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Marketing Cases Collection

                   Jin Hsueh
                EGRMGMT.510
                   Marketing
                 Dec.21.2012
Rosewood Hotels & Resorts:
Branding to Increase Customer
Profitability and Lifetime Value
                       Jin Hsueh
                   EGRMGMT.510
                       Marketing
                   2012.Sep.23rd
The reason why is Rosewood considering a new brand
                         strategy
•    Current brand positioning limits the market.
•    Low Brand Awareness
•    Low multiproperty cross-selling rates: 5% to 10 %, while corporate-branded
     hotels enjoy 10% to 15%.



       Pros and Cons for Rosewood adopting the new
                    branding strategy
Pros
• Increasing cross-selling rate
• Increasing Brand Awareness
Cons
• New Stagey might alienate guests at well-established properties
• Properties Managers have mix feelings to fully support branding strategy.
• Co-op owners are reluctant to be more visible brand.
• Cost marketing expenses.
• Increasing management cost
Case study analysis
                            Without Rosewood
                              Branding 2003
                                               With Rosewood Corporate
                                                       Branding
                                                                         •   IF Rosewood adopt new
Total Number of unique                                                       strategy in the 0 year:
                                 115,000               115,000
        guests                                                              Marketing expense will
  Average Daily Spend             750                    750                 increase
Number of days average
                                    2                     2                 Total number of repeat
       guests stays
Average gross margin per
                                                                             guests will increase
                                  32%                   32%
           room                                                             Retention Rate will
Average number of visits
    per year per guest
                                   1.2                   1.3                 increase
    Average marketing
                                  130                  138.696
                                                                            Gross profit will increase
    expense per guest
   Average new guest
                                  150                    150
   acquisition expense
 Total number of repeat
                                 19169                  26538
          guests
of which: total number of
                                  5750                  11500
mutliproperty stay guests


Average Guest Retention
                                 16.67%                23.08%
          Rate
Average Gross Profit per
                               672.011687                768
         Guest
    annual revenues            2100.036522              2400
Case study analysis
•      After six years…
      Years        0         1        2         3         4          5         6
Gross profit
                  768      814.08   862.92    914.70    969.58    1027.76   1089.42
  per guest
 Acquisition
                  150       150      150       150       150       150       150
expense per
 Marketing
                138.70     142.86   147.14    151.56    156.10    160.79    165.61
expense per
 Net profit
                 11.30      7.14     2.86      -1.56     -6.10    -10.79    -15.61
  per guest


    Retention
                100.00%    23.08%   5.33%     1.23%     0.28%     0.07%     0.02%
      Factor
     Discount
                 100%       93%      79%       74%       68%       63%       58%
      Factor
                  618      23.97    -113.51   -141.73   -148.13   -149.58   -149.90

•      Total LTV=-60, the value could help Rosewood decide not to take the new
       strategy and will make negative impact if they take action in the six
       years.
•      The retention and revenues cannot offset the increased marketing and
       operational cost, so Boulogne should not take the new strategy.
American Airlines’ Value
       pricing
                   Jin Hsueh
               EGRMGMT.510
                  Marketing
                2012.Oct.1st
why did Crandall, CEO of AA, introduce Value pricing

•    Given the high fixed cost, the airlines industry was sensitive to
     economic downturn. Due to 1. Recession 2. the Gulf war, AA
     reported losses of $77 million in 1990 and $165 million in 1991.
•    Due to the deregulation of domestic airlines, the market started
     growing.
•    The air travel is more and more demanding than before.


                          What is Value Pricing

•    There would be only four different fares:
      – First class
      – Regular coach –AAnytime Fare
      – 7-Day discount coach – PlanAAhead Fare
      – 21-Day discount coach h -PlanAAhead Fare
•    All fares were to be mileage-related
Case study analysis
                           Regular                 Discounts
       Route                                     Old          New
                        Old      New
                                          30 Day     21 Day  21 Day
 New York-Chicago       854      500       338         355    260
New York-Los Angeles    1504     920       398         549    460
   Dallas-Boston        1310     760       418         467    390
   Dallas-Denver        780      480       298         345    240
   Dallas-Seatle        1264     760       418         467    390
   Average price       1142.4    684       374        436.6   348
     difference                 -40.13%                      -20.29%

After the adoption of value pricing:
• The regular ticket fare goes down 40.13%
• The discount ticket fare goes down 20.29%
• Though the price fare decrease, it could be expected that the volume will
   be up and total revenues will increase after the adoption. Please see the
   next page.
Case study analysis
                                                                  operating per                                            total
               Revenues                                                                         operating
                                                  operating         revenue       marketing                    market   passenger     load
   AA         passengers       available seats                                                  expenses                                        yield
                                                  revenues         passenger      expernese                    shares     s grow     facrot
                 Miles                                                                           CRS cost
                                                                      miles                                                rate
 Before      63,667,000,000    1,046,122,248     8,168,476,100       0.1357           0        8,639,611,900   19.15%      2%         60.86     0.1283

Afert new
             63,967,000,000    1,046,122,248     8,468,476,100       0.1347       20,000,000   8,614,611,900   19.65%      4%       61.146773   0.1324
  policy

Difference    300,000,000            0           300,000,000         -0.001       20,000,000    25,000,000      0.5%       2%
                                                                                  cos t more
               a ddi tiona l                      a ddi tiona l                                  CRS cos t
 remark         revenues                           revenues
                                                                                  ma rketing
                                                                                                 s a vi ngs
                                                                                  expens es

With the new policy…
• Company
     AA could gain more operating revenues
     Load factor goes up, Yield goes up
     Market share goes up
• Customer
     Customers get lower ticket fare, more frequent connecting flight via hub.
     Agents will have more chances to sell AA tickets since the system
       management become more simple.
• Competitors
     Competitors would possibly follow the same policy, which makes the
       competition more fierce.
     AA’s advantage would be they are the first comer.
UnME Jeans: Branding in
       Web 2.0
                  Jin Hsueh
              EGRMGMT.510
                  Marketing
                2012.Oct.29
UnME Jeans product positions

•   The brand was designed for woman to forge their own unique identities.
•   The product line included fashion-forward jeans and were available in
    upscale department stores.
•   Girls who wore UnME jeans tended to be social and valued the brand for
    unique.
•   According to the article, UnMe is now landing in the area of Niche
    Marketing. After the investing the ads on socials, Unme is expected
    landing in 1 to 1 customers relationships section.

    Ability to interact
      with customers      III                     IV
           individually
                                database               1to1 Customer             With Web 2.0 Ads
                                                                          Unme
                                marketing              Relationships

     Interacting
                          I                       II
                                  mass                    niche
Customers addressed             marketing                marketing        Unme   Without Web 2.0 Ads
  only in mass media



                    Standard                Tailoring                Tailored
                    products                                         products
Phillips Foods, INC. –
Introducing King Crab to the
             Trade
                    Jin Hsueh
                 EGRMGMT.510
                    Marketing
                  2012.Nov.12
If Phillips take Trade Advertising Strategy
                                                                                                  Readers by sector
                                                                                                                                     Percentage of
                                         monly          Numbers of Cost of 1 full                  distribution/w
    publication     industry focus                                                  foodservice                       retailing   readers involved in
                                      circulation     issues per year page color                     holesaling
                                                                                                                                    seafood buying

    Progressive
                    Food retailing      43,000             14           12,200                          13%             65%              4%
      Grocer

                    North American
      Seafood
                       seafood          15,000             12           4,500          32%              37%             21%              90%
      Business
                       Industry
    Refrigerated
     and Frozen     Food retailing      12,000             11           4,400                           16%             78%              35%
    food retailer

                                     an average of
       Target                          0.3% of the                                                 cost 4,500 for
                       155.52                                            Cost        699840
     customers                        foodservices                                                   full page
                                     readers called


•       If go for a trade adverting, “Seafood Business” has the highest percentage of
        readers involved in seafood buying, Phillips might take “Seafood Business”
        magazine as the main promotion.
•       In passage, it mentioned that an average of 0.3% of the foodservices
        readers has responded.
•       We could estimate that Phillips could cost 699,840 to post full page color ads
        to target 155.52 customers for the whole year.
If Phillips take Trade Show Strategy
                                                                                                     description          Cost     mark
     description          numbers        mark              Staff        numbers                    Exhibit design        16,000
                                                      accommodate                                 Display materials      10,000
  total attendance         18,000                                          2
                                                      potential peaks                           Set-up and tear-down     7,000
     target group           65%                         supportive         2
                                                                                                 Transportation and
                                                                                                                         18,000
                                                       Staff to serve                                  freight
among group, looking                                                      10
                            16%                         customers                                   show service         27,000
   for king crab
                                                                                                                                  1400/per
                                                                                                 Travel and lodging      19600
  target customers         1872                            Total          14                                                        staff
                                                                                                                                  300/per
                                                            2. Calculate        the     total   meals entertainment      4200
                                                                                                                                   staff
average interactions         6           mins               staff: 14                                 VIP party          20,000

total customers spent                                                                            Print adverting and
                      11232                                             spcae/sq                                         2,000
  mins in the booth                                       Space                       mark             mailing
                                                                          feet
                                     10AM to 5PM
                                      for two days                                               collateral materials    2,000
total mins for exhibits    1140      10AM to 3PM
                                                          kitchen         350
                                       in total 19                                                   Total cost         125,800
                                          hours
                                                                                                                  4. Calculate the cost
     staff to serve                                                                                               spent
                          9.852632    round to 10
      customers                                           Set-up          250
 1. Calculate the Staff needed                                                     4 for 100
                                                      10 people space     250
                                                                                    sq feet

                                                     3. Calculate the space needed
                                                     : 850 sq. feet
 •      Based on the logic, calculate out the staff, spaces, and cost needed on the Trade
 •      #533 booth (1000 sq. feet) would fit the needs of Phillips, and they need 14 staff
Summary

                                    Target customers         Ratio
        Summary         Cost                                                 Pros and cons
                                        to reach       (customers/cost)
      Trade
                                                                              Not enough
    Advertising       699840 USD          155              0.0002
                                                                          foodservices readers
     Strategy
    Trade Show
                      125,800 USD         1872              0.014         More personal contact
     Strategy

•       The Customers/Cost Ration of Trade show strategy is much higher than trade
        advertising strategy, so going for trade show is recommended


          More reasons why should go for the trade show.

    •     Since Phase I had already been focused on ads, Phillips should go for a
          innovative strategy for Phase 2.
    •     Based on the Exhibit, it’s important to have a face-to-face interaction
          during the purchase process, trade show is a good option.
    •     People would come to trade show mean they have interests on the
          products, it means they are the potential customers.
    •     Through the trade show strategy, Phillips could manage and maintain
          vendor and customers relationships and evaluate the product service
    •     Following up trade show leads could be effective and efficient.
Mountain Main Brewing
Company: Brining the Brand to
           Light
                     Jin Hsueh
                  EGRMGMT.510
                     Marketing
                   2012.Nov.19
Case background

•   Mountain Man Brewing Company (MMBC) Lager was successful could credit to:
        Strong Brand awareness: Smoothness, drinkability
        High customer royalty and retention rate
        Effective grass-roots marking to spread by word of mouth
•   MMBC is facing decline due to
        The   competition from wine and spirits-based drinks
        The   increase in the federal excise tax
        The   initiatives encouraging moderation and personal responsibilities
        The   increase health concerns.
        The   enforcement of Arcane Laws



         Suggest Chris run for “Light” and reasons
•   The key customer segment for beer is young drinkers, which is match to
    the customer segment of “Light” drinkers.
•   The growth in the “light’ beer category which had been steadily gaining in
    market share.
•   If MMBC doesn’t take action at this time, the decline would still go on.
•   Light beer would help MMBC gain share, especially on-premise locations.
•   It is expected that Light beer market could boost the sales of Lager.
•   Please see detail calculation in the next page.
Marketing analysis

      Description      Light Beer     remark                        2005     2006     2007     Remark
      Sales price     103.7971014      100%         total "light"
         COGS             71.62         69%           market      18744303 19494075 20273838 Barrels
     Gross margin         32.18         31%        consumption

       adverting        15000000      TV ads       growth rate    0.04      0.04
       adverting                                   market share     0      0.0025    0.005
                        750000      for 6 months   MMBC share       0     48735.19 101369.2 Barrels
       campaign                                    2. Project the Light beer of market
                                        Total      share in 2 years
      total market
                       15750000      Marketing                       2005     2006      2007
        expense                                         gross
                                        cost                       32.1771 33.46419 34.80275
                                                   profit(margin)
         SG&A           900000       Fixed Cost
                                                    growth rate       4%       4%        4%
       breakeven      27970.20115      barrels
                                                   retention rate     0.53     0.53     0.53
    1. Calculate the gross margin and breakeven     discount rate     0.12     0.12     0.12
    points
                                                      LTV index         1    0.473214 0.223932
                                                    Customer life
                                                                    32.1771 15.83573 7.793442
                                                     time value
                                                   3. Calculated CTV

•     MMBC needs to sell 22790 barrels of beer to breakeven its cost
•     According to MMBC’s market share in Light beer, the first year could achieve
      the breakeven point.
•     CTV are all lager than Zero suggest that MMBC should go for Light beer market
3P’s marketing
•    Price: Light beer lands on higher household income than MMBC lager, so it is possible
     that MMBC could raise the sale price a little to secure the margin.
•    Place: Restaurants and Bars should be the major channel of MMBC to sell. Younger
     drinkers and women goes the places frequently.
•    Product Positions: To prevent from cannibalization, MMBC should be aware of branding
     strategy.
                            MMBC Lager                          MMBC Light
                   •   Male                        •   Young drinker and women
    Focus group
                   •   45 to 54 years old          •   21 to 27 years old
                   •   $103.79 per barrel          •   $120 per barrel, slightly higher
       Price
                   •   Target to working level     •   Target to middle level
      Major
                   •   Grass-roots marketing       •   Life-style advertisements
    advertising
     Package       •   In a brown bottle           •   In a light blue bottle
                   •   To maintain its profit      •   To enter a new market
     Strategy
                   •   Defensive marketing         •   Offensive marketing


                                      Summary
•    The sales revenue could cover the cost of launching a new product line in a year since
     it’s a extended product, not a whole new one.
•    Follow to the table above to execute to strategy to prevent from cannibalization
3 plans comparison
      Plan                Zwinktopia                Facebook                    YouTube

                   •   One-time charge
                                                                     •   One-time charge
                       $200,000             •   One-time charge
                                                                         $300,000
                   •   Yearly operation,        $350,000
  Investments                                                        •   Brand Channel and
                       maintenance, and     •   Ads program for
                                                                         the in-video ads for
                       updating for             $150,000
                                                                         $300,000 (CPM $40)
                       $100,000
                                            •   High user
                   •   High user                interactions
    Benefits                                                         •   High user interactions
                       interactions         •   Exploding social
                                                networking market
                                            •   Possibility of
                   •   Age focused are
     Risks                                      Negative             •   High CPMs: $25
                       little high
                                                impression
                   •   Digital Self
                                            •   Social Affiliation   •   Consumer Co-creation
 Focus Features        Expression
                                            •   Sharing              •   Sharing
                   •   Sharing
                                            •   25+ group are the
                   •   Age of 25 to 34
Target customers                                fastest growing      •   Not specific
                       using Virtual life
                                                age

     KPIs          •   Hard to evaluate     •   CPMs                 •   CPMs
Plan for UnMe

UnME should go for the FACEBOOK strategy based on the reasons:
 UnME Jeans is a more tailored product that require lots of interaction and
  customer feedback which FACEBOOK could provide.
 Peer review is important among young adults, and also affect their intentions
 clicking rates to evaluate to the real ROI on the Ads would be a more
  accurate method on FACEBOOK. Only people who interested in UnME will
  friend Sasha and click the page.


                        Suggestion to UnME
 Since UnME is targeting the young adult, it should take out the budget
  from tradition TV to FACEBOOK since Young adult are the majority user of
  Facebook.
 In Web 2.0, Fashion is important. UnME is right standing in this position.
  IF UnME could utilize its branding image would be a good plus.
 On the other hand, the uncertainty of Social Networking would be a risk if
  put too much investment on it.
 The best for UnME would be using adjacent strategy which is using both
  YOUTUBE and FACEBOOK for their major advertising. The reason is
  nowadays SOCIAL are combined with others. Only with the all around
  strategy could make the big success.
The TATA NANO: The
   PEOPLE’S CAR
              Jin Hsueh
           EGRMGMT.510
              Marketing
            2012.Nov.26
Market investment analysis
  description             #               remark
                                                      Please see the caculation left:
Dealers prices   $               2,500
    Dealers                                           1. The price selling to customer is 2,500 (not including
                 $               75.00      4%
   margain                                                tax).
TATA price to
                 $               2,425                2. Tata price to dealers is 2,425.
    dealers
     COGS        $              557.75      23%       3. The margin is 15%, so Tata earns USD363 to sell each
 contribution                                             Nano.
                 $              363.75      15%
    margin                                            4. Assume that Tata Nano would take over 10% of the
                                                          two and three wheeler market and few percentage of
expeceted to                                              Passengers vehicles, also it might cannibalize to its
                 $            7,000,000 assumption
  sell unis                                               own share market, we estimated Nano would sell 7
  total Gross                                             Millions units .
                 $     2,546,250,000
     profit                                           5. There is no any market expenses including here.
 new plant at
                 $       337,078,652     fixed cost   6. The fixed cost for the new plant would be 337 Millions
    Singur
   net profit    $   2,209,171,348.31                 7. Net profit would be USD 2 billions

                 The reasons Tata Nano would attract Indian’s middle class

1. the auto ownership in India ranged from 8 to 25 per 1,000 people. It still has the big
   potential for middle-class people in India to acquire a new car.
2. The low-cost two-wheelers played a major role in the current market, that showed that
   the people in India are price-orientation. Tata Nano could fulfill the demand of low-
   price and at the same time cover all the other features that a vehicle could provide.
3. Tata Nano could use its existing channels to sell Nano, it doesn’t have to rebuild a new
   channel system that lower the distribution cost a lot.
Product segment and positions (including two-
                  wheelers and vehilcels)

    High                                                                        Maruti    Passengers
                                                                                Udyog     Vehicle
                                                                    TATA Nano
                                                         Enfields
                                                          Diesel
                                                          Bullet
                                                 Motor
Speed                                            cycle
                                      Scooter
                                                                                           Two and three
                            Scooter
                                                                                           wheels segment
                     Moki     ette
                      ck
    Low

           Low                                  Price                              High
•     According to the passage, if we put the factor of “Price” and “Speed” as The Indian
      automobile market segment, the chart would be like above.
•     Tata Nano would be positioned as high-end products in two wheelers market
      segments. Comparing to the two-wheelers, Safety and comfort are the key words that
      Tata Nano could assure.
•     Also it server as a low-end product in the passengers vehicle. Comparing to
      passengers vehicle segment, the low price strategy is the market killer to appeal the
      middle-class people in India.
`
Manufacturing-wise

                                  •   IF Tata Nano adopt modular production, there
                                      are many benefits:
                                       –   Decrease the time to market since it could lower
                                           the production lead time.
                                       –   Decrease the inventory since the modules
                                           variation is low.
                                       –   Increase the product quality since the product
                                           complexity is lower than before.
                                       –   By adopting the modular production, Tata Nano
                                           could outsource specific modules to the lower
                                           cost-base factory to lower the COGS.
                                  Strategy should be:
                                  •   Design by Tata
                                  •   Manufacture modules by low cast base factory
                                  •   Ship modules by low cost base logistics
                                      company
                                  •   Assemble modules at where Nano will be sold


                                      Summary
•   By targeting the right customer segment and right product positions, Tata Nano is a
    good product and should be launched by Tata.
•   By calculating the profit, Tata Nano would earn profit by USD 2 Billion.
•   BY modular manufacturing, the quality will be good and cost would be lower.

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Marketing cases collection

  • 1. Marketing Cases Collection Jin Hsueh EGRMGMT.510 Marketing Dec.21.2012
  • 2. Rosewood Hotels & Resorts: Branding to Increase Customer Profitability and Lifetime Value Jin Hsueh EGRMGMT.510 Marketing 2012.Sep.23rd
  • 3. The reason why is Rosewood considering a new brand strategy • Current brand positioning limits the market. • Low Brand Awareness • Low multiproperty cross-selling rates: 5% to 10 %, while corporate-branded hotels enjoy 10% to 15%. Pros and Cons for Rosewood adopting the new branding strategy Pros • Increasing cross-selling rate • Increasing Brand Awareness Cons • New Stagey might alienate guests at well-established properties • Properties Managers have mix feelings to fully support branding strategy. • Co-op owners are reluctant to be more visible brand. • Cost marketing expenses. • Increasing management cost
  • 4. Case study analysis Without Rosewood Branding 2003 With Rosewood Corporate Branding • IF Rosewood adopt new Total Number of unique strategy in the 0 year: 115,000 115,000 guests  Marketing expense will Average Daily Spend 750 750 increase Number of days average 2 2  Total number of repeat guests stays Average gross margin per guests will increase 32% 32% room  Retention Rate will Average number of visits per year per guest 1.2 1.3 increase Average marketing 130 138.696  Gross profit will increase expense per guest Average new guest 150 150 acquisition expense Total number of repeat 19169 26538 guests of which: total number of 5750 11500 mutliproperty stay guests Average Guest Retention 16.67% 23.08% Rate Average Gross Profit per 672.011687 768 Guest annual revenues 2100.036522 2400
  • 5. Case study analysis • After six years… Years 0 1 2 3 4 5 6 Gross profit 768 814.08 862.92 914.70 969.58 1027.76 1089.42 per guest Acquisition 150 150 150 150 150 150 150 expense per Marketing 138.70 142.86 147.14 151.56 156.10 160.79 165.61 expense per Net profit 11.30 7.14 2.86 -1.56 -6.10 -10.79 -15.61 per guest Retention 100.00% 23.08% 5.33% 1.23% 0.28% 0.07% 0.02% Factor Discount 100% 93% 79% 74% 68% 63% 58% Factor 618 23.97 -113.51 -141.73 -148.13 -149.58 -149.90 • Total LTV=-60, the value could help Rosewood decide not to take the new strategy and will make negative impact if they take action in the six years. • The retention and revenues cannot offset the increased marketing and operational cost, so Boulogne should not take the new strategy.
  • 6. American Airlines’ Value pricing Jin Hsueh EGRMGMT.510 Marketing 2012.Oct.1st
  • 7. why did Crandall, CEO of AA, introduce Value pricing • Given the high fixed cost, the airlines industry was sensitive to economic downturn. Due to 1. Recession 2. the Gulf war, AA reported losses of $77 million in 1990 and $165 million in 1991. • Due to the deregulation of domestic airlines, the market started growing. • The air travel is more and more demanding than before. What is Value Pricing • There would be only four different fares: – First class – Regular coach –AAnytime Fare – 7-Day discount coach – PlanAAhead Fare – 21-Day discount coach h -PlanAAhead Fare • All fares were to be mileage-related
  • 8. Case study analysis Regular Discounts Route Old New Old New 30 Day 21 Day 21 Day New York-Chicago 854 500 338 355 260 New York-Los Angeles 1504 920 398 549 460 Dallas-Boston 1310 760 418 467 390 Dallas-Denver 780 480 298 345 240 Dallas-Seatle 1264 760 418 467 390 Average price 1142.4 684 374 436.6 348 difference -40.13% -20.29% After the adoption of value pricing: • The regular ticket fare goes down 40.13% • The discount ticket fare goes down 20.29% • Though the price fare decrease, it could be expected that the volume will be up and total revenues will increase after the adoption. Please see the next page.
  • 9. Case study analysis operating per total Revenues operating operating revenue marketing market passenger load AA passengers available seats expenses yield revenues passenger expernese shares s grow facrot Miles CRS cost miles rate Before 63,667,000,000 1,046,122,248 8,168,476,100 0.1357 0 8,639,611,900 19.15% 2% 60.86 0.1283 Afert new 63,967,000,000 1,046,122,248 8,468,476,100 0.1347 20,000,000 8,614,611,900 19.65% 4% 61.146773 0.1324 policy Difference 300,000,000 0 300,000,000 -0.001 20,000,000 25,000,000 0.5% 2% cos t more a ddi tiona l a ddi tiona l CRS cos t remark revenues revenues ma rketing s a vi ngs expens es With the new policy… • Company  AA could gain more operating revenues  Load factor goes up, Yield goes up  Market share goes up • Customer  Customers get lower ticket fare, more frequent connecting flight via hub.  Agents will have more chances to sell AA tickets since the system management become more simple. • Competitors  Competitors would possibly follow the same policy, which makes the competition more fierce.  AA’s advantage would be they are the first comer.
  • 10. UnME Jeans: Branding in Web 2.0 Jin Hsueh EGRMGMT.510 Marketing 2012.Oct.29
  • 11. UnME Jeans product positions • The brand was designed for woman to forge their own unique identities. • The product line included fashion-forward jeans and were available in upscale department stores. • Girls who wore UnME jeans tended to be social and valued the brand for unique. • According to the article, UnMe is now landing in the area of Niche Marketing. After the investing the ads on socials, Unme is expected landing in 1 to 1 customers relationships section. Ability to interact with customers III IV individually database 1to1 Customer With Web 2.0 Ads Unme marketing Relationships Interacting I II mass niche Customers addressed marketing marketing Unme Without Web 2.0 Ads only in mass media Standard Tailoring Tailored products products
  • 12. Phillips Foods, INC. – Introducing King Crab to the Trade Jin Hsueh EGRMGMT.510 Marketing 2012.Nov.12
  • 13. If Phillips take Trade Advertising Strategy Readers by sector Percentage of monly Numbers of Cost of 1 full distribution/w publication industry focus foodservice retailing readers involved in circulation issues per year page color holesaling seafood buying Progressive Food retailing 43,000 14 12,200 13% 65% 4% Grocer North American Seafood seafood 15,000 12 4,500 32% 37% 21% 90% Business Industry Refrigerated and Frozen Food retailing 12,000 11 4,400 16% 78% 35% food retailer an average of Target 0.3% of the cost 4,500 for 155.52 Cost 699840 customers foodservices full page readers called • If go for a trade adverting, “Seafood Business” has the highest percentage of readers involved in seafood buying, Phillips might take “Seafood Business” magazine as the main promotion. • In passage, it mentioned that an average of 0.3% of the foodservices readers has responded. • We could estimate that Phillips could cost 699,840 to post full page color ads to target 155.52 customers for the whole year.
  • 14. If Phillips take Trade Show Strategy description Cost mark description numbers mark Staff numbers Exhibit design 16,000 accommodate Display materials 10,000 total attendance 18,000 2 potential peaks Set-up and tear-down 7,000 target group 65% supportive 2 Transportation and 18,000 Staff to serve freight among group, looking 10 16% customers show service 27,000 for king crab 1400/per Travel and lodging 19600 target customers 1872 Total 14 staff 300/per 2. Calculate the total meals entertainment 4200 staff average interactions 6 mins staff: 14 VIP party 20,000 total customers spent Print adverting and 11232 spcae/sq 2,000 mins in the booth Space mark mailing feet 10AM to 5PM for two days collateral materials 2,000 total mins for exhibits 1140 10AM to 3PM kitchen 350 in total 19 Total cost 125,800 hours 4. Calculate the cost staff to serve spent 9.852632 round to 10 customers Set-up 250 1. Calculate the Staff needed 4 for 100 10 people space 250 sq feet 3. Calculate the space needed : 850 sq. feet • Based on the logic, calculate out the staff, spaces, and cost needed on the Trade • #533 booth (1000 sq. feet) would fit the needs of Phillips, and they need 14 staff
  • 15. Summary Target customers Ratio Summary Cost Pros and cons to reach (customers/cost) Trade Not enough Advertising 699840 USD 155 0.0002 foodservices readers Strategy Trade Show 125,800 USD 1872 0.014 More personal contact Strategy • The Customers/Cost Ration of Trade show strategy is much higher than trade advertising strategy, so going for trade show is recommended More reasons why should go for the trade show. • Since Phase I had already been focused on ads, Phillips should go for a innovative strategy for Phase 2. • Based on the Exhibit, it’s important to have a face-to-face interaction during the purchase process, trade show is a good option. • People would come to trade show mean they have interests on the products, it means they are the potential customers. • Through the trade show strategy, Phillips could manage and maintain vendor and customers relationships and evaluate the product service • Following up trade show leads could be effective and efficient.
  • 16. Mountain Main Brewing Company: Brining the Brand to Light Jin Hsueh EGRMGMT.510 Marketing 2012.Nov.19
  • 17. Case background • Mountain Man Brewing Company (MMBC) Lager was successful could credit to:  Strong Brand awareness: Smoothness, drinkability  High customer royalty and retention rate  Effective grass-roots marking to spread by word of mouth • MMBC is facing decline due to  The competition from wine and spirits-based drinks  The increase in the federal excise tax  The initiatives encouraging moderation and personal responsibilities  The increase health concerns.  The enforcement of Arcane Laws Suggest Chris run for “Light” and reasons • The key customer segment for beer is young drinkers, which is match to the customer segment of “Light” drinkers. • The growth in the “light’ beer category which had been steadily gaining in market share. • If MMBC doesn’t take action at this time, the decline would still go on. • Light beer would help MMBC gain share, especially on-premise locations. • It is expected that Light beer market could boost the sales of Lager. • Please see detail calculation in the next page.
  • 18. Marketing analysis Description Light Beer remark 2005 2006 2007 Remark Sales price 103.7971014 100% total "light" COGS 71.62 69% market 18744303 19494075 20273838 Barrels Gross margin 32.18 31% consumption adverting 15000000 TV ads growth rate 0.04 0.04 adverting market share 0 0.0025 0.005 750000 for 6 months MMBC share 0 48735.19 101369.2 Barrels campaign 2. Project the Light beer of market Total share in 2 years total market 15750000 Marketing 2005 2006 2007 expense gross cost 32.1771 33.46419 34.80275 profit(margin) SG&A 900000 Fixed Cost growth rate 4% 4% 4% breakeven 27970.20115 barrels retention rate 0.53 0.53 0.53 1. Calculate the gross margin and breakeven discount rate 0.12 0.12 0.12 points LTV index 1 0.473214 0.223932 Customer life 32.1771 15.83573 7.793442 time value 3. Calculated CTV • MMBC needs to sell 22790 barrels of beer to breakeven its cost • According to MMBC’s market share in Light beer, the first year could achieve the breakeven point. • CTV are all lager than Zero suggest that MMBC should go for Light beer market
  • 19. 3P’s marketing • Price: Light beer lands on higher household income than MMBC lager, so it is possible that MMBC could raise the sale price a little to secure the margin. • Place: Restaurants and Bars should be the major channel of MMBC to sell. Younger drinkers and women goes the places frequently. • Product Positions: To prevent from cannibalization, MMBC should be aware of branding strategy. MMBC Lager MMBC Light • Male • Young drinker and women Focus group • 45 to 54 years old • 21 to 27 years old • $103.79 per barrel • $120 per barrel, slightly higher Price • Target to working level • Target to middle level Major • Grass-roots marketing • Life-style advertisements advertising Package • In a brown bottle • In a light blue bottle • To maintain its profit • To enter a new market Strategy • Defensive marketing • Offensive marketing Summary • The sales revenue could cover the cost of launching a new product line in a year since it’s a extended product, not a whole new one. • Follow to the table above to execute to strategy to prevent from cannibalization
  • 20. 3 plans comparison Plan Zwinktopia Facebook YouTube • One-time charge • One-time charge $200,000 • One-time charge $300,000 • Yearly operation, $350,000 Investments • Brand Channel and maintenance, and • Ads program for the in-video ads for updating for $150,000 $300,000 (CPM $40) $100,000 • High user • High user interactions Benefits • High user interactions interactions • Exploding social networking market • Possibility of • Age focused are Risks Negative • High CPMs: $25 little high impression • Digital Self • Social Affiliation • Consumer Co-creation Focus Features Expression • Sharing • Sharing • Sharing • 25+ group are the • Age of 25 to 34 Target customers fastest growing • Not specific using Virtual life age KPIs • Hard to evaluate • CPMs • CPMs
  • 21. Plan for UnMe UnME should go for the FACEBOOK strategy based on the reasons:  UnME Jeans is a more tailored product that require lots of interaction and customer feedback which FACEBOOK could provide.  Peer review is important among young adults, and also affect their intentions  clicking rates to evaluate to the real ROI on the Ads would be a more accurate method on FACEBOOK. Only people who interested in UnME will friend Sasha and click the page. Suggestion to UnME  Since UnME is targeting the young adult, it should take out the budget from tradition TV to FACEBOOK since Young adult are the majority user of Facebook.  In Web 2.0, Fashion is important. UnME is right standing in this position. IF UnME could utilize its branding image would be a good plus.  On the other hand, the uncertainty of Social Networking would be a risk if put too much investment on it.  The best for UnME would be using adjacent strategy which is using both YOUTUBE and FACEBOOK for their major advertising. The reason is nowadays SOCIAL are combined with others. Only with the all around strategy could make the big success.
  • 22. The TATA NANO: The PEOPLE’S CAR Jin Hsueh EGRMGMT.510 Marketing 2012.Nov.26
  • 23. Market investment analysis description # remark Please see the caculation left: Dealers prices $ 2,500 Dealers 1. The price selling to customer is 2,500 (not including $ 75.00 4% margain tax). TATA price to $ 2,425 2. Tata price to dealers is 2,425. dealers COGS $ 557.75 23% 3. The margin is 15%, so Tata earns USD363 to sell each contribution Nano. $ 363.75 15% margin 4. Assume that Tata Nano would take over 10% of the two and three wheeler market and few percentage of expeceted to Passengers vehicles, also it might cannibalize to its $ 7,000,000 assumption sell unis own share market, we estimated Nano would sell 7 total Gross Millions units . $ 2,546,250,000 profit 5. There is no any market expenses including here. new plant at $ 337,078,652 fixed cost 6. The fixed cost for the new plant would be 337 Millions Singur net profit $ 2,209,171,348.31 7. Net profit would be USD 2 billions The reasons Tata Nano would attract Indian’s middle class 1. the auto ownership in India ranged from 8 to 25 per 1,000 people. It still has the big potential for middle-class people in India to acquire a new car. 2. The low-cost two-wheelers played a major role in the current market, that showed that the people in India are price-orientation. Tata Nano could fulfill the demand of low- price and at the same time cover all the other features that a vehicle could provide. 3. Tata Nano could use its existing channels to sell Nano, it doesn’t have to rebuild a new channel system that lower the distribution cost a lot.
  • 24. Product segment and positions (including two- wheelers and vehilcels) High Maruti Passengers Udyog Vehicle TATA Nano Enfields Diesel Bullet Motor Speed cycle Scooter Two and three Scooter wheels segment Moki ette ck Low Low Price High • According to the passage, if we put the factor of “Price” and “Speed” as The Indian automobile market segment, the chart would be like above. • Tata Nano would be positioned as high-end products in two wheelers market segments. Comparing to the two-wheelers, Safety and comfort are the key words that Tata Nano could assure. • Also it server as a low-end product in the passengers vehicle. Comparing to passengers vehicle segment, the low price strategy is the market killer to appeal the middle-class people in India. `
  • 25. Manufacturing-wise • IF Tata Nano adopt modular production, there are many benefits: – Decrease the time to market since it could lower the production lead time. – Decrease the inventory since the modules variation is low. – Increase the product quality since the product complexity is lower than before. – By adopting the modular production, Tata Nano could outsource specific modules to the lower cost-base factory to lower the COGS. Strategy should be: • Design by Tata • Manufacture modules by low cast base factory • Ship modules by low cost base logistics company • Assemble modules at where Nano will be sold Summary • By targeting the right customer segment and right product positions, Tata Nano is a good product and should be launched by Tata. • By calculating the profit, Tata Nano would earn profit by USD 2 Billion. • BY modular manufacturing, the quality will be good and cost would be lower.