Case studies

This exercise is one in a series intended to help students learn how to perform financial calculations in marketing contexts.

Kookaburra, a maker of cricket equipment popular in Australia, New Zealand, the United Kingdom, South Africa, and India, was considering two strategies for positioning a new cricket bat in India. Both strategies would cannibalize current sales, and Lulu Popplewell, category manager responsible for the Indian market, needed to calculate the financial impact of both to determine which one she would recommend.

This exercise poses a fictional problem about branding strategy on a new product, and asks students to consider the financial impact of different branding strategies and cannibalization rates.

After completing the exercise, students should be able to:

• Calculate the impact of cannibalization on units and profit for a new product launch

• Determine break-even cannibalization rates

• Understand how different branding decisions may impact the degree of cannibalization they should expect from a new product launch

Calculate the impact of cannibalization on units and profit for a new product launch

Determine break-even cannibalization rates

Understand how different branding decisions may impact the degree of cannibalization they should expect from a new product launch

California telecommunications company Wireworld is considering an acquisition of Nusantara Communications, a subsidiary of Indonesian conglomerate Bakrie & Brothers. Nusantara had invested $50 million in developing the advanced rural telephone system, which had the potential to provide much-needed telecommunications services to the mostly rural Indonesian population. If if were exported, the worldwide market for this product in the next five years was projected to be in the billions. Should Wireworld acquire this small company halfway around the world? Was it prepared to enter the Indonesian marketplace and beyond?

Students will examine a variety of data, including financial projections, in order to decide whether acquiring Nusantara will add value to Wireworld.

This case is used in Darden's first-year core operations class as part of a module on supply chain management. The Musictoday company provided online retailing services for such clients as the Dave Matthews Band and the Rolling Stones. But the lack of a formal inventory-management process had Musictoday concerned about future stockouts that would result in lost sales. This case covers the basics of safety stock within the context of a periodic review system. It introduces students to the periodic review system and provides them with an opportunity to link the optimal review period with the EOQ concept.

Supplements the (A) case.

The Penfolds case is designed to help students think through brand positioning and brand portfolio questions. Penfolds, one of the world's best known brands of wine, is performing poorly and a new management team needs to quickly reverse the business trends. To do so, the new management team needs to answer key questions, such as: What is Penfolds' positioning? Has the brand extended too far? Can Penfolds successfully play in all price segments of the wine industry? What is the best way to grow the brand going forward?

Students will learn about brand portfolio issues and brand positioning. The case is designed to prompt a discussion about how far a brand can extend without losing meaning, and the use of different branding elements such as sub-brands and endorsers.

Quality Wireless has received customer complaints about long hold times at its call center. To address these complaints, it put into place certain process changes at its call center. After one month, the company will now decide whether improvement has taken place.

To develop an understanding of process capability and how an improvement can be statistically validated. To understand the “check” phase of the plan-do-check-act cycle of Deming, using basic statistical principles.

Quality Wireless has received customer complaints about long hold times at its call center. To address these complaints, it put into place certain process changes at its call center. After one month, the company will now decide whether improvement has taken place.

To develop an understanding of process capability and how an improvement can be statistically validated. To understand the “check” phase of the plan-do-check-act cycle of Deming, using basic statistical principles.

This case (an abridged version of UVA-M-0663) describes the history of the Red Bull brand and how the company stimulated and harnessed word of mouth to build a new product category (functional energy drinks) and brand franchise. The case concludes by asking the reader to consider where Red Bull will take its brand, product line, and marketing next, in light of many competitive challenges in the United States. The case was written to foster discussion of nontraditional brand-building strategies and the growing globalization of brands and products targeted toward younger consumers.

Assumes an understanding of statistical process control and focuses on highlighting the usefulness of Six Sigma quality. Focuses on the issue of a worn bearing at a tire manufacturer leading to a mean shift (while producing defectives). Shows how a Six Sigma process would quickly detect the mean shift while producing fewer defectives.

To introduce the methodology of statistical process control and to illustrate the value of Six Sigma.

Supplements the (A) case.