Bus120 Cases 1 - 7 PDF

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Enclosed are seven group cases due on dates as indicated (on Turnitin). All cases in class need to be handled under five sub-heads: Summary Questions & Answers Original Research done by the group/ individual. Relationship to Concepts Bibliography / References – source citations- also use footnotes on each pg. A title page is a MUST – and must mention – -Subject (Bus 120), -Section (class day & time duration the class meets) -GROUP # -Group member names, emails, phone contacts -Date Submitted -Date Due Each group will be given a group# – which please use on all group submissions- else no credit. (all group members will be awarded a zero for the case if there is ANY deficiency in title page requirement – which please note carefully). Each group in class will submit each case on due dates as required – on TURNITIN and on email ([email protected]). Case submissions will be worth 30pts each. Group # corresponding to case # will make a (max 12-15 min.) presentation of the case (50pts ea).

Do not miss or try to postpone your submission & presentation. If you miss it – you will get nil (NO) credit and no other opportunity. Please note that all information being shared (including the professor’s slides, exam/assessments, cases) are privileged & proprietary information – and not to be copied, shared or communicated. Do NOT share with ANYONE. Any plagiarism, any breach of the highest standards of ethical conduct will attract severest penalties.

If your group or you individually have any questions – please connect with me immediately. Work hard, ethically, & do well. Good luck & best regards Shyam Vyas ____________________________________

From the desk of

Prof. Shyam Vyas, Ph.D.

Bus120 W’22 Essentials of Marketing Case # 1

Due As indicated on Turnitin

McDONALDS . . . A CREATION OF ITS TIME

In 1954, Ray Kroc, then 52, was the owner of a small company that marketed a strange-looking multimixer milkshake machine. His was a creative aspiring mind – always looking at new opportunities and possibilities. On his sales trips around the country, he had heard about the fantastic fast-food restaurant operated by the Mc-Donald brothers, Maurice and Richard, in San Bernadino, California. Their little drive-in establishment had eight Multi-mixers whipping out forty shakes at once. Because other restaurants did not match McDonald’s volume, Kroc made a special visit to observe this unique operation. Kroc was both surprised and elated by what he saw. He was surprised by the stream of people who came away with bags of hamburgers, French fries, and milkshakes. He was elated because he could not visualize similar restaurants nationwide, and all of them would be customers for his Multi-mixer. To Kroc, the McDonald brothers had a winning combination. They stressed exceptional cleanliness and high value in their operations. Loose wrappers and empty paper cups were regularly removed from the premises. Their hamburgers contained a tenth of a pound of meat and sold for a mere fifteen cents. A sixteen-ounce milkshake was twenty cents, and a three-ounce bag of French fries retailed for ten cents. Unable to contain his enthusiasm and optimism for the McDonald’s operation, Kroc confronted the brothers and proposed that they rapidly expand their fast-food business. Kroc was astounded that they thoroughly enjoyed their present small-business status and did not want to change it. They equated more restaurants with more problems. In contrast, Kroc viewed expansion as an opportunity. Thus, he suggested that they allow him to establish McDonald restaurant throughout the country. Kroc visualized an extensive franchised operation whereby, for a fee, independent businesspersons could operate a McDonald outlet. After some difficult negotiation, a persistent Ray Kroc left San Bernardino with a signed contract. Well before the time of his death in 1984, Ray Kroc was hailed as the Henry Ford of the fast-food restaurant business. McDonald’s restaurants brought mass production to an industry that had been built on individual service and small quantities. He developed an organization that contained specialists in every phase of the restaurant business. The company has been a leader in employee training programs and in upgrading the level of store supervision. Kroc realized that people would patronize a fast-food restaurant that offered good, fast service, and outstanding value. The McDonald’s chain grew rapidly because it satisfied an environmental climate that included working wives, an increasing number of youths, rising food prices, and a desire for convenience. Although numerous competitors arose to challenge McDonald’s leadership in the fast-food industry, the company has remained the leader. In 1988, thirty-four years after Kroc’s trip to San Bernardino, the fast-food giant celebrated the sale of its 70-billionth hamburger. Over the years, the McDonald organization has spent hundreds of millions of dollars to create an image as a wholesome, fun place to eat. In the 1970s, a survey of school children revealed that Ronald McDonald, the corporate symbol, was readily identified by 96 percent of the respondents. Among all children’s characters only one had a higher recognition factor – Santa Claus!!

Questions & Issues for Discussion 1. What is your understanding of Macro & Micro environmental forces? How did micro-environmental forces affect the development of McDonald’s? Please discuss this question using the above information provided in the case, as well as research by your group that focus upon macro & micro-environmental forces that may have affected the pace and quality of development of McDonald’s – and any other brand. Under what quadrant of Ansoff’s Grid would you put the expansion of McD in many countries globally? 2. What were the economic, social, and demographic factors that contributed to the great growth of McDonald’s? How do you see these forces as existent today – in Indian and global context? Have they changed – and how? How has/ or has - McD changed with time? Elaborate. 3. How will in your opinion, environmental factors change the fast-food industry in the future? Be specific please, and state reasons for your response. 4. What is the current state of Indian fast food industry? Which players are doing well – and how are Indian micro-and macro forces influencing and shaping this industry? Do research & inform of the latest developments that have affected McD’s India effort. What implications for McD’s competitors? ___________________________________________________end of Bus 120 Case # 1 McD SV/UFV

Due As indicated on Turnitin

From the desk of

Prof. Shyam Vyas, Ph.D.

Bus120 W’22 Essentials of Marketing Case # 2

HEWLETT-PACKARD DISCOVERS MARKETING

“Productivity. Not Promises,” describes the high-tech environment that is a hallmark of the Hewlett-Packard (H-P) Company. H-P, which was founded in 1945 in California’s Silicon Valley, is a granddaddy among the more than 1, 000 other computer-related companies residing in the Valley. Both of its founders – William Hewlett and David Packard – were engineering graduates from Stanford University. Technology has been the watchword of the company. H-P’s first product was an audio oscillator, a device for measuring sound waves. Walt Disney Studios ordered eight of these oscillators and used them in creating the unique sound system for the movie Fantasia. The company soon began producing a line of electronic testing devices such as those measuring the herbicide levels in food, and drug levels in athletes’ blood. In 1968 H-P introduced its first minicomputer, which immediately found wide industrial application. Four years later the company began producing the versatile H-P 3000 computer, which generated strong sales. By 1984, there were more than 15, 000 H-P 3000 systems at companies around the world. Through the years H-P had introduced several models of personal computers, but none of them had made a significant impact in the market. In 1972 H-P produced the first hand-held calculator, appropriately called the “electronic slide rule.” Although marketing consultant advised against its production, the company introduced it anyway. The calculator sold exceedingly well despite a price of $395. Until Texas Instruments began selling a similar unit two years later, H-P had the entire market to itself. As more competitors came onto the scene, the price and profitability of hand-held calculators nosedived. This caused H-P to drop its low-priced units and concentrate on selling the higher priced ones used by engineers and financial analysts. H-P remained the leading marketer of hand-held calculators selling for $50 and more. In 1984 H-P took a deep breath, expelled a wheeze sounding strangely like the word “marketing,” and introduced three new products: a compact computer called the Portable and two printer names Laserjet and Thinkjet. These products were developed for the mass market, which H-P had previously abandoned. To explain its move back into this market, H-P president John Young indicated that the company was going to become more marketing-driven with the help of the Personal Computer Group. As a result of this new marketing focus, H-P began utilizing marketing strategies similar to those of consumer-goods companies such as Procter & Gamble and Gillette. In the past, H-P engineers employed two different methods to determine products and markets – ask co-workers what was needed or build a machine for one customer and market it to others. This resulted in the production of a large number of tailor made products that were directed to specific customers. This strategy permitted H-P to charge high prices for a differentiated product. In the personal computer industry, however, a product that differs greatly from the IBM PC has a high probability of failure ! The H-P 150 was rejected by retailers because it was not IBM-compatible even though the unit had more speed and memory than the IBM- PC. It had a touchscreen permitting the operator to use the unit by pressing a finger against the monitor; however, it used a 3 ½ – inch floppy disk rather than the IBM 5 ¼ - inch disk. Originally there were only 25 software programs available on the smaller disk, while more than 5, 000 were obtainable on the larger one. H-P engineers justified the use of the 3 ½ - inch disk by declaring it was “the better system”.

Another reason for the failure of the H-P 150 related to the amount of gross margin (difference between cost and selling price) that a retailer could obtain on the unit. A small retailer could only expect to receive a 30 percent margin, while chains could anticipate about 40 percent. In contrast, dealers could realize nearly 45 percent margins on other competing personal computers because they could be sold with high-margined extras such as disk drives and monitors. The retailers thus were kind of unhappy selling H-P 150. To overcome some of its previous marketing errors, H-P designed its new Portable Model to be compatible with the IBM PC. The Portable carried a $2, 995 price tag, which included a bundle of built-in hardware and software. Dealers were particularly pleased when H-P began offering better payment terms and larger quantity discounts. They benefited, too, from a doubling of the advertising allowances for ads that mentioned H-P products. As a result of improved dealer relations, the company was able to increase the number of its full-line retailers from 350 to 750 in a relatively short time-frame, and it managed to stocked another 1, 050 dealers with a portion of the line. All this success with distribution network needless to say resulted in more sales, more satisfied intermediaries, and more profits. By 1987, computers and peripheral equipment accounted for over 65 percent of H-P’s sales and profits. Government was a strong customer segment and even in 1987 nearly 10 percent of the company’s output was sold to the U.S. government. There have been other marketing driven changes at H-P. Many of its industrial customers were prospects for both testing instruments and personal computers. In the past, H-P had two separate sales forces – one selling testing instruments and the other marketing computers. A sales force reorganization created a single sales force that now sells all H-P products rather than isolated machines. In order to create a brand family and gain greater consumer acceptance, H-P is giving names rather than numbers to its new products. The company hopes that Portable, Laserjet, and Thinkjet will become as readily identified among computer buyers as Cavalier, Corsica, and Corvette are among automobile purchasers ! H-P is attempting to gain market share and to become a market leader by engineering its personal computer line for low-cost mass production. For many years, the company had followed cofounder David Packard’s maxim that market share is not an object, but a reward. Today, the H-P marketing executives recognize that the personal computer industry, like the automobile industry, is a market-driven business and that only those producers with a dominant share of customer patronage will survive!! Questions & Issues for Discussion: 1. What is the core Marketing Concept? Please explain whether H-P has adopted the marketing concept? What does your group think? & Why? 2. How has H-P altered its marketing mix in an effort to become more marketing oriented? 3. What must H-P do in order to develop a marketing orientation? 4. Identify several similarities between the marketing of cars and the marketing of personal computers. What would make marketing effort successful in marketing of these product categories. 5. Please evaluate the general environment of business as prevalent today – and comment on the success factors that may contribute to a successful marketing effort by ANY company – in ANY product category. _______________________________________________________end of Bus 120 Case # 2 HP SV/UFV

From the desk of

Due As indicated on Turnitin

Prof. Shyam Vyas, Ph.D.

Bus120 W’22 Essentials of Marketing – CASE 3 THE WALL STREET JOURNAL The Wall Street Journal, a national financially oriented daily newspaper – and for many years the only U.S. national daily paper – was first published in 1889. Over the years many changes have been implemented to keep pace with the ever-changing business environment. For most of its history, the Journal published only business and financial information. in 1980, however, a second section was added to the paper containing general interest stories, arts and entertainment coverage, and articles on personal finance. Until the late 1970s, the Journal’s circulation was largely restricted to New York and other financial centers in the United States. Since that time, the subscriber base has grown both nationally and, with the introduction of international editions, internationally. The Journal’s circulation and advertising linage grew rapidly in the late 1970s and 1980. Circulation increased from 1, 477, 077 at the end of 1976 to 2, 108, 795 in 1983. Between 1979 and 1984, advertising linage rose by 36.8 percent. The Journal’s environment continues to change – perhaps at a faster pace than ever. To sustain the Journal’s status as the financial newspaper in the United States and in the world, executives must successfully surmount many challenges. A host of newer national newspapers, including USA Today, New York Times-National Edition, Investor’s Daily , and Financial Times, threaten to eat into the Journal’s market share. Competition has gotten more ferocious and vicious. The publishing magnate Rupert Murdoch has even proposed a special U.S. edition of the British-based Financial Times to directly compete with the Journal. Many other me-too financial newspapers are rearing to go –targeting customers across a wider geographic, gender, and occupation and interest bases, A 1986 Simmons Market Research Bureau study of Media and Markets found the readership (the number of people who read a publication during the duration of the study period) for the Journal had declined and was less than that of USA Today. To capitalize on this finding, USA Today ran ads within the paper citing the study and proclaiming that “USA Today’s readership is the industry’s largest.” And to further ride the crest of the study’s finding, the paper joined with General Mills in a promotion featured on GM products encouraging consumers to sign up for a free six-month subscription to the paper. While the response was high – 450, 000 people did sign up – USA Today’s bottom line was actually negatively affected by the promotion since the agreement between General Mills and the paper allowed General Mills to offer the subscriptions at prices far below the regular price. Nevertheless, USA Today and other national newspapers are gaining subscribers at the expense of the Journal. It appears that the increased general news coverage the Journal instituted in 1980 must continue and expand for the Journal to keep up with its competitors. More coverage, however, requires more editorial staff, which in turn means higher operating costs. While revenue at the Journal grew 4 percent in 1987, profits dropped 13.6 percent. Cost cutting and cost containment appear probable in the next several years. The general business climate also seems to be working against the Journal. The cost-cutting atmosphere in most U.S. businesses has reduced the ranks of middle managers, many of whom have received subscriptions to the Journal – paid for by the company – at work. The annual subscription fee, in excess of $100, has become a target of cost conscious executives. Finally, the stock market crash of October 19, 1987 took its toll on the Journal. Advertising linage dropped 15 percent in two months and 2.3 percent for the year.

All is not doom and gloom, however. A 1986 nationwide poll by the Los Angeles Times found the Journal to be America’s most trusted information medium. Another annual survey by Fortune once again found the publisher of the Journal, The Dow Jones Corporation, at the top of all American corporations surveyed for quality of products services. From surveys and from the over 10, 000 Letters to the Editor the Journal receives annually, executives learn about their market. A 1986 subscribers’ survey provided the following information:           

Four out of 10 subscribers live in the 20 largest metropolitan areas in the U.S. There are Journal subscribers in nearly every community Thirteen percent live in California and 7 percent in New York Eighty percent are in business or the professions Forty percent hold management titles Forty-four percent work for small businesses Ninety percent are college graduates Thirteen percent are women Median age of readers is 47 Readers have strong interest in personal financial information Readers have strong interest in mutual fund information

Based on this and other market research, Journal management identified several areas for possible action in the following year, including: 1. Provide the reader with a more timely and tightly edited newspaper by reorganizing and expanding the editing desks. 2. Group related stories and use more graphics, charts, and statistical summaries to enhance ease of use. 3. Increase coverage of daily developments and broad trends affecting readers’ career goals, business decisions, and personal financial planning. 4. Permit inclusion of more late breaking news by retooling pagination system. 5. Expand the Journal’s 154-city private delivery network (740, 000 Journals were delivered by this system in 1988) to increase speed and reliability of delivery. 6. Build more printing plants in overseas locations to speed overseas delivery. Journal management will evaluate these identified goals and will select some or all of them to implement based on further study. Questions & Issues for Discussion: 1. Using the information provided in the case, complete a situation analysis of the Journal. What constitutes a situation analysis? “an astute marketer is always in a situational analysis mode” – do you agree? Why? 2. Describe what you thi...