12. Conducting a SWOT analysis is a basic component of the market planning process. We have discussed Starbucks and Toyota (the Scion brand) in our group discussions. Use the information in the articles from the group discussions and the company web site and conduct a brief SWOT analysis for either Starbucks or Toyota. Select one of these companies, outline the four parts of the SWOT analysis, and describe at least two (2) entries for each part, (2 marketing strengths, 2 marketing weaknesses, 2 marketing threats, and 2 marketing opportunities.). Briefly explain why your think your entries are strengths, weaknesses, opportunities, or threats that would affect the company’s marketing strategy.
Starbucks is one of the leading purchasers and grinders of quality coffee beans. The company has an international market with shops established around the world. In conducting a SWOT analysis of the company, there are four considerations. First are the strengths of the company. Starbucks enjoys the position of having high brand equity as well as satisfied employees. The company has strong brand equity because of the quality of the products that they offer. Starbucks prides itself with offering exclusive coffee products or products that customers cannot find in other coffee shops. People make the effort to go out and purchase the exclusive coffee of Starbucks. The company also enjoys the benefit of satisfied employees expressed in the recognition of the company as Fortune’s top 100 companies to work in. The company attracts the best employees in their different branches ensuring service quality. Second are the weaknesses of the company. Starbucks has several weaknesses, one is the lower price of coffee in supermarkets and another is its shrinking target market. Starbucks competes with the cheaper make-your-own coffee sold in supermarkets and it also felt the dwindling of its original target market of people belonging to the 35 and above age range. Third are opportunities. Starbucks is faced with several opportunities. One is the expansion of its market to include the younger age range by making the company accommodating to the preferences of younger people through the variety of their products. Another opportunity is the introduction of its coffee products in supermarkets but which should include instructions on the specific manner that coffee is to be prepared if the final product is to become at par with coffee sold in the Starbucks shops. Fourth are threats. Several international companies also operate through the exclusivity of products espoused by Starbucks. This means that Starbucks has to continuously develop new varieties of their products if the company is to succeed in maintaining product differentiation. Another threat is the superiority of the access of competitors to channels of distribution. Companies selling ground coffee in supermarkets enjoy the benefits of this channel of distribution that Starbucks does not enjoy. Starbucks only provides its products and services to people within the vicinity of its cafes.
13. You are a marketing specialist working for a company that operates 21 multiplex movie theaters (theaters with several movie screening rooms) in suburban shopping malls and shopping centers near major metropolitan areas including Boston, New York, Philadelphia, Baltimore, and Washington, DC. The company wants to know if its potential customers want additional food items in the theater, if so what items, and if they want a dining area in the lobby. You have not been able to find any existing market research data and will have to generate your own primary data. Use this situation and give examples of how you could use three different methods to generate the primary data. For each of the three methods, explain why you think each method would be effective in this situation.
The first method is observation of customer behavior. This is done by posting observers at key points in the different theaters and documenting the behavior of customers for a given period in relation to the objective of the research. Since the objective of the research is to determine whether customers want additional food items or a dining area in the lobby, the observers will be posted at the food stalls in the theater. The significant behavior to be observed is the interest that people show on the food being sold by the stalls. An increasing or constant number of people going to the food stalls indicate that people are interested in purchasing food sold at the cinema. However, if there are only a few people buying from the food stalls then this means that there is little interest in the food that the theater has to offer especially if this is the experience throughout the period of research and regardless of the peak and slack days in the theater. In terms of the dining area, the behavior that should be observed is whether there are many people standing around the food stalls while eating especially if the people eat before going inside the theater and after watching a movie.
The second methodology is interview. This is done by randomly picking viewers to the different theaters and asking them about the food sold in the theater and their opinion on the putting up of a dining area near the food stalls. This is an effective method because the interaction between the research and the customer enables the researcher to ask customers why they answered they way they did and to clarify answers. The interview method provides a manner of gathering in depth information from customers including the type of food they want and the arrangement of the dining area. The number of interviews and the period of conducting the interview depend upon the number of viewers per day of a theater and should cover the peak and slack days. However, the interview should be conducted in a manner that will not inconvenience the customers.
The third methodology is survey. This is done in several manners but the most common way is to provide a suggestion box and forms that gauge the satisfaction of customers on the food and other existing arrangements and at the same time request them to give their suggestions and other comments. If the theater wants to expand its market by improving the food and dining arrangements, then research can be extended to include the people within the vicinity of the theaters and the questionnaire form asking the people about the theater services and products that they prefer can be floated to a significant number of people in other shops, supermarkets and other public places.
14. Assume you have just opened your own coffee and sandwich shop in a shopping center. The shopping center is in an affluent suburban area and there are a number of professional offices (lawyers, accountants, consultants, doctor offices) in the local area. You specialize in coffee, pastries, sandwiches, and salads, and serve breakfast. You plan to operate the store 7-days a week, 6:00AM to 9:00PM. Now all you need are customers. Outline the steps in the consumer decision process and briefly explain marketing actions you could take to help potential customers go through the process and decide to start patronizing your coffee shop. Please be specific and relate your response to the situation of opening the coffee shop.
Consumers go through the stages of the decision process before making the actual purchase of a product or a service. The fist stage of the decision process is problem recognition or the perception of a need. The company should introduce its services and its products as needs of its potential customers. The company may offer the service of going to the offices in the morning to take the orders of the office workers for coffee and sandwiches and then do this again during the afternoon break. The company may also distribute flyers to its potential customers stating its products, services and the time that it is open. In doing this the convenient service experienced by customers will make them rely on the company for their coffee, bread and breakfast needs.
The next stage is the information search or the seeking of products and services offering the greatest value. After the potential customers have realized their need for a convenient food shop, the company can heighten its promotion by giving free coffee and food in case the person making the delivery is late. This is to make potential customers consider the shop in deciding which product or service to be preferred. The shop should be able to prove to potential customers that they have a substantial competitive advantage over other shops.
The third stage is the evaluation of alternatives or the weighing of value. The company can help potential customers in this stage by again highlighting its advantage and difference over other shops and introducing the good reputation of the shop through its dedicated employees and the good reputation of its owners as well as the quality of its products and the convenience of its services. The competitive advantage of the shop is reinforced through the consistency in the substantiation or actual delivery of goods and services.
The fourth stage is the purchase decision or the actual buying of value. The company can help potential customers in this stage by offering excellent terms of sale by selling goods and services that are equivalent in value to payment made by customers. The company may also have allied services such as the reheating of coffee that have become cold to customers dining in the shop and accommodation of the specific preferences of customers on the ingredients of their food and the manner of preparation. The objective is total customer satisfaction.
The fifth stage is the post-purchase behavior or the evaluation of the value of the service. After customers have purchased the food and experienced the service, they assess their experience based on their pre-conceived expectations. After the assessment, customers are either satisfied or dissatisfied. The company can help customers in this stage by offering customer satisfaction surveys and suggestion forms to enable people to express their comments and suggestions. Customers appreciate business that take the time to lean about the level of satisfaction of their customers because the business is able to show that the importance of customers to the company.
15. Smith & Company is an accounting and management firm that provides financial auditing and general accounting services to large and medium-sized firms, primarily in the retailing and import/export businesses. The company also provides management services such as project planning, designing quality assurance programs, and employee development training. Smith & Company has offices in Houston, New Orleans, Seattle, Taiwan, and Hong Kong. Use at least three (3) of the market segmentation variables used for business markets and describe two (2) different possible market segments for the company’s services. For each of these possible market segments, indicate which bases for segmentation you are using.
Based on the description of the operations of Smith & Company, its market may be segmented into its domestic and overseas market. The domestic market comprise of the customers that are serviced by its offices in Houston, New Orleans and Seattle while its overseas market is constituted by the customers in Taiwan and Hong Kong. Several market segmentation variables characterize this aspect of segmentation. One is the customers served by the business. Based on this segmentation variable the company serves both domestic and international clients. However, the clientele of the company is limited only the market reach of its three domestic offices and two overseas offices. Another variable used in market segmentation is the environment where the company is operating. Smith & Company has to content with two general operating environments, the domestic environment consisting of the political, cultural and legal consideration for its operations in the United States and the overseas environment consisting of the political, cultural and legal operating environment in Taiwan and Hong Kong. Another variable is the perception of customers of the company. In the United States, the company is recognized as a local or homegrown company. However, in Taiwan and Hong Kong the company is a foreign company. The different in perception has an effect on the market share of the company. The primary basis of segmenting the market of Smith and Company into domestic and overseas is the geographic location of its market, the customers that the company serves, the environment in which the company operates and the perception of customers about the company.
The market of Smith & Company may also be segmented into small and medium sized firms. This means that the company exclusively offers its services to this segment of the market and it is from this market that the clientele of the company are classified. One variable that characterize this classification is the customers served by the business. Smith & Company targets small and medium sized firms relative to large clients in the market. Another variable characterizing the segmentation is the purchase readiness of the company or its available expertise and skills. The company has developed its expertise on the accounting and auditing needs of small and medium sized firms that justify its market segmentation. Another variable justifying the segmentation is the environment where the company operates. Smith & Company caters to the accounting and auditing needs of small and medium firms because the firms located near the offices of the company are classified as small and medium sized firms. The bases for the segmentation of the market into small and medium sized firms relative to large firms are the expertise of the company, the businesses operating in the market and the opportunities offered by the market environment.
16. Good Stuff, Inc., is a discount department store chain with 43 stores in the Boston-New York-Philadelphia metropolitan corridor. The company specializes in casual clothing, sporting goods, kitchen appliances, and toys. Assume you are a new marketing specialist in the company’s marketing department. You have been assigned to work on the company’s market research projects. Select one of the problems/questions below, outline the steps in the market research process, and give examples of what you might do/what you would accomplish in each step of the process to address the problem/question you selected. (Note: Please do not simply provide a generic definition of the steps in the research process extracted from the textbook, relate your response to the problem/question you selected).
The market research process involves seven steps. The first step is defining marketing problems and opportunities. One problem that the company may face is the possible reallocation of floor space that implies prioritizing the clothing products to be displayed. The company has to determine if reallocation is an efficient move and if so the manner of reallocation. The second step is to set objectives and determine a budget and timetables. The primary objective of the company is to gather as much information as possible from customers as basis for its decision regarding the possibility of reallocation. The third step is the selection of the type of research to be conducted including the appropriate methods and techniques. The company may opt to use the survey method to classify the clothing products according to profitability to determine which clothing products to prioritize. The fourth step is designing the research instruments. In the survey method, the average number of purchases made in the different types of clothing will be gathered and collated for the past 12 months to determine which types of clothing incurred the highest sales. The fifth step is the actual collection of data. Data collection is done continuously and objectively throughout the research period. The sixth step is the organization of data according to importance in addressing the problem and analysis of data through the applicable statistical tools. The seventh step is the presentation of research data and findings. The research results may show that clothing tailored toward adolescents accounted for the highest sales in clothing. This finding becomes the basis for the company to decide on the best possible solution to their problem.
21. Marketing is a basic function of all organizations. But what does marketing consist of? Briefly explain what marketing is (what does marketing consist of, what are we trying to accomplish with marketing) by using examples from the normal operation of a company that franchises a chain of fast food restaurants throughout the US.
Marketing is a process that commence from the development of a product or service to the time that customers are able to utilize the product or obtain the service. In the case of a fast food chain, marketing covers the entire process of the company’s decision on the food that it will serve, the manner of cooking and serving the food, and other services that the company plans to offer until the actual delivery of the order of the products and services and ending with the post company experience of the customer. Since marketing is a process, it involves a chain of continuous events that covers the planning and actualization stages and providing stimulus and expecting a response.
Marketing also involves the facilitation of the exchange of value for value between the business firm and its customers. In the case of the fast food chain, the facilitation of exchange refers to matching the money paid by customers with quality products and services. The expected result is that customers should fee that they received their moneys worth or even more than what they paid for with the business firm earning profit.
Marketing is targeted towards customer satisfaction and other goals of the company. This means that end of the marketing process is to satisfy customers including the other related goals of the company. In the case of the fast food chain, customer satisfaction is achieved by developing food and services that cater to the preferences of customers such that after the customer has tasted the food and experienced the service, the customer feels satisfied about the exchange or transaction that affects the propensity of the customer to return to the fast food chain or recommend the fast food to family, friends and colleagues.
Marketing involves the determination of particular business objectives and accomplishing these objectives through the appropriate means. In the case of the fast food chain, the primary objective is to achieve customer satisfaction and the related objectives are to increase the number of customers and increase customer retention to increase profit. These are done through marketing.
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