- Wal-Mart vs. P&G
Nassauer, S. & Terlep, S. (2016, June 14). The $10 billion tug of war between
Wal-mart and P&G. The Wall Street Journal, pp. A1 & A10.
Terlep, S. (2016, July 28). P&G starts online subscription service for tide pods
- What type of retailer is Wal-Mart (ppt. 16-10 to 16-12)? What
functions does it perform for P&G? What level of distribution intensity does P&G use? Discuss the implications of this decision. How does it relate to the classification of P&G’s products and their brand image and pricing strategy? (10 points)
- Discuss the strategic relationship between P&G and Wal-Mart (see ppt
15-18 and 1-31). What relationship bonds have developed over time (ppt. 1-32)? What has changed recently between the two partners? Why has this change occurred? What type(s) of channel conflict is(are) occurring? Which type of Vertical Marketing System (ppt. 15-15) are P&G and Wal-Mart pursuing? How does the type of Vertical Marketing System contribute to the conflict? What do you think P&G and Wal-Mart need to do to improve their relationship? (20 points)
- Discuss P&G’s online subscription service “The Tide Wash Club” as a response to the problems faced. Do you think it will be successful? Why or why not? (5 points)
- Driverless Cars
Schultz, E.J. (2016, October 31). The ultimate (self-driving) machine.
Advertising Age 87(21).
Liesse, J. (2016, November). Shaping the face of the new auto industry.
Automotive News, pp. 4-6
della Cava, M. (2017, April 4). Ford cruises to head of self-driving car pack.
USA Today, p. 3B.
Recently many car companies have been working on the development of a driverless car and autonomous car features. I have attached several articles
regarding these plans to help you answer the questions below.
- Evaluate the innovation of the driverless car based on each of the 5 product characteristics that speed up adoption (relative advantage, relative simplicity, compatibility, ease of trial, and observability). Be sure you demonstrate that you understand each of these characteristics and how it would impact speed of adoption. Do you think the product will diffuse quickly? Why or why not? Do you think it will be a major game changer? Why or why not? (ppt 12-7 through 12-11 should help you with this answer) (10 points)
- The article by Marco della Cava cites a study done by Navigant Research that claims that Ford is in the best position to benefit from the development of autonomous vehicles. Assuming they are the first to introduce a fully autonomous vehicle, what branding strategy should Ford use for this product? (Be sure to label the specific type of strategy, provide a potential brand name, and provide your rationale for this decision based on what determines a strong brand name and the advantages/disadvantages of the different types of branding strategies.) Describe the brand strength of the Ford Brand. (ppt. 11-24) (10 points)
- You have just been hired as a marketing consultant by Ford to develop
a plan for marketing their upcoming product introduction. Using the Product Life Cycle framework, advise the company regarding who should be the target market for the proposed introduction? Next, develop a plan based on the marketing objectives (product, price, promotion and place) for the introduction stage of the PLC. (You’ll find ppt slides 12-28 through 12-31 most helpful in completing this question.) You need to go beyond the simple objective stated in the PowerPoints and tell Ford management specifically how you would accomplish each objective. You should also develop a positioning strategy and statement (ppt slides 9-34 through 9-40), and include your recommendation regarding the kind of advertising scheduling you would use and whether you would focus on reach or frequency objectives (and why). Be sure to support your answers. What changes do you think they should make now? (10 points)
III. Packaged Food and Private label brands
- Discuss the environmental problems that big packaged food manufacturers are having. (Chapter 5). How have these companies responded to these issues? What would you recommend they do in the future? (10 points)
- Explain the “battle of the brands” concept. You should include
the definition, how the battle has impacted the power balance between manufacturers and retailers, how retailers have gained an advantage in the battle, and how manufacturers of national brands have tried to fight back. (ppt. 11-32 through 11-36 should help you answer this part of the question). (10 points)
- Discuss Target’s use of private label brands. You should include the following in your discussion along with your rationale and support: the types of private label brands they use (ppt. 11-32), the branding and positioning strategies they use, and the benefits Target receives from its store brands/private label goods? Is Target’s private label strategy working? Why or why not? What recommendations would you give Target management on how to improve their profitability? (10 points)
III. BREAKEVEN POINT AND MARK-UP PROBLEM (15 points): BE SURE TO SHOW ALL OF YOUR WORK FOR FULL OR PARTIAL CREDIT.
Lisa MacIntosh is the product manager for the Genius Smartwatch Manufacturing Company. The company has total fixed costs of $6,408,000 for the coming year. The owner estimates that variable costs for this smartwatch will be $240. The company sells its product directly to selective retailers and the retail selling price will be $600. The Genius Company has priced its smartwatch so that the retailer will earn a 40% markup on the watch. The total market for this style of watch is currently 900,000 and Genius has a 25% market share.
- What price is the Genius Company charging its retailers for the watch? What is the manufacturer’s contribution per unit and the contribution margin percentage for each smartwatch sold to the retailer? (3 points)
- How many units must be sold in order to break even? Is the
smartwatch profitable? What is its profit or loss? (2 points)
- The Genius company’s marketing director wants to generate profits
equal to 25% of sales for the watch line. How many units must be produced and sold in order to achieve this target return? What sales revenue must be generated in order to meet this target return? (2 points)
- Ms. MacIntosh is recommending that the advertising budget be
increased by $250,000. As a result of this increased spending on advertising, she expects to increase sales by 9%. Assuming that her forecast is correct, should the advertising budget be increased? What is the break even for the additional expenditure in units? What is the profit impact of such a move? (3 points)
- Ms. MacIntosh’s assistant just got a degree in economics and tells her that instead of increasing the advertising budget, she should decrease the price to the retailer by $20. He estimates that if she decreases the price to the retailer by $20, the company will be able to sell 8% more smartwatches to its retailers. Mr. Wolf is considering the two alternative actions to increase profits: increase the advertising budget or decrease the price. Assuming her assistant’s forecast is correct, which action (increase advertising or decrease price) should Ms. MacIntosh recommend? What would the breakeven in units be after the decrease in price? What is the difference in profit between the two actions? (5 points)
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