Daniel B. Kostiw

Bus 306

Chapter 2 Notes

1. If the company investors believe they face a once-in-a-lifetime opportunity, they

would need to evaluate the target market and competitors. If they notice that their

product is selling quickly and many other manufacturers are creating “knock-off”

products, they know that time is limited in capturing their market. In time, someone

will improve upon their idea and they will lose their opportunity. To better the

product, the group needs a mission statement. Considering most of the focus is

towards household women and dealing with rodents, the group should focus its

mission statement on mice problems and easy/safe traps. If I where to write this, I

would focus it around those points saying something along the lines of, “A mice-free

home is quick and easy”

2. Martha has identified a good target market for Trap-Ease; however there are other

markets to consider targeting. For example, many ranches, or out-door facilities

with cats and other small animals might want to consider this product. Maybe even

laboratories or testing facilities might be a unique and different target. They could

capture live specimens for testing the safety of medication.

3. Trap-Ease has positioned itself in the way of being a one-time, safe, easy, and “clean”

buy that focuses on a consumers desire rather then need. The company could

position the product to be more of a family need. Prioritizing the re-useable,

recyclable, and sustainable functions of the product. Focusing the product around

the marketing strategy of being “good”, “safe”, and “sustainable” would lead to

diversifying the market mix.

4. As of now, the current market mix is slim. The company does little to focus its

marketing strategy around the “Four P’s” (Price, Product, Place, Promotion). There

is no price range for the product, only one fixed cost with no promotions, which

could be listed on in magazine, newspapers, or super markets. The places that the

product is sold are limited and not where many at home women would go on a daily

basis. Though the product is well manufactured, it could include some more

biodegradable materials so the mouse along with the trap could decompose

together. In short, the market mix is poorly managed.

5. In the ways of a clean and “mess-free” mousetrap, there are really little competitors.

However, in the mousetrap business there are many. Poison pills, mousetraps,

professional exterminators, or even a household cat could be justified as a

competitor to Trap-Ease. However, many of these alternatives are either extremely

dangerous, costly, or simply not a possibility for all consumers.

6. If I where to change Trap-Ease’s marketing strategy, I would first begin to focus on

the market mix. I would evaluate the price and promotions the company offers. I

would recommend that the company place more promotional advertisements and

initial price details in their current marketing catalogs. I would advise Trap-Ease to

consider moving much of its promotions and advertising to online sources and have

advertisements on websites. It is more likely then not that the women who would

buy these are using the web on a daily basis as opposed to leaving to hardware and

discount chains. Also, women would not be the only focus group. Men go to many

hardware and trade shows, innovation and ease-of-use are grate to anybody. I

would bet, if a man saw this, he would mention it to his wife as an alternative she

would appreciate. The product could be re-worked to become more environmental

and sustainable in the event people dispose of the trap rather then re-use it. I

believe that the whole point is to avoid seeing a dead mouse, if this is the case many

would throw away the trap and not re-use it. Therefore, a recyclable container

would go a long way to promote and improve the product. I believe that some

operating and strategic control systems would be need in making these changes.

Closely track the number of sales after each type of marketing change. Begin slow

and move to online sources, then, if needed, create discounts. After that, change the

product around; this would increase costs but could also lead to increased sales.

Operation control will help track this. Strategic control would assess the overall

recognition of the product. Are more people talking about it? How is word

spreading? The company already has a strong start with receiving first place in

trade and hardware shows. I say use this to the companies advantage; publicize its

success and use it as a selling point for why it is better then every other alternative.

Chapter 20 Notes

1. International Paper (IP) defies common social criticisms for marketing by managing

natural resources, reducing their environmental footprint, and creating strategic

partnerships. Typically, social critics claim that marketers “created an endless cycle of

mass consumption…”(Pg. 588). IP defies this initial criticism by promoting the re-

planting of trees that are used to create their paper. The company also is responsible for

much of the innovation in recycling and reusing of old paper and carbon emissions. IP

has managed to recover and reuse 38,000 pounds of steam per hour (Pg. 607). Social

critics also argue that marketing leads to an overselling of private goods that lead to the

consumption of public resources and services. However, by creating strategic

partnerships IP manages the level of consumption and production based by business and

consumer demand. They then create new products to positively improve upon old ones.

Take for example the “ecotainer”, which transformed the old plastic lining disposable

cups into biopolymer or in other words, plant products. Marketing has been described as

cultural pollution; however, IP is hardly known in the public sector. The company

focuses operations on businesses and is “a company that most people know little

about”(Pg. 607).

2. International Paper is successful in applying concepts of sustainability due to the

companies “three pillars” of operations: managing natural resources, reducing

environmental footprints, and building strategic partnerships. Through these three pillars

IP manages to not only defy social criticisms, but also manages to apply the concepts of

sustainability. As mentioned prior, the company replants trees that create an infinite

supply of raw materials; they also reduce, reuse, and recycle old paper, and lastly, reduce

the waste of steam and fossil fuel consumption. Through their transparency with

customers, the company also cut its global greenhouse gas emissions by up to 40%.

Lastly, in building strategic partnerships, the ecotainer transformed the way companies

use disposable packaging by now making it biodegradable and “environmentally

friendly”.

3. In comparison to the Environmental Sustainability Portfolio, IP manages to implement

the greening of today and tomorrow through both internal and external elements of

production. The company maintains environmental sustainability and market

sustainability simultaneously. In pollution prevention, IP focuses on the greening today

by reducing the need for steam and coal use; in return, they eliminate the need for fossil

fuels before they are used. While focusing on internal production the company considers

the life cycle of their production (as shown through the ecotainer example) by producing

goods that can be recycled either by the company, or by compost. IP creates

environmental sustainability of tomorrow by constantly striving to create new and

innovative ideas and methods of production through new skills, research, and

development. In the long term, through replanting trees and raw materials used, IP creates

a sustainable vision for the future and manages a strategic framework for future external

impacts of production.

4. International Paper does practice enlightened marketing. Enlightened marketing is a

philosophy that a company would create the most optimal long-term performance based

on the consumers oriented market, social marketing, companies innovation, value, and

mission. International paper is consumer oriented by creating leading products to benefit

the consumer and eliminate external costs of production and maintains a sustainable

vision. The company clearly states that their values are in sustainability and as

demonstrated through their improvements of production and innovative product design.

The three pillars of operations are an example of all these elements combined together.

5. If IP where not to focus on social responsibility I do not believe the company would be

more financially successful. As we learned in prior classes, building a company around

shareholder wealth continually fails in the long run and never accommodates some of the

recently learned principles of marketing such as environmental sustainability or

marketing sustainability. Focusing on stakeholders leads to long-term benefit for the

company. Happy consumers, employees, and business partners creates a healthy,

symbiotic relationship within investors, producers, and consumers. I believe, that with the

current mission and operations of IP, there would be no better form of financial success

Chapter 3 Notes

7. Microenvironmental factors are the actors close to a company that affects that company’s

ability to serve customers. In the case of Xerox, many microenvironmental factors where

affected since the companies performance in the 1990’s. Initially, the company outsourced

most of its labor leading to nearly half the employee union being laid off dropping from

100,000 to 55,000. Second, the Xerox had to redefine its mission statement; the company

redefined whom it served and how it was going to continue to serve them. They reorganized

their market intermediaries; Xerox saw that copiers needed to be changed into faster, easier,

and more efficient machines that helped build “document management technology”. To make

this change, Xerox purchased Affiliated Computer Services (ACS) to help further developed

their IT presence and expand another microenvironmental factor, the public. With purchase

of other companies, they “resulted in a broad portfolio of customer-focused products,

software, and services…”

8. Macroenvironmental factors are large societal factors that affect a company causing

microenvironmental changes. For example, Xerox reorganized their market intermediaries,

due to a large societal shift in the demand for technology. Consumers needed multipurpose

hardware to create digital images of documents, relay information electronically, and yes,

still make copies. The change and large demand for equipment with these technological

advancements as well as internet capabilities lead to large demographic, technological, and

cultural changes that Xerox was frankly not prepared for. However, the company has since

changed and now focuses on the future; as stated in an annual report, “Macrofactors such as

globalization, emerging technologies, and, most recently, depressed financial markets bring

new challenges every day to businesses of all sizes”

9. Xerox has pursued the best strategy in focusing on the business services industry. Within this

industry there is much change. It provides major insight and creates significant changes in all

macroenvironmental factors. In considering this, Xerox has many opportunities to regain

their position of “top-dog”. With a refocused mission statement and significant

microenvironmental changes. Though there is much to learn from the private and public

sectors; I believe many of these trends start in business industries, or if not start, then develop

into larger projects. I believe Xerox has pursued the best business strategy available.

10. In responding to the first signs of declining revenues and profits Xerox should have began

making microenvironmental changes. At that point the company should have chosen to

recognize the societal and cultural changes around them. The company had blinders up and

failed to recognize the opportunities around them. In response, the company should have

implemented more diverse services with their copiers. Even if they failed, it would have been

a step towards maintaining a popular demand. However, at the time, the company would

have had enough money to put into public relations along with research and development.

11. I would recommend that Burns remembers what brought Xerox to the situation it was in over

a decade ago. With technology advancing to smartphones and tablets I believe one thing is

guaranteed, “just as e-mail and desktop software killed photocopying, smartphones and

tablets are killing inkjet and photo printers.” Pay attention to this, Now is a time to invent

something new. Create a way to combine these elements digitally, move past copy and photo

printers to look at the new thing…However, on a side note, I know that many people have a

demand to scan written text into a word processing format. This would be a way to add value

to software and hardware packages. This aside, I would put major research in the

macroenvironemntal changes within society.

Chapter 4 Notes

12. Meredith’s marketing information system contains a significant amount of secondary market

research with a little primary market research. The company conducts secondary market

research through creating and maintaining an internal database that collects purchasing and

personal information for nearly 80 percent of home owners -- primarily women -- as well as a

large portion of non-home owners (130). The secondary market research watches purchases,

subscription, and incentives that consumers follow. Following the secondary market

research, Meredith conducts its primary research as well. They begin to analyze the

consumers attitude towards information, why do they buy and what is happening in

someone’s life are all variables that are analyzed and viewed as influences towards a

customers purchasing decision. Yet, Meredith’s marketing information fails to fully dive into

the competition. It appears that the company -- though it has a large percentage of the market

-- doesn’t view the competition as a possible area of interest. However, there are reasons that

people are going to the competition; Why is this the case? It appears that this is an important

question to analyze.

13. Impersonal data points can result in meaningful relationships with customers. This is best

explained through an example of a company that does it successfully; take Amazon as a

company that is successful in this matter. The company analyzes your transactions then

builds a database around your interests. After purchasing a transaction, a survey is sent to

your email to verify that all conditions where perfect when the product arrived. If not, then

there is room for improvement and a custom return label gets sent to you. Amazon

accommodates all the needs for the consumer. Similarly, Meredith does its best to

accommodate the needs of women. It is best described by the companies efforts to cross-

promote different magazines, “based on what it knows about specific customers” (131).

14. Merediths marketing information expertise does transfer into other media and products; this

was proven when the text explained that, “its strength in managing marketing information

has also resulted in numerous partnerships with leading companies such as Home Depot,

DirectTV, Chrysler, and Carnival Cruise Lines” (131). None of these other products or

services operate the same way as Meredith. Home Depot may be the closest as it still

advertises with paper adds in the newspaper. However, other companies like Chrysler and

Carnival Cruise Lines do not do this -- at least not to what I have noticed --. Therefore, other

means of media that they may market through such as TV or the Internet can prove to benefit

by following the same means as Meredith.

15. Though Meredith is still heavily rooted in print, the company is focused on sustainable media

marketing methods. The paper and print industry is hurting, the text states that “magazine

advertising has been decreasing for years…” if Meredith chooses to maintain its course on

printed marketing, there is risk for a decline in sales. However this is not the case, as

mentioned earlier, “Meredith’s core competency of managing customer information is not

exclusive to print…” they go on to mention “it is something that will fuel the company’s

expansion…” (131). With the mindset of using printed marketing as a foundation to new

ventures it is difficult to find an issue with Meredith’s marketing strategies.

16. If I where to make a recommendation to Meredith, I would start by advising further research

into competitor marketing strategies. How do they manage to eliminate 20 percent of the

target market? I would feel that some more primary research would need to be conducted for

this experiment to be successful. The company has an overabundance of secondary

marketing information. With researching competition, Meredith could use more primary

market research to improve on their methods.

Chapter 6 Notes

1. The demand and market structure for Cisco’s products are placed around technology and

the advancing of telecommunications. As businesses plan to compete and grow on a

global scale, there needs to be ways to discuss new investments, methods, and structure

within a company or job. Arguably, Cisco’s market structure influences globalization

while also allowing for environmental, economical, and sustainable processes. As

opposed to sending individuals overseas or across a given country, telecommunications

allows for users to interact as if in person from miles away. Telecommuting has become a

popular form of work, and according to Cisco’s research, workers appreciate it so much

that they would work for less. Ultimately, this saves money for businesses, reduces

carbon emissions, and creates a healthier lifestyle for individuals.

2. Cisco’s business follows primarily systems, solutions, and new task selling situations

though their new ventures’ focusses heavily on systems selling. The company’s older

products where routers and other wireless networking devices. These components are

treated as a new task buy for consumers or businesses. I would argue that the lifespan for

such products is low enough that each time an order is placed, Cisco could account for it

as a first time buy for that customer. However, with the telecommunication solution

Cisco can focus new business strategies around selling a service or system.

3. The primary benefits come from Cisco’s telecommunication services, on page 187 in our

text the case study explains that, “telecommuters have higher job satisfaction”.

Continuing on, “people like working from home so much that they would be willing to

work for less pay.” In an example provided, a china relief worker explained the positive

impacts telecommunications had on diagnosing trauma patience by using the

communications to network with specialists in Maryland.

4. The customer buying process for a Cisco product follows the steps listed on page 176.

Industries are recognizing problems in communication and employee moral. These

companies have a need to make money, these factors negatively impact its ability to do

so. Product specifications and supplier searching show Cisco’s success in this market.

However, it is not to say the company could not go with other alternatives, this is when

companies spend much time researching for alternatives. Moving on, proposals and

selections are placed and the company continues to either make routine or variant orders.

In buying a Cisco product, you get the services and technical expertise from the company

to go with it. If a company chose to purchase their own broadband router or use a

competitor’s service, they would risk not getting enough help or services when needed.

5. The collaborative culture and products offered by Cisco is a something that could work

for all companies. Large businesses and smaller conglomerates can benefit from the

specialized services and personalized technical support Cisco offers. However, the depth

to which a business will use Cisco’s services would change. It is unlikely a small

business would use telecommunications as frequently as a larger, more global, business.

P&G for example would use these services to negotiate many global market transactions

inside, and outside of the U.S. Telecommunication offers a quick way to negotiate

between parties that have busy schedules and are unable to meet in person. However the

routers and internet services would be more beneficial than competitors.

Chapter 7 Notes

1. Darden focuses the sit-in dining through all the segmentations in different ways. Offering

a variety of meal-types with different atmospheres addresses the psychographic,

occasional, benefit, income, and behavioral segments. For example, Olive Garden offers

an Italian big-family atmosphere while offering their food at a reasonable price. Red

Lobster follows the white-collar workers and a fancier environment but also with a

unique wood-grilled taste. Darden focuses on expanding its business across the whole

U.S. therefore covering much of the geographic segments. With their casual and semi-

formal environments they reach all age and life-cycle segments as well as demographic.

2. I believe that Red Lobster, Olive Garden, and Longhorn Steakhouse demonstrate a large

spread in Darden’s positioning of brands. The company has effectively reached to

different psychographic, lifestyle, geographic, and behavioral segments in creating these

brands. From a geographic perspective, Longhorn is primarily based in the east coast, but

offers the ability to expand westward. Olive Garden is national, and offers a relaxed

environment and provides an experience unique for the customer therefore relaying the

psychographic segment. Red Lobster, along with the others, creates a lifestyle and

behavioral atmosphere for customers

3. The “Darden Standard” across brands could potentially backfire for the company because

it jeopardizes the uniqueness and separation between each of their sit-in restaurants. The

software and processes are great for running the businesses but they need to make sure

that the environment is different between each restaurant.

4. Though most sit-in restaurants are seeing decreasing sales in the market, Darden

restaurants will continue to dominate the market. This is because Darden has a large

presence already, they have great purchasing power – or so I assume without looking at

their financials – which allows them to buy-out any direct competition. The company has

shown that they are willing to make changes to how a given restaurant is operated to meet

the customer expectations. For example Olive Garden changed its atmosphere, Red

Lobster changed its cooking methods, and Longhorn Stakehouse is in the process of

making renovations to meet the “Darden standard”. The company has been around for a

long time, this helps in the company’s future performance.

5. I would advise Darden to be cautious on using similar operations with other stores. As

discussed in question three, the company runs a risk of merging stores together once it

adopts a similar “standard”. I would advise that Darden also takes a look at how it can

segment to higher incomes and cross-markets. The sit-in dining is great, but as noted in

the case study, more Americans are looking for a quick-dine place. I would advise that

Darden focus on using its standards to create a quick sit-in or take-out restaurant. Maybe

something along the lines of a Panera would be a model to research and further develop.

Chapter 8 Notes

1. Zipcar has taken a unique approach to their benefit orientation with customers. The

background behind Zipcar is that the company offers rental cars to everyday people.

These rental cars accommodate the customers by eliminating the costs of car payments

and paying for gas. Ultimately, Zipcar eliminates much travel time and strives to

streamline transportation in highly dense areas such as New York, Boston, San Francisco,

Los Angeles, etc. The unique positioning behind Zipcar is that it is completely loyal to its

customers. It fills a niche market of people who want to save money, and protect the

environment. Zipcar offers lines of vehicles that function towards lessoning fuel and

carbon emissions. The company strives to make their vehicles easily accessible and

custom for each consumer.

2. The benefits and values fall in line with the companies benefit oriented positioning.

Zipcar’s brand image focuses on efficiency and economy. As displayed by their

marketing strategies of “we <3 earth” and the subliminal messaging of their green logo to

follow, it is apparent how important these beliefs and values are to the company. Zipcar

makes things convenient for consumers by offering low and affordable prices, allowing

consumers to “save 67 percent on vehicle costs”. Subsequently, the company also

increases physical fitness; what initially may seem like an inconvenience, consumers

have to walk – no more than – ten minutes to get to their vehicles therefore leading to

weight loss, or so the company claims. All of this falls under the Zipcar’s ability to

promote their beliefs and values within their brand image.

3. The benefits based on beliefs focus towards changing the way society functions. It takes

the marketing strategy to a larger, more social focus arguably changing many of the

macroenvironmental forces surrounding the company. The benefit positioning saves the

consumers money. It helps them to believe that their decisions are the right ones. They

make a smart investment and choose to make a positive environmental, financial, and

personal decision. Ultimately, I believe that positioning based on benefits is a quick way

to gather followers for Zipcar. Showing the immediate benefit for their product helps to

get initial, positive, attention. In the long run, what keeps a company alive is their beliefs

and values. If Zipcar continues to meet the needs of consumers, create an environment

where they feel special and a part of a nice market, then Zipcar has a stronger belief and

value positioning then their benefits could ever amount to.

Not much competition lies in front of Zipcar. Car rental companies like Hertz, Avis, and Thrifty

are the only ones who pose a real threat to Zipcar. However, Zipcar is the only company that

creates an environmental and lifestyle association with their product. As Zipcar begins to change

the way society functions, car rental companies only provide a service without the personal

identification. In the future, I view Zipcar as the Netflix of automobiles. With the right

customization, personal touch, lifestyle change, and socio cultural norms, Zipcar could be an

extremely profitable company. If they choose to partner with other electronic fuel vehicles –

such as Tesla – , there would be a bigger increase in interest as those who might not be able to

afford such cars, would have the luxury to experience what it is like behind the wheel of one.

Chapter 9 Notes

1. A typical idea generation and new product development cycle begins in the idea

generation phase, most of the idea generation starts internally. These Ideas move on to

screening, concept development and testing, marketing strategy, business analysis,

product development, test marketing, and eventually commercialization. In a typical

company, the first four processes of new-product development are heavily analyzed and

much time is spent processing the information given. It takes a great deal of time for a

product to get to the test market, as at this point it takes a lot of money to get to. With

Google, all of their new-product ideas move extremely fast through the first two-thirds of

the new-product development phase and go immediately into the test market. For a

couple main reasons this process occurs. First, this helps Google avoid spending time on

a product that would eventually fail. Second, it encourages creativity and ambition within

the company to find the next big thing.

2. Google’s product-development process is customer centered more than anything. With a

focus on getting customers insight to new ideas before spending time on systematic and

team building efforts, the company essentially “cuts to the chase”. The early test

marketing is evidence to this. As explained in the first question Google skips many of the

steps used in the product development. This is solely to get the best product for the

consumer.

3. Google faces a couple challenges with managing its product portfolio. With new product-

development happening at a rapid pace and creating short lifecycles for these products, it

would be difficult for Google to account for all the ideas created within the company. In

addition, managing the costs of their new-product portfolio would be extremely difficult.

Most of Google’s ideas fizzle and die out quickly, with many ideas rushing to the test

market, the company faces difficulties also managing its processes. While a company

who is more “structured” spends the time to develop an idea, they have the capability to

track the ideas progress. There is a harm in both processes; not one is necessarily better

than the other.

4. There is no limit to how big Google’s product portfolio can grow. The company states

that, “anytime you cram some 20,000 of the world’s smartest people into one company,

you can expect to grow a garden of unrelated ideas.”(pg 286). With this, new idea

development is sure to occur. In addition, the “Solve for X” conferences help to create a

horizontal communication between departments. This allows for different ideas to flow

and create a collaborative ideas to develop; leading to expansions on new product

development. In addition, Google creates a mission for its employees making each one

responsible for innovation; in return, Google looks past an individual’s success or fail

rate, instead, their mindset focuses around another idea given and a possibility to spark a

new idea for someone else.

5. Google has proven to be a powerhouse in many markets. Recently the company has

expanded – successfully – in the app and mobile device markets. Because of their success

here, it process the company can expand its market. Google+ is still new, there are

hesitancies and a large competitor to deal with. However, competitors sometimes expand

too far or mess up, it is at this point that Google can snatch some of the market. A classic

example is Facebook taking over MySpace. Google’s quick determination to be

innovative, trendy, stylish, and unique drive the company towards success.

Chapter 10 Notes

1. Burt’s Bees does differentiate its pricing strategy from its competition. The competition

in lip-balm products tends to place its pricing strategy on a cost-based formula. However,

Burt’s Bees prices its products on value. It markets its portfolio of products based on

health, wellness, organic, and “green” or even sustainable production.

2. As stated in question one, Burt’s Bees executes a value-based pricing strategy. This is

because the company has perceived the value consumers are willing to pay for a product.

There is no competition that offers products similar to Burt’s within the lip balm market.

This even extends into their other product lines of hair and skin care. Though some

competition is presented, their rates are significantly lower than Burt’s and do not create

much competition.

3. Burt’s Bees has taken products past its lip-balm. Body lotions, oils, and other “natural

homemade goods” used for personal care all follow similar guidelines to their lip-balm.

Though the company sold itself to Clorox, the company maintains its independence while

creating each different product to the companies’ minimal “99 percent natural” standard.

This is important to Burt’s because it drives its pricing strategy and creates value to the

consumer.

4. Burt’s Bees could have been successful as a natural product if it employed a low-price

strategy, However, I do not think the company’s success would be as great as it is today.

There would be some success because people would purchase a product advertised as

“natural” over a product that was not at the same price. However, what really drives the

company’s success in its marketing and therefore its pricing is the fact that the added

value creates customer curiosity…as our text described this lead to a more diverse

demographic to purchase the company’s product(s). As the company began to show the

“value” in their product, it became more convincing to customers that this was not just an

average “run-of-the-mill” lip-stick, it was something more, and worth the extra price.

5. Burt’s pricing is sustainable. Their pricing strategy provides a future benefit to the

business. Their consumers see a future benefit because it is natural and good for them.

Burt’s product also fulfills the current “needs” – maybe more wants – from consumers.

Bus 306

Chapter 11 Notes

1. No, consumers might have the online websites to compare their lower overall price

among different products however, each company has created exposure and deals that

lead to lower than advertised pricing. Walmart might not have the same low price as is

advertised in their retail stores. In addition, Amazon Prime accounts (that you actually

pay for) lead to savings, but calculating the savings across different accounts and orders

is not “easy” for consumers. Maybe this is a point or Amazon to advertise the benefits of

a prime account?

2. It is more important for the companies to have the perception of lower prices. As our text

described having a low price is a double-edged sword. “Reckless price cutting may do

more damage than good to both Walmart and Amazon” (Kotler, Pg. 336). I question if

eventually, Walmart will cannibalize business from its retail stores with the process of

actually cutting prices too low. The perception of lower prices allows for companies to

make a profit and not become the “loss leaders” of the industry.

3. In accordance to figure 11.1 on page 316 of our text, I believe that Amazon and Walmart

should take their pricing strategy by optional product pricing. Consumers will look for

the lower rate, buy essentially upselling them on a good that is of higher quality say for

example standard DVD to Blu Ray could bolster sales. At this point, lower costs are

perceived as well as meeting the needs of consumers. Continuing with the example, if

consumers do not have a Blu Ray player, the companies can target them with product

bundle pricing. Now, put that Blu Ray dvd with this Blue Ray player for another all-time

low costs. Show the savings; consumers like this,

4. Low pricing is important, but in comparison to the other things a business needs to do

(like make money) it shouldn’t be taken to the extreme of hurting their profits. While I

(foolishly) view Walmart and Amazon as being smart enough not to make such decisions,

they already are. Understanding consumers perceived value and their value-based

payment price is quintessential to finding the appropriate all time conceived low cost to

gain their sale.

Chapter 12 Notes

1.

2. Horizontal conflict impacts Pandora by the number of alternative radio streaming companies

and “players” available to the market. Because the radio market is no longer a closed loop

network that is dictated by area codes or other geographic locations, Pandora risks losing its

listeners among the competitors like Spotify, the radio, online streaming, iTunes, or even

YouTube. The Vertical conflicts impacting Pandora are the licensing to songs, the audio quality

available to the company, the effectiveness of channels to stream their music, their intermodal

transportation networks, Pandora’s add-free listening with contracts could bolster their listening

audience, but also impact their profits due to the loss in advertising sales. However, these two

conflicts impact Pandora’s profits, quality, and exposer to the consumers

3. Through different distributor factors Pandora adds value for customers strictly through their

distribution factors by partnering with pioneer and alpine radio. This is an added value because it

includes customized radio though cars automatically. In addition, Pandora has created its

distribution to be customizable by the customer. They can create and change playlists based on

what they want, or Pandora will do it for them.

Music Composer

Consumer Products Businesses

Producer Label Company

Pandora

Streaming Platforms and Networks

Intermodal Transportation

4. Pandora could be successful in the long term. I believe that the customization of music

playlists will keep customers wanting to use their radio systems. In addition, the free networking

isn’t bad (I know because I use it). There are few interruptions by advertisements and even then

the advertisements feel like they are marketed towards the stations I listen to. Partnering with

radio companies bolsters the company’s visibility and further helps keep the company

recognizable. The concern I have is their loss of revenue if customers continue to pay only $36 a

year for add-free radio. I wonder if the amount already given is enough to cover any loss in sales

from radio. As more listeners come there will be more plays of songs (as the article states) so if

an idividuals $3.00 a month is enough to listen to over 40 hours of music that means Pandora

plays for one person 2,400 minutes of music, averaging each song to 4 minutes that leaves 600

songs. Divide that by the amount a month, the company must be paying record companies less

than $.005 per song played…I don’t think people would like that kind of return on music.

Chapter 12 Notes

1. Dollar General has a unique pricing and retailing strategy. In according to the chapter,

Dollar General would be an off-price retailer. This is due to the companies extremely low

prices of $1.00 and revenue made up from large volumes of sales. The company stocks

limited supplies and only has the necessities which fits into the company strategy and

model. Furthermore, this makes the company function like a convenience store due to its

size and geographic placements.

2. The Dollar General has a unique strategy in segmentation, targeting, differentiation, and

positioning. The company segments too many suburban areas and selects locations based

on income levels. Surprisingly, not just low-income families shop at these locations,

Dollar General mentioned that incomes even over $50,000 come in to make purchases

and buy products on a regular basis. Spending behaviors and saving money won’t “go out

of style”. So the company then targets the wants and needs from consumers that need

quick, speedy, in and-out service to get the items that they really just need. Dollar

General provides these products at a low rate. The company further differentiates itself

from competitors and positions itself in such a way that it allures people to change their

shopping methods and ultimately “shift where they shop”.

3. Dollar General has been successful over the past 40 years due not only to its low price

but ability to supply the necessities and quality products in an environment that is easy to

get in and out of. “Save time. Save money. Every day.” Truly shows how the company

has managed to stay successful. “Keep it real and keep it simple”, “hassle-free

experience”, a large product mix, and small store footprint lead to the savings the

company advertises.

4. The Dollar General offers a different approach to selling then the brick-and-mortar

retailers. Because of this I think that the store will be successful despite the brick-and-

mortar stores. I say this because the savings and the time in-and-out of the store are

unobtainable at a brick-and-mortar location.

5. Against the online retailers, the Dollar General will succeed. This is because they poffer

many simple necessities that customers can get immediately. It is hard to believe that

consumers would be willing to pay and wait for shipping times to obtain groceries, toilet

paper, soap, etc. At this point, stores such as Dollar General will have the upper hand.

However, in the competition for other products and services for the consumers I would

not believe that Dollar General will be a better choice.

Chapter 16 Notes

1. The innovation from salesforce.com caused sales reps to interact better with customers by

creating an online method for communication. When it came to unique requirements for

different products and ideas, sales forces could customize practices that fit the individual

needs. It further eliminated customers need to download software and allowed access to

be quick and easy between them and sales reps. Additionally the salesforce.com team

was able to “dramatically improve customer relationships with advertisers”.

2. Salesforce.com made a difference in NBCU and GE Capital in different ways. For NBCU

the website helped with cross selling, the tools needed to sell new inventory, improved

customer relations, lastly, it gave them the ability to take chances. For GE Capital,

salesforce.com helped them the ability to receive better information more quickly, it gave

them the means to communicate with individual customer needs. Salesforce allowed for

lateral teamwork and communication from CEO’s and CFO’s.

3. In the selling process, salesforce.com addresses each process. They have teams that meet

directly with companies to create a preapproach to the marketplace and then help to

manage the actual approach as a product is being sold in the market. Furthermore, the

presentation and handling of the sales is worked to meet their customer’s desires. Follow-

ups with how products are selling and areas of growth are discussed with their customers

once a sale has been executed.

Looking forward, salesforce.com will have to develop products that help to manage the

flow of inventory and reordering process’s. Using RFID’s and barcodes to create a

database for each customer. When working with feedback and improvements, the

company currently creates, forums and customer satisfaction surveys are gathered for the

company’s performance feedback. Ultimately the company tries to maintain an effective

productivity process