Marketing Management

Marketing Management
(Total 100 Points)
Answer All Questions. Each answer to your question requires examples to support your
analysis. Your exam requires you to answer individually; this is not a group work/test. Plagiarism
checker should not attribute your work to be more than 10%. If you need help with your writing,
check with our writing department or with me before you submit.
1. The marketing research process consists of definite set process to help make decisions.
Explain each step-in detail with examples.
2. Explain the purpose of the two complementary approaches to measuring marketing
productivity. How have you used it in your marketing plan. In addition, find an example of an
organization that has used this approach.
3. The value chain is a tool for identifying key activities that create value and costs in a specific
business. Identify the value chain activities first for your project and second, explain the concept
using an example.
4. According to one view, holistic marketing maximizes value exploration by understanding the
relationships between the customer’s cognitive space, the company’s competence space, and
the collaborator’s resource space; maximizes value creation by identifying new customer
benefits from the customer’s cognitive space. Define and explain this concept. what is the
purpose of understanding the cognitive part of the customer? How has Apple or Amazon utilized
this concept to their advantage or they have failed to use this concept?
5. The corporate strategy establishes the framework within which the divisions and business
units prepare their strategic plans. Setting a corporate strategy means defining the corporate
mission, establishing strategic business units (SBUs), assigning resources to each, and
assessing growth opportunities. Explain with examples how this concept
helps an organization with its marketing plan. Describe how you plan to use this concept in your
project.
6. In the social-cultural arena, marketers must understand people’s views of themselves, others,
organizations, society, nature, and the universe. They must market products that correspond to
society’s core and secondary values and address the needs of different subcultures within a
society. Use PESTEL to analyze this question, use examples to support your answers.
7. In the political-legal environment, marketers must work within the many laws regulating
business practices and with various special-interest groups. How do you navigate this maze?
Please use examples of Ford, Apple and Samsung to answer.
8. The marketing research process consists of defining the problem, decision alternatives; and
research objectives; developing the research plan; collecting the information; analyzing the
information; presenting the findings to management; and making the decision. Explain in detail
each step with an example. Second, what is the process you have set up for your class project?
9. Quality is the totality of features and characteristics of a product or service that bear on its
ability to satisfy stated or implied needs. Marketers play a key role in achieving high levels of
total quality so that firms remain solvent and profitable. How do you achieve quality and what
are the steps in attaining quality for your product.
Answer Any One Case:
Company Case 1
In-N-Out Burger: Customer Value
the Old-Fashioned Way
In 1948, Harry and Esther Snyder opened the first In-N-Out Burger in Baldwin Park, California. It
was a simple double drive-thru setup with the kitchen between two service lanes, a walk-up
window, and outdoor seating. The menu consisted of burgers, shakes, soft drinks, and fries.
This format was common for the time period. In fact, another burger joint that fit this same
description opened up the very same year just 45 minutes away from the first In-N-Out Burger. It
was called McDonald’s. Today, McDonald’s boasts over 34,000 stores worldwide that
bring in more than $88 billion every year. In-N-Out has only 281 stores in five states, good for
an estimated $625 million a year. Based on the outcomes, it would seem that McDonald’s has
emerged the clear victor.
But In-N-Out never wanted to be another McDonald’s. And despite its smaller size—or perhaps
because of it—
In-N-Out’s customers like the regional chain just the way it is. When it comes to customer
satisfaction, In-N-Out beats McDonald’s hands down. It regularly posts the highest customer
satisfaction scores of any fast-food restaurant in its market areas.
Compared to McDonald’s customers, patrons of In-N-Out are really “lovin’ it.” Just about anyone
who has been to an In-N-Out believes it’s the best burger they’ve ever had. It comes as no
surprise, then, that the average per-store sales for In-N-Out eclipse those of McDonald’s and
are double the industry average.
Breaking All the Rules
According to Stacy Perman, author of a definitive book on In-N-Out, the company has achieved
unequivocal success by “breaking all the rules.” By rules, Ms. Perman refers to the standard
business practices for the fast-food industry and even retail in general. In-N-Out has maintained
a tenacious focus on customer well-being, but it has done so by doing the unthinkable: not
changing. The company’s original philosophy is still in place today and best illustrates the basis
for the company’s rule breaking: “Give customers the freshest, highest quality foods you can
buy and provide them with friendly service in a sparkling clean environment.” The big burger
giants might
take exception to the idea that they aren’t providing the same customer focus. But let’s take a
closer look at what these things mean to In-N-Out. For starters, at In-N-Out, quality food means
fresh food. Burgers are made from 100 percent pure beef—no additives, fillers, or preservatives.
In-N-Out owns and operates its own patty-making commissaries, ensuring that every burger is
fresh and never frozen. Vegetables are sliced and diced by hand in every
restaurant. Fries are even made from whole potatoes. And, yes, milkshakes are made from real
ice cream. In an industry that has progressively become more and more enamored with
processing technologies such as cryogenically freezing foods and preparing all ingredients in
off-site warehouses, In-N-Out is indeed an anomaly. In fact, you won’t even find a freezer,
heating lamp, or microwave oven in an In-N-Out restaurant.
From the beginning, the company slogan has been “Quality you can taste.” And customers are
convinced that they can do just that. In-N-Out hasn’t changed its formula for freshness. But in
another deviation from the norm, it also hasn’t changed its menu. Unlike McDonald’s or
Wendy’s, which introduce seemingly unending streams of new menu items, In-N-Out stays true
to Harry Snyder’s original mantra: “Keep it real simple. Do one
thing and do it the best you can.” This charge from the founder focuses on what the chain has
always done well: making really good hamburgers, really good fries, and really good shakes
that’s it. While others have focused on menu expansion in constant search of the next hit item to
drive traffic, In-N-Out has tenaciously stuck to the basics. In fact, it took 60 years for the
company to add 7up and Dr. Pepper to its menu. Although the limited menu might seem
restrictive, customers don’t feel that way. In another demonstration of commitment to customers,
In-N-Out employees will gladly make any of the menu items in a truly customized fashion. From
the chain’s earliest years, menu modifications became such a norm at In-N-Out that a “secret”
menu emerged consisting of code words that aren’t posted on regular menu boards. So
customers in the know can order their burgers “animal style” (pickles, extra spread, grilled
onions, and a mustard-fried patty). Whereas the “Double-Double” (double meat, double cheese)
is on the menu, burgers can also be ordered in 3 × 3 or 4 × 4 configurations.
Fries can also be order animal style (two slices of cheese, grilled onions, and spread), well
done, or light. A Neapolitan shake is a mixture of chocolate, vanilla, and strawberry shakes. The
list goes on and on. Knowledge of this secret menu is yet another thing that makes customers
feel special. It’s not just In-N-Out’s food that pleases customers. The chain also features
well-trained employees who deliver unexpectedly friendly service. In-N-Out hires and retains
outgoing, enthusiastic, and capable employees and treats them very well. It pays new part-time
staff $10.50 an hour and gives them regular raises. Part-timers also receive paid vacations.
General managers make over $100,000 a year plus bonuses and receive a full-benefit package
that rivals anything in the corporate world.
Managers who meet goals are sent on lavish trips with their spouses, often to Europe in
first-class seats. For gala events, managers wear tuxedos. Executives believe that the men and
women who run In-N-Out stores stand shoulder-to-shoulder with any blue-chip manager, and
want them to feel that way. Managers are promoted from within. In fact, 80 percent of In-N-Out
managers started at the very bottom. As a result, In-N-Out has one of the lowest turnover rates
in an industry infamous for high turnover. Happy, motivated employees help create loyal,
satisfied customers. In fact, words like loyal and satisfied don’t do justice to how customers feel
about In-N-Out Burger. The restaurant chain has developed an unparalleled cult following.
When a new In-N-Out first opens, the line of cars often stretches out a mile or more, and people
stand in line for hours to get a burger,
fries, and a shake. Fans have been known to camp overnight to be the first in line. When
In-N-Out made its debut in Texas, one woman cried. “Pinch me, it just doesn’t feel real,”
whimpered customer Danielle DeInnocentes, overcome with emotion as the reality of her
newfound proximity to the burger chain set in.
Slow Growth Nurtures Fans
Some observers point out that it’s probably more than just the food and the service that created
In-N-Out’s diehard customer base. Because of In-N-Out’s slow-growth expansion strategy, you
won’t find one of the famous red-and-white stores with crisscrossed palm trees on every corner.
By 1976,
In-N-Out had grown to only 18 southern California stores, whereas McDonald’s and Burger King
had opened thousands of stores worldwide. It took In-N-Out 40 years to open its first
non-California
store in Las Vegas. And even as the company expands into Arizona, Utah, and Texas, it sticks
tenaciously
to its policy of not opening more than about 10 stores per year. The lack of access to an
In-N-Out in most states has created legions of cravers coast to coast. Fans have created
countless Facebook pages, filled with posts by consumers begging the family-owned
corporation to bring In-N-Out to their states. But In-N-Out’s policy is driven by its commitment to
quality. It will open a new store only when it has trained management and company-owned
distribution centers in place. The scarcity of In-N-Out stores only adds to its allure. Customers
regularly go out of their way and drive long distances to get their fix. Having to drive a little
further contributes to the feeling that going to In-N-Out is an event. Out-of-state visitors in the
know often put an In-N-Out stop high on their list of things to do. Jeff Rose, a financial planner
from Carbondale, Illinois, always stops at In-N-Out first when he visits Las Vegas
to see his mother. “You have to pass it when you drive to her house,” he says in his defense.
“It’s not like the time I paid an extra $40 in cab fare to visit an In-N-Out on the way to the San
Diego airport.” Consistent with the other elements of its simple-yet-focused strategy, In-N-Out
doesn’t spend much on advertising it doesn’t have to. In fact, although the company doesn’t
release financial figures, some estimates place total promotional spending
at less than 1 percent of revenues. McDonald’s shells out 7 percent of its revenue on
advertising. In-N-Out’s small promotional budget is for local billboards and radio ads. But when
it comes to really spreading the word, In-N-Out lets its customers do the heavy lifting.
Customers truly are apostles for the brand. They proudly wear In-N-Out T-shirts and slap
In-N-Out bumper stickers on their cars. Rabid regulars drag a constant stream of new devotees
into restaurants, an act often referred to as “the conversion.” They can’t wait to pass along the
secret menu codes and share the sublime pleasures of diving into a 4 × 4 animal style. “When
you tell someone else what ‘animal
style’ means,” says an analyst, “you feel like you’re passing on a secret handshake. People
really get into the whole thing.” In-N-Out doesn’t use paid endorsers, but word-of-mouth praise
regularly flows from the mouths of A-list celebrities. When former Tonight Show host Conan
O’Brien asked Tom Hanks what he recommended doing in Los Angeles, Hanks replied,” One of
the true great things about Los Angeles is In-N-Out Burger.” Paris Hilton famously claimed she
was on her way to In-N-Out when she was pulled over for a DUI. And paparazzi have snapped
shots of scores of celebrities getting an In-N-Out fix, including Miley Cyrus, Selena Gomez,
Christian Slater, and Nick Jonas. The fact that such celebrities aren’t paid to pay homage to the
brand underscores that In-N-Out is truly a hip place.
A Questionable Future?
Many analysts have questioned whether or not In-N-Out can sustain its unwavering 65-year run.
For example, the company that had been run only by Harry, Esther, or one of their two sons for
its first 58 years hit a barrier in 2006 when Esther Snyder passed away. The only direct
descendant of the Snyder family at that time was 23-year-old Lynsi Martinez, who was not yet in
a position to take over the company. That left In-N-Out in the hands
of Mark Taylor, the former vice president of operations. But as directed by Esther Snyder’s will,
granddaughter Lynsi took over as In-N-Out’s sixth president in 2010 before her 28th birthday.
Often described as shy, Martinez has progressively gained ownership of the company and will
have full control in 2017. The changing of the executive guard has gone largely unnoticed by
customers and fans, an indication that the In-N-Out legacy carries on. With long lines still
snaking out the door of any location at lunchtime, demand seems as high as ever. “The
more chains like McDonald’s and Burger King change and expand, the more In-N-Out sticks to
its guns,” says the analyst. “In a way, it symbolizes the ideal American way of doing business:
Treating people well, focusing on product quality, and being very successful.” In-N-Out’s
customers couldn’t agree more. When it comes to fast-food chains, delighted customers will tell
you, “There’s In-N-Out, and then there’s everyone else.”
Answer the following questions in detail:
1. Describe In-N-Out in terms of the value it provides for customers.
2. Evaluate In-N-Out’s performance relative to customer expectations. What is the outcome of
this process?
3. Should In-N-Out adopt a high-growth strategy? Why or why not?
4. With so many customers thrilled by In-N-Out’s “ no-change” philosophy, why don’t more
burger chains follow suit?
Dyson: Solving Customer
Problems in Ways They
Never Imagined
From a head-on perspective, it has a sleek, stunning stainless
steel design. With wings that extend downward at a 15-degree
angle from its center, it appears ready for takeoff. The latest
aeronautic design from Boeing? No. It’s the most innovative
sink faucet to hit the market in decades. Dyson—the company
famous for vacuum cleaners, hand dryers, and fans unlike anything
else on the market—is about to revolutionize the traditional
sink faucet.
The Airblade Tap—a faucet that washes and dries hands
with completely touch-free operation—is the latest in a line of
revolutionary Dyson products that have reinvented their categories.
In fact, Dyson was founded on a few very simple principles.
First, every Dyson product must provide real consumer benefits
that make life easier. Second, each product must take a totally
unique approach to accomplishing common, everyday tasks. Finally,
each Dyson product must infuse excitement into products
that are so mundane, most people never think much about them.
The Man behind the Name
James Dyson was born and raised in the United Kingdom. After
studying design at the Royal College of Art, he had initially
planned to design and build geodesic structures for use as commercial
space. But with no money to get his venture started,
he took a job working for an acquaintance who handed him a
blow torch and challenged him to create a prototype for an amphibious
landing craft. With no welding experience, he figured
things out on his own. Before long, the company was selling
200 boats a year based on his design.
That trial-and-error approach came naturally to Dyson,
who applied it to create Dyson Inc.’s first product. In 1979, he
had purchased what claimed was the most powerful vacuum
cleaner on the market. He found it to be anything but. Instead,
it seemed simply to move dirt around the room. This left Dyson
wondering why no one had yet invented a decent vacuum
cleaner. At that point, he remembered something he’d seen in
an industrial sawmill—a cyclonic separator that removed dust
from the air. Why wouldn’t that approach work well in vacuum
cleaners? “I thought no one was bothering to use technology in
vacuum cleaners,” said Dyson. Indeed, the core technology of
vacuum motors at the time was more than 150 years old. “I saw
a great opportunity to improve.”
Dyson then did something that very few people would have
the patience or the vision to do. He spent 15 years and made
5,127 vacuum prototypes—all based on a bag-less cyclonic
separator—before he had the one that went to market. In his
own words, “There were 5,126 failures. But I learned from each
one. That’s how I came up with a solution.”
Dyson’s all-new vacuum was far more than techno-gadgetry.
Dyson had developed a completely new motor that ran
at 110,000 revolutions per minute—three times faster than any
other vacuum on the market. It provided tremendous suction
that other brands simply couldn’t match. The bag-less design
was very effective at removing dirt and particles from the air,
and the machine was much easier to clean out than vacuums
requiring the messy process of changing bags. The vacuum also
maneuvered more easily and could reach places other vacuums
could not. Dyson’s vacuum really worked.
With a finished product in hand, Dyson pitched it to all
the appliance makers. None of them wanted it. So Dyson borrowed
$900,000 and began manufacturing the vacuum himself.
He then convinced a mail-order catalog to carry the Dyson instead
of Hoover or Electrolux, “Because your catalog is boring.”
Dyson
vacuums were soon picked up by other mail order
catalogs, then by small appliance chains, and then by large department
stores. By the late 1990s, Dyson’s full line of vacuums
were being distributed in multiple global markets. At that
point, Dyson, the company that had quickly become known for
vacuum cleaners, was already on to its next big thing.
The Dyson Method
During the development of Dyson’s vacuums, a development
model began to take shape. Take everyday products, focus on
their shortcomings, and improve them to the point of reinvention.
“I like going for unglamorous products and making them a pleasure
to use,” Dyson told Fortune magazine. By taking this route,
the company finds solutions to the problems it is trying to solve.
At the same time, it sometimes finds solutions for other problems.
For example, the vacuum motor Dyson developed sucked
air with unprecedented strength. But the flipside of vacuum
suction is exhaust. Why couldn’t such a motor blow air at wet
hands so fast that the water would be pressed off in a squeegeelike
manner, rather than the slow, evaporative approach employed
by commercial hand dryers?
With that realization, Dyson created and launched the Airblade,
a hand dryer that blows air through a .2-millimeter slot
at 420 miles per hour. It dries hands in 12 seconds, rather than
the more typical 40 seconds required by other hand dryers. It
also uses cold air—a huge departure from the standard warm-air
approach of existing commercial dryers. This not only reduced
energy consumption by 75 percent—a major bonus for commercial
enterprises that pay the electric bills—but customers were
much more likely to use a product that worked fast and did the
job right.
With very observable benefits, the Airblade was rapidly
adopted by commercial customers. For example, as part of a
comprehensive plan to improve its environmental impact, Los
Angeles International Airport (LAX) was looking for a solution
to the financial and environmental costs of manufacturing, distributing,
and servicing the paper towel dispensers in more than
100 restrooms throughout its terminals. Switching to recycled
paper towels helped, but only minimally. The energy used by
conventional hand dryers made them an unattractive alternative.
But when LAX management saw a demonstration of the Dyson
Airblade, it was a no-brainer. With Airblades installed throughout
its terminals, LAX was able to significantly reduce landfill
waste as well as costs. The overwhelmingly positive feedback
from travelers was icing on the cake.
Today’s Airblades have evolved, guided by Dyson’s
customercentric
approach to developing products. With the first
Airblade, it was apparent that all that high-powered air is noisy.
So Dyson spent seven years and a staggering $42 million to develop
the V4 motor, one of the smallest and quietest commercial
motors available. The new Airblade is quieter and almost
six pounds lighter than the original. But even more advanced is
Dyson’s new Blade V, a sleeker design that is 60 percent thinner
than the Airblade, protruding only four inches from the wall.
Assessing Real Customer Needs
Although Dyson sees itself as a technology-driven company, it
develops products with the end-user in mind. But rather than using
traditional market research methods, Dyson takes a different
approach. “Dyson avoids the kind of focus group techniques
that are, frankly, completely averaging,” says Adam Rostrom,
group marketing director for Dyson. “Most companies start
with the consumer and say, ‘Hey Mr. or Mrs. X, what do you
want from your toothbrush tomorrow or what do you want from
your shampoo tomorrow?’ The depressing reality is that often
you won’t get many inspiring answers.”
Rather, Dyson’s uses an approach it calls “interrogating
products” to develop new products that produce real solutions
to customer problems. After identifying the most obvious shortcomings
for everyday products, it finds ways to improve them.
It then tests prototypes with real consumers under heavy nondisclosure
agreements. In this manner, Dyson can observe consumer
reactions in the context of real people using products in
their real lives.
This approach enables Dyson to develop revolutionary
products like the Air Multiplier, a fan that moves large volumes
of air around a room with no blades. In fact, the Air Multiplier
looks nothing like a fan. By using technology similar to that
found in turbochargers and jet engines, the Air Multiplier draws
air in, amplifies it 18 times, and spits it back out in an uninterrupted
stream that eliminates the buffeting and direct air pressure
of conventional fans. Referring to the standard methods
of assessing customer needs and wants, Rostrom explains, “If
you . . . asked people what they wanted from their fan tomorrow,
they wouldn’t say ‘get rid of the blades.’ Our approach is
about product breakthroughs rather than the approach of just
running a focus group and testing a concept.
No-Nonsense Promotion
In yet another departure from conventional marketing, Dyson
claims to shun one of the core concepts of marketing. “There is
only one word that’s banned in our company: brand,” Mr. Dyson
proclaimed at Wired magazine’s Disruption By Design conference.
What Dyson seems to mean is that the company is not
about creating images and associations that do not originate
with the quality and function of the product itself. “We’re only
as good as our latest product.”
With its rigid focus on product quality and its innovative
approaches to common problems, Dyson’s approach to brand
building centers on simply letting its products speak for themselves.
Indeed, from the mid-1990s when it started promoting
its bag-less vacuums, Dyson invested heavily in television advertising.
But unlike most creative approaches, Dyson’s ads are
simple and straightforward, explaining to viewers immediately
what the product is, what it does, and why they need one.
“It’s a really rational subject matter that we work on, so we
don’t need to use white horses on beaches or anything like that,”
Rostrom says, referring to Dyson’s no-nonsense approach to
advertising. “We need only to explain the products. One thing
we’re careful to avoid is resorting to industry-standard ways of
communicating—fluffy dogs and sleeping babies and so on. We
don’t want to blend in that way.”
Today, Dyson complements traditional advertising with
digital efforts. Like its TV advertising, such methods are simple,
straightforward, and right to the point. For example, e-mail
communications are used sparingly, targeted to existing customers,
and timed for maximum impact. And beyond the media
it buys, Dyson considers public relations as the promotional
medium that carries most of the weight. From product reviews
in the mainstream media to online reviews and tweets about its
products, word of its Dyson’s products gets around fast. The Airblade Tap sink faucet, Dyson’s
most recent new
product, is a microcosm of Dyson’s marketing strategy. It took
125 engineers three years and 3,300 prototypes to develop the
final product. The Airblade Tap provides clearly communicated
solutions to everyday problems—solutions that make life
easier. It solves those problems in ways that no other product
has ever attempted, claiming to “reinvent the way we wash our
hands.” And it injects style into an otherwise boring product.
Dyson sums it up this way: “Washing and drying your hands
tends not to be a very pleasant experience. Water splashes, paper
is wasted, and germs are passed along. The Tap is a totally
different experience. You have your own sink, your own dryer.”
And at $1,500, it illustrates another element of the Dyson marketing
mix—a high price point that communicates quality and
benefits that are worth it.
If the Airblade Tap is a hit, it will serve to forward Dyson’s
goal of doubling its annual revenues of $1.5 billion “quite
quickly.” The company is not only continuing to demonstrate
that it can come up with winning products again and again, it
is expanding throughout the world at a rapid pace. Dyson products
are sold in over 50 global markets, selling well in emerging
economies as well as developed first-world nations. Dyson
does well in both economic good times and recessionary periods.
Dyson also sees another big move in its future—a chain of
company stores (as many as 20,000 stores in the United States
alone) carved in the image of Apple’s beloved hangouts. From
a single vacuum cleaner to what Dyson is today in less than
20 years—that’s quite an evolution.
Answer All Questions in Detail with examples
1. Write a market-oriented mission statement for Dyson.
2. What are Dyson’s goals and objectives?
3. Does Dyson have a business portfolio? Explain.
4. Discuss Dyson’s marketing mix techniques and how they
fit within the context of its business and marketing strategy.
5. Is Dyson a customer-centered company? Explain