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Class Project: Case Study MKTG 4204: Consumer Behavior May 4, 2011 Jordan Siegel Natalie Suprise Emily Trexler Table of Contents Case A: Ben and Jerry: 1 A-1: The Company 1 A-2: Company Image 1 A-3: Promoting the Environmental Cause 1 A-4: Effectiveness of the Promotion Campaign 1 A-5: Using Music to Help Provide Aid in Sudan 1 A-6: Largest Baked Alaska for Earth Day 1 A-7: Taking on the Issue of the Decline of Family-Owned Farms in the United States 1 A-8: Other Elements of the Marketing Mix 1 A-9: Ben & Jerry's OriginalValues 1 Case B: BMW: 1 B-1 The Automobile Industry 1 B-2 The Company 1 B-3 Communicating Excellence at BMW 1 B-4 The BMW Driver 1 B-5 All Things BMW 1 B-6 Competition within the Luxury Automobile Segment 1 B-7 Targeting Lower-Price Segments: The MINI and the Certified Preowned BMWs 1 B-7a: A Truly Unique Car: "The MINI puts a smile on your face" 1 B-7b Problems with the MINI 1 B-7c The Certified Preowned BMWs 1 B-8 Recent Developments 1 B-8a: Buying Used BMWs 1 B-8b The BMW Virtual Showroom for Preowned and Premium Selection Vehicles 1 B-8c Financing Made Easier 1 B-8d A New Ad Campaign 1 Case G: Disneyland Resorts Paris: 1 G-1: The Challenge 1 G-2: Marketing Failure 1 G-3: New Strategy 1 Case I: S.C. Johnson Company: 1 I-1: The Company 1 I-2: Corporate Mission 1 I-2a: Family Values 1 I-3: Advertising Campaign 1 I-4: Packaging 1 I-5: Scrubbing Bubbles Automatic Shower Cleaner 1 I-6: S. C. Johnson Wins the Ron Brown Award 1 I-7: So' 1 Bibliography 1 Case A: Ben and Jerry: A-1: The Company Ben & Jerry's is a top maker of superpremium ice cream. Co-founded by Ben Cohen and Jerry Greenfield in 1978 in a renovated gas station in Burlington, Vermont, the company was bought by consumer products giant Unilever (http://www.unilever.com) in 2000. The company sells ice cream, ice cream novelties, and frozen yogurt with names such as Phish Food and Cherry Garcia. With markets including the United States, Canada, Mexico, and Europe, it also franchises or owns more than 230 Ben & Jerry's "scoop shops." Ben & Jerry's donates $1.1. million of pretax profits to philanthropic causes. The original owners, Ben and Jerry, took special pride in creating and testing original flavors, instead of allowing food scientists to do these chores. In testing those original flavors, the founders made sure that testers ate an entire tub before rating the taste. Ben & Jerry's ice cream stood out from a crowded field of competitors largely because of the personalities of the founders. In 1978, Cohen and Greenfield embarked on their mission to build an ice cream company by taking a correspondence course at Penn State on how to make ice cream. The same year, Ben and Jerry opened their first ice cream store in Vermont. In 1980, the founders began distributing their ice cream to local grocery stores. Four years later, Ben & Jerry's filed suit against Häagen-Dazs (and the parent company, Pillsbury) because Häagen-Dazs had attempted to limit the distribution of Ben & Jerry''s ice cream in Boston. In 1985, Ben & Jerry's built its ice cream manufacturing plant, established its headquarters in Vermont, and created the Ben & Jerry's Foundation. Nearly a decade later, in 1994, Ben & Jerry's began to distribute its ice cream (in pints) in the United Kingdom. Also in 1994, the company began a national search for a new CEO, doing so in a very innovative way. Ben and Jerry's held a "YO! I'm Your CEO!" contest, inviting 100-word applications from anyone interested. In 1999, New York University's School of Business ranked Ben & Jerry's as first for its stance on corporate social responsibility. In 2000, Unilever was successful in acquiring Ben & Jerry's. A-2: Company Image Ben & Jerry's Homemade, Inc., has an image of being independent, earthy, and hippie-like, an image ascribable to the company's founders, Cohen and Greenfield. Over the years, the founders made their brand of ice cream stand out by developing goofy flavor names (occasionally linked to their favorite musicians, such as Jerry Garcia and Phish) and through their stance on the environment. A-3: Promoting the Environmental Cause Although Ben and Jerry's has been sold to Unilever, the environmental cause remains linked with the brand name. For example, the most recent cause-related tie-in has been the Dave Matthews Band. Matthews has put his own "green" philosophy on the new flavor, One Sweet Whirled, a play off of his song "One Sweet World." The promotion campaign encourages the reduction of greenhouse gases. Marketers at Ben & Jerry's have held One Sweet World Interactive Events at Matthews' concert venues, offering tastes of the new product and giving information about how to help reduce global warming. The same information can be found on their website (http://www.onesweetwhirled.com). At the retail level, Ben & Jerry's is setting up "action stations" to encourage people to become active in the environmental movement. A portion of sales goes to a consortium called Save Our Environment, to green nongovernment organizations (NGOs), such as the Sierra Club (http://www.sierraclub.org), and to the World Wildlife Federation (http://www.wwf.org). To learn more about the consortium, visit its website at www.SaveOurEnvironment.org. It seems that Ben & Jerry's is countering the Bush Administration's stance on the environment. The Bush Administration has failed to sign the Koyoto Treaty, which puts pressure on governments to take measures to reduce toxic gas emissions. The same administration also has pushed hard to open the Alaskan National Wildlife Refuge to oil drilling, despite the fact that the majority of Americans wants a cleaner and safer environment. According to Gallup, 60 percent of Americans favor energy conservation, 72 percent support tougher auto emissions standards, 83 percent favor higher standards for corporate pollution, and 82 percent want tougher enforcement of environmental laws. A-4: Effectiveness of the Promotion Campaign Who buys Ben & Jerry's One Sweet Whirled brand of ice cream' Mostly young adults and the baby boomers. This ice cream is essentially flavored with caramel, coffee, and marshmallow. American Demographics (http://www.demographics.com) reporter Matthew Grimm believes that Ben & Jerry's environmental campaign is not making much of an impact because the message is not reaching mainstream America. He reports the results of a survey of the Gallup organization that tracked American consciousness of global warming. The survey results indicated that consciousness of global warming rose from a low of 24 percent in 1997 to a high of 40 percent in 2000, but then fell to 29 percent in 2002. September 11 and the economic recession made environmental issues still a lower priority in 2003. A-5: Using Music to Help Provide Aid in Sudan Jesse Brenner, a 23-year-old senior at Wesleyan University, studied abroad in Botswana in 2003 and came back determined to help people caught in the escalating ethnic violence in Darfur, Sudan. Brenner with his friend, Eric Herman, started Modiba Records, focusing on African music. The Afrobeat Sudan Aid Project (ASAP) is the label's first release, a compilation of African-beat music with 100 percent of the proceeds going to Kebkayiah Smallholders Charitable Society, a community group that helps the Sudanese find food and shelter. When Brenner approached Ben Cohen for startup funds, Cohen fronted Modiba the cash needed for production and legal costs (about $10,000), while Brenner secured the African artists through connections from his semester abroad and New York–based music organization Afropop Worldwide. Then iTunes, Apple's (http://www.apple.com) successful Internet music store, signed on as a pro-bono distributor. Within a week of the launch (in early December 2004), ASAP had already cracked the iTunes top 30 albums chart, sharing space with the likes of Shania Twain and U2. A-6: Largest Baked Alaska for Earth Day In 2005, Ben & Jerry's decided to do something about Congress' decision to open up the Arctic National Wildlife Refuge for oil drilling. The company created the world's largest Baked Alaska for Earth Day 2005, placing the 1,140-pound, 4-foot-tall dessert made from Ben & Jerry's Fossil Fuel flavor in front of the Capitol. What was the message' Drilling in the wildlife preserve would cause environmental damage. This event received more than 30 million media impressions. The cost of the event was a miserly $40,000. A-7: Taking on the Issue of the Decline of Family-Owned Farms in the United States Ben & Jerry's launched an ad campaign to address the hot issue of the vanishing family farm. In the ad, a farmer by the name of Mike Eastman speaks about his dairy farm in Addison, Vermont. The farm is operated by his family (he and his wife and children). His farm is one of the 520 farms in a cooperative that supplies milk to Ben & Jerry's. The ad addresses the reality that family-owned farms are losing business and government subsidies to large factory farms. Ben & Jerry's website and ice cream stores offer more information on how to help save family farms. A-8: Other Elements of the Marketing Mix | | | The company is implementing what it preaches to others. Ben and Jerry's is evaluating its refrigeration systems to reduce CO2 emissions, looking at alternative energy sources, and encouraging its own employees to buy and consume products in ways that can reduce CO2 emissions. Ben & Jerry's truck fleet uses clean renewable energy from Native Energy, a Vermont-based energy provider with methane-capture, wind, and solar projects. The company has also introduced a video game at www.lickglobalwarming.com. The video game is designed to motivate kids to make sound environmental decisions like recycling and driving a fuel-efficient car to win backstage passes to a Guster concert. A-9: Ben & Jerry's OriginalValues Many social critics are positing the question, "Can a large company take over a socially responsible small company and still act socially responsible'" Ben & Jerry's has been under Unilever's ownership for about 8 years. Does Unilever have the same ethical image as Ben & Jerry's' Are consumers even aware that Ben & Jerry's is no longer truly Ben & Jerry's' Does the change of ownership really matter' Can a smaller company built on a different set of values really operate comfortably as a multinational company' Ben & Jerry's relationship with Unilever remains an uneasy one. In 2005, a social audit highlighted poor morale among employees. Ben & Jerry's employees are questioning whether the company is simply a Unilever marketing operation that uses Ben & Jerry's reputation for social responsibility to promote sales. 1. One of the important consumer rights is the right to a healthful environment. Ben and Jerry’s is a company that advocates sustainable consumption. How does it do this' Read the section on consumer rights in Chapter 16 and discuss. Ben and Jerry’s has always been a company that wants to make a difference for the environment and therefore creates different programs or events that are dedicated to an environmental cause. In recent years, Ben and Jerry’s has worked closely with Dave Matthews, a performer who is well known for his cause-related work. The cause that they worked on together was to eliminate greenhouse gases. Ben and Jerry’s has done promotions in the past at Dave Matthew’s concerts by offering taste tests and teaching people on the dangers of greenhouse gas emissions. Also, the purchases of the “One Sweet Whirled” ice cream brand under Ben and Jerry’s donates some of the profits to “Save our Environment” under the Green Movement Organization (GMO). Ben and Jerry’s also promotes using fuel-efficient products and alternative energy sources. An aspect of the “Consumer Bill of Rights” is the right to a healthful environment. This right is defined as the consumer’s right to have legislation that protects public health in the areas of hazardous waste control, toxic substance control, and safe drinking water programs. The Department of Energy (DOE) encourages and funds social marketing campaigns to motivate conservation behaviors. The programs that the DOE discusses are energy-efficient appliances, encourage maintenance behaviors and change energy use. Ben and Jerry’s advocates’ sustainable consumption through the use of campaigns partnered with well-known companies and celebrities to help get the word out and to make the world aware of the problems we are experiencing. 2. Do you believe that business should be involved in advocating causes like sustainable consumption' How do you feel about cause-related marketing in general' Read Chapters 16 and 17 and discuss. We believe that businesses should be involved with advocating sustainable consumption, especially the well known companies, because they have a much larger reach than a local organization. Seeing a company go above and beyond just making and selling a product and trying to help make a difference in the world and promote those issues truly stands out to consumers. If a company such as Ben and Jerry’s is as successful as it is, than why not attempt to build awareness. It costs a lot of money to create these types of cause-related promotions and in the end they are not getting that money back like they are it normal sales. We personally believe that a company that advocates sustainable consumption will make me a loyal customer. 3. Do you believe that Ben and Jerry’s cause-related marketing campaigns are successful' Evaluate the company’s environmental campaign using the principles specified in the Communication and Persuasion chapter (Chapter 10). Ben and Jerry’s has worked to help provide Aid in Sudan by working with a new record company to promote “The Afrobeat Sudan Aid Project.” They worked with iTunes to help get the music out to the public with all profits going to the Kebkayiah Smallholders Charitable Society. Ben and Jerry’s also has worked on many other little projects. They once made the largest Baked Alaska and placed it outside of the Capitol to discuss how the drilling in the wildlife preserve in Alaska would cause environmental damage. They also give out information about the decline of the Family Farms in America and to help bring about awareness and show how they support them by purchasing their milk from these farms. Ben and Jerry’s have been very successful when it comes to promoting cause-related marketing. There are many things that this company does to bring awareness, but the most successful one is the fact that they are a credible source. Ben and Jerry’s “practices what they preach”. They clearly know what they are talking about because they not only give out information on how to make a change, but they themselves have made that change. Their messages are given through factual tone appeals which appeals to the consumer’s thinking processes and focuses on informational reasons to buy. Ben and Jerry’s partnership with Dave Matthews shows the marketing concept of course congruity which refers to the extent to which a celebrity who endorses a brand has a characteristic similar to that brand’s attributes. Finally, Ben and Jerry’s music to help aid Sudan shows the use of music to create positive feelings about the advertised product. Overall, we believe that Ben and Jerry’s has used many marketing concepts successfully to promote all the cause-related marketing that their brand does. Case B: BMW: | Bavarian Motor Works, or BMW, is a leading global manufacturer of luxury automobiles. A high-priced, high-performance automobile, the BMW has long been a status product for consumers worldwide. The "Beemer" for consumers in the United States, but pronounced "Beh Em Veh" by most consumers in continental Europe, this automobile is a legend of style and class. One of BMW's greatest challenges is retaining its leadership position in the luxury automobile market—a challenge recently compounded by the company's decision to diversify into the lower-priced automobile market. Recently, in one of its most daring moves, BMW successfully launched the MINI—a very non–BMW-like automobile and the progeny of BMW's ill-fated relationship with the British Rover group—which has become known as the most beloved British car. B-1 The Automobile Industry The boom in the global economy in the late 1990s, coupled with increased consumer confidence, led to high growth in the automobile industry. Vehicle manufacturers were under pressure as never before to increase production, and the globalization of the industry posed further challenges with long-term structural changes for the industry:   1. Mergers and other strategic alliances led to a diminishing pool of independent manufacturers in the industry. Ford (http://www.ford.com) and DaimlerChrysler (http://www.daimlerchrysler.com) are likely to acquire additional companies, leading to the projection that by 2005, there will be fewer than 10 international players in the automobile market. 2. The Internet is also changing many aspects of the automobile industry. Consumers increasingly use it to research features, specifications, styles, and designs of numerous makes and models. Most importantly, consumers can use independent sources to precisely assess dealer profit and bargain successfully on price, adding to the downward pressure on price that the industry is experiencing. In addition, many websites offer detailed information about specific models, and it is predicted that consumers will be able to circumvent dealerships and order automobiles from manufacturers via the Internet. According to J.D. Power and Associates (http://www.jdpower.com), 62 percent of new automobile buyers surveyed in 2001 in the United States logged on to the Internet for information on their prospective purchases. 3. Another structural change in the industry is attributed to the evolving technology. The industry has seen substantial growth in "telematics"—the technologies that keep drivers connected to electronic networks. 4. Finally, there is a rising trend of automakers establishing a niche in the marketplace. These automakers are relying on new categories of vehicles that will expand the overall market. Chrysler's (http://www.chrysler.com) new design, the PT Cruiser sedan, has proved to be especially popular, with demand exceeding supply. In the United States alone, sales of new cars and light trucks reached a record level of 17.4 million units in 2000—an increase of 500,000 units over the previous year's sales of 16.9 million automobiles. The U.S. automobile market is the largest in the world for passenger vehicles. However, with the downturn of the economy in 2001, sales volume fell 2.5 percent, to 16.92 million vehicles. Globally, sales of new vehicles worldwide have been projected to grow from 50.6 million units in 1998 to 57.2 million in 2005. In Europe, automobile sales for 2001 surpassed the 14.7 million units recorded in 2000. B-2 The Company Karl Rapp created BMW in 1913 as an aircraft engine design shop just outside Munich, the capital of the state of Bavaria, Germany. The name of the shop was Bayerische Motoren Werke (Bavarian Motor Works). At the end of World War I, German aircraft production declined drastically, and the company began producing railway brakes. BMW made its first motorcycle in 1923, and the company began making automobiles in 1928 after purchasing a small automobile manufacturing company. Larger automobiles were added to the product line in 1933, and in 1941, the company stopped automobile production to produce aircraft for the German air force. Following World War II, the production of automobiles and motorcycles resumed. For the remainder of the decade, the company expanded through acquisitions, and in 1986, it began producing luxury vehicles. Sales rose, and in 1992, BMW outsold Mercedes in Europe for the first time ever. Currently, the BMW headquarters constitutes a Munich landmark, reigning in its imposing three-cylinder building just outside the Middle Ring (the Middle Beltway) as the city's tallest structure. BMW Group products are currently in greater demand worldwide than ever before. The fiscal year for 2000 held the record for deliveries, sales, and profits, with net income recorded at $966.1 million. BMW pursues a premium brand strategy and concentrates on markets with above-average growth potential and high margins. With this strategy, BMW sales rose an additional 7 percent in 2001, and sales are expected to grow at a faster pace than the overall market because consumers who typically purchase luxury cars are not affected as much by recession B-3 Communicating Excellence at BMW BMW developed the Herbert Quandt Foundation to promote the company's social involvement. The Herbert Quandt Foundation fosters national and international dialogue and mutual understanding among business, politics, and society. In addition, the foundation organizes a range of important events to bring together the leaders of industry and society. BMW focuses on environmental sustainability, understanding that oil is a limited resource and other forms of energy need to be explored. BMW is currently introducing a new 7 Series powered by hydrogen, and uses much research and development to explore solar-powered alternatives. But BMW's social consciousness goes beyond the environment. In addition to traffic safety, BMW focuses on social development issues such as intercultural learning, sponsorship of gifted students, and other educational programs. In addition to its foundation, BMW spreads the word of its excellence in other forums. The company is present at the North American International Auto Show in Detroit and at the Frankfurt Auto Show. It also sponsors the BMW International Open, one of the most important golf tournaments; the BMW Golf Cup International; and is present in the Formula 1 Racing circuit. BMW has national websites in Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Ireland, Italy, Lithuania, Netherlands, Norway, Portugal, Russia, Spain, Sweden, Switzerland, and the Ukraine. It also covers 19 countries in the Americas, 3 in the Middle East, and 9 in Asia, as well as South Africa, Australia, and New Zealand. The company's website offers insights into its long-standing tradition of innovation and quality. Its site, www.bmwfilms.com, offers a display of quality in the form of five short films with action-packed mini plots. Its automobiles are placed in James Bond movies, and its "ultimate driving" message is widely known. BMW offers zero-percent financing and reasonable leasing structures to penetrate the lower-income market. Also, it prides itself on continuous customer service with credit, personal banking, credit cards, and insurance. BMW also offers a protection plan, certification, and roadside assistance on all new and used BMW automobiles for most consumers in developed countries. Finally, BMW facilitates buying by offering a program that allows the buyer to customize his or her own car on the BMW website and have it delivered without leaving home. B-4 The BMW Driver Although BMW has many different types of consumers, a certain type in particular tends to purchase its vehicles: upper-middle-class and upper-class professional males. However, BMW has recently seen an increase in female customers. Baby boomers are the primary consumers, as they tend to have the most money to spend. In fact, consumers in this group aged 35 to 44 account for more new-vehicle sales dollars than any other group. Over the years, BMW has sought to target young professionals who are well-educated college graduates. Recently, however, BMW has widened its target market. It now caters to single, male executives, to families with children, and to older couples. Also, with the addition of the 3 Series, it is attempting to attract the "20-something" generation. BMW's superior design and quality attract consumers who are very safety conscious, but who are also seeking the status of owning a BMW. BMW's sleek styling also attracts consumers who are style conscious. With the introduction of the 3 Series, a more affordable automobile, BMW has seen a decrease in the average age of its consumers. B-5 All Things BMW The company offers a full line of automobiles for a large variety of luxury market segments: It produces sports cars, family cars, performance machines, and a variety of noncar products. BMW's introductory automobile is a BMW 3 Series. The company has a 5 Series targeted at the mid-luxury market and offers a 7 Series for the high-end luxury automobile buyer. BMW also offers sports cars, sports-utility vehicles (SUVs), and other vehicles. The 3 Series BMW, the introductory automobile, is offered as a sedan, coupe, convertible, touring car, and a compact, with 4 to 8 cylinders and a choice of gas or diesel. Safety is also a key concern in any BMW car, and the 3 Series BMWs have a variety of safety features: special headlight adjustments, multiple airbags, and special braking systems. Manufacturer's Suggested Retail Price (MSRP) for these cars ranges from $27,100 to $42,400. A typical 3 Series BMW is a 325 Series four-door vehicle. The price tag of this car usually runs about $27,100. The BMW has as standard features a 2.5L, 6-cylinder, 184-horsepower engine with a 5-speed transmission; ABS brakes; front and rear antiroll bars; a multilink suspension; rack and pinion steering; front- and rear-vented brakes; 16-inch alloy rims; and a full-size spare. Standard safety features include side-impact bars, driving lights, a full gauge panel, multiple airbags, and a security system. The BMW 5 Series is the company's mid-price offering. A sedan and a touring car are the options available in the 5 Series. These vehicles are also offered with a 4-cylinder engine with a choice of fuel consumption. Safety and design are enhanced for this series. The sophisticated safety system includes crumple zones, airbags, and tire pressure controls, among others features. MSRP ranges from $35,950 to $39,450. The top-of-the-line BMW is the 7 Series. This high-end vehicle is available in an 8-cylinder, 6-speed transmission. Safety and the ultimate in luxury are the key components of this vehicle. The car comes with a sophisticated safety system that utilizes 14 sensors to maintain safety and comfort. MSRP for this automobile ranges from $67,850 to $71,850. BMW also offers a variety of additional vehicles such as sports cars and SUVs. The BMW Z3 is its sports car. The automobile is available in a coupe or roadster with a 4- or 6-cylinder engine. Safety features include impact safety absorbers, electronic ignition immobilizer, and smart airbags. MSRP ranges from $31,300 to $37,900 for this BMW. The X5 is the BMW performance SUV, available in the normal X5 and the X5 4.6is. The normal X5 comes with a 6-cylinder engine, while the X5 4.6 is available with a powerful 8-cylinder engine. Safety features include a high-impact body shell, head and side airbags, and a sophisticated braking system. The MSRP ranges from $38,900 to $66,200. The BMW Z8 is the ultimate in driving performance, offering the highest quality and performance of any of BMW's products. The car comes with an electronic-start 8-cylinder engine that is completely electronically controlled. This BMW is a high-performance computer-run car with an MSRP around $130,000. BMW also produces M Series stock vehicles with "muscle" as the main function. These high-performance machines are made especially for those individuals searching for very high performance, safety, and design. Suspension, wheels, brakes, exhaust, and engine components are all modified to increase performance to its highest level. The M series is available as an M3 coupe, M3 convertible, M5 sedan, M coupe, or M roadster. MSRP for these driving machines ranges from $44,900 to $69,990. BMW also has developed an array of other products in an attempt to decrease the cyclical aspect of automobile retailing and increase diversification. BMW offers 11 different types of motorcycles that are used for a variety of purposes: touring, racing, street, and off-road use. Prices range from $8,000 to $30,000. BMW also offers a full line of motorcycle and car apparel and accessories. Clothing, bikes, and other similar products are all offered by the company. The automobile manufacturer also offers financial services, BMW driver training, BMW international Direct and Corporate Sales, BMW ASSIST, and sponsorships. The company makes information available through products and services such as split-screen maps, digital road maps, and drivers' assistance programs. BMW also produces a C1, similar to a covered motorcycle, which is used in crowded cities to move in tight places. It is also involved in the comeback of the MINI as it reaches for world markets. B-6 Competition within the Luxury Automobile Segment According to numerous websites quoting comparisons between luxury automobiles with prices between $40,000 and $60,000, the BMW 5 Series lives up to the slogan "the ultimate driving machine." It is spacious, comfortable, responsive, powerful, and safe, yet its options are very expensive. In comparison, the Mercedes E class is more fuel efficient than the BMW; it is large, comfortable, among the safest in the automobile industry, and it handles well, although not in snow. The Lexus GS is also more fuel efficient than the BMW; it is comfortable, reliable, and quite luxurious, and it fits its slogan "passionate pursuit of perfection." It has rear-wheel drive, which requires getting used to, and its options are also expensive. For automobiles with a price range from $30,000 to $40,000, the BMW 3 Series is very responsive; it accelerates quickly and breaks well, has smooth steering, but also has rear-wheel drive, which may pose a challenge, and is quite loud. The Mercedes C class (http://www.mercedes.com) is less fuel efficient, but it provides a safe and quiet ride. The Lexus ES (http://www.lexus.com) has a firm front-wheel drive. It is luxurious, spacious, and reliable, but its extra options are expensive. In terms of market performance, BMW's sales rose 15 percent through November 2001, vaulting it into second place among luxury automobiles in the United States. BMW sales jumped over Mercedes-Benz, which now holds the third spot. Mercedes-Benz has been slumping since 1998, when the company completed its merger with Chrysler, forming DaimlerChrysler. Toyota Motor Corporation's Lexus currently holds the number-one slot in the U.S. market. There is fierce competition among the luxury automobile makers, and focusing on such factors as customer service, price, and new product innovations will help BMW outperform its competitors. B-7 Targeting Lower-Price Segments: The MINI and the Certified Preowned BMWs B-7a: A Truly Unique Car: "The MINI puts a smile on your face" With the March 2002 introduction of the MINI to the United States, BMW hopes to gain a share of the small and compact car market. Targeting a high-tech and high-style consumer, the MINI features heated mirrors, a computer navigation system, an air-conditioned glove box, rain-sensing windshield wipers, and an eight-speaker premium stereo. The very "Euro-looking" MINI also features bright, flashy colors and a hard top of a different color. The wide range of colors and options gives each owner the opportunity to personalize the vehicle. The BMW Group's 2000 Annual Report states, "Through the MINI brand, the BMW Group will further enhance its appeal to young and modern customers. With its emotional character, the MINI is tailored precisely to these target groups and meets the growing demand for premium offers also in the small car segment." The MINI has fared well in Europe. The drivers—typically young, urban, and trendy - find the MINI easy to drive and park in congested cities and appreciate the high kilometer to gasoline liter ratio. The MINI is quite small, under 12 feet long, and 4 feet, 7 inches tall; with its doors open, it is wider than it is long. BMW hopes to lure the same segment that Volkswagen did so successfully with its new Beetle. With the MINI, BMW hopes not only to woo new customers but also to bring back current owners of the larger BMW cars. "The MINI will give BMW Group an excellent position in the small car segment in the future, especially as a MINI is the ideal second or third car for the BMW driver and other customers in existing BMW segments." The price is right for many consumers at $16,850 to $19,850, less than half the price of a BMW. BMW sells the MINI through MINI franchises, which do not carry the BMW name; any dealers that are approved to carry the MINI must provide separate facilities for the automobiles. In addition, the car itself does not show the BMW logo but has a separate MINI logo. B-7b Problems with the MINI In an effort to reach bargain-conscious consumers, BMW provides the MINI at an exceptionally low price. Serious concerns have been raised about the quality of the MINI and the fact that it is associated with the BMW name. Brand name dilution may be a serious future concern. BMW owners typically desire luxury and status; however, with the MINI being so price competitive, it is possible that many who cannot afford to purchase a BMW will purchase a MINI to be a part of the BMW family of cars. On the other hand, "as a luxury brand, if you lower your price range, it gets more risky," says Wendelin Wiedeking, president and chief executive of Porsche AG. "Exclusivity is very much related to price." More problems with the MINI have arisen in the company's international markets. A recall of 500 MINIs took place after workers noticed sparks while fueling vehicles. More than 6,500 vehicles were retrofitted to correct the problem, costing BMW more than $508,000. These types of setbacks have the potential to inflict damage to a prestigious brand name. "People are watching the MINI launch very carefully," said John Lawson, an analyst at Schroder Salomon Smith Barney. "They need to be convinced that the MINI will be a high-quality product and will be sensitive to anything that suggests it is not." B-7c The Certified Preowned BMWs BMW has focused its advertising efforts on its Certified Preowned vehicles in 2002. The Certified Preowned BMW is given a warranty and a series of checks in order to be classified as Certified. With this new push toward selling used cars, BMW might again be risking a dilution of brand image with luxury-conscious consumers. Making the BMW name a more affordable prospect to more segments of the population may reduce the prestige and luxury appeal of a BMW. In addition, continuous advertising of a preowned vehicle can lessen the brand name in the eyes of prestige-conscious consumers. B-8 Recent Developments B-8a: Buying Used BMWs BMW has launched a new used car program, called "BMW Premium Selection," designed to ensure the quality of its used cars around the world. The program is an exclusive offer of approved used BMW cars—globally consistent, reliable, and with premium quality. The program is designed to provide peace-of-mind motoring when purchasing a used vehicle. A BMW premium selection vehicle now comes with a series of stringent checks for performance, reliability, and safety. B-8b The BMW Virtual Showroom for Preowned and Premium Selection Vehicles BMW now has a fantastic virtual showroom (http://www.bmw.com.ph). This website shows all the preowned and premium selection BMW vehicles currently available in authorized dealerships. Customers can easily access interior and exterior photos of each vehicle, as well as information such as mileage and price. There is a search function that helps customers streamline their choices based on price, model, or location. Customers may then contact selected authorized BMW dealers for a test drive. B-8c Financing Made Easier A car is the second most important investment consumers make after buying a home. Good investors always look for affordable products that do not have a too-rapid depreciation of market value. In this vein, BMW has recently launched a financing package that simplifies and promotes the financing of car ownership. B-8d A New Ad Campaign Recently, BMW commissioned a study of potential buyers in the $30,000 to $100,000 price range and found a surprising result, namely, that 75 percent of the survey respondents indicated they would not consider purchasing a BMW. Why' The survey indicated that potential buyers perceived the BMW as not doing well in snow conditions (because of its rear-wheel drive feature). Also, concerns about fuel economy and safety were expressed in the survey. In contrast to past ads that have shown BMWs driven fast, rounding corners, and touting the slogan "ultimate driving machine," the new ad campaign attempts to address consumer concerns head-on. 1. As you analyze this case, describe the segmentation and the targeting strategy used by BMW in marketing the MINI and the Certified Preowned BMW. Tip: select consumer behavior concepts and model from Chapter 1. The MINI is targeted towards young and modern customers. It is focusing on groups with growing demand for good offers in the small car segment. The drivers are generally “young, urban, and trendy,” people within cities. The MINI is trying to bring a newer demographic but also attract current owners of larger BMWs. The Certified Preowned BMW is focused on targeting those that need more affordable options in the car industry but want the prestigious label of BMW. This may diminish the brand equity of BMW but they are taking their effort and focusing it on a new segment. 2. How is the BMW positioned in the consumer’s mind' Describe the typical BMW driver using psychographic and demographic variables. What leisure activities does this driver engage in' what the driver’s hobbies' What magazines does the driver subscribe to' Tip: select consumer behavior concepts and models from Chapter 6. The BMW is positioned in the consumers mind as a classy and sleek automobile that is fancy but practical for everyday life. Even those that do not have the ability to purchase BMWs view the brand as luxurious yet not over the top. The company has worked hard to convey this image; they also utilize the image of the brand user. The typical BMW driver is upper-middle-class to upper-class professional males that are generally involved in the business industry. The driver engages in leisure activities like watching informative television programs and reading the newspaper. The driver’s hobbies are likely to be playing golf, attending performing arts concerts, and exploring vineyards. The driver probably subscribes to magazines like Newsweek, Time, and The New Yorker to stay informed. 3. What strategy suggestions would you offer to BMW to ensure that the MINI and the Certified Preowned BMW do not dilute the BMW brand' Tip: Select consumer behavior concepts and model from Chapter 7. We feel that BMW should take extra measures to ensure that the MINI and the Certified Preowned BMW do not dilute the BMW brand. They can do this by creating separate marketing advertisement campaigns. It’s important to cater to the different users of each brand. Because BMW and MINIs have different brand images, they need to guarantee they are not sending mixed messages to their target markets. We would suggest that BMW ensure that the MINI and the Certified Preowned BMW do not dilute the BMW brand by creating separate marketing advertisement campaigns. It’s important to cater to each different customer. They could have individual locations for each type of car so when the consumer goes to the location they feel comfortable and like they fit in. Keeping these varying styles of cars together may blend their target markets and cause confusion for the consumer’s who may think they are getting one thing while actually get mixed up into another. For example, if someone is going to buy a high class BMW and they see the Certified Preowned BMWs then they may feel that they aren’t getting their monies worth because people of lower status will be there. Consumers want to enjoy the entire experience and feel like they are getting what they’ve come for whether it is a reduced price BMW, a trendy and hip BMW, or a high class BMW. Case G: Disneyland Resorts Paris: G-1: The Challenge Disneyland Resort Paris was known as Euro Disney in its first incarnation on the European continent. After its launch in April 1992, many name changes were made with the purpose of distancing the company from bad publicity. After four different name revisions, the Disney Corporation has settled on Disneyland Resort Paris. The idea of expanding the Disney magic to Europe proved to be a project that involved more attention to marketing than even this advertising giant could handle. Many Europeans did not want the American dreamland to distract their children, economy, and country from their own homegrown successful entertainment. David Koenig, author of Mouse Tales: A Behind-the-Ears Look at Disneyland, commented, "To the Parisian intellectuals, Disneyland was a symbol of everything contemptible about America: artificial, unstimulating, crass, crude, for the masses. Yet here was a 5,000-acre Disneyland springing up half an hour from the Louvre." From the very beginning, the Disney Corporation had the best of intentions for its European operation. After a successful opening of Disneyland Tokyo, the company was ready for its next international challenge. The company believed that locating the theme park in close proximity to Paris, France, would both ensure growth for Disney and offer an opportunity for it to incorporate different European cultures. It envisioned a Discoveryland that incorporated the histories of European countries through its fairy tales: Italy for Pinocchio, England for Alice in Wonderland, and France for Sleeping Beauty's chateau. G-2: Marketing Failure As Euro Disney, the company failed in many aspects of its marketing strategy:   * Euro Disney failed to target the many different tastes and preferences of a new continent of more than 300 million people; addressing the needs for visitors from dissimilar countries, such as Norway, Denmark, Germany, on one hand, and Spain, Italy, and France, on the other, was a challenge. * Disney's high admission costs were 30 percent higher than a Disney World ticket in the United States, and the company refused to offer discounts for winter admissions. * Euro Disney ignored travel lifestyles of Europeans: Europeans are accustomed to taking a few long vacations, rather than short trips, which would fit with the Disney model. The company also neglected to consider national holidays and traditional breaks when Europeans are more likely to travel. * Its restaurants did not appeal to visitors. Morris Nathanson Design in Rhode Island was responsible for designing the restaurants for Euro Disney. The company designed classic American-style restaurants–American-style restaurants are considered by most Europeans as exotic and unusual; unfortunately, the Europeans did not respond well to this format. * Euro Disney assumed that all Europeans wanted gourmet meals, which is not the case. While French consumers tend to live a more lavish lifestyle and spend larger amounts for gourmet meals, many other consumers in Europe do not–especially when they have to also spend large amounts on air travel, resorts, and park entrance fees. Meal scheduling was also problematic: the French, for example, are accustomed to having all businesses close down at 12:30 for meal times, but the park's restaurants were not made to accommodate such larger influxes for meals, leading to long lines and frustrated visitors. Finally, Euro Disney initially had an alcohol-free policy, which did not fit with local traditions, where wine is an important part of the culture. G-3: New Strategy Disney's failed marketing strategy for Euro Disney led to below-average attendance levels and product sales; the park was on the edge of bankruptcy in 1994, with a loss per year of more than $1 billion. Changing strategies–as well as its name, to Disneyland Resort Paris–has recently led to increased revenues of more than 4 percent, with operating revenues increasing by $32 million to $789 million. Net losses have also decreased from $35.4 million to $27.6 million. With a full-scale change in the company's marketing direction, Disneyland Resort Paris has been successful in attracting visitors from many countries. Access was a priority for Disney. The company worked on access to the park via the fast train–the TGV; it also worked deals with the EuroStar and Le Shuttle train companies. Disney has worked deals with trains and airlines to reduce prices–a move that ultimately benefited all; the price for transportation to Disney has dropped by 22 percent since the park's opening. In 1992, the Walt Disney Company negotiated with Air France to make Air France the "official" Euro Disney carrier. For visitors from the United Kingdom, British Airways is the preferred carrier of Disneyland Resort, and British Airways Holidays, its tour subsidiary, is the preferred travel partner. Disney also adapted targeting strategies to individual markets to address the interests and values of different segments of European consumers. It placed representatives around the world with the task of researching specific groups of consumers and creating the best package deals for potential visitors; the new Disney offices were established in London, Frankfurt, Milan, Brussels, Amsterdam, and Madrid. Research results led to the tailoring of package deals that were in line with vacation lifestyles of the different European segments. In addition to the package deals, Disney offered discounts for the winter months and half-price discounts for individuals going to the park after 5:00 pm. To better accommodate its guests, Disneyland Paris revised its stringent no-alcohol policy, allowing wine and beer to be served at its restaurants. The resort hotels also lowered their room rates and offered less expensive menu choices in their restaurants. The restaurants created more suitable food options, catering to different regional European tastes, but continued to offer large American-size portions. Crepes and waffles are on the menu of almost every street stand in the park. Mickey Mouse and Donald Duck have French accents, and many rides were renamed to appeal to French visitors: in Adventureland, Le Ventre de la Terre (Galleries under the tree), l'Ile au Tresor (Treasure Island), La Cabane des Robinson (Robinsons' Cabin); in Fantasyland, Le Chateau de la Belle au Bois Dormant (Sleeping Beauty's Castle, rather than Cinderella's Castle at Disney World, United States), Blanche-Neige et les Sept Nains (Snow White and the Seven Dwarfs), Le Carrousel de Lancelot, Le Pays des Contes des Fee (the Country of Fairytales); and in Discoveryland, L'Arcade des Visionnaires, Le Visionarium (a time-travel adventure with Jules Verne), Les Mysteres du Nautilus (Nautilus's Mysteries). The French-named attractions exist alongside attractions such as Main Street U.S.A., with its Main Street Station, vehicles and horse-drawn streetcars, and Frontierland, with Thunder Mesa River Boat Landing, Legends of the Wild West, Rustler Roundup Shootin' Gallery, and other similar themes. The hotels also have more traditional American themes–New York, Newport Bay, and Sequoia Lodge. The park also has numerous attractions that appeal to European guests in general, such as Pinocchio's Fantastic Journey, and Cinemas Gaumont, which feature live concerts with performers from around the world. Along with creating an environment of greater appeal to European visitors, Disney changed the name of its resort to Disneyland Resort Paris. In its advertising strategy, the company decided to focus its efforts on brand building, initially targeting consumers with a new communication strategy implemented by Ogilvy & Mather Direct. Disney changed its advertising, aiming its message at Europeans who did not grow up with Mickey Mouse; in the park's new commercials, parents and grandparents are shown delighting in the happiness of their children and grandchildren. The advertisements feature "children impatient to depart for and thrilled to arrive at the Magic Kingdom or a grandfather delighted by his grand-daughter's excitement at the prospect of seeing Mickey; or grown-ups sitting tensely before riding on the Space Mountain." The park is also working with Red Cell, a leading Paris-based advertising agency, for all its television campaigns for the park's new attractions. Disney is capitalizing on its recent European success by offering yet another grand theme park adjacent to Disneyland–the Walt Disney Studios. Disney is attempting to promote Walt Disney Studios in a manner that would not cannibalize attendance at Disneyland Paris. Among its attractions are a Rock'N'Roller Coaster Starring Aerosmith, capitalizing on the U.S. band's success in Europe; Animagique; and Cinemagique. The park is dedicated to the art of cinema, animation, and television, and it focuses on the efforts of many Europeans who made it all possible to bring fantasy to reality. 1. How do the values and lifestyles of European consumers differ from those of consumers in the United States' Discuss the Disney failure to address European consumers’ preferences based on their respective values and lifestyles. Tip: Read Chapter 6 carefully. There are many different values and lifestyles between the European consumer and the American consumer. First, Europeans have different work schedules which mean that the times of the day for their meals are different. For example, European shops close down around 12:30, usually for 1-2 hours. Disney failed to recognize this difference which led to a huge loss in their food revenue department. A second difference is that Europeans incorporate more alcohol into their culture more than Americans do. This was a huge problem and a huge loss for Disney, when the restaurants did not offer alcohol on the menu since Europeans drink alcohol more casually than Americans. Third, Americans take more vacations, but they last for a shorter amount of time. On the other hand, Europeans take fewer vacations, but they last longer. What Disney failed to look at in this travel factor was the holidays and the traditional breaks that Europeans get throughout the year. Instead of heavily marketing those time periods, Disney spent more time looking at American’s travel periods which clearly has not affect over in Europe. Finally, Disney categorized all of Europe as having one lifestyle and set of values and created a theme park around what they believed Europe was. However, Europe is a continent with 300 Million people, 50 countries, and a countless number of religions, meaning that there is an infinite number of different lifestyles and values. Overall, Disney did not change much about the concept of their park from the parks already established in America. This was a catastrophic loss for their revenue in Europe because not only does Europe have a negative view about Americans, but they now have a negative view about The Walt Disney Corporation. 2. A large proportion of the park’s visitors come from Spain and Latin America. How can Disneyland Resort Paris appeal more effectively to this market' Design a new target marketing strategy aimed at the Spanish and Latin American market. Tip: Read Chapter 12 carefully. A large proportion of the park’s visitors are from Spain and Latin America. The values and lifestyles in these countries are very different from the rest of Europe. A new target marketing strategy aimed at the Spanish and Latin American markets can be focusing on Disneyland Resort Paris as a “Home Away From Home”. They need to market Disneyland as a family destination since Spain and Latin American cultures cherish spending the extra leisure time that they have with their families. Because they are skeptical about uncertainty, Disney’s promotions need to be direct and straight forward so that they know exactly what situation they are getting themselves in. If they are uncertain about Disneyland these cultures will avoid the situation, which could be a huge loss financially for the Disney Corporation. Disney should also offer locally made products within the park, especially in the section of the park that is about the Spanish culture. This will follow with the promotion of “A Home Away From Home”. Case I: S.C. Johnson Company: I-1: The Company S. C. Johnson, formerly JohnsonWax, is a private "family company." It makes and markets a broad array of household goods under the Fantastik, Saran, and Edge brands, among others. Beginning in 1886 as a parquet flooring company, the company earned a reputation for consumer-driven innovation through a product specially formulated to care for parquet floors—Johnson's Prepared Paste Wax. The company passed through five generations of the Johnson family. Today the company has more than 9,500 employees in nearly 70 countries. I-2: Corporate Mission The corporate mission is stated as follows:   Employees–We believe our fundamental strength lies in our people. Consumers–We believe in earning the enduring goodwill of the people who use and sell our products and services. General Public–We believe in being a responsible leader in the free market economy. Neighbors and Hosts–We believe in contributing to the well-being of the countries and communities where we conduct business. World Community–We believe in improving international understanding. I-2a: Family Values Family values are the kind of values that promote the propagation of families, family nurturance, and healthy communities. Families are said to make up the basic unit of society, not the individual. Social critics argue that many of our social ills (crime, violence, sexual promiscuity, and rampant materialism) are directly and indirectly related to values that promote the individual self over and above the family. Family values are the kind of cultural values that are high on the American list of ideal cultural values. Politicians tout themselves as standing up for family values. Churches, synagogues, mosques, temples, and other places of worship lay claim to the notion that family values are at the heart of good society, humanity, and the spiritual life. Companies that position themselves as representing family values are successful in creating an aura of trust and commitment. One such company is the S. C. Johnson Company. I-3: Advertising Campaign S. C. Johnson has run many advertising campaigns such as the Pledge Grab-It mop and Ziploc. One of their ad campaigns touts "family values" in which Johnson (great grandson of the company's founder and chief executive over the period of its great expansion) emphasizes the fact that the company is not only family-owned but also dedicated to serve the family. He says, "in many ways taking care of one's home is just like taking care of a family, and we've never lost sight of that." I-4: Packaging Not only does the company emphasize the notion that they are a family company promoting family values in advertising, but they also do so in packaging. The company's name is on the package of every product with the tag "A Family Company." Reinforcing the customers' image of S. C Johnson as a family company standing up for family values is a good marketing strategy. Grimm reports that the company's own consumer research showed 80 percent of Americans considered products from family-owned companies trustworthy, versus 43 percent who say the same of those from publicly traded companies. This image breeds trust, which, in turn, affects customer loyalty and commitment. More recent research conducted by S. C. Johnson showed that 62 percent of surveyed adults said their trust in large family companies has stayed the same during the recent corporate scandals and 21 percent said their trust has decreased. Compare these figures with public companies. The same survey showed that 33 percent said their trust has remained the same for public companies, while 61 percent said it has declined. I-5: Scrubbing Bubbles Automatic Shower Cleaner More recently, the company launched Scrubbing Bubbles Automatic Shower Cleaner. This gadget sprays the cleaner on the whole shower at the touch of a button. So far, sales reports show this product as the best-selling new product in company history. The product is promoted through TV and print advertising, extensive PR, and buzz marketing. I-6: S. C. Johnson Wins the Ron Brown Award The company won the Ron Brown Award for Corporate Excellence for its environmental programs. The award is usually given annually by the Conference Board (a New York–based nonprofit management organization) to companies for the exemplary quality of their relationships with employees and communities. The award was given based on the firm's "Greenlist" program, an initiative under which more environmentally sound raw materials are used in its products. The company changed the resin used to make its Saran Wrap plastic film for food, making it more environmentally friendly when the chlorine-based packaging is incinerated. Currently the company uses low-density polyethylene to make Saran Wrap. The switch was made in mid-2004. The award honors the late and former U.S. Secretary of Commerce Ron Brown. Secretary Brown died in a 1996 plane crash. I-7: So' The moral of this story is that the promise of a good brand is a reflection of the people behind it. Consumers make attributions about the quality of the brand and the company service aspects by their image of the people behind that brand, especially corporate executives. The more they feel they trust these people the more they feel the company products and services are of high quality and can be trusted to deliver on their promises. 1. Read the chapter on culture (Chapter 11) and discuss the S.C. Johnson case from that perspective. After reviewing Chapter 11 on culture and comparing it to this case, S.C. Johnson shows they truly understand American culture. With their advertising campaigns, products, packaging, environmentally friendly actions, this family company is giving the American culture what they want. With quality, trusted, and reliable household products, S.C. Johnson is taking part in thousands (if not millions) of American’s lives every day. These material artifacts are critical for day-to-day activities; for example, the S.C. Johnson brands Saran and Ziploc are used daily by countless people. Most importantly, S.C. Johnson continuously emphasizes they are “A Family Company;” they know that most Americans hold family at the highest importance in their set of values. This is very smart for S.C. Johnson because consumers feel a connection with them because their values are aligned. 2. Read the discussion pertaining to traditional and emergent American values in (Chapter 12). Comment on the effectiveness of S.C. Johnson’s advertising campaign. Chapter 12 discusses the values Americans have, both traditional and emerging values. S.C. Johnson has always highlighted the traditional values Americans hold very close including traditional family life, gender roles, high standard of living, and a “live to work” mentality. This has proven to be effective for them as a company, with several advertising campaigns that represent these values. However, as there has been a slight shift and emerging values are becoming more prevalent, S.C. Johnson may want to reconsider some advertisements. Perhaps they should use less stereotypical gender roles and begin to embrace alternative family options in ads and commercials. By doing this and emphasizing high quality of life, they may reach more Americans. It is interesting to see the values of Americans changing, but it will also be interesting to see if the values of this “Family Company” change, as well. 3. Read (Chapter 10) on communication and persuasion and comment on the effectiveness of the campaign. What changes would you recommend to enhance the effectiveness of the campaign' As we discussed Chapter 10 on Communication and Persuasion, we feel S.C. Johnson has an effective campaign. Through advertisements like commercials and print ads, they use subtle persuasion to influence potential consumers to purchase their products. Their ads have a high degree of message relevance, relating to most consumers that see their promotions. The integrated information-response model and hierarchy of effects models are both very prevalent in their advertising strategies; the end goal is to get consumers to use the product as a trial and eventually make a commitment by being a loyal customer. We feel S.C. Johnson could improve their effectiveness by improving frequency of advertisements. We have never heard of some of their brands, so in order to develop higher awareness for brands like fantastik and Nature’s Source. They could also increase the message size or duration. Lastly, we feel they could use a celebrity or expert to appear in advertisements for some of their brands. For example, they could pay someone like Bear Grylls (Man vs. Wild TV show) to endorse their OFF! Insect repellant. He has a high recognition and could be seen as a credible source. Bibliography: "Spain - Spanish Geert Hofstede Cultural Dimensions Explained for Espana." Geert Hofstede Cultural Dimensions. 2009. Web. 05 Apr. 2011. .