Case studies

In the fall of 2007 a senior director of product marketing at Qwest in Denver, Colorado, gets an offer to work for an entrepreneurial high-growth venture. The vision is for greater wealth, accelerated business opportunity, more thrill on the job, and faster path to leadership by pursuing a position with a start-up firm. Kiva Allgood has management responsibility in her current position (e.g., manages a high-budget portfolio), with compensation of $145,000 in salary and incentive bonuses up to 100% of base salary. She realizes that she is not prepared for the negotiation because she has only negotiated job offers within large firms. She needs to know what many of these entrepreneurial finance terms mean and to understand whether she is being offered terms and amounts commensurate with the value she feels she will bring to the entrepreneur. She also needs to understand her opportunity cost and the expected value of her options: staying with the current job, starting her own venture, or taking this offer at the entrepreneurial venture. She had no idea there were also so many additional, non-financial factors to take into consideration. With her future on the line, she needs to work through the numbers fast. The entrepreneur gave her five days to come back with a counter offer, which he considered a generous amount of time. In evaluating these questions, students will take Allgood's point of view. The case is based on a real job offer to a real person named Kiva Allgood. The entrepreneur and his firm are fictitious in order to heighten the issues in this situation.

Exposes customary negotiations between a prospective employee and an entrepreneur, taking into account the valuation of the entrepreneurial firm, salary, stock options, ownership percentage, etc.; Examines the difference between considering a position with an entrepreneurial venture and one at a stable corporate organization; Looks at typical compensation criteria for entrepreneurial venture capital-backed firms; Introduces method for assessing an entrepreneur as a prospective future employer.

Quantifying the efficacy of marketing is an age-old challenge. As John Wanamaker said a century ago, “Half the money I spend on advertising is wasted; the trouble is I don't know which half.” The big difference today, however, is that the Internet enables detailed tracking of marketing campaigns in real time, or near time. Exemplifies how to leverage the Internet to dramatically improve the efficacy of marketing. Centers upon the Microsoft Security Guidance marketing campaign, which was designed to change IT professionals' perception of Microsoft's software product security. The integrated marketing campaign involved print media, analyst relations, and online advertising. The advertising was designed to drive IT professionals to a Web site on security guidance, then sign them up for free in-person security training classes. Illustrates two important best practices for marketing in the Internet age: first, the campaign was designed to be measured, and second, agility was specifically designed into the campaign. In addition to tracking weekly click-through data from the print and online advertising, the campaign also used online pop-up customer perception surveys. Analyzing the click-though data, Microsoft realized it had a problem at the end of the first week of the campaign–there were far fewer signups for the training sessions than anticipated. By the end of the second week the campaign was changed, resulting in a huge improvement in efficacy. Creates a scorecard illustrating the pros and cons of the Microsoft approach compared to a more traditional campaign. Illustrates how, rather than creating big-bang campaigns, high-performing marketing organizations today are continually experimenting. They build flexibility into campaigns and design them to be measured.

To learn how to leverage the Internet in marketing campaigns, analyze click-through data and online survey results acquired in near time, and learn how it is used to fine tune and dramatically improve a campaign. Furthermore, illustrates how nonfinancial metrics can be used to quantify marketing efficacy.

Examines the launch of FluMist, the first significant innovation in influenza vaccines in over 50 years. The head of sales and marketing for MedImmune is working through the launch plan for FluMist. In particular, he is struggling with the question of how best to position FluMist. To determine the correct positioning, he has to consider business objectives, competitive set, differentiation, and pricing.

Allison Watkins, senior director of Merck's Vaccines Division, needed to decide on the pricing of Gardasil, Merck's newest vaccine and one of the company's most important product launches of the year. The outside consulting firm she had hired to recommend a price for Gardasil had suggested a price of $120 per dose (or $360 per person, as each person required three doses over six months to achieve adequate immunity). The Gardasil marketing team disagreed about this recommended price; some thought it was clearly too high, whereas others said it was too low. The latter group argued that Merck would be missing a major opportunity by setting the price at such a low level. Watkins now needed to decide whether to follow the consulting firm's recommendation or to set a different price.

The case highlights the complexity and issues around pricing in the pharmaceutical industry. To decide on the price of Merck's new vaccine, students will work through product economics and be introduced to the role of economic modeling in determining appropriate prices in the biomedical industry. The case is unique because it gives students an opportunity to calculate a cost per quality adjusted life year (cost per QALY), and in the process discover the power and limitations of such an analysis.

In March 2009, Steve Fowler, vice president of strategy and client service at full-service advertising agency Ayzenberg, had just completed what he considered to be one of the most innovative campaigns he had ever handled. Capcom, a leader in the video gaming industry, had just launched Resident Evil® 5 (RE5), the latest release of one of the industry's most valuable game franchises. RE5, a powerful asset with a passionate fan base, had warranted the use of an online viral, or word-of-mouth (WOM), campaign for its worldwide game launch. Although the creative work and appropriate media for the RE5 launch had been meticulously planned, Fowler was also interested in measuring the effectiveness of the campaign to better serve his client. In the past, measuring WOM was practically impossible. However, a software company named Meteor Solutions had found a way to do exactly that. Fowler and his team had worked with Meteor to execute several campaigns for other clients, but he had never applied Meteor tools on such a large scale. Fowler knew Capcom would want to hear specific WOM figures. What was the return on investment for the RE5 campaign and the implications for future campaigns? Had the Meteor tools provided comprehensive and actionable information, or was more work needed before these solutions could be widely used in advertising?

How to measure the value and fully leverage social media marketing including key success factors, challenges, metrics and implications for future campaigns and other industries.

This case concerns the promotional activities of Nashua Photo, the nation's largest mail-order photofinishing firm. Discount-price mailers (inserted in local newspapers, for example) were used to generate new customers, but also allowed existing customers to pay a lower price. Students must evaluate not only the results of last quarter's 125 separate promotions in light of this “leakage,” but also the appropriateness of discount-price mailers within Nashua's marketing mix.

The case describes the international problem of money laundering and summarizes U.S. bank regulations aimed at reducing money laundering activities. The introduction of H.R. 3886 in 2000 was one in a series of attempts to formalize U.S. banks' monitoring of their customers. The bill was prompted by a government report that named and criticized U.S. banks for laundering billions of dollars linked to drug trafficking, fraud, and organized crime. Interest groups in favor of H.R. 3886 were predominantly law enforcement agencies that viewed current anti-money laundering laws as ineffective. Groups opposed to the bill included the American Civil Liberties Union, which believed that the collection of more information about bank customers' activities was an invasion of privacy, and the American Bankers Association, which claimed that the legislation would impose unnecessary costs on banks. The case can be used to introduce the distributive politics framework for analyzing non-market issues and formulating nonmarket strategies in the context of government institutions. The epilogue reveals that H.R. 3886 died before it ever reached the House floor, but that an expanded version of the legislation ultimately passed---with the support of stakeholders who originally fought it---as part of the USA PATRIOT Act after the terrorist attacks of September 11, 2001. This stance reversal provides an opportunity to explore how events, public opinion, and the media can create windows of policy opportunity

Utilize a framework for analyzing options for non-market action – Formulate a strategy for nonmarket action – Recognize how public opinion influences the opportunity for non-market action through events and/or new information, political actors, media coverage, and policy windows

This case features Old Spice's efforts to reposition Glacial Falls after sales stagnated in the United States. The challenges in this case are twofold. First, it sets the stage for deciding whether and how to reposition a brand after a period of significant stagnation. This entails a targeting dilemma about whether to keep existing customers or take the risk of losing them to go after a new target. Second, this case examines whether the company should make a sensory change in the product (i.e., the scent) or whether it should undertake a cognitive change in the positioning of the product instead.

The case gives students the valuable experience of making a positioning choice and supporting the rationale for the positioning chosen. Specifically, it can be used to discuss:

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

Carolina Araujo had recently taken control of her family's business, Pepita Disco PPM, Uruguay's second-largest producer of beef-based dog food, treats, and toys. While she respected the company's nearly eighty-year history, Carolina felt that Pepita Disco had grown complacent with its market share and was basically preserving the status quo. Her plan was to re-energize the employee base and grow Pepita Disco's business faster than the overall market.

This exercise poses a fictional problem about a company's efforts to predict the impacts of price, product cost, and spending moves on profitability.

After completing the exercise, students should be able to:

1. Calculate and explain changes in net margin

2. Calculate price and volume changes for a given price elasticity

Calculate and explain changes in net margin

Calculate price and volume changes for a given price elasticity

Supplements the (A) case.