Bojangles with Randy Poindexter
Should Accompany Chapter 12 of Solomon/Stuart
Content of Video: This video touches on all four of the elements in the marketing mix, but the most attention is given to the element of pricing. Both the concept of demand and the price elasticity of demand are defined and applied to the Bojangles situation. Although price is the only element in the marketing mix that contributes to profits, it is often the least appreciated.
The elements of the Bojangles experience are a unique, Cajun-style product, that‘s made
from scratch and served in a fun, festive restaurant. It is backed by strong promotion and distribution has increased to more than 242 restaurants in 8 states.
To set price, one has to factor into the pricing equation, the quality of the product, services provided, cleanliness of restaurant, advertising, merchandising and promotions to reach the price point desired. The result must be a price consistent with the consumer‘s perception of value.
Bojangles is in a situation of price elasticity, so when the issue of combo pricing arose, it took it slow and carefully factored in the major elements of pricing. The idea behind combo pricing is to trade a consumer who might otherwise have only purchased one or two items into buying a package that contains an entrée, a side and a drink because the packaged price is lower than the total of the individual items priced separately. The risk you run, according to Randy Poindexter, is that you trade some consumers down.
Bojangles went with the combo pricing and experienced double digit growth. Most of the combo growth comes at lunchtime when consumers are presumably buying a full meal. Today, it‘s a sandwich and a fixin‘ and a drink rather than just a sandwich and that‘s good for Bojangles‘ bottom line.
Description of Video: Only Randy Poindexter is interviewed in the video, but there are lots of shots of Bojangles‘ restaurants, the chicken, employees at work and people eating in the restaurant.
Teaching Tips: This video lends itself to a discussion of the relationship between price and the other elements of the marketing mix (section 1 of chapter 12). It can also be used to discuss demand and price elasticity of demand as illustrated in the video. But it is most useful for discussing pricing objectives—especially the relationship between image and
pricing, customer satisfaction and pricing. Ask students to think about the image of Bojangles. Does it lend itself to higher or lower prices than other quick-food establishments. Does the uniqueness of its product justify a higher price?
Combo pricing is basically a form of price reduction; buy the larger package because it‘s cheaper than all the individual items priced separately. Does instituting combo pricing lower consumers‘ perceptions like a straightforward price reduction would?
If competing restaurants have combo pricing and Bojangles doesn‘t, how would that affect consumers‘ perceptions of price at Bojangles? Is combo pricing necessary to meet the competition? Are consumers trained to look for combos when they visit quick food establishments?
Student Assignment: If you live in a state where there are Bojangles, you could ask students to visit Bojangles and other quick food establishments to check the prices and combos available. The goal would be to determine if it costs more or less to eat a meal at Bojangles. Knowing this will help to answer the questions above as to whether or not Bojangles is perceived as higher or lower priced than other similar restaurants. Also, students should check the cost of a combo against the total price of ordering the items individually to determine how much they would save. We know that the just noticeable difference that usually stimulates purchase is at least 10%. How does that affect this situation? Are all of the combos at least 10% less expensive?
Should Accompany Chapter 14 of Solomon/Stuart
Content of Video: This video profiles DHL, the leader in international express mail service for fast, reliable service as shown by a recent study. The keys to DHL‘s leadership are: (a) use of information technology, (b) understanding the customer‘s business (c) anticipating new markets and market needs and (d) constantly improving customer service.
A. Information Technology--There are several scenes of employees using scanners nd computers in the shipping and tracking of packages.
B. Understanding the customers business--To stress understanding the customer‘s business,
Brian Billings of DHL says that they find business customers to be constantly demanding and vocal and that competition in these markets is intense—all of which leads to the
development of new products and services.
C. Anticipating needs—DHL‘s efforts to constantly seek out new markets and needs is
underscored in Brian‘s comments about DHL‘s expansion over time. It is also reinforced in examples of new services introduced by DHL. One is pre-clearance of packages for customs so that goods are not held up at customs points. Another example is logistics services in which goods move goods from origin to destination without stopping at intermediate holding points. This meets the needs of industries when fashion or technology can outdate goods in a short period of time. As corporations reduce the costs of holding inventory and warehousing, this opens new possibilities to DHL.
D. Customer service--Finally, DHL‘s greatest strength is its focus on customer service.
They constantly strive to improve service by hiring their own employees and not turning
packages over to agents and through extensive training of employees. DHL employees
are known for their caring, can-do attitude. Brian recounts the example of a DHL
courier who recently took a package from an individual in a car in heavy traffic.
Description of Video: This video shows numerous still shots of DHL airplanes, employees at work and lots of shots of DHL vehicles against identifiable foreign backgrounds such as Rome and Russia. It also includes an interview with Brian Billings, Sr. VP of Marketing and Planning.
Teaching Tips: This video can be used with the physical distribution section of Chapter 14. Discuss concepts such as order processing, warehousing, materials handling and transportation and inventory control in class before showing the video. List these on the blackboard.
After showing the video, ask students how DHL can help reduce the expense and effort of each of the concepts listed on the blackboard. Stress that DHL might be able to take over some of these for the company. Recently, DHL has taken warehousing of parts for Kubota. When customers call the Kubota number, they are actually calling DHL which then ships the parts and notifies Kubota. Another example is DHL‘s agreement with Roche Logistics to
store, pick and pack, distribute and manage inventory for diagnostic analytical systems for F. Hoffman-LaRoche Ltd. Discuss in class why it is cheaper and easier for DHL to do this than for the manufacturing firms.
At the end of the video, students are asked which environmental factors (economic, political and cultural) would affect their selection of an international express mail service for their company‘s perishable foodstuffs from the U.S. to Asia. If you don‘t want to use this, you can avoid it by cutting the video off after Brian‘s comments about using local people to manage local business as there are a few seconds where the screen is blank.
If you do want to use it, you might want to hold this discussion before getting into detailed discussion of order processing, warehousing, etc. as this is much more general than physical distribution. For perishable goods, the fastest route to market is the best. So, DHL‘s pre-
clearance services would be useful to speed delivery as would their logistics service as the goods would never sit still. Unfortunately, these services may cost more (economic factor). Making sure that goods are handled properly could be a function of understanding the local market (cultural factor) and DHL‘s use of local people would facilitate this. Finally, DHL is perceived as a global company, not a U.S. one (as it has the largest share of international rather than U.S. delivery business) which might help it politically in markets where the U.S. is not popular.
DuPont: The Right Ingredients for Success
Should Accompany Chapter 10 of Solomon/Stuart
Content of Video: This video focuses on the branding strategy employed by DuPont. Because DuPont makes ingredient products used in the production of other products, branding is a major challenge for this company—especially when one considers that the
company has two markets. First, it sells directly to other manufacturers, but to be successful, it must understand and respond to the needs of final consumers and communicate to them. DuPont picks its direct customers carefully because the company wants not only to sell to them, but to partner with them. The customer should become a partner in designing the final products to be made from the DuPont ingredient brands. For final consumers, DuPont engages in marketing research in order to understand the needs of consumers, how they are living and what they are thinking in order to turn that knowledge into products meeting needs that consumers sometimes didn‘t even know they had.
To accomplish its goals, DuPont uses an umbrella strategy when the DuPont name is the umbrella under which the ingredient brands such as Corian, Kevlar, Nomex, Teflon and Stainmaster are sheltered and marketed in a proactive manner. Thus, advertising and communication for the individual brands is also associated with the DuPont logo and slogan ―Better things for better living.‖ As the umbrella or parent brand, DuPont is presented as standing for respect for the individual, safety, health and the environment, honesty and ethics. The ingredient brands are then promoted on the basis of the benefits that each provides.
DuPont adheres to five principles of Brand Management that are illustrated with comments by individual brand managers and DuPont personnel. The five principles are: (A) Personality—the company‘s culture, its goal of bringing solutions to consumer needs
(B) Visibility—projecting the company to its markets through a variety of advertising and
promotional means that create awareness of the company‘s brands and make them
visible in the marketplace as well as connecting with consumers.
(C) Target Management—selecting partners and customers: Whom do we connect with?
(D) Marketing management—managing the brand by understanding the dynamics of the
marketplace: by seeing, feeling and touching them
(E) Reputation Management—present DuPont globally in a way that builds on the core
values of respect, health, environment, honesty and ethics.
Description of Video: This video contains interviews with the following DuPont personnel: Kathy Forte, DuPont Public Affairs; Jamie Murray, DuPont Brand Director; Barbara Pandos, U.S. Programs Manager; Steve McCracken, VP, General Manager, Corian; Mary Kopf, Brand Manager—Kevlar and Nomex; David McAndrews, VP, General Manager
DuPont-Flouroproducts; Roszann Graham, Global District Director—Automobile Finishes;
and Gary Johnston,National Marketing Communications Manager, Nylon Furnishings. The interviews are interspersed with pictures of the founder, shots of the logo and slogan and ads for the various ingredient brands.
Advice to Marketing Students: To be good marketers, they should be totally tuned into the needs of customers so that they can translate those needs into an offering that meets the need in a timely fashion and quality way at a price that the customer is willing and can afford to pay.
Teaching Tips: Before showing the video, ask students what type of brand is DuPont? While it is a national brand, it does not fit neatly into any of the other branding types discussed in the textbook. Ask what DuPont means to them? What does it stand for? What kind of personality does it have?
Then shift to a discussion of the ingredient brands. Ask what products does DuPont make? Students should be able to provide a list of some of the products discussed in the video and other products such as Lycra. Point out that these products‘ names are also brands just as the name DuPont is a brand. Ask students what is the relationship between the two types of brands.
Conclude this part of the discussion by asking why DuPont engages in heavy brand management. This sets the stage for showing the video. The main issues of types of brands, relationships between brands and the personality and reputation of the brands as well as why DuPont advertises its brands to final consumers have been raised.
Now show the video. Point out that students should take note of the five principles of brand management. After showing the video, compare the students‘ answers with the information
in the video. They were probably pretty close. If they are, this indicates that DuPont has done a good job of communicating about their corporate and product brands.
Discuss how the approach used by DuPont differs from/is similar to that used by Intel or another ingredient branding firm (Intel sells to computer manufacturers, but does not partner with them) and General Motors or another umbrella branding firm (sells directly to the final consumer). Conclude with a discussion of whether this approach is worth the cost and extensive marketing and financial resources it requires. What are the benefits? Good corporate reputation, builds demand with final consumers, attracts topnotch partners who want to be affiliated with DuPont, enables the company to charge higher prices and build brand loyalty/repeat purchase and build esprit de corp among employees who are proud to work for a firm with the core values that DuPont has. Balance this against cost and drain on resources. The result should be greater benefit than cost, but only if the corporate claims are believable. Underlying all the advertising and reputation building is a focus on quality products that deliver the promised benefits. In the end, it comes down to the product—a
point made early on in the video.
FD&B Part I
Should Accompany Chapter 2 of Solomon/Stuart
Content of Video: This video primarily describes FD&B--a full-service marketing firm located on Long Island that handles the accounts of such clients as MasterCard, Watson and Hain Foods. Although they do deliver advertising, FD&B sees itself as a marketing firm, not an ad agency. They claim that the ad agency concept is outdated. The video focuses on the way that FD&B markets itself. This illustrates attention to the fundamentals of good marketing planning.
FD&B knows that a full service firm must be able to control communications and provide all the necessary resources needed for strategic planning and thinking. They believe that even though they are a small firm, they can provide the same services as a larger firm thanks to improvements in technology. In addition, they can turn things around faster and offer personalized service. They believe that clients expect more commitment from a smaller agency.
Throughout the video, the partners discuss the need for a marketing firm to be service oriented and to establish partnerships with their clients. To do this a firm must be consumer oriented, market driven, value-based, integrated and goal oriented. To do this, a marketing service firm must understand the clients‘ business and their needs. FD &B personnel often work for a new client for several weeks in order to understand their business.
To make sure that they understand the situation fully, FD & B uses lots of research—both
secondary and primary; quantitative and qualitative. They try to understand the product category, who the competition is, the dynamics of the product that they‘re doing communication for, who is the target consumer, what are they looking for and how can the product be positioned to provide a unique need.
FD&B seeks clients that are dedicated to their mission, looking for growth, want strategic planning, direct follow through, and executions carried out with the highest quality. That would create a match between the client and FD &B.
Description of Video: There are interviews with three partners at FD&B: Philip Franznick (President), Kevin P. Franznick (Executive VP) and Todd Brenard (Senior VP). There are scenes of people working at the agency, meetings with clients, planning sessions and excerpts from 8 o‘clock coffee ads done by FD&B.
Teaching Tips: The main value of this video is in demonstrating how a firm markets itself. Therefore, before showing the video, talk about the importance of planning and strategy. Ask the students to think of themselves as potential clients who are considering hiring a marketing/advertising agency. What would they look for in an agency? What evidence would they want to know that this is the agency for them? What services would they expect? Would they want a small or large agency? Why or why not?
After looking at the video, ask them what FD & B‘s mission is? What are their objectives? What is their competitive advantage? (These are all discussed in the first few sections of Chapter 2.) How would they feel about hiring FD & B. Did what they saw and heard make them feel good about FD & B? What evidence was most important? Was it what people said? The services discussed? The list of clients? Why would they want to pick FD &B? If they do, then FD & B did a good job of marketing themselves. If they didn‘t, it‘s important to discuss why. What was missing? What should FD & B have said?
FD & B Part II
Should Accompany Chapter 16 of Solomon/Stuart
Content of Video: In the beginning of this video, there are several screens that the define the role of the ad agency today according to FD & B. They are as follows:
To make a difference today’s marketers need the capabilities of an advertising agency
that has the experience, talent and desire to deliver targeted, creative solutions to marketing problems, quickly and efficiently.
To make a difference, the agency must create and execute effective advertising as well as strategically integrated promotion, public relations and direct marketing.
To make a difference the agency must understand the multiplicity of media available, discern their efficiency, synergistically plan for the media and maintain the know-how to negotiate and purchase media, time or space economically.
To make a difference, the agency must base all efforts on a deeply defined strategy. At F D & B, this process is called STRATEGICS.
STRATEGICS stands for synergistic thinking rigorously applied to effectively generate integrated creative solutions. In short, strategy is all.
To serve a client, FD & B believes that you must know who the customer is, what the distribution is, what the budget is and what the appeals of the product are. With this information, they can use STRATEGICS to provide direction, creativity and thoroughness for the programs they develop for clients.
In positioning, they believe that you should focus on the one key point that you want the consumer to take away. What is it about the product that will make it attractive to the consumer, given their lifestyle? For Hain Foods, it‘s that Hain makes better for you, all natural, delicious alternatives than the higher-fat foods you‘ve been eating.
In using STRATEGICS for MasterCard, they developed a For a Clean Bill of Health promotion. The objectives were to increase credit card usage by consumers and to encourage non-accepting health care providers to use MC not only because it might help their business, but also because they could provide their customers with the Clean Bill of Health promotion. They developed this campaign by beginning with what they needed to accomplish before they decided on the vehicle. This reinforces the importance of objectives.
Some of the challenges facing advertisers today is how to cut through clutter? To determine how shopping will change with the growth of direct mail ordering, selling over the internet and the use of debit cards?
FD & B‘s approach is a buyer-seller dyad that focuses on the needs and resources of the
client, not the other way around. When they have smaller clients, they start smaller--maybe with a test market.
They follow a process that asks what resources do we have? What are the key objectives that they need to build the client‘s business and profitability? They are engaged in integrated marketing communications and find that the promotional mix is constantly changing. Today it includes more public relations, direct mail and the internet. When many of the technology media merge such as telephone, cable and computer, promotions will be more targeted, more measurable and need a wider mix to get the message across.
Description of Video: This video contains ads from F D & B‘s clients, scenes of people at work at F D & B and interviews with partners Philip Franznick (President), Kevin P. Franznick (Exec. VP), Todd Brenard (Sr. VP) and Jennifer Friebely, Account Supervisor.
Teaching Tips: This video can be used to discuss the changes taking place among
advertising agencies. The manifestos that are seen on screen at the beginning of the video state a number of new ways that ad agencies must operate. The main changes are that ad agencies must be problem solvers, have a strategic focus, generate creative, integrated solutions and have the ability to use the new media effectively. This should relate to the section in chapter 16 about the promotion mix.
Before showing the video talk about the importance of promotional objectives, finding the right message and thinking about how the message is affected by different media. After the video, ask students to discuss the examples in the video. For Hain Foods, what was the positioning? How would that affect promotions aimed at current users? Non-users? Would it be equally effective for both groups? How would changes in media such as internet access on the home television affect promotion for Hain or MasterCard?
For the Clean Bill of Health campaign, who were the targets? What were the objectives? How would those affect choice of media?
You could also hold a general discussion of how the internet is changing the face of advertising and consumer shopping. What effects does this have on the promotional mix?
Forum Shops: Entertainment Retailing
Should Accompany Chapter 15 of Solomon/Stuart
Content of Video: This video shows and describes a new phenomena in retailing,
entertainment retailing which is built around a central theme. Because it adjoins Caesar‘s Palace in Las Vegas, this shopping center took its theme from ancient Rome. It‘s the Forum Shops with a very authentic Roman decor and architecture. Unlike its suburban cousins, the Forum Shops is not laid out in a rectangle or long bar. It‘s Y-shaped and consumers enter
the base of the Y from Caesar‘s which means that they walk a little ways before they must branch left or right. At that intersection, there is a Roman fountain that is pictured behind
Maureen in the video. If they go to the right, they will come to the fountain where Bacchus hourly invites the closeby Gods and shoppers to a party. If they go to the left, they will wind up at the fountain where hourly, Gadrius and Alia do battle with fire and water to see who will rule Atlantis. Thus, each arm of the shopping center leads to a major attraction which gives consumers a reason to stroll to the end of the arm.
On the way, they will pass a wonderful mix of shops.
While many of the shops at the Forum are expensive, designer shops—Gucci, Ferragamo,
Bulgari, Karan, others are very ordinary stores—The Disney Store and the Gap. So, there is
something here for everyone.
The architecture and attractions create a sort of fantasy extension to the rest of Las Vegas in which consumers may be likely to spend more than they would otherwise. After all they are on vacation and they may have been lucky in the casinos. This is explained by Maureen and reinforced by some consumers interviewed in the video.
But all of this fun is carefully structured. The Forum Shops are open longer hours to accommodate those in the casinos and those that work strange hours in Las Vegas. Because of the attractions and many benches and sidewalk cafes, you will find as many men there as women. The Forum Shops has cleverly created an environment that intrigues men as well as women. The Forum Shops also focus on training shop people to treat customers well—
especially foreign customers who may have a language problem or be unfamiliar with shopping in the U.S.. After all, they usually bring more money to spend. Finally, the Forum Shops give longer leases, but don‘t give any retailer exclusivity. They are, however, careful to make sure that each retailer they add brings something new to the Forum.
To attract customers, the Forum Shops advertise extensively on billboards, in-flight magazines and Las Vegas entertainment guides. They use a lighthearted approach to reduce the possible intimidation that some shoppers might feel at the Forum. They also run fam (familiarization tours) with travel agents as people nowadays are going to shopping destinations on vacation.
Description of the Video: The video features many shots of stores at the Forum, the
fountains of Bacchus and Atlantis and some of the action at Atlantis along with interviews with Maureen Crampton (Director of Marketing, The Forum Shops), and Robert Wynn (Atlantis Show Tour).
Teaching Tips: Show the video and elicit general student reactions. What did they think? Would they like to shop there? Did it look like fun? What did they like? Was there anything that they disliked? What‘s the purpose of the entertainment? (To get people to walk to the end of the Y and to keep them there longer.) How important is the design?
Shopping centers are usually classified as regional, local or neighborhood. Does a concept like The Forum Shops add another category? Remember that this is a destination for some consumers. There are now more people coming to Las Vegas to shop than to gamble. Why would consumers want to spend their vacation shopping? (They don‘t have time the rest of the year? Well, it is entertaining and it doesn‘t coast a thing to stroll around. There may
also be an urge to see what those really high toned stores are like. Note that the average shopper has an income between $50 to $60,000. They may not have many opportunities to shop at designer stores, but they are welcome here. So, this experience is out of the ordinary for them and there‘s always the urge to take something back—just to show that you‘ve been.)
Unlike most shopping centers, The Forum Shops have no anchors—no major department
stores. It consists of specialty stores. Ask students why they think there are no department stores—not even exclusive ones like Neiman Marcus.
Discuss the image of The Forum Shops. What are the elements of their image? How does their promotion and the message of their advertising enhance that image?
Personal Selling with Kathleen Carroll Mullen of General Electric
Should Accompany Chapter 18 of Solomon/Stuart
Content of Video: This video focuses on one salesperson in GE‘s electrical products division. It gives her background (degree in mechanical engineering), probes why she likes her job (the variety), what she thinks is important (knowing the customer very well and anticipating their next requests) and the importance of building a relationship with the customer.
Through on-screen statement, the video defines personal selling, places it in the promotional mix, and defines two types of selling (transactional and relationship). It also describes the Request for Quote (RFQ) process and why a good sales person works with customers to anticipate RFQs. It also stresses that it takes a team to put together proposals for big bids. The salesperson must meet with the customers‘ technical people to understand the technical specs of the project, with their own production people to understand what it will require to meet the bid and with the marketing people to determine pricing.
The video describes a situation when Carroll Mullen was a trainee and received a RFQ from an unknown company. At the end of the RFQ, the purchaser asked to learn more about GE and what it could do for them. Because of the effort involved in putting together a large bid and because the company was not one of the Fortune 100 firms that GE was targeting, management did not encourage Carroll, but she pursued it anyway. The result was an initial sale of $50,000, but through the relationship established, over $130 million has been sold to the firm and the account is still growing. This illustrates the importance of relationships.
Finally, it specifies that making a proposal or presentation and supplying a bid does not close the sale. Closing the sale requires that you know when the customer is ready to close. If you close before they are ready, you may get the initial sale, but you won‘t get repeat sales which is the basis of relationship selling.