how to prepare a marketing case

HOW TO PREPARE A MARKETING CASE

Scott Ward, J. Wesley Hutchinson, Jagmohan Raju, Stephen Hoch, and Eric M. Eisenstein This note was prepared by professors Scott Ward, J. Wesley Hutchinson, Jagmohan Raju, and Stephen Hoch, of the Wharton School, University of Pennsylvania, and by Eric M. Eisenstein, the Johnson School, Cornell University. Copyright ©2002 and 2005, all rights reserved.

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Copyright ©2000 and 2005, Professors Scott Ward, J. Wesley Hutchinson, Jagmohan Raju, and Stephen Hoch, the Wharton School, University of Pennsylvania, and Eric M. Eisenstein, the Johnson School, Cornell University, all rights reserved.

HOW TO PREPARE A MARKETING CASE

About Cases and “Reality”

Case studies are snapshots of particular business problems at specific points in time. They are written in a way to both faithfully describe the problem, and to allow students to read, assess and formulate responses in a reasonably short period of time (experience suggests that it takes about 4-5 hours to adequately prepare to discuss a case in class – it will probably take longer to write-up a case). Case studies are “real” in that they accurately represent relevant financial and strategic events and data that led up to a particular business problem. Cases are not real in many other ways. First, in the “real world,” business problems are not neatly packaged, discussed and solved in hours. Rather, problems unfold over months, making problem resolution an iterative process. Second, case studies are not “real,” in the sense that students do not have to take responsibility for implementing their decisions. This is a big deal in the “real world”! Cases vary in the level of specificity of the problem, and in the amount and kind of data presented that are relevant to the problem. Some cases focus on relatively narrow and specific problems, while others are more general and challenge you to consider more strategic issues. In no case will you find all the data you would like to have (which is very characteristic of business decision-making in the “real world”). You must make decisions in the face of uncertainty, recognizing that calling for more “market research” may not be feasible, due to the nature of the problem and the time and resources available. Virtually every MBA student sometimes feels “I really was barking up the wrong tree in that case.” What better place to make a mistake than in the MBA classroom rather than in the “real world”!

About Learning From Cases

The case method demands that you take full responsibility for your education. Most of us came up through an undergraduate educational process in which we learned about theories, memorized facts and formulae, and regurgitated them in examinations. Cases, by contrast, challenge you to learn in a different way. Learning from cases involves spontaneous generation of information, facts, rules of thumb, contingencies, etc. – in short, knowledge – “on the fly.” Knowledge accumulates through reasoning, rehearsal, analysis, AND listening to others. In the Tweeter case, for example, you could read in a textbook about consumer behavior and sustainable competitive advantage, but the lessons are more meaningful if you actually put yourself in the context of a live issue, involving a real company, product, competitive situation, market, history, etc. It is less a matter of reading about the concepts and tools of marketing in a textbook, than in utilizing your existing skills in perception, analysis, and logic to formulate and defend marketing programs, much as you did (and will do again) in the “real world.”

What do you learn from cases?

So what will you have learned at the end of every case study, and at the end of this (and other) case-oriented courses? The answer depends entirely on you, since case studies rely more on self-insight as the basis of knowledge than on a professor telling you things, or on your memorizing facts or formulae from textbooks. Get ready for some discomfort – the case method demands that you take full responsibility for your education.

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About Learning From Cases, continued Each case describes a complex, detailed and unique business situation. You need to look (along with your team) for two types of knowledge. First, you need to understand the analyses and concepts that are useful in the current case situation. Second, you must look for patterns and common elements that can be applied in “real” business situations. The point of case learning is that although each case is unique, the concepts, tools, analyses, and ways of thinking extend to many business situations. The critical skill is for you to learn how to appropriately apply what you learn in a single case to other business problems in other cases – and real situations. For example, the Black and Decker case involves putting together a strategic marketing plan to beat Makita. This problem arises in any company that is losing market share to a competitor or is thinking about entering a competitor’s market. The case involves substantial market analysis – quantitative (how big is the market, how does it segment, how fast is it growing) and qualitative (customer behavior: how do customers in segments vary in their buying motivations and behavior?). It also involves some economic analyses and concepts such as profit maximization and game theory (e.g., anticipating competitor reaction). Some issues will be relatively specific (e.g., particular brand issues, and particular competitive strengths and vulnerabilities), others will be very general (e.g., profit maximization, anticipating competitive response) – relevant to virtually ALL cases and business situations.

There are No Checklists There is no checklist of everything you might consider in a marketing case – here or in the “real world”! You can review or even memorize all the frameworks and checklists in the world, but only you can develop the ability to characterize business situations, size up the fundamental problems, isolate the strategic from the tactical, recognize and perform the most important analyses, and reach conclusions and state them in specific actionable ways. The first step is to have confidence in your abilities to do it, and to recognize that learning inductively rather than the more comfortable deductive method, is messy, and new for you. You will be considerably more comfortable several months from now than you are today, and you will be more comfortable still a year and two years from now.

Is there a right answer? No. That’s a fact that frustrates many students. The full answer to this question is a bit more encouraging. There is seldom (never?) a single right answer. However, there are always several sound, well-reasoned strategies to address any marketing problem. Equally important, there are many answers that are wrong because they are contrary to best practices and/or because they are internally inconsistent. One clear goal of case analyses is to learn to avoid truly poor decisions and to learn how to choose among competing reasonable plans. Remember that “the answer” to most applied managerial problems is “it depends.” Because they are rich in detail and complexity, and demand substantial analysis and insight from you, case studies are involving educational experiences that help you develop as a mature manager – to know the answer is most often “it depends,” but to have the wisdom to determine what it depends on, and what you should do about it.

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Preparing a Case

There is no one way to prepare a case. But to help you get started, we suggest the following approach. Take it from there to develop what works best for you. 1. Overarching Problem Definition: Go through a case rapidly, asking yourself “what is this

about, what is the underlying problem here, and what types of information am I given to analyze?” In particular, look at the first few paragraphs, and the last few, the sub-headings, and the exhibits. Try and develop skills to identify the underlying problem(s) in the case, not just the tactical decisions to be made that are readily apparent in the case.

2. Detailed Problem Definition: Now read the case very carefully, underlining key facts as you go. Attend to the 3C’s and 4P’s, looking for strengths, weaknesses, opportunities, and threats. Then ask yourself, “What are the overarching problems the manager has to resolve?” Note that you should always take the role of the manager(s) in the case.

3. Analysis: Note the key problems on a piece of paper. Then ask yourself, “What analyses must be done to evaluate possible solutions?” Assess what hard data is available and what assumptions must be made. Perform the analyses and relate them to the problems you identify.

4. Recommendations: Develop a set of recommendations supported by your analysis of the case. Frequently, it helps to try to write an executive summary to clarify your thinking. Attend to the interactions among the components of the marketing mix. For example, if you recommend a price change, consider the implications for brand image, advertising, and channel incentives.

Detailed Approach Problem Definition – Steps #1 and #2 Problem definition is critically important. If you define the problem wrong, you are likely to “miss the boat” – completely failing to address important case questions! In some cases, the problems are clearly stated, in other cases you may feel that the problems are somewhat different than those assumed by the manager, in other cases, the problem may be multidimensional in nature. Part of your learning experience is to develop a sense of a suitable framework for assessing the problem. For example, the case might say “Mr. X wondered what the advertising strategy should be.” But the underlying, or “real,” question may be much broader – segmenting the market, picking target market segments, and developing an overall strategy for reaching selected segments (which might include advertising as a tactic). You need to develop an ability to identify case problem(s) at a level that is appropriate, given the case situation and available data. This is THE major goal of case-based learning. Every business problem involves how to deliver shareholder value and maintain profitability. But, at the other end of the spectrum, the problem may be more complex than the tactical decision issues posed in the case. Good Problem Definition, Summary

1. Outlining the decision issues and defining them in a way that calls for action-oriented answers,

2. Put these issues in a proper marketing strategy context – that is, broader than a single tactical issue (e.g., should Tweeter continue with APP), but not so broad as to apply to every company in every situation (“increase sales and profits...”),

3. Deal with these problems from the perspective of an individual manager, recognizing the scope of responsibilities of that manager.

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Preparing a case, continued 2. Perform the Analysis

Now jot down areas for analysis on the piece of paper. This involves knowing the basic questions that marketers ask (which you should get from lecture), having a sense of the tools and concepts of marketing, and your innate reasoning abilities. Example The tactical problem of whether or not to keep APP for Tweeter involves areas of analyses from the very general to the very specific. Marketers always want to know “how big is the market?” and “how fast is it growing?” Be careful – what do you mean by “the market?” – all consumers? Certain segments? The “market” for high end audio, or mainstream audio? Most of the time you will also want to assess buyer behavior, trends in the marketplace, the competition, company competencies, and economic analyses – in short, a mix of supply-side and demand-side considerations.

Draw Conclusions

Marshal facts to help you understand each analytic area, and to draw conclusions. How are consumers behaving? What does that imply for the company? What about competitors? Are there obvious segments? The list of questions only seems endless. You must develop the ability to figure out which questions are the most relevant.

You will never have all the facts you want. This is not the case-writer playing head games with you – rather, it is a reflection of the “real world.” Do your best to draw conclusions from your analyses that are fact-based, but you must make some assumptions, and you should both explicitly state what your assumptions are, and have a good basis for them.

Make a Decision

Now it is decision time. You must reach specific conclusions and be prepared to present your decisions AND recommendations for actions in a cogent way (note that instructors are fond of opening case discussions by asking someone: “What should Manager X do?”). Summary. A good “answer” to a case has the following characteristics: • Deals explicitly with the specific problems and decision issues posed in the case, within

the context of broader strategic issues • Is well-supported by sound analyses, based on case facts, and by case data where possible,

clear assumptions when not possible • Assesses the pros and cons of your position, and the pros and cons of reasonable alternative

courses of action (that may likely be proposed by someone else in the class) preferably alternatives which are mutually exclusive and collectively exhaustive.

• Includes ideas for implementation – exactly how would you carry out your recommendations?

If you do all of this, the “right answer” will be the specific recommendations you make,

supported by rigorous quantitative and qualitative analyses. The “right answer” in a case is not necessarily what the company actually did. Hours on the Internet will only reveal what the company did – not why they did it or what they should have done!

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3. Case Discussion. Up to now, your preparation has been on your own. Now share your analyses and views with other members of your Team. The objective is not necessarily to develop a group consensus (although this is necessary for the team Case Write-Up). The objective is to sharpen and extend your base of analyses and viable solutions. We will rarely, if ever, ask for “the group’s” opinion in class. Rather, the idea is to use the Team as a sounding board for your perceptions, analyses, and decisions.

In class, your instructor’s role is to coordinate the discussion, and to codify it. It should be

obvious by now that you shouldn’t look to your instructor for “the answer” or even to tell you what your should do, or have done. The answer is within you, and you must take responsibility to build on the text, lectures and each case study to formulate an approach to dealing with problems described in each case, and formulating programmatic solutions, and presenting them in a defensible, articulate way. Sometimes your instructor may do some talking, but mostly his or her job is to insure that various viewpoints are expressed, to lead you into areas of consideration that you might have missed, and to help everyone see the problems and analyses that “you,” collectively and individually, do.

The classroom is a place for you to express, support, and defend your conclusions and

recommendations, and to probe the expressions of others. We learn through controversy and discussion. Good case discussions are highly involving, and we learn the most when we are highly involved. Participating in class helps you develop communication skills – absolutely essential in the “real world.” Class-participation may seem rigorous and tension-building when you are doing it, but most MBA’s find, in retrospect, that it becomes one of the most valued parts of your educational experience.

SOME DO’S AND DON’TS IN CLASSROOM CASE DISCUSSIONS

BEFORE CLASS

Prepare! Adequate preparation for class discussion is essential.

Use only the information provided in the case. Treat all cases as self-contained sources of information. If you feel that important information is missing (and sometimes it is), make reasonable and explicit assumptions.

Do not use 20/20 hindsight. It is always possible to find out “what happened” in a given case. Avoid the temptation to use 20/20 hindsight. The purpose of the case analysis is to assemble a convincing set of arguments for the best plan of action. Knowing what happened will not provide this reasoning. Moreover, you cannot assume that the actual strategy followed was the best strategy. In general, “fresh eyes” are one of your most valuable assets in solving marketing problems.

Do not use information from others who have analyzed the case. Some cases have been used previously at Johnson or at other schools, so the major arguments, issues, and analyses relevant in the case may be available from other students. Do not use these sources of information. Not only is this a poor learning strategy; it is a violation of Cornell’s Code of Academic Conduct.

Do use your learning team, but take personal ownership of your opinions. Your learning team is a valuable resource in preparing for case discussions. Most business decisions result from group problem-solving efforts, and you can learn a lot from each other that may not be covered in class. It is sometimes tempting to divide the labor among team members to be more time efficient. A certain amount of this is useful. However, extreme forms of delegation (e.g., each member analyzes one case and provides other members with notes) is a very poor learning strategy. Remember that in the final exam, in job interviews, and in your professional life, this will not be an option. Certain extreme forms of this strategy also violate the Code of Academic Conduct.

IN-CLASS DISCUSSIONS

Do raise your hand to participate, and do not interrupt! Common courtesy applies.

Don’t expect to participate whenever you want to. Your instructor may not call on you, even if you assume a statue-like posture, with your arm constantly in the air. This may be for a variety of reasons. In any case, if you have what you believe to be a truly important point for one part of the discussion, but you don’t “get it in,” don’t merely chip it in later, when it is not relevant. The quality – not the quantity – of your participation is what counts.

Do try and move the discussion along. Don’t participate for the sake of participating – be reasonably sure you have a comment worth making, in the context of what is being discussed. Nothing throws cold water on a discussion of X when someone says, “I’d like to go back to A.”

Don’t repeat case facts. This is a cardinal sin. We have all read the case. You may USE case facts to make a point, viz., “Since Black and Decker is losing share but has great distribution and brand image, it makes sense to introduce a fighting brand…”

Be respectful of others. The ideas of others are fair game for you to challenge, and productive business meetings are not love-ins, but challenge others in a respectful way. Rigorous does not mean obnoxious, rude, or insulting.

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GRADING STANDARDS FOR WRITTEN CASES Our advice is to respect the dimensions of evaluation that are used when evaluating any formal document. In rough order of importance, these dimensions are: logical structure/content analysis, eloquence, grammar, spelling, and other language usage. It is impossible to be taken seriously if you cannot write well. Each of the above elements is a critical part of effective written communication.

EVALUATIVE CRITERIA AND ADVICE I. Logical Structure and Content

A. Decide what the major issue is, and what minor issues exist. Read the questions carefully. B. Write an outline of the skeleton of your argument for a particular course of action. C. Write an executive summary of the case that encapsulates the major points of your outline, including

conclusion, main supporting evidence, and possibly rejected alternatives. D. Do not regurgitate or repeat case facts. Assume that your reader is knowledgeable about the

situation as given in the case. You may not assume that your reader has done analysis on case facts, but you may assume that your reader is familiar with the facts as given.

E. Be sure that you have addressed the question(s) that are associated with the case! Most cases have multiple possible points of emphasis. Case questions focus your attention on the relevant point(s) and allow you to deemphasize other distracting lines of thought.

II. Eloquence and Readability: Eschew jargon. Also, do not use highfalutin words for their own sake. Incorrect use of a pretentious word is worse than using a simpler construction.

III. Rhetoric & Style A. Cases are formal documents. Write them as if you were addressing the CEO of the company. That

means your tone is formal. 1. No colloquialisms (e.g., “gonna” rather than “going to”, “dead as a doornail”, “there’s more

than one way to skin a cat,” etc.). 2. No chatty phrasing (e.g., “we’re going to take them apart”)

B. Scan your paper for redundant or distracting verbiage. 1. The words: really, tremendous, sort of, kind of, utilize, and “etc.” should not appear in your

paper, but for rare exceptions. These are flags for shoddy writing. 2. Avoid imprecise constructions. “The lion’s share of the profits” (what is the lion’s share?); “the

majority…” (a 51% majority, or a 99% majority?); “high (or low) margins” (what is the margin, how do you know it is high/low?); ditto “higher/lower”, “bigger/smaller”, etc.1

C. Read the paper out loud. D. Have a friend or acquaintance read the paper for logic and for the above stylistic elements. E. Use the grammar checker that is built into Microsoft Word (use the formal setting, not technical or

informal). One common mistake is to overuse the passive voice, so be sure to check this. IV. Good cases almost always demand financial analyses. Think about what financial information you, a

CEO, or your boss would want were the case issue to arise in real life. Would you invest a substantial sum of money based on the evidence you have presented?

Follow the formatting and other guidelines in the syllabus!

1 Yes, this is a rare exception. Use of “etc.” is acceptable here because it is self-evident that (a) the litany of items is nearly infinite, and therefore no reader could reasonably expect a full enumeration, AND (b) it is self-evident how to characterize the class of enumerated items based on the examples, so that any reasonable reader could continue the list.

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