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Case One

PIC of Krave

            Background

The development of Krave came at a critical time when Kellogg was desperately attempting to recapture the market. Three factors that played a major role at the time included the economic conditions of the market, how the company communicated and interacted with its customers, and the technological application to continuous innovation. Economically, Kellogg had lost the market to General Mills which it needed to reclaim. Technological innovations, on the other hand, took center stage as the rival companies launched different products trying to attract all market segments. The development of Krave was about coming up with an energy boosting snack that is ideal during the day. The strategy at play was an intention to produce snacks designed for specific markets and segments.

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Focus

At around this time, the company turned its attention on developing snack products while building the traditional cereal business through heavy advertising and promotions. The company purposes to aggressively continue to penetrate new markets using the snacks business while it maintains its cereal business. It achieves this through a balanced leveraging of the snacks business and the cereals so it grips the two markets.  Besides, new snack products are being developed and launched aiming at the yet to be exploited specific markets. Other than development of quality snacks, Kellogg at this time of the year analyzes specific needs of the markets and develops products aimed at satisfying them. The company has set aside a huge advertising budget of $2 to $3 million. This will adequately help drive the acceptance of the product in to the market. Similarly, its branding has been designed with the K Snack Ums. Purposefully, the branding is to enhance the drive of the snack by association. Simply, by associating Krave to other Kellogg’s products, it would sell under the umbrella of the brand and quality attached to it.

Goals and Objectives

The primary objective of the launch of this product amongst others and the heavy advertising and promotion is to ultimately increase sales and increase profits. Also, the company seeks to reclaim its position as the market leader in the provision of snacks and cereals, and displace General Mills.

Guidelines

The company purposes to get back on its feet by significantly increasing volume of sales and subsequently increase profits. It the company’s expectation that the cost of product development and advertising will be recovered from the anticipated increase in sales. Kellogg plans to improve its technological infrastructure to enable innovative methods of advertising. Of keen interest is to register and maintain a strong online presence in order to keep in touch with the international market. Besides, the company plans to invest in and revamp its product distribution channels, and take over the available channels. Most importantly, is the distribution through partnership strategy where major retail outlets across the world will be identified and contract them to serve as the distribution centers.Eventually, the drastic steps taken during the year 1999b paid off by 2002, and fast forward to 2006. Through aggressive advertising and promotion, the company drove its market specific products in to the market and ultimately reclaimed I position in the market leadership.

Case Two

With successful redesign of cars by rival companies in the United States, BMW learnt its lessons right. The car market had slowly been changing with rising preference to redesigned, convenient and affordable cars while maintaining the feel of class of quality associated with the respective brands. As market taste and preference goes, BMW had to follow suit lest it be displaced by other major competitors including Volkswagen.  In a move to respond to the prevailing market trends, therefore, BMW had to make vital considerations as they redesign the Mini.

Considerations for Design

To begin with, BMW acquired Rover Group Ltd, one of the renowned British carmakers from when they gained the rights to the design and name of the Mini. The acquisition was a strategy to land them into an already established international market. The company would therefore only concentrate to taking over rather than penetrating a virgin market. Additionally, the company opted for a superior engineering and design over the popularity of the brand name as a marketing tool. The decision not to magnify the BMW name in the Mini worked perfectly well as the company did not receive a backlash from the original BMW customers who would feel wasted after the launch of the cheaper version of the new BMW, the Mini. Moreover, the company retailed the price of the Mini in the range of $15,000 to $20,000. Coupled with a fuel consumption capacity of 37 miles per gallon, the car was far much affordable even to the first time car buyer.  Besides, both the owners and prospective buyers of the Mini were given unrestricted access to guides and ideas on how they could personalize their Mini through a website.  This move built public confidence in the car.

Benefits to the Target Market

The design of the Mini targeted the middle and low income earners who are unable to afford the expensive and luxurious models of cars designed by the company. In other words, the market segment can afford a car associated with a popular and dominant brand. Besides, the affordability extends to cost of maintenance as the car only consumes one gallon in 37 miles. The need to run errands conveniently is of priority among consumers. The car’s fuel consumption rate, thus, enables owners to move around and about more cheaply.

Key points of Discussion During Design

Among the key points of discussion to designing BMW in order to deliver a car with the desired benefits, the knowledge and understanding of the target market is of importance. It is important to understand who the market is, what is their buying power, what is their need as far as cars are concerned. It is also of essence to note of what other competitors offer, thus, the gap between what they need and what is currently available to them. This discussion highlights the market’s specific needs that the design of the BMW needs to satisfy. Also, it is important to consider market changes in terms of choice and preferences. With this consideration, the company would design cars that serve the very current preferences, and most importantly, be designed in a model that can easily be modified to meet new preferences should there be any.

Design Pitfalls

An imminent market pitfall during redesign, especially when the redesign is to retail cheaply, is designing the car in the same model as the major brand. The redesigned car should not appear as a duplicate of the original car; neither should there be a thin line of distinction. A brand is at high risk of losing market confidence should its products appear to be duplicates. In an ideal situation, the two cars should be distinct in terms of design, target market and features. However, a market research centering on the effect of associating a popular, dominant and expensive car brand with an inexpensive car should be conducted.

Case Three

Lessons from failure of Pepsi-Kona

PepsiCo made costly mistakes as they introduced Pepsi-Kona. The company did not study their market in relation to consumption of coffee products. To begin with, they did not do a background study to understand the nature of the coffee product in the market and how consumers responded to it. Even though coffee products we popular among the youth market and there was need for product modifications, they did not study the trend and preferences of the market that would drive the modifications towards some direction, for instance, adding ginseng and other energy booster as Arizona Iced Tea were doing. In a nutshell, they did not conduct a research to understand who the market was, what was already on the market, and what the needs of the market were, so that they come up with a product that is designed towards the needs of the market.

Also, in many of their Pepsi-Kona promotional adverts, PepsiCo did not make specific their target group. This is a clear indication that they did not know who their market were. Arguably, this made it difficult to tailor their adverts towards their intended target group. It would be safe to say, therefore, that the junk adverts they ran could not attract a specific market segment. In the launch of Pepsi One, however, the company has made clear indications that they are targeting men of ages between 20 to 39 years old. This helps the company come up with specific adverts that are appealing to the target group. Finally, PepsiCo launched and marketed the product without selling its benefits. In a typical market of many sellers, it is product differentiation that sells. The company, however, did not sell the benefits of the Pepsi-Kona product and how it is unique from other competing products.

PIC for Pepsi-Kona

The products might have been launched as a diversification and modification strategy. Following their unsuccessful launch of Crystal Pepsi in the early 1990’s, the company might have intended to make another careful stab in the market, this time round, with a completely new product, coffee, that was by then popular. They might have been envisioning an expansion of their market size by targeting the popular consumers of the coffee products. PepsiCo might have been guided by the experience they gained from their earlier working relationship with Starbucks to venture into coffee.

Poor Test Marketing

PepsiCo conducted junk test marketing.  They had no specific target market; neither did they sell any benefits of the Pepsi-Kona. This made it difficult to attract the attention of any specific market segment, from where they would penetrate the market. Also, the taste of the Pepsi-Cola and coffee was not of a likable flavor. This was a concern raised by the few consumers who tasted Pepsi-Kona. In a rational consumer market, taste of a flavor of any product contributes largely to its success. Owing to the fact that the taste of the Pepsi-Kona was not likable, therefore, consumers did not prefer it, leading to its failure to break through the market.

Launching Pepsi One

In the case where test marketing was unsuccessfully conducted on Pepsi-Kona, it is my opinion that the Pepsi One managers should go ahead to launch the new product without any test market. In my understanding, having the new product approved by FDA and subsequent announcement is enough to serve as test market. From the time of announcing to the public of their plan to develop Pepsi One, and making public their target market, virtually, the target market segment and the public at large are expecting and prepared for the ultimate launch.

EXTRA CREDIT

The Suprising Power of Questions

In this article, Alison Wood Brooks and Leslie K. John underscore the importance of asking questions. The writers note that most people do not ask questions when they should. But for those who do, they question out of their emotional intelligence, natural inquisitiveness and the ability to read people. By frequently asking questions, the authors claim that we naturally improve our emotional intelligence, and become even better questionnaires, as a result. The writers give several reasons why many people hold back questions. To begin with, they claim that people who are egocentric and are eager to impress others with their ideas or thoughts are not likely to ask questions. Besides, apathetic people do not ask questions because they either do not care or they anticipate that they would be bored by the answers they would get. Also, others do not ask questions because they are overconfident that they know everything. Also, others do not ask for fear of victimization that they may be viewed incompetent. In their opinion, however, people would ask questions if they would understand how beneficial it is to ask questions. Asking a lot of questions in an engagement enhances interpersonal bonding and learning.There is only one way to becoming a better questioner. You have to ask a lot of questions. However, there are several factors that affect the quality of a conversation, which would in turn culminate into a lot of questions; For instance, the type of a question one asks. Many people do not like closed ended questions. Open-ended questions give room to engagements which lead to uncovering headed information or learning something new. However, in situations where you are negotiating, closed questions are ideal so that an absolute agreement s reached. How to frame the question in this case should not be provocative with a hard tone. In a nutshell, the type of question one asks should be dependent on the prevailing circumstances and the kind of information sought.

In addition, asking questions in the right sequence also improves the quality of the conversation. How someone responds to questions greatly depend on the questions are sequenced.  It makes one either comfortable to proceed answering or not. If your goal is to build relationships, for instance, I think it is advisable that you begin with lesser sensitive questions as the person becomes comfortable with you. Moreover, the kind of tone one uses to ask a question is also important. Many people would be more responsive if questions are asked casually rather than in an official tone.

On the other hand, just like asking questions, answering also depends with the quality of the conversation. Regardless of the tone sequence of the tone, choosing what to answer is purely a personal decision. The person chooses to either answer openly or not depending on what he considers appropriate to respond to and to disclose.

A More Profitable Approach to Product Returns

There have been discussions surrounding the product return policy since time immemorial. James Abbey, Michael Ketzenberg and Richard Metters, in their article, try to dig deep into the challenges facing business outlets as a result of the return policy. For over a century, the writers report that business outlets have been operating on very liberal product policies that provide no time limit or even a purchasing receipt at the time of return. The implication of this policy is that a buyer could return a commodity even two years after buying it without any accompanying receipt as proof of purchase, but still be eligible to get refund form the vendor. However, the policy was abused because people would, for instance, return a pair of boots purchased decades ago but still get full refunds. This made businesses incur worthless return costs.

Having incurred enormous losses associated with return policies including restocking costs, depreciation on the asset and ultimate refund to the buyer, business enterprises embarked on a journey to lock out abuse of the policy. This has been against sharp criticism from the buyers who claim that business stores unfairly target customers who make genuine returns in the pretext of preventing abuse of the policy. Among the changes that have so far taken effect is the policy that limits all product returns to at most one year from the date of purchase. In my opinion, arguing from the vendors’ point of view, it is only meaningful for a buyer to return an asset that can still realize a sale value. Even though still little, but it cushions the vendors from a double loss of revenue and the asset.  Even with this policy, it has not been rosy for the vendors since they are not adequately protected from abuse of the policy. It has been possible, therefore, for a customer to return an asset purchased in a different store, and still be refunded.

In a bid to obtain adequate protection, many business outlets in the United States have further amended the policy to include charging customers restocking fees and requirement for the original receipt of purchase, in addition to reduced shorter limits. Even though some retailers may be applying liberal policies, it is the writers’ opinion that those retailers are reducing in numbers everyday as each of them seek to tighten revenue loopholes. In as much as the buyers see the policies unfair, the vendors’ argument is that in addition to cushioning them from unprecedented loses, they train the buyers to take good care o their assets.

How to Improve the Accuracy and Reduce the Cost of Personnel Selection

The article authored by Don A. Moore centers on some of the challenges of the traditional face to face interview. The author discredits the popular notion that future performance of an employee is depended on how he performs during the traditional interview.  The writer curtains that it is terrible to predict an employee’s future performance using the traditional job interview involving the face to face interrogation. Traditionally, employment has been offered based on a candidate’s performance during the interview. While  the further engagements with a candidate has always been premised on the performance during the interview, the writer finds fault with the norm citing no direct relationship between performance during the face to face interview and the future performance.

Arguing against the popular notion, the writer claims that there is usually inconsistency when each interviewer asks interviewees different questions, thereby making it difficult to compare performance on a just and fair platform. Rather, structured interviews are proposed as an alternative to predicting a possible performance indication by a candidate. This comes about given the fact that all interviewers ask the candidates the same set of questions, thus making comparability practical. However, the best predictor of the future job performance is the actual performance on the job. This assertion implies that internships, short term contracts and internships best predict what an employee is actually capable off even in the future.

Moreover, the article presents other methods that can be used to evaluate future performance. It is noted that the less expensive to administers and accurate method is the general mental ability, in other words, the intelligence. Intelligent people perform better at work. They know what they are doing and why. Coupled with on-the-job training skills, an intelligent person is predicted to perform exemplary well even in the unforeseeable future. However, despite of the availability of tools that test intelligence, it is believed that it does not take account of personal virtues at work place including wisdom, consciousness or kindness. Regardless, it is argued that oral interview is either not perfect.

In a nutshell, an important lesson I am learning from this article is that it is not possible to accurately predict future performance. It is therefore entirely difficult to predict which candidate will perform better and which one will not, right from the personnel selection room. In some instances, you will pick a disappointing candidate just as you will turn down a would be performing candidate. What is important, therefore, is to be as thorough as possible during selection so as to make a fairly better decision.

 

 

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