critical and profitable strategy Calyx & Corolla should have conducted. Trough these processes, I believe that Calyx & Corolla could become a more profit company and grow its business effectively.

IM 571 A Marketing Management Case Study MD Motors Published by Harvard Business School 1. What should Holger Graossman do ? Why?

September 26, 2000

If MD Motor loses the right to sell Rolls Royce cars, the situation in which MD Motors will be in is so serious that Mr. Holger Gossman, Managing Director, have to reconsider the present strategies and add or change to new ones. Why So Serious ? 1. The company will probably lose 50-65% of the total sales (199798 based) 2. It will also lose many wealthy customers who own Rolls Royce. 3. Bentley, because the city is full of ups and downs, like Japan, more sportive style, may not be fit to the geographic condition in Hong Kong, while the Bentley, in 1997, accounted for about 60% of the 1918 cars sold by Rolls Royce Cars Limited in the world. 4. While Bentley has established its brand image which attracts many rich people, the strong brand impression may keep other people away from purchasing the brand. To Customer-Creation Marketing MD Motors has been taking Customer-Retention marketing strategies such as After-Sales Service, Driver Training program, and other programs offered for small-scale but close-relation customers. The strategies have been successful, because they match the needs of the customers. However, the reduction by around half of those customers will critically damage or force the company to go out of business. Therefore, MD Motors has to increase the number of new customers by shifting to CustomerCreation marketing strategies. To do so, the company should reconsider its target customers, target market, competitors, and marketing mix. Main Event As in the material, Volkswagen planned to launch a new range of smaller lower-priced Bentley models in 2002 or 2003. The new models can change the company's image from only the luxury-car maker to the more casual maker. Obviously, it is important for MD Motors to achieve successful results. Should not only the company maximize the sales but also try to make potential customers aware of the change of Bentley. Target Customer MD Motor should target the young and the middle-class as new customers. While rich people tend to choose high-status and more prestigious like BMW, Porsche, or Ferrari, middle-class people purchase new cars based on more practical perspectives, such as style, mileage per gallon, sharp turns at narrow space in Hong Kong. Since the features of new Bentley models cover those needs

and also have the features of sport-type car, those will put large impacts on the people. Target Market and Competitors Because of economic recession in Asia since 1998, people would be sensitive to price. The new models can attract not only the people owning middle-class car market also the competitors' customers who are getting sensitive to the money they are consuming; the competitors can be BMW, Ferrari, Porsche, Benz, or Rolls Royce, etc. In addition, even though people tend to be sensitive to price in economic recession, they have to always be anxious about the goods bought at gray markets because of their no guarantees or incredibility. Then, some of the people would buy a bit expensive but high-performance, durable, and reliable new Bentley, if the company is able to make them sure of the betteroff choice. Therefore, MD Motors can target the people as potential customers in competitors' markets and gray markets as well as in middle-class car markets. Promotion In addition to the new models promotion, MD Motors will be able to attract potential customers by other promotion mix listed in following, as examples. 1. Offers low-rate loan 1 and 2 are powerful attraction to many 2. Offers low down payment people in buying new cars. 3. Gives up Fixed-Price policy and make discounts, because it is usual for the middle-class and young who are concerned about price. 4. Advertises in mass-media to remake people's image to Bentley 5. Establishes sales department, since sales experts influence customers' decisions by their adequate and tender advices. 6. Establishes marketing department, since the company should find out and cover a variety of customers' needs. Caution Those strategic changes may cause original Bentley customers to leave away from the company, because they think the company loses the pride on their goods and is fluttering to the public. The company also should try to keep good relation to them, because they have strong powers to help MD Motors and Bentley maintain their reputations and brand image. Those are the main strategies MD Motors should take in the future so that it will overcome the crisis and survive in the competitive car markets. As reported by Yeap. S. (2000), Starbucks, in this summer, was ranked 72nd of all valuable brands in the world by the worldrespected brand research organization, also was elected as the

number-one restaurant chain in Tokyo. This means that Starbucks became one of the genuine brand companies. In my opinion, genuine brand companies should not only pursue their own profits but also try to return the profits to their employees, communities, societies, all of which are involved in the companies. Therefore, Starbucks deserves the prizes, because my research on the company convinces me that Starbucks has fulfilled these two requirements of the genuine brand companies. The 1999 annual report of Starbucks shows that its net income has been increasing by 42% each of this five years and the number of the shops in the world has reached 2498, although it was 677 in 1995. These data proves that the company is developing, increasing the profits, and succeeding in business. Starbucks also well performs in contributions to their employees, communities, and societies where it does business. Even part-time workers as well as full-time in Starbucks have the opportunities to receive health care, stock options, and free coffee bags, which all give them a sense of meaning to their work in Starbucks. The company also makes contributions to various children's organizations, academic schools, AIDS research projects, beach clean-ups, homeless shelters in every state where the shops are operated. As announcing in the mission statement, Starbucks has been making efforts to achieve its social responsibility, as the duty of the companies in 21st century. In summary, Starbucks obviously practices the requirements of the true brand companies: the good performance of its own business and the social responsibility to its internal and external relatives. Hence, I believe that Starbucks is a genuine brand and deserves the prize it gained in this summer. Yeap, S. B. (2000 July 20). Starbucks named one of the most valuable brands in the world. The company, Press room [On-line serials]. Retrieved October 18, 2000 from the World Wide Web: pressdesc.asp? pressid=139&nav=4&sid=AJ6L2N93MB108KMP60J7B53B1BXB8UH3 Starbucks deserves the prizes