Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e
Back Matter Cases © The McGraw−Hill
Companies, 2002than price-oriented, and Jamie feels that they are doing a
good job on service—so he is concerned with how he could be
“different.”
Evaluate Jamie McCullough’s overall strategy(ies) and the
mountain bike proposal. What should he do now?Chemical International, Inc.Chemical International, Inc., is a multinational producer
of various chemicals and plastics with plants in the United
States, England, France, and Germany. It is run from its head-
quarters in New Jersey.
Kevin Duryea is marketing manager of Chemical Interna-
tional’s plastics business. Kevin is reconsidering his promotion
approach. He is evaluating what kind of promotion—and how
much—should be directed to car producers and to other major
plastics customers worldwide. Currently, Kevin has one sales-
person who devotes most of his time to the U.S. car industry.
This man is based in the Detroit area and focuses on GM,
Ford, and Chrysler—as well as the various firms that mold
plastics to produce parts to supply the car industry. This ap-
proach worked well when relatively little plastic was used in
each car andthe auto producers did all of the designing them-
selves and then sent out specifications for very price-oriented
competitive bidding. But now the whole product planning and
buying system is changing—and of course foreign producers
with facilities in the U.S. are much more important.
How the present system works can be illustrated in terms
of the approach Chrysler used on its project to design the
Sebring.
Instead of the old five-year process of creating a new auto-
mobile in sequential steps, the new system is a team approach.
Under the old system, product planners would come up with a
general concept and then expect the design team to give it
artistic form. Next engineering would develop the specifica-
tions and pass them on to manufacturing and suppliers. There
was little communication between the groups and no overall
project responsibility.
Under the new approach, representatives from all the vari-
ous functions—planning, design, engineering, purchasing,
marketing, and manufacturing—work together. In fact, repre-
sentatives from key suppliers are usually involved from the
outset. The whole team takes final responsibility for a car. Be-
cause all of the departments are involved from the start,
problems are resolved as the project moves on—before they
cause a crisis. Manufacturing, for example, can suggest changes
in design that will result in higher productivity or better quality.
In the Sebring project, Chrysler engineers followed the
Japanese lead and did some reverse engineering of their own.
They dismantled several competitors’ cars, piece by piece,
looking for ideas they could copy or improve. This helped
them learn how the parts were assembled and how they were
designed. Eventually, Chrysler incorporated almost all of the
best features into its design of the Sebring.
In addition to reverse engineering, Chrysler researchers
conducted a series of market studies. This led to the inclusion
of additional features, such as easier-to-read gauges, oil dip-
sticks painted a bright yellow for faster identification, and a
net in the trunk to hold grocery bags upright.21Chrysler also asked assembly-line workers for suggestions
before the car was redesigned and then incorporated their
ideas into the new car. All bolts had the same-size head, for ex-
ample, so workers didn’t have to switch from one wrench to
another.
Finally, Chrysler included its best suppliers as part of the
planning effort. Instead of turning to a supplier after the car’s
design was completed, the Chrysler team signed long-term
contracts with suppliers and invited them to participate in
product planning.
Most other vehicles are now developed with an approach
similar to this, and Chrysler is not alone in the effort. Ford, for
example, used a very similar team approach to redesign its
Taurus. And major firms in most other industries are using sim-
ilar approaches. A major outgrowth of this effort has been a
trend by these producers to develop closer working relation-
ships with a smaller number of suppliers.
For example, the suppliers selected for the Sebring project
were major suppliers who had already demonstrated a serious
commitment to the car industry. They had not only the facili-
ties, but also the technical and professional managerial staff
who could understand—and become part of—the program
management approach. Chrysler expected these major suppli-
ers to join in its total quality management push and to be able
to provide just-in-time delivery systems. Chrysler dropped sup-
pliers whose primary sales technique was to entertain buyers
and then submit bids on standard specifications.
Because many firms have moved to these team-oriented ap-
proaches and developed closer working relationships with a
subset of their previous suppliers, Kevin Duryea is trying to de-
termine if Chemical International’s present effort is still
appropriate. Kevin’s strategy has focused primarily on respond-
ing to inquiries and bringing in Chemical International
technical people as the situation seems to require. Potential
customers with technical questions are sometimes referred to
other noncompeting customers already using the materials or
to a Chemical International plant—to be sure that all ques-
tions are answered. But basically, all producer-customers are
treated more or less alike. The sales reps make calls and try to
find good business wherever they can.
Each Chemical International sales rep usually has a geo-
graphic area. If an area like Detroit needs more than one rep,
each may specialize in one or several similar industries. But
Chemical International uses the same basic approach—call
on present users of plastic products and try to find opportuni-
ties for getting a share (or bigger share) of existing purchases or
new applications. The sales reps are supposed to be primarily
order getters rather than technical specialists. Technical help
can be brought in when the customer wants it or sometimes
the sales rep simply sets up a conference call between Chemi-
cal International’s technical experts, the buyer, and the users
at the buyer’s facility.
Kevin sees that some of his major competitors—including
General Electric and Dow Chemical—are becoming more ag-
gressive. They are seeking to affect specifications and product
design from the start rather than after a product design is com-
pleted. This takes a lot more effort and resources, but Kevin
thinks it may get better results. A major problem he sees, how-
ever, is that he may have to drastically change the nature of
Chemical International’s promotion. Instead of focusingCases 731