Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e
Back Matter Cases © The McGraw−Hill
Companies, 2002Hydraulic garage jacks are larger than bumper jacks and are in-
tended for use in or around a garage. They are too big to carry
in a car’s trunk.)
As Tom Gaines became more enthusiastic about the idea,
he found that Metal Works’ engineering department already
had a design that appeared to be at least comparable to the
products now offered on the market. None of these products
have any patent protection. Further, Gaines says that the com-
pany would be able to produce a product that is better made
than the competitive products (i.e., smoother castings)—
although he agrees that most customers probably wouldn’t
notice the difference. The production department estimates
that the cost of producing a hydraulic garage jack comparable
to those currently offered by competitors would be about $48
per unit.
Victor Carrington, the marketing manager, has just re-
ceived an e-mail from George Daggett, the company
president, explaining the production department’s enthusiasm
for broadening Metal Works’ present jack line into hydraulic
jacks. George Daggett seems enthusiastic about the idea too,
noting that it would be a way to make fuller use of the com-
pany’s resources and increase its sales. Daggett’s e-mail asks for
Victor’s reaction, but George Daggett already seems sold on
the idea.
Given Daggett’s enthusiasm, Victor Carrington isn’t sure
how to respond. He’s trying to develop a good explanation of
why he isn’t excited about the proposal. The firm’s six sales
reps are already overworked with their current accounts. And
Victor couldn’t possibly promote this new line himself—he’s
already helping other reps make calls and serving as sales man-
ager. So it would be necessary to hire someone to promote the
line. And this sales manager would probably have to recruit
manufacturers’ agents (who probably will want 10 to 15 per-
cent commission on sales) to sell to automotive wholesalers
who would stock the jack and sell to the auto parts retailers.
The wholesalers will probably expect trade discounts of about
20 percent, trade show exhibits, some national advertising,
and sales promotion help (catalog sheets, mailers, and point-
of-purchase displays). Further, Victor Carrington sees that
Metal Works’ billing and collection system will have to be ex-
panded because many more customers will be involved. It will
also be necessary to keep track of agent commissions and ac-
counts receivable.
Auto parts retailers are currently selling similar hydraulic
garage jacks for about $99. Victor Carrington has learned that
such retailers typically expect a trade discount of about 35 per-
cent off of the suggested list price for their auto parts.
All things considered, Victor Carrington feels that the pro-
posed hydraulic jack line is not very closely related to the
company’s present emphasis. He has already indicated his lack
of enthusiasm to Tom Gaines, but this made little difference in
Tom’s thinking. Now it’s clear that Victor will have to con-
vince the president or he will soon be responsible for selling
hydraulic jacks.
Contrast Metal Works, Inc.’s current strategy and the pro-
posed strategy. What should Victor Carrington say to George
Daggett to persuade him to change his mind? Or should he just
plan to sell hydraulic jacks? Explain.Deluxe Foods, Ltd.*Jessica Walters, marketing manager of Deluxe Foods,
Ltd.—a Canadian company—is being urged to approve the
creation of a separate marketing plan for Quebec. This would
be a major policy change because Deluxe Foods’ international
parent is trying to move toward a global strategy for the whole
firm and Jessica has been supporting Canada-wide planning.
Jessica Walters has been the marketing manager of Deluxe
Foods, Ltd., for the last four years—since she arrived from in-
ternational headquarters in Minneapolis. Deluxe Foods, Ltd.,
headquartered in Toronto, is a subsidiary of a large U.S.-based
consumer packaged-food company with worldwide sales of
more than $2 billion in 1997. Its Canadian sales are just over
$350 million—with the Quebec and Ontario markets ac-
counting for 69 percent of the company’s Canadian sales.
The company’s product line includes such items as cake
mixes, puddings, pie fillings, pancakes, prepared foods, and
frozen dinners. The company has successfully introduced at
least six new products every year for the last five years. Prod-
ucts from Deluxe Foods are known for their high quality and
enjoy much brand preference throughout Canada—including
the Province of Quebec.
The company’s sales have risen every year since Jessica
Walters took over as marketing manager. In fact, the com-
pany’s market share has increased steadily in each of the
product categories in which it competes. The Quebec market
has closely followed the national trend except that, in the past
two years, total sales growth in that market began to lag.
According to Walters, a big advantage of Deluxe Foods
over its competitors is the ability to coordinate all phases of
the food business from Toronto. For this reason, Walters meets
at least once a month with her product managers—to discuss
developments in local markets that might affect marketing
plans. While each manager is free to make suggestions and
even to suggest major changes, Jessica Walters has the respon-
siblity of giving final approval for all plans.
One of the product managers, Marie LeMans, expressed great
concern at the last monthly meeting about the poor performance
of some of the company’s products in the Quebec market. While
a broad range of possible reasons—ranging from inflation and
the threat of job losses to politics—were reviewed to try to ex-
plain the situation, LeMans insisted that it was due to a basic
lack of understanding of that market. She felt not enough mana-
gerial time and money had been spent on the Quebec
market—in part because of the current emphasis on developing
all-Canada plans on the way to having one global strategy.
Marie LeMans felt the current marketing approach to the
Quebec market should be reevaluated because an inappropri-
ate marketing plan may be responsible for the sales slowdown.
After all, she said, “80 percent of the market is French-speak-
ing. It’s in the best interest of the company to treat that market
as being separate and distinct from the rest of Canada.”
Marie LeMans supported her position by showing that
Quebec’s per capita consumption of many product categories
(in which the firm competes) is above the national average30Cases 739*This case was adapted from one written by Professor Roberta
Tamilia, University of Windsor, Canada.