238285387 case-studies

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Case study – Sydney’s water crisis and the role of marketing (p. 43)
1. Identify the constraints that limit Sydney Water as a state-owned rather than a private sector
organisation.
Answer: The marketing environment for Sydney Water is complex, and characterised by
political pressures. Its stakeholders include the water users of Sydney, many of whom indirectly
influence Sydney Water via the elected State government. As a state owned monopoly, Sydney
Water’s prices are regulated by a tribunal. It needs to reduce its sales volume, unlike a private
sector organisation, in order to meet its environmental protection objective. At the same time,
reduced sales reduce its revenue, making it harder to achieve another of its objectives, to be a
successful business with an adequate return on its assets.
2. Sydney Water’s conservation initiatives include campaigns designed to change consumer attitudes. Is
this necessary, or would it be preferable to rely on water restrictions, mandatory installation of water
efficient appliances and price rises?
Answer: Enforcing water restrictions and mandating water-efficient appliances would be
unlikely to succeed without the support of the community. Unpopular regulations are difficult
to enforce, and the state government would not wish to risk a voter backlash. For this reason,
attitude change strategies and legislation are often combined in social marketing, as in
campaigns against dangerous driving.
3. What are the arguments in favour of raising the price of water as a means of reducing demand? What
precautions may be needed when increasing the price?
Answer: If we assume that after our basic needs for water have been met, the demand for water is
normal, then raising the price of water should be effective in reducing water consumption. However,
when seeking a price rise from the tribunal, Sydney Water, as a State-owned monopoly, would have
to consider social objectives such as meeting the basic needs of low-income earners. This could be
achieved by concessional pricing or by stepped pricing, in which the small amount of water needed
for survival is cheap, but heavy water users (such as those with pools and large lawns) pay high
marginal rates for their excessive consumption. Sydney Water in fact uses both stepped pricing and
rebates to pensioners and large families with low incomes. Any price rise needs to be acceptable to
the electorate.
Document: 238285387-case-studies-150913055811-lva1-app6891.doc
Author: Zlatko Muhvic
Save Date: 11/09/2015
RMIT University Page 1 of 22

4. What are the arguments for and against the retrofitting and rebate programs?
Answer: The chief argument in favour of these programs is that they bring about the one-off,
permanent change so desirable in social marketing, so that water conservation is not dependent
on the consumer’s daily behaviour. These programs are also voluntary, and so more easily
accepted than a compulsory change. The argument against these programs is that they are
costly, both in terms of subsidy from Sydney Water and in reducing its revenue from the sale of
water. In addition there has been a limited uptake of these offers, suggesting consumers are
unaware of them or resistant to them.
5. What roles can you suggest for marketing research in Sydney Water’s social marketing strategy?
Answer: Marketing research is essential in social marketing. Sydney Water could use it to:
• Segment consumer groups
• Decide which groups to target
• Decide what messages will be most effective with each group
• Discover the reasons for the limited uptake of rebate and retrofit offers
• Track the effectiveness of its attitude-change campaigns
• Investigate the price sensitivity of consumers.
Case study – Viagra – an outstanding growth strategy (p. 77)
The world of pharmaceuticals offers numerous interesting insights into customers needs and the centrality
of these customer needs to the success of marketing. Another pharmaceutical company called Merck,
Sharpe and Dohme markets a prostate treatment called Proscar. One of the side effects of Proscar is that
it happens to promote hair growth. MSD also markets another treatment for baldness called Propecia
which is the same drug as Proscar, but half the dosage – at double the price!
1. Can you think of ways in which Pfizer could grow the sales of Viagra?
Answer: One approach is to go for higher market penetration – to identify more of the men
that have ED, and encourage them to seek treatment.
A second is to seek new markets. This case deals primarily with the treatment of ED.
However, Viagra is reportedly sought and used by a variety of people who are seeking to
improve their sexual performance. One of the emerging segments has been gay men who use
the product in order to improve their sexual performance. However, one enormous cause for
concern among this segment is that one drug often used by gay men is amyl-nitrate (a nitrate-
based drug) which when used with Viagra can lead to fatally low blood pressure. In another
application, there are reports that some makers of the drug, ecstasy, are combining it with
Viagra to make something that has been dubbed sexstacy. Some women have also reported
experimenting with Viagra to see if it heightens sensitivity in women as well.
Other markets may be around other functions of the drug. The drug was originally
developed for treatment of angina pectoris, and while it has some effectiveness, it was found
not to do any better than existing drugs. However, more recently, it has been approved for
the treatment of hypertension, specifically pulmonary arterial hypertension – or high blood
pressure in the arteries of the lung. For this application, the drug is marketed as a round,
white pill in a 20mg dose called Revatio (see Pfizer’s list of drugs:
www.pfizer.com.au/Products.aspx).
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2. Within its product portfolio (see <www.pfizer.com.au/Products.aspx>), Pfizer offers two products
that are in some ways similar to Viagra: Revatio and Caverject Impulse. Read the Consumer
Medicine Information (CMI) on these two drugs and comment on whether they represent
‘competitors’ to Viagra. Why would Pfizer support all three drugs?
Answer: Revatio appears to be exactly the same as Viagra except that Revatio is offered only
in 20mg doses while Viagra is offered in 25mg and 50mg and 100mg – all three Viagra doses
are offered at the same price incidentally. Revatio is essentially packaged for a different
market, and as such, does not ‘compete’ with Viagra at all. Caverject is a very different
formulation from Viagra (injectable VS oral), works a different way (Viagra requires sexual
stimulation to work, Caverject does not), and yet is aimed at the same market (ED). The
reason for maintaining Caverject within the portfolio is probably for cases where Viagra fails
to have any effect or is contra-indicated (e.g., the patient is taking nitrates for treatment of a
heart condition).
3. This case focuses primarily on the value of Viagra to consumers. What marketing mix should be
used to address the primary target, doctors?
Answer: Doctors are looking for products that will help them solve their patient’s problems.
Until the 1990s, doctors had very few options to offer to patients presenting with ED. The
enormous media coverage that Viagra has enjoyed is that patients are more willing to present
by asking directly for Viagra. Doctors are obliged to take a ‘history’ which means they must
investigate details of the condition and determine if Viagra or some other treatment is
appropriate.
For doctors, the marketing mix offerings might be summarised as follows:
 product – easy to use, clear instructions, minimal side effects
 price – not very important to doctors, probably not a major issue!
 promotion – via company representative primarily, maybe some reminder advertising
in doctors’ professional journals
 placement – only via pharmacy.
It is perhaps important to note that doctors represent a business-to-business market for the
pharmaceutical companies.
Case study – As planes get bigger, the marketplace gets more competitive
(p. 117)
What is the product offered by an airline: the core of the offer is time-critical transport, the expected or
actual product is the seat, schedules, in-flight services, etc., and the augmented product is frequent flyer
points, Qantas club, etc.
1. Consider the air travel industry’s microenvironment. Using Figure 3.1, identify the main
companies and other organisations forming the microenvironment.
Answer: Figure 3.1 (p. 85) shows the main actors in the organisation’s microenvironment.
Suppliers: Boeing & Airbus make the planes; Airports provide the landing and take-off
facilities; Company: include all the major airlines, British Airways, Qantas, Singapore,
United Airlines, United Arab Emirates, Virgin, Cathay; Marketing intermediaries: Travel
agents; Customers: people with a need to get to air travellers – reasons for travel – leisure,
business, visiting family & friends.
2. List and describe the main forces in the macroenvironment facing air travel industry companies.
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Answer: Figure 3.5 (p. 89) shows the forces in the organisation’s macroenvironent.
Demographic: China & India are on the move and have a large number of wealthy people
wanting to travel, the ageing population is al proving a demographic groups with money;
Economic: cost of fuel; Natural: Greenhouse Gas Emission, Carbon footprint, more
hurricane/tornadoes disrupting schedules, Technological: internet on planes; Political: Law
(anti-competitive pricing, consumer protection (not in some markets), changes of
government; Cultural: rise in number of Asian travellers, customers from different ethnic
and religious backgrounds require different foods, separate toilets etc.
3. What factors might be influencing the increase in air travel in Asia noted in the case study?
Answer: The factors are discussed in Q1 & Q2. The Asian market and the rise of a wealthy
Indian and Chinese population will influence the travel patterns around and in and out of
the Asian region.
4. Why do those who pay more for air travel perceive value, when it is clear that many other people
perceive value when they use a low-price air carrier?
Answer: The value is very much a customer perception and is based on expectations. The
customer who pays first class expects better food, drinks, service, priority boarding and
disembarking, and while the destination is important the actual journey also has value. The
customer who pays for economy class has a primary interest in getting to the destination and
does not generally have high expectations of the service along the way. Both these customers
get value for their money.
5. Conduct desk research into the environmental issues surrounding jet air travel and freight
forwarding. What actions might the air travel industry take to overcome such issues?
Answer: See websites: Carbon Offset Guide, developed through a partnership between EPA
Victoria and Global Sustainability at RMIT - http://www.carbonoffsetguide.com.au/; fly
carbon neutral with Qantas http://www.qantas.com.au/info/flying/flyCarbonNeutral/index
Case study – Researching smokers and gamers in clubland! (p. 156)
1. Is it a decision that you personally agree with – to conduct research among smoking gamers in
order to inform club management of the best approach to take in coping with the possible effects
of the smoking ban, and possibly to develop some initiatives? Why, or why not? Can consumers’
future intentions and reactions to possible initiatives be measured with any degree of accuracy?
Answer: Whilst there may be some students, perhaps non-smokers, anti-smokers or those against
gambling, who have ethical or moral issues with this product category the reality is that any
legitimate business that has a high proportion of customers that exhibit a particular behaviour,
such as smoking, need to understood that behaviour in terms of the impacts on their business, when
government policy is legislated. The purpose of marketing research is to help guide an
organisation’s marketing activities and finding out information about future behavioural intentions
of customers is an essential part of this plan.
Although research can never claim to be 100% accurate in predicting future behaviour it can, if
designed well, provided a very good guide to likely situations to be faced in the future and can
definitely provided an assessment of preferences for future initiatives.
It should be noted that the case study does not tell us how many smokers are affected, and it seems
that management is not interested in whether there might be a positive affect to revenues from non-
smokers. Whilst the smoking ban is bound to have some affect on this segment the management
seems to be only considering smoker members, rather than their total customer base. The inclusion
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of non-smokers would give a more robust research design to answer the questions about
maintaining future revenue levels.
2. Mariano at BRAND LIFE recommended a face-to-face survey be conducted at the club. Make a
list of the possible advantages and disadvantages of each of the alternative approaches for
conducting a survey mentioned in the case (an email survey, a survey on Kingfishers’ website, a
postal survey, a telephone survey, or a face-to-face survey at the smokers’ homes).
Answer: Firstly the target population must be defined as ‘smokers who are members of the club
and who use the gaming machines’, the following advantages and disadvantages of the survey
methods suggested in the original submission from BRAND LIFE could be evident.
Survey methods Advantages Disadvantages
Face-to-face survey at the
club combined with self-
completion survey forms
Good control over who is
selected.
Reasonably quick to conduct.
Generally good response
rates.
Control of the research
process possible.
Supervision of interviewers
possible.
Respondents may resent the
intrusion into their social
time.
Selection bias may occur
(e.g. sole gamblers).
Time available may be
limited.
May not want to be
interviewed in public.
Cannot control interviewer
effects/bias.
More expensive
Email Inexpensive.
No interviewer effects/bias.
No control over who
completes the survey.
Low response rates.
Kingfishers’ website Inexpensive.
Randomised selection of
respondents.
Good response to qualitative
questions.
No control over who
Low response rates.
Requires people to have
access to the website.
Target population cannot be
pre-identified.
Mail survey Inexpensive.
No control over who
Low response rates.
Question completion can
vary from planned order.
pre-identified.
Telephone Reasonable response rates. Cannot control interviewer
effects/bias.
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Not too expensive.
Has a personal interviewer
element.
pre-identified.
Face-to-face survey at the
smokers’ homes
Reasonable response rates.
Less social or context
pressure.
Control of question
presentation order.
Ability to probe in-depth
issues and sensitive issues.
Very expensive.
Time consuming.
Cannot control interviewer
effects/bias.
pre-identified.
3. Identify the management problem in a succinct statement; identify the research problem in another
succinct statement; then list three or four research objectives that emerge from the latter. For each
of these research objectives, make a list of three or four information needs that you would
recommend BRAND LIFE structure questions around when designing the survey questionnaire.
Answer:
Management problem: To decide on future management actions to maintain the level of visitation
and gaming amongst those smokers affected by the new smoking legislation. A subsidiary, but
actionable outcome of the research will be to decide on which of the possible initiatives being
considered by management would be most likely to maintain member usage of the club and its
gaming facilities.
Research problem: To devise a means of collecting information to determine the likely effect of the
new smoking legislation provisions on the members of the club who are smokers and gamblers, and
their preference for various alternatives in the way the club handles the changes need in club
operations.
Research objectives & information needs (i.e. the questions for the survey questionnaire):
RO: To assess the role of smoking in the gambling, drinking and socialising activities of club
members.
RO: To determine how smoking gamers are likely to react to the ban on smoking.
RO: To assess the smokers preferences for a range of possible initiatives that the club could
introduce.
RO: To determine if changes in behaviour will impact on the revenues of the club.
THE DETAILED INFORMATION NEEDS WOULD INCLUDE:
What factors make gaming more enjoyable and fun? What does the club do that makes gaming an
enjoyable past-time? When do they gamble? Who with? Do they use the other facilities of the
club?
What is their opinion of the new smoking laws? What do they know about them? Do they
understand them? What action will they take when smoking is banned from the gaming venue?
Will they cease to be members? Will they gamble less? Will they socialise more?
What do the customers want and need from the venue? Which of the initiatives suggested by
management are acceptable to the respondents? Which initiatives would they prefer to see
implemented?
Save Date: 11/09/2015

Demographics and behaviour: How often do they visit the club? Do they also eat and drink during
a visit? Length of membership? Residential location and distance to club? Age? Gender?
Occupation? Family Status?
Smoking behaviour: How many cigarettes do they smoke per day? How often? At what times?
4. Consider the sampling for the research. Indicate first whether you would recommend a
probability or non-probability design, and what sub-type of sampling design you would
recommend once you have made the broad choice between these two. Second, design a sampling
plan for the days of the week and times of the day for the envisaged seven-day fieldwork period.
Answer: The research sampling method proposed in this case study is non-probability with
respondents being selected on the judgment of the interviewer who approaches gamers at the
machine and ascertains whether they are smokers.
Students may choose either method and give their reasons. In probability sampling each potential
respondent has a known chance for study – can be random, stratified (2 step process - divide
population into sub-population then select respondents using a random method from each
population or strata) or cluster (area). True probability samples are therefore very difficult to
administer in the real world. However, this could be implemented by making a random selection of
which gaming machines would be approached in the venue and the user asked to participate.
In non-probability sampling a respondent’s likelihood of be included in the study is unknown – the
selection of respondent is more subjective than probability sampling and its methods includes
convenience, judgment, snow-ball and quota.
The approach to selecting the sample could be based on data about the venue. This would be most
effective if non-probability sampling was used although if statistical methods were used to make the
choices the procedure could come close to the requirements for a probability sampling process.
Now the anecdotal evidence supplied by the club on the number using the club is the key to
designing the sampling plan. Remember that the total number of interviews proposed was 300.
From the case study: Use of the club’s facilities on Monday, Tuesday and Wednesday mornings is
generally limited to retired people meeting friends for coffee in the coffee shop. Lunchtimes are
busier, with members taking advantage of the early-week specials in the bistro. The bistro and bar
areas fill up in the evenings, with some usage of the gaming areas (mostly the club’s more serial
gamers). Gaming revenue: 5% of total weekly gaming revenue is derived on Mondays, 9% on
Tuesdays and 11% on Wednesdays. The pattern of club use is different on Thursdays and Fridays,
the two busiest weekdays. Thursday is pension day and also the day when many workers get paid,
and this is when the coffee shop, bistro, the two bar areas and the gaming area get busy. In the
gaming area, 17% of revenue is derived on Thursdays and 21% on Fridays. Saturday is the single
busiest day for all facilities in the Kingfishers Workers’ Club and 26% of gaming revenue is
derived on this day. On Sunday there is relatively high usage of the food service areas, and a
somewhat lower usage of the bars and entertainment area. Gaming revenue is similar to the
revenue flow on a Wednesday (11%). If we assume that revenue per person (which is an unknown
factor) stays about the same on each day then a possible sample plan could be based on the revenue
percentages over a week:
Day % of revenue Number of interviews
Monday 5 15
Tuesday 9 26
Wednesday 11 33
Thursday 17 50
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Friday 21 66
Saturday 26 78
Sunday 11 32
Total 100 300
5. Evaluate critically whether the approach taken to recruiting the potential respondents, and the
approach to interviewing them (a mix of interviewer administered and self-completion) is
appropriate. Indicate the reasons for your views, and recommend a possible alternative approach
for in-club recruitment and interviewing. What methodological advantages might this have?
Answer: A mix of interviewer and self-completion questionnaires may elicit inconsistent responses
particularly as there is the potential for interviewer bias in the interview. Self-completion surveys
suffer from the danger of people reading ahead or going straight to the final questions. For
example: respondents might examine the ‘list of initiatives’ before giving their own ideas about how
the club could adapt or change.
Keeping the self-completion method the respondents could be asked to complete the survey using
computer assisted interviewing where the order of presentation of the questions is maintained.
Alternative: some parts of the questionnaire could be done first and then remaining questions
showing list of alternatives handed out by the interviewer.
It is important that a small scale pilot survey be conducted using the proposed method to check that
the process and questions will work as designed.
If using both methods the completed surveys could be clearly labelled and a comparison made
during analysis to check on the reliability and the validity of the responses (Reliability - when the
research technique produces almost identical results in repeated trials, Validity - when the research
method measures what it is supposed to measure e.g. preference measures really record preference
and not just a degree of interest.)
6. In general, what difficulties would you expect when conducting research among consumers from a
non-English-speaking background? What are the specific difficulties likely to be encountered in
recruiting and interviewing smoking gamers who are native Chinese speakers? What
recommendations would you make for maximising the participation of this important group of
Kingfishers members?
Answer: Language difficulties, lack of understanding legal concepts, and lack of understanding
laws can occur with respondents from NESB communities. In the research process some people are
not familiar with scales and ranking methods or even how to complete the survey process or even
with the concept of marketing research at all.
If the club has a high proportion of its members with NESB then the survey method may need some
adjustment. Using very well trained and experienced Mandarin speaking interviewers would be
appropriate.
The facilities of the club should be used to advertise the survey of members is taking place and
notices, letters or emails sent to members in their own language describing the survey to about to be
done.
Save Date: 11/09/2015

Case study – The tribe has spoken: networks, marketers and viewers still
love reality TV
1. Why are reality TV shows so popular with television networks and marketers?
Answer: For television networks, reality TV shows present a lower-cost alternative to their
usual offerings of sitcoms, dramas and variety shows. It simply costs less to produce one hour of
reality TV than it does to produce one hour of sitcoms or dramas, even though the differential is
decreasing. A large component of the cost of sitcoms/dramas are the salaries paid to the stars –
remember the US $750 000 per Friend or the multimillions offered to Jerry Seinfeld in his last
season. Reality TV participants are either unpaid or paid comparatively little. For example,
while the winner of Survivor receives $1 million, the other contestants receive significantly less
in terms of winnings (especially those voted off early) although most are paid modest amounts to
defray regular expenses such as rent.
Reality TV shows draw audiences that are attractive to advertisers. This is reflected in the
prices networks can charge for advertising during reality shows. Remember the profit to
networks like CBS from shows like Survivor. When you consider that Channel 10 could actually
auction advertising time in the finale of Big Brother to the highest bidder, you realise that reality
TV generates significant revenue for the networks.
For marketers, reality TV shows are able to deliver the coveted 18–49 demographic – the group
who are the largest spenders in the marketplace. Marketers are able to target this demographic
with their advertising, often tailoring their ads specifically to the show. Increasingly, reality TV
shows provide good product placement opportunities, especially if the products become coveted
prizes in reward challenges like Survivor’s Pontiac Aztek SUV. Sponsoring reality TV shows
allows marketers to align themselves with their particular target consumer, in the hope that the
positive associations/feelings their consumers have towards the show will become associated
with their company. Sponsorships open up many opportunities for promotional tie-ins such as
contests and in-store promotions. Reality TV shows can be used as a connection point to the
Internet, expanding the options for capturing consumers. Reality TV also provides marketers
with a new range of high profile endorsers/spokespeople with high recognition among their
target consumers, generally at a lower cost than celebrities.
2. Why is reality TV so popular with viewers? Make reference to the internal characteristics
(psychological and personal) and external characteristics (cultural and social) that influence consumer
behaviour.
Answer: Reality TV removes some of the artificiality of other genres such as comedies, bringing
viewers closer to the actual experience. Viewers see authentic emotions and behaviours even
though the scenarios may be contrived. Some would suggest that reality TV taps into the
human tendency towards voyeurism.
Viewers identify with the contestants/participants as they are real people who look and act as
they do – making them consistent with viewers’ personalities and self-concepts. In essence, the
participants become virtual members of their peer group, with social needs (Maslow) being
satisfied when shows are viewed. If you have ever cheered when a particular contestant is voted
off in Survivor, or were one of the hundreds of thousands who voted in Big Brother evictions or
for your favourite on Australian Idol, you realise that you can develop reasonably strong feelings
to these people – they become ‘virtual’ friends or enemies. We all have our favourites and those
we do not like, those we want to win and those we want to lose. And with many shows, we get to
actively participate, deciding the fate of the contestants we don’t like – a form of anonymous
revenge! Remember that the number one reason for watching is guessing who will be eliminated
and who will win.
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Fan clubs and chat rooms allow for the creation of virtual peer groups and communities, not
only providing opportunities to identify with the show’s participants but to interact with like-
minded people. These on-screen ‘peers’ are in situations that viewers can identify with –
remember that two major reasons for watching are seeing others in challenging situations and
imagining how you would react in the same situation. Most of us can imagine ourselves taking
the Survivor challenges of eating bush tucker or herding goats. Anyone who has lived in a share
house or comes from a large family can identify with Big Brother. We all know someone who
always avoids work, whinges or doesn’t pull their weight like many on The Apprentice. With
Big Brother in particular, the housemates became part of many people’s daily lives, almost an
extended family – getting a recap of their daily activities every night at 7 pm, sharing their
stress and joy on eviction nights, and wondering how tonight’s drama would be resolved
tomorrow.
Reality-speak has invaded our everyday language. How many times have you heard Who Wants
to be a Millionaire’s ‘Is that your final answer?’ or ‘Can I phone a friend?’; the Weakest Link’s
‘You are the weakest link, goodbye’; or Survivor’s ‘The tribe has spoken’?
While the participants may become celebrities themselves, like Sara Marie or Blair, they still
retain their ‘real person’ appeal – after all, we’ve seen them hung over, in the shower, making
dinner, doing their laundry, losing their tempers, plotting, scheming, lying and doing the Bum
Dance. As such, they can function as opinion leaders, especially for all those product
placements!
Check out www.realitytvfans.com for access to a wide range of reality TV show websites. Note
the number of international sites. Question 3 addresses some of the cultural issues relative to
viewing reality TV.
3. Many reality TV show concepts were developed and market tested in Europe then exported to America
and Australia. Do you think a reality TV formula can be exported to any country or are there cultural
factors to be considered?
Answer: While the basic format or premise has been exported, there have been subtle
differences in the actual shows aired, reflecting the cultural values and accepted practices in
each country. For example, segregated bedrooms are the norm in the UK’s Big Brother, despite
their addition of the ‘shagging shack’ while co-ed bedrooms exist in most other countries,
reflecting cultural values of privacy and ‘private space’. Nudity is the norm in European Big
Brother shows but was allowed only on the late night Big Brother Uncut in Australia.
Even though a ratings success, France’s Loft Story has inspired French intellectuals to ‘storm’
the loft, reminiscent of the storming of the Bastille, in a failed attempt to rescue the participants.
The French audio-visual authority ruled that the show failed to respect human dignity and that
its participants must be given a daily break from the cameras.
You can probably think of several countries where certain reality TV shows would be
considered unacceptable viewing. For example, in early 2004 the Middle East Broadcasting
Centre cancelled an Arab version of Big Brother in its second week following complaints of
immorality from Islamists in Bahrain. In 2003 Reality TV launched its channel in India. They
realised that racier shows (for example those with high sexually charged content) would be
culturally unacceptable. According to Chris Wronski, chairman of the parent company of
Reality TV, the channel reaches 14 million homes in India so ‘we have to be careful not to
offend anybody’ (Source: Brennan). Wronski points out that Central Europeans are more
accepting than consumers in the United Kingdom of shows like Impacto TV, which shows
extreme close-ups of accident victims. Wronski believes that reality shows ‘travel’ better than
other genres like comedy but that there must be an awareness of cultural boundaries.
You can also probably think of several countries where much of what has been shown in reality
TV shows would not have passed government censors or would have required changes to be
Save Date: 11/09/2015

culturally acceptable. For example, in Arab countries female Fear Factor contestants don full-
body wet suits for all water related challenges.
4. How real is reality TV and does it matter?
Answer: The vast majority of viewers are smart enough to realise that the full content of seven
days in the Australian Outback cannot be shown in an hour-long series. Or that 24 hours of life
in the Big Brother house cannot be shown in a daily half-hour program. They realise that they
are seeing an ‘edited’ version of reality. And they know that the producers make conscious
efforts to alter the outcomes or interactions. For example, intruders are often injected into the
Big Brother house and tribes merged or members switched on Survivor. One of the contestants
in the first Survivor sued the production company, claiming they conspired to have the other
contestants vote her off in favour of 72 year-old Rudy who was quite popular with senior
members of the audience.
In 2001 it was revealed – shock, horror – that some of the overhead and distance shots did not
feature real Survivor contestants but their stand-ins. And as scary as the lions are in Survivor
Africa, we realise that there is a camera crew nearby, most likely heavily armed. Those with a
keen eye have been known to spot the camera crews in action. And as we found out on Survivor
Outback, medical help is but a helicopter ride away.
With the 24-hour live feeds on the Internet, however, reality is reality, for those with the
patience to put up with slow downloads and the time to watch. Web viewers in the US saw one
Big Brother housemate threaten another with a knife live – he was quickly evicted with great
fanfare.
Case study: Innovative designs with traditional marketing (p. 224)
1. Which type of business-buying situation (i.e. straight rebuy, etc.) would POP Designs’ services be
most likely classified as? What implication does this have for POP Designs?
Answer: POP traditionally refers to ‘point-of-purchase’, which is POP Designs’ market - design of
retail and customer service space - but as they also believe their designs have POP, that is, they are
innovative and exciting and have the WOW factor, company is involved in the “modified rebuy”
and “new task” buying situations. POP Designs needs to engender new ideas and new designs to
meet changing tastes in the market, and cannot rest on its laurels in terms of past designs. Each
client will want something that suits their business and their customers and these will need to be
changed from time to time to reflect shifting styles and tastes. As each new design whether for an
existing client or a new client is POP’s challenge to manage because as this implies, there is greater
cost, greater risk, and many decision makers for every job.
2. Do you agree with their approach to segmentation and their selection of their target market? Explain
your answer.
Answer: POP Designs believe they appeal to firms that are more willing to take risks and are more
marketing-oriented and as a result, POP Designs target retailers and service firms that have a
relatively young management team, generate publicity for their new products/services, appear to be
customer-focused and are flexible in their decision making. They find these clients by
systematically reviewing the articles on various companies in business magazines and newspapers,
particularly those talking of expansion or a new direction.
3. The case refers to ‘layers of decision makers’. Who might participate in the business-buying process
for a firm, and what role (e.g. user, influencer, and so on) might they play?
Answer: The reference in the case to “layers of decision makers” refers to the large, long-
established retailers many of whom often have long-term relationships with other
design/architecture firms and whom POP Designs does not regard as their market.
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The following are examples of those that might participate in the business-buying process for such
firms.
Users – the people in the organisation that will actually use the purchased products – the secretary
using the word processor, the sales staff working in the customer space – they often initiate the
purchase, but it can also be part of a regular review of requirements, or a firms strategic vision.
Influencers – often the technical people such as engineers who develop the specifications and
evaluate proposed products, may be the stores branch who are the custodians of the organisations’
product policies, e.g. the secretary may order brand “a” paper but the company has a policy of
buying brand “b” because it is from renewable sources.
Buyers – select the suppliers and negotiate terms of purchase, may also be an influencer.
Deciders – actually choose the product, often this is the buyer but sometimes it is another person if
the product is over the buyer’s authority, usually in terms of dollars.
Gatekeepers – those who control the flow of information to others in the buying centre such as
secretaries and technical personnel.
4. What are the environmental factors highlighted in the case? How could these factors potentially
impact on POP Designs?
Answer: Business buyers are influenced by factors in the current and expected economic
environment, such as the level of primary demand (the changing shape of retail business), the
economic outlook (business buyers cut back on new investments and attempt to reduce their
inventories) and the cost of money (interest rates). Business buyers are also affected by
technological, political and competitive developments in the environment. Culture and customs can
strongly influence business buyer reactions to the marketer’s behaviour and strategies, especially in
the international marketing environment. The business marketer must watch these factors,
determine how they will affect the buyer, and try to turn these challenges into opportunities.
5. Do you agree with their promotional mix? What changes might you recommend to the firm?
Answer: POP Designs uses two distinct streams in its promotional mix, depending on whether they
are pursuing potential new clients (an expensive and time-consuming process) or seeking to
strengthen their relationship with existing clients (who generate ongoing business). POP Designs
considers both these promotional tasks as equally important. The following table summarises the
activities of the POP Designs promotional mix.
Potential New
Clients
Requires highly skilled in professional sales team with right mix of
relationship-building, presentation and product-knowledge skills and
with the personal traits of persistence and patience.
POP Designs works hard with media releases, trying to attract
publicity across a range of industry-based magazines and
publications.
POP Designs attends relevant industry trade shows, a process they
try not to overdo as it can become quite expensive.
Existing clients Building mutually rewarding long-term relationships with existing
clients is recognised as critical for the firm’s long-term success.
POP Designs uses a mix of hospitality (i.e. invitations to sporting
events, the Christmas party and restaurants), regular personal
contact, newsletters, occasional special deals, and priority access to
top management personnel.
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Case study: Open a pub and the drinkers will pour in … or will they? (p. 263)
1. ‘Build a better mousetrap and the world will beat a path to your door.’ Google this saying to find
information you can use to answer the following questions.
"If a man can write a better book, preach a better sermon, or make a better mousetrap, than his neighbour,
though he build his house in the woods, the world will make a beaten path to his door." This sentence, usually
paraphrased as: "Build a better mousetrap and the world will beat a path to your door," and is generally
attributed to Ralph Waldo Emerson.
a) What does the statement mean?
Answer: Define the two main components – better & beating. Consumers will only buy your product if they
agree it is better, a style conscious person may consider a mousetrap inferior if it is 10% more effective at
catching mice but 20% less attractive – this customer needs mousetraps in designer colours; customers have
real needs and may recognise your product as better but still do not beat a path to your door. The amount
of time and effort customers will expend to buy your product depends on their perception of its value. If
they believe it has only a small advantage over other products they are unlikely to travel great distances to
get to your shop. However, they may call a toll-free number if you promise to deliver the product and install
it for them.” (http://www.klebanoff.com/mousetrap.html)
b) How can it help us think about segmentation, targeting and positioning for pubs?
Answer: Market segmentation: Dividing the pub market into groups of potential customers
according to there wants (they want the designer mousetrap – pub atmosphere, variety of drinks
and food) and needs (don’t want mice – want an up market classy pub in which to sit and socialise).
Market targeting: Selecting which segments to target will be based on the actual need for this pub –
in mousetrap language - if no one knows about your mousetrap; they will not know there is a path worth
beating. The also need to have a mouse problem to need your mousetrap.
Market positioning: The mouse trap (pub) must occupy a clear, distinctive and desirable place in
the minds of potential customers relative to other mousetraps (the pub competition). ‘…in the
minds of target consumers; formulating competitive positing for a product and creating a detailed
marketing mix’ (p. 229).
c) Why is the statement wrong?
If people who have mice are not aware of their (the mice’s) existence, they will not be interested in the
mousetrap and people who think mice are "cute little things" are not good potential customers. Building a
better mouse trap is not a guarantee of achieving demand (sales). However after identifying the benefits of
the mousetrap (pub) from the customers' perspectives these must be communicated using all the marketing
mix elements that are both appropriate for the audience and message, and can be justified based on cost and
revenue.
2. Think of a pub you know well (not too well, I trust). Why do you go there? What does it offer
that other pubs don’t?
Answer: This question relies on the students having been to more than one pub and the answers
may vary according to their experiences. The may talk about the décor, facilities, services offered,
food, opening hours, locations, and any advertising/marketing material they have seen.
Case study – Tennis Australia: leveraging the grand slam event brand to
develop participation in tennis in Australia (p. 305)
1. Can the Australian Open Championships be described as a product? Give reasons for your answer.
Answer: The Australian Open Championships fits the definition of a product as ‘anything
that can be offered to a market for attention, acquisition, use or consumption that might
satisfy a want or need. It includes physical objects, services, persons, places, organisations
and ideas’ (Kotler et al., Marketing). ‘Consuming’ a tennis match can meet needs for
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entertainment and affiliation. It offers entertainment services and persons (in the form of
star tennis players).
The core benefits of the product may provide the consumer with an entertaining experience.
The actual product might include stadium facilities, catering, booking service, information
about tournament dates and merchandise. The augmented product could include access to
VIP seating and facilities, club memberships, package deals such as travel plus
accommodation plus tickets.
Other commercial products in the form of tennis tournaments include The Davis Cup, The
Fed Cup, Tennis Pro Circuit and Australian Open Series.
2. What service characteristics does Tennis Australia have with delivering the sport in Australia?
Answer: Tennis Australia has the following service characteristics:
Intangibility The consumer can play the game of tennis or view a tennis match but once
played or seen the experience is only a memory.
High involvement and personal nature A commitment by consumers to participate in tennis
is fairly high involvement as it involves planning, travel and time as well as expense of
equipment and clothing. The consumer must also be prepared pay attention, learn the rules
of the game and there is a degree of emotional involvement with the outcome.
Variability The consumer’s experience may vary according to their performance, their state
of mind and health, or the weather.
Synchronicity Playing tennis happens at the time it is arranged.
Perishability The experience of playing tennis is perishable: once it is over there is only the
memory of it.
Service quality measure Measuring the quality of a tennis match is difficult because of the
subjective nature of the experience, but is likely to be more positive if the participant wins a
game or is rewarded for participating.
3. What service characteristics does Tennis Australia have with delivering the Australian Open
Championships?
Answer: The Australian Open Championships is the core commercial product of Tennis
Australia and has the following service characteristics:
Intangibility The consumer cannot judge the quality of the matches before purchasing a
ticket to the Open. The experience is not a physical object.
High involvement and personal nature A series of tennis matches is fairly high involvement
as it involves planning, travel and time (up to a day) as well as expense. Enjoying the match
requires the consumer’s attention, knowledge and a degree of emotional involvement with
the players.
Variability The consumer’s experience may vary according to the players’ performances,
the behaviour of the crowd, the weather and the consumer’s own state of mind and health.
Synchronicity A tennis match is best watched as it happens, although it would be possible to
watch a video recording.
Perishability The experience of watching a live match is perishable: once it is over there is
only the memory of it.
Service quality measure Measuring the quality of a tennis match is difficult because of the
subjective nature of the experience.
4. Is the sport of tennis a brand? Why or why not?
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Answer: The entity ‘Tennis Australia’ is a brand and it’s mission reflects this. It also has a
series of brand statements about the game which would indicate that from tennis Australia’s
perspective “tennis” is a brand. However, if we take the definition of a brand from the text
– “a name, term, sign, symbol or design, or a combination of these, intended to identify the
goods or services of one seller or group of sellers and to differentiate them from those of
competitors” (p. 283) then the sport of “tennis” would not be considered a brand.
5. Is the Australian Open Championships a brand? Why or why not?
Answer: Using the definition of brand in the text, see Q4 above, the Australian Open
Championships is a brand – it is differentiated from other tennis tournament by name,
symbol, etc.
6. What value is there in aligning the brand of the Australian Open Championships with sport
development?
Answer: The Australian Open Championships is the core commercial product of Tennis
Australia, whose mission clearly states that it is “to grow, manage, promote and showcase
the sport of tennis….for people of both sexes, all ages and abilities” and the achievement of
this mission is linked with this product. “Participation in the sport generates membership
revenue for Tennis Australia, as well as tennis equipment and merchandise sales. Most
importantly, participation is crucial for Tennis Australia as it also provides the basis for the
development of future elite athletes. The more people who develop skills through coaching
and continued play in clubs around the nation, the more likely Australia will be to have
tennis players who are skilled enough to join the professional tours and play in tournaments
such as the Australian Open. Local champions always spur national pride, increased
interest in the sport and greater ticket sales at professional tournaments” p. 305.
7. Tennis Australia aims to build the value of the brand of tennis. Is the current brand statement
useful? Why or why not?
Answer: The brand statement is quite extensive and covers all the people the mission
includes and while this may not resonate with all of the general population there is no doubt
that there is something for everyone in brand, whether as player, spectator or just a person
with pride in the achievement of Australian tennis players.
8. How might you measure the success (or otherwise) of this brand realignment?
Answer: The ABS statistics in the case give a clue to one measure – participation rates in
tennis and other physical activities, as recorded in the national census – which is taken every
five years. Participation rates in local tennis clubs, ticket sales, enquiries about coaching,
attendance at tournaments.
Case study – Developing niche beer flavours – what’s your flavourite? (p.
343)
1. There are eight stages in the new product development process. Should companies always use all
steps in sequence or can some be deleted or overlapped to speed the development process?
Provide reasons to support your answer.
Answer: Depending upon the industry and the level of competition, there may be valid reasons
why a company should try and speed up the new product development process. These may be for
either aggressive or defensive reasons. There are both benefits as well as potential dangers of being
‘first to market’.
From an aggressive perspective, if there is minimal cost involved in product development and the
consequences of product failure are perceived as relatively low (low risk to company reputation,
low failed product disposal costs), the benefits of potentially speeding the development process may
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be considered worthwhile – but deletion of any stages of the development process are considered
highly risky and ill-advised.
From a defensive perspective, if a company has falling sales, ‘dog’ products, and/or competitors
have just released a new product that is selling well, there is justification to speed up the
development process by overlapping some of the eight stages (but once again, deletion of any stages
of the development process are considered highly risky and ill-advised). The danger however is in
rushing development too quickly and not taking appropriate care. The automobile industry is a
good example where some manufacturers have commercialised new models only to then recall them
due to design faults and faulty assembly.
Having a new-product development process that is well integrated into your overall marketing plan
will ideally minimise the risk of being caught in a situation where new product development needs
to be rushed.
2. How many beer flavours do you think a beer manufacturer should offer?
Answer: The more flavours a company offers, the more likelihood that there will be a flavour that
a target customer likes. The aim of adding flavours should be to increase sales revenue. Adding
new flavours within an existing target segment may simply result in cannibalisation of existing sales
with no net increase in sales.
Once a company is satisfied with the product offerings in a specific target segment, they could then
turn to developing flavours for a new target segment.
However, offering extra flavours (either in existing or in new segments) increases costs of
development, inventory stock-holding and marketing. Thus, there is a need to forecast sales
revenue increase versus extra costs to determine if there is a net profit gain by introduction of new
flavours.
3. There are a handful of very large beer producers in Australia, plus numerous imported beers.
What are the major beer brands in your local region? How can a small micro-brewery such as Five
Islands Brewing Company compete in such a market-place?
Answer: In any marketplace dominated by large firms, smaller firms need to identify niche
segments that are considered less attractive for the large firms.
The large companies have high operating costs and rely on economies of scale to achieve
appropriate profit levels.
By offering beers in niche markets such as geographic regions promoting the ‘local’ theme,
preservative free beers, no added sugar beers and using different manufacturing processes to
provide beers with more flavour than the high volume beers, a small producer can discover suitable
niche segments.
4. What flavours of beer or niche markets do you consider do not currently exist and may be a
commercial success?
Answer: This question should be utilised as an ‘idea generation’ exercise for students to exercise
their imagination and creativity. In any brainstorming exercise it is interesting to see what ideas
are generated. Students will offer differing answers depending upon their personal experiences and
backgrounds. Females have recently become a new target segment for beer companies and may
suggest various fruit-flavoured beers. Given the strong social pressures to not drink and drive,
development of a minimal alcohol beer that actually has a traditional beer flavour is a potential
strong market and may be suggested by some students.
5. Five Islands Brewing Company currently targets residents in a local geographic area plus tourists.
Given the high tourist activity in the region, how might Five Islands Brewing Company expand to
market its brand outside the current geographic region.
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Answer: Market research to ascertain the home-base of tourists will give Five Islands Brewing
Company an indication of which new geographic regions should be targeted for distribution of
packaged Five Islands Brewing Company beers. Appropriate wholesale and retail outlets within
these new regions can then be developed.
Case study: Australia’s mobile marker (p. 381)
1. List and discuss the factors outside the company that will affect the pricing decisions of an
existing independent mobile telephone service provider in the Australian market.
Answer: External factors that are likely to influence the pricing decisions an existing independent
mobile telephone service provider in the Australian market include the very nature of the
Australian market and demand, which is predicted to see 22 million mobile phones in use by 2010,
the competitors’ prices that are often complex and in Australia Choice magazine has instigated an
interactive web-based calculator for working out the optimal plan for their mobile habits, including
terms and conditions for the different plans and other external factors such as the economy, reseller
needs and government actions.
2. Discuss the internal factors that will affect pricing decisions for a new mobile telephone service
provider planning to enter the Australian market.
Answer: Internal factors will include the company’s marketing objectives, marketing-mix strategy,
costs and organisation for pricing, typically in large companies handled by divisional or product-
line managers.
3. Telecommunications companies that provide both fixed landline and mobile services in the
Australian market, such as Telstra, are effectively seeing the cannibalisation of landlines by
mobile connections, or possibly the loss of landline connections and customer defections to
alternative service providers. What pricing strategies could be implemented to avoid such
cannibalisation?
Answer: Using product-bundle pricing is already being used the mobile phone industry and
Telstra could add landline services to the “bundle” of products and services provided with the
mobile phone services. The main thing to remember with product-bundling pricing is that the
combined must be low enough to get them to buy the bundle.
4. Of the four general pricing approaches, which approach, or combination of approaches, would be
most appropriate for the pricing decisions of iPhone data plans in the Australian market?
Answer: The four general pricing approaches are cost-based pricing, value-based
pricing, competition-based pricing and relationship pricing.
Cost-plus pricing is a simple cost-based method, in which a standard markup is added to the
production costs to achieve the desired profit margin. Value-based pricing analyses
consumer needs and value perceptions and then sets the price to match consumers’
perceived value, this may involve expensive marketing research to measure consumer value.
Competition-based pricing based on ‘economic-value’, is when a company sets a price at
lower than customers’ perceived value and lower than its competitors, or going-rate pricing
which is quite popular as the price is set based on the competitors. The final approach is
relationship pricing which is more suited to the B2B market.
Students will come up with their own combinations and reasons, but based on the above
combination of value-based and going-rate may be appropriate as an entry pricing strategy.
5. Several strategies are available for pricing new products. Discuss which strategy you would
recommend to accompany Telstra’s rollout of its Next G network, including in your answer an
indication of which cell of the nine price/quality strategies matrix (Figure 10.12) you favour, and a
justification for your choice.
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Answer: Marketing-skimming pricing is when companies set a high price in order to
maximise their profit quickly, however given the number of competitors and offers in the
mobile phone market, marketing-penetration pricing may be better - set a low price to
enable them to enter and dominate the market quickly. Students will have their own
reasons for which of the nine price/quality strategies they choose but three 'superb-value'
would match a marketing penetration strategy.
Case study: Bike retailing and the store-within-a-store concept (p. 426)
1. Identify examples of retail operations from three different product categories that utilise the
store-within-a-store strategy. What are the likely synergies between the ‘host’ store and the
‘hosted’ store with each of your examples?
Answer: Students should draw parallels with department store retailers who often have boutique
clothing and accessories retailers within their physical stores. The stores-within-a-store vary in the
extent to which they are physically divided off from the ‘host’ store – some may have fixed walls
and security shutters and grills, while others may be less separated off, and more physically
integrated. The latter approach, from the consumer’s point of view helps to reinforce the
seamlessness of the consumer experience. There are some issues with ensuring the right ambience
and fully controlling brand point of sale image for the ‘hosted’ store. On the other hand there are
some distinctive advantages to the store within the store concept for both parties.
For the host store, any spare retail space can be more fully utilised, additional revenue is gained
from the sub-leasing, opportunities exist for co-operative retail advertising, there may be more
store traffic generated, there are cross-selling opportunities, and brand image may be enhanced.
For the hosted store, costs of leasing retailing space may be considerably lower than if they had to
establish and operate ‘stand alone’ operations, the could also save with co-operative retail
advertising, there may be a lot of in-store traffic, and (also similarly to the host) brand image may
be enhanced.
All of this means that potential exists for synergies between the parties. The secret is however
getting the right match – agreement on the terms of the lease, how their retail operations will
complement each other, areas in which they will co-operate, and how potential conflicts will be
resolved.
2. List ten possible areas of dispute and conflict between two retailers using the store-within-a-
store strategy. How can the chances of each of these occurring be minimised or eliminated?
Answer: MPP Sports* is a large sports store with retail operations in New South Wales,
Queensland and South Australia. The company retails a wide range of sports equipment and
accessories from various types of sports shoes, sports clothing (both summer and winter ports),
through to gym equipment (such as running machines and weights equipment). Its product range
is similar to that of Rebel Sports stores, (though it lacks that brand’s national coverage).
Significantly. MPP Sports does not offer a lot of depth in the product ranges which it stocks, and it
avoids stocking equipment and accessories for particular sports, which it feels really are the
preserve of other more highly specialised sports retailers. These include fishing, archery, fencing,
surfing and cycling (among others).
Bikes-R-Us* is a specialised cycling retailer that offers accessories and equipment for racing bike
and mountain bike enthusiasts, as well as bikes for ‘weekend’ riders. Children’s bikes are stocked,
since management recognises that not everyone wanting a children’s bike wants to purchase them
from chain stores like Kmart. They want to be able to offer a bike for everyone in a family in fact.
The bikes themselves range in price and quality from really expensive Peugeot racing bikes in the
latest lightweight materials, and which are packed with technology, through to inexpensive
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children’s bikes with trainer wheels, that are made in Taiwan (the home of the bulk of the world’s
bicycle production).
In terms of accessories Bikes-R-Us stocks a full range of items like helmets, gloves, pants, shirts,
shoes, tyres, tyre pumps, backpacks, water bottles, etc. A bike servicing and repair service is also
offered, and the staff in individual stores offer advice. Their breadth and depth of product
knowledge is based on the fact that many are racing or mountain bike enthusiasts themselves.
The decision by the Bikes-R-Us management to not open ‘stand alone’ stores, and to approach
MPP Sports’ management with the idea of a bike store within a sports store, was based on the
owners first experience with opening a stand alone store. This proved to be costly, since the lease
costs were high, and the sales revenue was far less than expected. What the owners had though
would be a high traffic location proved to be otherwise.
Their approach to MPP Sports was essentially based their thinking that a lower risk retail strategy
was desirable. Furthermore, such a strategy was seen as the best way to grow the brand with a
lower up front outlay. MPP Sports has stores across the three states in which it trades, and
agreement was reached in principle that Bikes R Us could open its stores in the majority of these, as
time and space permitted.
Bikes R Us currently trades in other stores, and sales revenue, and profits have generally been
good. The initial losses that the company sustained from opening its stand alone store (which it had
intended to be the anchor store in what it saw as a future chain) have been recovered. Management
was at this point now starting to consider its future retail strategy –namely will the store within a
store concept be the key to its future growth, or is there an alternative?
* Names have been changed.
3. Build an argument designed to convince Bike World management that opening an online store
is the optimal strategy for future expansion. In doing so, consider whether e-tailing is used by
other specialist ‘sports and recreation’ tangible product marketers.
The Bicycle Store on Sydney's Central Coast is a premium retail and online shop for bicycles and
accessories. See http://www.bicyclestore.com.au/. The product catalogue is extensive as is the
extent of brands, accessories and services offered.
E-tailing is the selling of retail goods on the Internet and is short for "electronic retailing" and
given that there is already a major player with an online presence Bike World would be wise to be
proactive. It does not lose any of it’s in store presence but rather adds another dimension to its
“retail” offer.
Students’ research on other stores that do sports business on line will vary.
4. Which of the three alternatives for expansion of the Bike World chain would you recommend?
What are the key reasons for your decision, and how are they related to each other?
1. Current store-within-a-store concept
2. Start opening own stores again
3. Establish on line store
Students will no doubt recommend one or more of these alterative. Combining the store-within-a-store
with an e-tailing site would have the least risk in terms of infrastructure (does not required physical
shops) and staffing (minimum staff required), and the cost of setting up the online store is unlikely to be
as expensive as setting up a store.
Case study – Sizzler: emerging from a PR nightmare (p. 480)
1. What seems to be the straightforward marketing communication strategy of Sizzler Australia?
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Answer: Sizzler advertises on television to create awareness for its famous salad bars. When
customers are in Sizzler, flyers at the cashier counter push the Sizzler Card, which entitles
cardholders to a free salad meal and subsequent promotional offers, such as discounts and
offers on special menus. Sizzler then informs its members via emails about special cardholder
promotions. The Sizzler home page online provides lots of supporting information on Sizzler –
its history, locations, special offers, etc.
2. What would have been a better Public Relations decision by Sizzler Australia when food
contamination was reported on 20 January 2006?
Answer: Sizzler should have provided all the contaminated food to Queensland Health
immediately for laboratory testing and should have informed the police too. It should have
started looking at safety measures immediately rather than after the second incident on 25
February 2006.
3. Why did Sizzler close all its self-serve salad bars in Australia when the two rat-poisoning
incidents occurred in Brisbane, Queensland?
Answer: The rat poisoning may have taken place in Brisbane but national media carried the
news countrywide, informing customers in Western Australia and New South Wales. Sizzler
had to demonstrate its responsibility and concern for all its customers in Australia and use the
closure period to review and implement food safety measures.
4. How did Sizzler Australia communicate with its customers during the closing and re-opening of
the salad bars?
Answer: Sizzler Australia did a good PR job to communicate directly with its Sizzler Card
members through emails. Sizzler attached the television commercial featuring new safety
measures and a newspaper advertisement announcing the re-opening of the salad bars.
5. How did Queensland Health come across from a public relations point of view during the Sizzler
rat poisoning publicity?
Answer: Queensland Health acted proactively by issuing a media statement about the situation,
worked closely with Sizzler and the police on the contamination issue, released information on
symptoms of rat poisoning, encouraged people with rat poisoning systems to call the hotline or
visit general practitioners or hospitals, and amended the new Food Act 2006 to include
immediate compulsory reporting of contaminated food.
Case study – Getting the promotional mix right in the bottled water market
(p. 514)
1. The firm appears to have experimented with a number of decisions (such as salesforce recruitment
and their compensation). Do you agree with this trial-and-error approach to making marketing
decisions? Explain your answer.
Answer: The use of door-to-door salespeople was very popular up to the 1960s with the advent of
television mass marketing. There have also been concerns in recent years with privacy and security
issues, although this was less so in the 1990s when Tropical Spring Water was just starting. The
trial and error approach may have been more expensive in the long run however they did not have
a lot of money up front to hire professional recruiting firms—this may have been their only
financial option. The outcome appears to have been successful. Using University students does
mean that the salesforce is unlikely to stay in place for very long (students graduate and get other
jobs). A salesforce with new people all the time is less productive.
2. The case highlights a number of localised promotional methods. While the firm used some of
these approaches, do you think its promotional mix was too limited? What other promotional
approaches should the owners have implemented?
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Answer: It was understandable why they used a localised approach since in start up they wanted to
minimise the cost of servicing the customers by not having to cover every suburb in Sydney from
the beginning of operation. They appear to have planned their start-up by not taking on too much
too soon; however the marketing should have included more than the one element (door-to-door).
Perhaps direct marketing using a telephone call centre may have elicited more orders initially or a
start-up special advertised in local paper and mail drop.
3. The firm seemed to rely on free samples as its main form of sales promotion. Which other forms
of sales promotion might be suitable for the firm?
Answer: Students will no doubt come up with a range of ideas. Those discussed in the text are:
Samples (already using this but can include discounted goods rather than just free ones);
Redeemable coupons (local paper, letter box drop); Cash-back offers (cash back after a specific
number of bottles have been used; Premium offer (free dispenser in second month for first 50
customers); Advertising specialties (gifts like key rings or other novelty items); Patronage rewards
(the more you use the less it costs, sign a contract for generous discounts); Contests and games of
chance and skill (a chance to win a dispenser).
4. Do you agree with the firm’s salesforce compensation structure? How could it be improved?
Answer: The use of a fixed amount plus commission elicited successful sales however the
application of incentives to the compensation structure in the form of expenses and fringe benefits
for high sales may have offered enthusiastic and committed sales people the incentive needed to
perform at a higher level. It may also have allowed the company to evaluate the sales performance
of all the salesforce on measure of commitment and enthusiasm for the company and its product.
5. As sales performance was critical to the firm’s success, what overall advice would you give the
owners in order to improve their approach to managing their salesforce?
Answer: The compensation structure mentioned in the answer to question 4 would help. Training
programs that help new sales staff identify with the company, its history, objectives, organisation,
financial structure, facilities, and products and markets.
Case study – Online, in-game advertising (p. 560)
1. Do you see benefits arising from in-game advertising? If so, who benefits?
Answer: Online, in-game advertising offers marketers an opportunity to reach audiences that are
shunning traditional media for their information or entertainment consumption, particularly the
young, professional male. Through the carefully managed use of different ad formats, including
billboards and product placements, advertisers can generate brand awareness and even positive
brand image. The online advertising environment offers greater interactivity and diagnostic
tracking of effectiveness than other media as well.
2. Player resistance to in-game advertising is a major concern for MMORPG producers and
advertisers. Might gamer resistance to online, in-game advertising be overcome? If so, how?
Answer: In-game advertising must be contextual, fitting seamlessly into the game and adding to
the pleasure and realism, or fantasy, of the game rather than detracting from it. As in other media,
such as books, movies and television, brands may be worked into game-play as product placements,
but this must be subtle and not disruptive. ‘Brand slapping’ must be avoided. Creative
opportunities abound for creating brand awareness or online linkages to brand follow-ups that
coincide with new game or version launches. As in all marketing situations, gamers are purchasing
a bundle of benefits; marketers can get their brands into these benefits in a multitude of ways, both
within and peripheral to the game itself.
Save Date: 11/09/2015

3. What methods are available for marketing communication managers to evaluate online, in-game
advertising effectiveness?
Answer: Marketers should monitor the effectiveness of their online advertising communication
performance, online channel performance, and relationship management performance. Web-,
audience-, and network-centric measures are available to evaluate the effectiveness of online
advertising communications. To evaluate channel performance, and specifically in-game
advertising, marketers must be able to identify the degree to which channel-specific objectives are
met, and the ROI identified for each marketing channel. Relationship management performance is
conveniently measurable in online settings via real-time reporting capabilities. While in-game
advertising is essentially an awareness-building medium, brand awareness shifts must be measured
by marketing managers. Geo-targeting specific ads supported by promotional offers may provide
the best indicator of effectiveness.
4. What might be the implications of game producers permitting advertising in their free-to-access
online games?
Answer: As a sample of the real game, which game producers hope to sell to gamers, the presence
of advertising may be perceived by gamers as disruptive to the game-play. This has the potential to
turn the gamer away from the brand, unless it could be made clear to triallists that advertising is
not a feature of the actual game.
5. Given the reported decline in television viewing and use of other traditional media in the core
gamer market, particularly 18–34-year-old professional males, how might online marketing reach
key audiences other than in online games?
Answer: As Townsend notes, a successful campaign might lead with a major interactive
integration in a single hit title, backed up by a dynamic billboard campaign across multiple titles
via a network and supported by out-of-game co-promotion activity timed with the launch of the hit
game. Advertising, supported by online sales promotions, that is peripheral rather than integral to
the game may be most effective. Product or service offers that are appropriate for the selected
audience should prove most effective.
Additional case study question not in the text book
6. Consider the implications of mixing real brands with virtual worlds such as the science-fiction
worlds of games like Anarchy Online, or the fantasy worlds of games like Second Life. What
might be the positive and negative implications for real brands entering unreal virtual worlds?
Answer: The Activision/Nielsen research findings suggest that brands that fit with games will be
regarded positively by gamers, yet in the imaginative worlds of science fiction or fantasy, real
brands may protrude intrusively detracting form the game-play. Negative brand associations may
harm overall brand equity back in the real world context. Alternatively, brand awareness and
image may be enhanced if a good fit is struck with the game. This is the challenge for the
marketing communications manager.
Save Date: 11/09/2015

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