Marketing Case Analysis

I have put both instruction and case study in the first file. And the second and third file are the example from the previous term.

 

I need this by this coming Sunday!

MinorCase Analysis:

An analysis of a case study should include the following sequential steps:

1.

Develop an understanding of the facts surrounding the case:

a. re-read the case several times

b) underline the important facts

c) interpret all charts

d) question any comments made in the case

e) evaluate past and current decisions

f) develop a list of questions (in addition to the ones provided at the end of the case) whose answers would be useful in addressing the issues.

2. Identify the key issues.

3. List alternative actions that could be taken:

a) different business objectives

b) different marketing objectives

c) customer market segments

d) overall business strategies

e) competition

f) economic trends

g) personnel capabilities

h) sales projections

4. Evaluate alternative courses of action

5. Recommendation

For the minor case, you are required to identify ONE (1) key issue, give TWO (2) alternatives for the key issue , and evaluate each of those alternatives by doing a strength/weakness analysis, and, finally, decide on a recommendation–one or more of your alternatives.

This analysis is no more than two (2) pages long, and it does NOT require additional research. The information that you will need is either in your Lecture Series or in your book.

Grading will be based upon your writing ability and your critical thinking ability.

(Proficiency and content)

Sam’s Club: Smarter Discounts

When they purchase a membership in Sam’s Club’s eValues program, customers receive customized, targeted offers from the retailer. These “smart” discounts are more appealing than generic promotional campaigns, because they pertain specifically to items the customer already has expressed interest in through past purchases.

How are retailers designing such personalized appeals? In the case of Sam’s Club, it relies on sophisticated data mining techniques to collect information from every transaction. This information not only enables it to target customers better but also supports complex evaluations of the best products to carry and which to eliminate.

In turn, Sam’s Club develops predictive analytics that estimate what any particular customer will buy in the future. As a simple example, a customer who buys newborn baby diapers might receive a coupon for wipes, to encourage immediate purchase, and then later receive a coupon for the next diaper size, to encourage future purchase. Each customer’s offers get loaded onto his or her member card, so there is no need to remember to bring discount coupons on the shopping trip.

Sam’s Club designates its offers into three categories and ensures that customers receive promotions in each: rewards, incentives for products the customer normally purchases, and cross-category offers for items the customer has never bought. The response rates for the targeted items are impressive. Whereas mass marketing usually offers yield a 1–2 percent response rate and segmented offers increase that rate to 5–6 percent, Sam’s Club has achieved a 20–30 percent response rate with its predictive analytics.

With the power of analytics, Sam’s Club thus is inciting tremendous loyalty among customers.

Ethnic Preferences

Julie Jargon, “Pizza Chain Seeks Slice of Bicultural Pie,” WSJ.com, December 30, 2010.

Food marketers like Kraft Foods and Anheuser-Busch are making their products and advertising more user-friendly for Hispanic consumers by adding Spanish translations to packaging and selling lime-infused beer. The Dallas-based pizza chain, Pizza Patron, is going the opposite direction and adding English to their Spanish-language marketing materials. The shift comes in response to focus groups and surveys that indicated the chain was attracting younger and more multicultural customers.

When the first Pizza Patron opened in 1986, it lured first-generation immigrants who tended to order in Spanish. Recognizing the opportunity to differentiate Pizza Patron from other pizza chains, the company’s founder focused on opening new stores in neighborhoods that were predominantly Hispanic, offered menu choices likely to appeal to Hispanics, used Spanish on menus and menu boards, and focused advertising on Spanish-speaking radio and television stations. The strategy resulted in a chain that has grown to 100 stores in 25 years, and that projects revenues of more than $40 million this year.

Now the Pizza Patron restaurants are serving the children of these early customers. These young diners, who frequently have purchasing power in the household because of their English language skills, are more fully integrated into American culture. According to a recent U.S. Census Bureau report, these young Hispanics are the fastest growing segment of the youth population in the United States, making them a valuable resource for Pizza Patron. As a result, Pizza Patron is shifting its marketing mix so that a significantly higher number of ads will run on English- language media outlets. New stores will open in neighborhoods that are less heavily Hispanic, as well as in areas where Hispanics have moved.

Despite the appeal of this new audience, the chain doesn’t want to run the risk of alienating its existing customer base. As a result, the restaurants will continue to offer food which appeals to its target clientele, including toppings like chorizo sausage and jalapeno peppers, churros, and lime-and-pepper flavored chicken wings. While English will now be the primary language on menu boards and printed materials, these marketing tools will still contain Spanish. The store also plans new marketing efforts designed to appeal to their traditional clientele, including in-store displays relating to holidays traditionally celebrated by Hispanics and Spanish-language phrases that mean more to Hispanic customers than to those who simply translate the individual words.

Ethnic Preferences

Summary

Pizza Patron, the pizza chain that has 100 stores opened around the U

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S. mainly in Hispanic neighborhoods is now want to attract a new target market, which is the English speaking groups. When the first Pizza Patron opened in 1986, they saw the opportunity to differentiate themselves from other Pizza chains by focusing only on the first-generation Spanish immigrants. Therefore, they used Spanish on their menus and menu boards, offered menus choices that Hispanics preferred, and focused advertising on Spanish media. However, Pizza Patron now is shifting its marketing strategy to focus on young Hispanic group who are the fastest growing segment of the youth population in the U.S. They also have purchasing power in the household because of their English speaking skill. Therefore, the restaurants will use English on their menus, menu board, and media in order to attract more of English speaking group.

Issue

The chain is running the risk of alienating its existing target customer base by changing their marketing mix.

Alternative I

Pizza Patron can open new restaurants in less heavily or non-Hispanics with all of their menu board and printed materials will be in English. Also, advertising will be in English media outlets. However, they should continue offering the same food on menu that appeal to the original clientele. This alternative will benefit the restaurant by helping to expand into a new market segment. By expanding new restaurants into the areas that are less or non-Hispanics can help the restaurant increase their sales revenue. Moreover, for offering the same food on the menu and using English as the main primary of all the ads, menu, and menu board will help saving on their production and marketing costs. On the other hand, for applying this alternative; the restaurant will be facing with the risk of losing original clientele. This is because the original customers can hardly read and listen to English ads, menu, and menu board. Even though sometimes they might have someone to translate into Spanish for them, but some of them might be upset of the change and not want to return to purchase again.

Alternative II

First, they should leave everything the same on the existing Hispanic market; everything on the menu and ads are still in Spanish. Additionally, focus on new target customers in new markets in non-Hispanic areas and change the menus and ads in those areas only. The advantage of this alternative is to lowest the risk of losing current clientele base. If the restaurants are using the same strategy in existing areas, there will be the greatest chance that they will gain the brand loyalty from the existing market. Moreover, the restaurant can expand more to non-Hispanic group in new areas. This will make them gain more revenue and have more customers in their market. However, if they apply this alternative; there will be a high costs in marketing budget, production costs, inventory costs, management costs, promotional costs, etc. The restaurants will run two different market segments, which are Hispanics and non-Hispanics markets. As a result, the restaurants have to worry about the costs from diversifying the markets.

Recommendation

First of all, if the company has enough budgets, and they are not worried about over spending in the two market segments then I think they should pick alternative two. This will help the restaurant with the sales expansion of the company without the risk of losing the original clientele.

On the other hand, if the company doesn’t want to spend too much on the new costs that would occur in different market segments then they should pick alternative one. There will be an opportunity in expansion as alternative two, but in this alternative the restaurants will have a risk of losing its existing customers base.

Therefore, the restaurant should focus on their budget first in order to decide which choice is more suitable for them at the time.

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