Berkeley-Columbia Executive MBA Program Marketing Strategy (XMBA 206-1) Summer 2008 Instructor: Professor Ganesh Iyer Office: F699 Phone: 510-643-4328 Email: giyer@haas.berkeley.edu Faculty Assistant: Course GSI Course Website Office Hours: Doanna Seaward, Tel (510) 642-2734, dseaward@haas.berkeley.edu Houman Modarres, Tel (415) 577-2151, modarres@gmail.com http://groups.haas.berkeley.edu/marketing/courses/xmba206.html TBA, You may, of course, reach me by email or phone. Text Book Marketing Management 13e., Philip Kotler and Kevin Keller. 1.0 Course Objectives: As the core marketing course in the program, Marketing Organization and Management is a survey course designed to provide students with an understanding of the basic concepts of marketing management and experience in making marketing strategy decisions. Specifically, the course will cover issues relating to the marketing concept, designing marketing strategy, and implementing marketing tactics. The treatment will be both conceptual as well as with an emphasis on managerial decision-making. 2.0 Readings The readings for the course and the cases will be contained in the course packet. In addition, there will be recommended readings from the Kotler and Keller text book. Some additional readings will be handed out in the class. 3.0 Class Format: The course will make a mix of lectures, in-class exercises and the case method. The weights used in arriving at the final grade for the course will be as follows: Class Participation 15% Individual written case brief 15% Group written case brief 15% Group project 25% Final exam 30% Case Preparation and Mechanics (Please also read the Haas note on cases How to make the case method work for you ) Full preparation by all class participants is essential to have fruitful class discussions. Merely reading the case will not be enough. The successful use of the case method depends on careful and thorough preparation, and active class participation. Therefore the quality of your preparation and the resulting participation will be a determinant of the grade received in the course.
Step 1, Individual Preparation: It is recommended that you first prepare each case through two readings. It is best to first read the case quickly to develop an overview and then read the case more thoroughly a second time. This second reading will help you to identify the problem and the major issues. Make any notes and mark-up the case to help structure the facts. Once you have a good grasp of the case fundamentals, you can aim to develop specific recommendations for the problem that you have identified and to answer the discussion questions that I will provide for every case. Develop alternative solutions to the problem and debate the pros and cons of each solution. Consider the course material covered up to that point in time and the assigned readings (if any) for the day. As is often the case in actual practice, cases may not have all the data you would like. Nevertheless, an important part of the learning is based upon your developing a reasoned plan of attack based upon available data. In the class discussion, I will try and build an analysis of the situation and address the problems and issues in the case. Each person must be prepared to share her (his) individual views with the class. The objective of the class discussions is to examine all aspects of the situation: facts, suppositions, alternatives or final action. My task as the instructor is to facilitate the discussion and pull together the prevailing views and the important themes of the case. The overall quality of the discussion, however, is the collective responsibility of the entire class. Step 2, Group Discussion: After your individual preparation of a case you will benefit a lot by discussing your case analysis with your group. This group discussion is recommended for all cases except for the case which has been assigned as individual graded assignments. In this group discussion you should try to see whether your colleagues have alternative points of view and understand the rationale for such views A typical request at the end of a case discussion is: What is the answer? The might not always be a single correct answer. In most case discussions there can be several viable "answers/alternatives" that are developed and supported by different participants in the class. What is important, therefore, is an understanding of the rationale for each alternative and the pros/cons of pursuing competing alternatives. Class Participation Class participation will be graded after each class meetings. Please expect to be cold-called in this class. Lack of preparation can hurt your class participation grade. The characteristics of effective class participation are suggested by the following three questions. 1. Do the comments show evidence of analysis of the case and does it add to our understanding of the problem? 2. Does the participant go beyond simple repetition of the case facts and move the class into new territory? 3. Is the participant a good listener? Are the comments linked to relevant comments made by others? I will assume that you have read the reading assignments before coming to class. For each class, you should be prepared to discuss materials related to both the previous lecture and the assigned readings. I will also assume that you have thoroughly analyzed all cases and the assigned case questions and are prepared to discuss them in class. Please display your name card. Your attendance is important. Absences from class without prior notification will affect your class participation grade. Written Assignments Each student will submit two written assignments over the semester, one of which will be individual, while the other will be group exercise. Each assignment will be based on specific questions/issues that will be given to the students. The case write-up is due at the beginning of the class on the day the case is to be discussed. No assignment will be accepted late. More details about the assignments will be provided in-class. 2
SCHEDULE OF ACTIVITY Session Assignment 3 Form Groups 5 Individual case report due (Optical Distortion) 8 Group case report due (Calyx and Corolla) 10 Group Project 3
DETAILED OUTLINE OF SESSIONS BLOCK 1: MARKETING CONCEPT AND CONSUMER ANALYSIS SESSION 1: INTRODUCTION TO MARKETING MANAGEMENT: MAY 21, 2008, 4.30 PM TO 7.30 PM In this introductory class we present a framework for marketing management that will unify the remaining sessions of the course. We will also go over the syllabus, the requirements of the course and other administrative details. CASE: Bombardier and Alstom (Insead case # 5117) Marketing management involves a process for approaching and solving marketing problems. In this session, we put the process into practice. We will use Bombardier and Alstom to introduce the marketing concept in action and to give you an appreciation for the strategic role of marketing orientation in a company. Because some study groups will not be able to meet in time to prepare this case, each individual student should prepare answers to the following discussion questions. 1. What should a marketing orientation mean for Bombardier? 2. Where is the problem, with Bombardier or with Amtrak? What could have been done to improve the relationship between Bombardier and Amtrak? 3. What are the reasons for Alstom to license its best technology to a competitor? This syllabus and course description. A review of the syllabus materials will give you a good idea of the structure and content of the course. Levitt, Marketing Myopia HBR Classic, Reprint R0407L. 4
SESSION 2: CUSTOMERS COMPANY & COMPETITION MAY 22, 2008, 1.00 PM TO 4.00 PM CASE: Product Team Cialis: Getting Ready to Market (HBS 9-505-038) A critical assessment of the customers, company and competitors is an essential precursor to setting a marketing strategy. In the case of Cialis, we analyze the strategy of product that is a follower. We focus on the effect existing competition has had on the customers and how existing and potential competitors might influence the marketing decisions of a second-mover. 1. Describe the purchasing process for erectile dysfunction drugs. What are the primary impediments to adoption? What does this imply about the focus of marketing efforts? 2. How did the first entrant, Viagra, affect the potential market? What are some of the advantages and disadvantages of being a first-mover? 3. What are the competitive strengths and weaknesses of Viagra? Assess Levitra as a competitor? How should Cialis account for each of these competitors in its launch? Kotler and Keller, Chapter 10, pp. 267-278. 5
SESSION 3: CUSTOMER ANALYSIS, MARKET SEGMENTATION AND POSITIONING MAY 24, 2008, 1.00 PM TO 4.00 PM We devote this session to presenting a framework that is useful for understanding customer behavior. We will start the session with the consumer behavior exercise. This will require you to interview and collect data from one customer. In the second half of the class, we will develop a framework and use it to operationalize the concept of market segmentation. The Ford Ka exposes you to the strategic and the market research aspects of market segmentation. Segmentation is a tool to divide heterogeneous markets into more homogeneous sub-markets based on the characteristics of customers. Targeting is the process of choosing the most attractive segments for the company to pursue. Together segmentation and targeting integrate the analyses of customers, company and competition into Positioning. CASE: Ford Ka: The Market Research Problem (Insead 06/2003-5066) Ford the third largest car manufacturer in Europe decided to launch the Ka in small car market. Before Gilles Moynier can get to the specifics of marketing strategy, Ford must analyze market research and decide on a market segmentation and target selection strategy. 1. Can different demographic variables separate out Ka Choosers and Ka Non-Choosers? 2. Are there differences in the way Ka Choosers and Non-Choosers perceive the small car market? What are the explanations for the differences? 3. Are there distinct attitudinal segments? If yes, how well can they help separate out the choosers from the non-choosers? 4. What type of segmentation scheme would you propose to help separate out the choosers from the nonchoosers? Dolan, "Analyzing Consumer Perceptions," (HBS 9-599-110), pp. 1-8. Discusses methods for analyzing how consumers see the market, including profile analysis and perceptual mapping techniques. Dolan, "Analyzing Consumer Preferences," (HBS 9-599-112), pp. 1-6. Discusses methods for analyzing consumer preferences. Skim Kotler and Keller, Chapter 8 END OF BLOCK 1 6
BLOCK 2: MARKETING STRATEGY (PRODUCT AND PRICING) SESSION 4: BRANDING AND MEASURING BRAND EQUITY JUNE 5, 2008, 1.00 PM TO 4.00 PM CASE: Intel Inside The "Intel Inside" campaign has encountered resistance by IBM, Hewlett Packard and Compaq. Management must re-evaluate if the original objectives of the campaign are still attainable. 1. What are the pros and cons for subscribing to the campaign, from the OEM's point of view? 2. How has the campaign been doing up to the point of the case? 3. What is Intel trying to achieve here? 4. What really are the value and the role of Intel Inside? Inside Intel", cover story, Business Week, 1 June 1992. Squeeze, gently Intel and microchips, The Economist, Nov.30 - Dec. 6, 1996. Kotler and Keller, Chapter 9, and Chapter 12, pp. 337-338. In this session we will also discuss the use of conjoint analysis to measure the value of the Intel brand name and how such measurement can be used for decision-making in the competitive marketplace for semiconductor chips. 7
SESSION 5: PRICING JUNE 6, 2008, 4.30 TO 7.30 PM CASE: Optical Distortion Optical Distortion Inc. is a small new company with a patent for an innovative new product which is a contact lens designed to impair the eyesight of chickens. The case deals with the problems faced by the company and marketing strategy that the company needs to design to launch the product. One of the main decisions that management needs to consider is the pricing policy for this product. 1. What characteristics of the ODI lens make it appealing or unappealing to different types of chicken farmers? 2. What geographic areas and market segments should ODI focus its efforts? 3. What pricing policy should ODI adopt? Kotler and Keller, Chapter 14. 8
SESSION 6: INTEGRATING PRODUCT, PRICING AND SEGMENTATION JUNE 7, 2008, 4.30 TO 7.30 PM CASE: Cambridge Software Corporation Cambridge Software Corp. must decide whether or not to offer multiple versions of a new software product. The firm has identified five market segments for the software and is deciding which, if any, of three product versions (a high end "industrial" version, a mid-range "commercial" version, and a low-end "student" version) to offer. The decision depends on the size of the different market segments, the customers' willingness-to-pay, and the costs of developing and producing each of the three versions. Shapiro, Carl and Hal R. Varian, Versioning: The Smart Way to Sell Information, HBR, November- December 1998, pp. 106-114, [98610]. Kotler and Keller, Chapter 12, pp. 328-334. END OF BLOCK 2 9
BLOCK 3: MARKETING STRATEGY (COMMUNICATION AND DISTRIBUTION) SESSION 7: COMMUNICATION AND ADVERTISING JUNE 26, 2008, 1.00 TO 4.00 PM The first part of the class will provide an overview of the marketing communication mix. We present a framework for managing advertising: setting objectives, budgeting, message strategy, media planning, and measurement. The second half of the class will deal with non-traditional marketing communications and the development of an integrated marketing communication (IMC) concept. CASE: Launching the BMW Z3 Roadster (HBS 9-597-002) In January 1996, executives at BMW of North America were in a position to review their innovative and non-traditional promotional campaign for the Z3 Roadster. 1. Evaluate the success of BMW s promotional campaign for the Z3 roadster? Was it a successful implementation of the integrated marketing communication (IMC) concept? 2. What was the role of non-traditional media in the launch of the Z3 Roadster? Which elements of the campaign were most important? Kotler and Keller, Chapter 18, pp. 497-514. 10
SESSION 8: GOING TO MARKET JUNE 28, 2008, 4.30 TO 7.30 PM PART 1: CHANNEL MANAGEMENT STRATEGY Distribution Channels are the conduit for transfers between a firm and its consumers. Channel decisions are among the most critical decisions facing management. Channels take a long time to build and cannot be changed easily. The session focuses on channel design and management and the inter-relationships between channel decisions and the other elements of the marketing mix. CASE: Goodyear: The Aquatred Launch In January 1992, Goodyear management is concerned with the impact of a new product, Aquatred, on channel relations. Specifically, Goodyear must decide whether to broaden its current distribution to include mass merchandisers, and if so, whether Aquatred should be available to these channels. 1. How do customers buy tires? How can the market be segmented? 2. What is your evaluation of Aquatred s strategic role and its marketing program? 3. Should Goodyear broaden its distribution to include mass merchandisers? Should they be offered Aquatred? Skim Kotler & Keller Chapter 15. PART 2: DIRECT MARKETING STRATEGY Advances in information technology, the growth of the Internet, and direct marketing technologies are increasingly allowing firms to target at the level of the individual customer. This session is devoted to how firms should leverage this ability to go direct to customers. CASE: Calyx and Corolla Calyx and Corolla is marketing fresh flowers through direct mail and through the internet. Using exclusive contracts with flower growers and delivery via FedEx, they have cut out the "middle man," so that they can supply flowers that are fresher than competition. 1. What are the strengths and weakness of the Calyx and Corolla formula? 2. What steps should Ms. Owades and her associates take to fully develop the formula? 3. What is the value of a C&C customer using their current direct marketing approach? 4. Should C&C use a TV ad approach to acquire new customers? ASSIGNED READINGS: Elie Ofek: Customer Profitability and Lifetime Value (HBS 9-503-019) END OF BLOCK 3 11
BLOCK 5: INTEGRATING THE MARKETING-MIX AND COURSE SUMMARY SESSION 9: COURSE SUMMARY INTEGRATING THE MARKETING-MIX AUGUST 14, 2008, 1.00 TO 4.00 PM CASE: McDowell s Vintage McDowell s the largest manufacturer of alcoholic beverages in India is planning to launch an alternative to Scotch whisky in India. One of the main problems facing the company in developing the launch strategy is the positioning of this new product. The case will highlight some of the unique marketing strategy issues SUMMARY AND TAKEAWAYS 12
SESSION 10: PROJECT PRESENTATIONS AND WRAP-UP AUGUST 15, 2008, 3.30 TO 7.30 PM DISCUSS SAMPLE EXAM END OF BLOCK 5 13
BRIEF OUTLINE Session Block 1. Session 1 (05/21) 4.30 pm to 7.30 pm Block 1. Session 2 (05/22) 1.00 pm to 4.00 pm Block 1. Session 3 (05/24) 1.00 pm to 4.00 pm Block 2 Session 4 (06/05) 1.00 pm to 4.00 pm Block 2 Session 5 (06/06) 4.30 pm to 7.30 pm Block 2 Session 6 (06/07) 4.30 pm to 7.30 pm Block 3 Session 7 (06/26) 1.00 pm to 4.00 pm Block 3 Session 8 (06/28) 4.30 pm to 7.30 pm Block 5 Session 9 (08/14) 1.00 pm to 4.00 pm Block 5 Session 9 (08/15) 3.30 pm to 7.30 pm Session Topic Introduction: Part 1: Introduction to Marketing Management (Framework for Marketing Management) Part 2: Case: Bombardier (Marketing Myopia) Customers, Company and Competition Case: Product Team Cialis: Getting Ready to Market Customer Analysis and Market Segmentation Case: Ford Ka Product Strategy and Branding Case: Intel Inside Pricing Case: Optical Distortion. Integrating Product and Pricing Strategy: Product Line Design. Case: Cambridge Software Corporation Advertising Lecture Case: BMW roadster, Non Traditional Advertising Going to Market Case: Goodyear: The Aquatread Launch Direct Marketing and CRM Case: Calyx and Corolla Integrating the Marketing Mix and Course Summary Case: McDowell s Vintage Project Presentations, Final exam, Wrap-up 14