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D. MKTG 444

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Question 1

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The service marketing triangle The service marketing triangle or the Service triangle as it is commonly called, underlines the relationships between the various providers of services, and the customers who consume these services. As the name suggests, the service marketing triangle can also be used to market the service to consumers. The marketing completely depends on the interaction going on between the customer and the service provider. We will look at each of these interactions in detail, and also read on how to market to your customer based on the interaction. There are 6 main relationships in the Service triangle. And based on these relationships, there are three ways to apply marketing tactics. a) Company to Customers - One of the critical thing is to communicate the service strategy to the customers. Most of the E-commerce companies are nowadays employed in convincing the customers to buy from their portal only. For this buying, they are communicating various service advantages which the customers have. Communication of the service strategy to customers is important to build the trust of customers and hence to convert the customers to be loyal to the company. b) Company to employees - Another important relationship in the service triangle is that between the company and the employees. Imagine an Airline where the flight attendants themselves are frustrated with the company. You, as a customer, will land up with the poorest services. Hence, training employees, building value and trust, and empowering employees are some of the ways that the company can make their employees a positive influencing force for the customers. c) Company to systems - To keep customers happy, efficient and productive systems need to be developed. Imagine your bank in the 1960's where everything was done by paper. If you wanted to transfer money, you will have to fill many forms, and the recipient had to fill many forms. Ultimately it was a tedious process. However, due to advanced systems, nowadays you can not only transfer money to others sitting at home, you can practically do 80% of the banking work sitting at home from your laptop. That's the importance of systems in a service marketing triangle. d) Customers to systems - Although building systems are important, these systems should be most useful to customers. Taking the same example of banking systems above, it is surprising that even today when you go to a bank, there is a queue. Look at retail stores. There's always a big line to check out. The interaction between customer and system is critical to build the service brand. Taking the example of E-commerce systems, when the customer is promised various service advantages, and when he fails to return a product due to system errors or logistics errors, he becomes dissatisfied with the service. For a company, it is important not only to build systems, but ensure that the systems comply to the customers and give excellent experience to customers. e) Employees to system - Not only do systems leave customers frustrated, they also leave the employees frustrated. Imagine a McDonald's where orders taken at the front

desk are not reaching the kitchen. Or imagine a service center, where although you have entered a grievance, the employee is not getting your complaint and hence not calling you. Ultimately it is the employee on whom you are going to get angry! In one of the consumer durable companies know, the systems were top of the line, but they had so many processes with regards to outstanding and inventory, that a simple order processing took 20 minutes. This same company had at least 1 lakh dealers and distributors. So imagine the continuous delay in order processing and the pressure on employees due to this system issue. The system was working excellently, but it was creating friction between the employees and the system. Both, Employee motivation, and the empowerment of employees depends on the type of system you hand over to your employees. If the systems are very good and your employees are able to make good use of it, you will get very happy and satisfied customers. Serv-uction model is used to illustrate factors that influence service experience, including those that are visible and invisible to consumer. It consists of Servicescape, Other Customer, Contact Personnel/Service Providers and Invisible organizations and system .Discuss the various gaps involve

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The TSL team agreed to a follow-up meeting within the next week. However, the team knew it would be difficult to decide on what price they would accept (if any). They worried that if they didn't agree to Target's suggested price that they would lose their chance to sell through Target, which would mean they would either have to find another retailer (and none were as large or important as Target) or give up on national retail, which accounted for 30% of all grocery purchases, including bars. Aboard the airplane heading home from the meeting, they pondered what made the most sense. Pricing was proving more difficult than they had anticipated.

Running Case Questions Does it make sense that TSL approached Target to begin with, given TSL's premium product positioning? Why would TSL consider Target as a retail outlet?

Do you think TSL would consider dropping the deal and forgoing a chance to end up on Target's shelves? Would this be entirely bad?

What information do you take from their analysis (as represented in the chart)?

Who is TSL's primary competitor for Target shoppers?

Do you think TSL should create a new or distinct product to sell through Target, and what are the pros and cons of doing so?

What price or package combination (number of bars) do you recommend for TSL given the scenario, and why?

Application Exercise Pricing is one of the most difficult marketing-mix decisions. In this case, the decision is complicated because TSL wants to increase distribution. Similar to most start-ups, TSL has discovered that it can be very difficult to refuse a customer, especially a potentially large customer, even when it puts pressure on profits and could have repercussions for the brand in the long run. So, given the team's challenge, we will enlist your help. Your task is to make a pricing decision based on some additional data. Create a spreadsheet to complete the following tasks:

Assume Target sells a box of four TSL bars for $4.99 and has a 20% margin (meaning they keep 20% of the $4.99 per box).

What is the price Target pays for each box to TSL?

How much does Target make for each box sold? (This is the unit contribution for Target.)

What is the markup for Target for each box of bars? For each bar?

If it costs TSL $0.55 for each bar in variable costs (all variable costs included), how much does TSL make per bar in-unit contribution? (Remember, Unit Contribution = Unit Price Unit Variable Cost.)

What is TSL's contribution margin? What is TSL's markup?

If TSL has $25,000 in fixed costs, how many boxes do they need to sell through Target to break even? (Remember, Break-Even Units = Fixed Costs / Unit Contribution.)

Written Analysis Report Template for Chapter 10 Running Case TSL: Pricing Under Pressure

MARK333 Introductory Marketing

Identify the strategic issues and/or problems.

Analysis.

Recommendations and action plan.

3James.com

a)What is an example of how the Dual worlds are converging

b) What are apps and why are they important?

c)Can personal privacy become a problem as the real and digital

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Impact of New Technology in the Picture Frame Shop As the owner of the picture frame shop, suppose you decide to rent a machine for $18.000 annually that will speed up the production of framed pictures. Using this machine, you simply key in the dimensions needed to automatically cut the frame, glass, and matting for any picture frame size. Automating the production process dramatically increases the output of framed pictures and reduces losses in miss-cut glass and mats.

This new technology increases annual fixed costs from $32.000 (dashed blue line AB in Figure 13-10A) to $50,000 . However, it has the benefit of lowering variable cost from $40 to $20 per unit. The variable cost with the new machine is depicted by the flatter orange wedge WZV in Figure 13-10B. Compare this to the variable cost without the new machine, the larger orange wedge CFB. Calculate the break-even point (1) without the new machine and (2) with the new

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A local dental practice decides to run a Groupon campaign. The campaign offered $335 worth of dental services (such as teeth whitening) for $165. For the total campaign, 235 coupons were sold. We estimate that 85% of the coupons will be redeemed, that 35% of the coupons will be redeemed by existing customers and that, on average, Groupon customers purchased 1.5 coupons. Let's assume that 20% of new customers come back after the Groupon coupon visit. The dental practice estimates its cost of goods sold to be 45%. Finally, the bill for the average Groupon customer was $390. The dental practice negotiated a 50/50 split with Groupon.

Calculate the revenue from the Groupon campaign.

The correct answer is 30.374

Can you please explain to me how that is the correct answer?