J menus, self-service, akeout orders, and high turnover characterized fast-food restaurants. The four market ‘include McDonald’, Burger King, Wendy's, and Taco they comprise about half of the 59,960 fast-food in the United States. In 2002, these four leaders ly assumed 70 percent of the $45 billion market. For syear ending 2002, McDonald's achieved annual rev- $15.4 billion. Since MeDonald’s is the world’s lead- ice retailer, they operate more than 29,000 restau 121 countries, serving 45 million customers each day. -MeDonald’s owned a 43 percent stake in the fast-food ‘Chief competitor Burger King had a 19 percent market 5,000 fewer stores than MeDonald’s. Wendy's 2001 ‘ere $6.15 billion, with a 13.2 percent share. the domination of these market leaders was once 0 spell “doom” for local regional operators, smaller instead, rebounding and experiencing new levels of ‘Chains like Sonic and Carl's Jr. are invading markets, formerly havens to their larger counterparts. With more chains competing for the consumer's fast-food ‘marketing is becoming increasingly important. iuding their three-year revitalization effort, "6 unveiled its $500 million “We love to see you ‘campaign in June 2000, which reinforced the chain's lity to make sandwiches to order. The MeDonald’s ting plan emphasized ongoing variety with the jon of the New Tastes Menu. This is a permanent featuring 40 food items that franchises within the same may choose to rotate for various periods. The new sas backed by an estimated $60 million ad campaign by smarket agency, DDB Worldwide. By 2010, McDonald's to double domestic system-wide sales and triple cash flow, In order to achieve this 10-year growth ‘MeDonald’s new company brands—Bosion Market, ‘Mexican Gril, and Donatos Pizza will have to play a in their growth picture ‘Starting in 2002, Burger King introduced several new jtems that purposely were chosen to be in direct ition with McDonald's Big Mac, Quarter Pounder. and, /MeMuffin. Even though McDonald’ long dominated the ‘market with its Happy Meals, Burger King set its ‘on the fast-growing kiddies crowd. In 2001, Burger 1.1 Life in the Fast Lane: Fast-Food ~ Chains Race to Be Number One King was armed with an $80 milion budget and new research ready to target kids. They picked a marketing agency ‘exclusively specializing in kids marketing, Interpublic Group ‘of Cos.” Campbell Mithun. Burger King aimed to leverage the space between kiddies and adults. While not abandoning the very young crowd, Burger King centered ils kids program on its Big Kids brand meals. Now more than ever, marketing to consumers” tastes is key to competing in the increasingly ntense fast-food restaurant war, Capturing of retaining market position is intuitively tied to keeping up with the changing preferences of the American consumer. In a recent study conducted by Maritz Market Research, convenience of location, quality of food, menu selection, and then service are the most important influences (on adults’ fast-food choices. Surprisingly, low price was not among the top four reasons why Americans made their fast: food selections. Only 8 percent of those surveyed made a fast- food choice based on price. Adults under the age of 65 cited proximity of location as the most important factor in their fast-food purchase, with 26 Percent of those polled stating it to be the chief criterion influencing their dining choice. After convenience of location quality of the fast-food itself was most important to consumers, ‘This is interpreted to mean that not only do consumers want a superior product, but also they want a consistency in quality in each order at any location, Taco Bell recently shed its emphasis, ‘on low price for a focus on quality. The chain transformed its, “Extra Value Meals” multi-menu item combination package imto “Border Select” meal platters by upgrading and modifying the food offered and the image presented. Arby's, a chain specializing in roast beef sandwiches, holds the phrase “a cut above" not only as an advertising slogan but also as an intended view of its restaurants in general. “In everything we talk about—our uniforms, our buildings, our sandwiches—we want to be a litle bit better than our competitors,” proclaims the chain spokesman, Moreover, customers are craving a variety of selections. According to 16 percent of American consumers, menu selection is the chief reason for choosing a fast-food restaurant. Knowing such important informa offering diversified menus with unique items. For example, the Oklahoma City-based Sonic chain offers, in addition to the traditional sandwich, “things that you can’t get at competitors chains are olike . .. onion rings and cherry limeades.” Market leaders are also looking to capitalize on that one item that the competitor is not offering. In 2002, Wendy's restaurants introduced its new line of Garden Sensation Salads and racked up record sales according to the firm, Menu selection is important to senior citizens as well. One in four senior citizens feels that menu selection is the most important factor in their choice of dining establishments. Experts predicted that the number of ‘menu items will continue to grow as all fast-food restaurants offer new items to avoid consumer boredom and maintain growth and market share, AS a spokesman for Burger King said. "We'll stay with what we know best, but we have to add items to meet consumer preferences.” ‘About 12 percent of adults fel that fast service isthe basis of their choice for a fast-food restaurant, McDonald's strateg is to “attract customers with price and keep them with service’ ‘and become “recognized as the service leader in the nation, according to the corporation's USA president. To emphasize this aspect, McDonalds plans to extol its drive-thru operations. in a series of television ads, showeasing the speed at which the hard-working staff diligently prepares the customers’ orders, Taco Bell too exalts service qualities in its stores, with a mission summarized in the acronym FACT, which stands for “fast food, accurate orders, cleanliness, and food served at the right temperature.” Wendy’s has adopted the special acronym “MBA” which stands for a “Mop Bucket Attitude.” This represents Wendy's “commitment to the traditional definition ‘of customer satisfaction which places customer service (cleanliness, service, and atmosphere) before numbers and ‘computer printouts.” Wendy's maintains that this commitment is a major reason for their success. Burger King has long recognized the importance of providing good service and also creating a favorable and memorable dining experience. Burger King was the first fast-food restaurant to introduce dining ‘rooms that allowed its customers to dine inside its facilities. In 1992, Burger King became the first fast-food restaurant to introduce table service and an expanded dinner menu in order toeenhance the customer's dining experience, ‘The most recent trend in fast-food restaurants has been toward value pricing. This trend was ushered in by Taco Bell. which dropped prices and boosted system-wide sales by 18.5 percent in only two years. While it was a novelty for a short time, the value pricing has become a part of almost every major competitor. MeDonald’s offers its Extra Value Menu, Wendy’s has a 99¢ Super Value Menu that emphasizes variety by offering items which range from ready-to-g0 Side Salads to a Country Fried Steak Sandwich, Burger King and Hardee's offer similar plans to that of McDonald's. Currently, McDonald’s is bringing attention to its value menu by spending an estimated $10 million on a national advertising ‘campaign focused on its Value Meals. In 2002, McDonalds introduced an Extra MeValue Menu of items priced under $1 In a further effort to expand the fast-food market, the industry looked overseas. Since Asian and European markets are at the stage of fast-food that America reached in 1960, American chains have a substantial competitive advantage internationally. Marketing experts predicted that it will be a — ‘easier for established U.S. chains to expand overseas than at home. To illustrate, McDonald's realized about 40 percent ofits ‘operating profits outside the United States in 2000, as compared with 21 percent in 1990. In addition, Burger King focused on Japan as a wide open market for its burgers and, gave much attention to the Eastern European market. It recently ‘opened restaurants in Poland, the former East Germany, and Hungary, while at the same time establishing a training academy in London to service its European franchises ‘Wendy's has also been recognized as a serious competitor in the international fast-food market. Wendy's has more than 8,000 restaurants located in more than $0 countries outside of the United States, Due to the loss of Wendy's founder and well-known spokesperson Dave Thomas in 2002, Wendy's marketing and advertising strategy will be undergoing some changes. Thomas made more than 800 commercials for Wendy’s since 1989 and became a household name due to his, regular guy persona and popularity, Wendy's has been preparing for Dave Thomas’ passing since 1996 when his health began declining. However, the effects this will have on the company’s strategy remains to be seen both nationally and internationally Given the stiff competition in the fast lane, the question remains whether McDonald's can continue to be the leader in the domestic fast-food race. as well as become the front-runner in the international fast-food race. The use of marketing research willbe critical in achieving these goals. QUESTIONS 1. Describe the marketing information needs of the fast-food industry. 2. What role can marketing research play in providing the informa- tion needed? 3. Give some examples of problem identification research that MeDonald's ean undertake to ensure their continued leadership in the fast-food industry 44. Descrie the kinds of problem solution research that Wendy's might undertake to improve is sales and marketshare. ‘5. Given the market potential overseas, should fast-food chains ‘conduct marketing research in foreign countries? What kind of| ‘opportunities and challenges wil the fast-food chains encounter ‘while conducting international marketing research? REFERENCES Christopher Barton, “MeDonald’s 10 Try to Boost Servier, Restaurant Investment,” Knight Ridder Tribune Business News Glnuary 9, 2002): 1 ‘Ameet Sachdev, "Wendy's Founder Dave Thomas Dies at Age 69," Knight Ridder Tribune Business News (January 9, 2002): 1 ‘Amy Zuber, “Listen up, Mac: BK Aims to Reign Supreme, ‘Orders Menu Changes,” Nation's Restaurant News 35 (51) (December 17, 2001): 3, 126 Bob Sperber, "MeD Beefing up Value Meals." Brandweek 42 (45) (December 3, 2001): 3 ‘Amy Zuber, “Skeptics Unsure MeD Can Attain Sales Doubling,” ‘Nation's Restaurant News 35 (11) (March 12, 2001): 1,96Inc. (wwv:nike.com), located in Beaverton, Oregon, is foumber one U.S. athletic footwear company and one of ‘most recognized American brands among foreign con- This high degree of recognition is one of the main Nike has been so successful. For the 2001 fiscal year ‘May 31, 2001, the company continued to soar, with cof over $9.5 billion, Perhaps such success could be attributed to its concept advertising campaigns. The company uses a process 4s often called “image transfer.” Nike ads traditionally fnot specifically place a product—or mention the brand A mood or atmosphere was created and then the brand iated with that mood, “We don't set out to make ads. ultimate goal is to make a connection,” states Dan den, executive of one of Nike's ad agencies, One ad ed the Beatles and clips of Nike athletes, Michael and John McEnroe, juxtaposed with pictures of folks also engaged in sports. It was used to infer that athletes prefer Nike and that perhaps if the general nce buys the brand they will play better too. Nike's table image-based ads have ranged from shocking, 4s its portrayal of real blood and guts in a “Search and "campaign used during the 1996 Olympic games, to us, such as the first ad used to launch Michael 9's Jordan brand wear. The latter advertising made the in-cheek suggestion that Jordan himself had a hand ‘production by slipping away from a Bulls’ game at half to run over to his company and then return in time for {game's second half. In 1998, Nike shifted to a new phase in its marketing -2y. Nike emphasized more of its product innovation than the jockey, edgy attitude that it displayed in jous years. “We recognize that our ads need to tell mers that we're about product innovation and not just *s and exposure. We need to prove to consumers that ie not just slapping a swoosh [the company trademark] on to make a buck,” said Chris Zimmerman, director of 's U.S. advertising. With the launch of the “I can’ apaign, Nike showed less of the celebrity athletes that wviously adorned its marketing output and showed more it usage than in the previous “Just Do It" campaign, spetitors Reebok and Adidas recently featured more jet-focused ads and were met with a great deal of 8s. Despite this rearranged focus, Nike did not back from innovative marketing. ‘Nike continues to excel in the advertising arona. Nike was ‘one of 2001's best in advertising by Time Magazine for ‘ad featuring expert dribblers doing trick moves. Time is das saying the ad conveyed a message that “Sport is je. Sport is dance. Sport is ar." Nike states that this ad was it most popular ad in 20 years. Another popular ad from .2 Nike Sprints Ahead of the Competition, Yet Has a Long Way to Run 2001 was known as the “Take Me Out to the Ballgame” ad. This particular ad featured professional athletes from varying sports singing one line of the song “Take Me Out to the Ballgame" in their native language. As the company looks ahead to 2010, at the heart of Nike's future strategy is the intemational arena, which could prove to be the most difficult element for Nike to undertake. ‘There seemed to be a pretty strong recognition that by 2010, Nike would be larger outside of the U.S. than inside. As of 2003, international sales comprised one-third of Nike's business. Nike would like to expand into the soccer and international sports arena, but to do so, it would have to refocus its marketing and distribution in order to re-establish itself as an authentic, technically superior sports shoe In February 2001, Nike unveiled its latest technological revolution, the Nike Shox, to United Kingdom consumers. ‘This shoe was in development for 16 years, and Nike hoped it would revolutionize the sports shoe market in much the same Way that Nikeir did when it was launched in the UK in the 1980s. One reporter in London states that his pair of Nike ‘Shox makes him feel like he is “walking on cloud nine with & spring in {his} step.” The shoes are reported to provide support, comfort, shock absorbency, and style all at the same time. The Nike Shox line of athletic shoes is shaping up to be very popular in both the U.S. and the UK. Most recently, Nike bought out many of its worldwide distribution centers in order to achieve greater control of its operations. In the future, Nike would like to build up its presence in the key markets of China, Germany, Mexico, and Japan. Nike will focus its advertising on sports, and will feature sports that are of a particular interest in specific regions. Nike realizes that while itis ahead of competition, it slill has a long, long way to run. QUESTIONS Should Nike switch from a focus on celebrities roa focus on its Products in its advertising? Discuss the role of marketing research in helping Nike management make this decision. What kind of research should be undertaken? 2. How would you describe the buying behavior of consumers with respect to athletic footwear? 3. What is the management decision problem facing Nike as it tempts to retain its leadership postion? 44. Define the marketing research problem facing Nike, given the ‘management decision problem you have identified §. Develop two suitable research questions ane! formulate two hypotheses foreach, 6. How can the Intemet be used to help Nike in conducting mar- keting research, and in marketing its products?REFERENCES Anonymous, “The 2001 Best & Worst: Advertising,” Time 158 (27) (December 24, 2001): 88 Sarah J, Heim, “Nike Champs Move to Gridiron." Adweek $1 (46) (November 12, 2001):6, Agnes Jumah, “Design Choice, Nike Shox,” Marketing (March 22, 2001): 14, vocnikebiccom/ 1.3 Lexus: Imparting Value to Luxury and Luxury to Value! In the 1980s, Toyota developed a concept for a new car that Was destined to be a success. The concept of the cat, which ‘was to be called Lexus, was based on the observation that there was a large, affluent market for cars that could boast exceptional performance. A significant portion of that market ranked value highly. However, they were unwilling to pay the extraordinary expensive prices that Mercedes charged for its high performance vehicles. Toyota planned to target this mar~ ket by creating a car that matched Mercedes on the perfor. ‘mance criteria but was priced much more reasonably, provid- ing consumers the value they desired, and making them feel that they were smart buyers, Toyota introduced the Lexus (www.levus.com) in 1989 with much fanfare. A clever advertising campaign announced the arrival of this new car. For example, one ad showed the Lexus next to a Mercedes with the headline, “The First Time in History That Trading a $73,000 Car for a $36,000 Car Could Be Considered Trading Up.” Of course, Lexus had all the detail thatthe Mercedes did: a sculptured form, a quality finish, and a plush interior. The detail was not, however, limited to the car. Separate dealerships were created that had the type of atmosphere that affluent consumers expected fiom 4 luxury carmaker, including a grand showroom, free refreshments, and professional salespeople Toyota placed a strong emphasis on the performance of the new car. A package was sent to potential customers that included @ 12-minute video displaying Lexus’ superior engineering. The video showed that when a glass of water was placed on the engine block of a Mercedes and a Lexus, the water shook on the Mercedes while the Lexus had » virtually still glass of water. This visually told the viewer th the stability of Lexus was far more extraordinary than even ‘one of the most expensive cars around. Another video showed @ Lexus making a sharp turn with a glass of water on its dashboard. The glass remained upright: again, the Lexus Proved itself. These videos were successful in bringing in customers, whose expectations were surpassed, As a result of its continued success, Lexus decided to aise the prices of their vehicles. However, this strategy did ‘ot work out as well as Lexus had hoped. Lexus realized that it lacked the heritage for prestige that European luxury cars command and that people are once again willing to pay extra for it thas, asa result, tured to anew advertising campaign ‘0 inspite an emotional response to its cars. The campaign was exceptionally powerful because it also had to combat the decrease in growth of the luxury car market compared to the auto industry's overall growth. Partly responsible for this, decline, the “near luxury” autos have skimmed away potential luxury auto consumers. Included in this group are the Toyota Avalon, the Nissan Maxima, and the Mazda Millennia, BMW. ‘and Mercedes also introduced products for this segment: the BMW 3 Series and the Mercedes C Class. In response to this competition, Lexus emphasized non- traditional advertising and promotion, in addition to more ‘mainstream luxury car advertisements. While many companies that rely heavily on commercial advertising are upset with TiVo (the new television viewing system that allows users o filter out commercials), Lexus positioned TiVo (o its advantage. Lexus sponsored a “New World of Luxury” sweepstakes where the prize was a new ES300. TiVo users used their system fo search for Lexus commercials for clues to «questions that Lexus posted on TiVo's promotional page. The ‘Sweepstakes ran from November 12-December 14, 2001 and Kept TiVo users watching Lexus commercials rather than filtering them out. Lexus continues to show the automobile industry and its current customers that it is building vehicles with luxury, Performance, and style. In 2001, JD Power & Associates ranked the Lexus luxury car number one in durability for the seventh year in a row. The award was based on the number of Problems reported by 40,000 users of small trucks and Passenger cars. Also in 2001, Lexus was ranked number one in retention of customers for the second year in a row and ramed number one in customer satisfaction with dealer service by JD Power & Associates As a result of Lexus’ marketing efforts, in 2000 Lexus set 4 record of its own by selling a sizzling 206,037 units, which was an alltime sales record for the luxury automaker. With this, Lexus became the top-selling luxury brand, edging out Mercedes-Benz, In 2001, Lexus was named the bestselling luxury brand for the second year in a row. The company sold 223,983 new vehicles, an increase of 8.7 percent over 2000,Pre-owned vehicle sales were also up by 20.4 percent, ‘totaling almost 58,000, and certified pre-owned vehicle sales ‘were over 33,000—a 23.4 percent increase over 2000. At the ‘end of 2001 the GX470, Lexus’s third SUV, was introduced at the Detroit Auto Show. The SUV was priced from ,000-$50,000, which positions it nicely between Lexus's other SUV models. For the future, Lexus is faced with the challenge of 2 for younger consumers for their vehicles. Denny ents, group VP-general manager of Lexus, said the ‘group for the new luxury sedan has a median age 47 and 55, while the current LS buyer's median age Years old. “The exterior design is much more dramatic the previous generation LS 400,” said Mr. Clements, admitted that past observations about the LS styling have ‘words such as “sedate” and “boring.” Continued 1 plans will help Lexus attempt to attract younger for their vehicles. cus plans to expand marketing efforts in the future ‘aim of not only gaining new customers, but also present clients. While the company’s plans are lassified, their latest efforts hint that newer tactics will follow in the unconventional style of For instance, Lexus’ recent sponsorship of a skiing. Colorado included an invitation to all Lexus ‘spend a luxurious all-expense-paid weekend in ns. These efforts are consistent with Lexus’ of imparting value to luxury and luxury 10 QUESTIONS 1. Deseribe the management decision problem facing Lexus as it seeks to fight competition from other luxury car manufacturers such as Mercedes, BMW, and Jaguar as well as competition from the “near luxury” autos like the Nissan Maxima and the Mazda Millenia. Formulate the marketing research problem corresponding to the ‘management decision problem you have identified in (1). . Develop a graphical model explaining the consumer choice process for luxury ear. J. Identify two research questions based on the definition of the ‘marketing research problem and the graphical model . Develop at least one hypothesis for each research question you have identified in (4). How would you conduct an Intemet search fr information on the Tuxury car markot? Summarize the results of your search ina repor. REFERENCES Terry Box, “Demise of SUVs Certainly Looks Premature,” Knight ‘Ridder Tribune Business News (January 7, 2002): 1 Jean Halliday, “Has Lincoln, Caddy Lux Run Out?” Advertising Age 72 (82) (December 31, 2001): 4 ‘Karl Greenburg, “Lexus looks for TiVo to up Commercial Viewing,” Brandweek 42 (46) (December 10, 2001): 28 “Toyota Lexus Top in U.S. Car Durability Study," Jui Press English ‘News Service (Novernber 16, 2001): 1 Anonymous, “Lexus Tops in Reteation,” Auromorive News 76 (5956) (November 5, 2001): 262.1 The Forecast Is Sunny for The Weather Channel! The Weather Channel, the first 24-hour all-weather net- Began broadcasting in 1982, it quickly became the ‘of mockery. “Many in the industry ridiculed us, sug that the only type of advertiser we would attract be a raincoat company or a galoshes company,” bers Michael Eckert, The Weather Channel's CEO. pondering where advertising support would come critics questioned what kind of audience was going to 40 a channel that boasts wall-to-wall weather, a topic is as interesting as staring at wallpaper. far, the answers to these questions have been quite Inits over twenty years of broadcasting, the channel ed support from a cadre of deep-pocket advertisers, Ginclude Buick, Motorola, and Campbell's Soup. In ‘Weather Channel reached more than 83 million U.S. ds and covered more than 95 percent of cable homes. on, their exposure goes beyond U.S. shores to reach houscholds in Latin America under the name, El el Tiempo, cording to The Weather Channel's vice-president of, ‘marketing, Steven Clapp, “There might have been 2 en people weren't willing to admit that they were “Now people are proud to say they watch us. Research we are (gaining ratings}, although i's dificult to 1" A major event linked tothe increase in popularity ork isthe extensive brand building effort that stated fing of 1995. Although some viewers will always see f as just a commodity, promise for making the on of weather forecasts into something brandable lies segment of “Weather-engaged” viewers, viewers in regularly and ones thatthe network wants to reach, Jknow that they can turn tous for quality forecasts and expertise. What we're trying to do is take it one step d emotionally bond with the viewer,” says Clapp. pth, a branding expert, agrees that branding the ps build stronger ties to viewers and advertisers pany's efforts have spanned from improving the products, extending The Weather Channel name to oducts, and a promotional blitz snetwork, whose slogan declares that “no place on better weather,” went beyond providing just expert forecasts to create lines of programming tailored to retaining viewer interest, The network uses a staff of more than 100 meteorologists to analyze National Weather Service data and prepare 4,000 localized forecasts. While these local reports are the channel's mainstays, new features have crept that have had the effect of stretching the average viewing time from 11 minutes to approximately 14 minutes, with some fanatical individuals watching for hours at atime. These new features act to expand what constitutes the channel's weather information and spark the interest of the average viewer ‘beyond the routine weather topics. For example, “The Skiers Forecast” spotlights conditions on ski slopes. The Weather Channel! has worked with the National Football League to prepare specialized game day forecasts. Playing off a recent upsurge in interest in the weather among audiences, the network has presented features such as The Chase, a program about people who chase tornadoes, and Forecast for Vietory, 8 ‘one-hour long show that looked at the role of weather in deciding significant battles of World War II. These features keep certain segments of the market glued to the station for more than just the weather forecast In order to create more brand awareness and to keep weather forecasts and weather updates as accurate as possible ‘The Weather Channel and the U.S. Navy teamed up to share information in 2001. The Weather Channel now has access to the Navy’s sophisticated technology in order to assist in predicting and presenting the weather. Also, in January 2002, ‘The Weather Channel became the weather forecaster for USA Today's domestic and international issues as well as for USAToday.com. ‘The two companies shared the weather coverage for the 2002 Winter Olympics in Salt Lake City ‘The Weather Channel worked to extend its boundaries beyond just the television format. Customized Weather Channel reports are available for over 30 online services, 250 radio stations, a hugely popular 900-number phone service, and 64 newspapers across the U.S.—all with The Weather Channel tagline or logo. Just recently, The Weather Channel began to offer wireless weather delivered to hhandheld devices. This project is in conjunction with Verizon, ATT, Sprint, and Palm Pilot. “If a consumer sees The Weather Channel name in the newspaper, that just reinforces 367the brand,” says Hayes Roth. In addition to these partnerships, The Weather Channel has worked to package weather in creative ways including books, home videos, calenda educational material for elementary schools, and a CD-ROM titled Everything Weather. In fact, after a hugely positive response on a test mailing, the network started a mail-order catalog of company-themed merchandise. One of the most widely popular line extensions is the company's web site, www: weathercom, which enables users to create personalized ‘weather page. In only 40 minutes after its launch, 1,000 users had already created a customized web page. In late 2000, Weather.com re-launched its site in an effort to refresh the look, feel, and organization of content. The goal is also to enable the site to accommodate more traffic and content, as well as incorporate database functions. Now, Weather.com is delivering even more-highly personalized Weather content. The re-launch is part of the site’s ongoing strategy to make the weather relevant. Its also a continuation of Weather.com’s positioning of itself as a lifestyle site. According to Debora Wilson, President and CEO of Weather.com, the company is going to launch new country specific sites to draw more of an audience. The company is hhoping the new sites, targeting the UK, France, and Germany, will help to boost online revenue. The company began launching the new sites in late 2001 and 2002. There has also been a report about Weather.com including a “portfolio of ssubscription-based services” on its site but Wilson declined to sive estimates of how this would affect revenue. In an effort to transform itself into a lifestyle destination Web site, Weather.com launched a 4-city test marketing campaign in 2001, that featured its first offline advertisement. ‘The test cities included Houston, Nashville, Philadelphia, and Columbus, Ohio. This campaign was expected to cost between $2 million and $10 million depending on the results from the test cities. Weather.com felt the need to explore advertising in different medias; therefore, their promotional test included offline advertisements from a variety of television, radio, and. outdoor sources. Additionally, Weather.com tested uncon- ventional ad schemes on dry-cleaner bags and packages of airline peanuts, Weather.com’s non-traditional campaigns featured such taglines as, “Forget about what they are wearing in Paris, think Anchorage” and “Don't you have your own Doppler?" Vice President of Marketing, Alan Kaminsky, said, “The test campaigns were a part of a larger strategy to give Weather forecasts a higher profile.” Even though Weather.com’s prot contributed to their overall strategy, the few problems to overcome despite their to branding expert Hayes Roth. He said, brand name but it’s boring as toast. They re Job of on-air branding. If you're surfing eb that you tend to flick by i.” Roth also sees that 4 cool or hip image. He said, “People MTV's logo because they've decided that it's don't know if people want to see The We their jacket.” Despite some gray clouds, We have a very sunny spot. The network has a audience, something of which other networks Furthermore, Weather.com really knows what ‘about, and that isa very marketable commodity. potential of owning the weather and could brand of weather. So watch out gray clouds, it and the forecast is sunny for The Weather Chi (QUESTIONS 1. Visit the Web site of The Weather Channel (wn¥ws ‘Write a report about te typeof information available 2 Identify other potential sources of information ‘weather, 3. Discuss the role of qualitative research in id sumet’s needs for weather-related information, Wi tive research techniques should be used? . Ifa survey were to be conducted to determine cons fences for weather-related information, which i method would you recommend? Why’? Can observation methods be used to determine con ences for weather-related information? IF so, which tional methods would you use? Why’? REFERENCES “E-Business: The Weather Channel, Inc, (September 10, 2001): 48. ‘Anonymous, “The Weather Channel gets Navy Data,” B ‘and Cable 131 (25) June 11, 2001): 67 Kim McAvoy, “Changing With the Weather.com,” Broadeé abe 131 (7) (February 12, 2001): 38-29. Keith Flamer “Eye ofthe Storm,” Broadcasting & Cable 130 (September 25, 2000): 84-86, Inernetweek 2.2 Who Is the Host with the Most? The once traditionally complacent hotel industry had to learn to market its services due to the increase in the number of hotels and the accompanying drop in occupancy rates. The hotel industry generated $110 billion in 2001, and every chain is continually trying to segment to gain a bigger share of the 368 market, Perhaps the most troublesome problem the industry faced is the ack of customer loyalty. Most hotels provide sim ilar facilities, and most customers do not travel enough to ree= ‘ognize distinctions between them. For this reason, many com= Panies opted to differentiate their hotels through multiple“or moving into different market segments. The continue to use broad market reach techniques, ay fe! that future success can be gained in target- segments of the market and catering to their needs the competitor. Three important segments that {importance for hotel chains in the 1990s are busi ers, scnior citizens, and extended-stay travelers portance of business travelers to more luxury has not gone unnoticed. Marketing research 75 percent of stays at these types of facilites are elated. It is, therefore, no wonder why certain gone out of their way to court business travelers. 1990, Marriott (www:marriott.com) began to offer designed to meet the needs of business travelers {eit that it could enter the moderately priced market ig business travelers with the Courtyard Hotel To better meet the needs of business travelers, installing high-speed Internet access in thet October 2000. Marriot also has an ExecuStay sdesigned for extended-stay business travelers. The 6,500 fully furnished apartment style units across d States. Finally, Marriot provides conference business travelers. These centers have stte-of-the- I communications equipment to give business ja mecting area away from the home office. e chains, like Holiday Inn, have made attempts at 4o-business marketing. Holiday Inn uses trade ‘marketing, and traditional media with a special sto penetrate members ofthe business sector five percent of our corporate marketing budget is for business-to-business.” says CEO Bryan Holiday Inn is also adapting rooms to make them ged to business travelers. Between 1994 and 1999, spent more than $1.5 billion on hotel renovations. ginents Hotels (www: sixcontinentshotels.com), the the Holiday Inn chain, offered its Crowne Plaza and Suites chains to appeal to the up-scale business d to compete with Courtyard Hotels. The company ‘name Holiday Inn for its middle-class image hotels mame Holiday Inn Express to compete with such B chains as Motel 6, Red Roof, Days Inn, Super 8, and odge. However, Holiday Inn still experienced es in differentiating its various brands, especially than one was located in the same city. In order 10 mers coming back to its hotels, Six Continental Started “Priority Club Worldwide,” which the calls the “world’s first and largest multi-brand hotel rogram.” Members of the club receive special as well as points anytime they stay in one of the Continental Hotels around the world. The points redeemed for free hotel stays, airline miles, brand ods, and vacation packages. During November 2001, Tnn held a “Next Night Free” promotion. This gave ‘chance to earn one free night for every night they up to five free nights! Holiday Inn held the gn to encourage travelers to stay at Holiday Inn or extended periods of time during the holiday season, Hyatt’s (www: yatt.com) research showed that 58 percent of business travelers were spending more time working in their rooms, and 72 percent stated that they felt pressure t0 show work while on the road. As a result, Hyatt began marketing its Business Plan program, which includes office style conveniences in the rooms such as complimentary local toll-free, and credit-card telephone access; and 24-hour printer, copier, and fax availability. Hyatt also offers its business travelers cutting edge technology such as high-speed Ethernet access and videoconfereneing equipment. In addition, a complimentary breakfast is provided to help business travelers stay productive on the road, In 2000, Hyatt ‘was on the forefront of developing faster, more efficient check-in options, which included 1-800-CHECKIN, allowing {Buests to check in to their hotel rooms in the U.S. and Canada by telephone. Taking advantage of this propensity, hotels have tailored their Web sites, facilitating online reservations and developing special advertising for this media. Firms are also attempting to address other needs of the traveler beyond just the work-related ones. When Hilton Hotels found that approximately 50 percent of business travelers suffer from some form of insomnia, the chain, in conjunction with the National Sleep Foundation, designed special rooms. The ‘Skeep-Tight Rooms project is claimed to provide the “ultimate sleep environment” and features top-quality mattresses, synthetic down pillows, a music system with a CD player all to soothe the weary business traveler to sleep and a clock and special lamp which gently awaken the traveler 30 minutes before commute time, Another segment of the market that hotel chains are courting are senior citizens. A study by RoperASW shows that the number of Americans over 50 will increase by 47.3 million in the next 25 years. In the United States alone, someone tums 50 every seven seconds. Marketing research also show that men and women over 50 travel more and stay longer in hotels than do their younger counterparts, spending, ‘more than $30 billion in travel in 2000 alone. Choice Hotels adapted accommodations for this segment in 1995 and continue to be successful today. Select Choice chains feature the Senior Room package in 10 percent of the rooms, which features comforts seniors indicated are similar to those in their own homes. Brighter lighting, large button phones, and standard TV remote controls are amenities that are intrinsic 10 these special rooms. Bathrooms were given special attention, featuring special lever door handles and grab bars, With these rooms generating $5 million in annual revenues, other chains are looking into addressing concerns of this segment. One aspect of catering to seniors that is gaining importance by hhotel chains is assisted living. Assisted living facilites, which are in the middle of the spectrum of independent living and nursing homes, allow seniors to live as they wish while Providing certain extra services such as meals and housekeeping. Hyatt, which operates Classic Residence facilities, and Marriott, which offers Brighton Gardens facilities among other operations, are leaders inthis segment. The fastest growing segment of the market, extended- stay travelers, has traditionally been the most neglected. In 3692000, extended-stay hotels comprised roughly 30 to 35 percent of the entire hotel market. Extended stay travelers are uests who wish to stay five days or longer and require special facilities, such as 24-hour staffed front desks and sometimes kitchen amenities. Unfortunately, demand for this type of hotel room far exceeds supply. In 2000, only 3 percent {0 5 percent of the lodging supply—or just more than 100,000 rooms—were dedicated to extended-stay facilities. In 2000, a study conducted by PricewaterhouseCoopers for Extended StayAmerica indicated that approximately 300,000 new rooms could be supported by the demand that existed. Hotel chains realized the missed opportunity, and ‘began pouring resources into developing and marketing these facilities. Marriot’s Residence Inn dominates the market, but ewer entrants to this segment are trying to capitalize on the ‘widespread interest in extended-stay rooms. In 1997, Holiday Inn launched a new extension, Staybridge Suites by Holiday Inn, specifically designed for this market. These suites feature such amenities as 24-hour self-serve laundry facilities, a 24-hour convenience store, high-speed Internet ‘access, a personal telephone number, and voice-mail box for teach suite. As of 2000, they had 25 successful new hotels and 25 hotels that were under construction. Holiday Inn's extension proved to be a success. Hotels are attempting to segment the market and offer ‘enhanced services to attract customers. For a hotel to be successful in attracting customers, it must be the “host with the most.” Marketing research will be a key driver for success in this industry QUESTIONS 1, entity some possible sources of secondary data for industry. What types of data are available on the Intemet? 2 The hotel industry has faced the woublesome problem of emtiation. Holiday Inn would like to undertake research to determine how it can differentiate itself f ‘competitors. What research design would you recommend? ‘3. What information is needed for Holiday Inn to develop a gram to differentiate itself from competition? . Design a questionnaire to obtain the relevant information, 5. What research design would be appropriate for monitoring ‘sumers" changing needs and preferences for hotels? ‘6. Marriott would lke to know what isthe best way tose hotel market. What type of research design would you ‘mend and why? REFERENCES Edward R. DeLome, “Hotel Industry Slowly Sees Light at the « Recession Tunnel," The Real Estate Finance Journal (Winter 2002): 36-37 Julie Forster, Andrew and Christopher Palmeri, "Making Hay itRains," Business Week January 14, 2002): 32-33 Eryn Brown, “Heartbreak Hotel," Fortune 144 (11) (Nov 2001): 161-165. Paul Davidson and Doug Carroll, "Marriott Chief Says Industry Is in Recession; Occupancy Rate Down, but Risen Since Sept 11." USA Today (November 20, 2001). Daniel Northington and Sheridan Prasso, “Holiday Inn Has Ticket.” Business Week (3720) (February 19, 2001): 16. 2.3 Candy Is Dandy for Hershey ‘The battle was on! Hershey and Mars, the two candy giants, dueling over the number one spot in the $73-billion-a-year ceandy industry. Hershey (www:hersheys.com) lost its throne in the early 1970s, and it took the company time to get back into the competitive arena. By 1985, however, Mars and Hershey Were the manufacturers of the top 10 candy bars, and together they shared 70 percent ofthe market. Cadbury held about 9 per- Cent of the market and Nestle only 6 percent. Then in 1988, Hershey acquired Cadbury and its share jumped from 36 per- ‘cent to 4 percent of the candy market. The addition of brands such as Cadbury Dairy Milk Chocolate, Peter Paul Mounds, ‘Almond Joy, and York Peppermint Pattie enabled Hershey 19 regain its throne in the candy market. ‘The late 1980s and early 1990s produced the introduction of such products as Hershey's Kisses with Almonds, Hugs, ‘Hugs with Almonds, Amazin’ Fruit gummy bears, and the Cookies ‘n’ Mint Chocolate bar. In 1994, Hershey Food Corp. celebrated its 100th year in business. In 1996, Hershey addressed its lack of strong showing products in the non- chocolate sector of the industry by acquiring Leaf North ‘American brand, which produces such strong sellers as Jolly 370 Rancher and Good & Plenty. Also in 1996, Hershey its low-fat Sweet Escapes line, which brought in over million in 1997. After problems in implementing @ new distri system in 1999, Hershey restored sales, market sh: ‘earings growth in 2000, marking its best year vol since 1996. For the fiscal year ending 2001, total sales’ $45 billion, which were 8 percent higher than the same! period for the previous year. As of 2002, Hershey dominating the candy market with a 30.3 percent share. The number two player M&M/Mars, Inc.’s share was 16.8 percent, while the number three co Nestle, had 6.3 percent of the market. The decisions past 100 years have been both diverse and profitable. Tables 1 & 2.) One factor that helped Hershey in their battle M&M/Mars was its excellent marketing research Hershey's research showed that the typical consumer ‘candy as a luxury good or as a self-indulgence. Bi these attitudes and beliefs, 70 percent of all candy sales attributed to impulse buying. In 1999, Hershey iFirst Hershey's Chocolate Bar is sold Hershey's Kisses are introduced Hershey's Milk Chocolate Bar with Almonds is introduced, Sales reach $5 milion Mr. Goodbar chocolat bar is introduced. ‘The Hershey's Krakel bars introduced Hershey's Miniatures are introduced. Milton Hershey dies atthe age of 88. Reese Candy Co., producer of Reese's peanut butter cups, is purchased Hershey purchases San Giorgio Macaroni Co, Hershey Chocolate Corp. changes its name to Hershey Food Corp Y¥ & S Candies, Inc,, manufacturer of licorice and icorce-type products such as Twizzlers and Nis, is purchased Luden’s and Sth Avenue trademarks are added through acquisition of the Dietrich Corporations confectionery operations, Hershey Foods Corp. acquires Peter Paul/Cadbury U.S. cunfectionery operations, Brands acquired include Peter Paul ‘Mounds and Almond Joy bars and York Poppermint Patties. Hershey's Kisses with Almonds ae introduced Fluid milk plant used to produce a chocolate drink is purchased, Hershey's Cookies ‘n’ Mint bar and Amazin’ Frit gummy bears are introduced, Hershey's Hugs and Hershey's Hugs with Almonds are introduced Hershey's Nuggets chocolates and Reese's Peanut Butter Puffs brand cereal are introduced Hershey launches the Sweet Escapes low-fat chocolate line. Hershey acquires Leaf North American brand 10 strengthen its non-chocolte lin. Reese's Crunchy Cookie Cups are introduced. Reese Sticks ar launched. Hershey's Bites are introduced in flavors such as Almond Joy, Reese's Peanut Butter Cups, Hershey's Milk Chocolate ‘with Almonds, and Hershey's Cookies and Creme. Hershey acquires the breath mint and chewing gum business of Nabiseo for $135 millon Hershey's Bites secured the #10 spot of 2000s Top 10 lis of best new product introductions. a Sy es enn cnt ne CE SENT] OGRA scp esc Base ‘Stan Gi PeRcENTAGe) | ‘A consumer's age was also shown to influence buying Saickers 10.20 habits. Market research also informed Hershey that the tenet 938 | opulent geting el ne 17st say 18D Maat ai feng pence 3 tae 3s ae he dona ee S| Rerun’ nth 19901 vas cong ew 30 age it Kat | group. For this reason, the candy industry decided to move wn a tcl ach ay-bum aa Fryar 200 aneege: the median age for Americans was 40. The National Hershey Almond 39 | Confectioners Association believes that as Americans get Crunch 3.33 older, they tend to favor the better things in life. Among these tiny ae, Te sa mat as foe ven be Pie wich uc sans he sent er eagle Pras 02 he str cagy fae cued? Adina xin marke She, Hey decile 6 Ect popped cnr Tie scer of tacoma fins poder nova Fr ean 198, Msi Bsc wes peas inereting he urcped Ress Nutageus any tr oes nly ee nd he a7p percent) __ 1990 2000 (Est) 3B percent 33 percent 2Bpercent 24 percent 24 percent 26 percent Candy Consumption by Age Gr ‘Ace Grour «1980, O-I7y ——46percent 18-Myrs 22 percent 35-45 yrs 20percent 464 yes 2 pereent —Spercent 17 percent staff showed consumers the name Acclaim typed on a plain white pioce of paper and asked them what came to mind, their biggest association was with the Acclaim automobile made by Plymouth, This showed marketers they needed to create a new name so they tested the name NutRageous, The name fit the product’s description perfectly! Introduced in February 1998, ReeseSticks combines three ingredients consumers love: Reese’s peanut butter, crispy wafers, and milk chocolate. ReeseSticks proved to be So successful that demand initially exceeded Hershey's ability to produce all the usual packtypes. “To appeal to adults with larger appetites, Hershey introduced the Kit Kat Big Kat in May 2000, This bigger version of an old favorite is two times as wide and three times as thick as one section of the traditional Kit Kat. To appeal to. children, Hershey introduced a new candy creation product called the Hershey's Candy Bar Factory. The product entered the market in June 2000, allowed kids to use their creativity and imagination to create their own, unique chocolate candy. For many reasons, Hershey, like its competitors, has been ooking toward the snack industry with the insight that sweets do not just consist of candy. Today's more sophisticated Consumers look at ice cream bars, cookies. and chocolate covered granola bars when they crave something sweet. In 1999, Hershey and Breyers Ice eream teamed up to launch 3 ‘wvo-item candy flavors line: Breyers Hershey's Milk Chocolate ‘with Aimonds Chocolate Ice Cream with Fudge Swirls, and Breyers Reese's Peanut Butter Cup Ice Cream with Fudge Swirls. Hershey has already entered the granola market with ‘New Trail granola bars, Hershey also produces other non-candy items such as baking chocolate and candy, chocolate syrup. chocolate drinks, ie cream toppings, hot cocoa mix, and peanut butter. They have also entered the non-chocolate candy market with their acquisition of Y&S Candies, which produces ‘Twizzlers and Nibs. In an effort to reemphasize the Twizzler band’s playfal qualities, a new campaign was launched during the spring of 2001. Commercials featured a 30-second, live- action spot, which marked a departure from 15 years of tinimated executions, The new Twizzler’s TWIST-n-FILL candy, introduced in June 2000, also emphasized Twizzler playful qualities. The candy combines flavors and is available i {wo combinations, watermelon/cherry and raspberry/tropical In late 2000, Hershey acquired the breath mint chewing gum business of Nabisco for $135 million. brands affected by the acquisition include Tee Bre Breath Savers Cool Blasts intense mints, Care’ff Stick’ ree, Bubble Yurn and Fruit Stripe gums. and Nak ‘gum factory in Puerto Rico, While candy is dandy Hershey, there is the shrewd realization that candy bars, ‘may not give the company its sweetest bottom line. QUESTIONS 1. Search the Internet and compile information related tothe market 2 Describe the kind of market research that could have led 10) introduction of Kit Kat Big Kat. Discuss the kind of res ‘esign that would be appropriate Describe the target audience for Kit Kat Big Kat. What ki information about their preferences, purchase intentions, iors, lifestyles, psychographies, and demographics had obiained? 1. Discuss the scaling techniques which should be used to ‘references, purchase intentions, lifestyles, altitudes, and ‘edge about candy. What isthe nature (nominal, ordinal, in ‘or rato) of information obtained from each of these scales? . Design part of a questionnaire that could be used to obtaia information. ‘What would be the best way to administer the question Which interviewing method shouldbe used? Why? Recommend an appropriate sampling technique For How should the sample size be determined? . Could the observation method be used to determine preferences fr different kinds of candy bars? Iso, which ‘ation method would you use? Why” REFERENCES Bill Sulon, “Hershey Foods Tops Candy-Selling Rivals” Ridder Tribune Business News (lanuary 19. 2002): 1 Stephanie Thompson, “Hershey to Tnerease Ad Budgets Brands,” Advertsing Age (72) 44 (October 29, 2001): Anonymous, “Rite Aid Names Hershey fo Supplier ofthe Year ‘Drug Store News (23) 15 (October 22, 2001): 26, Anonymous, “Hershey's Bites Make IRIs Top New Products ‘Gandy Industry 2 (February 2001): 1 ‘Anonymous, “Hershey Takes On Nabisco Mint, Gum BE ‘Candy Industry 165 (12) (December 2000): 1,2.4 Fragrances Are Sweet, But Competition Is Bitter ure fragrance industry has become a marketing war Every manufacturer is battling for its picce of market Inthe 1970s, fragrances ranked in the top 20 amon the highest dollar expenditures. However, by the mid they had dropped tothe top 50. As a result, manufacturers heavily on new product introductions to stimulate con- interes, sometimes atthe price of older brands. The num ‘new product introductions shot up trom 20-25 per year in ly 1980s to 30-40 in the mid 1990s, However, new prox!- 1rease total botle sales, Since 1981. items ction failed to ‘of women's fragrances in the United States tumbled 34 percent in total bottle sas. In the twenty-first century, the fragrance industry dnues to face rising price competition, price transparen fundamental changes in distribution. In 2000, the global for fragrances in seven countries was valued at imately $15 billion. The fragrance market is heavily sd by prevailing fashion trends and is characterized by level of brand loyalty. All ofthese factors contribute 10 limited growth prospects for the fragrance industry in the However, competition among fragrance companies still ues. Fragrance companies have to attempt to portray brand as a “dream in a bottle.” In 2001, fragrance ies spent a total of $46.8 million on advertising in an to portray the “dream-like” quality oftheir fragrance, ‘A major theme in perfume advertising is sex. The sales suggest that the sex angle did not have as much fas some fragrance makers had hoped. A report by itor in 2000, the London-based marketing research ancy, said that despite the fragrance industry's emphasis unisex products, the market has peaked and more tional, gender-specific fragrances are back in vogue. The titive nature of the industry forced several manufacturers lore new distribution outlets. One of these was the fore market (see Table 1). Consolidation among. nt stores reduced the number of distribution outlets fragrances. Marketing research indicated that drugstore ers were purchasing more non-drug items, such as sup and fragrances. Pharmacy and drugstore fragrance accounted for 47 percent of value share in 2000. fer, this is expected to decrease as competition from. chains becomes heated. Consumers between the ages and 60 were found to go to the drugstore for ptions more often than younger consumers, Women in 20s and 30s who had small children also made frequent fo drugstores. Women under 25, who accounted for 8 10 sent of fragrance purchases, preferred shopping for ees in drugstores to department stores. On the other women who were 45 and over, had high incomes, and jionary buying power purchased 33 percent of [oc7RBLE Sales Through Drug Stores Calvin Klein ‘Yoes Saint Laurent Estoe Lauder Chanel Hugo Boss Christian Dior Lynx Gillewe Series Coty Yoes Rocher Revlon Od Spice TABLE 2 Market Share of the Major Brands: 2000 Market Share (percent) __ 1. LVMH Moet Hennessy Louis Vuitton SA 2 LOwal SA 3. Estee Lauder Company, Ine 4. Unilever Group 5. Avon Products, In 6 Coty ne fragrances. These women generally bought from department stores. Apparel specialty stores had also gained attention, since their total overall sales increased at twice the rate compared to the increase in department and discount department store sales. The move to drugstore and discount markets has allowed fine fragrances to be available to more ‘consumers who are price conscious. However, it has also led toa lessening of the image of the fine fragrance. Since many brands are now available in multiple types of retail outlets, a ‘gap has been created for exclusive brands sold at a higher price in a limited number of stores. Table 2 lists the major ‘brands in terms of market share. Minorities represented another potential market segment ‘The spending of Blacks, Hispanics, and Asian Americans on perfumes is expected to grow at a much faster rate than the rest of the population. Due to a decline in the U.S. fragrance market, ‘marketers have chosen to tap into new markets such asthe LatinAmerican countries. Since Latin American countries continue to integrate with the global economy and the rise of Latin culture has increased worldwide, marketers thought these countries ‘would be a great growth opportunity, This attitude has been generated by overall market success posted by Peru, Venezuela. Argentina, and Chile. Datamonitor anticipated that through decrease in inflation, an increase in privatization, and lower existing trade barriers through bilateral and comprehensive wgreements, Latin American countries would continue to improve their economic stature and serve as a strong marketplace for fragrance in the future, In addition, the male segment is predicted to gain a stronger focus, Since the 1990 was the era of developing a positive image for the Female, itis believed that the next decades will be the era of developing a positive image for the male. Women’s fragrance sales had a total value of $478 million in 2000, As of 2008, the men’s market for fragrances was approximately half the size of the women’s market. There was an upswing in men’s fragrance use when ‘men’s lifestyle and fashion magazines first emerged. but this area of the market only grew by 1.3 percent between 1999 and 2000. Ithas been reported that around 30 percent of men receive cologne, aftershave, or other fragrance as a gift, and that 39 percent of men stick to one brand when purchasing a fragrance, In addition, 36 percent of men are reported 10 have ‘one brand of fragrance that they wear all the time. Another segment that perfume manufacturers cannot afford to overtook js the older American. By the year 2003, more than one-third of the population was over 50. In 2003, e-commerce in the fragrance industry tumed out tobe very promising and profitable for already existing brands and new brands that were otherwise unobtainable. Experts stuggest that fragrance marketers tie in e-commerce to boost brand recognition. However, fragrance marketers must realize the rise of the Internet has increased price transparency, which ‘makes it easier to shop around online forthe best bargain. Marketers must also increasingly Team the importance of marketing research, The keys to success have been in defining, the market, truly understanding the consumers’ preferences. creating a brand that consistently meets these expectations, and ‘communicating these brand attributes to the consumer. Beyond. discerning the popular trends itis important to match the brand image to the fragrance. Even the most brilliant fragrance will rot sel iF it does not meet the perceptions ofthe brands’ traits. Consumer testing is used to make sure that the product meets and has been increasingly vital tothe industry. A survey by the NPD Group found that women buy perfume instead of waiting for someone else to buy it for them, Among those who do use fragrances. 49 percent have purchased three or more bottles for themselves within the past, year. Likewise, the small boom in sales of perfume gift sets is largely duc to women buying these gifts for themselves. Due to these purchases, “most women who wear a fragrance ‘own six bottles of scent or more.” A 2002 study found that big names are increasingly important. To reinforce this idea, 63 percent of fragrance users admitted that designer sd their brand decisions. That was truer of women age 15 to 34 than their elders, who and celebrity names influen« remain “more loyal to classic scents, 374 Teday’s consumers have a diverse lifestyle and the goal fragrance marketers is to meet these very different needs. important trend is consumer interest in the innerirected sea for peace and relief from stress, There has been a distinct away from the heavy scents of the early 1990s toward fres lighter fragrances in the 2000s, Comforting home scents such vanilla, chocolate, and coffee ane becoming popular. The heal lifestyle (rend is still popular and scents such as flowers fits. which connote health and vitality, are popular. Quest fragrance supplier, is using the most up-to techniques to capture the scents in nature and turn them in invigorating body fi Meanwhile, consumers showing a renewed interest in glamour and dressing up for evening, To accommodate these differing lifestyles, consur are looking for fragrances that can accommodate the look or fe ‘of a particular day or evening. Brands that can offer a ge tude combined with an elegant luxury, and can succes ‘communicate and deliver on a popular image, will be profit Iti up to marketers to meet consumer expectations if they to revitalize sales in the next millennium and mask the bitter’ ‘of competition with the sweet fragrance of success. QUESTIONS Identity some possible sources of secondary data forthe srance industry. What sources can be located on the Internet how should an Internet search be conducted. Discuss the kind of market research fragrance manufac ‘could conduct to determine if there is a demand for a new ance Once an audience for a new fragrance has been targeted, kind of information is needed! about their atitudes, pref purchase intentions, behaviors, motivations, psyehog and demographics? |. Which techniques would you recommend for collecting information needed above? Discus. . Design appropriate scales for obtaining the fied above For marketing research project aimed at assessing the for anew fragrance, a junior analyst designed the enclosed tionnaire (Exhibit 1). Is this a well-designed questionna ot, ow could it be improved? ormation REFERENCES Peter Landay, “Euromonitor Finds ‘That Unisex Fragran ‘Losing Appeal,” Chemical Market Reporter 257 (10) 0 2000): 31, Mark Dolliver, “Taking Fragrant Matters Into Their Own, Adiweek 41 (50) (December 11,2000): 61 Bill Schmitt, “Making Scents of Demand and Technology Ts (Chemical Week (163) 43 (November 21-28, 2001): 36. Glenn Koser, “Retail Scents.” Global Cosmetic Industry ( (November 2001): 50. Anonymous, “Message ina Bote,” Chemist & Drugeist 2001): 40, Taylor Nelson Sofres,wirw:msafes.com, July 29, 2001—t0p) in pharmacie{you shop depart re whichone yu eg?” saonls are see dovtlaow ———daaree ly agree ly by one haf fg Dem ages ae erent : : 1 Caley enema grace gies moe Fences nay elisa tein in. Sony neve wees et now Sonny diag Sony ase seve devi kaow Strong dag 19, at the ues yo ok Fri 28, Are ou happy with be grams carey oa he mer2.5 Is Super Bowl Advertising Super Effective? About 140 million Americans and 700 million total global viewers tune in to Super Bowl Sunday, making the event fone of the largest occasions for home entertainment. Advertisi ing the Super Bow! is limited and Priced at a premium. The fight for the prime spots starts, months in advance of the actual airtime. In 1993, the cost for a 30-second time slot was a high $850,000, but by 1997 the cost had shot to $1.2 million for the same short time frame. In 1998, a 30-second spot during the Super Bowl cost S13 million. In 2000, a 30-second spot during the Super Bowl cost companies a record average of $2.2 mil: lion. Dot.com companies that have since failed or are strug sling to keep their heads above water purchased forty per ‘cent of the Super Bow! ad slots in 2000. For the 2001 Super Bow! XXXVI, the average rate for an advertising spot was approximately 2.1 million, In 2002, during Super Bowl XXXVI, Fox Network offered {60 commercial spots for a total of 30 minutes of advertising time. The average selling price for each 30-second spot was just under $2 million, at $1.9 million each, Companies who paid for commercial time during Super Bowl XXXVI included Anheuser-Busch, who purchased ten 30-second spots, PepsiCo, who featured one 90-second commercial starting Britney Spears, E-Trade, M&M/Mars, AT&T Wireless, Levi Strauss, Yahoo!, Visa, and fast food chains Quizno's, Taco Bell, and Subway are among others, Although Fox did end up selling all of the available ad spots, the network did not sell the final ad until the ‘Thursday before the game. There are several reasons for the selling delay and for the reduced rates i facing the “worst advertising recession in recent memory This caused companies to carefully monitor how they their advertising budgets and many decided that the money could be better applied elsewhere. Many companis advertise during other prime time events that were more alfordable. The average rate for a 30-second spot during the carly evening news in 2002 was $45,900, Even events such as the Golden Globes (estimated prive $45,000 per 30-second spot) the Grammies (estimated price $57,000 per 30-second spot), and the Academy Awards (estimated price $1.6 million per 30-second spot) offer companies ad time at lower rates, However, these events do not draw as many viewers as the Super Bowl. Secondly, the NFL, for the frst time, sponsored a pre-game show on the Friday night before the Super Bow! ‘Some companies, such as AOL Time Warner, Phillip Morris, Miller Brewing Co., and Motorola chose to avoid paying “television's highest commercial prices” and bought ad time for lower rates during the pre-game show. A final reason for lower rates and less marketer interest in Super Bow! ad time \was competition from the 2002 Olympic Winter Games. The ‘games began just five days after the Super Bowl and offe 17 days of events during which advertisers could bt commercial time. The average selling rate for 1 30-secot prime time spot during the Olympics was only $600,000, bargain compared to the Super Bowl. Is Super Bow! advertising worth the cost? For mi advertisers who bought time slots in previous games, answer was a resounding no. Nissan, Porsche, Fila, and 3 passed on the chance to advertise during the game. Accor to marketing consultant Jack Trout, the increasing rates buying Super Bow! ad time difficult to justify. Nis marketing chief Brad Bradshaw stated that although’ ‘company had intended to advertise during the game, ite to the conclusion that the resources could be better used sell its vehicles in other ways, In addition to the cost factor, many question wl effect advertising actually has on the audience. The pu of an advertisement is to inerease customer awareness f particular brand. For Super Bowl ads, however, the by name often becomes secondary to the commercial itself terms of viewer attention, Super Bow! ads have bec ‘events in and of themselves, with each firm trying to put the next earth-shattering commercial that will stir about the commercial itself. Ever since Apple comput classic “1984” ad, firms have been trying to top previ ids. Ad agencies and clients often seem to shoot ‘ads that are extraordinary for the sake of creativity than their intended purpose. with many attention-get promotions not translating into product purchases. It questionable whether brand name is retained, and so des having an incredible commercial, many advertisers" dollars possibly go into just providing new fodder for cooler conversation for the week instead of form lasting brand image in the minds of consumers. Wil new research into the effectiveness of Super advertising and its effect on consumers, many adver may be better off avoiding buying Super Bowl ad time abandoning the world’s biggest television audience. Some advertisers like Purina Cat Chow have t slightly different approach by purchasing airtime on the: directly following the Super Bow. They obtained airt one-sixth of the cost during the game and they believe they retain approximately 40 percent of the audience. advertiser got the biggest bang for the bucks: M& advertised during Super Bowl 2002, or Purina Cat advertised after the game? Without systematic mi research aimed at measuring Super Bowl adv effectiveness, questions such as these beg answers. It to be established that Super Bowl advertising is effective!What kind of research design would you recommend for mining the effectiveness of M&M/Mars’ advertising during the Super Bowl? If the research design involves a survey of households, whieh survey method would you recommend andl why? ‘What kind of measures and scales will you employ in your survey? ‘Can the observation method be used to determine the effective- ness of M&M/Mars advertising during the Super Bow!? If so ‘which observation method would you recommend and why? Which syndicated services discussed in the book can provide useful information? REFERENCES “Super Bowl Ads Sold Out,” CNNMoney (February 1, 2002) rmoney.cnn.com/2002/02/0 /news/wires/superbowl_ads_apy Vanessa O'Connell and Joe Flint, “Super Bowl Gets Competition,” The Wall Sreet Journal January 28, 2002): B1 “Super Bowl Veteran Serambling to Score,” The Wall Sireet Journal 237 14) Ganuary 19, 2001) BS. si