Marketing Concepts and Strategies B01.2310, Sections 21, 22, 23
Prof. Eric Greenleaf
Spring 2002
Case Study Questions
Calyx & Corolla - Jan. 30 and Feb. 4
Since the elements of the marketing mix are interdependent, it is important to get an early overview of the entire set of marketing functions. Calyx & Corolla gives an excellent introduction to the kinds of problems and decisions that marketing addresses. It also gives a chance to apply concepts from the Handout on Quantitative Analysis in Marketing, and to get early experience at marketing decision making.
Think about the following questions - there are more than for the usual case, since they apply to all seven topic areas of the marketing mix from the syllabus. As you think about these questions, you will no doubt see that C&C's strategy in one area affects its strategy in others - this dependence among different elements of the marketing mix is a very important part of marketing strategy. Many of these questions relate to the "Quantitative Analysis Assignment for Calyx & Corolla" that you will also complete.
I) Consumer Decision Making
What are the consumer needs that C&C satisfies?
What advantages does C&C' have over other firms that allow it to satisfy
these consumer needs well?
How do the needs C&C satisfies compare with those satisfied by other flower
sellers?
How do consumers make the decision to buy flowers from C&C, and how can
C&C try to influence their decision making process?
II) Identifying Valuable Customers
How would you describe the target consumer segment for C&C flowers?
Is this the most appropriate target segment, and should the firm try to grow
by expanding to reach other segments?
Which kinds of customers are most valuable to C&C? Least valuable?
What is the "product" that C&C sells, and how is it "positioned"
(how does it compare to competing products and consumer needs)?
III) Using Market Research to Make Better Marketing Decisions
How could C&C use market research to improve its marketing strategy and
tactics? What would it like to know?
Do you think C&C should go ahead with the Minneapolis/ St. Paul test?
IV) Managing New and Existing Products to Assure the Firm's Future
Where are C&C's "products" in their life cycle?
Do you feel C&C needs a more aggressive new product development effort?
What do you think the brand name "Calyx & Corolla" means to consumers?
Is it an effective brand name, or would you change it?
V) Pricing Strategies to Return Customer Value to the Firm
How does C&C decide what price to charge consumers for its products?
How much of this price goes to C&C, and how is the rest divided among the
distributors that C&C uses as partners?
How much more expensive are C&C flowers compared to flowers bought from
a flower shop or sent through FTD, and why might a consumer be willing to pay
this higher price?
How sensitive is C&C profit to changes in costs for: a) flowers, b) shipping,
c) catalogs?
VI) Choosing and Managing Marketing Partners
How does C&C's distribution system differ from that used by other flower
sellers, and why has C&C chosen this distribution system?
Why does C&C rely on flower sellers that it cannot completely control instead
of growing its own?
How does C&C use personal selling in its marketing strategy?
VII) Communicating with Consumers
What is C&C's apparent communications strategy? Do you feel it has to be
expanded?
What message is FTD conveying in its communications strategy and what is the
objective of this message?
Visit Calyx & Corolla's web site, http://www.calyxandcorolla.com, and compare it with one of the competitors mentioned in the case, http://www.1800flowers.com.
1) Who are the members of the buying center for the CT scanner at Lohmann University Hospital? How can Kurt Thaldorf determine who is a member? Will everyone at LUH help him obtain this information? Do you think it is possible for Thaldorf to know precisely who is in the buying center?
2) What are the different roles in a buying center? How can Thaldorf find out who occupies each of these roles at Lohmann University Hospital, and the formal and informal rules that govern this buying center?
3) What are the different interests and objectives of the different members of the Lohmann buying center? How might these conflict for different members, and where are the areas of greatest potential conflict? How can Thaldorf obtain this information? How can Thaldorf try to create a source of consumer value by helping to resolve this conflict?
4) What aspects of Mediquip's CT scanner should Thaldorf emphasize to each member of the buying center? Can he emphasize different aspects to different people without being duplicitous?
5) Is it Thaldorf's fault that LUH did not buy a CT scanner from Mediquip? Is there anything he should have done differently?
Calyx & Corolla - Feb 20 (for estimating the value of a customer)
Think about the following questions as you read the Handout on Estimating the Value of Customers and complete the assignment on Estimating the Value of a Calyx & Corolla Customer:
1) Why is it important for C&C to think about the value of its customers? Why doesn't it want to attract all possible customers?
2) What factors determine the value of a customer to Calyx & Corolla?
3) How can C&C estimate this value?
4) Should C&C try to attract lots of customers with an average value that is moderate, or fewer customers, with a higher average value?
TiVo - March 27
1) Why do firms need to develop new products? What is TiVo's competition, and where are these products in the product life cycle?
2) Which factors affect how quickly consumers are likely to adopt TiVo? Which of these work in TiVo's favor, and which against it? How does the competition compare on these factors?
3) What kinds of consumers are most likely to be Innovators and Early Adopters for TiVo, versus Early Majority? What can TiVo do to cross this "chasm" between these two groups? Should its initial marketing efforts focus on "crossing the chasm" to the latter, or attracting Innovators and Early Adopters?
4) How should TiVo position its product? How does you answer to 1-3 affect this decision?
Cumberland Metal Industries: Engineered Products Division - April 8
Think about the following questions as you read this case and complete the assignment on "Proposing cost- and value based prices for Cumberland:"
1) What is cost plus pricing? What are the advantages of this pricing method that make it so popular at Cumberland, and what are its limitations? How does Cumberland Metals implement cost plus pricing?
2) What is value-based pricing? What are the advantages of value based pricing over cost plus pricing and what are the disadvantages?
3) What are the factors that Cumberland must consider in deciding how to "split" the savings from the curled metal pad between consumers on the one hand, and Cumberland and the pad's distributors on the other, when it sets a price?
4) How can Cumberland educate consumers about the "value" of the curled metal pad? Which elements of the marketing mix should it use? Why is consumer education important for successful value based pricing?
5) Which consumer segments should Cumberland target to receive these education
efforts? Do all of these segments buy pile-driving pads?
Federated Industries - April 10
1) Why are capacitor prices in a downward spiral?
2) Why did the five "official pricing policies" Federated used prove inadequate for competitive purposes? Did Federated anticipate how customers and competitors would react to these policies?
3) How did Federated attempt to use legal price signaling to stabilize prices? Why were these attempts unsuccessful? What might Federated, or one of its competitors, have done differently in reaction to this signal to help prices stabilize? What types of price signals are legal, and which represent illegal collusion and price fixing?
4) How might Federated have better anticipated the price moves its competitors made? How might Federated better anticipate its competitors' reactions to its own price moves?
5) After Midland submitted its bid of $1.98 per kilovar to the Southern Valley Authority, all three of the largest firms told customers they would meet this price. At this price they sold a lot of capacitors! Was this a mistake? What is likely to happen to capacitor demand in the second half of 1984? Why did Thomas Connors decide to meet the $1.98 price (think about his mandated objectives)?
6) Can Midland, or any capacitor manufacturer, afford to sell for $1.98 per KVAR for a prolonged period? How would this affect your response to the $1.98 price? What factors would you consider as you answer these questions? How would you treat each of the different costs involved in capacitor manufacturing (e.g., Exhb. 1) in deciding whether to sell for $1.98?
7) What bid should Federated submit, if any, in Phase III of the SVA bidding? Should Federated exit the capacitor market? Should Midland?
8) Is there any way Federated can stop the downward spiral of capacitor prices?
San Fabian Supply Company: Philippines - April 17
1) What functions does San Fabian perform as a MacDowell distributor?
2) What are the sources of conflict between MacDowell and San Fabian? Try to
consider them from each side's perspective.
3) How can the two parties resolve each source of conflict?
4) Do you think MacDowell should carry through its plan to terminate San Fabian, or should it try to resolve the conflict and keep San Fabian as its sole distributor in the Philippines?
5) If MacDowell does terminate San Fabian, what new skills will MacDowell have
to acquire to succeed in the Philippine market? Can it acquire these skills
easily? Which are most difficult to acquire?
6) If MacDowell does terminate, and replaces San Fabian with its own Philippine
salesforce, how large will this salesforce have to be? What size would you suggest?
7) One simple approach to answering (6) is to multiply the size of San Fabian's current salesforce by the percentage of its sales that come from MacDowell products. What critical issues does this approach ignore?
TiVo - April 24 and 29 (for communication strategy)
1) What should be the objective of TiVo's communications strategy at this time?
2) Which communication methods should TiVo use? Is conventional advertising the most important?
3) Do you think the four TV ads and the print ad described in the case are appropriate for TiVo? What kind of a message strategy do they use? What kind of a message strategy do you recommend TiVo should use?
4) Which media, and which particular media vehicles (particular magazines, TV shows, etc.) do you think TiVo should use?
5) Who are the target audience for TiVo (think back to our previous discussion of TiVo when we examined new products and adoption of innovations)? How does this affect your choice of media and vehicles?
6) How much should TiVo spend on communications in the next year? How should this be allocated across the different communications methods and media you recommend?