XAVIER UNIVERSITY

BHUBANESWAR
B.com/BBM
BATCH 2020-23/ SEM-I END TERM
Principles of Marketing
DURATION: 2.5 hrs
FULL MARK:40

Note:
 All questions are compulsory
 There are total 6 questions in 2 case studies
 Write your answers either on MS word file (font size-12) or in Pen- paper mode
 Word limit for each question: Max. 250 words

(25 Marks)
1. One Ford, One Big Turnaround
In 2006, as the United States was nearing one of the worst economic recessions in its history, Ford
Motor Co. was best known for big brawny pickups, gas-guzzling SUVs, and the all-American
Mustang. That year, Ford posted a $12.6 billion loss. In 2007, it posted a $2.7 billion loss, and U.S.
and global economies dove into a three-year recession. During that recession, Ford’s major U.S.
competitors (General Motors and Chrysler) suffered such losses that the U.S government gave them
massive bailout loans and both companies filed for bankruptcy. Ford, however, executed a series of
key strategic maneuvers, asset divestitures, cost-cutting initiatives, and layoffs to weather the storm
without bailouts. The result is a very different company and brand.
A major part of Ford’s strategy involved significant changes in the products it had to offer. For
years all the Detroit automakers had largely ignored the market for small cars, but the oil shock of
2008, increased regulatory pressure, and changing consumer demand made it clear that the focus
had to change. Understanding the shift in consumer demand when he became CEO in 2006, Alan
Mullaly started a massive consolidation of Ford’s product lines. One of Mullaly’s goals was to have
a stable of products clearly defined for each market segment around the world—small, medium, and
large cars, utilities, and trucks. Mullaly set a goal for Ford: reduce the existing 97 nameplates in its
portfolio to between 25 and 30 nameplates by 2013.
Mullaly began by selling off many of Ford’s non-core brands, including Aston Martin in 2007,
Jaguar and Land Rover in 2008, Volvo in 2010, and Mercury in 2011. Divesting noncore brands
allowed Ford to focus on recharging the Ford brand and making it great. For example, Mullaly
discovered that the once popular Taurus model had been discontinued because a weak design had
not been well received. Mullaly then asked his design team, “How many billions of dollars does it
cost to build brand loyalty around a name?” Because the Ford Taurus name had great brand loyalty
and name recognition, Mullaly immediately brought the Taurus back and set about reviving the
brand name with new cooler design, rather than lose the valuable brand equity.
Along with changing the Taurus, Ford revamped the Fusion and Focus lines and brought in the
Fiesta from global markets. The changes have reaped awards: Ford’s revamping of the Ford Fusion
resulted in the mid-size sedan being selected as the 2010 Motor Trend Car of the Year. The new
Fiesta was ranked number one by U.S. News Rankings and Reviews in the affordable small car
category at the beginning of 2011.
One way that Ford has been able to quickly bring about success is by building different
models with the same or similar excellent components all over the world. The Focus and
Fiesta lines use a single platform for each worldwide market. Ford will still offer five Focus
variants based on that one platform—four-door, hatchback, SUV, minivan, and commercial
vehicle. The cost savings allow Ford to produce hybrid and electric models more affordably.
In fact, the Ford Focus Electric, due out in late 2011, is one of five electric vehicles that Ford
intends to release over the next two years. Ford is also exploring alternative fuels such as
hydrogen and increasing the efficiency of existing gas and diesel engines.
But a vehicle is more than its engine, and Ford understands that the entire consumer
experience is what builds loyalty. Ford engineers invest great care and creativity in the design
and safety features of their vehicles. For example, the integrated tailgate step and assist bar
on Ford F-series trucks make it easier to climb into the truck bed. Ford’s curve control
technology in the Ford Explorer can automatically reduce the vehicle’s speed by 10 mph in
one second if it senses the driver is taking a curve too recklessly.
Now that the economy is showing signs of growth (though very slow growth), Mullaly is
confident that Ford will continue to produce solid profits and even improve on its
performance from the past year. And he believes in the new product strategy: “You make less
money on smaller cars, but we can make a return,” he says. This will certainly be key to
Ford’s continued success.
Question 1: What are some of the benefits Ford has achieved through reorganizing its product
line? (7 marks)
Question 2: Discuss the various product modifications that Ford made to the Ford Explorer.
(6 marks)
Question 3: What are some examples of Ford’s product line extensions? (6 marks)
Question 4: What are some examples of Ford’s product line contractions? (6 marks)

(15 marks)
2. Burger King
Having It Their Way for a Change
So how do you get your name out when you’re the number two burger joint in the country?
By the turn of the millennium, in the minds of many, Burger King had been relegated to
sitting the bench in the fast-food industry. And in a way, after having changed owners and
being rebranded so many times, it might come as no surprise. Then in 2003 Burger King
hired the advertising agency Crispin Porter + Bogusky, which brought on some major brand
changes for the fast food franchise. At the time, Burger King was viewed as a boring brand
with very little personality and identity. Crispin Porter + Bogusky quickly took steps to give
Burger King a new image, an image that would be fun and that people would want to be
associated with. Over the last few years, Burger King’s new advertising campaigns have
certainly caught people’s attention.
Attention, however, is not necessarily a positive thing. The Crispin Porter + Bogusky
agency has been known for edgy and controversial advertising and its work for Burger King
has been no exception. It certainly gave Burger King a new face. Early promotions included
Burger King’s “subservient chicken” Web site, where a man in a chicken suit sitting in front
of a video camera would respond to commands put in by viewers. BK spun off the
subservient chicken theme in 2005 with a faux metal band called Coq Roq to promote its new
Chicken Fries. The campaign included commercials featuring the band—a group of six
musicians wearing chicken masks—along with a Web site and music videos for four songs
singing the praises of subservient chickens and Chicken Fries.
If the name of the band itself did not set the tone (never mind the lead singer: Fowl
Mouth), the Web site launched with a photo gallery containing pictures of young women with
captions like “Groupies love the Coq” certainly did. The images set off a major controversy,
with many viewers claiming the images were demeaning to women and inappropriate for
children. The captions quickly came down. The company blamed the captions on
malfunctions in Flash and XML programming. The innuendo of Coq Roq was not an
anomaly in BK’s new advertising messages either; about the same time BK released a series
of commercials featuring former Hootie and the Blowfish front-man Darius Rucker singing a
rewritten version of the “Have it Your Way” theme song with suggestive lyrics while
traveling through a fantasy land of food and provocatively dressed women. Though
controversial, Crispin Porter + Bogusky was setting Burger King apart, and sales began to
improve.
BK’s advertising, however, has not just relied on sex to sell its products. While it has
established the 18- to 34-year-old male as a major target demographic, many of BK’s latest
advertising campaigns have been simply designed to surprise consumers and shake things up.
One of Crispin’s early moves was a resurrection of Burger King’s stale old mascot: the King.
But rather than give him a hip contemporary makeover, they kept the crown, red beard, and
kingly apparel topped with a creepy, smiling, immobile mask. The King has since been
featured in many of Burger King’s recent campaigns, such as their “Waking up with the
King” feature in which a confused young man wakes up to find the King in bed right next to
him. The King then gives him a breakfast sandwich. In 2007, Burger King launched its
“Whopper Freakout” hoax campaign, where they pulled the Whopper off the menu at a
couple of select Burger King locations and filmed customers’ reactions on hidden cameras.
In late 2008, Burger King advertisers stoked further controversy with their “Whopper
Virgins” commercials. The campaign focused around taste tests between the Whopper and
McDonald’s Big Mac similar to PepsiCo’s “Pepsi Challenge” against Coca-Cola, but as ever,
Burger King added a twist. Their ad firm hired an independent research team to perform the
tests among three separate people groups (the Inuit tribes of Iceland, the Hmong on Thailand,
and a group of rural farmers in Transylvania) who they identified as having no exposure to
either the McDonald’s or Burger King brands or marketing (or fast-food at all). The taste
testers appeared in their traditional garb, and according to the filming by the research team,
the majority choose the Whopper. And while the research team and the advertisers at Crispin
claimed that the project was undertaken with the utmost care and respect for the people and
their cultures, the ads (again) set off a flurry of controversy with accusations that Burger
King’s campaign was exploitative and culturally degrading.
Whether their advertising crosses the line or not, BK’s promotions have certainly
been successful. The Subservient Chicken Web site drew 439 million visitors, the Coq Roq
Web site drew substantial traffic as well, and the Chicken Fries proved a success on the BK
menu. When Burger King released an Xbox videogame featuring the King, the game sold
several million copies. Burger King caught significant attention with its latest stunt also,
titled “Whopper Sacrifice.” The campaign, featuring the tagline “Friendship is strong, but the
Whopper is stronger” was run on Facebook, where the company created an application that
would send out a message every time the user defriended someone. For every ten people
users defriended, BK offered them a coupon for a free Whopper. Shortly after the launch,
Facebook banned the application. BK responded by posting the following message on the
campaign’s Web site: “Facebook has disabled Whopper Sacrifice after your love for the
Whopper proved to be stronger than 233,906 friendships.”
Question 5: What do you think of Burger King’s advertising tactics? Is it OK to
attract new customers while alienating others? Is Burger King’s advertising ethical?
Explain. (7.5 marks)

Question 6: How did Burger King manage the negative publicity it received over the
content of its Coq Roq Web site? (7.5 marks)