Case analysis and short answer
Part A: Short-Answer Questions (6 questions)
1) The United States is, by many accounts, facing an opioid crisis. Among various hypotheses that have been advanced for this phenomenon, one hypothesis is that increased pharmaceutical advertising on television causes increased substance dependency. Evaluate the main pros and cons of using each of the following four research instruments to collect data that will allow for testing this hypothesis: survey questionnaires, qualitative methods, eye-tracking, and neuro-methods. Which would you recommend using and why?
3) View the following advertisements for Dove Men+Care: Advertisement 1 (https://www.youtube.com/watch?v=zAW7iWhjJbU) and Advertisement 2 (https://www.youtube.com/watch?v=KJDIDKQIMNI). Write down two appropriate positioning statements for Dove Men+Care, one based on each advertisement. Evaluate the evolution in Dove Men+Care’s positioning from Advertisement 1 to Advertisement2. Explain whether you think this evolution was a good decision, and why.
4) Consider any brand that you are extremely loyal to. Specific to this brand, use the Brand Resonance Model to explain how the various brand building blocks have resulted in evolving levels of brand equity for you as a consumer over time. (2 points)
5) A hoverboard is a levitating board similar in shape and size to a skateboard; it is typically used for personal transportation (see https://en.wikipedia.org/wiki/Hoverboard). Although long considered fictional, there have been increasing recent attempts to create real hoverboards. Explain how the various characteristics of hoverboards as an innovation are likely to influence their rate of adoption among the general populace. (2 points)
6) According to USA Today’s Ad Meter, “Forever” from The Farmer’s Dog was the highest-rated Super Bowl LVII commercial (you can view the commercial at https://www.youtube.com/watch?v=IAIo-pUDl0sLinks to an external site.). What are the commercial’s likely IMC objectives, and why do you think so? Of Cialdini’s principles, which ones does the commercial use? Explain how the commercial’s use of these principles might influence consumers and help the company meet its objectives for the commercial.
7) Warby Parker is a retailer of eyeglasses, sunglasses, and contact lenses. Founded in 2010 as a completely online company, Warby Parker was able to manufacture its own eyewear and leverage its direct channel structure to sell prescription eyeglasses at $95, compared to the $200 or higher charged by major eyeglass retailers. Additionally, for each pair of eyeglasses that Warby Parker sells, the company donates a pair of eyeglasses to non-profit organizations that distribute the eyeglasses among the one billion people worldwide who otherwise lack access to eyeglasses. Based on this information, explain the various ways in which Warby Parker’s holistic marketing approach enables its channel strategy, pricing, and corporate social responsibility (CSR) initiatives to support each other.
Part B: Case Analysis (4 questions)
Use the following case based on a real company to answer the questions in this part:
Global Tech LLC (Global Tech) is a privately-owned information technology (IT) and business processing outsourcing (BPO) services company that was founded in 1999, with headquarters in “Silicon Valley,” California. In 1999, the company also started operations in Hyderabad, India, and its business model was simple. The US operations would generate business from US clients, and the Indian operations would fulfill the business by providing IT and BPO services. The company’s vision was “To be the best IT and BPO services company in the world.”
1999 was a “boom” time for the IT industry, especially companies with Indian operations, who were able to leverage cost advantages to “patch” older software for Y2K compliance. To aid business development, Global Tech quickly hired 10 salespeople in the US, and this helped the company reach $101M annual revenue within five years. Although the company is tight-lipped about current revenue and profit, analysts estimate that revenue had a compound annual growth rate (CAGR) of 5% from 2004 till today. The company has also grown from around 1,000 employees in 2004 to 5,021 employees today, most employed in India, but also including 51 US-based salespeople. Global Tech’s competitive strategy was and still is driven to a large extent by cost differentiation, using hourly billing rates as low as $15 to acquire new clients, and then providing satisfactory services to secure repeat business at similarly low billing rates, resulting in gross margins of less than 35% as opposed to the 40% to 45% margins made by other companies in the same industry.
A simplified value chain of the IT industry suggests that companies at the high end engage in differentiated activities that are more proprietary and less imitable, allowing them to appropriate more value. These include firms such as Google, SAP, and Microsoft, who engage in R&D services to develop their own products and services. IT consulting companies such as IBM and Accenture engage clients to understand business and functional requirements that can be fulfilled by products or services from companies such as Google and SAP. IT consulting companies then pass this information on to their IT services SBUs or other IT services providers. IT services providers work on these requirements to develop, port, maintain, or test IT systems and software that meet clients’ requirements. Development is the most lucrative as it allows providers to create new solutions that typically command a higher price, followed by porting, which involves migrating an existing solution from one environment to another (for example, Windows 8 to Windows 10). Maintenance and testing are less lucrative as they involve troubleshooting or validating existing solutions, although maintenance comprises the largest volume of business for many companies. IBM and Accenture have their own IT services SBUs, and are major players in this space, along with HP, Fujitsu, and Indian IT companies such as Tata Consultancy Services (TCS) and Infosys Limited. Finally, BPO services in the IT industry typically focus on call center operations and other back office operations such as finance and accounting services and human resources management services, with Capgemini and Genpact among the major players. For the most part, Global Tech is focused on IT and BPO services, although it also provides IT consulting services to some clients.
A majority of the company’s business comes from North America, with three clients – Costco Wholesale, Safeway, and WellPoint Health Networks – making up almost 25%. In addition to these three clients, the company has almost 500 smaller US clients in various industries such as banking & financial services, energy & utilities, media & entertainment, public sector, retail, and telecommunications. Most of the work for Costco and WellPoint involves the maintenance of legacy mainframe solutions, but this has been decreasing over time as clients port their old mainframe solutions to more stable solutions from Oracle and Microsoft. The work for Safeway, on the other hand, involves a balanced mix of development, porting, and maintenance, and the work for the company’s other clients broadly follows its balanced mix for Safeway. Global Tech also has alliances with IBM and Microsoft, which allow it to position itself as a preferred IT services provider for products, services, or consulting solutions involving these companies.
Although the company has been around for almost 20 years, it has grown organically along many dimensions, and the senior management has been exploring some strategic moves to set course for the next ten years and beyond. For starters, almost everyone on the senior management team felt that the company needed a clear mission statement that went beyond the company’s vision. Additionally, they agreed on the need to have a clear positioning, but they could not agree on what would be best for Global Tech in terms of the customers it should focus on, and what message it should highlight in its marketing communications. At a recent meeting, the VP of Marketing also stressed the need to be more mindful in redesigning the company’s logo (currently just the company’s name in plain, black text), with special focus on a distinct color palette that would also be consistent with the company’s positioning.
Finally, the CEO repeated an issue that she had been highlighting for some time: that the company should be more scientific in the way it decided on salesforce staffing. She felt that the company’s salesforce had pretty much grown at the same rate as the rest of the company, with growth across the rest of the company being driven by increased headcount at the offshore operations. Although offshore headcount might indicate volume of business and, thereby, appropriate salesforce size, given that up to 33% of the offshore team was sometimes on the “bench,” without active projects to work on, it was possible that the company didn’t need as many salespeople either. On the other hand, it was possible that the current salesforce was operating at maximum capacity, so adding more salespeople might generate more business, but it was difficult to say for sure.
The VP of Sales was tasked with validating whether the current salesforce size was appropriate or not. To determine this, he decided that he would continue with the company’s current expectation that, on average, each salesperson made one daily sales call per client or prospect. He knew that the annual overall salesforce objectives included getting 10 new clients, but that this would require engaging with at least 100 prospects. He also wanted to distinguish between call frequency for prospects (twice a week) and clients (weekly for 10 of the company’s biggest accounts and fortnightly for the other accounts, in order to keep repeat business flowing in small increments at regular intervals). Armed with this information, he set out to address the task before him.
8) Perform a SWOT Analysis for Global Tech. Please ensure that you analyze the main issues (as opposed to identifying and listing case facts).
9) Do you agree with Global Tech’s vision? Why or why not? Based on what you think might be an appropriate vision for the company, come up with a good mission statement for Global Tech, and explain why it is a good mission statement.
10) Explain which customers Global Tech should focus on, and what its key message to these customers should be. Based on the customers and message, what would a good brand logo look like, and why?
11) Estimate and explain what you think the company’s salesforce size should be.
