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Operations Management

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Ken Cardashian founded a new credit card company to compete with Visa & MasterCard. It is called the CARD.

Pre-approved invitations were sent to millions of Americans. To encourage individuals to use the CARD, fees were much lower than Visa and MasterCard. The marketing department also sent materials about the new CARD to businesses of every kind throughout the US. A main selling point to get the businesses to use the CARD was that the processing cost of the CARD to the business was lower than either VISA or MasterCard. Included in these materials were "We accept CARD" decals to be placed on or near the front door of the establishment, and on or near the cash register.

The CARD was widely accepted and used by individuals, but many businesses were not aware of the CARD. The Company hired employees to go to businesses and physically hand them the decals to post and explain the benefits of the new CARD. The employees were to contact the businesses between 8AM to 6PM.

After three months, the Company noted that the employees had an 8% failure rate of having the businesses post the decals and other materials. The Company also noted that 37% of the 8% failure rate was the result of failure to contact management/owner.

1 What is the problem faced by Cardashian?
2 What is the cause of the problem?
3 What are some solutions to the problem?
4 What is your recommended solution to the problem?
5 Defend your recommendation.
6 Would 6-sigma help solve this problem?

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Solution Preview

1. It appears that Ken Cardashian failed to reach the entire business community through the marketing techniques employed. As many businesses were still unaware of what the CARD was, businesses may not be willing to accept the CARD as payment for goods or services.

2. Market saturation is key on all levels when launching a new product or service. The goal is to reach buyers and consumers alike in order to create a curiosity and a need for the new product or service. Cardashian did not reach his entire target audience. On another ...