Adarsh shikshan prasarak mandal Govt.Regd.No.Mah – 5653
ADARSH MANAGEMENT INSTITUTE OF INDIA MARKS: 100 COURSE: MBA

SUB: BUSINESS MANAGEMENT

N.B.: 1) Attempt any Four Questions 2) All questions carries equal marks.

NO. 1
THE FORECAST IS SUNNY FOR THE WEATHER CHANNEL

When The Weather Channel, the first 24 – hour all – weather network, began broadcasting in 1982, it quickly became the object of mockery. “Many in the industry ridiculed us, suggesting that the only type of advertiser we would attract would be a raincoat company or a galoshes company,” remembers Michael Eckert, The Weather Channel’s CEO. Besides pondering where advertising support would come from, critics questioned what kind of audience was going to tune in to a channel that boasts wall-to-wall weather, a topic that sounds as interesting as staring at wallpaper. So far, the answers to these questions have been quite surprising. In its over twenty years of broadcasting, the channel has gained support from a cadre of deep-pocket advertisers, which include Buick, Motorola, and Campbell’s Soup. In 2003, the Weather Channel reached more than 83 million U.S. households in Latin America under the name, El Canal del Tiempo. According to The Weather Channel’s Vice-president of strategic marketing, Steven Clapp, “There might have been a time when people weren’t willing to admit that they were viewers. Now people are proud to say they watch us. Research shows that we are (gaining ratings), although it’s difficult to isolate why.” A major event linked to the increase in popularity of the network is the extensive brand building effort that started in the spring of 1995. Although some viewers will always see the weather as just a commodity, promise for making the presentation of weather forecasts into something brandable lies in a growing segment of “Weather – engaged” viewers, viewers who tune in regularly and ones that the network wants to reach. “Viewers know that they can turn to us for quality forecast and weather expertise. What we’re trying to do is take it one step further and emotionally bond with the viewer,” says Clapp. Hayes Roth, a branding expert, agrees that branding the channel helps build stronger ties to viewers and advertisers. The company’s efforts have spanned from improving the network’s products, extending The Weather Channel name to related products, and a promotional blitz. The network, whose slogan declares that “no place on Earth has better weather,” went beyond providing just expert forecasts to create lines of programming tailored to retaining viewer interest. The network uses a staff of more than 100 meteorologists to analyze National Weather Service data and prepare 4,000 localized forecasts. While these local reports are the channel’s mainstays, new features have crept in that have had the effect of stretching the average viewing time from 11 minutes to approximately 14 minutes, with some fanatical individuals watching for hours at a time. These new features act to expand what constitutes the channel’s weather information and spark the interest of the average viewer beyond the routine weather topics. For example, “The Skiers Forecast” spotlights conditions on ski slopes. The Weather Channel has worked with the National Football League to prepare specialized game day forecasts. Playing off a recent upsurge in interest in the weather among audiences, the network has presented features such as The Chase, a program about people who chase tornadoes, and Forecast for Victory, a one-hour long show that looked at the role of weather in deciding significant battles of World War II. These features keep certain segments of the market glued to the station for more than just the weather forecast. In order to create more brand awareness and to keep weather forecasts and weather updates as accurate as possible. The Weather Channel and the U.S. Navy teamed up to share information in 2001. The Weather Channel now has access to the Navy’s sophisticated technology in order to assist in predicting and presenting the weather. Also, in January 2002, The Weather Channel became the weather forecaster for USA Today’s domestic and international issues as well as for USA Today.com. The two companies shared the weather coverage for the 2002 Winter Olympics in Salt Lake City. The Weather Channel worked to extend its boundaries beyond just the television format. Customized Weather channel reports are available for over 30 online services, 250 radio stations, a hugely popular 900 number phone service, and 64 newspapers across the U.S. – all with The Weather Channel tagline or logo. Just recently, The Weather Channel began to offer wireless weather delivered to handheld devices. This project is in conjunction with Verizon, AT & T, sprint, and Palm Piolt. “If a consumer sees The Weather Channel name in the newspaper, that just reinforces the brand,” says Hayes Roth. In addition to these partnerships, The Weather Channel has worked to package weather in creative ways including books, home videos, calendars, educational material for elementary schools, and a CD-ROM titled Everything Weather. In fact, after a hugely positive response on a test mailing, the network started a mail – order catalog of company – themed merchandise. One of the most widely popular line extensions is the company’s web site, www. weather.com which enables users to create a personalized weather page. In only 40 minutes after its launch, 1,000 users had already created a customized web page. In late 2000, Weather.com re-launched its site in an effort to refresh the look, feel and organization of content. The goal is also to enable the site to accommodate more traffic and content, as well as incorporate database functions. Now, Weather.com is delivering even more-highly personalized weather content. The re-launch is part of the site’s ongoing strategy to make the weather relevant. It is also continuation of Weather.com’s positioning of itself as a lifestyle site. According to Debora Wilson, President and CEO of Weather.com, the company is going to launch new country specific sites to draw more of an audience. The company is hoping the new sites, targeting the UK, France and Germany, will help to boost online revenue. The company began launching the new sites in late 2001 and 2002. There has also been a report about Weather.com including a “portfolio of subscription-based services” on its site but Wilson declined to give estimates of how this would affect revenue. In an effort to transform itself into a lifestyle destination Web site, Weather.com launched a -4 city test marketing campaign in 2001 that featured its first offline advertisement. The test cities included Houston, Nashville, Philadelphia, and Columbus, Ohio. This campaign was expected to cost between $2 million and $10 million depending on the results from the test cities. Weather .com felt the need to explore advertising in different Medias; therefore their promotional test included offline advertisements from a variety of television, radio, and outdoor sources. Additionally, Weather.com tested unconventional ad schemes on dry-cleaner bags and packages of airline peanuts. Weather.com’s non-traditional campaigns featured such taglines as, “Forget about what they are wearing in Paris, think Anchorage” and “Don’t you have your own Doppler?” Vice President of Marketing. Alan Kaminsky, said, “The test campaigns were a part of a larger strategy to give weather forecasts a higher profile.” Even though Weather.com’s promotional campaign contributed to their overall strategy, the network still had a few problems to overcome despite their potential, according to branding expert Hayes Roth. He said, “They have a great brand name but it’s boring as toast. They’re doing a Medicare job on-air branding. If you’re surfing channels, it so dull that you tend to fick by it.” Roth also sees that the brand lacks a cool or hip image. He said, “People wear clothes with MTV’s logo because they’ve decided that it’s cool logo. I don’t know if people want to see The Weather Channel on their jacket.” Despite some gray clouds, Weather.com does have a very sunny spot. The network has a large loyal audience, something of which other networks are envious. Furthermore, Weather.com really knows what they’re talking about, and that is a very marketable commodity. It has the vast potential of owning the weather and could become the official brand of weather. So watch out gray clouds, it is clearing up and the forecast is sunny for The Weather Channel!

Questions:
1. Visit the Web site of The Weather Channel (www.weather.com) Write a report about the type of information available at this site.
2. Identify other potential sources of information about the weather.
3. Discuss the role of qualitative research in identifying consumer’s needs for weather-related information. Which qualitative research techniques should be used?
4. If a survey were to be conducted to determine consumer preferences for weather-related information, which interviewing method would you recommend? Why?
5. Can observation methods be used to determine consumer preferences for weather-related information? If so, which observational methods would you use? Why?

IS SUPER BOWL ADVERTISING SUPER EFFECTIVE ?

About 140 million Americans and 700 million total global viewers tune in to Super Bowl Sunday, making the event one of the largest occasions for home entertainment. Advertising time during the Super Bowl is limited and priced at a premium. The fight for the prime spots starts months in advance of the actual airtime. In 1993, the cost for a 30 – second time slot was a high $850,000, but by 1997 the cost had shot to $1.2 million for the same short time frame. In 1998, a 30-second spot during the Super Bowl cost $1.3 million. In 2000, a 30-second spot during the Super bowl cost companies a record average of $2.2 million. Dot.com companies that have since failed or are struggling to keep their heads above water purchased forty percent of the Super Bowl ad slots in 2000. For the 2001 Super Bowl XXXVI, the average rate for an advertising spot was approximately 2.1 million. In 2002, during Super Bowl XXXVI, Fox Network offered 60 commercial spots for a total of 30 minutes of advertising time. The average selling price for each 30-second spot was just under $2 million, at $ 1.9 million each. Companies who paid for commercial time during Super Bowl XXXVI included Anheuser- Busch, who purchased ten 30 – second spots, Pepsi Co, who featured one 90-second commercial starring Britney Spears, E-trade, M & M/Mars, AT & T Wireless, Levi Strauss, Yahoo, Visa and fast food chains Quizno’s Taco Bell, and Subway are among others. Although Fox did end up selling all of the available ad spots, the network did not sell the final ad until the Thursday before the game. There are several reasons for the selling delay and for the reduced rates in 2002. First, marketers were facing the “worst advertising recession in recent memory.” This caused companies to carefully monitor how they spent their advertising budgets and many decided that the money could be better applied elsewhere. Many companies chose to advertise during other prime time events that were more affordable. The average rate for a 30-second spot during the early evening news in 2002 was $45,900. Even events such as the Golden Globes (estimated price $45,000 per 30-second spot), the Grammies (estimated price $57,000 per 30-second spot), and the Academy Awards (estimated price $1.6 million per 30-second spot) offer companies ad time at lower rates. However, these events do not draw as many viewers as the Super Bowl. Secondly, the NFL, for the first time, sponsored a pre-game show on the Friday night before the Super Bowl. Some companies, such as AOL Time Warner, Phillip Morris, Miller Brewing Co., and Motorola chose to avoid paying “television’s highest commercial prices” and bought ad time for lower rates during the pre-game show. A final reason for lower rates and less marketer interest in Super Bowl ad time was competition from the 2002 Olympic Winter Games. The games began just five days after the Super Bowl and offered 17 days of events during which advertisers could buy commercial time. The average selling rate for a 30-second prime time spot during the Olympics was only $600,000, a bargain compared to the Super Bowl. Is Super Bowl advertising worth the cost? For many advertisers who bought time slots in previous games the answer was a resounding no. Nissan, Porsche, Fila and MCI passed on the chance to advertise during the game. According to marketing consultant Jack Trout, the increasing rates made buying Super Bowl ad time difficult to justify. Nissan marketing Chief Brad Bradshaw stated that although the company had intended to advertise during the game, it came to the conclusion that the resources could be better used to sell its vehicles in other ways. In addition to the cost factor, many question what effect advertising actually has on the audience. The purpose of an advertisement is to increase customer awareness for a particular brand. For Super Bowl ads, however, the brand name often becomes secondary to the commercial itself in terms of viewer attention. Super Bowl ads have become events in and of themselves, with each firm trying to put out the next earth-shattering commercial that will stir talk about the commercial itself. Ever since Apple computer’s classic “1984” ad, firms have been trying to top previous years’ ads. Ad agencies and clients often seem to shoot for ads that are extraordinary for the sake or creativity, rather than their intended purpose, with many attention-getting promotions not translating into product purchases. It is questionable whether brand name is retained, and so despite having an incredible commercial, many advertisers’ ad dollars possibly goes into just providing new fodder for water cooler conversation for the week instead of forming a lasting brand image in the minds of consumers. Without new research into the effectiveness of Super Bowl advertising and its effect on consumers, many advertisers may be better off avoiding buying Super Bowl ad time and abandoning the world’s biggest television audience. Some advertisers like Purina Cat Chow have taken a slightly different approach by purchasing airtime on the show directly following the Super Bowl. They obtained airtime at one-sixth of the cost during the game and they believe that they retain approximately 40 percent of the audience. Which advertiser got the biggest bang for the bucks: M & M/Mars that advertised during Super Bowl 2002, or Purina Cat Chow that advertised after the game? Without systematic marketing research aimed at measuring Super Bowl advertising effectiveness, questions such as these beg answers. It remains to be established that Super Bowl advertising is super effective?
Questions:
1. What kind of research design would you recommend for determining the effectiveness of M & M/Mars advertising during the Super Bowl?
2. If the research design involves a survey of households, which survey method would you recommend and why?
3. What kind of measures and scales will you employ in your survey?
4. Can the observation method be used to determine the effectiveness of M & M/Mars advertising during the Super Bowl? If so, which observation method would you recommend and why?
5. Which syndicated services discussed in the book can provide useful information ?

NO. 3
DAIMLER CHRYSLER SEEKS A NEW IMAGE “I’d trade in my Corvette convertible in a minute to buy this car”, exclaimed an excited observer at an advance showing of the then Chrysler Motors Corporation’s
(now Daimler Chrysler, www.daimerchrysler.com) design ideas for the 1990s. Since battling back from the brink of bankruptcy in the late 1970s, Chrysler continued to run a distant third to GM and Ford in the American automobile market, and even that position was challenged by Honda in 1990 (see Table 1). Chrysler dramatically rebounded in the early 1980s and gained almost two percentage points over the first five years of the 1980s by adding more economical, middle-class cars to its line of luxury sedans. However, increased competition from Japanese imports, poor product quality, and unimaginative design led to falling market share in the latter half of the decade. Chrysler did, however, succeed with its minivan. Because of their triumph with the minivan, Chrysler was even more determined to succeed in the car market, so engineers and managers tried to design automobiles that fit the stylish, high-quality image Chrysler needed. Chrysler continued to maintain its business strategy of focusing on profit instead o market share, avoiding global alliances, and thriving on a shortage of capital. In 1989, Chrysler held an advance showing of concept cars for the 1990s that included a V-10 engine for both trucks and cars. Two stylish, yet pragmatic concepts were released, including the Chrysler Millennium and the tiny Plymouth Speedster. Both cars featured eye-catching design but failed to deliver performance because underneath they were based on the traditional Chrysler platform and power train. The reviewers, however, did take note of the rear-drive two-seat sports car, made available in 1992, which incorporated the V-10 engine. Code- named the Dodge TBD (To Be Determined) and later named the Dodge Viper, it looked like a Chevrolet Corvette – but carried a price tag of $55,000. Since the introduction of the Viper (www.dodge.com/viper), Chrysler raised the starting price several times. At the beginning of 2002, Chrysler added a four-figure price hike bringing the price to a starting value of $75,500 for the RT/10 Roadster model and $76,000 for the GTS Coupe model. The Viper was positioned to restore Chrysler’s reputation for designing exciting cars.
|TABLE 1 |
|U.S. Automobile Market Shares (%) |
|YEAR |CHRYSLER |FORD |G.M. |HONDA |OTHER |
|1980 |10.7 |16.6 |46.8 |4.3 |21.6 |
|1985 |12.5 |18.8 |42.5 |5.0 |21.2 |
|1990 |9.3 |23.9 |35.5 |9.4 |21.9 |
|1993 |15.0 |26.0 |34.0 |5.0 |20.0 |
|1996 |15.9 |25.1 |32.1 |5.5 |21.4 |
|2001 |12.8 |27.1 |28.5 |7.0 |24.6 |

Even though some call the Dodge Viper the “sexiest yet silliest” car around, it appears that the introduction of the Dodge Viper was a success. Recently, Chrysler Corporation President John Lutz stated that the company will keep Viper production lower than the number of Vipers that are demanded, estimated as approximately 2000 cars per year. Chrysler also revealed that it would offer the Viper in two new colours, emerald green and yellow. Previously, the first 250 cars were red, and the rest were painted black. Improvements are also planned for the interior of the Viper. Chrysler also introduced a coupe version of the Viper, the Viper GTS, which featured a roof instead of a soft convertible top. In April 2002, Dodge planned to end the production of the GTS coupe with a limited Final Edition production run. The Final Edition GTS will be painted an eye – catching red and have white racing stripes. It will feature other unique touches such as a black leather steering wheel and shift knob embellished with red stitching. Only 360 of the Final Edition GTS models will be produced. In May 2002, Dodge planned to begin production on the 2003 Dodge Viper SRT-10, which will be available exclusively in convertible form. For continued success the Viper must attract the yuppie crowd – the highly educated, affluent baby boomers- that tend to prefer imported vehicles. Because this group would be the prime target group for such a high-performance car, Chrysler needed to ensure that it could complete in a market traditionally dominated by Corvette, Mazda Miata, Porsche Boxster, Porsche 911/96, and Mitsubishi 3000 GT. Primary concerns for Chrysler were overcoming its boxcar image with this group, determining if they should offer incentives on the Dodge Viper, the importance of styling and prestige when promoting to this market, and how to exploit its merger with Daimler –Benz to the advantage of Viper. To address these concerns, 30 statements were constructed to measure attitudes towards these factors and to classify the respondents. The respondents used a nine-point Likert scale (1 = definitely disagree, 9 = definitely agree). The respondents were obtained from the mailing lists of Car and Driver, Business Week, and Inc. magazines and they were telephoned at their homes by an independent surveying company. The statements used in the survey of 400 respondents are listed below :
1. I am in very good physical condition.
2. When I must choose between the two, I usually dress for fashion, not comfort.
3. I have more stylish clothes than most of my friends.
4. I want to look a little different from others.
5. Life is too short not to take some gambles.
6. I am not concerned about the ozone layer.
7. I think the government is doing too much to control pollution.
8. Basically, society today is fine.
9. I don’t have time to volunteer for charities.
10. Our family is not too heavily in debt today.
11. I like to pay cash for everything I buy.
12. I pretty much spend for today and let tomorrow bring what it will.
13. I use credit cards because I can pay the bill of slowly.
14. I seldom use coupons when I shop.
15. Interest rates are low enough to allow me to buy what I want.
16. I have more self-confidence than most of my friends.
17. I like to be considered a leader.
18. Others often ask me to help them out of a jam.
19. Children are the most important thing in a marriage.
20. I would rather spend a quiet evening at home than go out to a party.
21. American – made cars can’t compare with foreign – made cars.
22. The government should restrict imports of products from Japan.
23. Americans should always try to buy American products.
24. I would like to take a trip around the world.
25. I wish I could leave my present life and do something entirely different.
26. I am usually among the first to try new products.
27. I like to work hard and play hard.
28. Skeptical predictions are usually wrong.
29. I can do anything I set my mind to.
30. Five years from now, my income will be a lot higher than it is now.
In addition, the criterion variable, attitude towards Dodge Viper, was measured by asking each person to respond to the statement, “I would consider buying the Dodge Viper made by Daimler Chrysler.” This statement was measured on the same nine-point scale as the 30 predictor statements. The data for the case are provided on CD-ROM as well as the Web site. In the text (tab delimited) data file, the first variable represents attitude toward a Chrysler sports car. The next 30 variables, in the order listed in the case, represent the ratings of the lifestyle statements. In addition, the data are also provided as an SPSS file and as an EXCEL file.

Questions:
The director of marketing for Chrysler is interested in knowing the psychological characteristics of the yuppies to configure the Dodge Viper program. You have been presented with the responses from the survey outlined above. Analyze the data according to the following guidelines:
1. Frequency distribution: Ensure that each variable is appropriate for analysis by running a frequency distribution for each variable.
2. Regression: Using a stepwise regression analysis, locate those variables that best explain the criterion variable. Evaluate the strength of the model and assess the impact of each variable included on the criterion variable.
3. Factor analysis: Determine the underlying psychological factors that characterize the respondents by means of factor analysis of all 30 independent variables. Use principle component extraction with varimax rotation for ease of interpretation. Save the factor scores and then regress them on the criterion variable, forcing all predictor variables to be included in the analysis. Evaluate the strength of this model and compare it with the initial regression. Use the factor scores to cluster the respondents into three groups. Discuss the significance of the groups based on the underlying factors. Repeat this cluster analysis for four groups.
4. Cluster analysis: Cluster the respondents on the original variables into three and four clusters. Which is a better model? Compare these cluster results with the cluster results on the factor scores? Which is easier to interpret, and which explain the data better.
Based on the analysis, prepare a report to management explaining the yuppie
Consumer and offering recommendation on the design of the Dodge Viper. Your recommendations should aid Daimler Chrysler in achieving what they seek a new image for the Viper that is attractive to the yuppie market and that helps them outperform the competition in the performance car market.

NO. 4
PAMPERS DEVELOPS A RASH A RASH OF MARKET SHARE
In 2001, the disposable diaper industry reached sales of $3.9 billion. Traditionally, the industry’s top selling brand was Procter & Gamble’s (www.pg.com) Pampers (www.pampers.com)line of diapers. Proctor & Gamble dominated the market through the 1970s and into the 1980s with Pampers as its flagship offering. In the late 1970s, Luvs was added as a secondary offering to compete with Kimberly-Clark’s (www.kimberly-clark.com) Huggies (www.huggies.com) brand. By 1985, Huggies controlled 32.6 percent of the market and was a major threat to P & G’s industry leadership. Beginning in 1994 and 1995, Huggies began to lead both Proctor & Gamble brands in market share of the then $3.6 billion diaper industry. In 1996, Pampers and Luvs gave P & G a combined 36.9 percent share of the market while Huggies took 39.7 percent . While Huggies grabbed share in 1995, analysts stated that this share came at the expense of Pamper’s market stake. Meanwhile, P & G undertook efforts to regain the top spot, by spending more promotional dollars and introducing new innovations. In 1996, P & G spent $48 million on diaper promotions. The company spent $8 million to add breathable side panels to its Pampers Premium brand. The panel strips allowed air to flow into the diaper without any leakage, and were supposed to lower the humidity in the diaper, thus reducing diaper rash. In 1997, Huggies continued to lead the market, especially with Huggies ‘Pull-Up Training Pants holding a 10 percent market share. The Huggies brand was largely responsible for much of Kimberly – Clark’s lead over Proctor & Gamble. Kimberly-Clark’s strategy was to segment the market with new niche products, and the strategy worked very well. Huggies overnights, diapers for overnight use, and Huggies Pull-Ups Good Nites, diapers for older children who wet the bed, were new introductions that catered to specific segments of the market. The company was testing Huggies Little Swimmers Swim-Pants; diapers designed to withstand swimming, and began nationwide marketing of the product in 1998. In 1997, Proctor & Gamble preceded its rival in introducing a product that addressed a new concern among consumers – skin care. P & G rolled out another innovation in diapers which was diaper linning that was actually good for the baby’s skin with Pampers Gentle Touch lining, backed by a $25 million promotional campaign. The lining contained a special blend of three skin-soothing chemicals that transfer to the baby’s skin evenly. Pampers continued its focus on skincare with the introduction of Pampers Rash Guard in late 1999. Tests have shown that the formulation of zinc oxide and Petrolatum used in the diaper lining reduces diaper rash without interfering with moving moisture away from the baby’s skin. These innovations have proven very successful for P & G. Information Resources, Inc. listed pampers Rash Guard as number nine on its list of the “top 10 best selling new products in the consumer packaged goods industry for 1999-2000.” During the 52 weeks following the introduction of the product, sales reached $97.2 million. Likewise, P & G made new introductions under the Luvs brand. In 2000 Luvs Splashwear was introduced to provide consumers with a diaper babies could use in the pool. In 2001 Luvs Overnights were introduced for babies that needed improved leakage performance overnight. In 2002 SleepDrys from Luvs were introduced for children 4 and up that wet the bed. In the beginning of 2002, both P & G and Kimberly-Clark had some unique product fetures that the competing brand was not offering. For example, Kimberly-Clark was marketing a Pull-Ups brand diaper that was targeting mothers with toddlers who were going through potty training. The disposable training diaper could be pulled on and off like regular underwear, but still had the absorbency features of a diaper. Kimberly – Clark was also offering Good Nites brand disposable underpants for older children who wet the bed. P & G had a unique hold on the skin care market with their Pampers Rash Guard Diaper, and had just introduced a Pampers Baby Dry brand with Quick Grip sides that could be fastened and re-fastened to get a perfect fit. Both Kimberly-Clark and Proctor & Gamble were offering swimming diapers, overnight diapers with extra absorbency, and diapers with added stretch for a better fit, and premium top of the line diapers. To remain on the cutting edge of customers needs, Proctor & Gamble needs to continue to seek out and address exactly what consumers are searching for in a diaper before any rival, as the firm did by introducing the Pampers Gentle Touch lining. Thus, the use of marketing research may be the key to enabling P & G to regain leadership in the diaper market. In this increasingly competitive diaper market, P & G’s marketing department desired to formulate new approaches to the construction and marketing of Pampers to position them effectively against Huggies without cannibalizing Luvs. To do so, 300 mothers of infants were surveyed. Each was given a randomly selected brand of diaper (either Pampers, Luvs, or Huggies) and asked to rate that diaper on nine
|TABLE 1 |
|Disposable Diaper Market Share (percent) |
| |1990 |1991 |
|X1 |Count per box |Desire large counts per box ? |
|X2 |Price |Pay a premium price ? |
|X3 |Value |Promote high value? |
|X4 |Skincare |Offer high degree of skin care? |
|X5 |Style |Prints / colors vs. plain diapers |
|X6 |Absorbency |Regular vs. super absorbency |
|X7 |Leakage |Narrow/tapered vs. regular crotch |
|X8 |Comfort / size |Extra padding and form-fitting gathers? |
|X9 |Taping |Resealable tape vs. regular tape |

Data were collected at a suburban mall using the mall intercept technique and are provided on CD-ROM as well as the Web site. In the text (tab delimited) data file, the first variable represents brand preference (Y). The next nine variables represent the ratings of the brands on the nine attributes in the order listed in the case
(X1 to X9 ). In addition, the data are also provided as an SPSS file and as an EXCEL file.
Questions:
You must analyze the data and prepare a report for the marketing department. The one-page memo you received suggested that you use the following procedures.
1. Frequency distribution: Run a frequency distribution for each variable and show bar graphs of the first three variables.
2. Cross – tabulations : Group brand preference as low, medium, and high under the formula low = 1 or 2, medium = 3 to 5, and high = 6 or 7, Group all independent variables as either, low = 1 to 3, medium = 4, and high = 5 to 7. Run two variables cross tabulations of preference with each independent variable. Run the following three-variable cross-tabulations: preference with count per box, controlling for price, preference with unisex, controlling for style, and preference with comfort, controlling for taping. Interpret these results for management.
3. Regression: Run a regression equation for brand preference that includes all independent variables in the model, and describe how meaningful the model is. Interpret the results for management.
4. One-way analysis of variance: Group all independent variables into low, medium and high groups as you did for cross-tabulations. Run a one-way analysis of variance on each independent variable with brand preference. Explain the results to management.
5. Discriminate analysis: Group brand preference into two relatively equal groups based on its distribution. Run discriminate analysis on the grouped data and interpret the results for management. Repeat this analysis by grouping brand preference into three relatively equal groups.
6. Factor analysis: Determine any underlying factors inherent in the data by running a factor analysis using principle components extraction with varimax rotation. Print all available statistics. Save the factor scores and regress these on brand preference. Interpret these results for management.
7. Cluster analysis: Use a nonhierarchical procedure to cluster the respondents, based on the independent variables, into two, three, four, and five clusters. Also run a hierarchical procedure to obtain five clusters using Ward’s method and creating a dendrogram: Interpret all these results for management.
Interpret the results of the survey and make recommendations based on your findings to the marketing department. They want your opinion about which of the nine attributes mothers value most highly, as well as your ideas for specific actions that can increase market share for Pampers in today’s market. The marketing department is counting on your recommendations to provide them with ways to improve Pampers image and cure the rash of market share loss.

NO. 5
NIKE SPRINTS AHEAD OF THE COMPETITION,
YET HAS A LONG WAY TO RUN

Nike, Inc.(www.nike.com), located in Beaverton, Oregon, is the number one U.S. athletic footwear company and one of the most recognized American brands among foreign consumers. This high degree of recognition is one of the main reasons Nike has been so successful. For the 2001 fiscal year ended May 31, 2001, the company continued to soar, with sales of over $9.5 billion. Perhaps such success could be attributed to its concept - based advertising campaigns. The company uses a process that is often called “image transfer”. Nike ads traditionally did not specifically place a product – or mention the brand name. A mood or atmosphere was created and then the brand is associated with that mood. “We don’t set out to make ads. The ultimate goal is to make a connection,” states Dan Weiden, executive of one of Nike’s ad agencies. One ad featured the Beatles and clips of Nike athletes, Michael Jordan and John McEnroe, juxtaposed with pictures of regular folks also engaged in sports. It was used to infer that real athletes prefer Nike and that perhaps if the general audience buys the brand they will play better too. Nike’s unpredictable image-based ads have ranged from shocking, such as its portrayal of real blood and guts in a “Search and Destroy” campaign usesd during the 1996 Olympic games, to humorous, such as the first ad used to launch Michael Jordan’s Jordan brand wear. The latter advertising made the tongue – in – cheek suggestion that Jordan himself had a hand in production by slipping away from a Bulls’ game at half time to run over to his company and then return in time for the game’s second half. In 1998, Nike shifted to a new phase in its marketing strategy. Nike emphasized more of its product innovation skills than the jockey, edgy attitude that it displayed in previous years. “We recognize that our ads need to tell consumers that we’re about product innovation and not just athletes and exposure. We need to prove to consumers that we’re not just slapping a swoosh (the company trademark) on stuff to make a buck,” said Chris Zimmerman, director of Nike’s U.S. advertising. With the launch of the “I can” campaign, Nike showed less of the celebrity athletes that previously adorned its marketing output and showed more product usage than in the previous “Just Do It” campaign. Competitors Reebok and Adidas recently featured more product-focused ads and were met with a great deal of success. Despite this rearranged focus, Nike did not back away from innovative marketing. Nike continues to excel in the advertising arena. Nike was named one of 2001’s best in advertising by Time magazine for its ad featuring expert dribblers doing trick moves. Time is quoted as saying the ad conveyed a message that “Sport is music. Sport is dance. Sport is art.” Nike states that this ad was their most popular ad in 20 years. Another popular ad from 2001 was known as the “Take Me Out to the Ballgame” ad. This particular ad featured professional athletes from varying sports singing one line of the song. “Take Me Out to the Ballgame” in their native language. As the company looks ahead to 2010, at the heart of Nike’s future strategy is the international arena, which could prove to be the most difficult element for Nike to undertake. There seemed to be a pretty strong recognition that by 2010, Nike would be larger outside of the U.S. than inside. As of 2003, international sales comprised one-third of Nike’s business. Nike would like to expand into the soccer and international sports arena, but to do so, it would have to refocus its marketing and distribution in order to re-establish itself as an authentic, technically superior sports shoe. In February 2001, Nike unveiled its latest technological revolution, the Nike Shox, to United Kingdom consumers. This shoe was in development for 16 years, and Nike hoped it would revolutionize the sports shoe market in much the same way that NikeAir did when it was launched in the UK in the 1980s. One reporter in London states that his pair of Nike Shox makes him feel like he is “walking on cloud nine with a spring in (his) step.” The shoes are reported to provide support, comfort, shock absorbency, and style all at the same time. The Nike Shox line of athletic shoes is shaping up to be very popular in both the U.S. and the U.K. Most recently, Nike bought out many of its worldwide distribution centers in order to achieve greater control of its operations. In the future, Nike would like to build up its presence in the key markets of China, Germany, Mexico, and Japan. Nike will focus its advertising on sports, and will feature sports that are of a particular interest in specific regions. Nike realizes that while it is ahead of competition, it still has a long, long way to run.

Questions:
1. Should Nike switch from a focus on celebrities to a focus on its products in its advertising? Discuss the role of marketing research in helping Nike management make this decision. What kind of research should be undertaken /
2. How would you describe the buying behavior of consumers with respect to athletic footwear?
3. What is the management decision problem facing Nike as it attempts to retain its leadership position?
4. Define the marketing research problem facing Nike, given the management decision problem you have identified.
5. Develop two suitable research questions and formulate two hypotheses for each.
6. How can the Internet be used to help Nike in conducting marketing research, and in marketing its products?

NO. 6
LEXUS: IMPARTING VALUE TO LUXURY AND LUXURY TO VALUE !
In 1980s, Toyota developed a concept for a new car that was destined to be a success. The concept of the car, which was to be called Lexus, was based on the observation that there was a large, affluent market for cars that could boast exceptional performance. A significant portion of that market ranked value highly. However, they were unwilling to pay the extraordinary expensive prices that Mercedes charged for its high performance vehicles. Toyota planned to target this market by creating a car that matched Mercedes on the performance criteria but was priced much more reasonably, providing consumers the value they desired, and making them feel that they were smart buyers. Toyota introduced the Lexus (www.lexus.com) in 1989 with much fanfare. A clever advertising campaign announced the arrival of this new car. For example, one ad showed the Lexus nest to a Mercedes with the headline, “The First Time in History that Trading a $73,000car for a $36,000 Car could be considered Trading Up.” Of course, Lexus had all the detail and a plush interior. The detail was not, however, limited to the car. Separate dealerships were created that had the type of atmosphere that affluent consumers expected from a luxury carmaker, including a grand showroom, free refreshments and professional salespeople. Toyota placed a strong emphasis on the performance of the new car. A package was sent to potential customers that included a 12-minute video displaying Lexus’ superior engineering. The video showed that when a glass of water was placed on the engine block of a Mercedes and a Lexus, the water shook on the Mercedes while the Lexus had a virtually still glass of water. This visually told the viewer that the stability of Lexus was far more extraordinary than even one of the most expensive cars around. Another video showed a Lexus making a sharp turn with a glass of water on its dashboard. The glass remained upright; again, the Lexus proved itself. These videos were successful in bringing in customers, whose expectations were surpassed. As a result of its continued success, Lexus decided to raise the price of their vehicles. However, this strategy did not work out as well as Lexus had hoped. Lexus realized that it lacked the heritage for prestige that European luxury cars command and that people are once again willing to pay extra for it. It has, as a result, turned to a new advertising campaign to inspire an emotional response to its cars. The campaign was exceptionally powerful because it also had to combat the decrease in growth of the luxury car market compared to the auto industry’s overall growth. Partly responsible for this decline, the “near luxury” autos have skimmed away potential luxury auto customers. Included in this group are the Toyota Avalon, the Nissan Maxima, and the Mazda Millennia. BMW and Mercedes also introduced products for this segment the BMW 3 series and the Mercedes C Class. In response to this competition, Lexus emphasized non-traditional advertising and promotion, in addition to more mainstream luxury car advertisements. While many companies that rely heavily on commercial advertising are upset with TiVo (the new television viewing system that allows users to filter out commercials), Lexus positioned TiVo to its advantage. Lexus sponsored a “New World of Luxury” sweepstakes where the prize was a new ES300. TiVo users used their system to search for Lexus commercials for clues to questions that Lexus posted on TiVo’s promotional page. The sweepstakes ran from November 12-December 14, 2001 and kept TiVo users watching Lexus commercials rather than filtering them out. Lexus continues to show the automobile industry and its current customers that it is building vehicles with luxury, performance, and style. In 2001, JD Power & Associates ranked the Lexus luxury car number one in durability for the seventh year in a row. The award was based on the number of problems reported by 40,000 users of small trucks and passenger cars. Also in 2001, Lexus was ranked number one in retention of customers for the second year in a row and named number one in customer satisfaction with dealer service by JD Power & Associates. As a result of Lexus’ marketing efforts, in 2000 Lexis set a record of its own by selling a sizzling 206,037 units, which was an all – time sales record for the luxury automaker. With this, Lexus became the top-selling luxury brand, edging out Mercedes – Benz. In 2001, Lexus was named the best selling luxury brand for the second year in a row. The company sold 223.983 new vehicles, an increase of 8.7 percent over 2000. Pre-owned vehicle sales were also up by 20.4 percent, totaling almost 58,000 and certified pre-owned vehicle sales were over 33,000- a 23.4 percent increase over 2000. AT the end of 2001 the GX470, Lexus’s third SUV, was introduced at the Detroit Auto Show. The SUV was priced from $45,000-$50,000, which positions in nicely between Lexus’s two other SUV models. For the future, Lexus is faced with the challenge of aiming for younger consumers for their vehicles. Denny Clements, group VP-general manager of Lexus, said the target group for the new luxury sedan has a median age between 47 and 55, while the current LS buyer’s median age is 58 years old. “The exterior design is much more dramatic than the previous generation LS 400,” said Mr. Clements, who admitted that past observations about the LS styling have included words such as “sedate” and “boring.” Continued marketing plans will help Lexus attempt to attract younger consumers for their vehicles. Lexus plans to expand marketing efforts in the future with the aim of not only gaining new customers, but also retaining present clients. While the company’s plans are highly classified, their latest efforts hind that newer marketing tactics will follow in the unconventional style of ads past. For instance, Lexus’ recent sponsorship of a skiing event in Colorado included an invitation to all Lexus owners to spend a luxurious – all expense-paid weekend in the mountains. These efforts are consistent with Lexus’ philosophy of imparting value to luxury and luxury to value.

Questions:
1. Describe the management decision problem facing Lexus as it seeks to fight competition from other luxury car manufactures such as Mercedes, BMW, and Jagur, as well as competition from the “near luxury” autos like the Nissan Maxima and the Mazda Millennia.
2. Formulate the marketing research problem corresponding to the management decision problem you have identified in (1)
3. Develop a graphical model explaining the consumer choice process for luxury cars.
4. Identify two research questions based on the definition of the marketing research problem and the graphical model.
5. Develop at least one hypothesis for each research question you have identified in (4).
6. How would you conduct an Internet search for information on the luxury car market? Summarize the results of your search in a report.