Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e
Back Matter Cases © The McGraw−Hill
Companies, 2002that the leading carpet and furniture stores in Petoskey always
recommend Kittany for preventive maintenance in quality
carpet and furniture care. Often Kittany is given the keys to
the area’s finest homes for months at a time—when owners are
out of town and want his services. Kittany’s customers are so
loyal, in fact, that Vita-Clean—a national household carpet-
cleaning franchise—found it impossible to compete with him.
Even price-cutting was not an effective weapon against
Kittany.
Sharon Bidwell thought that she knew the business as well
as Kittany—having worked for him many years. Sharon was
anxious to reach her $60,000-per-year sales objective because
she thought this would provide her with a comfortable living
in Petoskey. While aware of cleaning opportunities in busi-
nesses such as office buildings and motels, Sharon felt that the
sales volume available there was small because most businesses
had their own cleaning staffs. As Sharon saw it, her only op-
portunity was direct competition with Kittany.
To get started, Sharon spent $1,400 to advertise her busi-
ness in the local newspaper and on an Internet website. With
this money she bought two large announcement ads and 52
weeks of daily ads in the classified section—listed under Mis-
cellaneous Residential Services. The website simply listed
businesses in the Petoskey area and gave a telephone number,
e-mail address, and brief description. She put magnetic sign
boards on her truck and waited for business to take off.
Sharon had a few customers and was able to gross about
$150 a week. Of course, she had expected much more. These
customers were usually Kittany regulars who, for one reason or
another (usually stains, spills, or house guests), weren’t able to
wait the two weeks until Kittany could work them in. While
these people agreed that Sharon’s work was of the same qual-
ity as Kittany’s, they preferred Kittany’s “quality-care” image
and they had an ongoing relationship with him. Sometimes
Sharon did get more work than she could handle. This hap-
pened during April and May—when seasonal businesses were
preparing for summer openings and owners of summer homes
and condos were ready to “open the cottage.” The same rush
occurred in September and October—as many of these places
were being closed for the winter. During these months, Sharon
was able to gross about $130 to $150 a day—working 10 hours.
Toward the end of her discouraging first year in business,
Sharon Bidwell is thinking about quitting. While she hates to
think about leaving Petoskey, she can’t see any way of making
a living there in the carpet- and furniture-cleaning business.
Kittany seems to have dominated the market—except in the
rush seasons and for people who need emergency cleaning.
And the resort housing market is not growing very fast, so
there is little hope of a big increase in potential customers.
Evaluate Sharon Bidwell’s strategy planning for her new busi-
ness. Why wasn’t she able to reach her objective of $60,000?
What should Sharon do now? Explain.Republic Polymer CompanyGary Walden, a chemist in Republic Polymer’s polymer
resins laboratory, is trying to decide how hard to fight for the
new product he has developed. Walden’s job is to find new,
more profitable applications for the company’s present resin5products—and his current efforts are running into unexpected
problems.
During the last four years, Walden has been under heavy
pressure from his managers to come up with an idea that will
open up new markets for the company’s foamed polystyrene.
Two years ago, Walden developed the “foamed-dome con-
cept”—a method of using foamed polystyrene to make
dome-shaped roofs and other structures. He described the pro-
cedure for making domes as follows: The construction of a
foamed dome involves the use of a specially designed machine
that bends, places, and bonds pieces of plastic foam together
into a predetermined dome shape. In forming a dome, the ma-
chine head is mounted on a boom, which swings around a
pivot like the hands of a clock, laying and bonding layer upon
layer of foam board in a rising spherical form.
According to Walden, polystyrene foamed boards have
several advantages:- Foam board is stiff—but can be formed or bonded to itself
by heat alone. - Foam board is extremely lightweight and easy to handle. It
has good structural rigidity. - Foam board has excellent and permanent insulating char-
acteristics. (In fact, the major use for foam board is as an
insulator.) - Foam board provides an excellent base on which to apply
a variety of surface finishes, such as a readily available
concrete-based stucco that is durable and inexpensive.
Using his good selling abilities, Walden easily convinced
his managers that his idea has potential.
According to a preliminary study by the marketing research
department, the following were areas of construction that
could be served by the domes: - Bulk storage.
- Cold storage.
- Educational construction.
- Covers for industrial tanks.
- Light commercial construction.
- Planetariums.
- Recreational construction (such as a golf-course starter
house).
The marketing research study focused on uses for existing
dome structures. Most of the existing domes are made of
cement-based materials. The study showed that large savings
would result from using foam boards—due to the reduction of
construction time.
Because of the new technology involved, the company de-
cided to do its own contracting (at least for the first four to five
years). Walden thought this was necessary to make sure that
no mistakes were made by inexperienced contractor crews.
(For example, if not applied properly, the plastic may burn.)
After building a few domes in the United States to demon-
strate the concept, Walden contacted some leading U.S.
architects. Reactions were as follows:
“It’s very interesting, but we’re not sure the fire marshal of
Chicago would ever give his OK.”Cases 715