testbank45.com€¦ · Web viewCase 1.A. BIG BROTHERS OF FAIRFAX COUNTY. Case Perspective: The...

Case 1.A

BIG BROTHERS OF FAIRFAX COUNTY

Case Perspective:

The leaders of the Big Brothers program in Fairfax County are concerned about the imbalance they are currently experiencing with respect to the number of boys wishing big brothers and the number available. They felt that a lack of awareness and inaccurate knowledge could be the cause of the shortage of volunteers and are considering sponsoring a marketing research study to investigate these issues.

This case serves as a useful introductory case in that students need not have any previous exposure to the study of marketing research in order to make headway with it. The case is particularly useful in forcing students to come to grips with the issue of the differences between the marketing problem and the marketing research problem. This in turn gives them a better appreciation of the role research can play in solving marketing decision problems. In addition, it provides students the opportunity to begin to see and understand the difference between research designed to provide information (i.e., discovery-oriented research) and research designed to select among strategic alternatives (i.e., strategy-oriented research). The case is also very useful in forcing students beyond the narrow perception that many bring to the study of marketing research, namely, that it primarily consists of asking appropriate target groups how they behave, feel, and so on. A study of the perceptions and attitudes of eligible males toward the Big Brothers program might certainly be called for in this case. At the same time, it is only one of the research alternatives that might be appropriate. The case typically provides some interesting discussion when students are pushed to specify how they would go about collecting some information class discussion previously identified would be useful to the leaders of the Big Brothers program.

Case Questions:

1. What are some possible marketing decision problems? State whether the decision problems are discovery- or strategy-oriented.

2. What are some relevant marketing research problems for the decision problems you have identified?

3. What types of information would be useful to answer these questions?

4. How would you go about securing this information?

Case Analysis:

1. What are some possible marketing decision problems? State whether the decision problems are discovery- or strategy-oriented.

Students might choose to go a number of different directions in response to this question. Relevant discovery-oriented decision problems might include: Why aren’t there enough male volunteers? What factors keep men from volunteering to be Big Brothers? Assuming that enough basic information is available, some relevant strategy-oriented might include: How should Big

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Brothers of Fairfax County increase the number of Big Brothers? Which type of promotional appeal should Big Brothers use? Should Big Brothers advertise more? Less? Differently? Should it consider other changes in its operation such as altering the orientation meetings?

2. What are some relevant marketing research problems for the decision problems you have identified?

There are often numerous research problems that might be associated with any given decision problem. Research problems for the discovery-oriented decision problem “Why aren’t there enough male volunteers?” might include: Determine if there is a fundamental imbalance in the demographic composition in the area that is tending to generate the inequality between the number of Little Brothers needing Big Brothers and the number of men volunteering; Investigate the perceptions and attitudes among those who might use Big Brothers; Determine if orientation meetings are not informative enough to encourage those attending to commit to the program.

Research problems for the strategy-oriented decision problem “Which type of promotional appeal should Big Brothers use?” could include: Determine which of three advertising slogans is perceived most positively by potential Big Brothers; Determine which of three advertising slogans is most easily recalled by potential Big Brothers.

3. What types of information would be useful to answer these questions?

The information that is relevant depends, of course, on which tentative explanations are deemed as being most productive. For the types of research problems cited above, some possibilities might include: (1) census data for the area regarding the number of one-parent families with a female head and the number of adult males, (2) information about the accuracy of the perceptions and the attitudes toward the program of those who might make Big Brothers, (3) people’s reaction to the orientation meetings of those attending, and (4) awareness levels for three different ad slogans being considered.

4. How would you go about securing this information?

It is unrealistic to expect students to have very sophisticated answers to this question since they do not yet have any knowledge of the various types of research designs and the strategies that are called for to execute each. Nevertheless, it is productive to ask students how they would go about securing information on each of the questions class discussion has identified as being important.

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Case 1.B

TRANSITIONAL HOUSING, INC. (A)

Case Perspective:

Transitional Housing, Inc. (THI) is a local non-profit organization that provides assistance to homeless and very low income individuals in finding emergency shelter, food, employment, transitional housing, and affordable apartment housing. As part of its planning, the Board of Directors of THI was interested in determining ways to improve the organization's services. Given the organization's limited resources, the Board decided to focus first on two of the facilities it operates, the Drop-In Shelter and the Hospitality House, focusing on the specific ways in which they might be improved.

This case is a useful introductory case in that it serves as a vehicle in illustrating several issues with respect to the conduct of a marketing research study. One major use is in illustrating the difference between decision problems and research problems. Another effective use is for illustrating the interrelationships among the steps of the marketing research process. Even though students will have limited understanding of marketing research techniques at such an early stage in the course, class discussion should help them appreciate how the availability and ready access to a target population can dramatically affect how they might choose to sample from a target population, the feasible ways of collecting data, and the types of questionnaires that might have to be used.

Case Questions:

1. What is the decision problem? Is this decision problem discovery- or strategy-oriented?

2. What are some relevant research problems?

3. Discuss in general terms how you would address the Board of Directors concerns. Specifically, who would you obtain information from and how would you access these people?

Case Analysis:

1. What is the decision problem? Is this decision problem discovery- or strategy-oriented?

The basic decision problem concerns the actions that should be taken by the board with respect to revising THI's existing facilities and services. The decision problems cited by students will probably be primarily strategy-oriented. Examples include:

Should they remodel the Drop-In Shelter so it can accommodate more homeless? Should they open another facility to handle the overflow? If another facility is opened, should it have the same operating philosophy and policies as

the Drop-In Shelter, or should other concepts be explored (e.g. operate it more like a hotel and have the guests pay some amount toward their lodging?

Should THI eliminate some services currently provided at the Drop-In Shelter because the guests do not use them or see value in them?

Should it offer other services for which the guests see a need?C-3


Relevant research problems might include (a) developing information that would be helpful to the board in making its decisions, and (b) determining whether a decision criterion has been met. For example:

Investigate guest needs that are not being met. Determine services that are not needed by guests. Examine alternatives that exist to meet guest needs. Determine if at least 80% of respondents believe that an additional service is necessary.

Once research problems are established, a related issue is how to collect the necessary data.

3. Discuss in general terms how you would address the Board of Directors concerns? Specifically, who would you obtain information from and how would you access these people?

While at this stage the students will not have enough knowledge of marketing research methods to develop very sophisticated answers to this question, they should realize they have different groups of people with whom they must be concerned and that these groups will place different demands on the research process. Characteristics of each group and research implications are listed below:

Paid Staff:

The paid staff is known, stable and likely to work regular hours. Therefore, it should be relatively easy to interview them, either all of them or an "appropriate" sample. Given that the list of population elements is readily available, various methods could be devised for drawing the sample of paid staff so that it is representative. Moreover, the paid staff could be expected to be somewhat articulate, suggesting they could be surveyed in person, over the phone or by mail.

Volunteer Staff:

The volunteer staff is likely to be similar to the paid staff, except that the volunteer staff probably has a less stable work schedule. This would make contacting volunteers more problematic. Instead of contacting them at work, it might be more efficient to contact them at home. This would suggest using telephone interviews or self-administered questionnaires, given that personal interviews scheduled at home would be costly.

Guests:

The guests would clearly be the most difficult group to sample, particularly if one were interested in getting a representative sample of them using probability sampling methods. There is likely to be high turnover in who might be considered guests, and some homeless might never come to the shelter at all, either because they are not aware of it or do not like its operating policies and procedures or perhaps its location. Of course, a new facility at some other location operating differently might appeal to them. While this is certainly consistent with the Board of Director's alternatives, it complicates considerably the research.

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Also, considering the target population as all homeless in the Madison area creates some very difficult sampling and administrative problems. How are they to be found? Would they be willing to talk to a stranger who approached them on the streets? Could one get interviewers who would be willing to wander the streets, perhaps at night, looking for people sleeping in building entrances, boxes and so on?

Defining the target population as homeless who visit THI's Drop-In Shelter eliminates some of these problems. Interviewers should certainly be easier to find if they are assured they can do all of their interviewing in the safety of the Drop-In Shelter. The interviews could certainly be completed more quickly since the target group is more concentrated. There would still remain some problems of guest trust of the interviewer which could affect the respondent's willingness to talk candidly to the interviewer. Moreover, the only way this group could be contacted is through personal interviews, since they would neither have mailing addresses or phones at which they could be reached. While self-administered questionnaires work better when they use structured rather than open-ended questions, open ended questions are often much better in eliciting the new ideas for facility and services the board is interested in.

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Case 1.C

SUPERVISORY TRAINING AT THE MANAGEMENT INSTITUTE

Case Perspective:

The Management Institute conducts programs aimed at providing education and training in at least a dozen areas of business and not-for-profit management. The supervisory training area, which designs and conducts continuing education training programs for first-level supervisors, had experienced a decline in enrollments in its various programs over the last few years. The three program directors wanted to know why and were considering sponsoring a marketing research study to investigate the reasons.

This case is a useful introductory case in that it serves as a vehicle for illustrating several issues with respect to conducting a marketing research study. For one thing, it can be used to highlight the differences between decision problems and research problems. It can also be used to highlight the fact that most research designs are compromises in that they cannot be designed optimally to achieve a single research objective but must be designed to achieve multiple research objectives. This often means that one objective must be traded-off against another so that the design reflects an optimal compromise with respect to the various research objectives. The case allows students to take some broad research questions and to translate these questions into specific types of research information that will be needed to answer them. If instructors wish to do so, they can also use the case to illustrate the point that slight changes in the way research questions are posed can have profound consequences with respect to the research strategy that is called for to answer them. In this respect, the case serves as a nice vehicle for illustrating the interrelationships of the steps in the marketing research process.

Case Questions:

1. What is the manager’s decision problem? Is this problem discovery- or strategy-oriented?


3. Which research problem would you recommend pursuing? Why?

4. How would you recommend MI go about addressing this research problem? That is, what data would you collect and how might those data be used to answer the research question posed?

Case Analysis:

1. What is the manager’s decision problem? Is this problem discovery- or strategy-oriented?

Ultimately, the decision problem faced by the program directors at Management Institute is what they can do to halt the enrollment declines and hopefully turn them into enrollment increases (e.g., “How do we increase enrollments?”), which amounts to a strategy-oriented decision problem. However, their ability to do that largely depends upon their being able to isolate the reason

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or reasons for the decline, which suggests that a discover-oriented decision problem (e.g., “Why are enrollments declining?”) is likely appropriate before moving on to strategy-oriented research. If the declines are attributable to some fundamental changes in the external environment in which MI operates, e.g., economic conditions, then the program directors may not be able to do very much to stem the declines. If, however, the declines can be traced to the programs themselves or the way in which they are promoted, then MI may be able to do a great deal to reverse the enrollment trends. The key thus becomes one of identifying and isolating the possible causes.


Operating under the discovery-oriented decision problem noted above, a number of research problems are relevant, including (a) examine the marketing environment (e.g., economic conditions, competition), (b) determine level of awareness among target market, (c) investigate market demand for current program content, and (d) investigate current participant satisfaction. If students frame the decision problem as strategy-oriented, possible research problems include such things as determining which of two promotion campaigns will generate higher levels of awareness, or determining which of two new course proposals is of greater demand among the target market.

3. Which research problem would you recommend pursuing? Why?

It is difficult to know which research problem students might develop and choose to address in this situation. The key is to ensure that the students have justified their choices, preferably on grounds of which research problems will generate the most useful information relative to the stated decision problem.

4. How would you recommend MI go about addressing this research problem? That is, what data would you collect and how might those data be used to answer the research question(s) posed?

When this case is used early in the course, students cannot be expected to have much experience with the details surrounding the various steps in the research process. At the same time, some class discussion regarding how they recommend proceeding is typically interesting and productive. While they may not be able to give detailed answers with respect to how to proceed, students can be forced to make some general strategy recommendations and to explore the implementation implications of the strategies they recommend. Most students, it seems, feel that some kind of survey is in order to assess the perceptions and attitudes of potential attendees toward MI's programs. While this is a useful step for some of the questions, there are less expensive, faster, alternative research strategies for addressing some of the other possible causes.

Consider, for example, the issue of the impact of the economic environment on enrollments. To answer this question it would be useful to know from where MI draws its enrollment for the supervisory programs. Does the enrollment come from a particular sector or sectors of the economy, for example, manufacturing, retail trade, government, or do the programs draw from all sectors? Are there specific types of manufacturers or other institutions within specific sectors that particularly take advantage of MI's programs? This information is needed because different sectors of the economy could be impacted differently by general economic conditions. Fortunately, the information as to what industries are represented by past attendees of the programs is readily available in MI's records because all past attendees filled out short biographical questionnaires at the start of each program. Information like this that is available in internal records provides some of the fastest, least expensive data an institution can collect to answer a research problem. Once the major

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segments served are identified, it becomes a relatively easy matter to check published statistics to determine what has been happening economically within each segment over the past several years. One can even go so far as to plot such things as tax collections or unemployment by sector against enrollment by sector to see if there is a correlation.

Another source of data that should not be overlooked is those that have experience in the continuing education industry for their views as to what is going on generally within the industry. These people could include those on MI's own staff as well as professional writers who follow the industry. It would certainly seem worthwhile to check the trade publications serving the industry for any insights published articles might shed on general trends in continuing education. One 1983 study commissioned by Training Magazine found for example that most people taking continuing education courses were taking them to advance in their jobs. This finding raises the interesting possibility that the content of MI's programs was not perceived as leading to job enhancement. This question bears on the issues raised by the program supervisors as to how the contents of the programs are perceived and in this sense represents no new insights into what is happening. That is not the point though of engaging in these other data collection activities prior to going ahead with a formal survey within some designated target group. The point is rather that these other types of activities like a check of both internal and external secondary data, unstructured interviews with knowledgeable people within the profession, and the identification and analysis of the operations of institutions doing extremely well and those doing extremely poorly recently with respect to their continuing education activities can be quite provocative in making sure all of the research questions that need to be addressed get asked. The danger in going ahead without these other activities is that the most important driving forces behind the enrollment declines may not get investigated.

Suppose the preliminary research suggested that one of the main thrusts of the more formal research effort should be an assessment of people's attitudes toward MI's programs and their decision-making processes. Specifically, suppose the research questions that were posed were: Determine factors that prompt supervisors to seek training; determine factors that motivate supervisors to come to the Management Institute for that training; investigate how an individual typically learns of a supervisory training program; and identify the procedures that a supervisor must follow to get permission to attend a training program.

One of the first issues that naturally arises when addressing these issues is from whom should this information be sought. Past attendees of Management Institute programs? Those that attend regularly? Those that used to attend but have not in the recent past? Those who have never attended? Each of these different specifications of the target group has of course some profound implications with respect to the whole conduct of the research, and students should be pushed to articulate what some of the main differences might be. The most dramatic difference in research strategy would be triggered by specifying that the study should be done among those who have never attended MI programs before versus saying that past attendees would be the relevant group of respondents. As long as past attendees are the target population, MI has a number of things going for it when conducting the research. For one thing, they would have a sampling frame from which to draw the list of potential respondents. When contacted, respondents might be more likely to comply with the request to participate in the study, particularly if they enjoyed their course experience and had favorable attitudes toward MI. Given that such people have some idea of the purpose, content, and structure of such programs, it might be relatively easy to develop structured questionnaires to get at their decision processes leading to attend and their attitudes when attending such programs. This would of course make tabulation of the results easy. The use of a relatively up to date mailing list and structured questionnaires would probably allow the data to be collected by mail questionnaires.

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The situation is very different though if the target population is specified to be those who have never attended any MI programs. This raises a whole host of questions regarding how those who are to be contacted are to be determined. What industries are to be sampled? What geographical areas? Even after these determinations are made, there is the issue of how individual respondents within these industries are to be determined. Will the sample consist of firms and the questionnaires be sent to anyone who will reply in those firms? Can a mail questionnaire even be used if those receiving the questionnaire do not have the necessary experience with continuing education programs to answer the questions being asked? Will they be inclined to answer without some added inducement? The fundamental point is, slight changes in the purposes of the research can dramatically affect the way the research is carried out, a point that can be nicely illustrated by forcing students to trace through the research design strategies for some of the research problems they suggest would be needed to help answer with the decision problem of how to reverse the enrollment declines.

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Case 1.D

WISCONSIN POWER & LIGHT (A)

Case Perspective:

Over the past several years, the management of Wisconsin Power & Light (WP&L) has been shifting its strategic focus from a product-driven to a market-driven orientation. As a result, WP&L has instituted Demand-Side Management Programs as part of their attempt to be more sensitive to the demands of their market. With the nation's increasing interest in environmental issues, WP&L developed a series of customer-oriented programs intended to foster the conservation of energy. One of these programs is the Home Energy Improvement Loan (HEIL) program, which was designed to make low interest rate financing available to residential gas and electric WP&L customers for conservation and weatherization measures. The HEIL program enlists neighborhood financial institutions to provide the loans to approved customers and is mediated by WP&L account representatives. All previous market research concerning these programs has focused primarily on issues from the customers' perspective. WP&L now wants to examine the HEIL program as perceived by the participating lenders, with the specific intent of identifying areas for improvement.

This case is useful for illustrating the instrumental role that a clearly communicated research request plays during the initial stages of a research effort. Specifically, the case can be used to demonstrate the importance of obtaining clear and unambiguous information at the onset of a research study and how the information in the research request guides the development of the decision problem, design and the logistics of execution. The goal of the case is to stress to the student that the implementation of an appropriate and efficient research design which addresses the true decision problem is contingent upon having a sufficient background about the issues to be addressed.

Case Questions:

1. Prepare a research request agreement that will address WP&L's study objectives.

Case Analysis:

1. Prepare a research request agreement that will address WP&L's study objectives.

The purpose of the research request agreement is to ensure that the true decision problem will be addressed by the research. A comprehensive understanding of the research problems and objectives is necessary to the research process as the research design and analysis flow logically from the problem. Consequently, it is necessary to spend adequate time in gaining clear insight into the purpose of the research and what questions are to be addressed, otherwise, the end results may be worthless. A logical way to proceed with this crucial initial step is for the researcher to gather preliminary background information from the decision maker, draft a statement of the research problem and then submit the statement back to the requester to ensure the integrity of communication between the two parties. The research request agreement serves as the initial communication vehicle between the decision maker and the researcher, and is different from a research proposal in that the former focuses on the purpose of the research while the latter concentrates on the techniques for conducting the research.

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The information presented in the WP&L case is not atypical of the type of information that would be communicated to the researcher during an initial project meeting or telephone call. The task for the researcher thus becomes one of critical inference; that is, to use the information provided to lay out the objectives of the research and a basic plan in which to address them. The research request serves as a written documentation of the inferences drawn from the initial communication between the decision maker and the researcher and should contain elements related to the following issues:

1) What events led to a need for research?

The research request should outline the background of the issues under investigation and any events that necessitated a change or decision to act. For WP&L, no information is provided as to specific problems with the HEIL program that may have led to a need for research. Rather, the current study evolved logically from a series of research projects aimed at optimizing the services and benefits provided through the HEIL program. All prior research focused on better tailoring the program to address the needs of the end users (homeowners). Having oriented the HEIL program in the best interests of the loan recipients, WP&L is now focusing its efforts on the distributors of its service, namely the participating banks and lending institutions.

2) What is the manager’s decision problem?

Given the information provided, it appears that WP&L is continuing to implement a planned change, although the last three or four stated goals of the research hint that perhaps the program has not been uniformly accepted by participating lenders. This represents an opportune time for the researchers to work with managers to identify the real decision problem. It may be that the stated purposes represent the whole story; on the other hand, it may be that the program has not been as successful as WP&L would have liked (an unplanned change) and managers simply haven’t told the researchers everything that they know or suspect. It is also possible that the managers themselves have not recognized an underlying problem. In any case, it is the researcher’s duty to carefully examine the situation in an attempt to get at the real problem, perhaps using the ALCA model (i.e., ask, listen, clarify, analyze).

Because of the exploratory nature of the WP&L study, no specific decision-actions are clearly delineated in the given information. However, based on WP&L's primary goal for the project, to identify ways to improve the HEIL program from the lender's standpoint, one can infer that the action under contemplation involves a potential change or series of changes to the administration or features of the HEIL program. Examining the specific sub-issues to be addressed in the project, it is possible to deduce some of the actions that WP&L may consider. These actions might include methods to motivate lenders to promote the program, a change in administration that would facilitate information flow between WP&L and participating lenders, lowering the default rate of the loans, or changing the features of the loan program to be more directly beneficial to the lending institutions. In this situation, the researcher might frame the decision problem as strategy-oriented (e.g., “How should we change the program to make it better?) or as discovery-oriented (e.g., “What is the status of the HEIL program among lenders?”). Given that no decision criteria are provided and the nature of the specific information goals suggested by managers, the preferred framing is probably one of discovery.

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3) What are the research problems?

Compiling a set of research problems to be addressed in the study is crucial to the development and design of an efficient research project. The stated research problems in the research request agreement can be derived from the information received from the decision maker (including information uncovered via further questioning on the part of the researcher). The research problems should flow logically from the stated manager’s decision problem. The following research problems might be appropriate for the discovery-oriented decision problem “What is the status of the HEIL program among lenders?”

Determine the motivating factors leading to participation in the HEIL program.

Investigate current levels of bank promotion of the HEIL program.

Examine current levels of satisfaction among HEIL lenders, particularly with respect to administrative and program features.

Determine current methods of credit analysis.

Examine default rates for different categories of HEIL loans.

Determine lender commitment to the HEIL program.

Determine reasons for loan inactivity at some “participating” lending institutions.

In addition to the questions listed above, the student might develop other questions of interest. Any additional question, however, should relate directly to the decision problem stated by the student.

4) How will each piece of information be used to act on the decision problem?

This part of the research request should provide justification for each issue to be investigated in light of the decision problem. The goal here is to supply logical reasons for each piece of the research so that each question makes sense and so that unnecessary issues are eliminated prior to the execution of the project. In this case, the information to be gathered with each question should be related to the issue of identifying areas of the HEIL program which, in lenders' opinion, could stand some improvement.

5) Who is to be interviewed? From where are the data to be obtained?

The goal here is to make sure that the sample, in terms of its composition and scope, is clear to the researcher. For the WP&L project, it is obvious from the information given that the sample is to be comprised of participating lenders. The research request agreement should indicate this fact. In this case, the researcher may wish to consult further with WP&L regarding the specific analyses to be conducted with the data, so that the researcher can design an appropriate sample plan.

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6) What are the logistics of the research project?

The decision maker should clearly communicate the budget and time frame for the project. The researcher should include these in the statement back to the decision maker to ensure that both parties understand the constraints of the research project. In the WP&L case, no information is given pertaining the logistic requirements of the study. The student should include a comment to the effect that the research design and techniques chosen will be contingent on the cost and timing of the study, which needs to be provided by a WP&L representative.

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Case 1.E

HAND-TO-HAND AGAINST PALM (A)

Case Perspective:

This case is about an electronics manufacturer of a handheld personal digital assistant (pda) at least temporarily called OML (for, “Organize My Life”) to compete directly with Palm Pilot in its booming industry. The OML manager is dealing with classic product design issues—what features should the OML line offer, and to whom should their product(s) be targeted.

This case is useful for illustrating the relationship between marketing issues (e.g., product design, segmentation and targeting) and marketing research issues. For example, if the OML is to be targeted primarily to a student segment, the target would dictate the population to be sampled and perhaps even the venue of data collection (college or high school campuses, not shopping malls).

Case Questions:

1. What is the decision problem? State whether the decision problem is discovery- or strategy-oriented.

2. What are some relevant research problems for the decision problem you have identified?

3. How would you recommend the OML marketing manager address the research problem(s)? That is, what data would you collect and how might those data be used to answer the research question(s) posed?

Case Analysis:

1. What is the decision problem? State whether the decision problem is discovery or strategy-oriented.

The basic decision problem might be stated as “How should we take the OML to market?” Students might further break the decision problem down into two component questions—one about the product itself and the other about the target customer. If the company had done its preliminary research into target market demographics and preferences and was now ready to make decisions about features to be offered, prices, etc., strategy-oriented research would be necessary. Under the circumstances, however, it appears that significant preliminary, or discovery-oriented, research remains.

Regarding the product: the OML management team knows there are numerous combinations of features that the handheld assistant device could have, and they want to know what features would combine to be the most attractive. On top of the standard features like calendars, notepads, etc., they are considering adding features from among these: internet access, wireless internet access, voice recognition capabilities, stereo quality sound systems for downloading music, video and digital photographic abilities, and global positioning mapping (“u r here”) software.

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Regarding the target customer: OML believes it wants to target its product to university students. These potential users have less income than the typical Palm Pilot user (who is male, in his early 40s, college-educated, white-collar professional). The fact that their target customer has less money raises two issues: 1) is there a sensitive price point beyond which students would not purchase the OML device? 2) while the list of features mentioned previously is impressive, they might be prohibitive to the OML manufacturer if the device is priced to be attractive to students. Part of the answer to this issue will be internal—R&D can speak to how much “wireless internet access” “costs,” for example. However, the research would be important in determining whether any of these features are “must-haves” to the target customers, which would then modify the pricing accordingly.

2. What are relevant research problems for the decision problem you have identified?

The research problems can be divided into two general categories. First, regarding the product, the research needs to determine what the students’ priorities are in terms of the functions and features they would like to see bundled into the pda. Another important research problem is to investigate target market pricing issues, and the inherent trade-offs of low vs. high price, with few vs. many features.

Second, issues regarding the target customer are important. Research might be conducted to investigate the benefits sought by OML targeted undergraduates “in general” vs. engineering and computer science students vs. MBA graduate students. Researchers might also investigate demand for the new product among different segments of the overall student market. A market analysis could begin with a secondary data search on proportions of students across say, 50 public and private universities to determine whether there would be a substantial enough-sized student body to focus just on engineers, say, or would the OML have to be desirable generically to the entire student body to be profitable. The question of whether OML could produce three product lines (i.e., general, engineers, MBAs) is perhaps more of an internal cost-based decision, and if the OML managers are not prepared to answer it, they need to include all three segments in their sampling schema on campuses.

3. How would you recommend the OML marketing manager address the research problem(s)? That is, what data would you collect and how might those data be used to answer the research question(s) posed?

Regarding the OML product and its features, the main concern will be to design a study wherein the researchers can determine the trade-offs the student customers are willing to make (e.g., a “conjoint,” when that comes up later in the quarter, would be ideal). This issue is critical because in new product design, it is typical for a customer to say, “I want feature A, B, AND C” and not be inclined to give up anything (and all for a low price of course!). If a survey is used, rankings may be fruitful, because inherently, ranks force some attributes to appear as more important than others. Alternatively, a respondent can be asked to “assign 100 points” to a list of features such that the number of points assigned represents the desirability of that feature, etc. A third alternative is to provide a simple checklist of features from which the respondent chooses, if the respondent is restricted to be able to check only a subset (e.g., pick 5 of the 15 listed attributes).

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It doesn’t seem that the OML group knows enough about its product or its potential customer base to rule out a generic model, vs. one targeted to engineers or MBAs. Thus, the sampling plan would need to include some selection from each group (“strata” when addressed later in the chapters on sampling). There may be a need to further assure inclusion of students representing private and public universities, given the centrality of the pricing problem. They may wish to sample “general undergrads,” “engineers and computer scientists,” and “MBAs” in rough proportion to their presence on campuses.

Case 1.F: TELECARD.COM (A)

Case Perspective:

Teresa Morgan and two partners had started Telecard.com, a new internet venture selling prepaid long distance telephone services about a year ago, but so far the company was doing poorly. The partners are trying to come up with a strategy that would allow them to keep the company in business.

This case is useful for demonstrating problem definition when the problem is clear (lack of revenues) but the causes of the problem are unknown, leading to a wide variety of potential research problems that might be addressed. Telecard.com (B) provides detail about the research problems that actually were addressed in this case, and emphasizes sampling and data collection issues.

Case Questions:

1. State the manager’s decision problem. Is this decision problem the result of planned or unplanned change? Is it discovery- or strategy-oriented? Under the circumstances, which do you believe is more appropriate: a discovery or a strategy orientation? Why?

2. State five (5) possible research problems related to the decision problem. How would you decide which research problem(s) to pursue?

Case Analysis:

1. State the manager’s decision problem. Is this decision problem the result of planned or unplanned change? Is it discovery- or strategy-oriented? Under the circumstances, which do you believe is more appropriate: a discovery or a strategy orientation? Why?

The key issue in this case is lack of revenue, which might be due to any number of things ranging from lack of interest or need on the part of consumers, poor product design, ineffective communication, etc. Although students may phrase the decision problem in different ways, an acceptable decision problem will be something along these lines: “Why haven’t sales increased?” The decision problem is the result of unplanned change.

Sometimes it is difficult for students to grasp the difference between discovery-oriented and strategy-oriented decision problems. In this case, however, the problem is clearly discovery in nature, involving issues such as “what is going on?”, “why haven’t we been able to sell the service more effectively?” and so on. Some students may argue that “how

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can we save the business?” is a strategy-oriented decision problem, but there is no evidence in the case to suggest that the partners have any idea what alternate strategies might need testing. Given that that the partners seem to know very little at present about why the service isn’t selling, it appears that a discovery orientation is much more appropriate.

Suppose that the partners had decided on a target market and were attempting to set the appropriate prices for this market or fine tune a promotional campaign. In this situation, a strategic orientation would be appropriate.


There are any number of potential research problems associated with the general decision problem “Why haven’t sales increased?” The key is to make sure that students understand that the alternative research problems should (a) relate back to the decision problem in some fashion and (b) be written as a statement of what a researcher might do. For example, “investigate current customer satisfaction” is one possible research problem. Others might include “determine target market perceptions of internet transaction security;” “determine target market awareness of Telecard.com;” and “investigate purchase patterns of current customers via internal records.”

The choice of research problem(s) to address is often a critical one, especially in cases like this where the decision problem is essentially wide open. Ideally, one would have unlimited resources and could pursue all research problems that might shed any light at all upon the decision problem. Because this is unrealistic, researchers must weigh the likely value of information obtained against the costs of obtaining it. Managerial input is important, particularly for determining the likely value of information obtained from various research problems. Ultimately, researchers must select the one or two research problems that seem to give the most valuable information given the available research budget and time constraints.

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Case 1.A Big Brothers of Fairfax CountyBig Brothers of America is a social service program designed to meet the needs of boys ages six to 18 from single-parent homes. Most of the boys served by the program live with their mothers and rarely see or hear from their fathers. The purpose of the program is to give these boys the chance to establish a friendship with an interested adult male. Big Brothers of America was founded on the belief that association with a responsible adult can help program participants become more responsible citizens and better adjusted young men.The program was started in Cincinnati in 1903. Two years later, the organization was granted its first charter in New York State through the efforts of Mrs. Cornelius Vanderbilt. By the end of World War II, there were 30 Big Brothers agencies. Today there are 300 agencies across the United States, and more than 120,000 boys are matched with Big Brothers.The Fairfax County chapter of Big Brothers of America was founded in Fairfax in 1966. In 1971, United Way of Fairfax County accepted the program as part of its umbrella organization and now provides about 85 percent of its funding. The remaining 15 percent is raised by the local Big Brothers agency.Information about the Big Brothers program in Fairfax County reaches the public primarily through newspapers (feature stories and classified advertisements), radio, public service announcements, posters (on buses and in windows of local establishments), and word-of-mouth advertising. The need for volunteers is a key message emanating from these sources. The agency phone number is always included so that people wanting to know more about the program can call for information. Those calling in are given basic information over the telephone and are invited to attend one of the monthly orientation sessions organized by the Big Brothers program staff. At these meetings, men get the chance to talk to other volunteers and to find out what will be expected of them should they decide to join the program. At the end of the session, prospective volunteers are asked to complete two forms. One is an application form and the other is a questionnaire in which the person is asked to describe the type of boy he would prefer to be matched with, as well as his own interests.The files on potential Little Brothers are then reviewed in an attempt to match boys with the volunteers. A match is made only if both partners agree. The agency stays in close contact with the pair and monitors its progress. The three counselors for the Big Brothers program serve as resources for the volunteer.The majority of the inquiry calls received by the Fairfax County agency are from women who are interested in becoming Big Sisters or from people desiring information on the Couples Program. Both programs are similar to the Big Brothers program and are administered by it. In fact, of 55 calls concerning a recent orientation meeting, only five were from males. Only three of the five callers actually attended the meeting, a typical response.Although the informational campaigns and personal appeals thus seem to have some effect, the results were also generally disappointing and did little to alleviate the shortage of volunteer Big Brothers. There are currently 250 boys waiting to be matched with Big Brothers, and the shortage grows weekly.Big Brothers of Fairfax County believed that a lack of awareness and accurate knowledge could be the cause of the shortage of volunteers. Are there men who would volunteer if only they were made aware of the program and its needs? Or is the difficulty a negative program image? Do people think of Little Brothers as problem children, boys who have been in trouble with the law or who have severe behavioral problems? Or could there be a misconception of the type of man who would make a good Big Brother? Do people have stereotypes with respect to the volunteers—for example, that the typical volunteer is a young, single, professional male?

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Questions1. What are some possible marketing decision problems? State whether the decision problems are discovery- or strategy-oriented.2. What are some relevant marketing research problems for the decision problems you have identified?3. What types of information would be useful to answer these questions?4. How would you go about securing this information?

Case 1.B Transitional Housing, Inc. (A)1

Transitional Housing, Inc. (THI), is a local nonprofit organization located in Madison, Wisconsin. THI provides assistance to homeless and very low income individuals and families in finding emergency shelter, food, employment, transitional housing, and affordable apartment housing. These services are provided through four basic THI programs (see exhibit below for details):1. The Drop-In Shelter: An emergency drop-in shelter for men located at Grace Episcopal Church.2. The Hospitality House: A day shelter for homeless and very low income men and women.3. The Transitional Housing Program: Provides transitional living arrangements for families and single men for six months or more depending on the needs of the individual/family and the unit.4. The Housing Opportunity Program: Helps families in obtaining a lease.As part of its planning, the board of directors of THI was interested in determining ways to improve the organization’s services. Their original thought was to conduct a survey of the organization’s paid staff, volunteers, and guests (the homeless staying at THI or using its facilities or services), to determine which programs of THI they found particularly useful, which should be revised, and what other programs or services might be of more assistance to guests.However, the analysis of THI’s internal statistics and other published data indicated the need for THI to narrow its focus. Specifically, internal information indicated the number of agencies serving the male homeless population was decreasing, and the number of homeless families was increasing. Moreover, THI was currently the only Madison shelter that served the male homeless population, and this community appeared to be underserved. In fact, the number of homeless men staying at THI’s Drop-In Shelter had increased 89 percent, from 607 three years ago to 1,146 the past year. This was partly due to the closing of other Madison male shelters in the last three years. Finally, the THI shelter was filled beyond its capacity of 66 men per night. During the winter, there were frequently more than 90 men staying at the Drop-In Shelter on any given night, with many of them sleeping on the hallway floor.Given this information, the board of directors decided to use the organization’s limited resources to focus first on the Drop-In Shelter. More specifically, the board asked for an evaluation of THI’s current facilities and the services for the homeless as well as a determination of what future services and facilities it should try to provide.

Questions1. What is the decision problem? Is this decision problem discovery- or strategy-oriented?2. What are some relevant research problems?3. Discuss in general terms how you would address the board of directors’ concerns. Specifically, who would you obtain information from and how would you access these people?

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1The contributions of Monika Wingate to the development of this case are gratefully acknowledged.

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EXHIBIT 1.B-1Programs Offered by Transitional Housing, Inc.

Drop-In ShelterLocated at the Grace Episcopal Church in the downtown area, the Drop-In Shelter (DIS) is a 46-person-capacity emergency drop-in shelter for men. Overflow capacity for 20 additional people is provided at St. John’s Lutheran Church from October through April. The basic services provided at DIS are shelter, food, personal grooming supplies, and counseling. Medical and legal services are also provided once a week through volunteers. The shelter is open to all men who are not incapacitated by drugs or alcohol and agree to abide by the rules of DIS. Operating hours are from 8:00 P.M. to 8:00 A.M. seven days per week, 365 days per year. Both dinner and breakfast are provided for DIS guests through the support of approximately 1,200 volunteers (churches, community groups, and other interested individuals) who offer their help to DIS.

Hospitality HouseHospitality House (HH), located on the near west side, is a day shelter and resource center for homeless and very low income men, women, and children. HH is generally regarded as a warm, safe place for the homeless to congregate, where services are provided but are not mandatory. The basic services provided at HH are: assistance with finding employment and housing, help for obtaining benefits from other social service agencies, and mental health services. Telephones are available for the guests’ use, and guests may also use HH as a mailing address while they are staying at DIS.

Transitional Housing ProgramThe Transitional Housing Program (THP) operates 15 traditional housing sites throughout Dane County. There are 20 family units and 39 single units. Residents of THP may stay in the units for a period of six months to “permanent,” depending on the unit and the needs of the individual or family. Services provided to the residents of the THP include: money management, employment counseling, case management, and referrals to agencies involved in providing services needed by the individual or family. DIS is often the first step in the process of single men involved in THP.

Housing Opportunity ProgramThe Housing Opportunity Program (HOP) is a service provided by THI that is designed to aid families in obtaining a lease in their own name and staying in the site on a permanent basis. THI leases apartments from area landlords and subleases the units to homeless families, whoa are referred to THI through area shelters. During this time, THI assumes responsibility for any unpaid rent or repairs that may accrue. Maintenance checks are performed monthly and outreach services are provided to families involved in the program.

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Case 1.C Supervisory Training at the Management InstituteUniversity of Wisconsin–Extension is the outreach campus of the University of Wisconsin system. Its mission is to extend high-quality education to people who are not necessarily “college students” in the usual sense. The Management Institute is one of the departments within UW–Extension. It conducts programs aimed at providing education and training in at least a dozen areas of business and not-for-profit management.The supervisory training area within the Management Institute designs and conducts continuing education training programs for first-level supervisors. The training programs are designed to improve a trainee’s managerial, communication, decision-making, and human-relation skills. They consequently cover a broad range of topics.A continuing decline in enrollments in the various programs during the past several years had become a problem of increasing concern to the three supervisory program directors. They were at a loss to explain the decline, although informal discussions among the supervisors raised a number of questions to which they did not know the answers. Have people’s reasons for attending supervisory training programs changed? What are their reasons for attending them? Was the decline caused by economic factors? Was it because of increased competition among continuing education providers? Was it due to the content or structure of MI’s programs themselves? Was it because of the way the programs were structured or promoted? Were the programs targeted at the right level of supervisor?Typically, the major promotion for any program involved mailed brochures that described the content and structure of the course. The mailing list for the brochures was all past attendees of any supervisory training program conducted by the Management Institute.

Questions1. What is the manager’s decision problem? Is this problem discovery- or strategy-oriented?2. What are some relevant research problems?3. Which research problem would you recommend pursuing? Why?4. How would you recommend MI go about addressing this research problem? That is, what data would you collect and how might those data be used to answer the research question posed?

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Case 1.D Wisconsin Power & Light (A)1

Recent changes in the utility industry have led to a more deregulated and competitive environment. In response, Wisconsin Power & Light (WP&L) has been shifting its focus from that of a product-driven company to one of a market- and information-driven company. Management has increasingly relied on information from marketing studies and has been incorporating the external data in their decision-making processes. WP&L’s espousal of a market-sensitive mentality has helped to shape the company’s overall business strategies. One current area of concern for WP&L involves environmental issues, so much so that one of the company’s goals is “to be a responsible corporate citizen, promoting the social, economic, and environmental well-being of the communities that it serves.”WP&L, in an effort to realize its environmental goals, developed several programs for its residential, commercial, and industrial customers to foster the conservation of energy. The programs, which were classified under the BuySmart umbrella of WP&L’s Demand-Side Management Programs, consisted of such specific programs as Appliance Rebates, Energy Analysis, Weatherization Help, and the Home Energy Improvement Loan (HEIL) program. All previous marketing research and information gathering focused primarily on issues from the customer’s perspective, such as an evaluation of net energy savings, an estimation of the number of individuals who would have undertaken the conservation actions even if there was no program in place, and an evaluation of customer attitudes and opinions concerning the design, implementation, features, and delivery of the residential programs. Having examined the consumer perspective, WP&L’s current goal is to focus on obtaining information from other participants in the programs, namely employees and lenders.The next task for the management of WP&L to undertake is a study of the Home Energy Improvement Loan (HEIL) program of the BuySmart umbrella. The HEIL program was designed to make low-interest-rate financing available to residential gas and electric WP&L customers for conservation and weatherization measures. The low-interest guaranteed loans are delivered through WP&L account representatives in conjunction with participating financial institutions and trade allies. The procedures for obtaining a loan begin with an energy “audit” of the interested customer’s residence to determine the appropriate conservation measures. Once the customer decides on which measures to have installed, the WP&L representative assists in arranging the low-interest-rate financing through one of the participating local banking institutions. At the completion of the projects, WP&L representatives conduct an inspection of the work by checking a random sample of participants. Conservation measures eligible under the HEIL program include the installation of natural gas furnaces/boilers, automatic vent dampers, intermittent ignition devices, heat pumps, and heat pump water heaters. Eligible structural improvements include the addition of attic/wall/basement insulation, storm windows and doors, sillbox insulation, window weather-stripping, and caulking.

PurposeThe primary goal of the current study is to identify ways of improving the HEIL program from the lenders’ point of view. Specifically, the following issues need to be addressed:• Identify the lenders’ motivation for participating in the program.• Determine how lenders get their information regarding various changes/updates in the program.• Identify how lenders promote the program.• Assess the current programs with respect to administrative and program features.• Determine the type of credit analysis conducted by the lenders.• Identify ways of minimizing the default rate from the lenders’ point of view.• Identify lenders’ opinions of the overall program.• Assess the lenders’ commitment to the program.

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• Identify if the reason for loan inactivity in some lending institutions is due to lack of a customer base.

Question1. Prepare a research request agreement that will address WP&L’s study objectives.

1The contributions of Kavita Maini and Paul Metz to the development of this case are gratefully acknowledged as is the permission of Wisconsin Power & Light to use the material included.

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Case 1.E Hand-to-Hand Against Palm (A)An electronics and personal computing firm has been watching closely the success of the Palm Pilot and seeks to introduce a competitive device, beta-named “Organize My Life!” or OML for short. The OML marketing manager has gathered some intelligence on the Palm Inc. sales and believes that, for all its success, some potential markets are being underserved.Handheld personal digital assistants (PDAs) were introduced unsuccessfully at first by Apple in 1993. Some analysts argue that the Newton, Apple’s market offering, was not clearly positioned to the consumers; others argue that they were simply ahead of their time. 3Com’s Palm Computing focused the PDA, limiting its functionality to calendars and appointments, contact directory information, and to-do lists, so as to convey its technological benefits more clearly to the potential user. In only five years, Palm achieved more than two-thirds of the global market to support this claim.1 Over 5.5 million devices have been sold, and sales continue to show strong growth (sales are expected to reach 13 million in the next two years).Competitors offer Internet access, including wireless variants, but the OML group has data that indicate only 17 percent of PDA users would pay extra for this feature—these users already have PC Internet access and view the PDA’s access version as redundant, and worse, likely to be slow. OML is considering conducting research to investigate whether other features, like voice recognition capabilities, stereo quality sound systems for downloading music, video and digital photographic abilities, and global positioning mapping (“u r here”) software would be valued.In addition to seeking data on features, OML is considering the attractiveness of this technology to another segment. Its data indicate the typical Palm Pilot user is a male, in his early 40s, college-educated, and a white-collar professional with a relatively high income. OML is interested in serving the university student market. An important concern is that the typical student will have fewer discretionary funds than the current PDA purchaser profile. Thus, OML marketing discussions revolve around questions like these: What is the price point beyond which students would be less inclined to purchase this device? If the device were priced at, say, $299 or less, which features would be prohibitive to continue to offer? What are the students’ priorities in terms of the functions and features they would like to see bundled into the PDA? Would the benefits sought depend on whether this device were targeted to undergraduates “in general” compared with engineering and computer science students and compared with MBA graduate students? How do we choose the features to offer and the segments to target?Questions1. What is the decision problem?2. What is (are) the research problem(s)?3. What recommendations would you make to the OML marketing manager to address the research problem(s)? That is, what data would you collect and how might those data be used to answer the research question(s) posed?

1See David Rynecki, “Is Palm’s IPO Really the One to Catch?” Fortune (February 2, 2000), pp. 213-214.

Case 1.F Telecard.com (A)Teresa Morgan was having a bad day. One year ago, she and two other partners started Telecard.com, a new Internet venture selling prepaid long-distance telephone services. So far, the company had yet to show much increase in revenues, much less turn a profit. Worse yet, the venture’s start-up capital—money Teresa and her partners had scraped together from savings and what they could borrow from friends and family—was all but gone. She figured that if she and her partners continued to draw no salaries, the company could probably hold out another three months at most. Prospects for additional cash inflows were almost nonexistant because of their poor operating results from the first 12 months. So, instead of

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celebrating the company’s one-year anniversary, Teresa was trying desperately to devise a new plan for the company.

The Company and Its ServicesTelecard.com was the brainchild of three close friends who worked together at a large advertising agency located just outside Chicago. Teresa Morgan was an account representative who had been with the agency for about eight years. Her friend Steve Morrison was director of the agency’s computing and information services department and had joined the agency two years ago after working with another ad agency for several years. Maria Carlotti managed the agency’s media scheduling department; Teresa had known Maria since college. The friends regularly ate lunch together and sometimes socialized on weekends with each other’s families.

One day at lunch, Teresa, Steve, and Maria were talking about the Internet and the way it had changed business practices for several of their clients. During the same lunch, Maria complained about having to drive to a nearby shopping center on a break to purchase a prepaid long-distance calling card to use for personal business while at work. As the conversation continued, Steve pointed out that the plastic calling card wasn’t really necessary to use prepaid long distance; only the numbers on the card mattered. And if the card itself wasn’t needed, then distribution of the service would not be limited to retail store locations. Thus, the basic idea of Telecard.com was born: The venture would purchase blocks of long-distance telephone service from telecommunications companies and resell it over the Internet in the form of prepaid long distance. Within three months, the new partners had gathered start-up capital, designed an attractive and userfriendly Web page and placed the service online. Because of the uncertainty of the new venture, all three partners kept their jobs at the agency and spent most of their “free” time after work and on weekends working on Telecard.com.

Compared to traditional forms of prepaid long- distance, the partners believed that Telecard.com was amazingly simple. A customer accesses the Telecard.com Web site and chooses (a) the number of prepaid minutes they want to purchase, and (b) the pricing plan that best fits their calling needs (see below). Using a secure payment system, the customer then provides a credit card number and an e-mail address. Within minutes, the purchase is verified and an access number is mailed electronically to the customer. The prepaid long distance is then used exactly like any other type of prepaid long-distance service, except that no tangible card is ever produced. The elimination of the plastic card greatly reduces the cost of the service, and these savings are passed on to the customer in the form of lower prices.

Three different calling plans are available to meet different calling needs. The first plan offers long distance at $0.025 per minute with a $0.90 per call surcharge and is ideal for calls over 10 minutes in length. The second plan is available at $0.039 per minute and a $0.20 per call surcharge. The third plan offers a $0.089 per minute rate with no surcharge; this plan is best for shorter calls or when there is a strong likelihood of getting an answering machine.

Target Market and PromotionInitially, Telecard.com offered its services to anyone who logged into its Web site. That is, in their haste to get the service online, the partners paid little attention to identifying potential market segments, although they implicitly assumed that the customers would be business professionals much like themselves who needed a convenient way to make personal long-distance calls when away from home (e.g., at the office; while traveling). Working with an extremely limited promotion budget, the partners had left much of the promotion of the service to word-of-mouth, although they had managed to get a little local publicity through a feature story in the business section of one of the daily newspapers.

The ProblemSo far, results have been much worse than Teresa had hoped. During the first 11 months of operation the company had total revenues of $4,110, based on sales of 39,918 minutes of prepaid long distance across 1,438 customers. During the same time period, the costs (including Internet access fees, development costs, cost of services sold, and depreciation of hardware) amounted to $18,768. The company Web site had been accessed (i.e., “hit”) 3,793 times. From some of the comments and questions that customers left on the “comments” section of the Web site, it was clear that at least a few customers really liked the service and were accessing the site multiple times. The partners recognized that almost all new ventures experience lean times in the beginning, but they didn’t know how much longer they could hold out.

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The more Teresa thought about the situation, the more confused she became about what to do next. One of her friends in the research department of the ad agency suggested conducting marketing research and offered to help, but Teresa wasn’t sure that it would do any good.

Questions1. State the manager’s decision problem. Is this decision problem the result of planned or

unplanned change? Is it discovery or strategy oriented? Under the circumstances, which do you believe is more appropriate: a discovery or a strategy orientation? Why?


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Case 1 – Barbecue Blues Sauce Company


Case Perspective:

Faced with no growth in sales over the last couple of years for its original style of barbecue sauce, Barbecue Blues Sauce Company has developed a second sauce recipe as a possible line extension. A marketing research study was commissioned to assess consumer reactions to the new sauce as well as two alternative sub-brands that could be used in a family branding strategy. An Executive Summary of the research findings is presented at the end of the case. Students are asked to utilize the data to recommend whether or not the company should offer the extension, and if it is offered, to recommend which of the two sub-brands should be implemented.

Although it could be used at other times early in the term, this case was developed and has been used extensively as a first day opening exercise. When used on the first day, the case sets the stage for the remainder of the term by getting students to begin to recognize:

(1) the vital ways research informs marketing decision making,(2) the extreme importance of being able to evaluate the quality of research studies and

the corresponding findings,(3) how little they currently know about marketing research, and(4) the value this course will bring to them as future marketing professionals.

Prior to this case becoming part of a copyright protected textbook, students were not required to read the case prior to coming to class, so they would learn the details and answer the questions within the context of an in-class group. Now, however, it will be necessary to notify students that they should bring their textbooks to the first day of class and/or read the case prior to coming. It is still recommended that you have students discuss their responses to the questions with other students before presenting their recommendations to the class. This helps set the stage for the group work that is prevalent throughout the term. But, they also really do share interesting ways to interpret the data with one another.

Initially, the class discussion will focus on the case questions using the information provided in the case. Unlike most cases, however, additional information will be provided which will lead to a discussion that is intended to be the primary learning experience. This new information centers on the company’s market share performance following the implementation of its decision. The purpose of this will be discussed below.

Case Questions:

1. Based on the information provided in the Executive Summary below, would you recommend the new formulation of barbecue sauce be marketed, in addition to the original sauce, through retail grocery and specialty foods markets? Why or why not?

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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2. If you are recommending marketing the new barbecue sauce, use information from the Executive Summary to develop a strong justification for which of the two sub-brand names, "Chicago Style" or "Spicy Blend," should be employed.

The Executive Summary referenced in both questions is reproduced below.

Executive Summary

Marketing Problem

To determine whether the new barbecue sauce formula should be marketed, in addition to the original Barbecue Blues sauce, through retail grocery and specialty stores; and if so, which of the following two brand names should be used: Barbecue Blues - Chicago Style Sauce or Barbecue Blues - Spicy Blend Sauce?

Summary of Findings

Of the 728 study participants:

Approximately 83% claimed to use barbecue sauce at home (i.e., 56% use it frequently and 27% use it occasionally). Of these 604 barbecue sauce users…

Approximately 41% use barbecue sauce exclusively when cooking outdoors, 24% use barbecue sauce exclusively when cooking indoors, and 35% use barbecue sauce for both indoor and outdoor cooking.

The average number of times in the last month barbecue sauce was used while cooking at home was 2.67.

Approximately 52% reacted favorably to the new barbecue sauce (i.e., 21% liked it and 31% liked it very much).

- Approximately 49% reacted favorably when "Chicago Style" was the sub-brand name (i.e., 12% liked it and 37% liked it very much).

- Approximately 53% reacted favorably when "Spicy Blend" was the sub-brand name (i.e., 29% liked it and 24% liked it very much).

Approximately 43% indicated they would be likely to purchase the new barbecue sauce (i.e., 25% were likely and 19% were very likely).

- Approximately 45% indicated they would be likely to purchase the new barbecue sauce when "Chicago Style" was the sub-brand name (i.e., 27% were likely and 18% were very likely).


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- Approximately 41% indicated they would be likely to purchase the new barbecue sauce when "Spicy Blend" was the sub-brand name (i.e., 22% were likely, 19% were very likely).

Case Analysis:

1. Based on the information provided in the Executive Summary below, would you recommend the new formulation of barbecue sauce be marketed, in addition to the original sauce, through retail grocery and specialty foods markets? Why or why not?

The statistics presented in the Executive Summary lead 99.99% of the student groups to recommend introducing the new sauce. Their reasoning varies, but nearly all of them cite the finding that over half of the respondents (52%) “reacted favorably” (very few groups question what reacting favorably means). Some groups recommend implementation, but express concern that fewer than half of the respondents indicated they were likely to purchase the new sauce. On rare occasions, a group will express a desire for additional information, but they will generally recommend implementation in light of the information they do have. With some regularity teams will make their recommendations based on reasoning unrelated to the marketing research information. In order for this case to have its full intended impact on learning, it is imperative that you emphasize the importance of groups justifying their recommendations based on the research information. Additionally, it is highly recommended that you have each of the teams present their recommendations regarding implementation before any of the teams are allowed to discuss their branding recommendations. This will make it easier for the teams to clearly articulate their reasoning and easier for you to remember their comments so you can help them compare and contrast justifications across groups.

2. If you are recommending marketing the new barbecue sauce, use information from the

Executive Summary to develop a strong justification for which of the two sub-brand names, "Chicago Style" or "Spicy Blend," should be employed.

Somewhere in the neighborhood of 60% of the groups tend to recommend the Chicago Style sub-brand. The most common reason is that more respondents (45% versus 41%) indicated they would be likely to purchase that brand and more respondents liked it very much (37% versus 24%). Many groups will also add that they think the Chicago Style name “sounds better” or “conveys more meaning because of its link to a geographic location” than the Spicy Blend name. Among the roughly 40% of the groups that recommend the “Spicy Blend” name, most will highlight how a greater percentage of respondents (53% versus 49%) responded favorably overall toward it and more respondents (19% versus 18%) indicated they were very likely to purchase it. Some of these teams will also argue that Spicy Blend communicates something more meaningful about the nature of the new sauce.

Once all of the groups have presented their recommendations to the class, commend them for their efforts to act on the basis of the data rather than their own opinions. Stress how


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important this is in marketing. Then tell them you happen to have some information about how the company performed after introducing the new sauce. Present the information in the table below.

Market Share

Quarter 0 1 2 3 4 5 6

Original Sauce 25% 22% 17% 15% 15% 16% 15%

New Sauce 0% 5% 12% 19% 7% 4% 3%

Give the students a moment to analyze and absorb the outcomes. This should be followed by a discussion of the changes in market share. While they will probably use different terminology, the students will usually be able to identify how the new sauce cannibalized the sales of the original sauce and how the overall brand was diluted by moving from a 25% market share to an 18% share.

Remind the students they were just hired as part of Barbecue Blues marketing team. In effect, their interpretation of the data and their decision recommendation was their first opportunity to make a favorable impression on the job. Emphasize the importance of the decision to the company – reminding the students of how sales had not been growing, and now they have declined significantly since introducing the new sauce. At this point you should ask them how secure they are feeling in their new job. Repeat the question 2-3 times using different phrasing to highlight rhetorically how much they may have jeopardized their tenure at the company.

Students will often seek to defend themselves by saying they were instructed to make a decision recommendation based on very limited information. Rather than argue against this, acknowledge it, and point to the fact that companies frequently have limited information. The point, however, is to gauge the quality of the information they do have. To relieve the sense of defensiveness and encourage collaborative learning, you might also acknowledge to the students that the case was structured in a way that “set them up and/or threw them a curve.” The point now is to get them to think about what they, as future managers, should ask about any market intelligence before using it.

Again, the point is to capture their attention by emphasizing the very real possibility of jeopardizing their careers by utilizing bad information. The ensuing discussion is the primary learning experience from the case. Ask the students to identify the questions they should have asked in the following areas: (1) the type of study actually conducted, (2) the study participants, (3) the setting of the study, (4) tasks performed in the study, (5) the manner in which questions were asked and answered, and (6) how the data were analyzed. Experience with this case has revealed that students will identify some important questions they should have or would like to © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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have asked in each of these areas, but you will likely need to augment this discussion by offering other important questions. Some of the key questions that should be raised by you or the students are presented below.

Questions about the Research

(1) Type of study: What kind of study was actually conducted? Was it a survey, a taste test, or some type of market test? If a survey, did respondents actually get to try the sauce, or did they merely see a bottle of the sauce? If a taste test, how was it structured – was it blind or were brands identified? If a market test, was it a lab experiment or a field experiment and what other factors were introduced and/or controlled (pricing, packaging, competitive brands)?

(2) Study participants: How was the relevant population defined? How was the sample of participants generated? Was a probability or non-probability sample utilized (e.g., people wandering through grocery stores, vs. people contacted at random)? Were current customers identified?

(3) Study Setting: Where was the study conducted – in an actual shopping environment, in a dining facility, in a mall with many people around, in a central interviewing facility, or some other setting? Did the environment provide a meaningful context for the product and consumers’ reactions to it, or was it an unrelated context?

(4) Tasks performed by participants: What were the participants asked to do to determine the favorability of their reaction to the sauce and their likelihood of purchasing it? If the sauce was sampled, what was it compared against – the original formula, competitors’ sauces, nothing? Why didn’t the study include tasks that could identify the possibility of cannibalization and/or brand dilution?

(5) Questions asked/answered: What specific questions were asked to generate these statistics? How were the questions worded? Were they in any way leading? Were they clearly worded or ambiguous? Did they contain any implicit assumptions (e.g., price of new sauce)? Who administered the questionnaire - self-administered or by interviewers? If self-administered, were the instructions clear and easy to follow? If by interviewers, did they introduce bias in the interview process? How were interviewers trained before completing the study?

(6) Data analysis: Were any tests of statistical significance performed, or were the analyses restricted to simple descriptive statistics. If tests were performed, what significance level was utilized and why weren’t the outcomes presented in the Executive Summary. Which of the differences in statistics reported, if any, were statistically significant? Why weren’t differences discussed in terms of managerial relevance?

Be sure to utilize this discussion to reinforce in the minds of students how much they need to learn this semester in order to be enlightened users of marketing research services and


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information. Using this case on the first day provides a strong and meaningful context for discussing the course syllabus and highlighting how the course is structured to help students develop an understanding of marketing research that will help them be successful in their future marketing careers. It is recommended that you specifically tell them:

For students pursuing a management-oriented career, the course is intended to develop a level of research competency that will enable them to interact intelligently with marketing research providers when requesting information, assessing proposed research projects, as well as evaluating and using information from completed research. For students pursuing a career in marketing research, the course is intended to lay a foundation on which more advanced marketing research courses will build.


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