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MGMT E-6000 Marketing Management

Spring 2012

Instructor: Dr. John L. Teopaco

E-mail: jteopaco@fas.harvard.edu

Telephone: 617-353-3146

Required Materials: Custom Coursepack [Harvard Coop]

You cannot teach a man anything.


You can only help him discover it within himself.
- Galileo Galilei

COURSE DESCRIPTION

Marketing is the interface between the company and the marketplace. Managers in all
functional areas of business need an understanding of marketing fundamentals. While
marketing managers create and implement marketing strategy, managers in accounting,
finance and operations also need to understand marketing plans that require their
cooperation or approval.

This course covers the processes involved in the creation, communication, sale and
distribution of products. It takes a managerial perspective exposing students to the
tasks and decisions faced by marketing managers, including target market selection,
competitive positioning, and the formulation of product, pricing, communications and
distribution strategies.

COURSE OBJECTIVES

The principal objectives of the course are to enable you to:

1. Understand and apply the basic concepts and frameworks of marketing management
2. Perform rigorous qualitative and quantitative analyses required for the formulation of
effective marketing programs
3. Communicate effectively in writing and orally
4. Develop teamwork skills
GRADING

The course grade will be determined accordingly:

Class participation - 50%


Group written case analysis - 25%
Solo written case analysis - 25%
100%

Your participation grade is based on attendance, punctuality, regularity and quality of


contributions to class discussions. [Refer to Appendix-B for a more detailed
description of grading expectations.] Please note: Attendance is a necessary but not
sufficient condition for a satisfactory grade. You need to make significant
contributions!

COURSE LEARNING PHILOSOPHY

Knowing is not enough; we must apply.


Willing is not enough; we must do.
Johann Wolfgang von Goethe

Marketing management encompasses decision-making skills, analytical abilities,


concepts, knowledge, and communications skills. This course is designed to help you
develop these skills and capabilities, and specifically, the skill to develop effective
solutions based on analysis and reasoning.

Marketing Management is an interactive, discussion course. I do not lecture. For


every class, you are required to have fully prepared the assignment and to discuss your
preparation in class.

RULES OF THE GAME

Education is not preparation for life; education is life itself.


- John Dewey

We shall treat our class sessions as business meetings. As such, attendance, punctuality,
preparedness, and meaningful contributions are required. Well practice professional
demeanor in class. Specifically, we shall adhere to the following protocols:

(1) Arrive on time. Quit on time.

(2) This is a discussion class, and not a note-taking class, therefore, computers are
not allowed.

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(3) Stay during the entire duration of the class. Take your break prior to class. Do not
leave prematurely. If you must leave early, please alert me in advance.

(4) You may bring beverages to class. Please do not eat in class.

(5) Turn off cell phones.

(6) Only one conversation at a time.

(7) Bring your name card to every class.

(8) Stay in the same seat (at least for the first three weeks).

Violating these protocols is disruptive to class learning and disrespectful to the rest of the
class. Since I evaluate your performance for every session, a violation automatically
degrades your evaluation for that class. (If you forget your name card or you dont stay
in the same seat, you risk not getting credit for your class contribution that day!)

Be fully prepared for each class session. Be ready to open the case discussion at the
beginning of class and to answer questions that I may pose during discussion.

Active contribution to class learning is the key to success in this course. There is no
make-up for missed classes. If you are unable to attend class, please e-mail me in
advance. Emergencies will be dealt with on a case-by-case basis.

You are responsible for announcements made in classassignment changes, extra case
data, etc.

If an emergency arises and class is cancelled, in the next class, we shall pick up where we
left off (i.e., well cover the assignment that was missed).

CASE ANALYSIS

He that has sense knows that learning is not knowledge,


but rather the art of using it.
Richard Steele

Cases are vehicles for learning diagnostic skills and for applying concepts and
frameworks introduced in readings and conceptual discussions. The learning from a case
comes in two ways. The first involves pre-class preparation: the ability to diagnose case
problems and issues, to select and apply appropriate forms of analysis (e.g., quantitative,
logic, experience, conceptual) and to make decisions about case solutions. Each student
should make a decision about what should be done before coming to class and be able to
document and present that solution on the basis of analysis.

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The second part of learning from cases comes from realizing that other people do not
always diagnose, analyze, and solve problems the way you do. Understanding others
positions, learning from them, and countering them with your own is a critical part of
the learning experience. To do so, you must listen to each other as well as talk in class.
Only when you have tried to defend your position can you fully understand its
strengths and weaknesses. There is no single right answer for a case, just as there is
rarely a single right marketing decision in actual practice.

Analysis is more than noting and summarizing case facts. The facts must be noted, but
then reasoning must be applied to determine how these facts relate to each other, and
most importantly, how these facts point to the underlying causes of the case situation.

[Refer to Appendix-A for a description of the case method of learning and your
responsibilities.]

INSTRUCTOR BACKGROUND

I have had a varied career in marketing, consulting and teaching. After receiving my
MBA degree from the University of Minnesota, I worked in product management for
The Pillsbury Company, Citibank and Norwest Bank, and in advertising account
management for Ogilvy & Mather Advertising.

After this corporate experience, I decided to pursue my interest in teaching by studying


for my doctorate in marketing at Harvard Business School. I have taught at Babson
College, Miami University, Northeastern University, and Boston University where I am a
full-time faculty member.

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APPENDIX-A

The Interactive/Discussion Method of Learning

The primary learning materials that we will be using are cases and conceptual readings.
The most important rule to keep in mind is that you are expected to have fully prepared
for class by having thoughtfully read the assignment and answered the assigned
discussion questions.

Cases deal with real life business situations. Analysis and discussion of cases provide an
effective means of developing the attitudes and skills necessary to become an effective
manager. There are no right or wrong answers. However, there are good and bad
analyses! What is important is the process of arriving at your own conclusions and
recommendations, by marshalling evidence in the case, and applying careful and logical
thinking.

Take a proactive stance when you read the conceptual articles. How does the reading
relate to prior articles? How does it relate to the assigned case and prior cases that we
have discussed? How does the content relate to your own personal experience as a
consumer? What examples and illustrations vividly bring to life the concepts that you are
reading about?

Most importantly, you should be eager and willing to share your insights with the rest of
the class! I shall guide and provoke discussion primarily by asking fundamentaleven
seemingly navequestions. You should be prepared to go with the flow of the
discussion.

Class Participation

In this course, you will be expected to be present for all class sessions and to arrive
on time. You will be evaluated on your performance for each class session. Absentees
will get failing grades for missed classes. If you absolutely cannot attend class, please
e-mail me in advance.

Your in-class contributions are all-important because we will be learning from one
another. My role is not to impart wisdom, but to facilitate your learning from each
other. Arriving at a consensus is not the objective of class discussion! To the contrary,
comments that identify the pros and cons of alternative decisions or points of view, and
generate a healthy debate are strongly encouraged (and rewarded).

Lively, vigorous discussions are the goal, but arguments should always be at a
professional level. In this spirit, please do not speak unless called upon, and whoever has
the floor should receive the full attention of the class. Listen to what he or she has to say!
Build on previous speakers comments. Do not raise your hand while
someone is speaking. Finally, address your comments to the entire class, not just
to me.

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Grading will be based on quality (depth, insightfulness, contribution to class learning)
and quantity (consistency, regularity). Quality counts more. However, one cannot make
quality comments without some quantity. Those who do not participate are likely to do
poorly in the course.

As mentioned, you are expected to come fully prepared and ready to participate for every
class. (Otherwise, please do not bother attending so we can avoid any potential
embarrassment and waste of class time.) Be prepared to be called upon to open a case
by presenting your full analysis and recommendations at the start of class, or to be asked
for a comment in the midst of the discussion.

The grading of class participation is necessarily a subjective exercise. However,


high-quality comments have one or all of the following characteristics:
(1) insightfulness, (2) appropriate application of marketing concepts, and (3)
advancement of the discussion. Some specific criteria for evaluating discussion
contributions are:

Does the student demonstrate an eagerness to participate?

Is the student a good listener? Does he/she build on others comments?

Is the student willing to interact with other class members?

Are the points made relevant to the discussion? Are they linked to others
comments?

Do comments demonstrate evidence of in-depth analysis of the case?

Do comments add to our understanding of the situation?

Do comments make a substantive contribution to the advancement of our


analysis?

Is there a willingness to test new ideas, or are the comments safe?

Do comments show an understanding of concepts or analytical techniques


properly applied to the current situation?

Is the student presenting insightful quantitative analysis?

Is the student presenting ethical considerations and insights?

I will give you a midterm class participation grade. However, if you feel that you are
having difficulty getting into the discussions, please talk to me right away. Take
advantage of office hours. Dont wait until mid-term or worse, until the end of the term!

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APPENDIX - B
Profile of the A Student--An Outstanding Performer

Being a successful student, particularly in a case/interactive course, is multi-dimensional.


Aside from academic prowess, positive attitudes and behaviors are equally important and
indicative of the excellent student.

Grading an entire terms performance with a single letter grade is a complex and difficult
process. Class contribution grades reflect in-class performance. Therefore, they reflect
pre-class preparation and effort only implicitly. Massive preparation and personal effort
without any corresponding in-class contribution will not warrant a satisfactory grade.

To clarify my grade expectations and values, the following profile (albeit stylized) is an
attempt to illustrate why and how an outstanding performer earns an A .

Attendance: A students have virtually perfect, punctual attendance. Their


commitment to the class resembles that of the instructor.

Preparation: They are thoroughly prepared for class. They are ready to share ideas and
insights concerning multiple facets of the case and readings. They have
identified the central issues and concepts. They have examined
qualitative and quantitative data thoroughly to support their
arguments.

Enthusiasm: They exhibit interest in the class and in the subject. They go beyond the
obviouslooking behind the facts of the case. They share pertinent
personal experiences and insights.

Retention: A students have retentive minds. They connect past learningfrom


previous cases, chapter readings, and previous coursesto the present.

Attitude: They have a winning attitude. They have both the determination and the
self-discipline for success. They show initiative and drive.

Talent: A students have something specialexceptional intelligence,


extraordinary creativity, organizational skills, diligence, or a
combination
thereof. These traits are evident to the instructor and classmates.

Management: They have clearly defined personal goals for the course and are committed
to strategies for achieving them. They monitor their performance and are
proactive in making necessary adjustments (i.e., allocating more time to
preparation, meeting with the instructor, forming study groups).

Results: A students make consistently high grades on various performance

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measures--oral and written, qualitative and quantitative.

CASE PREPARATION QUESTIONS

Aqualisa Quartz

1. Why is the Quartz shower not selling?

2. What is the Quartz value proposition to plumbers? To consumers?

3. Is the Quartz a good product? Is it a niche product or a mainstream product?

4. What is the rationale behind Aqualisas multiple brand strategy (Aqualisa,


Gainsborough, and ShowerMax)? Be prepared to map out how each brand goes to
market, i.e., what channels of distribution each brand uses and the consumer segments
they reach.

5. What should Rawlinson do to generate sales momentum for the Quartz product?
Should he change his marketing strategy to target consumers directly, target the DIY
market, or target developers? Should he lower the price of the Quartz? Or should he do
something different altogether?

Note on Marketing Strategy

1. The central role of marketing in the enterprise stems from the fact that marketing is
the process via which a firm creates value for its chosen customers. What does this
mean to you?

2. What is a marketing strategy?

3. What are the 5Cs? What are the 4Ps? What is the relationship between the two?

Note on Low-Tech Marketing Math

Please do the following exercises. The answers are in brackets.

1. A manufacturer wishes to establish a retail list price of $6.00 on an item. The item
will be sold via a wholesaler and retailers (stores). Retailers have a policy of obtaining a
40% margin based on selling price. What price must the wholesaler sell the item for?
[W.S.P. = $3.60]

2. In order for the wholesaler to receive a 20% margin, what price must the
manufacturer sell the item for? [M.S.P. = $2.88]

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3. The manufacturers cost of goods sold is $2.00. What is the manufacturers margin in
unit contribution dollars and contribution margin percentage? [U.C. = $0.88;
CM = 30.6%]

4. A manufacturer plans to sell a product for $5. The unit variable costs are $2 and total
fixed costs assigned to the product are $30,000. How many units must be sold to
breakeven? [BESV = 10,000 units] What must the manufacturers dollar sales volume
be to breakeven? [BESR = $50,000]

5. What would breakeven volume become if fixed costs were increased to $40,000 while
the selling price and variable costs remained unchanged? [BE = 13,333 units]

6. What would breakeven volume become if selling price were dropped from $5 to $4
while fixed and variable costs remained unchanged? [BE = 15,000 units]

7. What would breakeven volume become if unit variable costs per unit were reduced to
$1.50, selling price remained at $5 and fixed costs were $30,000? [BE = 8,571 units]

Product Team Cialis: Getting Ready to Market

1. What are the most relevant dimensions along which to segment the patient market for
ED treatment? (This is a separate and independent step from the selection of the actual
targetsee below.)

2. Of the segments identified, which would you target initially with Cialis?

3. What is Viagras positioning in the marketplace in 2002? How would you


characterize the Viagra brand?

3. What would be the most effective way to position Cialis in the marketplace?

4. What marketing mix activities should accompany the launch of Cialis?

a) What would be the most important messages to communicate to the target patients?
To physicians? To partners?

b) What medium would you use to reach each of these parties and what would your
relative resource allocation be to each?

c) How would you price Cialis (assuming no health coverage)? What type of
promotions would you offer?

5. What competitive response do you anticipate from Pfizer? From

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Bayer-GlaxoSmithKline?

Market Segmentation, Target Market Selection and Positioning

1. Explain the differences between segmentation, targeting and positioning.

2. What are the major bases for segmenting consumer markets? (Refer to Note on
Marketing Strategy.) Cite examples.

3. How does one determine which market segment to target?

4. What is the significance of positioning to marketing strategy?

5. How do you develop a positioning for a product? What is a positioning statement?

6. How do companies differentiate their products for effective positioning? Cite


examples.

Principles of Product Policy

1. What is product policy? What are key product policy decisions?

2. What is a product line? What is product line breadth? What is product line length?

3. Why does one need a product line? What is a product line strategy? What are
important considerations in formulating a product line strategy?

4. What is a new product development process? What are the characteristics of an


effective one?

5. What are marketing strategy considerations for each stage of the product life cycle?

British Airways: Go for It, America! Promotion

1. Whats the problem facing BA? Is it reality or perception?

2. What is your appraisal of the strategic alternatives that BA considered in addressing the
business downturn problem? Can you think of any other worthwhile options?

3. Assess both the concept and proposed implementation of the Go for It, America!
program. Can you think of ways to enhance its launch?

4. What reactions do you have to the questions raised about the program near the end of

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the case?

Integrated Marketing Communications

1. What is integrated marketing communications?

2. Explain the various communications mix tools/vehicles. For what objective is each
tool best suited? What are disadvantages of each vehicle?

3. What is fundamentally different between sales promotions and media advertising?


Whats the difference between consumer promotions and trade promotions?

4. Explain the 6Ms model for communications planning. How useful is it?

Charles Schwab & Co.

1. What circumstances motivated development of the TTC campaign?

2. Evaluate the creative (message) strategy behind the TTC campaign.

3. How effective was the TTC test market? Evaluate the results.

Financial Analysis Tips: In analyzing results of the test over control, assume that the lift
of 205 in Exhibit 11 is for one year. The budget weight of advertising tested was
equivalent to a $100 million national campaign (p. 9) Therefore, the test markets
represented a $6 million media expenditure (6% of $100 million). Disregard the fourth
quarter in your analysis of the effect of the test. Assume that net new assets for the test
markets in 2004 were $3.018 billion (6% x $50.3 billion [Exhibit 1]).

4. Would you support Saegers TTC budget request for 2006?

Principles of Pricing

1. What is cost-based pricing? Whats wrong with it?

2. What is true economic value? What is its role in pricing strategy? How does it aid in
setting an actual price point?

3. What factors determine price sensitivity? How do we use economic value and these
sensitivity factors to set price?

Atlantic Computer: A Bundle of Pricing Options

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1. What price should Jowers charge DayTraderJournal.com for the Atlantic Bundle (i.e.,
two Tronn servers + PESA software)? Note from the Planning the Strategy section in the
case that Jowers makes a conservative estimate that two Tronn servers plus PESA equals
the performance of four Ontario Zink servers.

2. Think broadly about the top-line revenue implications from each of the four alternative
pricing strategies. Approximately how much money over the next three years will be
left on the table if the firm were to give away the software tool for free (i.e., status quo
pricing) versus utilizing one of the other pricing approaches?

3. How is Matzer likely to react to your recommendation?

4. (a) How is Cadenas sales force likely to react to your recommendation?

(b) What can Jowers recommend to get Cadenas hardware-oriented sales force to
understand and sell the value of the PESA software effectively?

5. How are customers in your target market likely to react to your recommended pricing
strategy? What response can be provided to overcome any objections?

6. How is Ontario Zinks senior management team likely to react to the Atlantic Bundle?

San Fabian Supply Company

1. As an exclusive distributor, what does San Fabian do for MacDowell?

2. Why does MacDowell want to change the relationship?

3. What would be the impact of the change on San Fabian?

4. What options does San Fabian have?

5. What would you recommend San Fabian do?

Financial Analysis Tip: Use Exhibit 5 to estimate selling and general & administrative
expenses associated with MacDowell sales.

Distribution Policy

1. What functions do marketing channels perform?

2. What decisions do companies face in designing their channels?

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3. What are the various levels of distribution intensity? How does one decide which
level is appropriate for ones business?

4. What are potential channel conflicts? How can a manufacturer mitigate or minimize
channel conflicts?

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GROUP WRITTEN CASE ANALYSIS

GENERAL MILLS, INC.: YOPLAIT CUSTARD-STYLE YOGURT (A)

General Guidelines

Your report should be no longer than five pages double-spaced, 1-inch margins, 12-size
font, with page numbers, and stapled (no plastic/hard covers, please). If you wish to
include exhibits that you have created, you can have up to two. Reports will be collected
in class. Late reports will not be accepted.

Form and presentation count. Your writing should be presentable to top management
lucid, persuasive, proper grammar and sentence structures, no typos. Stylistically, be
direct. Use terse, simple sentences, headings and subheadings. Edit and proofread your
work. Sloppy and unprofessional writing will lower your grade.

Please do not conduct outside researchuse only the data provided in the case.

Analysis Guidelines

Assume the role of a consultant to Bruce Becker, Director of New Business


Development, and address your report to him. He is quite familiar with the yogurt
industry and Yoplait, therefore, do not repeat or restate case facts per se. Present
analysis, insights, conclusions and recommendations, and use case facts only to support
them. In short, write about the facts significancethe answer to so what? about these
facts.

Becker said (p.11): I wondered if we were researching ourselves to death. We were


rolling out regular Yoplait quite successfully without a whole lot of industry data and
primary research. Aside from that, the research we had done on Custard-Style had
consistently indicated that it was a winner.

Your task, therefore, is to advise Becker on the following:

(1) Why do a test market? What does Becker already know about Custard-Style
based on the research to date? What uncertainties remain, if any? What are the
key questions facing Becker at this time?

(2) Which or which combination of research methods would you recommend? What
sequence? What are the pros and cons of each of the test market alternatives being
considered by Becker?
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I am particularly interested in the analysis that leads to your recommendations.

SOLO WRITTEN CASE ANALYSIS

GREAT AMERICAN KNITTING MILLS: GOLD TOE SOCKS

General Guidelines

Your report should be no longer than five typewritten pagesdouble-spaced, 1-inch


margins, 12-size font, with page numbers, and stapled.

Analysis Guidelines

In writing this report, you are a marketing consultant brought in to advise Frank
Bendheim, president of Great American.

Your task is to address the following: Should Gold Toe change its distribution
strategy? Why? And if so, how?

As president, Bendheim is very familiar with the sock industry and his own company.
Therefore, do not repeat or restate case facts per sehes already aware of these! Cite
case facts only as evidence or support of your analysis, insights and conclusions. In other
words, write about their significance (the so what part).

I am particularly interested in the analysis that leads to your recommendations. An


outstanding report is balancedciting pros and cons of strategic alternatives, and it
covers all the key issues and areas of analysis in an insightful and logical manner.

You may want to consider the following points and integrate useful insights into your
analysis and recommendation (simply answering these questions should not constitute
your report):

How successful has Gold Toe been? What are the reasons for its performance?

What are the benefits of Gold Toes exclusive distribution policy?

What is the significance of recent developments in the marketplace: competition,


consumers, and retailers?

What are the pros and cons of expanded distribution?

What are implementation considerations of your recommendation?

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Form and presentation count. An excellent report would be presentable to top
managementlucid, persuasive, concise, proper grammar, no typos. Stylistically, be
direct. Use terse, simple sentences. Cut out the fat. Avoid puffery and jargon. Be
decisive and persuasive.
MGMT E-6000 Marketing Management
Spring 2012 Course Schedule

MODULE DATE ASSIGNMENT

Course Orientation 1/26 Syllabus

Marketing Overview 2/2 Aqualisa Quartz: Simply a Better Shower

2/9 (1) Note on Marketing Strategy


(2) Note on Low-Tech Marketing Math

Segmentation, Targeting, 2/16 Product Team Cialis


Positioning

2/23 Market Segmentation, Target Market


Selection and Positioning

Product Policy 3/1 Principles of Product Policy

3/8 Due: Group Written Case Analysis


General Mills, Inc.: Yoplait Custard-Style
Yogurt (A)

3/22 General Mills, Inc.: Yoplait Custard-Style


Yogurt (B)
[distributed by instructor]

Marketing Communications 3/29 British Airways: Go for It, America!

4/5 Integrated Marketing Communications

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4/12 Charles Schwab & Co., Inc.: The Talk
to Chuck Advertising Campaign
MGMT E-6000 Marketing Management
Spring 2012 Course Schedule

MODULE DATE ASSIGNMENT

Pricing Policy 4/19 (1) Principles of Pricing


(2) Genvet Pharmaceuticals

4/26 Atlantic Computer: A Bundle of


Pricing Options

Distribution Policy 5/3 (1) San Fabian Supply Company


(2) Distribution Policy

5/10 Due: Solo Written Case Analysis


Great American Knitting Mills:
Gold Toe Socks

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