Case Analysis: Strategy Issues Of Soren Chemical Company Sample Paper

Introduction

Dependence on consumers’ behaviour and changes in the demand brings us to the question of not only how to choose strategy and tactics but how to combine all important and applicable features in one suitable plan for decisions and implementations. On example of Soren Chemical company it shown that the difference of targeted segment may create a major loses and question management team in how to identify problems, issues and modify the entire strategy of marketing plan (Rangan & Yong, 2011). Statement of major problems

Strategic Problem

The main goal of the Soren Chemical was focused on developing consumer brand. Wrong development of go to market strategy was the major problem, which resulted the failure in launching new product on the market. Tactical Problem

Identification of go to market approaches and correct combination can be achieved only through completed steps. Management team did not fully define the market value proposition. Marketing department did not evaluate full consumer based research before launching the product. They did not understand consumers’ needs and their demand behaviour(Rangan & Yong, 2011). As a next step, the exploration of distribution channels, was not fully accomplished because of limited knowledge about the targeted market. As a result the positioning of the product as well as distribution and pricing approaches were not suitable for that case. Identification of issues

In order to identify the major mistakes which have been done by management it is important to understand company’s vision and their main goal. Provided background of the company and information about the product Coracle introduced not only the vision of Soren Chemical but allowed to understand reasons behind the decisions of management team. Moreover, chronological presentation of steps applied by the marketing department of the Soren Chemical allowed highlighting of most important symptoms of failed launching. Identification of possible issues which occurred the problem to happen, will be the fundament for developing possible alternative approaches (Brown & Pope, 2008). Issue 1: Development of B2C

Soren Chemical had a success in B2B concept behind in their history; however company decided to invest in new products, which will target consumers directly. In order to develop the strategy of multi-branding through introducing new product company is required analysis of macro- and micro-environment, in order to identify consumers’ needs, evaluate competitors and analysis of other factors which may affect the process of launching the product (Rust, Lemon & Zeithaml, 2004). B2B experience provides Soren Chemical more strength in targeting new segment, because the company has already some knowledge of the market and environment. It is experienced with the product development and its distribution at some part. However, Soren Chemical did not use their experiences in gathering more research and exploration of consumers’ need and distribution channels specifics. Even though, they have proceed with survey later after failure. Moreover, it means that marketing spending were wrongly allocated and further financing is limited. Issue 2: PUSH vs PULL

As the main goal of the company is focused on developing their own brand which will be recognized by customers and will be asked they want to continue investing in new products which will be easier to position on the market. Application of Push or Pull strategies depends on different factors. Push approaches applied through positioning brand through encouraging distribution channels to push the product to consumers. This approach is more suitable for companies which have some control under the demand. It requires close relation with distribution channels and strongly based on supply system. While Pull strategy is more about advertising the product directly to consumers in order to build recognition of the product and pull consumers to purchase.

To increase the demand through Pull strategy it is important to totally understand the targeted segment needs and behaviour (Leiht, 2011). Marketing team of Soren Chemical applied Push strategy in order to differentiate the Coracle product, while the micro-environment analysis showed that competitors have around 15-20% of market shares each. This also negatively affected their further decisions in choosing promotion and pricing approaches. Issue 3: Sales Promotion Tool

As all other steps in marketing plan sales promotion also can be developed in different directions. Company may focus on customer or trade promotion as well as business promotion. Selection of one or the other direction requires to identify what are the actual promotion tools will be used. It includes targeted participants, identification of promotion size, conditions offered by manufacturer and the time frame of the whole promotional process (Hwang & Chi, 2005). Coracle’s main benefit of including and therefore replacing other products for clearing the water was the main idea of marketing message. The team have decided to announce this benefit on the package of the product, what refers to low cost customer promotion tool. At the same time the team also focused on trade promotion through providing product description to distribution channels in order to push it further to customers (Rangan & Yong, 2011).

However, Soren Chemical did not create any program of persuading the resellers to introduce the new brand and actually push it towards customers. As an evidence, the survey which was developed by marketing team of Soren Chemical showed that 70% of respondents were not informed about Coracle by wholesale distributors (Rangan & Yong, 2011). The problem of low sales was caused by applying low effective tools towards different targets. Issue 4: Pricing Strategy

Statistical results of water clarifiers showed that new product of Soren Chemical will give financial annual benefits comparing to other products. However, pricing strategy has to be focused not only customers’ benefits but also on distribution channels. As a result the price was too expensive to attract customers but not enough profitable for resellers to introduce the product. According to Porter’s model of pricing strategy, there are three approaches to develop suitable and competitive pricing for the product. Cost leadership approach, which focused on providing high quality product for a lower price in order to compete on existed market. Another strategy is focused on specific segment in which other companies would not compete. Refer to the pricing comparison of Soren Chemical and their main competitors; the product was positioned according to differential strategy. The price of 25$ per unit of Coracle product was much higher than its competitors (refer to the case study data) . In terms of customers perception this could differentiate the product and make it unique if the benefit was introduced to customers by retailers or distributors. Issue 5: Launching of the product

Apart from combining different approaches and techniques of choosing distribution channels or identifying the suitable price and others, period of time when the product should be launched is crucial. The company launched the Coracle during the fall 2006 while the season for this product starts in May. Launching the product at the period of time when the demand just declined had a certain effect on low performance of sales of Coracle. As it was too early to provide information to distribution channels or consumers, the effect of techniques and strategic approaches were negatively affected. Generation of solutions

Every case may include great variety of techniques and approaches applied through the marketing processes. Therefore, there can be found many high and low important issues which have to be analysed and modified in order to achieve set objectives. Importance of understanding macro- and microenvironment of the market is the key to identify the suitable combination of strategies for launching a new product (Rust, Lemon & Zeithaml, 2004). Solution 1

Alternative: Developed Research Scheme

Management team of Soren Chemical could focus more on research of the new market they move on. The team could conduct survey for consumers before launching the product. This would help them in retrieving more information about consumers and their needs. Therefore, go to market strategy could be modified before its application. Moreover, the survey could provide the information about the Coracle product. This could combine spending of R&D and promotion of the brand. Closer analysis of distributors and competitors would provide better understanding of pricing limits for the product. Solution 2

Alternative 1: Pull Strategy

The opposite of the decision that Soren Chemical took, is to apply Pull strategy through direct building the brand recognition and increase of demand. As the competitors are strong and it is hard to gain distributors interest in selling the product attraction of consumers’ attention is the key solution. Direct contact to consumers will not only increase sales but will give possibility to manufacturer to set up even higher price. This could be more expensive than working only with partners or distributors. However, considering the long-term goal of the company of creating a branded product these expenses can will bring more profit in future product launching on the base of the created brand. Alternative 2: Combination of Push and Pull Strategies

Refer to the sales results and all survey findings it can be concluded that marketing team does not a big financial recourses to develop solid Pull Strategy towards consumers in a short period of time. Therefore, as an alternative strategy is the balanced combination of Push and Pull approaches. It is based on accurate selection of information programs and promotional techniques towards consumers with a support of distributors and suppliers. These can be promotions for consumers via distributors and sellers, with negotiated benefits. Such approach will not create extreme increase in demand but it will create stable growth of branded product within consumers and distributors. Another advantage of combining both strategies is the more possibility for management team to adopt according to latest changes on the market and environment. Solution 3

Alternative 1: Customer Promotion Tool

Sales promotion of Coracle could focus only on customers in order to strengthen the Pull strategy. Highlighting the benefits of the product through the packaging as it was decided already. Moreover, they could provide samples, promotional products or advertising articles about launched product based on previous success in B2B. This would introduce the background of the company, create the trust of consumers and spread the benefits of the product within the targeted segment. The alternative provides more advantages in developing brand recognition and further brand equity. This tool can be strong for increase in sales if the segment analysis was done correctly and vice versa.

Alternative 2: Trade Promotion Tool

Marketing team could focus on distribution channels and encourage resellers to provide space on shelf and push the product to customers. However, to provide information about the product is not enough and company could negotiate conditions with distributors in terms of gross margin, which will interest them in carrying the brand further. Opportunity to negotiate is a positive side of the tool as both sides can obtain their objectives. Nevertheless, this approach may affect the price and therefore sales. Apart from this manufacturer could apply short-term incentives for resellers in order to motivate them to sell the product. These can be bonuses as in cash equivalent as well as in price reduction for future orders or simple brand item gifts (pens, t-shirts etc). Solution 4

Alternative 1: Differentiation Strategy

Soren Chemical could take the risk and increase prices so the distributors’ gross margin remains 20%. This would encourage them to push the product to consumers. If the brand is unknown, manufacturer is dependent on distributor, In order to differentiate the product on shelf. In case if consumers aware of the product their perception does not change because of the higher price as there is annual cost benefits.

Alternative 2: Focus Strategy

Company should focus on specific segment and entering the market with a high price for product which remains to be hard to compete. Taking into consideration the product launching failure, management team faces more expenses to be undertaken in order to bring the project to profitability. The price should be increased in order to rapid the return on investment. Moreover higher price will be a solution in interests negotiations with distributors and provide stronger differentiation on the competitive market. Solution 5

Alternative: Product Seasonality

Time framing of the marketing plan is an important requirement for achievement of objectives. Considering that high seasons starts in May, Soren Chemical should launch the product 2 months prior. This period gives

time to introduce the brand and product itself to consumers before season starts. At the same time there are consumers which are independent of seasonality and therefor may already purchase the product. This can already build some recognition and therefore interest of distribution channels by the time of higher seasonality. Recommendation and Implementation

The analysis of the applied strategy and tactics by Soren Chemical marketing department allowed highlight the major problems and issues that caused the dramatic law results of sales performance. Understanding of vision and goals of the company provided better understanding of reasons that stood behind the decisions and therefore allowed to critically evaluate these issues. In order to modify the entire go to market strategy it is important to observe different alternatives. Selection of most suitable strategies and tactics for the action plan will be linked to theories and supported by practical examples (Brown & Pope, 2008). Decision Strategy: What? Who? How?

Considering that the main goal of the company is to build recognized brand name through launching new product on existed market. In order to achieve objectives, company should identify what product they want to deliver and who is the purchaser. The most important is to identify the strategies and tactics you want to apply in action plan. Soren Chemical targets consumers to provide developed water clarifier product. Strategies for product promotion, distribution, pricing have to be chosen from possible alternatives and mostly suited for the current situation of modifying entire strategy of already launched product (Brown & Pope, 2008). Action Plan

Combination of Push and Pull Strategies

Alternative of combining both approaches is more suitable for this case as the company does not have a market share or recognized brand. Concerning the limited finance resources for modifications accurate selection of tools for both strategies will allow management team reduce promotion expenses and increase product value for consumers and distributors. It should start from introducing the product directly to consumers and following up with involvement of distributors in promotion to consumers. Such approach will provided growth of demand and distributors interests (Leiht, 2011).

Customer Promotion

Company should focus on customer promotion tools. Negotiations with distribution channels have a strong impact on price of the product which further can strongly effect the customers’ perception. Therefore, customer oriented tools are focused on development of the brand and actual demand on the market. Further development of the website will increase customer loyalty and simplify the way to inform consumers. Moreover, consumer promotion should be according to the target. It means to provide promotion not in general for all residential pools market but for separately for the owners self-maintained and maintained by professional services. This would help to deliver the use simplicity and cost benefits of the Coracle product. Direct promotion may be in the form Point-of-Purchase (POP) as demonstrations, samples. Involvement of distributors into these promotion programs can slightly cover trade promotion; therefore encourage distributors and professional services. This could be done on the contract basis of partner distributor. Manufacturer will distribute product only through chosen distribution partners what will automatically differentiate the reseller as the only chain who sells that product. This would encourage reseller to be involved in the consumer promotion programs in order to build its own brand and the brand of Coracle product. It is a creation of unit long-term goal for this partnership. As a result of it is fast-forwarding the growth and development of the brand. Focus Pricing Strategy

Recommended alternative solution for pricing strategy would be to focus on specific segment and highly differential price from competitors. Stronger input in customer promotion will build the customers’ expectations of the product which further will be supported. At the same time it will increase the gross margin of distributors and their interest in pushing the product of Soren Chemical instead of its competitors. Apart from this, pricing strategy should provide some flexibility to consumers. For professional services agencies that work for residential pool market would be designed separate pricing of products with discounts according to obliged minimum amount to be purchased. This will attract this segment as the annual cost would increase even more and provide the word of mouth promotion process.

However, the pricing strategy cannot be confirmed from the plan as there should be negotiated agreements with distributors. Timeframe and seasonality

According to the segmentation of consumers this will allow to separate the promotion in two stages before the season starts. Through the whole promotion program involvement of distributors and their contribution will support the growth of consumers’ interest and therefore demand. As for the pricing strategy, it can be overlooked according to changes in demand during the seasonality. This based on the actual product use. It refers to product use description and therefore replacement cycle. Short-term promotion program should be fully accomplished prior the season starts in order to adopt pricing accurately.

The complexity of the action plan requires full involvement of marketing department and partial participation of three major departments . These are: R&D department: to maintain the process. Especially this may occur in case of modifying the packaging in order to estimate suitable price for market (closely related to possible issues in negotiations with distributors). H&R department: in order control the labour force of promotion in terms of company vision and limited financial allocation for the project. Finance Department: involved in every decision making process of the developing and implementation of the strategy (as the project has failed before) Conclusion

The critical analysis of the case identified the problems and issues that caused it. Implementation of theories and flexibility of strategies allowed to provide recommendation for alternative action for go to market strategy for Soren Chemical. However, all these strategies cannot be observed separately as they are all linked between in order to obtain the set goals. Variety of combinations is the key instrument in marketing strategy (Hayes, Pisano, & Nichols, 2012).

References

Brown, G. F., & Pope, A. V. (2008). Get-to-Market Plans : From Strategy to

Successful Implementation. Retrieved from http://www.bluecanyonpartners.com/wp-content/uploads/downloads/2012/03/Get-to-Market-Plans.pdf BusinessPlanningHQ. (2013, 10 29). BusinessPlanningHQ. Retrieved from BusinessPlanningHQ: http://www.businessplanninghq.com Hayes, R. H., Pisano, G. P., & Nichols, N. A. (2012). MANAGING INNOVATION IN THE INFORMATION AGE THE FALL AND RISE OF STRATEGIC PLANNING. Harvard Business Review. Hwang, I., & Chi, D. (2005). Relationships among internal marketing, employee job satisfaction and international hotel performance: An empirical study. International Journal of Management, 22(2), 285–294. Retrieved from http://scholar.google.com/scholar?hl=en&btnG=Search&q=intitle:Relationships+among+Internal+Marketing+,+Employee+Job+Satisfaction+and+International+Hotel+Performance+:+An+Empirical+Study#0 Leiht, P. (2011). Balancing Push and Pull Strategies (pp. 1–2). Retrieved from http://www.justenough.com/thought-leadership/JustEnough-Thought-Leadership-Balancing-Push-and-Pull-Strategies.pdf Melillo, L. (2011, 10 28). Office Mocrosoft. Retrieved from Office Microsoft: http://office.microsoft.com/en-us/word-help/create-a-go-to-market-plan-HA001207235.aspx Rangan, V. K., & Yong, S. (2011). Soren Chemical : Why Is the New Swimming Pool Product Sinking ? Harvard Business School, 1–8.

Appendix

Business Process Table

Celebrity Endorsement On Consumer Behaviour: An Adidas Case Study

BACKGROUND & JUSTIFICATION

Research into the world of celebrity advertising sprang from the modern day phenomena of celebrity culture and the total incomprehension of its extent until I became a victim to celebrity endorsement without realisation of the occurrence. My purchase of a certain cosmetic item that’s allegedly worn by a Kim Kardashian triggered the idea of research into the world of celebrity advertising and its impacts upon consumer attitudes and spending.

Within a congested media environment where advertisers are faced by an increasing challenge of attracting consumer attention, celebrities seem to be the medium that possess have the ability to breakthrough this media clutter and hold viewers’ attention. (Dix, Phau, Pougnet, 2010). Hsu and McDonald (2002) also state that 70 per cent of Japanese commercials are celebrity endorsed, in addition, celebrity advertising increased from 15 to 25 per cent of total advertising in the United States between 1979 and 1997 alone. Hsu and McDonald, 2002). Adidas defines itself as the performance brand and the multi-sport specialists (Adidas, 2011) However, according to Pringle 2004, the brands celebrity marketing history began as early as 1986, when they saw the major hip-hop stars Run DMC performing their song “My Adidas” on stage, in front of fans who immediately responded by holding up their own Adidas Shoes. The brand reacted immediately and signed the artists to a $1. 5 million sponsorship contract. (Pringle, 2004).

LITERATURE REVIEW

According to Arnould, Price, Zinkhan 2002, Consumer behavior is defined as individuals or groups acquiring, using, and disposing of products, services, ideas or experience, also including the acquisition and use of information. Consumer culture refers to an organized social and economic arrangement in which marketers govern the relationship between meaningful ways of life and the symbolic and material resources on which they depend meaning refers to the value in use to the consumer. Arnould, Price, Zinkhan, 2002) Arnould et al 2002 also state that cultural meaning are not only connected to the product through text but also through persona ads, such as celebrity endorsers, advertising effectiveness depends on the credibility, trustworthiness, expertise and likeability of the endorser, he further states, the endorser develops a meaningful persona as a result of their past social context interactions, here, the endorser infers meaning from the culturally created world, such as Harrison ford’s heroic persona or Julia Roberts’s romantic persona.

As a result, in the endorsement process the cultural meanings move from the celebrity to the product, in the form of; speech, contiguity, closeness and similarity. Arnould et al make a final point of a previous study conducted where researchers found that the meaning connected to previously unendorsed products such as towels and DVD players changed dramatically when they were linked to Madonna and Model Christine Brinkley, However, although the meanings remains similar regarding the products, they differed significantly between the two celebrity endorsers. Arnould, Price, Zinkhan, 2002). “it appears safe to say that celebrities owe some of their effectiveness as marketing devices to their credibility and attractiveness” “for the models purposes, as long as the credibility and attractiveness conditions are satisfied, any celebrity, should serve as a persuasive source for any advertising message” (McCracken, 1989).

The quote mentioned above was Grant McCracken’s foundation for the his 1989 models that were the first approaches to understand celebrity endorsement, which are still referred back to today although heavily criticized in the late 80’s and 90’s. The Meaning Movement and Endorsement Process by McCracken 1989, is illustrated as Exhibit A, within the Appendix This Attractiveness and credibility models seem to be adopted by adiddas; “credibility and visibility through partnerships and icon is an important tool to drive market share growth” mentioned as part of the 2010 Adidas strategy.

Temperley and Tangen 2006, mention that a celebrity endorser is moderately more effective for products high in psychological or social risk, involving elements such as good taste, self-image and opinion of others, compared to a “normal” spokesperson (Temperley, Tangen 2006) Multi-celebrity endorsement’s refers to use of two or more celebrities in an advertising campaign’s, according to the attribution theory mentioned the research conducted by (Hsu and McDonald, 2002) individuals identify causality to certain events on the basis of their own behavior or the behavior of others.

In the context of celebrity advertising, a consumer may ask whether an endorser recommends a product because the endorser actually believes in the positive attribution of the product(internal attribution) or just because their being paid to advertise (external attribution), in particular, consensus is one of the attribution factors which refers to the consumers perception of whether other individuals, including other endorsers, view the product similarly to the endorser, therefore, using multiple celebrity endorsers creates a consensus that helps advertisers positively affect consumer perception.

In addition to helping create a positive image within consumer perception, using multiple celebrities in advertising represents a diverse mix in gender, type and age, which in return widens the appeal to wider audiences. (Hsu and McDonald, 2002) (Adidas, 2011) Football, is adidas‘ most strategic priorities, Being the most popular sport worldwide, football is clearly one of adidas’ key strategic priorities. Building on its success around major sporting events such as the 2010 FIFA World Cup, the brand strives to ncrease its strong market position by continuously creating the industry’s top products and fully leveraging its outstanding portfolio of sports marketing partners, and individual players such as the adidas Golden Ball and Boot winners of the 2010 FIFA World Cup Diego Forlan and Thomas Muller, and also Lionel Messi, Kaka, Steven Gerard, David Beckham and Michael Ballack. (Adidas, 2011) 2010 was the most successful year in adidas Football history due to the undisputable 2010 fifa world cup where adidas sponsored the the winning team, Spain.

As a result, adidas football sales skyrocketed to an all time high, exceeding 15 billion euros. (Adidas, 2011) The 2011 marketing campaign showcases adidas’ distinctive presence across different sports, cultures and lifestyles fusing the worlds of sport, music and fashion. Captured in their natural, authentic surroundings, brand ambassadors from football stars Lionel Messi and David Beckham to NBA star Derrick Rose and pop icon Katy Perry to the adidas skateboarding team and many more show that “when you love your game, whatever the game, you put your all into it. (Adidas, 2011) ‘From the court to the catwalk, the stadium to the street, we are giving an authentic statement with credibility only adidas has. ‘ (Adidas, 2011) 4. 0RESEARCH QUESTION In what ways does celebrity endorsement impact consumer attitudes towards the adiddas organization? 5. 0RESEARCH OBJECTIVES ?To examine adiddas’ history with celebrity advertising. ?To identify consumer responses towards adiddas’ celebrity campaigns. ?To investigate/analyse the overall effectiveness of celebrity advertising to the adiddas brand. 5. 1METHODOLOGY: RESEARCH APPROACH

The research approach that has been undertaken for this project will be an inductive approach. For the purposes of this research, it is believed that triangulation would satisfy the research objectives in the most effective and robust method. The data will be gathered and explored to satisfy the research objectives and the results will be explained to highlight the causal relationship. (Saunders et al 2007)

METHODOLOGY: RESEARCH STRATEGY

The strategy of this research will be conducted as a case study, in order to get the most effective understanding of the context.

In addition, a case study is better to suited as a strategy for the multiple sources required for the empirical evidence required to satisfy the research objectives. (Saunders et al 2007) As stated in 5. 1, a mixed method approach will be undertaken. An exploratory method would be used to explore the gathered data and, the results will be analyzed for the explanatory method in order to illustrate the causal relationship of the question. (Saunders et al 2007) This research will include a combination of primary and secondary data.

Various secondary data will be explored and examined in order to gain insight of the relative data. A combination of Questionnaires and interviews will then be used to broaden the scope of influx of information in order to prove the causal relationship of the explanatory method. (Saunders et al 2007) The secondary data to be used for the purpose of this study will include, Adiddas marketing campaign reports, consumer behavior models for contrast and comparison ad well as various journals and books.

DATA COLLECTION

Due to the approach of this research being inductive, a qualitative approach to research will also be performed in order to help build the theory to explain the current phenomena. Qualitative research is the best mechanism that can be used to understand consumer attitudes as a result of celebrity advertising. A qualitative approach will also bring to light, the consumers decision making process involved in purchasing a celebrity endorsed product, to infer what pushes a consumer towards a celebrity endorsed product at that time. Saunders et al 2007) The qualitative data collection methods shall be undertaken under the following guidelines: 5. 3a Questionnaires As questionnaires are not to be used under the exploratory research strategy, the questionnaire questions are to be based on the explanatory approach framework, and they will be structured to derive answers that would help establish the causal relationship between consumer attitudes and celebrity endorsement required for the explanatory research. Questions such as: •Do you believe most celebrity endorsed products illustrate brand loyalty? I. e. would you buy the product again)? •Would you purchase an adiddas product if it was endorsed by celebrities such as the singer Chris brown? (after his violent assault on then girlfriend, Rihanna) The research requirements have established the design of the questions within this questionnaire to ask mostly behavior variable questions; as the research objectives aim to infer consumer behavior and experience. There would also be an opinion variable presence within the questionnaire in order to establish consumer awareness of cultural celebrity influence.

Depending on the variety of questions within the questionnaires, the respondent’s response questions will vary from: (Saunders et al 2007) •Yes and No answers •Rating questions – Range from Strongly agree to strongly disagree •Category questions •List questions The questionnaire is to be self-administered, delivery and collection questionnaires. (Saunders et al 2007) 5. 3b Semi-structured Interviews Interviews will provide the appropriate medium for open ended questions as they cannot be conducted in questionnaires.

The semi-structured interviews will be the data collection method used for the purposes of the exploratory research for this study. The interviews will consist of exploratory and explanatory questions that may lead to answers to satisfy at least 1 or both strategies, as well as open windows to fresh point of views, opinions of which may have not been considered. As the interview is semi-structured, given the right sample of the population, the data could be tremendously useful, as it will cover a wider range of consumer behaviors and opinion.

The interviews would ask questions such as: •What was the last thing you purchased that was endorsed/advertised or used by a celebrity? •Who was the celebrity? What was your thought-process behind the purchase? •Do you believe a celebrity makes a brand more credible? Please give reason for your answer? •If you’re absolute celebrity role-model, or crush was endorsing adiddas, would that is a deciding factor in choosing to purchase a product in adiddas rather than their main competitor Nike?

Please give reasons for your answer To rule out any bias within the interview, questions such as the following will also be included: •Has celebrity endorsement of a product ever “put you off” or influenced you in a negative way towards the brand? Please explain your answer. The purpose of these interviews is to get the interviewees to express their thoughts behind the consumer spending made towards celebrity endorsed products and a reaction towards adiddas’ celebrity endorsement campaigns. All interviews will be conducted face-face in order to encourage free speech from interviewee to provide stronger evidence.

The interviews will be formal of the content being asked, however the atmosphere the interviews will be conducted in will be very informal in order to make respondents feel comfortable enough to express their true behavioral habits and opinions as consumers, this atmosphere will include the attire worn by the interviewer, necessary to keep within the informal atmosphere as well as friendly, approachable and relatable persona, also helpful to encourage honesty within both the interview and questionnaire. Saunders et al 2007)

SAMPLE SIZE

According to Dix et al 2010, celebrity endorsers such as athletes and film stars are most effective in influencing the attitudes of the market because they are respected by and are highly identifiable with young people, college and university students are a highly desired target market for sport marketers as they are most likely to have moderate levels of identification with a specific team or athlete and to be attracted to some specific attributes or elements in sport.

The information above states as the basis for the population of the research sample to be LJMU students, the sample shall be around 150 students of different backgrounds, studies, and fashion sense in order to get an extremely general scope for variation in answers. The desire for general variation defines the type of sampling required for this case study to be Non-Probability sampling. (Saunders et al 2007) A combination of Purposive and self-selection sampling will be best suited to this case study for the following reasons: •Purposive:

This method of sampling would allow the researcher free reign in selecting the cases that are best suited to the case and best to satisfy the objectives of the research. Although, the representation of this sample is said to be low, it is very much dependent on the researchers choices for this case study the choice made will be a typical case in order to focus on illustration. The low representation has also led to the option of another sampling technique to ensure a good representation: •Self-selection:

This type of sampling allows individuals to identify themselves voluntarily to take part; this is a great source of information as the data collected is a more dynamic response by individuals wanting to be heard and have something to say regarding the case. This combination of sampling allows a more representative sample and in some ways can cross-check themselves towards a unanimous objective. (Saunders et al 2007)

ACCESS & ETHICS

Access to students involved in the data collection samples will be as follows; •Made during a convenient and free time within the university but not in lectures or close to lecture times, •Not during high stress time such as end of semesters, during last week of coursework submissions or exams. •The sample will be conducted over a period of time in order to gain a variety in students participating. •Adverts will be placed on student message boards throughout the university advertising students for the self-selection sample, advertising the study along with a contact number and email address. Students required for the semi-structured interview will be asked in a variety of ways; in person, in student halls, through social networking sites, and emails An ethical approach to be undertaken during this research is as follows: •All questionnaires, and interviews are private and confidential, no names will be taken. •All participants of this study will be informed of what the purposes of the research are and the way in which the information they provide will be used. •A sensitive and ethical manner will be undertaken whilst collecting date on people’s personal consumer behavior.

TIMESCALE

Timescale: towards completed research project. DateMonth NumberTask Start October1Brainstorm any additional material e. g. 2012 adiddas reports End November2Collection and reading of literature Advertise self-selection sample for interview End December3Create questionnaire and prepare interviews End January 4Conduct Interview and administer questionnaire Data collected(secondary & Primary) analyzed and interpreted towards methodology and literature Mid-February5Further analysis and writing End-March 6Draft completed Mid-May8Draft Revised End-May8Submission Source: Saunders et al 2007 8. 0RESOURCES

This case study remains to be easily-resourced; •Financially: low budgeted only costs involve cost of printing and photocopying, which have been accounted for. •Data Access: should not cost anything as it is all student-to-student exchange of information and will not be a problem to access data. ?

APPENDIX

Exhibit A Source: Bing Search= www. tennismates. com, 2011 10. 0BIBLIOGRAPHY •Adidas. (2011). adiddas is all in – Launching the biggest marketing campaign in the brand’s history. Available: http://www. adidas-group. com/en/pressroom/archive/2011/14March2011. aspx. Last accessed 28th March 2011. •Adidas. (2011). Adidas Strategy.

Available: http://www. adidas-group. com/en/investorrelations/strategy/adidas/default. aspx. Last accessed 28th March 2011. •Ahn, S. Kim, H. Forney, J.. (2009). Fashion collaboration or collision? Examining the match-up effect in co-marketing alliances. Journal of Fashion Marketing and Management. 14 (1), 6-17. •Arnould, E. Price, L. Zinkhan, G. (2002). Consumers. New York: McGraw-Hill . 5-673 •Byrne, A. Whitehead, M.. (2003). the naked truth of celebrity endorsement. British Food Journal. 105 (4/5), 288-294. •Charbonneau, J. Garland, R.. (2010). Product Effects on Endorser Image. Asia pacific journal of marketing and logistics. 2 (1), 101-108. •Dix, S. Phau, I. Pougnet, S.. (2010). “Bend it like beckham”: the influence of sports celebrities on young adult customers. Young Consumers: insight and ideas for responsible marketers. 11 (1), 37 •Pringle, H. (2004). Celebrity Sells. West Sussex: John Wiley & Sons Ltd. 118. •Temperley, J. Tangen, D.. (2006). consumer self-concept, identity and involvement. The Pinocchio factor in consumer attitudes towards celebrity endorsement: an examination of a recent reebok campaign. 2 (2), 100 •Saunders, M. Lewis, P. Thornhill, A. (2007). Research Methods for Business Students. 4th ed. Essex: Pearson Education. 2-397.

Strategic Management Of The Smith Group

The Smith Group, a U.S. manufacturer of power and hand tools, is just one of many companies that has benefited from the implementation of a Vendor-Managed Inventory (VMI) system in their supply chain. IN VMI systems, the supplier; or in this case, The Smith Group, has control over managing the inventory levels at their retailers. However, in order to establish a VMI system it is necessary to have advanced technological capabilities. For many of The Smith Group’s existing customers, this does not pose a challenge. Unfortunately, some of the smaller distributors do not have the infrastructure to transmit the necessary data to carry out a successful VMI system. To combat this issue, The Smith Group has implemented a Kanban system with the distributors who are unable to support a VMI relationship. The Kanban system, developed by Toyota Motor Corporation in the late 1940s, is an inventory management system that uses a pull strategy to signal upstream when and which inventory needs replacement. The Kanban system is related to just-in-time production, meaning that little to no excess inventory is carried, rather, the inventory is manufactured and stocked exactly when it is needed. Prior to advancements in technology, the Kanban system used physical cards on each product that were collected and relayed to the supplier when sold. Once the cards were collected, the supplier knew exactly which products needed to be replenished at each retail location and could adjust their manufacturing and shipments accordingly. This process reduces the need for inventory demand forecasting on the supplier’s end as well as simplifies the inventory ordering process on the retailer’s end. By implementing this system, The Smith Group is able to better communicate about inventory levels with its smaller retailers, almost on a level that exists with their VMI system relationships.

When, for example, a certain power drill is sold at the vendor, the card associated with this product, which contains relevant information, is collected and relayed to The Smith Group upon the delivery truck’s arrival at the distribution facility. In contrast, a VMI or a modern Kanban system would deliver the information from the cards to The Smith Group via an electronic interface. However, since the smaller distribution centers do not have the technology requirements to do it electronically, the card system provides the next-best method. There are several direct benefits to using this system in addition to easing the inventory ordering and management. The Kanban system provides manufacturers direct access to customer demand trends. Thus, they are able to analyze and react to consumer preferences much more rapidly than in a push-based strategy. Particularly in electronics and technology sectors, this type of information is key to staying ahead of the game and eliminating the production of obsolete goods. Additionally, the distribution facilities are able to save money in several areas. For one, they can cut down on the inventory holding costs. There is also the possibility to reduce the size of the distribution facilities, since they would not be storing excess levels of inventory, which would reduce rent and overhead costs. The supplier is also able to reduce costs by ensuring that they do not produce large quantities of excess inventory that cannot be sold. Another advantage of utilizing the Kanban system is that it reduces waste, which is greatly beneficial to the environment. As with any method of supply chain management, the negatives must also be considered in addition to the positives. Since the Kanban system is not an electronic system, there is always going to be room for human error. One of these are manual entry errors that may cause a disruption in the manufacturing of replacement inventory. There is the possibility that either too few or too many products would be manufactured as a result of this human error.

Another example is lost cards that would result in not getting the product delivered when it is needed because there would be no recognized “demand” for it. By using the Kanban system, the lead time it takes for the delivery trucks to collect the cards that were detached from the sold inventory and transmit them back to The Smith Group would be higher than using an electronic system. If the data was transmitted automatically and electronically, The Smith Group would have much more rapid access to the information. Due to the fact that technology is ever changing and updating, other companies that use an electronic data transfer program could possibly get products to the distribution factory more accurately and in a timelier manner, which would result in more competition. Also by using this pull method, thereby reducing inventory at the distribution factory, there is a greater chance for stock outs if there is an unpredictable surge in demand for a specific power or hand tool. Finally, since The Smith Group is starting to use a made-to-order process, transportation costs may be higher because if their distributor’s inventories are lower and might need to be replenished more often, delivering their products may have to be more frequent. The Kanban card system implies that inventory is managed at a base-stock, or the minimal inventory level required to sustain continuous operations. This is due to the fact that the Kanban system utilizes a pull strategy as opposed to a push strategy. In a push strategy, the manufacturers must forecast future sales based on past trends. The manufacturer produces higher levels of inventory to send to the distributor to “push” the product to the consumer. Although there is a much lower risk for stockouts, the inventory and holding costs are higher. However, in a pull strategy, a company uses current trends and reacts directly to the products being sold and manufactures inventory replacements according to this. Thus, no—or very little—excess inventory is manufactured. Establishing the Kanban system and a pull strategy would give The Smith Group the ability to expand their current production into more customizable made-to-order production. Instead of the push system where they would make many power and hand tools to send to their distributors, the Smith Group would set up an additional communication network between the customers and themselves to analyze customer trends and decide how much of a certain product they will manufacture.

There are different levels of customization that The Smith Group could implement; they could simply produce a certain amount of products, and react to customer purchases and demand by making more of a certain item and less of another, which would be a very basic method of made-to-order production. However, they also could create a more advanced network to allow the consumers more levels of customization. Regardless of what level of customization The Smith Group wants to offer, this idea of made-to-order production is facilitated and simplified through the introduction of the Kanban pull strategy system. The implementation of the Kanban system allows The Smith Group to reduces its inventory and as a result, the distribution facility will also seeing a reduction in the amount of inventory it has to hold. A reduction in inventory will lead to excess storage space in the distribution facility. The distributor then has a variety of options as to what to do with the empty space. One option for the distributor would be to use a smaller facility, which would result in cheaper rent and overhead costs. Another option would be to lease out the extra space in their current facility is not using and generate additional revenue. Lastly, the distributor has the potential to establish new relationships with different manufacturing plants and use the extra space to hold and distribute some of their inventory. The Kanban system, which was developed by Toyota from recognition of the need for an improvement in customer driven inventory management, has provided companies with an extremely effective way of inventory management since its creation.

Although most modern Kanban systems have foregone the card system in exchange for a technology based communication method, similar to VMI, the same principles still apply. This system was particularly useful to The Smith Group and their small distributors because it allowed them to establish a pull-based strategy, which otherwise would not have been possible due to technology barriers. Without additional information about the costs associated with the implementation of the Kanban system, such as the initial costs, the possible increased transportation and manufacturing costs, and the reduction in inventory and holding costs, it is hard to provide a definite recommendation. However, assuming that the costs are not extremely excessive, we would highly recommend using a Kanban pull-strategy system. Particularly for The Smith Group, whose products are not greatly susceptible to drastic changes in demand, which is a major risk for pull-based strategy management, the advantages of Kanban seem to greatly outweigh the risks.

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