Exercise – Consumer Buyer Behaviour

Consumer Buyer Behaviour

The Buyer Decision Process

Here’s a recap: If a marketer can identify consumer buyer behaviour, he or she will be in a better position to target products and services at them. Buyer behaviour is focused upon the needs of individuals, groups and organisations.

  • Make decision.
  • Action.
  • Post-purchase behaviour i.e. did it meet your expectations? Did you use it? Was it reliable? Etc.

It is important to understand the relevance of human needs to buyer behaviour (remember, marketing is about satisfying needs).

Describe the Buying Decision Process for a mobile/smartphone. Fit your description around the five stages that follow:

  • Recognition of a need.
  • Choice of level of involvement (i.e. justifying you time and effort e.g. low for bubble gum, high for a holiday).
  • Identification of alternatives.

Exercise – Internet Marketing and Promotion: Internet Advertising

Internet Marketing and Promotion: Internet Advertising

Exercise – Manor Grange Hotel

It’s fantasic for hiking and short walks in a natural rural setting. The hotel stands in 40 acres of rural Scottish countryside – with lochs and small copses, which are typical of the area and provide a habitat for salmon and water birds.

Manor Grange Hotel is a 40 bed hotel, 4 Star hotel located in the in the Scottish Highlands near to Inverness. It is an historic building, which was once owned by Sir Frazer John – a retired Naval officer – with a passion for wildlife, especially fish and wild birds.

Hikers

Exercise Task

Manor Grange Hotel needs advice upon how to promote itself using web-based technologies. Advise them on methods of marketing their business on The Internet.

Excercise – Contribution Analysis

Contribution Analysis

Boreland Toys is a two year old toy company that primarily makes wagons for children, but has recently considered using its set up to fill spur of moment orders for shop wagons and perhaps wheel barrows. The firm boasts a dedicated workforce that readily contributes ideas in company forums.

  • (a) Identifying previously unkown costs
  • (b) Assisting in categorizing costs
  • (c) Guidance in setting a prices for totally new projects
  • (d) All of the above

(4) True or False, generally speaking Contribution Analysis identifies overhead costs by accounting for all known fixed, direct and variable costs and then subtracting that amount from revenues.

Management plans to use input from factory stewards and machine operators combined plus some accounting principles to reveal a price with profit potential. The company profit margins have been slim, though production has experienced steady growth profits have stagnated. The company thinks better accounting might have lead to the level of pricing which would have generated a profit.

Despite its past mistakes Boreland is intrigued about a proposal from Conner Industries to purchase a large order of tool wagons. Boreland is unsure of what price to charge for wagons supplied to Conner, there is the potential to shift production processes for the new order but not make a profit due to a poor handle on costs of production.

Answer the following questions to demonstrate an understanding of Contribution Analysis and its application.

(1) Boreland should employ which of the following accounting principles?

  • (a) Restitution Calibration
  • (b) Transactional Analysis
  • (c) Constitutional Analysis
  • (d) Contribution Analysis  

(2) To calculate a products contribution to profits, Boreland will need to assemble which of the following data?

  • (a) Number of units sold
  • (b) Contribution margin per unit
  • (c) Price records
  • (d) Variable costs per unit
  • (e) All of the above

(3) Which of the following are potential benefits Boreland might realize as a result of      employing a Contribution Analysis?

Exercise – eMarketing Product

eMarketing Product

Categorise the following examples as Online Extender, Online Alternative, Online Innovator (Existing Business), or Online Innovator (Online Start-Up):

B – Online Alternative

The Online Alternative is a new start-up that uses the Internet as an original channel of distribution to get products, brands, services or solutions, currently available elsewhere, to market. Some segments may be better targeted with this online alternative, for example remote or fragmented markets.

eMarketing Product

C and D – Online Innovators

Online Innovators come in two forms:

  • C – Online Innovators are existing businesses that see a benefit to launching new and innovative products, brands, services or solutions online by leveraging new technology. Existing businesses have a wealth of knowledge and learning that underpin their moves onto the Web. Remember, the Internet is not a business paradigm shift (at least not yet) and so current business approaches are often adapted for the Internet. Existing businesses have experience.
  • D – Online Innovators are start-ups that seize the opportunity to launch new and innovative products, brands, services or solutions online. Despite not having as much knowledge and learning as some of their competitors, they are flexible and can move much more quickly. Start-ups often lack experience.

Company One is a successful commercial bank with a very well-known and popular brand. It has decided to launch a new online brand which uses online technology as a channel to market its current portfolio of services – employing a new and energetic branding theme pitched at youth segments.

Company Two is also a commercial bank. However its strategy is to use the Internet as a way of communicating with, and accessing its traditional segments with its existing portfolio of brands.

Company Three is a new business that has gained a large amount of venture capital for its innovative business idea. It is employing Web 2.0 technology to build a community of practice for African farmers that currently work in remote regions, but may soon have access to the Internet in many local towns.

Company Four is also a new business. Its owners have seen an opportunity to get jewellery to consumers by building a website which employs e-commerce technologies. Essentially the site owners intend to advertise using Google Adwords based upon keywords such as ‘wedding ring’ and ‘bling.’ Hopefully the pay-per-click adverts will move traffic to their site where sales will be made.

Exercise – Arthur D Little (ADL) Strategic Condition Matrix

Arthur D Little (ADL) Strategic Condition Matrix

Map the following SBU’s onto the Arthur D Little (ADL) Strategic Condition Matrix. Then decide upon the best way forward for each SBU.

E – This SBU manufactures and promotes the World’s most well know lenses brand. This designer lens is marketed through retails outlets throughout the World and tends to command a premium price not only for precision but also through its association with fashion and celebrity.

A – This SBU is one of the biggest and oldest brands of lens photographical lenses in the World. It used to be the biggest supplier of lenses to both professional and amateur photographers, before the growth and current dominance of digital cameras. It needs to invest in a change programme that will downsize its business and give it a new and rejuvenated strategic direction.

B – This SBU manufactures high technology lasers that are used in the manufacture of specialist components for the production of aircraft. It has a number of unique patents as well as a 10 year contract with the World’s largest aircraft manufacturer.

C – This SBU is photocopier manufacturer that is currently under increasing attack from budget priced competitors that offer a very similar product and service package with a no frills brand. The SBU is finding it difficult to hold on to market share.

D – This SBU markets high quality optical equipment for use in laboratories, mainly in schools in Europe and the United States.

Exercise – Ansoff’s Matrix – Planning for Growth

Ansoff’s Matrix – Planning for Growth

Colorado Ricardo Mountain Bikes was founded by Ricardo Francisco in 1992. He was a keen cyclist who spent his weekends with many friends cycling and having fun in the mountains of Colorado. He was very competitive and loved to take his bike off-road to test his strength and endurance.

Ricardo’s company needs strategies for growth before it is too late. Use Ansoff’s matrix to examine the options for Colorado Ricardo.

However he found that the bikes themselves kept on breaking-down under the strain. So Ricardo designed and built a number of bikes to overcome this problem. Many failed but eventually he came up with the ultimate in off-road bike, which he called the ‘Colorado Ricardo’.People liked Ricardo’s bike and he was asked to build and sell them to other cyclists in the Colorado region. It went so well that soon he was able to give up his own job as a DJ to focus on the construction of the bikes.

Ansoff's Product/Market Mix

As the mountain bike sport took off, Ricardo’s business grew to produce 10,000 units in 1996. However sales have fallen annually since then and forecasted sales for 2000 are only 4,000 units.

Exercise – Balanced Scorecard

Balanced Scorecard

Place the 8 objectives and measures into the four balanced scorecard metric categories of Finance, Customers, Business Processes and Learning and Growth. Please note that objectives and measures (in the table below) may not be related i.e. objective (1) and measure (a) do not belong together. So first place the objectives, and then place the measures.

1. Finance

Objective

Measure

 

 

 

 

2. Customer.

Objective.

Measure.

 

 

 

 

3. Business Processes

Objective

Measure

 

 

 

 

4. Learning and Growth

Objective.

Measure.

 

 

 

 

Categorise the following as Financial, Customers, Processes, or Learning and Growth (You may need to print this page):

Objective

Measure

1. To be the cost leader in our market by 2004

(a) Average time taken for customers to receive complete orders

2. To reduce customer churn by 75% within 12 months

(b) Customer retention rates

3. To lead the market in speedy delivery by 2008

(c) Return On Capital Employed (ROCE)

4. To build a sports and social club by March 2009

(d) Employee satisfaction rates

5. To increase profitability by 20% by 2005

(e) Statistical process control

6. To produce products that are right first time within 3 months

(f) Employee retention rates

7. To train and develop all team leaders by 2006

(g) Customer feedback or complaints

8. To achieve 99% customer satisfaction within 5 years

(h) Unit cost

Exercise – Generic Strategies

Generic Strategies – Michael Porter (1980)

Consider the global market for restaurants. Place the following restaurants onto the Generic Strategies matrix.

Generic Strategies

  • McDonalds (Global Brand).
  • Chick King (lesser known chicken restaruant).
  • KFC (global brand).
  • Burger King (global brand).
  • Woodies Restaurant Chichester, UK (small but popular restaurant).
  • Denny’s or Little Chef (national chain of identicle restaurants.
  • MGM Hotel Restaurant, Las Vegas (huge brand, single mega hotel).
  • Subway (growing ‘sub’ sandwich brand).
  • A deli in New York (small but popular deli).
  • A hot dog stand in a New York street (cheap but low quality).

 

Exercise – Four Banding Alternatives

Four Banding Alternatives

Banana Computers

Banana Computers is a well-established personal computer (PC) manufacturer. Designers and computer enthusiasts alike prefer the brand and it has a cult following all over the World. Banana is innovative and creative.

Four Branding Alternatives

Your Task.

Apply the Four Banding Alternatives to the scenario of Banana Computers. How should they progress with their branding strategy

Exercise – Core Competences

Core Competences

The Core Competences of Amazon.com

Here’s a recap. A core competence is the result of a specific unique set of skills or production techniques that deliver value to the customer. Such competences give an organization access to a wide variety of markets. Hamel and Prahalad (1990) refer to a number of organizations and their products to support their concept including NEC, Honda and Canon.

Three tests of core competence.

  • Provides potential access to a wide variety of markets.
  • Should make a significant contribution to the perceived customer benefits of the end product.
  • Should be difficult for competitors to imitate.

Consider the well-known brand Amazon.com

  • 1. What are Amazon’s core competences, threshold competences, scarce resources, and threshold competences? Plot them onto the diagram

Core Competences

  • 2. What are Amazon’s material resources, human resources, and intangible resources? Plot them onto the diagram.

Core Competences

Exercise – Standard Costing

Standard Costing

McReynolds, Inc is a manufacturing company, producing electronic circuit boards.
In recent years it has generated its product primarily by the traditional manufacturing method.

(5) McReynolds plans to adjust its standard costing operations, which may result in which of the following benefits:

  • A. The change may align company performance management with cost accounting
  • B.  McReynolds may now adjust faster and beat Nolan Industries to new markets
  • C. Pertinent information allow revisions and more realistic standard costs
  • D. The firm gains the ability to utilize recent information compiled by key cost centers
  • E.  The certainty of replacing Nolan as regional market share leader
  • In the company’s inaugural year the president and founder determined that its standard costs should be based upon the ten year averages associated with the region’s market leader Nolan Industries. Nolan had recently experienced dramatic growth, aided in part by great labor relations, setting the pace in innovation, and stable material prices.

    The President acknowledges that his rationale in establishing such ideal standard costs was a desire to develop a company theme of high performance goals.

    McReynolds has kept copious operations and expenses records. The company is contemplating a transition to a Flexible Management System. The strategy shift was influenced by a company Cost Accounting Committee, which focused on the benefits of shifting its cost accounting methods. They were influenced by a review of the marketing department’s competitive analysis which revealed certain vulnerabilities in Nolan Industries.

    While the competitive analysis highlighted Nolan’s inflexibility in chasing new market demand, the Standard Costing Committee suggested that if operations were to be revised so should its cost standards.  Mc Reynolds ultimate goal is to be able to utilize machines that are adaptable to shifting product demands and to utilize more current standards.

    Considering the history and current status of McReynolds Inc, how would you answer the following questions?

    (1) Which of the following Standard Costing Plan development procedures are highly recommended?

    • A.Outsource to college freshmen
    • B.Perform séance requesting assistance from dead founder
    • C.Establish Cost Accounting Committee
    • D.Invite major competitors to submit suggestions

    (2) Which of the following companies are most likely to employ a standard costing procedure?

    • A.Manufacturing
    • B.Cartooning
    • C.Public Relations
    • D.Media Records
    • (3) The proposed shift in manufacturing procedures represents a change from traditional to flexible, which of the following costing method is most applicable?

      • A. Regional Marketing Standards
      • B.  Royal Industry Standards
      • C.  Overall Cost Standards
      • D.  Current Level Standards

      (4) What were some of the erroneous aspects of the original standard costs done d by McReynolds?

      • A.Basing standards on goals
      • B.Basing standards on ideal conditions
      • C.Establishing standards without key input
      • D.Relying solely on outside data to determine standards
      • E.All of the above

Exercise – Boston Matrix

 

The Boston Matrix

The Boston Consulting Group’s Product Portfolio Matrix

Manor Way Tools began life as a small steel company at the end of the 19th Century. It was one of the first companies to put carbon into regular iron to create steel. It was strong and flexible. Their first products were fish hooks which were made from the flexible wire that they were able to produce.

The tool trade is very complex and competitive. Manor Way’s main competitor is Oliver Tools. They are the market leader in many similar areas of the market.

Boston Matrix

Analyze your product portfolio using the Boston Matrix.

  • Oliver is the market leader in handsaws with 40% of the market. Manor Way has only 25%. There is little house building and nowadays many amateurs use power tools. However is is still quite profitable.
  • Manor way still make a range of barbed fish hooks which are now banned in some markets.
  • Both Oliver and Manor Way have invested heavily in gardening tools and expect sales to increase in the future since people have more leisure time and a larger disposable income. Maner Way has 10% of the new market, and Oliver has 15%.
  • Manor Way has a high share in the new market for sandpaper replacement products. Their Wayplate is a steel sandpaper replacement for which they have sole rights. They have 5% of this growing market.
  • What about the javelins?

Over the years the product portfolio grew to include anything that their operation could turn its hand to such as javelins and railings. Today they focus their operations on the manufacture of tools for the professional, production, and the enthusiastic amateur. Core products include handsaws, drill bits, screwdriver, bowsaws etc.

 

Exercise – Marketing in a Credit Credit Crunch

Marketing in a Credit Credit Crunch

Mystic Movers is a mom and pop Moving and Storage Company, composed of mainly family members. The company originated quite spontaneously and took off initially based on word of mouth advertising. The company’s advertising strategy consists of simply copying some of its competitors’ sales literature. Its prices were arrived at in a similar arbitrary fashion.

Mystic knows what its customers don’t like due to its low rating on consumer websites and complaint records, but it doesn’t know what customers liked about its service. Chief among customer dislikes are employee appearance and items lost during moving.

The recession has reduced the number of people relocating to other cities and many have postponed plans to move to upgraded dwellings. The result has been a reduction in sales prompting Mystic to consider layoffs and drastically cut back on advertising. The company has excellent internal records of customer contacts and had considered conducting its own customer feedback survey and using the results to help guide an advertising campaign.

Since its initial success came via word of mouth, the company has never compiled demographic data or defined its target market. Mystic recently joined a Moving Company Association whose purpose is to keep its members attuned to political changes and lobby in support of stakeholder interests.

Your questions

1. A great framework for conducting a situational analysis which takes into account economic and political factors is a part of which of the following

  • a. Transactional Analysis
  • b. Nutritional Analysis
  • c. Systems Analysis
  • d. PEST Analysis

2. The Mystic Company’s current lack of information on customer opinions hinders its understanding of which of the following factors?

  • a. Customer needs
  • b. Brand Perception
  • c. The buyer decision process
  • d. Consumer values
  • e. All of the above

3. Mystic Company personnel most likely to be assigned to monitor and adapt to changes in the marketing environment is which of the following?

  • a. The Company Attorney
  • b. The Truck Mechanic
  • c. The Marketing Manager
  • d. The Auditor

4. Which of the following approaches is most likely to result in the development of Smart Objectives?

  • a. Following the leader
  • b. Proceeding on instinct
  • c. Outlining specific, realistic and achievable tactics
  • d. Crossing your fingers

5. Which of the following current or planned initiatives will aid Mystics formulation of its advertising tactics and decision-making?

  • a. Assessing the cause of customer complaints
  • b. Continuing to mirroring the moves of competitors
  • c. Conducting a customer feedback survey
  • d. Utilizing information provided by the Association

Exercise – Three Levels of a Product

Three Levels of a Product

Here’s a recap before the exercise (below): The CORE product is NOT the tangible, physical product. You can’t touch it. That’s because the core product is the BENEFIT of the product that makes it valuable to you. So with the car example, the benefit is convenience i.e. the ease at which you can go where you like, when you want to. Another core benefit is speed since you can travel around relatively quickly.

Complete the table below by filling in the blank spaces. All companies have a CORE, ACTUAL and AUGMENTED product or service.

Product or service or brand

Core Product

Actual Product

Augmented Product

Ford Focus

Freedom to travel

A motor car

 

Spanish Holiday

Relaxation

 

Holiday insurance

Budget/No Frills Airline e.g. EasyJet or Ryanair –

 

An airline journey

Food bought during your flight

Chelsea Football Club

Excitement and leisure

Sporting event

 

Nike

Association with the best in sports.

Nike online allows you to personalise your trainers

Hilliers’ Garden Centres

 

Goods for gardens

Hilliers’ gardening club

The ACTUAL product is the tangible, physical product. You can get some use out of it. Again with the car example, it is the vehicle that you test drive, buy and then collect.

The AUGMENTED product is the non-physical part of the product. It usually consists of lots of added value, for which you may or may not pay a premium. So when you buy a car, part of the augmented product would be the warranty, the customer service support offered by the car’s manufacture, and any after-sales service.

Exercise – PEST Analysis

PEST Analysis

Consider the following ODCI information and conduct a PEST analysis.

Government type: constitutional monarchy note: Malaya (what is now Peninsular Malaysia) formed 31 August 1957; Federation of Malaysia (Malaya, Sabah, Sarawak, and Singapore) formed 9 July 1963 (Singapore left the federation on 9 August 1965) . . .

Telephones: main lines in use: 4.4 million (1998) Telephones – mobile cellular: 2.17 million (1998) Telephone system: international service good domestic: good intercity service provided on Peninsular Malaysia mainly by microwave radio relay; adequate intercity microwave radio relay network between Sabah and Sarawak via Brunei; domestic satellite system with 2 earth stations international: submarine cables to India, Hong Kong, and Singapore; satellite earth stations – 2 Intelsat (1 Indian Ocean and 1 Pacific Ocean).

Radio broadcast stations: AM 56, FM 31 (plus 13 repeater stations), shortwave 5 (1999) Radios: 9.1 million (1997) Television broadcast stations: 27 (plus 15 high-power repeaters) (1999) Televisions: 3.6 million (1997) Internet Service Providers (ISPs): 8 (1999) Merchant marine: total: 361 ships (1,000 GRT or over) totaling 5,000,706 GRT/7,393,915 DWT ships by type: bulk 61, cargo 119, chemical tanker 34, container 55, liquified gas 19, livestock carrier 1, passenger 2, petroleum tanker 57, refrigerated cargo 1, roll-on/roll-off 6, specialized tanker 1, vehicle carrier 5 (1999 est.) Airports: 115 (1999 est.) Airports – with paved runways: total: 32 over 3,047 m: 5 2,438 to 3,047 m: 4 1,524 to 2,437 m: 11 914 to 1,523 m: 6 under 914 m: 6 (1999 est.).

. . . nominally headed by the paramount ruler and a bicameral Parliament consisting of a nonelected upper house and an elected lower house; Peninsular Malaysian states – hereditary rulers in all but Melaka, Penang, Sabah, and Sarawak, where governors are appointed by the Malaysian Government; powers of state governments are limited by the federal constitution; under terms of the federation, Sabah and Sarawak retain certain constitutional prerogatives (e.g., the right to maintain their own immigration controls); Sabah – holds 20 seats in House of Representatives, with foreign affairs, defense, internal security, and other powers delegated to federal government; Sarawak – holds 28 seats in House of Representatives, with foreign affairs, defense, internal security, and other powers delegated to federal government.

Economy – overview: Malaysia made a quick economic recovery in 1999 from its worst recession since independence in 1957. GDP grew 5%, responding to a dynamic export sector, which grew over 10% and fiscal stimulus from higher government spending. The large export surplus has enabled the country to build up its already substantial financial reserves, to $31 billion at yearend 1999.

This stable macroeconomic environment, in which both inflation and unemployment stand at 3% or less, has made possible the relaxation of most of the capital controls imposed by the government in 1998 to counter the impact of the Asian financial crisis. Government and private forecasters expect Malaysia to continue this trend in 2000, predicting GDP to grow another 5% to 6%. While Malaysia’s immediate economic horizon looks bright, its long-term prospects are clouded by the lack of reforms in the corporate sector, particularly those dealing with competitiveness and high corporate debt.

Ethnic groups: Malay and other indigenous 58%, Chinese 26%, Indian 7%, others 9%.

Religions: Islam, Buddhism, Daoism, Hinduism, Christianity, Sikhism; note – in addition, Shamanism is practiced in East Malaysia.

Languages: Bahasa Melayu (official), English, Chinese dialects (Cantonese, Mandarin, Hokkien, Hakka, Hainan, Foochow), Tamil, Telugu, Malayalam, Panjabi, Thai; note – in addition, in East Malaysia several indigenous languages are spoken, the largest of which are Iban and Kadazan.

Literacy: definition: age 15 and over can read and write total population: 83.5% male: 89.1% female: 78.1% (1995 est.).

Exercise – Place, distribution, channel, or intermediary

Place, distribution, channel, or intermediary

Welcome to Newtown. It sits 25 miles from Commerce Town, 10 miles away from Friesner Airport, and 35 miles away from Poshbury.

  • This site is close to Newtown. However the 7,000 of the 10,000 citizens of Newtown work in Commerce Town and spend little time at home during the working week. This site site some 5 miles away from Newtown and 4 miles away from the growing Friesner Airport. It is situated on the only road between Friesner airport and Newtown.
  • Which place would you recommend to Floor-Mart? Justify your recommendations.

    Floor-Mart are considering where to put their new store. Their store will sell groceries and provisions 24 hours a day (at a premium price of course).They have three options, each one is considered below. You must recommend a place for the position of the new store.

    Place Exercise

    • This site is next to Commerce Town. It has very few inhabitants. However 7,000 people travel there everyday to go to work. It already has a competing store (C). There are plans to build low cost housing in the area.
    • This site is very close to the exclusive Poshbury. It has 1,000 very exclusive, wealthy inhabitants. There is no competition in the locality.

    Exercise – Segmentation

    Segmentation

    Construct a battlemap for the music industry. ‘Age group’ is one basis for segmentation, you need to select the other. Plot the recordings onto the battlemap.

    Segmentation

    Nigel Kennedy.

    Kanye West.

    Robbie Williams.

    Sugarbabes.

    Paul Simon.

    Phantom Menace Soundtrack.

    Bananarama.

    American Beauty Soundtrack.

    Marilyn Manson.

    Titanic Soundtrack.

    Alicia Keys.

    Foo Fighters.

    Madonna.

    Amy Winehouse.

    Razorlight.

    Genisis.

    Spice Girls.

    Kurt Cobain.

    Mick Jagger.

    Boston Symphony

    Exercise – Promotion

    Integrating the Promotions Mix – Exercise

    ‘www.cuttingitshort.com’ – The Campaign

    Clarissa Drive-Terrior is one of the new breed of entrepreneurs that have taken advantage of the massive opportunities open to e-businesses. Her idea was to sell travel and flights, theatre tickets, and similar products and services, to consumers that need them at very short notice; hence the name cutting it short. www.cuttingitshort.com became extremely popular almost immediately. It was so popular that Clarissa decided to float the business. This was also a huge success, with stocks/shares exchanging hands for more than $20.00 each.

    Now that the business was a success, it needed a campaign to reinforce its brand attributes in the mind of existing consumers, and the generate new ones.

    Your task is to integrate the promotions mix to form a campaign for www.cuttingitshort.com.

    Use the different elements of the mix which were:

    • Personal Selling.
    • Sales Promotion.
    • Public Relations.
    • Direct Mail.
    • Trade Fairs and Exhibitions.
    • Advertising.
    • Sponsorship.

    Exercise – Swot Analysis

    SWOT Analysis

    Strengths, Weaknesses, Opportunities and Threats (SWOT).

    Highly Brill Leisure Center has hired you to help them with their marketing decision making.

    Perform a SWOT analysis on Highly Brill Leisure Center, based upon the following issues:

    1. The Center is located within a two-minute walk of the main bus station, and is a fifteen-minute ride away from the local railway station.
    2. There is a competition standard swimming pool; although it has no wave machines or whirlpool equipment as do competing local facilities.
    3. It is located next to one of the largest shopping centers in Britain.
    4. It is one of the oldest centers in the area and needs some cosmetic attention.
    5. Due to an increase in disposable income over the last six years, local residents have more money to spend on leisure activities.
    6. There has been a substantial decrease in the birth rate over the last ten years.
    7. In general people are living longer and there are more local residents aged over fifty-five now than ever before.
    8. After a heated argument with the manager of a competing leisure center, the leader of a respected local scuba club is looking for a new venue.
    9. The local authority is considering privatizing all local leisure centers by the year 2000.
    10. Press releases have just been issued to confirm that Highly Brill Leisure Center is the first center in the area to be awarded quality assurance standard BS EN ISO 9002.
    11. A private joke between staff states that if you want a day-off from work that you should order a curry from the Center’s canteen, which has never made a profit.
    12. The Center has been offered the latest sporting craze.
    13. Highly Brill Leisure Center has received a grant to fit special ramps and changing rooms to accommodate the local disabled.
    14. It is widely acknowledged that Highly Brill has the best-trained and most respected staff of all of the centres in the locality.

    Exercise – Pricing Strategies

    Pricing Strategies

    Listed below are a series of pricing strategies/polices. Place them onto the correct section of the matrix.

    • Holiday Inns try to fill hotels during winter weekends.
    • Burger King introduces a new range of value meals.
    • Nokia launch a new videophone.

    Pricing

    • Wall-Mart launch a new range of own-label soups.
    • Cunard launch two new cruise ships.
    • A cable TV provider moves into a new area and needs to achieve a market share.

    Exercise – The Product Life Cycle (PLC)

    The Product Life Cycle (PLC)

    Here’s a recap of the Product Life Cycle (PLC). It is followed by the PLC exercise (below).

    Introduction.

    The need for immediate profit is not a pressure. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution.

    Decline.

    At this point there is a downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting.

    Exercise

    Put the following products on the Product Life Cycle (PLC).

    • MS-DOS.
    • Internet Telephones (WAP or 3G).
    • Palmtop computers.
    • Play Station 2.
    • Sega Megadrive.
    • Fax machines.

    Growth

    Competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances, joint ventures and take each other over. Advertising spend is high and focuses upon building brand. Market share tends to stabilise.

    Maturity.

    Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilise. Producers attempt to differentiate products and brands are key to this. Price wars and intense competition occur. At this point the market reaches saturation. Producers begin to leave the market due to poor margins. Promotion becomes more widespread and use a greater variety of media.

    Exercise – Personal Selling

    Personal Selling

    Fishbourne Financial Services

    You are the salesperson for Fishbourne Financial Services. You have worked hard recently on prospecting and have a meeting with Mr Boosh, regarding his personal finances. You have sent some information to him prior to your call. You are about to begin your sales call, and your objective is to sell the client a pension scheme Complete the following Tasks:

    (a) Mr Boosh raises the following objection – ‘Your pension scheme seems very expensive’ – How would you handle it? [There are 4 ways to handle this objection]

    (b) You have reached the end of the sales call. How would you close the deal for the pension scheme with Mr Boosh? [There are 3 ways to close this deal]

    Exercise – Introduction to Marketing Research

    Introduction to Marketing Research

    Puerto Vallarta Autos

    Puerto Vallarta Autos has been in business since 1967. It has always been a successful, professional organization. Since the locality has an economy based mainly upon agriculture, their traditional customer has been the aspiring Mexican consumer, usually business or professional people.

    3. Select a sampling method. Do we us a random sample, stratified sample, or cluster sample?

    4. How will we analyze any data collected? What software will we use? What degree of accuracy is required?

    5. Decide upon a budget and a timeframe.

    6. Go back and speak to the managers or clients requesting the research. Make sure that you agree on the problem! If you gain approval, then move on to step seven. 7. Go ahead and collect the data.

    8. Conduct the analysis of the data.

    9. Check for errors. It is not uncommon to find errors in sampling, data collection method, or analytic mistakes.

    10. Write your final report. This will contain charts, tables, and diagrams that will communicate the results of the research, and hopefully lead to a solution to your problem. Watch out for errors in interpretation.

    Recently they have noticed that their local market has changed considerably. Puerto Vallarta has become a center for tourism and recreation for Mexicans from Guadalajara and Mexico City, as well as North Americans and Europeans. There are many beach clubs, hotels, apartments, and holiday condos.

    Autos

    Doreteo Dominguez, the sales manager at Puerto Vallarta Autos, feels that the company may have a problem. They do not know who their customer is and hence cannot target advertising.

    You are the Account Representative for Punta Mita Marketing Research Associates. Advise Doreteo Dominguez on an appropriate method of marketing research, and describe any advantages and disadvantages of such a method.

    The Marketing research Process.

    Marketing research is gathered using a systematic approach. An example of one follows:

    1. Define the problem. Never conduct research for things that you would ‘like’ to know. Make sure that you really ‘need’ to know something. The problem then becomes the focus of the research. For example, why are sales falling in New Zealand?

    2. How will you collect the data that you will analyze to solve your problem? Do we conduct a telephone survey, or do we arrange a focus group? The methods of data collection will be discussed in more detail later.

    Exercise – Bowman’s Strategy Clock

    Bowman’s Strategy Clock

    The Strategy Clock: Bowman’s Competitive Strategy Options

    Firstly here’s a recap of the various options from Bowman’s Strategy Clock. The exercise is at the bottom of this page.

    Place the following competitive offerings onto the Strategy Clock:

    • New Zealand Lamb
    • A standard domestic 40 watt light bulb
    • A Colored 40 Watt light bulb
    • Per per view TV
    • Hyundai Autos
    • First Class fights on United Airlines
    • A standard paper clip
    • SAGA holiday (for the over fifties).

    Option one – low price/low added value

    • likely to be segment specific.

    Option two – low price

    • risk of price war and low margins/need to be a ‘cost leader’.

    Option three – hybrid

    • low cost base and reinvestment in low price and differentiation.

    Bowman's Strategy Clock

    Option four – differentiation

    (a)without a price premium:

    • perceived added value by user, yielding market share benefits.

    (b)with a price premium:

    • perceived added value sufficient to to bear price premium.

    Option five – focussed differentiation

    • perceived added value to a ‘particular segment’ warranting a premium price.

    Option six – increased price/standard

    • higher margins if competitors do not value follow/risk of losing market share.

    Option seven – increased price/low values

    • only feasible in a monopoly situation.

    Option eight – low value/standard price

    • loss of market share.

    Exercise – Traffic Lights

    Traffic Lights

    Dubliner’s Ale

    Dubliner’s Ale is a global beer band which is based in Dublin, Eire. It has an international appeal for beer drinkers based mainly upon its well known and recognised brand.

    • Differences between international and domestic marketing need to be addressed. Continue with international marketing activities where the traditional brand is easier to protect. Reconsider domestic marketing.
    • Develop new and innovative products to compete in the new, exciting and innovative markets. Let’s develop (or buy into) a new lager brand, a new cider brand and an innovative spirit-based designer brands.

    Its marketing strategies and especially its advertising campaigns are very high profile and even loved by those that enjoy high quality and creative commercials. However over recent years the market for traditional beers has been displaced by new and innovative alcoholic drinks brands. Today’s drinkers much prefer lagers, ciders and spirit-based designer brands. So Dubliner’s Ale has some creative marketing to do. Undertake a traffic lights exercise on their behalf, by placing the bullets below under the following headings:

    Traffic Lights
    Traffic Lights
    Traffic Lights
    • Red – STOP.
    • Amber – PROCEED WITH CAUTION, and make some improvements.
    • Green – Go or Let’s carry on with this activity.

    Place the bullets below under the three headings above:

    • Generate stylish and creative marketing communications campaigns for our new products that enhance and build upon our reputation for marketing excellence.
    • Develop want tomorrow’s consumers will want, and jump one step ahead of our competitors.
    • Depending upon narrow and out modish, traditional products. Today’s drinkers much prefer lagers than old fashioned beers.
    • Spending a disproportionate amount of our marketing communications budget on products that consumers no longer value, simply because the campaigns are great.
    • Positioning was great but now needs to be altered. Let’s reposition our traditional brand to make it appeal to today’s drinkers. This could even mean making ‘beers’ in general more acceptable to new segments.

    Exercise – Value Chain Analysis

    Value Chain Analysis

    Fen Side Golf Course

    Fen Side Golf Course is an internationally known Scottish golf facility. It is not just an eighteen hole world-class golf course, it has a five star hotel with 250 luxury rooms, and private leisure centre, indoor tennis courts, as well as a series of top class restaurants.

    • D. Fresh fruit and vegetables are delivered and prepared every day.
    • E. The hotel has an advanced room reservation system.
    • F. Fen Side is promoted through magazines targeted at the weathly and influential.
    • G. The whole experience is based upon high quality, professional service at every stage.
    • H. Limousines are available to take guests to airports as they finish their stay.
    • I. Fen Side has a series of contracts with suppliers of meat and fish.

    Below are a series of nine activities that add value to the Fen Side experience. Print out the value chain above and place the appropriate letter (below) onto the value chain.

    Value Chain

    • A. All staff are trained to the highest industry standards.
    • B. The hotel management team focus on goals set out in their strategic plan.
    • C. All golf course fairways are trimmed and watered daily.

    Exercise – The Six Living Generations In America

    Exercise: Marketing A Laptop Computer to Different Generations

    Consider the Six Living Generations: If you were marketing a laptop, what would be the product offering? What would you talk to them about? How would you promote the laptop to each generation? Complete the table below, then check your answer.

    Product Offerings:Talk To Them About:Promotion:
    GI Generation.
    Mature Generation.
    Baby Boom Generation.
    Generation X.
    Generation Y.
    Generation Z

    Exercise – Marketing Plans and Consumer Behavior

    Marketing Plans and Consumer Behavior

    Exercise

    Haversham Business School originated three years ago to assist middle mangers in obtaining executive level positions. Its founders felt certain that there was a viable market for managers pursuing their continuing education.

    The owners are well versed at curriculum development, sales, and problem solving. The school emphasizes the upper crust, upper echelon aspects of their training inventory in order to justify the higher fees it charges. To match this theme, the school was located in the downtown high rent district near its professional clientele.

    The school survived its first years primarily due to government subsidies in certain industries and company benefit packages that covered work related continuing education. Recently, they have reached a plateau in new enrollees and revenues. Their business plan is very cursory and concentrates on the corporate middle management market.

    Recently, Haversham has noticed an increase in inquiries from people seeking assistance in developing basic education skills. Many long time employees have been laid off and realize that they need to enhance their math and computer skills. The availability of skilled teachers has convinced the owners that the school could quickly shift gears and offer a lower cost curriculum in the basic job skills as well as the health and computer fields. The shift hinges on whether the volume of new enrollees can offset the reduced income per student.

    The majority of business schools serving the market Haversham is considering are located in neighborhood districts and have long been known for accessibility and affordability.

    Your task

    Taking into account the company’s history , contemplated initiatives and applicable marketing plan concepts, please answer the following questions:

    1. Haversham’s initial focus on the needs and profit potential in the professional market represents which marketing plan concept?

    • a. Stereotyping
    • b. Indemnification
    • c. Segmentation

    2. Haversham’s specific identification of middle management executive in the downtown district represents which marketing plan element?

    • a. Young Urban Professionals
    • b. Goal Setting
    • c. Targeting

    3. Based upon current consumer perceptions and behavior, which of the following entities appears to more readily meet their needs?

    • a. Haversham Business School
    • b. Other Business School competitors

    4. In order to better understand current consumer behavior, which of the following elements should be considered?

    • a. Culture
    • b. Attitude
    • c. Brand Choice
    • d. Location Choice
    • e. All of the above

    5. When Haversham begins to alter its curriculum, offer lower course fees and relocate, it can be said to employ which of the following marketing plan concepts?

    • a. Re-engineering
    • b. Marketing Inputs (Product, Place Promotion, Price)
    • c. Positioning
    • d. Change Management

    Exercise – Marketing Plans

    Marketing Plans

    Case Study – Counselling on the Internet: a new innovation

    Cannon Counselling is amongst the most highly regarded counselling practices in Western Australia. It employs three full-time, and17 part-time, counsellors. All are qualified and experienced. They work with all types of clients, both directly and via referral from doctors. It is a successful company. However, it is not growing and is looking for an innovative way to expand its enterprise.

    The Australian government is offering substantial sums of money to organisations that want support in marketing their products or services via the internet. This is called the ‘E-commerce for the Millennium Project’. The owner of Cannon Counselling, Steve Bull, is very interested in this opportunity to expand his business in such a progressive way.

    Your brief.

    You work for the E-commerce for the Millennium Project. Steve Bull has asked you to help him prepare a marketing plan for Cannon Counselling’s expansion onto the Internet. Use the AOSTC to write an outline marketing plan.

    ANALYSIS.

    OBJECTIVES.

    STRATEGIES.

    TACTICS.

    CONTROLS.

    Exercise – Balance Sheet

    The Balance Sheet

    Marketing and the Balance Sheet

    Review the Balance Sheet below and answer the following questions:

    1) What kind of assets are account receivables?
    2) Is there sufficient cash on hand and accounts receivable to pay for taxes and accounts payable?
    3) What percentage of fixed assets is represented by land ownership?

    Balance Sheet Ending December 31st 2014.


    Assets
    Current Assets
    Cash on Hand

    $10,000.00

     
    Accounts Receivable

    $25,000.00

     
    Inventory

    $15,000.00


    Total Current Assets

    $50,000.00
    Fixed Assets
    Garage and Equipment

    $40,000.00

    Less Depreciation

    ($12,000.00)

    Land Owned

    $8,000.00

     
    Other (Intangible Assets)

    $2,000.00

     

    Total Fixed Assets

    $38,000.00



    Total Assets

    $88,000.00
      

    Liabilities & Shareholder Equities
    Liabilities
    Accounts Payable

    $20,000.00

    Taxes Payable

    $7,500.00

     
    Long-Term Loan

    $15,000.00

     
      

    Total Liabilities

    $42,500.00


     
      
    Shareholder Equity
    Common Stock

    $45,500.00

    Retained Earnings

    0


    Total Shareholder Equity

    $45,500.00



    Total Liabilities $ shareholder Equity

    $88,000.00

     

    Exercise – Five Forces Analysis

    Analysing the environment – Five Forces Analysis

    The market for online education

    Place the following eight points onto the five forces model:

    • Start up costs are very low.
    • Sudents have access to books, videos, and paper-based distance learning packs.
    • The more innovative learning sites give lesson for free just for the love of it.
    • More people with access to the web every second.
    • Companies, governments, and self funding students invest huge amounts in their education.
    • There are very few high quality web sites available.
    • Traditional colleges and universities are adapting their products for on-line learning.
    • Government legislation in the US and Europe encourages on-line learning.

    Exercise – The Loyalty Ladder

    The Loyalty Ladder

    Farley’s Irish Dream

    Farley’s Irish Dream is a brandy-based liqueur (i.e. a sweet and creamy alcoholic drink) that is popular in most parts of Canada. It is associated with the sports of skiing, bobsleigh and snowboarding. It is most well liked during the months of winter when it is seen as a warming and relaxing treat that is shared with friends and family after participating in winter sports. Farley’s has decided to enter the European market, by targeting countries that have regions with a similar climate, and where the brand associations of winter sports can be exploited.

    Farleys

    Recommend an integrated marketing communications campaign that will turn Prospects into Advocates in the new European markets.

    Exercise – Profit and Loss Statement

    Profit and Loss Statement Exercise

    Profit and Loss Statement Exercise

    Fishbourne Marketing

    Review the Profit and Loss Statement below and answer the following questions

    1) What impact does Cost of Goods Sold have on Total Income?

    2) If quality improved such that returns were reduced by 50%, what impact would that have on Net Income?

    3) If alternative office rental accommodations could be found at a savings of $5,000 what would be the impact on Net Income?

    Profit and Loss Statement

    Fishbourne Marketing

    January 1, 2014 to December 31, 2014

    Income
    Gross Sales
    $323,789.40
    Less Returns and Allowances
    $10,000.00
    Net Sales
    $313,789.40
    Cost of Goods
    Merchandise
    inventory, January 1
    $160,000.00
    Purchases
    $90,000.00
    Freight Charges
    $2,000.00
    Total Merchandise Handled
    $252,000.00
    Less Inventory, December 31
    -$100,000.00
    Cost of Goods Sold
    $152,000.00
    Gross Profit
    $161,789.40
    Interest Income
    $2,500.00
    Total Income
    $164,289.40
    Expenses
    Salaries
    $50,360.40
    Utilities
    $5,800.00
    Rent
    $23,000.00
    Office Supplies
    $2,250.00
    Insurance
    $3,900.00
    Advertising
    $8,650.00
    Telephone
    $2,700.00
    Travel and Entertainment
    S$2,550.00
    Dues and Subscriptions
    $1,100.00
    Interest Paid
    $2,100.00
    Repairs and Maintenance
    $1,250.00
    Taxes and Licenses
    $35,589.00
    Total Expenses
    $139,289.40
    Net Income
    $25,000.00

    Exercise – Financial Ratios

    Financial Ratios

    Jumpys is a neighborhood restaurant famous for its jolting coffee. Named for its owner Jumpy Johnson, the restaurant specializes in a breakfast menu that has many loyal fans among the locals. But every since Jumpys neon dancing coffee cup sign went up, the owner has wanted to expand in an even bigger way.

    2. Jumpys Current Ratio is 2.29:1, True or False?

    3. Jumpys Ownership Ratio is 29.2:1, True or False?

    4. Jumpys Profitability Ratio is Zero, True or False?

    Jumpys is located in a region that holds a round of championship events at the same time every year. Johnson noticed that increased promotions during those events brought a tremendous influx of new customers to the advertisers. He is convinced that once those new customers visit Jumpys, they will be captured forever.

    In prior years Johnson has not been prepared financially to capitalize on the event, but recently he has been working closely with his accountant to monitor the restaurants financial health with the idea of seeking a loan. His accountant has provided the following summary of pertinent company financial information:

    Current Assets: $32,000

    Current Liabilities: $14,000

    Net Profit: $15,000

    Net Sales: $100,000

    Net Worth: $34,000

    Total Debt: $18,000

    Answer the following questions:

    1. Lenders and investors use financial ratios to determine which of the following (multiple choice):

    (a) Company License Renewal Decisions
    (b) Actuary Liabilities
    (c) Towing Costs
    (d) Identify good candidates for financial assistance.

    Exercise – Activity-Based Costing (ABC)

    Activity-Based Costing (ABC)

    The slumping economy has prompted many businesses to go over their expenses with a fine tooth comb. As noted previously in the Marketing Teacher. Lassiter Boots was recently lauded for its efficiency. Although the award stressed process improvement initiatives, the company might also be congratulated for its implementation and use of activity based costing.

    3. How might the possession of the most accurate production costs benefit a company?

    • A. Allow the sales team more certainty in marketing and promotion materials.
    • B. Encourage competitors to utilize prison labor.
    • C. Remove accounting method sanctions
    • D. Facilitate project bids based on more accurate cost estimates

    4. Which of the following might be a negative outcome resulting from utilizing the Traditional costing model?

    • A. Negative Citing by the Basic Register of Illegal Activities
    • B. Increased production without corresponding increased profits
    • C. Increased incidence of basic occurrences
    • D. Revocation of membership to Activity Based Council

    Anticipating the coming economic downturn, Lassiter began a study of its expenditures with an eye on saving money. During its first two years Lassiter had captured new markets as a result of its ability to adjust its machine set up to produce whatever a large contractor demanded on the spur of the moment.

    At year end , Lassiter was surprised when its selling price did not cover all of the company’s production costs. Lassiter had employed a traditional accounting model which measured cost, based on machine hours. Lassiter values its privacy, but did provide an example based on a couple of procedural steps.

    Because it had a ready inventory of materials needed for the spur of the moment opportunity, it was assumed profits would ensue. After and itemizing its current procedural steps, Lassiter delineated those costs employing activity-based costing. It was discovered that the previous model tended to mask the cost of altering its machine setup.

    The Lassiter leadership team realized that the pre-preparation costs siphoned off potential profits. Below is a comparison of alternative accounting models assuming that Lassiter accepts an impromptu opportunity to manufacture a specialty boot.

    Production Costs Calculation

    By calculating production costs on a project by project (batch) basis, expenditures previously designated as overhead will now more accurately applied to each production purpose.

    The cost per set up (assembly) is calculated by arriving at a total cost of machine hours operated and dividing that cost by the number of setups that occurred during the year.

    With this overview in mind please answer the following questions:

    1. A Traditional costing model might entail which of the following aspects?

    • A. An embroidered recognition of achievement affixed to a plaque
    • B. The accounting practice of basing costs on machine usage per hour
    • C. Conventional wisdom with regard to inventory depreciation methods
    • D. Wages established by regional standards for a five year period

    2. A company which routinely adjusts factory procedures to pursue impromptu opportunities might benefit from which of the following accounting models?

    • A. Lone Wolf  Accounting Software
    • B. Senate sub-committee accounting principles
    • C. Labor Department pay rate guidelines
    • D. Activity-based accounting model

    Exercise – Advertising

    Advertising

    This is a warm up exercise. Consider the table below, ‘Advertising Media.’ Decide upon a span of time, for example a couple of hours or perhaps a whole day. The idea is to keep a record of the adverts you see in a short span of time. Look at the table below, and record 1, 2 and 3 where you see a any type of advert. Complete the grid below (You may need to print it off).

    Advertising Media

    Outdoor (Posters or transport)

    New Media – Mobile devices

    New Media Internet – websites and search engines

    1

    2

    3

    1

    2

    3

    1

    2

    3

    Newspapers (Local and National)

    Television

    Magazines

    1

    2

    3

    1

    2

    3

    1

    2

    3

    Radio

    Cinema

    Others…

    1

    2

    3

    1

    2

    3

    1

    2

    3

    • Having done this, summarise points below under the following headings:
    • What kind of products and services did you come across?
    • Why did the adverts catch your attention?
    • How were the adverts targeted at you and your segment?
    • Would you buy this product or service based upon the advert?

    Exercise – SWOT Analysis – POWER SWOT

    SWOT Analysis – POWER SWOT

    Dada Sky Inc.

    Exercise – Implementing a POWER SWOT

    Background

    Vijay Shivalingu is the Marketing Director for Dada Sky Inc, based in Western India. He is beginning his marketing plan which will form the basis of a new and exciting satellite based digital TV and Internet experience.

    Personal experience.

    • Vijay has many years experience in the motor industry, and in fact began his career at Dada Motors Inc after graduating from university with a degree in engineering. He has no formal marketing qualifications, but has lots of valuable real-world experience.

    Strengths.

    • Dada has one of three new 25 -year government licenses to supply satellite services across India.
    • Dada will be the first to launch its new services in the summer. Dada is a well-known brand in India for cars. It is not renowned for its technology brands.

    Weaknesses.

    • The company is 3 months behind schedule with its launch programme.

    Opportunities.

    • Huge expansion of TV and Internet access in India. The expansion is growing by 100% per annum. The potential value of such a business could be huge.
    • Education will soon be delivered to remote Indian villages via the Internet and laptops. This is a government funded programme worth $1 billion US.

    Threats.

    • A large European competitor brand has also entered the market.
    • A large Australian competitor brand has announced a joint-venture with a national terrestrial TV Indian brand.

    Exercise – Return On Investment (ROI)


    Return On Investment (ROI)

    Alexandra Cavanaugh, founder and CEO of Alexandra Cavanaugh Apparel is the creative genius behind a popular line of a line of pre-teen apparel and accessories such as t-shirts, sweatshirts and jeans using fabrics that are comfortable and stylish. The firm was launched three year ago and makes profit by selling to major fashion brands. However the business always had it eye on establishing its own brand and opening its own retail outlets.

    (4) Based upon the available financial data, what is the ROI for Alexandra Cavanaugh’s direct mail campaign?

    • (a) 241
    • (b) 1st percent
    • (c) 19th Quartile
    • (d) 19%

    The company finds itself at a fork in the road where it must ratchet up sales to continue its ambitious goals or cut costs to insure survival. Recently the firm opened four retail outlets as a part of its own-brand expansion plans. The company budgeted a substantial amount to promote the new outlets and its products. The investments were made before the recent economic downturn and are now getting a close review.

    The CEO is particularly focused on the firm’s expenditure in the direct marketing category. Since data on its target market show a propensity for shopping via the internet and its website produces a steady stream of subscribers – the CEO is skeptical of continued investments in direct marketing. She has challenged the marketing team to produce Return On Investment (ROI) data on direct marketing promotions. Below are data available for calculation:

    Annual Profits: $103,000

    Annual Direct Mail Investment: $5,150

    Answer the following questions to demonstrate an understanding of Return On Investment (ROI) and how it is applies to Alexandra Cavanaugh:

    (1) Why should Alexandra Cavanaugh Apparel be interested in determining whether its promotions are reaping the rewards desired?

    • (a) Because such data goes into tax preparation
    • (b) Because the information may support last years personnel decisions
    • (c) Because attendance at the company picnic is down
    • (d) Because it desires that company expenditures contribute to profits

    (2) How is the ROI calculation result expressed?

    • (a) Number of units sold
    • (b) Contribution margin per unit
    • (c) A percentage
    • (d) Variable costs per percentage
    • (e) All of the above

    (3) In addition to scrutinizing the ROI for its direct marketing campaign what other aspects of its advertising could be reviewed?

    • (a) Newspaper display ads
    • (b) Radio commercials
    • (c) Website catalog
    • (d) All of the above

    Exercise – Annual Accounts


    Annual Accounts

    Sterling Patterson Insurance is a three year old firm engaged selling health insurance in the United States. They specialize in providing Long Term Health Insurance Policies.
    The company has set forth a strong expansion strategy which includes a low budget marketing plan. Sterling Patterson sees an opportunity to enter the international market for health insurance. Its strategy includes developing an affiliate program to recruit local agents. The Company’s health insurance marketing efforts will focus on those in upper socioeconomic classes with a proven ability to pay.

    (4) Which of the following companies may be most likely required to provide more detailed financial information in the form of annual accounts?

    • (a) Limited liability companies
    • (b) Insurance companies
    • (c) Savings Institutions
    • (d) Barber Shops Limited

    Six months from its planned launch in Europe and Asia, Sterling Patterson has realized that it has insufficient knowledge of accounting implications associated with complying with various international regulations. In addition to having a fine marketing plan, Sterling Patterson now realizes it must prepare a path through a maze of various accounting guidelines.

    It was most recently determined that the company would increase accounting staff expertise and capabilities in order to avoid potential catastrophes such as failing to meet financial deadlines. It will submit the required annual accounts needed for participation in diverse international markets. Sterling Patterson understands the risk that such failures to disclose might jeopardize potential relationships and investments.

    Demonstrate your understanding of annual accounts and how they might impact Sterlings planned expansion, by answering the following questions:

    (1) How does information in the annual accounts differ from a basic annual report?

    • (a) Potentially more notes of explanation
    • (b) Increased occasions to illustrate data showing multiple years
    • (c) Requires more effort in identifying interested parties and their concerns
    • (d) All of the above

    (2) Which of the following is not a governmental entity regulating the content of annual accounts?

    • (a) International House of Pancakes
    • (b) American Securities Exchange Commission
    • (c) International Accounting Standards Board

    (3) What are reasons why more notes, explanations and disclosures might be necessary when doing business in international markets?

    • (a) They may reveal different accounting policies that are applicable
    • (b) They may provide clarification on differing tax rules
    • (c) Valuation rules concerning assets may vary from country-to-country
    • (d) All of the above

    Exercise – Cash Flow Statement

    Cash Flow Statement

    Fishbourne Marketing

    Review the Cash Flow Statement (below) and answer the following questions:

    • 1) What is the name of the figure shown at the top of each month?
    • 2) Which line item amounts seem to fluctuate the most?
    • 3) Name some line items which may be influencing the amount shown in the other listed items?
    January
    February
    March
    April
    May
    June
    Beginning Cash Balance

    15,000

    20,548

    22,296

    23,493

    24,191

    180,955
    Cash inflows:
    Accts. Rec. Collections
    180,955
    180,955
    182,455
    185,855
    181,455
    180,955
    Loans on proceeds
    Sales & receipts
    5,000
    0
    3,500
    0
    4,500
    6,000
    Other:
    Total Cash Inflows

    185,955


    180,955

    185,955

    185,955

    185,955

    186,955
    Available Cash Balance
    200,955
    201,503
    208,251
    209,448

    210,146
    212,244
    Cash Outflows (Expenses):
          
    Advertising
    300
    300
    300
    400
    400
    400
    Bank Service Charges
    45
    45
    45
    45
    45
    45
    Credit Card Fees
    35
    35
    35
    35
    35
    35
    Delivery
    Health Insurance
    478
    478
    478
    478
    478
    478
    Insurance
    200
    200
    200
    200
    200
    200
    Interest
    25
    25
    25
    25
    25
    25
    Inventory Purchases
    1,000
    1,000
    450
    750
    450
    1,000
    Miscellaneous
    300
    300
    300
    300
    300
    300
    Office
    1,000
    1,000
    1,000
    1,000
    1,000
    1,000
    Payroll
    83,300
    83,300
    83,300
    83,300
    83,300
    83,300
    Payroll Taxes
    7,300
    7,300
    7,300
    7,300
    7,300
    7,300
    Professional Fees
    250
    250
    250
    250
    250
    250
    Rent and Leases
    1,000
    1,000
    1,000
    1,000
    1,000
    1,000
    Subscriptions and Dues
    90
    90
    90
    90
    90
    90
    Supplies
    200
    200
    100
    200
    100
    200
    Taxes and Licenses
    44,629
    43,429
    44,629
    44,629
    44,629
    44,829
    Utilities and Telephone
    130
    130
    130
    130
    130
    130
    Other
    Subtotal

    140,282

    139,082

    139,632

    140,132


    139,732

    140,622
    Other Cash Out Flows:
    Capital Purchases
    Loan Principal
    125
    125
    125
    125
    125
    125
    Owner’s Draw
    40,000
    40,000
    45,000
    45,000
    45,000
    40,000
    Other:
    Subtotal

    40,125

    40,125


    45,125

    45,125

    45,125

    40,125
    Total Cash Outflows
    180,407

    179,207

    184,757

    185,257

    184,857

    189,747

    Ending Cash Balance
    20,548
    22,296
    23,493
    24,191
    25,289
    31,497

    Exercise – Annual Reports for Marketers

    Annual Reports for Marketers

    Lassiter Boots is a manufacturing company producing insulated winter boots aimed specifically at the outdoor, sporting and farm markets. The company made its initial public offering (IPO) three years ago.

    4. Which of the following pieces of United States legislation addressed Annual Reports for publicly traded companies?<

    • (a) The Fair Tax Act
    • (b) The Federal Employment Protection Act of 1924
    • (c) The Securities Exchange Act of 1934
    • (d) The Existential Domain Act of 1943

    5. Which of the following company facts about Lassiter Boots are amenable to marketing in a letter to the Stockholders or a positive depiction on the cover of their Annual Report?

    • (a) The Industry Standard Award for Quality
    • (b) The growth trends in Annual Sales
    • (c) The positive dividend growth rate
    • (d) The government citation for unsafe working conditions

    Year 1

    Year 2

    Year 3

    Annual Sales

    $40,000,000

    Annual Sales

    $40,900,000

    Annual Sales

    $41,100,000

    Annual Net Income

    $2,300,000

    Annual Net Income

    $2,700,000

    Annual Net Income

    $2,900,000

    Annual Dividend Growth Rate

    Zero

    Annual Dividend Growth Rate

    4.5

    Annual Dividend Growth Rate

    5.5

    Toward the end of its first year in business, Lassiter hired a new Chief Executive Officer widely know and respected for his ability to increase efficiency and performance. Sales, Net Income and Dividends have all increased steadily for the last two years.

    Lassiter is a recent recipient of an Industry Standard Award for Quality in the last year covered. To a degree, it helps to balance a negative citation they received for unsafe working practices.

    To apply your knowledge of Annual Report contents and recommended principles found in the Marketing Teacher, answer the following multiple choice questions:

    1. Which of the following elements are not typically found among Annual Reports contents?

    • (a) A Balance Sheet
    • (b) An Income Statement
    • (c) A Summary of Nutritional Contents
    • (d) A Letter to Stockholders

    2. Which of the following entities are stakeholders with a legitimate interest in the past 12 months at Lassiter Boots?

    • (a) Elementary School #56
    • (b) Company Employees
    • (c) Potential Business Partners
    • (d) The Screenwriters Guild

    3. Which of the following elements are not typically found among Annual Reports contents?

    • (a) A Balance Sheet
    • (b) An Income Statement
    • (c) A Summary of Nutritional Contents
    • (d) A Letter to Stockholders

    Exercise – Direct and indirect costs

    Direct and Indirect Costs

    Palmer Employment Training is a 2 year old company providing face to face counseling and classroom training in job seeking and job retention skills. Palmer has won two contracts with educational institutional institutions and is contemplating bidding on a Government sponsored job placement project. Palmer delivered onsite counseling services to a local college.

    4. Select the types of firms below that are likely to stress the need for accurate and realistic overhead costs?

    • (a) Service firms
    • (b) Manufacturing
    • (c) Not for profits
    • (d) All of the above

    With its ability to build rapport and inspire action, Palmer has enjoyed a built a quick reputation based on a high placement rate. Palmer’s leadership committee acknowledges room for improvement when it comes to cost estimation and cash management.

    The company is happy with its reputation but is more focused on insuring that profits are not usurped due to inaccurate accounting of overhead costs as well as adhering to governmental standards for calculating overhead.

    1. Which of the following is not an example of an indirect cost?

    • (a) Heat
    • (b) Benefits
    • (c) Wages
    • (d) Light

    2. Which of the following are concepts that help you arrive at accurate overhead costs?

    • (a) Cost allocation
    • (b) Fiscal immunity
    • (c) Identification of costs that contribute directly to production
    • (d) Using appropriate data and formulas to calculate the total indirect costs

    3. Which of the following is an example of direct costs?

    • (a) Administration
    • (b) Taxes
    • (c) Salaries
    • (d) Materials

    Exercise – Internal Marketing

    Internal Marketing

    Casey Brothers Insurance (CBI) goes to Las Vegas

    Casey Brothers Insurance (CBI) was created in 1870 by Orville and Wilbur Casey as a service to the Texas oil industry, specializing in life asurance policies to workers in dangerous occupations. Over the last century its business has expanded massively. It now has over 200 small branches all
    over the US.

    Recently the insurance business has changed tremendously. Customers work in a variety of industries, in many different locations. They tend to shop around for the best quotations and prices. They do not rely upon the convenience of local companies. Many consumers use the Internet to search for appropriate policies at the right price. Andew and Paul Casey, the current Directors of the business, have decided to radically restructure their organization. They have decided to close down all of the 200 small branches. They will be replaced by a Las Vegas based head office with a purpose built call center. The company hopes that many employees will take early retirement, with others accepting the offer to retrain and to move to Las Vegas, a prosperous and expanding city.

    Your role is to draw up an internal marketing plan to implement the proposed relocation and call Center.

    Exercise – International Marketing and Culture

    International Marketing and Culture

    A Cultural Analysis of China

    For this exercise you need to apply the Cultural Clock Framework of Terpstra and Sarathy to the Peoples’ Republic of China (PRC). cheap nba jerseys The 8 sub-headings are as follows:

    Bibliography

    Friesner, T and Hart, M.C. (2004) ‘A Cultural Analysis of eLearning for China’ Electronic Journal of eLearning, Vol 2, Issue 1.

    Dislaimer:
    This exercise is based upon an adaption of Friesner and Hart (2004). It is written from Answer a Western European perpsective. Therefore if you live in the Greater China Region your local knowledge may be more detailed and Answer realistic than that contained in this exercise. So please Lamborghini take into account that it is meant as an exercise for marketing learners, rather than as a source of decsion-making information on the country of China. It is simply a case study, and to nothing more.

    • Language
    • Religion
    • Values and Attitudes
    • Aesthetics
    • Law and Politics
    • Technology and Material Cultures
    • Education
    • Social Organization

    Terpstra

    Place the following wholesale nfl jerseys under the 8 headings of the Terpstra 薄毛であるケースは…。 and Sarathy’s Cultural Framework:

    • 1. Communism, materialism and Post-materialism are the three competing value orientations.
    • 2. The National People’s Congress is the highest organ of state power in the PRC.
    • 3. The Chinese are keen gamblers and game players. Games tend to be rich in colour and appear very complicated to the Western eye, and this is reflected in the popularity of Internet gaming.
    • 4. It should be appreciated that learning is an active process and teaching materials should be variegated.
    • 5. Confucian philosophy has a role in shaping Chinese thinking and learning styles.
    • 6. Filtering is a problem for Western websites.
    • 7. The national um and official language of the People’s Republic of it China (PRC) is Mandarin Chinese wholesale nfl jerseys (Putonghua) with 1.3 cheap nfl jerseys billion speakers.
    • 8. Taoism, Confucianism and Buddhism are the main religions.