Faculty of Business Studies
Tutor Marked Assignment

B202 A: Understanding Business Functions I

First Semester 2011 – 2012

This tutor-marked assignment consists of two parts each of which consists of a set of questions that are based on a case study. This assignment will be graded out of a 100 and is worth 20% of the total grade assigned to the course. Out of the 100 marks, 84% will be divided equally between the two questions, that is, 42 marks for each case study. The remaining 16% will be distributed equally as follows: presentation of ideas and organization of the answer, adherence to specified word count, proper referencing and use of the E-library.

In this TMA, you are expected to demonstrate your knowledge and understanding of some of the major issues in human resource management and marketing. The first case study focuses on motivation whereas the second one is concerned with the marketing mix of marketing. Prior to answering the questions, read each case study thoroughly and carefully. In your answer, you are expected to show your analytical skills of the subject matter. Your answer should be within the specified range of words, and you must follow the Harvard Style of Referencing. You are expected to present a well structured and organized piece of work that is of your own. Plagiarism will be penalized by deduction of marks. The right use of outside sources and personal examples is highly appreciated and will be rewarded.

PART A
Building a better workplace through motivation
Introduction
People spend a considerable part of their lives at work, so it is not surprising that they expect to be rewarded and satisfied with the job that they do. Motivation is concerned with why people do things as well as what drives them to behave in a particular way. Understanding what motivates individuals is important in the workplace. Research suggests that motivated employees are happier at work. They get more satisfaction from their work, are absent less often, tend to be more loyal and work with more enthusiasm. This in turn encourages them to contribute more to the development of an organisation.
This case study focuses on how Kellogg’s motivates its people. It illustrates how the use of motivational techniques helps to develop the business as a ‘great place to work’.
The Kellogg Company is the world’s leading producer of breakfast cereals. Its products are manufactured in 18 countries and sold in more than 180 countries. For more than 100 years, Kellogg’s has been a leader in health and nutrition. It has done this by providing consumers with a wide variety of food products.
Within Kellogg’s, there is a variety of functions and work roles. These include engineering operatives in the manufacturing section. Others work in finance, marketing, sales, information technology or human resources. Keeping everybody motivated no matter what their role is not easy. Kellogg’s was recently placed in the top 100 of the Best Companies to Work For list in The Sunday Times. Kellogg’s values and culture support its role as a good employer. Encouraging everyone to live by the K-Values throughout the whole business creates a culture of people that have ownership over their own projects and strive for continuous improvement and industry-leading results. These values influence the behaviour of individuals within the workplace, making Kellogg’s a positive place to work. Employees are encouraged to speak positively about each other when apart, focusing on their strengths. This involves listening to others and accepting their right to their own views regarding the workplace.
The benefits of Kellogg’s investing in people can best be illustrated by looking at the work of some of the theorists who have worked on motivation. The remainder of the case study shows how Kellogg’s commitment to creating a ‘great place to work’ is supported by these theories.
Taylor
Frederick Taylor was associated with what has become known as ‘scientific management’. Taylor believed that monetary reward was an important motivating factor. Pay could simply be used to increase rates of output. Taylor’s view of motivation applies to people who tend to work within narrow job confines such as on a production line. These are people who can be paid according to the amount of work that they do or units they produce. This is known as ‘piece work’.
For many people pay is still a prime motivator. For example, within Kellogg’s many employees are motivated by cash alternatives which include the opportunity to buy and sell their holiday days. Taylor’s theory breaks down jobs into components or specialist tasks through the division of labour. This especially applies to production processes within large companies like Kellogg's. These rewards can help to increase productivity and profitability. The danger with this is that individuals are simply focused on output to get rewards so quality might suffer as a result of employees rushing to do the job.
Scientific management is not a process that allows development of people. It limits their ability to take ownership of what they do. Kellogg’s staff are encouraged to be creative and use their imagination to contribute towards change. Consequently, Taylor’s view of monetary reward for output is not appropriate for the motivation required for this type of workplace.
Maslow
Maslow’s theory relates motivation to a hierarchy of needs. At the bottom are essential physiological needs such as air, food, shelter and clothing. As individuals satisfy one level of need, their motivations change as they aspire to reach the higher order needs. Therefore, to motivate an individual Maslow suggests that it is necessary to know where within the hierarchy each employee is placed so that these factors can be taken into account.
Within Kellogg’s every employee is motivated to work through each of these levels. As they do so, this provides positive effects for each employee and the organisation. For example * Physiological needs – Kellogg’s offers competitive salaries. This gives people the means to acquire the basic needs for living. The Kellogg’s Cornflex flexible benefits programme allows employees to choose those benefits that suit them. This includes childcare vouchers, cash alternatives to company cars and discounted life assurance schemes. These savings and competitive salaries help workers pay go further and so motivates them to be loyal to the company. * Safety needs – Kellogg’s values the safety of all employees. The company is committed to providing a safe and healthy work environment to prevent accidents. Employees are however accountable - that means they have to take responsibility for observing the health and safety rules and practices. Kellogg’s also offers employees a range of working patterns. Some may want to work part-time, others may want career breaks or undertake homeworking. This helps employees to choose the best option for a healthy work-life balance. * Social needs – These are associated with a feeling of belonging. Kellogg’s operates weekly group ‘huddles’. These provide informal opportunities for employees to receive and request information on any part of the business, including sales data and company products. This helps strengthen teams and enhances workers’ sense of belonging.
Having an open approach to communication keeps everybody focused on the company’s aims and objectives. Kellogg’s breakfast clubs and support for swimming promote a healthy life-style and keep the business active in the community. * Esteem needs – Kellogg’s recognises that all employees should feel that they contribute to the achievements of the business. Feedback from appraisals helps to assess how far individuals contribute to the company’s K-Values. They include values such as being positive, seeing the best in people and recognising diversity. Kellogg’s positively recognises and rewards staff achievements. * Self-actualisation – Kellogg’s provides employees with the opportunity to take on challenging and stimulating responsibilities. For example, the business provides the opportunity for individuals to take ownership of projects. This enables them to develop and improve.

Laura Bryant joined Kellogg’s straight after university in 2002. She joined the Field Sales team initially. This involved visiting five to ten supermarkets a day to develop relationships at a local level. After two years her hard work was rewarded and she was promoted to Customer Marketing Manager at Head Office. This helped to raise her profile as she wanted to move into marketing. With support from her manager, Laura made the transition from Sales to Marketing as Assistant Brand Manager on Rice Krispies and Frosties. In 2009 she was promoted again to manage the marketing plan for Special K and she is now Brand Manager for Kellogg’s Cornflakes. The company has helped motivate her to climb the hierarchy of needs and achieve her career ambitions. |

Mayo
Elton Mayo was the founder of the Human Relations Movement. His experiments were conducted at the Hawthorne plant in the USA during the 1930s. His work showed that taking an interest in and caring for employees can have a positive effect on employee motivation and productivity. He showed that employees were best motivated if they worked in teams. They were also motivated if managers communicated and consulted with them more and took a greater interest in their views and wellbeing.
Kellogg’s keeps a two-way dialogue with employees through its communication programmes. This helps to empower the workforce. For example, its open-plan lobby area with coffee bar accommodates as many as 200 people. It provides an informal venue for briefings and presentations. The WK Kellogg Values Awards programme provides special recognition for what employees do and rewards them for how they perform.
‘Here at Kellogg’s listening is a central premise of the way we work. We believe that our employees have some of the best ideas and that a successful company is one that listens to the grass roots feedback and acts on it. Any employee can raise an issue or a suggestion via their rep who will raise it at one of their monthly meetings.’ (Sue Platt, HR Director)

The Kellogg’s suggestion box scheme helps to generate ideas and improve productivity. Kellogg’s has an initiative called ‘Snap, Crackle and Save’ - an employee suggestion scheme to save costs within the supply chain. Hundreds of ideas have been put forward over the last couple of years. One idea suggested that the same thickness of cardboard could be used for packaging in all manufacturing plants in Europe. This saved around £250,000 per year.
Kellogg’s also shows its commitment to making its business a great place to work. It provides personal development planning for employees which includes provisions such as secondments and study leave as part of staff development. This reinforces staff commitment and their sense of being treated well.
Herzberg
Herzberg felt that satisfied employees would be productive employees. Herzberg’s theory is sometimes called the two-factor theory. These factors are hygiene factors and motivators. Hygiene factors are often referred to as ‘dissatisfiers’. These are elements in the workplace that could make employees unhappy, such as excessive company bureaucracy or an autocratic working environment.
Herzberg motivators (sometimes called ‘satisfiers’) are aspects of any workplace that give individuals job satisfaction. These include, for example, the level of responsibility of the job, promotion or recognition for effort and performance. Herzberg believed that businesses needed to ensure hygiene factors were minimised in order to enable motivators to have their full effect.
Kellogg’s has developed a number of motivating factors. These are designed to ensure that Kellogg’s is perceived as a good place to work and a desirable employer of choice. For example, Kellogg’s has a ‘Fit for Life’ programme offering employees access to fitness centres, free health checks and annual fitness assessments by healthcare specialists every spring. It also provides a ‘summer hours’ programme from May to September so if employees have worked a full week's hours by noon on a Friday, they can finish work at that point. This means employees can adjust their working hours to balance their work against family or lifestyle commitments.
Awareness of motivating factors helps Kellogg’s to build a business that delivers consistently strong results. Other initiatives within the organisation include:
• flexitime, home working, part-time working and job sharing
• career breaks, parental leave, time off for dependents and maternity and paternity leave
• on-site gyms or subsidised access to local facilities. Claire Duckworth works in the Consumer Insight team at Kellogg’s. She takes part in Latin American ballroom dancing competitively with her partner. They are ranked 7th in England in the over-35 category. Flexible working at Kellogg’s enables her to travel to events and provides her with the opportunity to pursue her hobby at a serious level. This opportunity to adjust her working life to accommodate her personal ambitions makes Claire feel respected and supported. |

Motivators within the Kellogg’s company reflect the different personal aspirations of staff. The working environment provides the opportunity to move forward and take on responsibilities. There is clear recognition and reward for performance. For example, the Kellogg’s sales team meets every Friday morning to share success stories of the week. Once a month it recognises individuals that have worked above and beyond the K-Values. Winners receive a range of awards ranging from cash prizes, vouchers or holiday entitlements.
Conclusion
This case study illustrates the range of different motivation measures in practice at Kellogg’s. It demonstrates that highly motivated employees can improve efficiency, output and quality for a business.
Motivating staff helps to make them more committed to the workplace. By understanding the effects of different motivation techniques, Kellogg’s is able to make work a more exciting and interesting experience for employees whilst creating a more productive, profitable and competitive business.
GLOSSARY
Scientific management: Using logical methods to achieve objectives at the lowest cost.
Monetary reward: Monetary payments and benefits received by employees.
Piece work: A payment system where payment is made according, to output i.e. for every 'piece'produced.
Division of labour: Breaking down a production process or job into a number of specialised tasks.
Homeworking: Working from home rather than in a traditional work environment such as an office.
Work-life balance: Creating conditions for staff that allow work and home commitments to be balanced against each other.
Appraisals: A process to assess the performance of an employee, often based upon comparing outcomes with targets.
Empower: To give formal and informal authority to employees so that they feel in control of their own work.
Supply chain: Sequence of linked transactions that carries a product from its origins as raw materials or components to its receipt by the final consumer.
Dissatisfiers: Activities within the workplace, outside the control of employees that cause them dissatisfaction.
Autocratic: Taking decisions without consultation or discussion.
Flexitime: A variable work schedule where employees must be at work for a defined part of the day but the remaining hours are flexible subject to them achieving the total daily, weekly or monthly hours that the employer expects.
Job share: Where the hours and duties of a job are divided between two staff.
Answer the following questions for Part A: 1- Using two motivation theories of your choice, explain a) the similarities and b) the differences between the two theories. Support your answer with out of the case examples. (12 marks, 300 words) 2- Describe (at least 3) benefits to an organization of having a motivated workforce. (15 marks, 300 words) 3- Evaluate the benefits to organizations of using different motivation approaches. (15 marks, 500 words)

PART B
Creating a winning marketing mix

Introduction
By focusing on the needs of consumers, an organisation creates a business that can outperform its competitors. Being closer to consumers and providing exactly what they want is known as market orientation. A market orientated business carries out research to find the needs and wants of consumers. It then uses the findings to design products and marketing strategies to satisfy these needs. This compares to product orientation which focuses first on developing a product and then seeks ways to persuade the consumer to buy it.
This case study describes how JD (part of the JD Sports Fashion PLC Group of companies), a large and well-known retailer, manages the balance of its marketing mix around its consumers’ needs in order to achieve business growth. The marketing mix is often termed the 4Ps. It is a useful way of looking at how organisations reach their consumers. For example, businesses need to create a mix that involves:
• the right products
• sold in the right place
• at the right price
• using the most suitable forms of promotion.
Founded in 1981 in Mossley, in Manchester, with a single shop, JD today is a well recognised brand. With 335 stores JD is the UK’s leading retailer of fashionable sports and casual wear. For 20 years JD expanded through organic growth.
It opened up stores in new locations to grow its customer base and increase revenues. It traded on the rising trend, particularly amongst young people, of wearing sportswear in everyday life.
In addition to organic growth, The JD Sports Fashion Group has also expanded in recent years by acquisition and now has a number of businesses in its portfolio. It has increased its JD store base through the acquisition of First Sport and All:sports as well as acquiring Scotts (premium branded menswear) and Bank (young male and female branded fashion) in the UK. The Group also made international acquisitions including the French sports fashion retailer Chausport and Champion Sports in Ireland. The JD Sports Fashion Group has also acquired brands such as The Duffer of St George, Nicholas Deakins, Canterbury of New Zealand, Kooga, Kukri and also the fashion brands Chilli Pepper, Nanny State and Sonneti. Brands such as Mckenzie, Brookhaven, Carbrini and Pure are exclusive brands that are only available at JD stores. With over 500 stores in the UK, Ireland and France, the JD Sports Fashion Group has a reputation for stocking the most exclusive and stylish lifestyle products.
As a B2C (business to consumer) organisation, the performance of the JD depends on how desirable its brands are to consumers. By providing exactly what the consumers want JD can outperform its competitors. It also helps it to remain buoyant in a challenging business environment. JD has continued to grow despite the fact that levels of unemployment are increasing and many consumers now have reduced disposable income. The demand for non-essential goods, such as branded clothing, would normally decrease as incomes fall.
Product
The ‘product’ is concerned with the function and features offered by a good or service. Product also encompasses factors such as quality, design, after-sales service and branding.
JD sells lifestyle products. These are sportswear ranges worn in everyday life. JD targets different groups of consumers who desire trainers and sports fashion as casual day wear. Many of the products that it sells are from the global ‘power brands’. These are long-established, popular brands such as Nike and adidas. These brands appeal to large groups of consumers and are easily recognised by JD customers. They are backed by large marketing budgets which help to boost sales and sustain demand by consumers.
Usually it is manufacturers who decide what products to produce and retailers have no say in this. However, JD is different. The company has so much buying power and knowledge of the market that manufacturers are happy to take its ideas. These are then used to produce exclusive products for JD. For example, the adidas Forest Hills and adidas Training PT footwear ranges were developed exclusively for the JD Group and cannot be found in any other retailer.
JD works with suppliers across the world to develop and deliver own-brand products. Prior to any orders being placed, all new suppliers must complete the Group’s risk assessment form to ensure that their activities are in line with the Ethical Trade Initiative Base Code. This code covers areas such as health and safety, working hours, wages, fire procedures and maternity pay provisions. This ensures that the people employed to make JD’s own brand products have good working conditions and that products are sourced ethically. Other social and environmental factors are also taken into account. For example, last year 423.3 tonnes of cardboard, used in packaging, was returned to the Group’s distribution centre for recycling.
Price
The price charged for a product will depend on a number of factors: the cost to make it, the level of profit required, competitor prices and the price consumers are willing to pay. The demand for necessities, such as bread and fuel, is unlikely to change much as prices fluctuate. The demand for sportswear and casual clothing, however, is more likely to be price sensitive. Getting the price right is a key part of an organisation’s marketing strategy. This is because it is the price that directly generates income, allows debts to be paid, re-investment to occur in the business infrastructure and profits to be made. Businesses need to ensure that the price charged is perceived by consumers as value for money in relation to the quality of goods and services.
There are different pricing strategies which can be adopted to generate demand:
• Market penetration – introducing a new product at a lower price to help gain market share.
• Competitive pricing – often used for well-known products or brands that are in high demand. Prices are similar to competitors. To be competitive, JD must ensure it doesn’t charge higher prices for the same goods (or similar) than other sports and fashion retailers.
• Strategic pricing – This might be used to position an exclusive product or brand to make it more desirable for consumers and generate demand or demonstrate value.
By buying in large volumes, the company’s unit costs are lower. For example, discounts achieved by bulk purchases of trainers means the cost for each pair is lower than that paid by smaller retailers. This ensures JD remains competitive.
Place
The place element of the marketing mix involves making products available to the customer in the most convenient way. JD operates in:
• the high street
• out of town locations
• shopping centres
• e-commerce.
JD wants to make the shopping experience distinctive from that of its rivals. It does this by innovative displays and creative imagery to make the store experience fun and exciting. For example, the JD store in Cardiff won a UK Retail Interior Of The Year award for its design and ambience. This included a giant table-football fixture and light-boxes to display trainers.
The JD Property Committee meets regularly to look at the performance of all stores and consider new locations. This includes analysing sales performance and forecasting sales. This type of data helps JD to assess where its outlets are giving the best return on investment. The right location can maximise sales, limit costs and therefore maximise profits. There are a range of factors that influence the choice of new store locations.
In addition to traditional forms of shopping, JD has also invested in e-commerce. JD recognises that with the increasing use of online shopping, consumers now expect very high standards of service and functionality from a web ordering site. In order to reach consumers in the best possible way, the company’s web designers constantly aim to improve the functionality of the site. It is now possible for consumers to buy products directly from the website.
In a mystery shopper survey of 49 major UK e-commerce sites in 2010, JD was the top all-round performer. It scored well for:
• quality of its customer service - particularly its clear delivery and returns information
• its checkout process - which is simple and easy to use
• its product pages - with photography that provides consumers with the most helpful views of products before they buy.
Promotion
The purpose of promotion is to create awareness in consumers or generate interest and desire to buy products. Promotion can also be used to create or change a brand image and maintain market share. JD wants to position itself away from competitors to give it competitive advantage. This means that high profile manufacturers and brands will prefer to release their products to JD rather than its competitors as they are likely to sell more products and protect the brand’s positioning.
JD promotional activity uses a mix of above-the-line and below the-line promotions. Its above-the-line activities include:
• paid-for advertising in newspapers and magazines. JD advertises in high circulation titles, such as the men’s lifestyle magazine FHM and the music magazine NME
• product placements in a range of publications are used to promote the different brands
• TV and radio advertising. Radio advertising in particular allows JD to target its key 13-20 year old audience quickly and in a way that young people find relevant.
Although these types of media reach a wide audience, they can be costly. It is also difficult to measure response rates. JD also makes significant use of other forms of paid-for advertising. Described by JD as ‘ambient marketing’, this uses outdoor advertising such as poster sites and t-sides on public transport and around key stores in areas of high footfall. JD positions itself alongside professional football clubs such as Blackpool FC and has made kit deals under the Carbrini brand, supplying kits for the field of play and training wear. The company also advertises on television backdrops, in club shops and around the grounds. This approach helps to target the young, largely male audience which is typical of its customer profile. It also establishes the brand within local communities.
Below-the-line promotions offer opportunities to communicate directly with consumers. For example:
• E-mail helps JD to regularly contact its database of consumers with promotions and product information. Magazines and leaflets present product and lifestyle content.
• Sales incentives, promotions and competitions with celebrities generate excitement and interest in the brand. This reinforces its youthful appeal. For example, JD partnered with Adidas to provide VIP tickets for an exclusive N-Dubz event at the O2 Arena for JD.
• Sponsorship and product endorsement by celebrities and music artists are used to highlight new ranges and products. For example, Tinchy Stryder promoted the Star in the Hood clothing range and The View promoted The Duffer of St George range in a press campaign.
• A JD partnership with the Manchester Evening News Arena not only puts the brand in the arena itself, but also enables the company to feature competitions and offer prizes to capture potential custom.
• JD also uses impactful photography and high quality point-of-sale materials in stores and window displays to attract consumers and increase footfall.
Growth of social media such as Facebook and Twitter also enables the company to use consumer recommendations as part of its promotional activities. It is estimated that every person viewing a page may pass on information to another 150 people.
Conclusion
JD’s marketing mix has created a unique position for the brand within the mind of its consumers whilst remaining true to its corporate values. The company focuses on stocking the products its consumers want, as well as offering distinctive or exclusive ranges that can only be bought at JD. This, combined with its choice of strategies for placing and positioning the brand, has resulted in significant growth for the business. By uniquely understanding and valuing consumers, JD continues to grow within a difficult economic and competitive market. By constantly adapting and changing its marketing mix through a focus on consumers, it has effectively managed to stay ahead of the competition.
GLOSSARY
Organic growth: Growth in the size of a business through the expansion of its own sales (not through mergers or takeovers).
Fascia: The external signage of a store which helps to show visitors and customers who the business is at first glance and give the premises an identity.
Business environment: The complex factors largely outside a firm's control that still affect its performance, e.g. government decisions, the business cycle, social trends and new technologies.
Disposable income: That part of an individual’s or household’s income that remains after deductions for tax, national insurance and a pension.
E-commerce: Using the internet and associated technologies for trading purposes (buying and selling).
Competitive advantage: An ability to earn superior profits through lower costs or distinctive product quality that competitors cannot readily copy.
Above-the-line: Promotion through advertising: TV, radio, internet, press etc.
Below-the-line: Indirect sales promotion other than advertising, e.g. price promotions and point-of-sales displays.
Product placement: When products are 'placed' in films or TV shows or with celebrities, giving them strong and favourable exposure.
Sponsorship: Where an organisation funds a sporting, community or cultural event in return for exposure of their name or brand.
Footfall: A measure of the number of people who enter a particular store.

Answer the following questions for part B: 4. Using an example known to you, analyze the four main elements of its marketing mix. (12 marks, 400 words) 5. Analyze the following sentence from the case: "The demand for sportswear and casual clothing is more likely to be price sensitive". (12 marks, 300 words) 6. Evaluate why organizations like JD use the marketing mix to position their products within the minds of consumers of their products. (18 marks, 500 words)

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Both Cases were adopted from www.thetimes100.co.uk