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LINKING MARKETING AND CORPORATE STRATEGIES CHAPTER CONTENTS PAGE MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION .................................. 2-2 STUDENT LEARNING OBJECTIVES ................................................................................ 2-3 KEY TERMS AND CONCEPTS ........................................................................................... 2-3 LECTURE NOTES Where Can an “A” in Ice Cream Making Lead? ........................................................... 2-4 Organizations and Their Levels of Strategy .................................................................. 2-4 Setting Strategic Directions ........................................................................................... 2-7 The Strategic Marketing Process .................................................................................. 2-10 ANSWERS TO “APPLYING MARKETING CONCEPTS AND PERSPECTIVES” .... 2-15 ANSWERS TO “INTERNET EXERCISE”......................................................................... 2-17 SUPPLEMENTAL LECTURE NOTE (SLN) SLN 2-1: Lands’ End: The Complexities of Being an “E-tailer”. ................................ 2-20 IN-CLASS ACTIVITIES (ICA) ICA 2-1: Marketing Yourself........................................................................................ 2-21 ICA 2-2: Marketing Planning Worksheet ..................................................................... 2-28 VIDEO CASE 2 TEACHING NOTE (TN) Golden Valley Microwave Foods: The Surprising Channel ......................................... 2-32 POWERPOINT THUMBNAILS .......................................................................................... 2-36 2-1 Chapter 2 MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION PowerPoint Slidesa Transparenciesb Handoutsc Textbook Figures Figure 2-1 Figure 2-2 The three levels of strategy in organizations: corporation, business unit, and functional .............. Boston Consulting Group growth-share matrix for a strong, diversified firm showing some strategic plans.......................................................... Figure 2-3 Four market-product strategies: alternative ways to expand sales revenues for Ben & Jerry’s ............ Figure 2-4 The strategic marketing process............................... Figure 2-5 Ben & Jerry’s: a “SWOT” to get it growing again .. Figure 2-6 Elements of the marketing mix that comprise a cohesive marketing program ................................... Figure 2-7 Organization of a typical manufacturing firm, showing a breakdown of the marketing department............................................................... Figure 2-8 Evaluation and control of Kodak’s marketing program .................................................. Supplemental Figures and Advertisements Figure 2-A A magazine ad from JCPenney ................................ Figure 2-B A magazine ad from Lands’ End ............................. In-Class Activity (ICA) Figures ICA 2-1, Figure 1 The Do-It-Myself Marketing Plan ....................... ICA 2-2, Figure 1 Marketing Planning Worksheet for Team Development Sessions ........................................ a b c “PowerPoint Slides” are available on a CD-ROM and appear as “PowerPoint Thumbnails” within this chapter of the Instructor’s Manual. 100 “Transparencies” are available to textbook adopters by request of their local McGraw-Hill/Irwin sales representative. Instructors may choose to reproduce some figures and hand them out to each student in the class to enhance discussion. These “Handouts” are shown with a check in the right column. Chapter 2 2-2 STUDENT LEARNING OBJECTIVES After reading this chapter students should be able to: Describe the three organizational levels of strategy and how they relate to each other and the marketing function. Describe why business, mission, culture, and goals are important in organizations. Understand how organizations set strategic directions by assessing where they are now and seek to be in the future. Describe the strategic marketing process and its three key phases: planning, implementation, and control. Explain how the marketing mix elements are blended into a cohesive marketing program. Describe how marketing control compares actual results with planned objectives and acts on deviations from the plan. KEY TERMS AND CONCEPTS goals objectives market segmentation points of difference market share profit marketing plan situation analysis marketing strategy strategic marketing process marketing tactics SWOT analysis mission 2-3 Chapter 2 LECTURE NOTES Chapter Opening Photo: Ben & Jerry’s Website CHAPTER OPENING EXAMPLE Where Can an “A” in Ice Cream Making Lead? Slide 2-8 Chapter Opening Photo: Ben & Jerry’s Social Mission Ben Cohen and Jerry Greenfield were grade school classmates on Long Island. In 1978 they headed to Vermont and eventually started Ben & Jerry’s Homemade, Inc.—a company that produces dozens of flavors of ice cream, ice milk, and yogurt. Some of their flavors: Cherry Garcia, Rainforest Crunch, Peace Pops, and the recent One Sweet Whirled ice cream. Ben & Jerry’s website reflects its creative, funky approach to business—linked to a genuine concern for social causes. Some examples: Slide 2-9 It contributes 7.5% of its pretax profits to charities. Chapter Opening Photo: Ben & Jerry It pays its employees a livable wage. It purchases supplies from other socially responsible firms. Its PartnerShops help nonprofit organizations provide training and jobs. Slide 2-10 But by the late 1990s Ben and Jerry concluded the company’s sales were flattening and it needed additional financial resources to grow. So in 2000, Ben & Jerry’s agreed to be acquired by Unilever, a huge multinational. Ben & Jerry’s would operate separately from Unilever’s current ice cream business to preserve the company’s legendary concern for the environment and social responsibility, and both cofounders would continue their involvement with the company. Because of intense competition, firms must continuously revisit both marketing and corporate strategies, as Ben & Jerry’s Homemade has had to do. I. ORGANIZATIONS AND THEIR LEVELS OF STRATEGY There are two basic kinds of organizations: A business firm is a privately owned organization that serves its customers in order to earn a profit, which is both: – the reward to a business firm for the risk it undertakes in offering a product for sale, and – the money left over after a firm’s total expenses are subtracted from its total sales. Chapter 2 A nonprofit organization is a nongovernmental organization that serves its customers but does not have profit as an organizational goal. Some examples: museums, orchestras, and private hospitals. 2-4 A. Levels in Organizations and How Marketing Links to Them Figure 2-1 Three levels of strategy Slide 2-13, T There are three levels in large organizations: 1. The corporate level, where top management directs overall strategy for the entire organization and creates value for its shareholders. 2. The business unit level (also termed strategic business units or SBUs), which is the part of an organization that markets a set of related products to a clearly defined group of customers. 3. The functional level, where groups of specialists actually create value for the organization. The term department refers to these specialized functions. Examples of functional units are finance, human resources, marketing, and research and development. B. Strategy Issues in Organizations Organizations need a reason for existence and a direction. This is where their business, mission, and goals converge. Business and mission apply to the corporate and business unit levels; goals relate to all three levels. 1. The Business. Organizations exist for a purpose—to accomplish something for someone. But over time, its purpose gets fuzzy. One guideline in defining the company’s business: Try to understand the people served by the organization and the value they receive, which emphasizes the critical customer-driven focus that successful organizations have. In famous article by Harvard professor Theodore Levitt (Marketing Myopia), organizations must not define their business and customer focus too narrowly. Some examples: Railroads are in the “transportation” business, not the railroad business. Disney is in the entertainment business, not movie or theme park businesses. Medtronic is in the business of alleviating pain, restoring health, and extending life, not the medical device business. 2. The Mission. By understanding its business, an organization can define its mission, which is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values. 2-5 Chapter 2 Star Trek has probably the best-known mission statement in America: “To explore strange new worlds, to seek out new life and new civilizations, to boldly go where no one has gone before.” Medtronic Mural What is its mission? Slide 2-15 Medtronic’s mission statement: “To contribute to human welfare by application of biomedical engineering in the research, design, manufacture, and sale of instruments or appliances that alleviate pain, restore health, and extend life.” Organizations must connect not just with their customers but with all their stakeholders, which: Are the people who are affected by what the organization does and how well it performs. Includes employees, owners, board members, suppliers, distributors, unions, local communities, and customers. 3. Goals. Goals or objectives convert the mission into targeted levels of performance to be achieved, often by a specific time. Goals measure how well the mission is being accomplished. Business firms pursue several different types of goals: Profit. According economic theory, a firm seeks as much profit as possible. Sales (dollars or units). A firm may elect to maintain or increase sales even though profits may not be maximized. Market share, which is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself. Quality. A firm may choose to focus on high quality. Customer satisfaction. Customers are the reason an organization exists. Can monitor their satisfaction through surveys or complaints. Employee welfare. A firm may recognize the critical role employees play in its success. Social responsibility. A firm may seek to balance conflicting goals of consumers, employees, and stockholders to promote overall welfare of all these groups, even at the expense of profits. Nonprofit organizations also set goals: Chapter 2 Private organizations strive to serve customers efficiently. Government agencies try to serve the public good. 2-6 CONCEPT CHECK 1. What are the three levels in today’s large organizations? Answer: The three levels are the corporate, business unit, and functional. 2. What is the meaning of an organization’s mission? Answer: Mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values. 3. How does an organization’s goals relate to its mission? Answer: Goals or objectives measure how well the organization’s mission is being accomplished. II. SETTING STRATEGIC DIRECTIONS Setting strategic directions involves answering two questions: Where are we now? Where do we want to go? A. A Look Around: Where Are We Now? Asking an organization where it is at the present time involves identifying its customers, competencies, and competitors. Lands’ End ad What strategic direction? 1. Customers. Strategic directions must be customer-focused and provide genuine value and benefits to present and prospective customers. 2. Competencies. Slide 2-17 Answers the question, “What do we do best?” Competencies are an organization’s special capabilities, including skills, technologies, and resources that distinguish it from other organizations. Exploiting them can lead to success. Competitive advantage is a unique strength relative to competitors, often based on quality, time, cost, or innovation. 3. Competitors. In global competition, the lines among competitive sectors are increasingly blurred, so successful firms continuously assess both who the competitors are and how they are changing in order to respond with their own strategies. 2-7 Chapter 2 SLN 2-1: Lands’ End: The Complexities of Being an “E-tailer” Lands’ End started as a catalog retailer. But defining its competitors as other catalog retailers would be a huge oversimplification. Lands’ End now competes not only with other catalog retailers of clothing but with traditional department stores, mass merchandisers, specialty shops, and well-known brands of clothing sold in all these kinds of retailers. In addition, all these have websites for Internet sales. B. Growth Strategies: Where Do We Want to Go? Knowing where the organization is at the present time enables managers to set a direction for the firm and allocate resources to move in that direction. Two techniques to aid in these decisions are the (1) business portfolio analysis and (2) market-product analysis. Figure 2-2 BCG growth-share matrix Slide 2-24, T 1. The Business Portfolio Analysis. The Boston Consulting Group’s (BCG) business portfolio analysis uses quantified performance measures and growth targets to analyze a firm’s business units (called strategic business units or SBUs by BCG) as though they were a collection of separate investments. This analysis has also been applied at the product line or individual product or brand level. The SBUs are positioned on a growth-share matrix, in which: The vertical axis is the market growth rate, which is the annual rate of growth of the specific market or industry in which a given SBU is competing. The horizontal axis is the relative market share, defined as the sales of the SBU divided by the sales of the largest firm in the industry. BCG has given names and descriptions to the four resulting quadrants in its growth-share matrix based on the amount of cash they generate or require from the firm: Chapter 2 Cash cows (lower left). SBUs that have a dominant share of slow-growth market. Generates large amounts of cash to pay company overhead and to invest in other SBUs. Stars (upper left). SBUs with a high share of high-growth market that needs extra cash to finance their future growth. Question marks or problem children (upper right). SBUs with a low share of high-growth markets. Requires a lot of cash to maintain or increase market share. Management must choose which to invest in and phase out the rest. 2-8 Fujitsu Tablet PC ad What SBU cash strategy? Management often makes decisions on the role of its SBUs in the future and either injects or removes cash from it. As a result, four alternative strategies are available for each SBU: Slide 2-25 Dogs (lower right). SBUs with a low share of low-growth markets. May generate enough cash to sustain but do not hold promise of becoming winners for the firm. Consider dropping unless relationships with other SBUs, competition, or potential strategic alliances exist that benefit the firm. NOTE: The area of the circles in a growth-share matrix is proportional to the corresponding SBU’s annual sales revenue. Build. Invest cash in question marks to increase market share and turn them into stars. Hold. Invest just enough cash in cash cows to maintain market share at their current levels. Harvest. Remove cash from cash cows in the short-term even though they may lose market share and become dogs in the longer run. Divest. Phase out dogs by withholding cash or actually selling them to gain cash for other SBUs. 2. The Market-Product Analysis. Duncan Hines ad What SBU cash strategy? Firms view growth opportunities via markets and products. Slide 2-26 Figure 2-3 Four marketproduct strategies For any product there is both a current market (existing customers) and a new market (potential customers). For any market there is both a current product (what existing customers now use) and a new product (something customers might use if developed). Firms consider four alternative market-product strategies: Slide 2-28 Market penetration. Increase sales of present products in existing markets. There is no change in the basic product line or the market served, but increased sales are possible through finding efficiencies. Example: Increase sales of Ben & Jerry’s present ice cream products to U.S. consumers by hooking onto Unilever’s Breyers and Good Humor ice cream brands or through developing new flavors. Market development. Sell existing products to new markets (such as geographically). Example: Selling existing Ben & Jerry’s products to South American consumers, whose incomes are increasing in South American markets, but are not well aware of the Ben & Jerry’s brand. 2-9 Chapter 2 Product development. Sell a new product to existing markets. Example: Unilever could try leveraging the Ben & Jerry’s brand by selling its own Ben & Jerry’s brand of children’s clothing in the U.S. This is risky because consumers may not be able to see a clear connection between the company’s expertise in ice cream and children’s clothing. Diversification. Develop new products and sell them in new markets. Example: Sell a brand of children’s clothing in South America. This is a potentially high-risk strategy because the company has neither previous production experience nor marketing experience on which to draw. CONCEPT CHECK 1. What are competencies and why are they important? Answer: Competencies are an organization’s special capabilities, including skills, technologies, and resources that distinguish it from other organizations. They are important because exploiting these competencies can lead to the organization’s success. 2. What is business portfolio analysis? Answer: Business portfolio analysis studies a firm’s business units as though they were a collection of separate investments. 3. What are the four market-product strategies? Answer: The four market-product strategies are: (1) market penetration; (2) market development; (3) product development; and (4) diversification. III. THE STRATEGIC MARKETING PROCESS Figure 2-4 The strategic marketing process Slide 2-34 T After the organization assesses where it’s at and where it wants to go, other questions emerge: How do we allocate our resources to get to where we want to go? How do we convert our plans into actions? How do our results compare with our plans, and do deviations require new plans and actions? This approach is used when: ICA 2-1: Marketing Yourself Chapter 2 Engaging in the strategic marketing process, whereby an organization allocates its marketing mix resources to reach its target markets. This process is divided into three phases: planning, implementation, and control. 2-10 Developing a marketing plan, which is a road map for the marketing activities of an organization for a specified future period of time, such as one year or five years. A. Strategic Marketing Process: The Planning Phase The planning phase consists of three steps: Figure 2-5 SWOT of Ben & Jerry’s Situation analysis. Market-product focus and goal setting. The marketing program. 1. Step1: Situation (SWOT) Analysis. Slide 2-36 Ben & Jerry’s SWOT: new social resp. programs? Slide 2-37 Ben & Jerry’s SWOT: new ice cream flavors? Slide 2-38 Ben & Jerry’s SWOT: new ice cream flavors? Slide 2-39 A situation analysis involves taking stock of where the firm or product has been recently, where it is now, and where it is headed in light of the organization’s plans and the external factors and trends affecting it. A short-hand summary of the situation analysis is a SWOT analysis, an acronym describing an organization’s appraisal of its internal strengths and weaknesses and its external opportunities and threats. A SWOT analysis helps a firm to identify the strategyrelated factors to help the firm grow and succeed by building on vital strengths, correcting glaring weaknesses, exploiting significant opportunities, and avoiding disaster-laden threats. A SWOT analysis is based on an exhaustive study of the four areas in Step 1 of the planning phase and forms the foundation on which the firm builds its marketing program: – – – – Identifying trends in the firm’s industry. Analyzing the firm’s competitors. Assessing the firm itself. Researching the firm’s present/prospective customers. 2. Step 2: Market-Product Focus and Goal Setting. Determining which products will be directed toward which customers is essential to develop an effective marketing program. This decision often based on market segmentation, which involves considering prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. 2-11 Chapter 2 Medtronic’s Champion What point of difference? Slide 2-41 Goal setting involves setting measurable marketing objectives to be achieved. For an entire marketing program, the objective is often a series of actions to be implemented over several years. Example: Medtronic’s Champion heart pacemaker targeted at the “affordable and reliable” segment: Figure 2-6 Marketing mix elements Set marketing and product goals. Design and market such a pacemaker in three years for the Asian market. Select target markets. The Champion pacemaker will be targeted at cardiologists and medical clinics in India, China, and other Asian countries performing heart surgery. Find points of difference. Points of difference are those characteristics of a product that make it superior to competitive substitutes. For the Champion pacemaker, the key points of difference are high quality, long life, reliability, ease of use, and low cost. Position the product. The pacemaker will be “positioned” in cardiologists’ and patients’ minds as a medical device that is high quality and reliable with a long, nine-year life. The name “Champion” was selected after testing acceptable names in India, China, Pakistan, Singapore, and Malaysia. 3. Step 3: Marketing Program. This aspect of the planning phase involves developing the marketing program’s marketing mix and the budget. Example: Medtronic’s Champion heart pacemaker: Slide 2-43, T ICA 2-2: Marketing Plan Worksheet Chapter 2 Product strategy. Offer a Champion brand pacemaker with features needed by Asian patients. Price strategy. Manufacture the Champion to control costs to price it below $1,000 (US). Promotion strategy. Demonstrate the Champion at cardiologist conventions. Place (distribution) strategy. Search out and train reputable medical distributors across Asia to call on cardiologists and medical clinics. Budget. After developing a sales forecast, a budget is developed that must be approved by top management. 2-12 CONCEPT CHECK 1. What is the difference between strength and an opportunity in a SWOT analysis? Answer: Both are positive factors for the organization, but strength is an internal factor whereas an opportunity is an external one. 2. What is market segmentation? Answer: Market segmentation involves considering prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. 3. What are points of difference and why are they important? Answer: Points of difference are those characteristics of a product that make it superior to competitive substitutes. They are the single most important factor in the success or failure of a new product. B. Strategic Marketing Process: The Implementation Phase Implementation, the second phase of the strategic marketing process, involves executing the marketing plan. The four components of the implementation phase are: 1. Obtaining Resources. The responsible marketing manager must obtain the people and money necessary to succeed. Figure 2-7 Marketing department Slide 2-48 2. Designing the Marketing Organization. A marketing program needs a marketing organization to implement it. The responsibilities of all individuals within the marketing organization need to be specified. 3. Developing Schedules. Effective implementation requires deadlines—scheduling important milestones and meeting them. 4. Executing the Marketing Program. Effective execution requires attention to detail for both marketing strategies and marketing tactics. 2-13 Chapter 2 A marketing strategy is the means by which a goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it. Example: Kodak’s launch of a new product targeted at Gen Yers (18-28 yrs). Marketing tactics are detailed day-to-day operational decisions essential to the overall success of marketing strategies. Example: Kodak decided to form a crossfunctional team to develop a digital camera that plays MP3 music files. C. Strategic Marketing Process: The Control Phase The control phase of the strategic marketing process seeks to keep the marketing program moving in the direction set for it. It has two key elements: Figure 2-8 Kodak: evaluation and control 1. Compare the results of the marketing program with the goals in the written plans to identify deviations. Slide 2-51 Kodak Exploiting a positive deviation? 2. Act on these deviations by: Slide 2-52 Kodak Correcting a negative deviation? Slide 2-53 Can reveal a planning gap, which is the difference between the projection of the path to reach a new goal and the projection of the path of the results of a plan already in place. The ultimate purpose of the firm’s marketing program is to “fill in” this planning gap. Exploiting a positive deviation. Example: Since consumers like to take their film to Kodak mini-labs at retailers and get a CD for a second set of “prints,” Kodak strengthened its strategic partnerships with retailers like Wal-Mart, Kinko’s, etc. by installing its PictureMaker. Correcting a negative deviation. Example: Digital camera owners want to get exact photo from cameras linked to PCs and the Internet. Software was improved to allow this with the EasyShare cameras. CONCEPT CHECK 1. What is the control phase of the strategic marketing process? Answer: This is the phase that seeks to keep the marketing program moving in the direction set for it. 2. How do the objectives set for a marketing program in the planning phase relate to the control phase of the strategic marketing process? Answer: The planning phase objectives are used as the benchmarks with which the actual performance results are compared in the control phase. Chapter 2 2-14 ANSWERS TO “APPLYING MARKETING CONCEPTS AND PERSPECTIVES” 1. (a) Explain what a mission statement is. (b) Create a mission statement for your own career. Answesr: Consumer wants or benefits met by each of four products or services include: 2. a. A mission statement defines the organization’s scope, often identifying its customers, markets, products, technology, and values. b. An example of a mission statement for a student’s career might be: “To be recognized as an outstanding, ethically and environmentally responsible, global marketing executive.” What competencies best describe (a) your college or university, (b) your favorite restaurant, and (c) the company that manufactures the computer you own or use most often? Answers: Some competencies for each of these organizations might be: 3. a. Your college or University. [NOTE: These vary along a continuum from research universities to community colleges.] A world-class research institution for biotechnology; student-oriented faculty. Flexible course scheduling to accommodate the special needs of part-time and working students. b. Your Favorite Restaurant. Genuine French cuisine. A family menu at a reasonable price. c. The Company That Manufactures the Computer You Own or Use Most Often. A 24-hour, 1-800 number help line. Capability of new computer models to run all software designed for older models. Why does a product often start as a question mark and then move counterclockwise around BCG’s growth-share matrix shown in Figure 2-2? Answer: When a product is introduced, it is usually a “question mark” because it is “new” and there is uncertainty about consumers’ acceptance of them. After a period of time, depending on the product category, the “not-so-new” product could be classified as a “star” if its growth rate is sizeable and had a significant share of the product category. If the growth rate in the product category falls substantially and there is great competition from competing brands, the product probably will fall in the “cash cow” category. If, however, the product isn’t supported with an effective marketing program, it could become a “dog.” 2-15 Chapter 2 4. Many American liberal arts colleges have traditionally offered an undergraduate degree in liberal arts (the product) to full-time 18- to 22-year-old students (the market). How might such a college use the four market-product expansion strategies shown in Figure 2-3 to compete in the twenty-first century? Answers: 5. a. Market penetration. Obtain a greater share of the full-time 18- to 22-year-old students in the geographic area served by the college. b. Product development. Offer new courses at either the undergraduate or master’s degree level in areas such as business, computers, or law. c. Market development. Offer existing liberal arts courses to new markets in the form of distance learning via the Internet, part-time courses for evening, etc. d. Diversification. Offer new courses in business or computers to new markets, such as employees of local companies. What is the main result of each of the three phases of the strategic marketing process: (a) planning, (b) implementation, and (c) control? Answers: The results of each phase of the strategic marketing process are: 6. a. Planning phase. Results are formal marketing plans that identify specific objectives to be achieved by a particular time and the specific actions to achieve those objectives. b. Implementation phase. Results are formal measurements of the results achieved, which can be compared with the plans established in the planning phase to determine if any deviations from plans occurred. c. Control phase. Results are new actions taken to exploit opportunities where deviations from plans are better than expected or corrective actions where deviations from plans are worse than expected. The goal-setting step in the planning phase of the strategic marketing process sets quantified objectives for use in the control phase. What actions are suggested for a marketing manager if measured results are below objectives? Above objectives? Answers: If the marketing manager discovers a planning gap, which is a difference between the projection of the path to reach a new goal and the projection of the path of the results of a plan already in place for the marketing program, he or she can take the following actions: a. Below objectives: Correct a negative deviation by making minor or major changes to the existing marketing program of a product to better reflect future expectations in the marketing environment. b. Above objectives: Exploit a positive deviation by strengthening strategic partnerships, engage in a market development or product development strategy, etc. to maintain or enhance the firm’s position. Chapter 2 2-16 ANSWERS TO “INTERNET EXERCISE” Internet Exercise Ben & Jerry’s social mission Slide 2-57 Ben & Jerry’s markets its flavors of ice cream, frozen yogurt, sorbet, and novelty bars in response to both consumer ahem! tastes and important causes it supports, a practice continued even after being sold to Unilever in 2000. Recently, Ben & Jerry’s teamed up with the award-winning Dave Matthews Band and SaveOurEnvironment.org to fight global warming by creating the One Sweet Whirled ice cream flavor in pints and novelty bars. But not all flavors last. The ones that don’t wind up in Ben & Jerry’s Flavor Graveyard. 1. Go to Ben & Jerry’s website (www.benjerry.com) to read Ben & Jerry’s mission statement. What are the elements of its mission? Do you think all companies should have these elements in their mission statement, particularly the idea of “linked prosperity?” Why or why not? Answers: The elements of its mission can be found in its mission statement below: “Ben & Jerry’s is founded on and dedicated to a sustainable corporate concept of linked prosperity. Our mission consists of 3 interrelated parts: a. Product Mission: To make, distribute, & sell the finest quality, all natural ice cream and euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment. b. Economic Mission: To operate the company on a sustainable financial basis of profitable growth, increasing value for our stakeholders & expanding opportunities for development and career growth for our employees. c. Social Mission: To operate the company in a way that actively recognizes the central role that business plays in society by initiating innovative ways to improve the quality of life locally, nationally, and internationally. Central to the mission of Ben & Jerry’s is the belief that all three parts must thrive equally in a manner that commands deep respect for individuals in and outside the company and supports the communities of which they are a part.” Answer: Should all companies have these elements in their mission statement, particularly the idea of linked prosperity? Students may offer support for each side of this question. Examples include: 2-17 Chapter 2 For “Linked Prosperity”: 1. Increases well being of all people if the correct choices are made by company management. 2. When the world is using its resources carefully, there will be more remaining for future generations. Against “Linked Prosperity”: 1. Those who excel in their chosen field may not be inclined to give their best work if everyone is rewarded in the same way: 2. The business community does not have the role of improving the quality of life for a broad community when the cost for this action reduces value for the company shareholders. 2. Ben & Jerry’s prides itself on being a socially responsible firm. Each year, it publishes a “Social Audit” that reviews its social responsibility in several areas. Check out Ben & Jerry’s latest report by clicking the “Our Company” link and then the “Our Mission” link for the latest social audit. Be sure to click on the Marketing & Sales link. What has Ben & Jerry’s done in the areas of packaging, marketing and sales, and activism to be a socially responsible corporate citizen? Answer: Ben & Jerry’s cites the following actions in its latest social audit as examples of its commitment to its social mission: a. Packaging. b. Chapter 2 Converted domestic pint packaging to our Eco-Pint, which is constructed from unbleached paperboard that is biodegradable. Incorporated a recyclable tamper-evident seal on all of our domestic and international pints. Marketing and sales. Created the Global Warming Campaign in concert with the Dave Matthews Band, and in partnership with many environmental non-profits. The goal is to educate and motivate our consumer base to: (1) urge Congress to enforce legislation that reduces U.S. reliance on fossil fuels and supports renewable, efficient energy sources; (2) reduce carbon load emissions through individual actions; and (3) to motivate consumers abroad around Kyoto issues and personal actions to reduce CO2 emissions. 2-18 c. Activism. d. Signed the “Invest in America Statement of National Priorities” to urge the President and Congress to address the needs of children in poor communities and their families, improve public transportation and housing, and protect water and the environment. Supported the Tom Joyner Foundation, which supports scholarships at traditionally black colleges by offering the Butter Pecan flavor to generate royalties. Had a fleet of 7 “scoop trucks” that gave out over 250,000 samples to support local organizations by either donating or selling ice cream to fundraise for nonprofit groups. Helped build KaBoom!, a playground in Boston. Teamed up with the American Red Cross Give a Pint - Get a Pint program on campuses nationwide to raise awareness about the services that the American Red Cross provides. Others include dioxin, recombinant Bovine Growth Hormone (rBGH), and genetically modified organisms. What impact do these efforts have on a firm’s sales and profits, like those of Ben & Jerry’s? Answer: The impact on sales and profits depends on demand. If these actions and new flavors stimulate demand beyond the cost of providing the actions and manufacturing the flavors, then profits should increase, all other things held equal. If the demand is not there for the new flavors, then profits will suffer. 3. To see Ben & Jerry’s current flavors and those “laid to rest” in the Flavor Graveyard, visit www.benjerry.com/our_products/flavor_graveyard. Have any of your favorite flavors been laid to rest? If yes, what are they? Answers: See the website. 2-19 Chapter 2 SLN 2-1: SUPPLEMENTAL LECTURE NOTE Lands’ End: The Complexities of Being an “E-tailer” As described later in the Retailing and Wholesaling chapter (Chapter 14), firms like Lands’ End increasingly face “intertype competition” from clothing sellers that may be department stores, mass merchandisers, boutiques, catalog outlets, or on the Internet (e-tailers). Lands’ End competes with many of these and also retail outlets that started simply as clothing brands. Figure 2-A JCPenney e-tailing ad Lands’ End is not only in catalog retailing—where it started—but now also has stores and has achieved success in e-tailing by selling over the Internet. The result is that both it and major competitors like JCPenney must be creative in finding ways to use their promotional dollars to reach target customers. JCPenney. The JCPenney ad (Figure 2-A) announces its free “$1,000 shopping spree” that can be entered by going to its special website shown in the ad. Lands’ End. The Lands’ End ad (Figure 2-B) also gives the reader its website. But unlike the JCPenney ad, this Lands’ End ad actually “asks for the order” and invites the reader to order its “Reversible Down Jacket” through either its website or its 800 number. Slide 2-62, T Figure 2-B Lands’ End e-tailing ad Slide 2-63, T Chapter 2 2-20 ICA 2-1: IN-CLASS ACTIVITY Marketing Yourself Learning Objectives. To show students, especially non-marketing majors, that marketing is applicable to their future by using the strategic marketing process and marketing mix when looking for a job. Definitions. The following marketing terms are referred to in this in-class activity (ICA): Marketing Mix: The elements of the marketing mix are the marketing manager’s controllable factors—product, price, promotion, and place—that can be taken to solve a marketing problem. Points of Difference: Are those characteristics of a product that make it superior to competitive substitutes. Positioning: The place an offering occupies in a consumer’s mind with regard to important attributes relative to competitive offerings. Situation Analysis: Taking stock of where the firm or product has been recently, where it is now, and where it is headed in light of the organization’s plans and the external factors and trends affecting it. Strategic Marketing Process: The approach whereby an organization allocates its marketing mix resources to reach its target markets. SWOT Analysis: An acronym describing an organization’s appraisal of its internal strengths and weaknesses and external opportunities and threats. Nature of the Activity. To have students apply the strategic marketing process to themselves as they seek employment. Estimated Class Time. 15 minutes. Materials Needed. The Core02.ppt file in the Core PowerPoint CD from the Core Instructor’s Box. Copies of the “Marketing Yourself” handout for each student. Copies of ICA 2-1, Figure 1: The Do-It-Myself Marketing Plan worksheet for each student. A transparency of ICA 2-1, Figure 1: The Do-It-Myself Marketing Plan. 2-21 Chapter 2 Preparation Before Class. Follow the steps below: 1. Make a transparency of ICA 2-1, Figure 1. 2. Make copies of the “Marketing Yourself” handout and “The Do-It-Myself Marketing Plan” worksheet. 3. Review the PowerPoint slides. ICA 2-1 Instructions. Follow the steps below to conduct this ICA: HotJobs.com TV ad Slide 2-65 1. Show Slide 2-65: HotJobs.com TV ad (TRT: 0:30). This humorous ad shows how being both qualified and prepared for the job interview can lead to a job that fits both the applicant and the employer. 2. Ask students about the type of jobs they hope to land after graduation and how they intend to find these jobs. Most students will describe a “shotgun approach” of aiming at any job without any focused or targeted effort at specific careers (product management, marketing research, advertising, sales, etc.) or positions (assistant product manager, marketing research analyst, etc.). 3. Contrast the difference between a shotgun approach and a targeted marketing effort. This is a good opportunity to explain how research can help students develop information to identify alternative “target markets.” For example, students can learn about potential opportunities through networking, internships, informational interviewing, and many secondary sources. 4. Have students conduct a situation analysis, which involves taking stock of what they have done regarding their career search, where they are now, and where they are headed in terms of their existing plans and the external factors and trends affecting their employment prospects. A SWOT analysis should be used to appraise students’ personal strengths and weaknesses as well as their opportunities for and threats (or barriers) to successful employment. a. To conduct an internal analysis, ask students what some of their strengths and weaknesses are in terms of the courses taken and grades received, work experience, extra-curricular activities involvement, honors received, etc. b. To conduct an external analysis, ask students which industries or types of jobs are growing or in demand that may be opportunities. Further, ask them what advantages or “points of difference” they have relative to other “competitors” (other students) seeking the same job opportunities, such as taking this Chapter 2 2-22 marketing course, the reputation of this educational institution, etc. Finally, ask them what other external forces can impact their job search, for example a downturn in the economy, the need to be computer literate, etc. This type of focused approach helps to define potential market segments that can be targeted. 5. Ask students to identify elements of their marketing mix: a. What type of “product” do you have to offer? b. What sort of “pricing” is appropriate? c. What “promotion” will be utilized? d. What type of “place” or channel will be used? These include intermediaries such as on-campus career services, networking, employment agencies, and even the Internet, with firms such as HotJobs.com. 6. Pass out copies of the “Marketing Yourself” handout and “The DoIt-Yourself Marketing Plan” worksheet and ask students to spend 10 minutes filling them out. 7. Show the transparency of ICA 2-1, Figure 1. Bolles’ Job & Mission Slide 2-66 8. Call on students and ask them to share portions of their personal marketing plan with the class. If students have few ideas about their marketing mix, ask about how information could be developed to help formulate an appropriate marketing mix. 9. Show Slide 2-66 from Richard Bolles’ “Anatomy of a Job” and “How to Find Your Mission in Life” from the best-selling jobhunting book What Color is Your Parachute” to provide students with a tangible resource for applying the strategic marketing process to themselves. Marketing Lesson. The strategic marketing process can be applied to products, services, ideas, and even to marketing yourself! Websites. To investigate some job possibilities, go to the HotJobs.com website, which is www.hotjobs.com. To view the Ten Speed Press website, go to www.tenspeed.com. For Richard Bolles’ website, go to www.jobhuntersbible.com. There, you will find information on the latest edition of his best-selling book, What Color is Your Parachute? Bolles also has several other resources that may help students plan their careers and first job search. 2-23 Chapter 2 MARKETING YOURSELF Planning Phase Situation Analysis Internal Assessment: What are your strengths and weaknesses? What can you do to enhance your strengths and minimize your weaknesses? What points of difference or competitive advantage do YOU have? If you don't have one, can you develop one? External Analysis: What are the trends in the environmental factors that could impact your job search and career development? These consist of: sociocultural, economic, technological, competitive, and regulatory factors. Competitive Analysis: What type of background, experiences, strengths, and weaknesses do your competitors have? Market Analysis: What market segments (job opportunities) have you identified as having the best potential? How do you fit into these markets? [NOTE: This means doing some research!] Focus and Goal Setting What are your objectives? Make them specific and measurable! What is your target market? Examples might be large public accounting firms, businessto-business sales, and marketing research for a consulting firm in Chicago, etc. Marketing Program Product: YOU. Know yourself well. Continually improve yourself. Understand how you can meet the needs of your target market—prospective employers! Pricing: What salary and compensation package do you want? What are you willing to settle for? What’s the average salary received by competitors in your target market? Promotion: Very important. Think about the buying process. How will you create awareness for yourself? What can you do to “break through the clutter” and get the opportunity for an interview? Your personal selling skills will be important for telephone contacts and face-to-face interviews. Probe to find out about the needs of the organization before that “sales call” and during the interview. Have your questions prepared. Place: What channels have you developed to access your target market, such as associations, personal contacts, professors, etc? Do some careful research on these. Don’t assume that intensive distribution is necessarily the way to go. Focus your efforts to those target markets that hold promise. Chapter 2 2-24 Implementation Phase Develop a timetable and budget for research, wardrobe, résumés, and travel. Carry out your program. Contact your target market opportunities. Follow-up consistently. Remember that looking for a job requires a significant commitment of your time and effort. Control Phase Follow-up on all leads. Find out why you did or didn’t make the cut. Ask at an interview what it was about your résumé that interested them. Even if you don't get the job, you have more insight. Similarly, when you call to follow-up on those cover letters and résumés that you sent out, ask when decisions will be made, when it would be appropriate to call back (and then do it). If you are rejected, call back and ask why. If you exhaust all of the possibilities in a given target market, go back to your situation analysis and identify new segments. Always send a “Thank You” note. Resources: Your college placement office. Informational interviewing (a great opportunity to learn more about careers you are considering while you are still in school and can make some adjustments to your program). Internships. Good experience to build your résumé and potential contacts for positions. Even if you don't want to work there, they can possibly open doors for you elsewhere. Richard N. Bolles, What Color is Your Parachute?: A Practical Manual for Job-Hunters and Career-Changers, (Berkeley, CA: Ten Speed Press). A companion workbook is also available. See www.jobhuntersbible.com (Bolles’ website) and www.tenspeedpress.com. Martin Yate, Knock'em Dead; Cover Letters That Knock ‘Em Dead; and Resumes That Knock ‘Em Dead, (Holbrook, MA: Adams Media Corporation). See www. adamsmedia.com. Websites. The following contain resources on job searches, résumé writing, interviewing, job postings, etc. www.careercity.com www.hotjobs.com www.careerXroads.com www.monster.com www.careers-in-marketing.com www.studentcentral.com 2-25 Chapter 2 ICA 2-1, FIGURE 1: THE DO-IT-MYSELF MARKETING PLAN STRATEGIC MARKETING PROCESS Situational Location Analysis of Factor (SWOT) Internal: Me MY OWN MARKETING PLAN Kind of Factor Favorable My Strengths: Unfavorable My Weaknesses: Opportunities For Me: Threats Affecting Me: Personality Formal Education Job Experience Motivation Other: External: P L A N N I N G Economic Technical Legal Other: Focus and Goal Setting P H A S E My Goals Upon Graduation My Desired Position Personal Goals: Job Description: Industries: My Target Industries, Organizations, and Locations Organizations: Geographical Areas: Personality: My Uniqueness (Points of Difference) Education & Experience: Other: My “Positioning” Chapter 2 How You Compare to Other Job Applicants: 2-26 ICA 2-1, FIGURE 1: THE DO-IT-MYSELF MARKETING PLAN P L A N N I N G P H A S E I M P L E M E N T A T I O N P H A S E C O N T R O L MARKETING PROGRAM Product Strategy Formal Education/Courses: (Actions to Improve My “Marketability”) Job Experiences/Projects Completed: MY OWN MARKETING PLAN Extra-Curricular/Volunteer Activities: Obstacles To Overcome: Price Strategy Compensation Sought: Promotion Strategy Résumé, Personal Interviews, and Letters/Telephone Calls: Place Strategy Networking for Contacts and References: Schedule/Budget Marketing Actions Actions to Take/Budget 1. Deadlines 1. (Courses to take, summer jobs to get, résumés to write, clothes to buy, travel arrangements to make, etc.) 2. 2. 3. 3. 4. 4. 5. 5. Evaluation What Did and Didn’t Work: Control How to Modify Strategy: P H A S E 2-27 Chapter 2 ICA 2-2: IN-CLASS ACTIVITY Marketing Planning Worksheet Learning Objective. To have students do a marketing plan that lets them apply the strategic marketing process to highlight the key issues in assessing a marketing opportunity. Definitions. The following marketing terms are referred to in this in-class activity (ICA): Marketing Plan: A road map for the marketing activities of an organization for a specified future period of time, such as one year or five years. Strategic Marketing Process: The approach whereby an organization allocates its marketing mix resources to reach its target markets. Nature of the Activity. To have students complete the marketing planning worksheet for a simple marketing situation that might be either: 1. The one described below. 2. One the instructor selects. 3. The product or service the student or team will use for a marketing plan class project. If Choices #1 or #2 are used, this ICA will be used as a means of summarizing the course in conjunction with Chapter 2 of the textbook. Alternatively, the ICA may be used early in the course to help students undertake a preliminary structuring of the product or service used for their marketing plans (Choice #3 above). Estimated Class Time. 20 minutes. Materials Needed. A scenario, like the one below or Choices #2 or #3 described above. Copies of the “Marketing Plan Worksheet” handout for each student. Copies of the ICA 2-2, Figure 1: “Marketing Planning Worksheet for Team Development Sessions” handout for each student. Preparation Before Class. Follow the steps below: 1. Read the material below to use either the scenario below as a basis for the student activity or prepare one of your own. 2. Make copies of ICA 2-2, Figure 1: “Marketing Planning Worksheet” and the “Marketing Planning Worksheet for Team Development Sessions” handouts for each student. 3. Make a transparency of ICA 2-2, Figure 1. Chapter 2 2-28 Instructions. Follow the steps below to conduct this ICA: 1. Give students this background mini-lecture: “A subsidiary of a community health center, specializing in private psychiatric care, has recently expanded into human resource development programs for business and industry. As the first in a series of offerings, the subsidiary is planning to offer an outdoor, adventure-based team development session for employee groups who work together to accomplish tasks. The center’s subsidiary activities are intended to generate sufficient revenues to help fund new health programs.” 2. Pass out copies of the Marketing Planning Worksheet handout. 3. Give students 10 minutes to complete the worksheet. 4. Inform students that the Marketing Plan Worksheet provides examples of possible responses to each of the factors involved in developing a marketing plan. 5. Pass out copies of the Marketing Planning Worksheet for Team Development Sessions handout. 6. Show the transparency of ICA 2-2, Figure 1: Marketing Planning Worksheet for Team Development Sessions. 7. Discuss the students’ ideas and their marketing implications for the choice that was selected from above. Marketing Lessons. Marketing managers are often faced with a number of alternative opportunities. The Marketing Planning Worksheet enables a marketer to quickly assess the key environmental and marketing factors. While this quick assessment cannot replace an in-depth analysis, it can often screen out impractical ideas. 2-29 Chapter 2 MARKETING PLANNNING WORKSHEET FOR: _____________________ FACTOR ISSUE MARKETING PLAN Who Benefits? Consumer How Do They Benefit? Analysis/Target Market Analysis Who Decides to Buy or Use? Point of Difference? Consumer/Social Factors Economic Factors Environmental (Uncontrollable) Technological Factors Factors Competitive Factors Legal/Regulatory Factors Objective Research (Collect Info) Product/Service Offered Price Developing the Marketing Plan Promotion – Advertising – Sales Promotion – Public Relations – Personal Selling Place/Distribution Budget Executing the Marketing Plan Who is Responsible? Milestone Dates Evaluating the Marketing Plan Did it Work? © McGraw-Hill Companies, Inc. 2003 Chapter 2 2-30 ICA 2-2, FIGURE 1 MARKETING PLANNING WORKSHEET FOR TEAM DEVELOPMENT SESSIONS FACTOR Consumer Analysis/Target Market Analysis Environmental (Uncontrollable) Factors ISSUE MARKETING PLAN Who Benefits? Employees, work groups, employers How Do They Benefit? Skill building: problem solving, creative thinking, communication Who Decides to Buy/Use? Owner, CEO, Director of Human Resources Point of Difference? Alternative, more experiential approach Consumer/Social Factors Perception of need, values to human resource-development Economic Factors Perceived as too expensive by many smallmedium companies Technological Factors Only 8 - 10 people at one time—requires high technical and safety emphasis Competitive Factors One competitor—program not as inclusive or safe but it costs half the amount Legal/Regulatory Factors None Objective Provide team building workshops to area companies leading to other businesses Which companies now purchase such programs? What are their characteristics? What companies are considering more progressive management practices? 2 hours of orientation and planning, 9-hour course w/ 2 meals, 2 hour debrief session Research (Collect Info) Product/Service Offered Developing the Marketing Plan Executing the Marketing Plan Evaluating the Marketing Plan Price $150 Promotion – Advertising Professional/business journals – Sales Promotion None – Public Relations Professional meeting, free course exhibits, newspaper, TV, radio, fairs – Personal Selling By facilitators and Marketing Director Place/Distribution 4 hours in their office and 9 hours on course Budget $100,000 Who is Responsible? Marketing Director Milestone Dates Complete model by Aug. 1-2; free days by Oct. 1; Exec. Comm. & Bd. by Sep. 1 Did it Work? Meeting revenue targets © McGraw-Hill Companies, Inc. 2003 2-31 Chapter 2 TN: VIDEO CASE 2 Golden Valley Microwave Foods: The Surprising Channel Video Case 2 Golden Valley Microwave Foods Slide 2-69 Synopsis: Golden Valley Microwave Foods (Golden Valley) developed the technology that jump-started the microwave popcorn industry. The vital technology was a thin strip of material laminated between layers of paper in the popcorn package that focused the microwaves to produce high quality popped corn. Golden Valley got the capital it needed from its partner, but agreed not to distribute ACT II brand microwave popcorn in US grocery stores for ten years. ACT II focused on selling through mass merchandisers like Target and WalMart, which now account for 33% of all bag sales (21% of dollar sales) for the microwave popcorn industry. Students can see how ACT II has managed the product/brand and contemplate directions for future growth at Golden Valley. Teaching Suggestions: This video can be used with Chapter 11 and a focus on managing products and brands. However, it is also quite integrative and can be used with Chapter 9 (segmentation and positioning), Chapter 13 (marketing channels), or Chapter 15 (integrated marketing communications). The primary theme is branding and product positioning, but the case also illustrates the connection between channel strategy and marketing communications. These concepts might be addressed through the recommended SWOT analysis. The case video highlights ACT II’s product differentiation strategy and how the company integrates its website (www.actii.com) into its overall marketing strategy. After viewing the video, an instructor might start the discussion by asking the following questions: 1. How many of you have ever consumed microwave popcorn? Most students will have bought this product. 2. What brands do you typically purchase? Students may say ACTII, Pop Secret, Orville Redenbacher (also owned by Golden Valley Microwave Foods), Newman’s Own, Jolly Time, etc. 3. Where do you typically buy microwave popcorn? Student may say grocery stores, convenience stores, mass merchandisers, such as Target or Wal-Mart, etc. 4. What has Golden Valley done to grow its sales? Chapter 2 2-32 Answers to Questions: 1. Visit ACT II’s website at www.actii.com and examine the assortment of products. Do a SWOT analysis for Golden Valley Microwave Foods. Use Figure 2-5 in Chapter 2 as a guide. In assessing internal factors (strengths and weaknesses), use the material provided in the case and on ACT II’s website. In assessing external factors (opportunities and threats) augment the case material with what you see happening in the snack food industry. Answer: The results of each phase of the strategic marketing process are: Strengths Weaknesses 1. ACT II is the dominant microwave 1. Late entry to grocery channel (68% of popcorn seller in all non-grocery channels dollar sales and 49% of bag sales of (mass, drug, club, vending, video and microwave popcorn for the industry). convenience store). 2. Limited previous experience with 2. Innovation success. Golden Valley has consumer-oriented promotional campaigns many firsts: (ACT II ran its first TV ad in 2001). First mass market microwave popcorn. First flavored microwave popcorn tub. First extra butter microwave popcorn tub. First fat-free microwave popcorn. First one-step sweetened microwave popcorn. 3. Established relationship with Wal-Mart, the largest, fastest-growing mass seller of microwave popcorn. Opportunities 1. Extending the ACT II brand name into new snack food categories. 2. Reaching new global markets (as microwave oven penetration levels increase in many countries). 3. Potential for significant grocery channel sales (but also an apparent weakness). Threats 1. Mass merchandise-giants like Wal-Mart and Target can exercise significant bargaining power against Golden Valley. 2. Customer backlash against higher fat products like buttered popcorn may impact sales. 2-33 Chapter 2 2. Compared to selling through the non-grocery channels, what kind of product, price, and promotion strategies might Golden Valley use to reach the grocery channel more effectively? Answers: Mass merchandisers like Target and Wal-Mart emphasize store reputation (brand) and merchandise lines, including private brands. In contrast, grocery stores all carry the same deep assortment of brands in each product category. That means ACT II will be competing for shelf space with many other brands of microwave popcorn. a. Product strategy. Because of the large slotting fees that may be required, Golden Valley may reduce the variety of ACT II product available in grocery chains. b. Price strategy. The grocery business runs on one of the smallest margins in retailing; it may be as low as 1%. That means grocers will push for the lowest possible cost and be dedicated to efficient practices such as EDI and “just-intime” inventory systems—and expect ACT II to use them, too. Grocery chains often require manufacturers to pay a slotting fee to place a new item on the shelf. In some areas, these can run as high as $100,000 per store. That can be too expensive for a smaller company like Golden Valley. c. Promotion strategy. Consumers are much more promotion-sensitive in grocery stores. For example, consumers use manufacturer and store coupons at the grocery store. Grocery stores expect brand owners like Golden Valley to distribute more coupons, participate in the chain’s free standing insert or promotional flyer, and do other advertising to help sell ACT II products to consumers. In the grocery store channel, ACT II may have its own consumer (pull strategy) advertising to encourage consumers to select ACT II brand at the grocery store. There are few “national” grocery chains, but mostly regional chains, which will require ACT II sales force to make more calls and/or have more salespeople. As the number of chains buying ACT II increases, ACT II has to handle more accounts, more transactions, and different customer ordering, shipping, and stocking systems. ACT II will need an information/ordering process system capable of handling this complexity or may have to rely more heavily on wholesalers. Chapter 2 2-34 3. What special marketing issues does Golden Valley face as it pursues growth in global markets? Answer: The market for microwave popcorn many not be completely “global” in that there are significant regional taste differences. These differences mean Golden Valley has to: Identify the specific taste preference for microwave popcorn in a given country. Develop “unique” products for specific countries. Achieve the scale economies required to be price and cost competitive in each country. Gain access to appropriate distribution channels. Golden Valley must follow the distribution of microwave ovens around the world. It is not economically feasible to sell microwave popcorn in a country until there is sufficient penetration of microwave ovens in the country. Epilogue: Instructors may have students visit the ACT II website (www.actii.com) or do it in class. In the case video, Frank Lynch, Vice President of Marketing, explains the value of ACT II’s website in obtaining: Customer comments. Requests for information such as nutrition, ingredients, etc. Inquiries about certain products, such as the mini-bags at Halloween. Based on comments from consumers, these became a regular item. In addition, ACT II has tested promotional activities on its website. The promotion is delivered to the customer on the package, and executed on the website. Once customers come to the website to play the game, they also find out about new items being introduced or other special promotions. Instructors can ask students to assess the ACT II website and the kinds of consumers most likely to visit it. 2-35 Chapter 2 POWERPOINT THUMBNAILS Chapter 2 Slide 2-1 Slide 2-2 Slide 2-3 Slide 2-4 Slide 2-5 Slide 2-6 Slide 2-7 Slide 2-8 Slide 2-9 Slide 2-10 Slide 2-11 Slide 2-12 2-36 Slide 2-13 Slide 2-14 Slide 2-15 Slide 2-16 Slide 2-17 Slide 2-18 Slide 2-19 Slide 2-20 Slide 2-21 Slide 2-22 Slide 2-23 Slide 2-24 2-37 Chapter 2 Chapter 2 Slide 2-25 Slide 2-26 Slide 2-27 Slide 2-28 Slide 2-29 Slide 2-30 Slide 2-31 Slide 2-32 Slide 2-33 Slide 2-34 Slide 2-35 Slide 2-36 2-38 Slide 2-37 Slide 2-38 Slide 2-39 Slide 2-40 Slide 2-41 Slide 2-42 Slide 2-43 Slide 2-44 Slide 2-45 Slide 2-46 Slide 2-47 Slide 2-48 2-39 Chapter 2 Chapter 2 Slide 2-49 Slide 2-50 Slide 2-51 Slide 2-52 Slide 2-53 Slide 2-54 Slide 2-55 Slide 2-56 Slide 2-57 Slide 2-58 Slide 2-59 Slide 2-60 2-40 Ben & Jerry’s SWOT analysis: new ice cream flavors? Slide 2-39 Slide 2-61 Slide 2-62 Slide 2-63 Slide 2-64 Slide 2-65 Slide 2-66 Slide 2-67 Slide 2-68 Slide 2-69 Slide 2-70 Slide 2-71 Slide 2-72 2-41 Chapter 2