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PART IV
INTERNET APPLICATION GUIDELINES
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CHAPTER 1
INTERNET APPLICATIONS
A. Discuss how Dell Inc.’s Web site (www.Dell.com) supports its mission, value proposition, and brand
image. What advantages (and limitations) does the Web site provide to business buyers?
Dell’s web site provides service and support, marketing and merchandising functions, and
facilitates a unique individual relationship with the customer. It aims to be a wholly different computer
shopping experience, providing easy and convenient 24-hour-a-day access to its online hardware and
software store to home shoppers, businesses, and public institutions. It is Dell’s mission to deliver the
best customer experience in all markets it serves. Dell.com is the company’s primary vehicle to
distribute its products and interact with its customers. Since an online store has the advantage of
24hour accessibility and allows for better customer data retrieval as well as customized displays (Dell
can change the web site’s look according to individual customer’s preferences) it serves Dell’s mission
of delivering a superior shopping experience. A drawback however might be that there is no store clerk
one could ask questions and who could demonstrate products of interest right on the spot. Granted, Dell
allows for customer queries and feedback but the ‘physical, social’ aspect of shopping is lost online.
Here, Dell may find that customers, while trying out the online experience, may feel drawn back to the
brick and mortar establishments they are accustomed to. Dell’s business customers on the other hand
who are hopefully not subject to such emotional considerations as their home shopping counterparts
may value the easy to use, clear, structured, and individualized approach Dell presents. In particular,
Dell’s Premier option for frequent business shoppers affords valuable extra services that may prove
very useful in managing the procurement and upgrading activities in a company.
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B. Go to www.travelocity.com and investigate the site. How does travelocity.com collect information
about its customers and how might this prove valuable to the company and ultimately the customer?
What privacy issues could arise?
Travelocity offers a wide array of travel-related products and services online, most prominently
airline, car rental and hotel room reservation and booking capabilities. Since its inauguration a few
years ago it quickly became on of the Web’s most successful and widely used travel booking services
and ranks as one of America’s largest travel agency’s (top five). One of Travelocity’s success factors
is the ability to gather and synthesize customer data online. Customer’s signing up for the first time are
asked to provide a set of information helping Travelocity to better service customers’ wants and needs.
The web site affords the opportunity to customize information, and product and service offerings
according to individual needs. Brick and mortar agencies will have a much harder time securing this
level of personalization and quick and easy access to travel information required. The customization
option also affords Travelocity the opportunity to sell services and products beyond its own scope by
signing up interested businesses. For example, customers interested in taking a trip to Paris will find
that restaurants, theaters, sight venues and others display their offers on Travelocity.com, allowing for
convenient booking or contact and thus improved travel planning on the customer’s end. Finding out
about a customer’s travel habits will enable Travelocity to anticipate needs and to proactively offer
travel bargains and packages suited to the customer. Granted, not all customers will opt for the online
booking option as they require the personal attention of a “real-life” person in order to feel more secure
about their travel bookings.
C. Review the McKinsey & Co. Web site. Are there indications that the consulting company is marketoriented?
The web site is www.mckinsey.com. There are several indications of this company’s efforts to
provide customers with superior value. For example, customer focus is evidenced by the extensive use
of reference sites (successful) projects, to reassure users of the firm’s credibility. The site provides
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much information about leading consultants. Two major concerns of consultancy clients relate to the
firm’s experience and the quality of its people. The mission statement emphasizes the goal of
improving client performance and attracting the most talented people as consultants. The projects
described on the site emphasize the cross-functional nature of McKinsey projects. The site provides an
extensive intelligence and news service for clients. While it is not possible to exactly evaluate
McKinsey’s cross-functional working and their competitive intelligence capabilities, the Web site is
strongly suggestive of a total business perspective that focuses on offering superior value to clients.
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CHAPTER 2
INTERNET APPLICATIONS
A. Examine the Web sites of Borders (www.borders.com) and Amazon (www.amazon.com). Compare and
contrast the two approaches to using a Web site as part of each company’s competitive strategy.
The Borders site takes prospective purchasers direct to Amazon.com. Although formerly online
foes, Amazon and Borders became allies in the early 2000s, when Borders decided to join with
Amazon.com and present its offerings via the latter’s online portal. The alliance seems to make a lot of
sense, especially after the rude awakening following the dot.com crash in early 2000. Brick-andmortar now seems not as bad as it did just a few years ago. While Borders tried to go it alone on the
Information Superhighway for some time it found that the smarter way of earning money is to line up
with someone who has the capabilities, the recognition, and the amount of traffic to its website that will
make it more likely to generate profits in the future. Borders is thus freed to concentrate once again on
what it does best, selling books in its bookstores nationwide. The alliance with Amazon.com allows
Borders to effectively complement its physical store presence on the Internet. Similarly, Amazon.com
is now able to add some ‘tangibility’ to its cyberspace presence, at least in the United States, by
extending its “bricks and mortar” reach. “Both companies will continue to work together to bring
about additional customer benefits in the future, which may include the ability for customers to reserve
a title online for later purchase and pick up at their neighborhood Borders store, as well as extending
the alliance internationally. Amazon’s strategy is to offer customers the choice of direct deliveryt of
products or the ability to collect from Borders’ stores (tackling the problematic issue of shipping costs
and delivery problems for consumers. In addition, customers of the co-branded site, as well as
customers of Amazon.com, may receive notification of upcoming author events and musical
performances scheduled to take place in Borders stores.
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B. Examine the Web sites of ebay.com (www.ebay.com) and uBid.com (www.uBid.com). Compare and
contrast the two approaches to using a Web site as part of each company’s competitive strategy.
Analyze the differences and similarities and suggest improvements as well as a marketing strategy for
the two companies (i.e. solely internet based).
Ebay and uBid are both two Internet portals affording users the opportunity to sell any
conceivable item online using an auction-type approach. Both their online presences (e.g. layout of
the web pages) appear very similar in nature. Users can sell and buy virtually any item (used or new)
at discounted prices. The Internet serves as the platform to bring together those that otherwise would
have never found each other, providing a level of efficiency not otherwise possible. Ebay has made
strong inroads internationally (e.g. in Europe), providing individualized country sites, while uBid
remains largely a US-centric operation. Ebay’s first mover advantage internationally may prove to be a
vital success factor in the future, with Internet adoption picking up in many locations overseas. Ecommerce in the US is expected to become increasingly competitive, with saturation levels quickly
attained. From a brand perspective, Ebay is clearly superior to uBid with higher awareness levels and
recognition among online users. However, Ebay suffered some credibility issues a while back when
hackers obtained credit card information of registered Ebay users. Users became increasingly more
reluctant to provide credit card information online, a problem the company is faced with especially
internationally. Its response has been to develop its own secure payment system.
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CHAPTER 3
INTERNET APPLICATIONS
A. Visit the Web site of Project 2000 (www2000.ogsm.Vanderbilt.edu), founded at the Owen Graduate
School of Vanderbilt University to determine if the Web provides useful information for market and
competitor analysis. Describe the various types of market information available on the Web.
This site provides numerous examples of the new types of research and market tests which are
becoming available to evaluate the effectiveness of alternative Web strategies and Web site
developments. The current phase of this innovative program includes a large online consumer panel, a
virtual laboratory, a demonstration e-commerce site, and the analysis of clickstream data sets of Web
navigation behavior, as part of the researchers’ eLab work. In addition, the eLib offers an extensive list
of research papers available for download. This site is an exciting demonstration of the research
challenges and resources faced by Web-based marketing strategies.
More generally, it is clear that the Web is incredibly rich in information about markets and
competitors, much available free of cost. Students can list types and examples if marketing information
available. The list might include:

Competitors’ Web sites – choose any market and compare several of the market leaders in strategy
and performance

International markets – go to the CIA Web site www.cia.gov/cia/publications/factbook for upto-date economic and market data on countries throughout the world

Market characteristics – select a product-market and search it through Google to uncover press and
analyst commentaries.
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B. Visit Hoover’s website (www.hoovers.com). Investigate the different options for competitive and
market analysis provided. How can these online tools best be utilized? What limitations apply?
Hoover’s online portal affords its paying users many options to conduct competitive, industry
and market analysis. Information is obtainable on most major companies in the world, including their
subsidiaries. Financial data is available for quarterly and annual performances. In addition, one can
obtain benchmark information on each company’s competitors and learn about the industry.
Investment reports published by the major investment houses of the world can be retrieved as well as
information on products and operations, key people, news and other items of interest.
The information provided on www.hoovers.com is useful for a beginning understanding of a
company to be analyzed. In many cases this might suffice, especially when one only needs a high level
understanding of the business, industry, or market. However, in other instances the information has to
be supplemented with data retrieved from other databases, SEC filings, information from corporate
intelligence findings etc. Nevertheless, www.hoovers.com is a valuable starting point for any type
analysis on companies, industries and markets.
C. Go to the website of Bass Hotels & Resorts (www.basshotels.com) and investigate the different hotel
property brands and examine the customers targeted by each brand. Define and describe the productmarket and structure within which the hotel’s brands are included.
Bass Hotel & Resorts now trades as InterContinental Hotels Group (in the early 2000s, the
Bass brewing interests in Europe were sold off, and this included the use of the name “Bass”). Students
going to www.basshotels. com will be automatically redirected to InterContinental (www.ihgplc.com) .
The site offers a download of notes describing each of the company’s major brands.The company
operates a portfolio of several distinct hotel brands. The company’s flagship is undoubtedly the five
star InterContinental brand, serving the discerned international business traveler and offering upscale
amenities and services, consistently throughout the world. InterContinental also targets the meeting
market through its ‘InterContinental – The Meeting Place’ program. Crowne Plaza hotels are geared
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toward the four star business and leisure traveler segments, offering an efficient, comfortable, and
modern ambience with top level amenities, primarily in North America and Europe but also
increasingly throughout the rest of the world. Hotel Indigo (from 2004) is a alternative brand for
travelers seeking a refreshing hotel experience, in a brand strap-lines as “Innovate. Inspire. Intrigue.”
Holiday Inn is serving the three star hotel market and does not primarily specialize in the business
traveler but still offers business solutions (e.g. rooms equipped with modern communication solutions
etc.). The brand is especially popular among leisure travelers looking for consistently clean, efficient,
and modern hotel rooms, providing trusted comfort throughout the world. Holiday Inn’s Express brand
is a scaled down version of the regular Holiday Inn brand, targeting those who seek comfortable and
easy accommodations, including free breakfast bars and other hassle-free services. Staybridge Suites
offers spacious, comfortable suites including kitchen facilities for those planning on an extended stay.
Here, InterContinental tries to target those business travelers on longer assignments (e.g. business
consultants.) Candlewood Suites (from 2003) complements the Staybridge brand in the mid-market
business and personal traveler multiple nights stay market.
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CHAPTER 4
INTERNET APPLICATIONS
A. Explore several of the following web sites: www.adquest.com, www.americanet.com,
www.autosite.com, www.mlm2000.com, www.sidewalk.com, www.monster.com, www.realtor.com.
How does the information available from these sites affect our traditional concept of market
segmentation? How is the market segmentation process altered by such Internet providers?
The traditional concept of market segmentation, specifically companies gaining vast access to
consumer data and using it as a competitive advantage, may quickly becoming obsolete. Information
from the web, specifically from the above sites, is becoming more readily accessible to consumers and
could replace traditional venues such as articles and advertisements in newspapers and magazines.
Whereas information from these traditional sources are presented in one dimensional, black and white
ads, the Internet offers colorful, multimedia, and interactive advertisements. Using the Internet,
customers can more effectively search for goods and services. Sites can be customized for specific
users. Thus, Internet advertisers and companies can gain much information quickly about customers
using their site. They have access to their customers’ unique interests by viewing which sites they visit
most frequently. Because of the ease and speed of use, consumers may prefer searching for
information on the Internet rather than looking through a magazine or newspaper.
For example, www.autosite.com offers to consumers a variety of information concerning the
purchase of a new or used car. The site has pictures of models of different cars, used car reports, and
classifieds built into the site. The site also offers a loan/lease calculation function where customers can
figure out their payments on a new or used car. Consumers have access to book value reports and
advice on owning a car such as repairs, maintenance, insurance quotes, financing, and warranties.
When customers use this site, the company gains information on the customers’ desired product,
preferred features, as well as demographic information.
Thus, such Internet marketers alter the traditional market segmentation process. Internet
marketers can gain a larger amount of information than the traditional marketers can in less time. This
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eliminates the traditional marketer’s previous competitive advantage. In order to compete with the
Internet, traditional marketers will have to collaborate or partner with Internet marketers to gain their
previous wealth of knowledge.
B. Evaluate the following site for additional ideas and material concerned with market segmentation and
the types of support that can be provided for companies: www.marketsegmentation.co.uk.
This webpage has been designated a “cool site” by the Open Directory because of its clarity
and free downloads. The site provides an extremely pragmatic operational approach to segmentation
developed from a consultancy perspective. It provides a number of pages relating to how to define
markets, market mapping and market segmentation to enhance company strategy and profitability. The
site is also popular because it is possible to download a free presentation on market segmentation.
This site can achieve two things: it can reinforce the practical issues to be addressed in
developing market segmentation strategies for companies, but it also underlines the growing
availability of resources on the Web to support strategic development in companies and executive
education.
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CHAPTER 5
INTERNET APPLICATIONS
A. Revisit the list of major marketing research agencies in Exhibit 5-6. Visit several of the websites listed.
Examine the major types of information provided both as standardized services and special study
capabilities. List these and identify the ways in which such resources can impact on marketing
decisions.
The purpose of this exercise is to build some familiarity with the resources provided by leading
marketing research agencies both in standardized services – panels, market reports, etc. – and in the
capabilities for undertaking special studies to address particular issues. The exact listing will depend on
which sites are selected, but the tabulation should have the following structure:
Agency
Standardized Information
Services
Application to marketing
decisions
Agency
Special Study Capabilities
Application to marketing
decisions
A number of interesting issues are raised about the quality of information in the context of
making strategic decisions rather than just the technical quality of data collected, and the likely costs of
information to be balanced against benefits.
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B. Select a well-known company or brand and use a search engine to find Webpages that include its
name. Review the contents of Webpages from different sources. Discuss the impact of Internet-based
information on traditional ideas about confidentiality and privacy.
This exercise provides the chance for creative trawling through the diverse Web information
and opinion concerning a company and its brands. Results should encompass: performance and news
from the company’s own Website; financial analysis from services like Hoovers capsules and other
collation services; up-to-date stories from the financial press and journals; distributors associating
themselves with the company or brand in question; competitive and price comparisons; customer chat
rooms and bulletin boards; and, in some cases even customer pages that criticize the company or its
products – XYXCorpSucks.com and the like.
The goal of this exercise is to demonstrate the amazing amount that can be learned about a
company by a simple Web search. There are fewer and fewer hiding places! Reports based on Web
searches can be enormously revealing about companies that may be competitors or potential alliance
partners, or suppliers or major customers. They also underline how much other organizations can learn
about our own company. They frequently dispel many traditional views about what is confidential in
business and about issues of privacy. These last questions can be the subject of an interesting
discussion about changing behavioral standards driven by technological revolution, contrasted with the
possible need to control technology to preserve integrity.
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CHAPTER 6
INTERNET APPLICATIONS
A. Procter & Gamble (P&G) competes in the United States and many other countries. Consider how P&G
may utilize maps in analyzing and selecting market targets (see tiger.census.gov and
www.nationalgeographic.com).
A large and diverse company such as Procter & Gamble that operates all around the world
needs to carefully plan and execute its market targeting strategies. A thorough analysis of different
population segments is necessary to determine specifically who to communicate to and who to select
for special type promotions and other marketing initiatives designed to best place products and service
offerings in the market place. Maps as available online can help to divide a population, nationally or
globally, according to various criteria. For example, the Census data provide information on household
income, racial and ethnical background, education level, and many other categories useful for the
marketer. Procter & Gamble over the course of its history has collected valuable information on
customer habits and preferences that it can use to supplement the information retrieved from
demographic data sources, such as the Census. It may know that less affluent population segments
prefer the usage of a special type of soap or detergent and then, utilizing maps, devise its marketing
communication strategies accordingly (e.g. run promotional ads on regional TV stations where
appropriate). Very often, multi-nationals such as Procter & Gamble, find that people in different
countries desire products to be localized and adapted to their particular tastes. Here, P&G can use
country maps to determine where there is overlap (e.g. Germany, Austria, and German-speaking
Switzerland may require a similar product mix) and where there are differences.
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B. Go to www.jnj.com and click on Background and then on “Fast Facts.” Describe the different business
segments.
(The following is adapted from company web site)
Consumer

Major franchises—skin and hair care, sanitary protection, wound care, oral care, baby care and
nonprescription drugs.

Familiar brand names include JOHNSON'S line of products; NEUTROGENA® skin and hair
care products; adult and children's TYLENOL® (acetaminophen) and MOTRIN® (ibuprofen)
analgesics; BENECOL®; SPLENDA® Brand Sweetner; o.b.® Tampons; STAYFREE® sanitary
protection products; REACH® toothbrushes; BAND-AID® Brand Adhesive Bandages;
IMODIUM® A-D antidiarrheal; MYLANTA® gastrointestinal; MONISTAT® for vaginal yeast
infections; HEALTHY WOMAN® Dietary Supplements; and PEPCID® AC Acid Controller.
Medical Devices and Diagnostics

Product lines include surgical implants, instruments, needles and sutures; blood glucose
monitoring systems; wound closure devices; endoscopic instruments; specialty dressings;
orthopaedic products for joint repair and replacement and for correcting spinal deformities;
contact lenses; clinical chemistry systems; medical devices, including cardiovascular
monitoring and vascular access products; intravenous catheters and shunts; coronary and
biliary stents; diagnostics used in physicians' offices and laboratories for identification of
diseases such as hepatitis C.

Well-known brands include ACUVUE® Disposable Contact Lens; PROLENE® sutures;
ENDOPATH® Trocars; ONE TOUCH® PROFILE® blood glucose monitor; PROTECTIV®
I.V. Catheters; P.F.C.®Sigma Knee System; PALMAZ-SCHATZ® Balloon-Expandable Stent
and the S.M.A.R.T.™ stent, a self-expandable, crush-recoverable nitinol stent.
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Pharmaceutical

Development of products for family planning; psychiatry, mental illness and diseases of the
nervous system; gastroenterology; oncology; immunotherapy; cardiovascular disease;
dermatology; pain management; allergy; antifungals; antihistamines; anti-infectives; and
antiparasitic drugs; and biotechnology-derived products.

Well-known brands include PROCRIT® for the treatment of Anemia; SPORANOX®
antifungal; RISPERDAL® antipsychotic for schizophrenia; LEVAQUIN® anti-infective;
ULTRAM® analgesic; NIZORAL® antifungal; RETIN-A MICRO® acne treatment;
REMICADE® for treating Crohn's Disease and Rheumatoid Arthritis; ORTHO-NOVUM®
group of oral contraceptives; and ORTHOCLONE® OKT-3, for kidney, liver and heart
transplant rejection.
C. Go to www.ual.com/site/primary/0,10017,1314,00.html (Economy Plus United Airlines). Discuss how
this site impacts United Airlines’ market targeting strategies. How is positioning considered by the
Web site?
Economy Plus is a premium seating area in United Airline’s economy class cabins—consisting
of the first 6-11 rows (depending upon the fleet type)—that offers up to 5 inches more legroom per
seat. This means more space and greater comfort for business travelers who are flying in coach—
especially when it's not possible to upgrade to First Class. The airlines boasts 21,000 seats that are
classified as ‘Economy Plus.’ United Airlines is aiming to reward loyal customers and those who pay a
little extra. Economy Plus is available on a first-come, first-serve basis to United’s and Star Alliance’s
frequent flyer program members (premier and higher) and those passengers paying full-economy class
tickets rather than discounted or gray market prices. More legroom is treasured by most airline
passengers, especially on long-haul flights. United created the new program, responding to business
traveler requests obtained through long term marketing research studies. The move follows the
precedents of other major carriers (e.g. American Airline’s TWA etc.). Removing seats to afford more
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leg-room proves a risky move as it might curtail revenues. However, it might also boost United’s
revenue streams when more and more passengers are convinced that paying a little extra will provide
them with an extra portion of comfort worth their while. United Airline’s website allows the instant
booking of ‘Economy Plus’ seats by selecting the full-fare economy price rather than a discounted
ticket. United is effectively utilizing its own web presence to market one of its new programs.
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CHAPTER 7
INTERNET APPLICATIONS
A. Visit the website www.alliancestrategy.com and review the presentations and material available at the
site. Summarize what factors should be taken into account in making alliances between organizations
effective.
This site provides an extensive array of supplementary materials concerning the effectiveness of
strategic alliances from numerous sources. There are a variety of downloads – articles, reports and
presentations; an up-to-date news service around prominent alliances; web-cast seminars on alliances
issues, and descriptions of consulting projects completed in the alliance strategy area. These resources
provide a basis for developing a view of the rationale for alliances (market, resource, capabilities or
technology access, etc.) and the commonest problems faced in making alliances effective (common
interests, balance, liaison mechanisms, control measures, etc.)
B. Go to the investor information and company history on www.amazon.com. Identify the evolving
network of strategic relationships with customers, suppliers, and collaborators both on the Web and
with conventional organizations. Which of these relationships are the most important to Amazon?
There are many interesting elements in the Amazon.com business model, but one of the most
critical is the evolving set of relationships that the company must manage as it extends its operations.
At the outset, Amazon set out to sell books without incurring the costs of inventory by sourcing books
from third parties in response to customer orders. The partnering with “Amazon Associates” involved
other Web sites providing links to Amazon for their site visitors, and receiving a commission on any
sales made by Amazon to those customers. Founder, Jeff Bezos, is quoted as saying that the future for
Amazon is in being a broker who helps people find things on the Web, and takes a commission from
sellers as a reward for putting them in touch with buyers. For example, zShops and the Amazon
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Commerce Network allow space for smaller suppliers to sell on the Amazon.com Web site, in return
for a 1-5% commission on sales.
Important new alliances are extending the business model further: the 10 year alliance with
Toys’R’Us makes toys available through a co-branded Web site; Amazon is actively searching for
additional alliances with “bricks and mortar” retailers to combine Amazon’s Web expertise and
fulfillment capabilities with the purchasing power and inventory holding capacity of conventional
retailers. Other ventures include a joint venture with the auction house Sothebys to market collectibles
and memorabilia on a joint Web site, and taking over the online operations of Borders, the second
largest U.S. bookstore chain.
Considering which of these relationships – which include customers, suppliers, and
collaborators – is the most critical is an interesting debate. Managing suppliers is critical to operating
the business model with minimum inventory costs and effective fulfillment of customer orders.
Collaborations are critical to extending the product range, geographical coverage and building the scale
of the operation. However, the relationship with the customer probably remains the most important on
the grounds that only by maintaining the strength of that relationship can customers be retained and
become the marketplace for the new extended ventures.
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CHAPTER 8
INTERNET APPLICATIONS
A. Visit the web site of the Gap (www.gap.com). Discuss how the web can be used in new product
planning for a bricks-and-mortar retailer such as the Gap.
The Gap can utilize the Internet in several ways for its new product planning efforts. Customer
purchases realized through Gap’s online store could be much easier tracked and valuable marketing
data derived from transactions occurring online. New promotional programs and product offerings
could be potentially test-marketed online to gauge consumer interest and adoption before incurring the
expense of launching these initiatives in the brick-and-mortar stores. Mass customization can be easier
realized using specific customer data retrieved from user input and fed to manufacturing outlets. Direct
online customer feedback forms could provide a valuable tool for the Gap to query the end-consumer.
Moreover, online customers are enabled to specify the design of the clothes they wish to buy
from Gap. Here the company has the opportunity to use mass customization technology in order to
personalize clothing for its customers. Further, the Internet allows Gap to announce new product
innovations faster than through any other medium. Customers can essentially be included in the idea
generation process for new products through online panels and the like.
B. Virgin Group Ltd. is an interesting corporate conglomerate headed by British tycoon, Richard C.N.
Branson. Visit Virgin.com and develop a critical analysis of Virgins new product strategy of launching
a portfolio of online businesses.
Virgin offline as well as online sticks its name on virtually any conceivable enterprise. The
Virgin.com web site merely serves as a portal for several of the existing businesses under the Virgin
umbrella. Virgin’s online businesses are poised to support the company’s brick-and-mortar ventures by
allowing customers easier access and the comfort of being able to conduct their business at home.
However, just as with Virgin’s myriad of ‘physical undertakings’, the online world of Virgin is
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beginning to look a bit too cluttered and the company might be in danger of losing its focus. While it is
commendable to offer one’s clientele a wide variety of products and services a concentration on what
one does best has still often proven superior over an all-inclusive strategy. Amazon.com in the United
States was often bashed for going into too many directions at once. Virgin might run the risk of
becoming the Amazon of the UK.
A key issue concerning the Virgin Group’s entry into new business areas is evaluating the
company’s distinctive capabilities. While the brand is familiar to a huge population base, the identity
does not logically extend to a diverse range of product categories. The danger, of course, is possible
weakening of the core brand equity.
C. Dell Inc. is expanding its product portfolio. Go to www.dell.com and describe the product categories in
which Dell competes.
Dell Inc. lists its products around its key market targets: small business; medium and large business;
Government, Education and Healthcare; and, most recently, home and home office. For the major
traditional Dell sectors, products consist of:

Personal computers – work stations, desktops, laptops and handheld machines

Servers, storage and networking products

Printers, projectors and other peripherals

Software
However, the home and home office category shows radical changes to the Dell product portfolio:

Electronics and accessories

Media centers
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
Televisions

Dell’s Digital Jukebox
This analysis raises several important questions about Dell’s capabilities for marketing and servicing
products in the home and home office marketplace, as well as the issue of relationships with suppliers
like Sony (a minor player in PCs but a major players for televisions and media products where Dell is
now competing. It is interesting to attempt to reconstruct the strategic logic which has led Dell to
expand its product portfolio in this direction, and to evaluate whether the Dell direct business model
has good fit with this new direction.
D. Visit the Hennes & Mauritz website and compare H&M’s product offerings with those offered by Gap
(www.gap.com).
On the face of things very similar retailers – both are fashionable apparel sellers, both are
international, and both rely heavily on supply chain expertise to deliver customer value – the
differences between H&M and Gap are clear in their product offerings – both in functionality and
design. There is some small overlap in terms like the “updated classics”, although here H&M is
substantially cheaper. While Gap has moved up market towards the position previously held by Banana
Republic – i.e., smart casual wear – H&M has moved to dominate the younger, “cheap chic”
marketplace. Interestingly, H&M’s performance with its “cheap chic” concept in the young fashion
marketplace globally has been very effective, at a time when Gap has been struggling with its
competitive position and financial performance.
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CHAPTER 9
INTERNET APPLICATIONS
A. Examine the Fortune Brands web site (www.fortunebrands.com). Analyze and evaluate the strategic
initiatives used by Fortune Brands in their strategic brand management.
The Fortune portfolio is comprised of brands in three major categories: 1) spirits and wine; 2)
golf; 3) home and office. The specific brands in the portfolio include: Moen, Jim Beam, Titleist,
Master, Day–Timer, King Cobra, and FootJoy.
Fortune Brands has three strategic goals in managing this brand portfolio. Furthermore,
Fortune’s strategic brand management consists of a “sharp focus on revenue growth, cost initiatives,
and asset management (RCA).” Specifically, Fortune concentrates on three goals: great consumer
brands, 13–15% E.P.S. growth goal, and a determination to delight shareholders. The focus on RCA
along with great consumer brands provide a strategic initiative for Fortune Brands. The company
focuses on managing 14 brands that are $100 million or more that also have leading market shares with
plenty of room for expansion. The company drives revenue growth faster than the existing brand
categories by maintaining a strong pipeline of innovative new products. Also, the company manages
supply chain activity on a worldwide basis to ensure low costs and high quality. Lastly, the company
drives a higher return on investment by aggressively controlling capital expenditures. In this way,
Fortune increases revenue, lowers costs, and effectively manages assets.
Fortune Brands’ second major goal is E.P.S. growth. The long–term goal set forth by the
company is 13–15% that they have met and exceeded for 13 successive quarters. Future E.P.S. goals
also are expected to be matched. Future E.P.S. goals appear to be achievable due to Fortune’s ability to
leverage financial strength and breadth of brands to support brand growth strategies. For example, in
1997, the company had $13 million free cash flow, an increase of 37% from the previous year. Also,
Fortune maintains a powerful balance sheet with 22% debt to total capital (12/31/97) and a credit rating
of “A”.
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Fortune’s third and final goal, a “determination to delight shareholders” also seems achievable.
Fortune places a primary emphasis on internal growth of highly profitable brands (35% contribution
return on net operating assets in 1997, up 2%). Also, there has been great consolidation and acquisition
opportunities that significantly exceed Fortune’s cost of capital of 11%. Finally, Fortune has taken
great strides to enhance shareholder value in the past years by spinning off 70% of revenues, including
tobacco, life insurance, and other businesses.
B. Visit the Website of Lastminute.com (www.LastMinute.com). Map the business model used by this Web
brand. Review the strengths and weaknesses of the model, and consider how this brand has been
established and how it may be extended.
A tour of the LastMinute.com Web site reveals the company’s mission statement to be:
“lastminute.com encourages spontaneous, romantic and sometimes adventurous behaviour by offering
people the chance to live their dreams at unbeatable prices!". The products and services on offer are
organized into: Holidays (including luxury and budget travel, car rental), Hotels, Flights, Going Out
(including theater, music, sports and experience events), Restaurants (including takeaway food), and
Shopping (including gifts, electronics, gifts and auctions), but the site also offers a range of life-style
services, such as house cleaners, chauffeurs, and babysitters.
The LastMinute.com business model could not operate without the Web, which provides the
last-minute marketplace linking buyers and sellers, but with no involvement in fulfillment. The
business is genuinely a “Web brand”, providing information and customer service and taking a
commission from suppliers. The business model can be mapped very simply:
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Consumers
Information
Order
Fulfilment
LastMinute.com
Information
Commission
Suppliers
The history of this company and its Web-based operation also illustrates the requirements for
building a Web brand to be similar to those for any successful brand. LastMinute.com used all the
conventional means of advertising and publicity in the press and elsewhere to establish brand
awareness and the values associated with its brand. There was never any question that because it was a
Web brand it would only advertise on the Web. The company’s history shows the potential for brand
extension in the move from travel and theater tickets into a range of services for the “cash rich, time
poor” consumer.
C. Go to www.e4m.biz, operated by the UK’s Marketing Council. Register at the site and choose the
Business-to-Consumer area, and the Brand Consistency option under Strategy area. Review several of
the short cases describing how companies are striving for consistency in their brand identification
while using multiple channels including the Internet. What conclusions can you draw regarding the
requirements for brand consistency across multiple channels?
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This Web site is a free service offered by the Marketing Council in the U.K. There are a variety
of cases and links to other Web sites for further information, covering both Business-to-Business and
Business-to-Consumer cases. There are pages concerned with several important aspects of e-marketing,
such as customer retention and building customer loyalty, but the focus here is on managing a
consistent brand experience across multiple channels.
Under the topic of brand consistency, the site offers a group of 12 company examples, each
with a synopsis, a downloadable summary, and links to other Web sites for further information. These
cases are extremely up-to-date, and reflect the experiences of well-known companies. The owners of
the site promise to update and extend the cases available.
This material provides the basis for a discussion of how the consumer’s experience of the
brand may be different across different channels (particularly the Internet channel compared to the
conventional) and the problems that this poses for companies who rely on a consistent brand
identification as perceived by the consumer. The cases from the site provide examples of how different
companies have faced up to this challenge.
D. Visit the Yahoo Inc. website. Describe Yahoo’s brand portfolio.
Yahoo! is widely recognized as the premier online brand globally and is seen by some as a
prototype. The Yahoo! products are listed on the website. Yahoo! developed through a focused brand
strategy built around a family of media products. Initially a portal with search facilities, Yahoo!
invested in building a credible, sustainable and likeable brand. Initially, extensions were close to the
original Yahoo! concept – for example, localized versions of Yahoo! for overseas countries, or even
cities like San Francisco; Yahooligans!, a web guide for children; and, My Yahoo!, a web guide
customized around individual preferences. More recent additions to the portfolio have included
ventures like Yahoo Platinum – a premium online video and audio service – and Yahoo! web hosting.
More recent extensions to the family of media products have been consumer electronics (through an
alliance with the manufacturer) including home theater systems and DVD players. Yahoo! is an
interesting example of the development and extension of an online brand.
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CHAPTER 10
INTERNET APPLICATIONS
A. Examine the web sites of Aveda (www.aveda.com) and The Body Shop (www.bodyshop.com). Compare
and contrast the distribution networks of these two retailers.
The Body Shop’s distribution network is concentrated on retail outlets owned by The Body
Shop. There are around 2000 shops in 52 countries, although 70 percent of them are franchised. They
also offer a catalog, and in the U.S.A., U.K., and Australia offer an in-home sales facility for
consumers. Aveda distributes its products primarily through intermediaries or free–standing Aveda–
owned stores selling only Aveda products. These intermediaries are hair care salons designated as
either an Aveda Concept Salon or an Aveda Distributor. The free–standing stores are Aveda Lifestyle
Stores. Both The Body Shop and Aveda offer a range of products from hair care to cosmetics.
However, Aveda must zealously protect its distribution network from unauthorized distribution by
intermediaries. Aveda is concerned that these intermediaries will not uphold the image and standards
of the brand. Aveda even maintains strict regulations for use of the Aveda name in web sites by
authorized distributors. Aveda provides extensive education and training for its re-sellers. The Body
Shop sells direct to end–users and avoids much of the conflict with intermediaries. However, The
Body Shop has experienced problems in maintaining its share price and is facing more intense
competition and challenges in management of its retail outlets. The Body Shop exited from
manufacturing to concentrate on retailing but has lost substantial ground to competitors like Bath &
Body Works and more general pharmacy/drug store chains with imitative products.
B. Go to the site of the Worldwide Retail Exchange (www.worldwideretailexchange.org) and review the
public pages describing the history, membership and operation of this international inline exchange for
retailers. Identify and list the ways in which the exchange alters distribution strategy for suppliers, and
the impact on consumers.
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Online exchanges have demonstrated mixed success in actually performing in several sectors.
Nonetheless, they remain an extremely significant potential for radically altering buyer-seller
relationships in the value chain with some major effects.
The Worldwide Retail Exchange (WWRE), at the time of writing, represents around 60 major
retail groups worldwide and has sales revenue of around $845 billion. WWRE is an independent
company operating the exchange and a range of services for its retailer members, but also operates a
variety of online alliances with other sourcing services in different sectors and locations. The Web site
provides a downloadable presentation about the development and operation of WWRE.
Touring the site provides insight into the history and membership of WWRE, but also the
growing range of added-value services provided to members, e.g., collaboration software for suppliers
to plan private label production with retailer customers; reverse and forward auctions and negotiation
facilities; group buying facilities to pool demand among members and buy together; supplier catalog
searching; assistance with logistics and international trade controls; and a framework for collaborative
planning. For each of its services, WWRE lists the retailer and supplier benefits provided.
There are a number of clear impacts of this type of online exchange already apparent. The
exchange consolidates the buying power of major retailing groups – they can source products globally,
compare prices and specifications, and negotiate on the basis of that knowledge. Suppliers, particularly
of unbranded products, must compete with competitive sources of those products throughout the world
– for example, with producers enjoying lower local wage-rates and cost structures in overseas
countries. In addition, the online exchange provides the framework for the retailer not just to negotiate
lower prices from suppliers, but also to intervene more directly in the upstream part of the value chain
– e.g., locating cheaper sources of raw materials and packaging for its suppliers, to exert further
leverage on prices.
Effects on consumers are less clear. There is the potential for lower prices of goods where the
online exchange provides a mechanism for retailers to cut costs further in the value chain. There is also
the possibility of greater product choice, since the retail assortment reflects the global availability of
new products. There may, however, also be concerns about product quality as more components and
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packaging are sourced internationally, and that consumer choice will be restricted as retailers prefer to
reduce assortment size to reduce costs and avoid low-volume products.
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CHAPTER 11
INTERNET APPLICATIONS
A. Explore the web site of American Airlines (www.aa.com). Consider how the Web can facilitate price
discrimination.
Price discrimination, especially in the airline market will become increasingly difficult in the
future, considering the rising transparency and availability of online booking options. There are a
myriad of sites offering travel related services, most prominently flight reservation and booking
services. However, airlines have increasingly re-directed traffic to their own web sites by making
special deals and discounts available only there. American Airlines is heavily promoting its Net
SAAver program. Customers sign up online by providing their contact information, other
demographic data, and information on frequent travel destinations and travel preferences (e.g. time of
day, first class or economy etc.). This allows American Airlines to specially target these customers
with fare promotions suited to individual needs. The information gained through the online sign-up
procedure will allow American to complement its database and intelligently plan promotions and
special discount deals and individualize its offerings. It is important to be very careful about charging
different prices, however, so as to not offend customers who might learn about the different prices
offered. American Airlines’ revenue management group employs a very effective computerized
decision support system when making pricing decisions.
B. Visit the web site of Amazon.com. Evaluate Amazon’s pricing strategy. How do its prices compare to
those of “brick and mortar” retailers? Critically evaluate the company’s product offering and
determine potential market segments.
Amazon.com is one of the largest online retailers in the world, offering a vast array of products
and services either on its own or in conjunction with one of its strategic alliance partners.
Amazon.com’s expansion out of its core business, online book selling, allowed the company to capture
a larger share of the whole e-commerce pie than before. The company’s pricing strategy compared to
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brick and mortar establishments was initially to offer low prices for premium products, providing fast
and reliable service. In the beginning of its corporate history Amazon even subsidized the shipment of
its products to ensure timely delivery. Meanwhile, the online retail giant has made profits for the first
time (Q4, 2001). However, recently the company has begun to up its prices for the extra convenience
afforded to online buyers. Amazon targets virtually every online shopper, from the United States and
all around the world. The company’s second largest market is Germany, closely followed by the
United Kingdom. Its portfolio of products offered on its web site is largest in America, something that
is poised to change after Amazon realized in the US that it can make profits selling such unrelated
items as a Shakespeare play and a lawnmower. Some segments that may be worthwhile targeting with
special promotions are university students (books, music, computers, home electronics etc.),
housewives (books, gifts, accessories, household goods) etc. The company needs to be aware of the
fact that brand extension into too many unrelated areas harbors great risk for the established brand
equity and should be conducted very carefully. Partnering with other companies such as Toys ‘R’ Us
has helped to reduce brand extension risks.
C. Visit Oracle.com. Discuss how Oracle considers price in the information provided for its business
process software suite.
The emphasis on the Oracle web site is on the technical excellence of its products and the user
benefits they provide. Prices are not emphasized. The price lists are published but they are at the back
of the site. They are also complex. For example, there are separate lists for: U.S. Commercial; U.S.
Commercial for Oracle on Demand; U.S. Government; and a Licensing Table. Within each price list
there is a choice of a named user license or a processor license, and within these categoroes there are
additional costs for software updates and product support. While price is not the primary selling device
for Oracle, they have designed price lists to allow business users to make choices in the type of license
they buy, and to opt in or out of additional services, to fit different budgets.
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D. Study the information available from Starbucks Web site (www.Starbucks.com). Discuss how the
Website enhances the firm’s ability to obtain premium prices.
Numerous attributes of the Starbucks website are designed to build an image and reality of
quality, choice and user experience, such that price is a relatively minor issue. Indeed, there is no
mention of prices on the site. Instead, the site is about fine coffee – a coffee menu; coffee education
opportunities; “black apron” exclusive coffees. Information about the stores features nutrition and
brewing information; news of local events; the wireless Internet technology available in the stores. The
Starbucks card makes giving coffee drinking as a gift easy, and has the effect of pre-paying for coffee
to make the consumer less aware of the costs incurred. The site does an impressive job in avoiding the
issue of price, and indeed building the expectation that such fine products in such outstanding stores
would naturally come at a high price, and that may even be part of the attraction in providing the
consumer with the opportunity for self-indulgence.
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CHAPTER 12
INTERNET APPLICATIONS
A. Discuss how Godiva Chocolatier’s web site (www.godiva.com) corresponds to the brand image
portrayed by its retail stores. What are the promotion objectives that Godiva’s management seems to
be pursuing on the web site?
Godiva’s web site is designed to reflect the brand’s image of upscale, luxury chocolates
providing the ultimate in satisfaction for the chocolate connoisseur. The layout and design correspond
to the product wrappings and promotional displays used in retail stores and partner outlets (e.g. Barnes
and Noble bookstores). Gold, a precious metal, conveys the notion of expensive and exclusive.
Godiva chocolates are not to be confused with a Hershey bar, although their substance may be quite
similar. However, Godiva is satisfying not merely the craving for chocolate but also the desire to be
different, to appear as tasteful, affluent and perhaps somewhat sophisticated – an Old World
characteristic. Godiva may be regarded as the Mercedes in the chocolate world, at least in America. In
Europe the brand fights against Lindt, which is equally a luxury chocolate brand but sold in ordinary
grocery stores, a distribution channel Godiva largely avoids. On its web site, Godiva is heavily
promoting its business gift giving initiatives, targeting executives who wish to make a difference with
their gift giving. Chocolates are almost always a perfect gift, appreciated by a broad spectrum of
otherwise very diverse people. The web seems ideal for promoting such a program because most
executives find themselves pressed on time and may thus be more likely to resort to a quick online
solution.
B. Go to the websites of NBC (www.nbc.com) and the BBC (www.bbc.co.uk) - British Broadcasting
Co.). Contrast the ways NBC and the BBC promote their daily TV programs online. Which
similarities and differences do you detect? Suggest ways of improvement considering the respective
cultural frame of reference and target market for NBC and the BBC?
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While NBC’s homepage is clearly all about television, the British Broadcasting Co’s web site
appears more like a regular Internet portal (e.g. Yahoo), offering news, communication, areas of
interest etc. NBC is content to only provide information on its programming and also offers NBC
merchandise on sale at its online store. The BBC may have chosen the more effective method of
driving traffic to its site as users may visit it in order to read the news, manage their portfolio of stocks,
search for topics of interest, communicate with friends etc. NBC also offers news and financial
services but not on its NBC.com site but rather on affiliate web pages (MSNBC, CNBC) which one can
click on NBC.com. The availability of TV program channels is much more limited in the UK
compared to the US. The differences in the competitive environments may help to explain the NBC
and BBC Internet initiatives.
C. Discuss how Apple’s (www.apple.com) marketing strategy for iPod Mini is enhanced by a Web-based
approach.
The Apple marketing strategy for the iPod has two essential elements: to dominate supply of
the hardware for legal music downloads from the Web, and to operate the most successful download
site (effectively acting as a wholesaler for music companies).
The Web-based strategy shows a constant stream of product innovations to fend off other
hardware suppliers like Sony. The original iPod led to the smaller iPod Mini (a much smaller, lighter
machine, with an innovative clickwheel control, and available in five colors). However, the iPod Mini
was followed by the iPod photo – carrying music and 25,000 photographs, and product variants like the
USiPod Special Edition (in black with a red clickwheel, and with engraved signatures from the US rock
stars). The site also offers an iPod store for iPods and accessories.
However, in addition to the hardware innovations, the Apple strategy relies on success in
dominating the supply of downloads and other related services. The iTunes download site is the largest
legal source of music downloads, but this position must be defended. Innovations include free single
downloads for users of the site, and the addition of audiobooks.
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The Web-based strategy offers Apple the opportunity to bring innovative product and service
offers around the iPod/iTunes to their target market faster than any other channel and with greater
control over prices and market access. The key to success is probably the download service itself, so
attracting large volumes of consumers to sample and adopt iTunes is vital. The time-frame within
which Apple has strategic freedom is limited – new hardware from competitors is reaching the market
rapidly; supermarket retailers and launching their own download sites; Starbucks is offering download
facilities in its stores; and Microsoft will inevitably target this market.
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CHAPTER 13
INTERNET APPLICATIONS
A. Examine the Web site of Salesforce.com. Discuss how the Internet service provider can assist sales
managers in their salesforce management activities.
Salesforce.com with 12,500 customers and 195,000 subscribers is a leading supplier of ondemand Customer Relationship Management software. Leading applications are salesforce automation,
customer support, marketing automation, analytics, document management and contract management.
the site offers free access to video demonstrations of the key applications. Specifically in the salesforce
automation application, the product offers facilities for lead and opportunity management, territory
management, team selling, account management, and key analytical metrics.
The advantages for the sales manager lie in the enhanced access to information about
salesperson activities and results – including key metrics like business in the pipeline and up-to-date
forecasts. The system provides a full set of analytical metrics available instantly and at any level of
aggregation required. Moreover, the CRM technology provides salespeople with superior flows of
information about the results they are achieving with their own accounts and the ability to react quickly
to adverse changes, while understanding which of their activities are most productive with different
types of customer. There is also a potentially substantial reduction in the time needed for recordkeeping and reporting, since much is automated. Although not replacing the critical interface between
sales manager and salesperson, the CRM technology is a very promising approach to assisting
managers in enhancing salesforce productivity.
B. Visit Nokia’s US website (www.nokiausa.com). Evaluate Nokia’s sales approach online. How does
Nokia enhance its direct marketing strategy through web-based offerings?
Nokia is clearly the world’s number one in the cellular phone and accessories market. The
company has developed long-standing relationships with cellular phone services providers (e.g. AT&T,
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Vodafone, Deutsche Telekom/VoiceStream etc.). Online it offers a wide array of new phones and
other cellular devices. The web affords Nokia the opportunity to carry all of its manufactured items in
one central, though virtual, store. Brick-and-mortar retailers lack the shelf space and mail order
catalogs will not include the newest model, a serious drawback in a tumultuous, fast-changing industry.
The web also allows Nokia to respond quickly to price changes in the industry and thus fend off
possible competitive threats. Moreover, Nokia will be able to directly learn important information
from its customers (e.g. demographics, usage behavior etc.). This will be beneficial when creating new
cellular solutions. Nokia can use the web to better interact with the end-consumer, offer its newest
products at updated prices, and sell direct without intermediary channels. However, the company
needs to be careful not to offend its existing channels (e.g. should Nokia decide to sell a particular
phone model cheaper online than through the brick and mortar stores).
C. Review the web site of Merrill Lynch (www.ml.com). How does Merrill Lynch leverage its global
position to adjust to local markets through the Internet? Why is the Internet particularly relevant for
firms in the financial services industry?
Merrill Lynch, the global investment powerhouse, is present in virtually every major financial
center in the world. Its Internet portal is designed for global customers, as well as four primary country
markets (USA, India, Japan, and Australia). The company offers a myriad of research capabilities,
account handling, online financial services, advice and other items online. Since the global money
market virtually never sleeps, firms in the financial services industry find the Internet especially useful
to secure a 24-hour service to its worldwide clients (incl. account access, transfer etc.). Nowhere are
purchases and sales handled at such mind-boggling speeds as in the financial services industry. Money
changes hands in a matter of nanoseconds and the Internet plays a pivotal role in enabling these
transactions. Through the Internet one can conduct business effectively from anywhere where a
telephone or cellular connection is accessible. Thus, being present online and offering wide-ranging
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services on the Internet allows Merrill Lynch to capture more business than before, enhance its
customer service initiatives, and communicate better to its clients.
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CHAPTER 14
INTERNET APPLICATIONS
A. Visit the Web site of the Strategic Account Management Association (www.strategicaccounts.org) and
review some of the research library resources available at the site. What is the basis for suggesting that the
strategic/key account manager is anything more than a senior salesperson working on major accounts.
Why is it any different? Where can a strategic account manager be positioned in the marketing and sales
organization?
The Strategic Account Management Association (SAMA) is the professional body focused on
major, national, key, or strategic account management approaches. It is committed to a very broad view
of strategic account management:
“Installing a comprehensive strategic account management approach within a
company requires significant financial investment, long-term focus and multifunctional capabilities along with substantial restructuring of the sales
organization. Critical success factors for SAM include organizational alignment,
senior management commitment, processes and systems for communications
and knowledge management, selecting strategic accounts, account planning,
relationship and program metrics and the potential to realize the benefits of a
mutually profitable strategic account relationship.
A strategic account manager (also titled major account manager, key account
manager, national / global account manager) is the guardian of the strategic
customer relationship, orchestrating the deployment of corporate-wide
resources to provide comprehensive product, service and solutions to the
strategic account. This position is overseen by a VP / director of strategic
accounts (also titled manager of strategic accounts, VP of sales) and senior
executive sponsors, all of whom support and empower the strategic account
manager in their respective roles. Other support personnel may include
account teams of varying composition.”
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The SAMA Website offers a range of research reports and studies for sale, but also Knowledge
Resources, providing access to downloads of articles, white papers, presentation material, research
papers, and lists of other resources in the field.
The strategic account approach positions the SAM as an individual with a general
management-type of responsibility for the strategic account. Activities include collaborating with the
customer to plan the customer’s own end-market business, and developing joint decision making
mechanisms and other approaches to integration between buyer and seller organizations. This is the
basis on which it is suggested that strategic account management goes beyond a senior sales role.
Nonetheless, it is clear that in practice many individuals with job titles like strategic/key account
manager are actually senior salespeople with a portfolio of major accounts. This diversity in practice
suggests that organizational positioning will depend on the type of strategic account management being
adopted. The full-blown SAMA-style strategic account management is a new business model, and may
require structures with are cross-functional and not located in conventional sales or marketing
organizations.
B. Go to the Web site of Coca-Cola Inc. (www.cocacola.com). Use the corporate information pages (Our
Company; Our Brands; and Around the World) to identify the growth in brands marketed by the
company and its geographic emphasis. Identify the challenges for this company in organizing for a
growing brand portfolio in a diverse global marketplace.
The Coke Web site is extremely interesting and diverting. Web pages offer a virtual plant tour,
“Coke fun”, details of the Coke race family, the Youth Partnership, and a range of advertising
examples and history drawn from the company’s archives. The site also provides an online Annual
Report.
However, in addition to entertainment value, the Coke site is also revealing of the major
transition in the company’s branding policy in response to marketplace change, as well as the high
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degree of internationalization. Coke is frequently seen as largely a single-brand company, but the
display under “Our Company”-“Our Brands” –“Around the World”, demonstrate that (at the time of
writing) Coke is managing a portfolio of 230 brands running from A&W-Ko to Yangguang and Yonki,
and is selling in more than 200 countries throughout the world. Brand sampler dropdowns provide
sampler vignettes of each brand, e.g. Thums Up is Coke’s leading brand in India. The pages also
provide country fact sheets reflecting Coke’s market position.
The challenges facing Coke in managing this diverse brand, product and geographical portfolio
are several, and may be illustrative of those facing other companies with mature brands marketed
globally. In addition to positioning its new products and brands differently with consumers in different
markets, to the traditional Coke positioning in the U.S., the company also has to confront major
differences between markets. As the global drinks market has fragmented, Coke had no choice but to
develop local brands, and could no longer rely on the power of the global brand identity backed by
global advertising. Changes in market tastes have driven the company into mineral water and juicebased drinks, milk-based drinks and even clothing. The organizational challenge is to manage a
growing range of new products, as well as increasing market diversity.
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CHAPTER 15
INTERNET APPLICATIONS
A. Visit the web site for 1–800–flowers (www.1800flowers.com). How does this company employ its
web site to adapt to a constantly changing environment?
1–800–flowers is an online flower shop that does $300 million a year in business. The
company takes orders through an 800 number and provides delivery through 2,500 local flower shops,
including company–owned stores, franchisees, and independent florists. Telephone sales are now
complemented by electronic shopping on the company’s web site. The interactive ordering will
contribute $30 million to the company’s revenues.
1–800–flowers can respond rapidly to a changing environment. The company can immediately
remove flowers that are not available from the web site. In contrast to print catalogs, surplus flowers or
new varieties can be added immediately. Traditional catalog merchants can inform customers of
supplements or special sales over the phone when the order is made. However, the web–based
approach allows the customer to view the product and any specials before placing the order.
Photographic images of the flowers on the web also help to minimize customer concerns about the
appearance of unfamiliar flowers. In these ways, the company responds to a changing environment and
boosts company sales.
B. Enter the phrase “marketing implementation” into your search engine and review the first 20 sites
indicated. View several of those representing consultancies and agencies offering products and services to
support marketing implementation. Which sound most likely to be effective? What role, if any, can external
agencies play in developing effective marketing strategy implementation initiatives?
Exactly what is found by this search will depend on when it is done and which search engine is
utilized. However, the general finding will likely be that the following types of websites are identified:
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
Consultancy companies offering their views on how external agencies can improve implementation
performance. Some will be marketing consultants specializing in strategy issues, while others will
take a general or human relations management perspective and offer advisory services in change
management.

Software suppliers offer various products for planning and managing change programs, which are
mainly record-keeping mechanisms.

Some sites will actually be concerned with specific technologies or projects and approaches to their
implementation, e.g., most searches will identify e-business and e-CRM products and companies
claiming expertise in their management (e.g., Cisco, IBM).

Search normally finds a range of articles and reports, and some case studies concerned with
implementation.
The materials located through this kind of search are usually topical and interesting. However,
the different resources available need to be matched closely to what type of implementation is being
considered – there is a vast difference between implementing a CRM project and a program of
customer value enhancement. Many of the support resources available are little more than tools for
systematic planning. These tools can be extremely useful, but do not really get to grips with the
management of change at the level of structure and process in the organization. They can be compared
on this basis and views taken about their likely effectiveness in different situations.
The more general point for discussion is the advantages and disadvantage of external support in
implementing marketing strategies. While external support provides objectivity and frees resource and
expertise to concentrate on implementation, against this must be balanced the rejection of externallydirected change initiatives by people inside the company and questions about the long-term
effectiveness of change programs that are not rooted in the culture and processes of the company.
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