Assignment #1 - Market Segmentation and Product Positioning.
The student is required to prepare a research plan to support introducing the product and service for your original company's marketing plan to the U.S. market. In addition to stating your marketing objectives, the student is required to:
1. Identify the marketing segment for the product and explain why this segment was selected
2. Discuss the target market and why these customers will be targeted
3. Conduct a SWOT (strengths, weakness, opportunities and treats) analysis for the company
4. Describe the market position for your product and service.
Support your recommendations with at least two reference sources that discuss the nature of the product, use of market research methods related to the product, or considerations in conducting research.
1. The name of the company must be on the cover page of the assignment.
2. The assignment questions must be written as headings. The answer to the question must follow the question, and must be written in APA format.
3. The answers to the questions must be written in sentence format, be free of grammatical errors, and demonstrate a thorough understanding of the question topic.
4. The paper must contain citations.
5. The paper must have at least two reference sources, and one should be an industry reference.
6. The assignment must include a reference page.
This is for a hypothetical company... I would like the company name to be "The Hot Potato"
Mission statement "Our mission is to have a healthy food selection coupled with efficient and superior service."
Objectives: to establish a presence as a successful fast food outlet and to gain a market share in the food industry.
To make 'The Hot Potato' a destination spot for target market segment.
To expand to numerous locations by year three and venture into franchising in metropolitan cities across the nation.
The mission of Hot Potato, Inc. is to provide healthy food options that compete within the
fast food industry. The organization will serve baked or steamed potatoes with a variety of healthy
topping choices, including but not limited to, broccoli, celery, chive, tomato, corn, beans, peppers,
a variety of low fat grated cheeses and lean meat pieces (chicken and beef tips). While the organization
competes in the fast food, products are differentiated as healthier options not only with the toppings,
but with the processing of the items. All potatoes vegetables toppings are steamed or baked. Lean
meat toppings are broiled, rather that sautéed.
In order to compete within the fast food industry, Hot Potato must identify the market
segments in which the products will be targeted, as well as develop a marketing strategy to reach
those segments. Marketing objectives will be determined by considering how the organization should
position itself within the industry and how to best reach the target audiences. The mission of the
organization, to provide a better, healthier fast food alternative, should also be incorporated into
marketing objectives, to convey the organization's product offerings to consumers.
Identifying the Market Segment
The market segment might possibly include all fast food consumers. There are many people
facing health issues that must maintain strict dietary guidelines. Those with Type II Diabetes, High Blood
Pressure and Coronary Artery Disease typically are not encouraged to consume fast foods or are limited
to salads on most fast food menus. Hot Potato offers food products that are more substantial and can
be selected as a meal, rather than a side dish. Therefore, the market segment will include all consumers
who want a healthier fast food option to reduce intake of calories from fat and to meet specific dietary
needs. This segment also wants foods that are low in fat and that will allow them to feel satisfied.
Identifying the target market usually involves grouping potential consumers by need. While
the need for healthier fast food options is one common need, marketing segmentation also requires
to consideration of desired benefits (Rohan, nd). In considering why potential consumers will desire
a healthier fast food option, some obvious benefits, such as time savings in eliminating meal
preparation and monetary value in pricing strategy are also features that draw many consumers to
fast foods in general.
While typically the middle aged adult comes to mind when a low fat or low sodium diet is
mentioned, there are many others who will fall into this category. School age children today are
becoming heavier and the incidence of obesity is greatly increasing. Many parents must either avoid
fast foods altogether, when addressing issues of ...
The solution discusses marketing research plan for new company called 'The Hot Potato.'
MIS (Three Case Studies)
Reality Gets Better
Many of us are familiar with the concept of virtual reality, either from films like Avatar and The Matrix, or from science fiction novels and video games. Virtual reality is a computer-generated, interactive, three-dimensional environment in which people become immersed. But in the past few years, a new spin on virtual reality known as augmented reality has emerged as a major focus of many companies' marketing efforts. More than just science fiction, augmented reality is an exciting new way of creating richer, more interactive experiences with users and future customers.
Augmented reality differs from traditional virtual reality because users of augmented reality (also called AR) tools maintain a presence in the real world. In virtual reality, users are completely immersed in a computer-generated environment, and often use head-mounted displays that facilitate the immersion and eliminate any interference from the real world. Augmented reality mixes real-life images with graphics or other effects and can use any of three major display techniques-head mounted displays, just as with virtual reality, spatial displays, which display graphical information on physical objects, and handheld displays.
Almost everyone has already encountered some form of AR Technology. Sports fans are familiar with the yellow first-down markers shown on televised football games, or the special markings denoting the location and direction of hockey pucks in hockey games. These are examples of augmented reality. Other common usages of AR include medical procedures like image-guided surgery, where data acquired from computerized tomography (CI') and magnetic resonance imaging (MRI) scans or from ultrasound imaging are superimposed on the patient in the operating room. Other industries where AR has caught on include military training, engineering design, robotics, and consumer design.
As companies get more comfortable with augmented reality, marketers are developing creative new ways to use the technology. Print media companies see AR as a way to generate excitement about their products in an entirely new way. Esquire magazine used AR extensively in its December 2009 issue, adding several stickers with designs that, when held up to a Web camera, triggered interactive video segments featuring cover subject Robert Downey Jr. Turning the magazine in different directions yielded different images. A fashion spread describing dressing in layers showed actor Jeremy Renner adding more layers as the seasons changed. The orientation of the magazine as held up to a Web camera determined the season.
Lexus placed an advertisement in the magazine that displayed "radar waves" bouncing off of nearby objects on the page. Again, adjusting the angle of the magazine affected the content of the ad. Lexus Vice President of Marketing David Nordstrom stated that AR was attractive to him because "our job as marketers is to be able to communicate to people in interesting ways that are relevant to them and also entertaining." User response to the magazine was positive, suggesting that AR accomplished this goal. Other companies that have pursued AR as a way to attract and entertain their customers include Papa John's, which added AR tags to their pizza boxes. These tags display images of the company's founder driving a car when triggered using a Web camera. That company's president believes AR is "a great way to get customers involved in a promotion in a more interactive way than just reading or seeing an ad."
Mobile phone application developers are also excited about the growing demand for AR technologies. Most mobile phones have camera, global positioning system (GPS), Internet, and compass functionalities, which make smartphones ideal candidates for handheld AR displays. One of the major new markets for AR is in real estate, where applications that help users access real estate listings and information on the go have already taken oft'. An Amsterdam-based start-up, application developer layer, has created an app for French real estate agency MeilleuraAgents.com where users can point their phones at any building in Paris and within seconds the phone displays the property's value per square meter and a small photo of the property, along with a live image of the building streamed through the phone's camera.
Over 30 similar applications have been developed in other countries, including American real estate company Zip Realty, whose HomeScan application has met with early success. While the technology is still new and will take some time to develop, users can already stand in front of some houses for sale and point their phones at the property to display details superimposed on their screen. If the house is too far away, users can switch to the phone's interactive map and locate the house and other nearby houses for sale. ZipRealty is so encouraged by the early response to HomeScan that it plans to add data on restaurants, coffee shops, and other neighborhood features to the app. Another well-known application, Wikitude, allows users to view user-contributed Web-based information about their surroundings using their mobile phones.
Skeptics believe that the technology is more of a gimmick than a useful tool, but Layer's application has been downloaded over 1,000 times per week since its launch. Being able to access information on properties is more than just a gimmick-it is a legitimately useful tool to help buyers on the go.
Marketers are finding that users increasingly want their phones to have all of the functionality of desk top computers, and more AR mash-ups have been released that display information on tourist sites, chart subway stops, and restaurants, and allow interior designers to superimpose new furniture schemes onto a room so that potential customers can more easily choose what they like best. Analysts believe that AR is here to stay, predicting that the mobile AR market will grow to $732 million by 2014.
CASE STUDY QUESTIONS
1. What is the difference between virtual reality and augmented reality?
2. Why is augmented reality so appealing to marketers?
3. What makes augmented reality useful for real estate shopping applications?
4. Suggest some other knowledge work applications for augmented reality.
THE FLASH CRASH: MACHINES GONE WILD?
On May 6, 2010, the U.S. stock markets were already down and trending even lower. Concerns about European debt, primarily the possibility of Greece defaulting, added to exhibiting investor uncertainties about the markets and the economy at that time. But at 2:42 PM, in a flash, the equity market took. a plunge so fast and so deep that it could not have been motivated by investor uncertainty alone.
Before the plunge, the market was already down 300 points on the day. In less than five minutes after 2:42, the Dow Jones Industrial Average plummeted more than 600 points, representing a loss of $1 trillion in market value. At its lowest point, the Dow was down a whopping 998.50 points to 9869.62, a 9.2 percent drop from the day's opening. This represented the biggest intraday decline in Dow history. Fortunately, this loss was temporary, vanishing nearly as quickly as it appeared. By 3:07 PM, the market had already regained nearly all of the points it had lost, and eventually closed down just 347.80 points that day at 10,520.32. The hefty loss was still its worst Dow percentage decline in over a year, but it certainly could have been worse.
How could this "flash crash" have happened? It now appears that the abrupt selling activities of a single mutual fund company touched off a chain reaction. A confluence of forces was unleashed by the structural and organizational features of the electronic trading systems that execute the majority of trades on the Dow and the rest of the world's major stock exchanges. Electronic trading systems offer considerable advantages over human brokers, including speed, reduced cost, and more liquid markets. High-frequency traders (HFTs) have taken over many of the responsibilities once filled by stock exchange specialists and market makers whose job was to match buyers and sellers efficiently.
Many trading systems today, such as those used by HFTs, are automated, using algorithms to place their nearly instant trades. A number of the HFT trading firms and hedge funds now use machine learning to help their computer systems trade in and out of stocks efficiently. Machine learning programs are able to crunch vast amounts of data in short periods, "learn" what works, and adjust their stock trading strategies on the fly, based on shifting dynamics in the market and broader economy. This method is far beyond human capability: As Michael Kearns, computer science professor at University of Pennsylvania and expert in AI investing, stated, "No human could do this. Your head would blow off." It would appear, however, in situations like the flash crash, where a computer algorithm is insufficient to handle the complexity of the event in progress, electronic trading systems have the potential to make a bad situation much worse.
At 2:3.2 P.M. on May 6, Waddell & Reed Financial of Overland Park, Kansas started to sell $4.1billion of futures contract8 using a computer selling algorithm that dumped 75,000 contracts onto the market over the next 20 minutes. Normally, a sale of that size would take as much as five hours, but on that day, it was executed in 20 minutes. The algorithm instructed computers to execute the trade without regard to price or time, and thus continued to sell as prices sharply dropped.
After Waddell & Reed started to sell, many of the futures contracts were bought by HFTs. As the HFTs realized prices were continuing to fall, they began to sell what they had just bought very aggressively, which caused the mutual fund's algorithm in turn to accelerate its selling. The HFT computers traded contracts back and forth, creating a "hot potato" effect. The selling pressure was then transferred from the futures market to the stock market. Frightened buyers pulled to the sidelines. The markets were overwhelmed by sell orders with no legitimate buyers available to meet those orders.
The only buy orders available at all originated from automated systems, which were submitting orders known as "stub quotes." Stub quotes are offers to buy stocks at prices so low that they are unlikely to ever be the sole buyers of that stock available; during the unique conditions of the flash crash, they were. When the only offer to buy available is a penny-priced stub quote, a market order by its terms, will execute against the stub quote. In this respect, automated trading systems will follow their coded logic regardless of outcome, while human involvement would likely have prevented these orders from executing at absurd prices.
In the midst of the crisis, the New York Stock Exchange activated circuit breakers, measures intended to slow trading on stocks that have lost a tenth or more of their value in a short time, and routed all of their trading traffic to human brokers in an effort to stop the downward spiral. (NYSE is the only m or exchange with the ability to execute trades both via computers and via human brokers.) But because of the enormous volume of orders, and because other fully electronic exchanges lacked similar circuit breakers, it may have had the reverse effect in the short term. While computerized systems simply continued to push the market lower, humans were unable to react fast enough to the situation.
Regulators are considering several different approaches to preventing future flash crashes, but it may be that there is no satisfactory solution. The Securities and Exchange Commission (SEC) may attempt tn standardize circuit breakers acro5s all financial markets, limit high-frequency trading, overhaul the stub quoting system, or stipulate that all buy and sell orders be limit orders, which places upper and lower limits on the prices at which stocks can be bought and sold. But it may be that events like the flash crash are what author and hedge fund adviser Nassim Uleb called "Black Swans" in his book of the same name-unpredictable and uncontrollable events under which we only have "the illusion of control."
After 'Black Monday' in1987, the last crash of similar size, it was thought that computer trading prevented sudden drops in the market, but the flash crash indicates that electronic trading simply allows them to occur over a shorter time period, and may even magnify these sudden market moves in either direction because they can happen faster with less chance of intervention. But, as the flash crash has proven, if we rely solely on these automated methods of electronic trading, we'll still need to worry about machines gone wild.
CASE STUDY QUESTIONS
1. Describe the conditions that preceded the flash crash.
Z. What are some of the benefits of electronic trading?
3. What features of electronic trading and automated trading programs contributed to the crash?
4. Could this crash have been prevented? Why or why not?
Piloting Valero with Real-Time Management
If you haven't heard of Valero, don't worry. It's largely unknown to the public although investors recognize it as one of the largest oil refiners in the United States. Valero Energy is a top-fifty Fortune 500 company headquartered in San Antonio, Texas, with annual revenues of $70 billion. Valero owns 16 refineries in the United States, Canada, and Aruba that produce gasoline, distillates, jet fuel, asphalt, petrochemicals, and other refined products. The company also owns 10 ethanol plants located in the Midwest with a combined ethanol production capacity of about 1.1 billion gallons per year.
In 2008, Valero's chief operating officer (COO) called for the development of a Refining Dashboard that could display real-time data related to plant and equipment reliability, inventory management, safety, and energy consumption. Using a series of monitors on the walls of the headquarters operations center room, with a huge central monitor screen showing a live display of the company's Refining Dashboard, the COO and other plant managers can review the performance of the firm's 16 major refineries in the United States and Canada.
The COO and his team review the performance of reach refinery in terms of how each plant is performing compared to the production plan of the firm. For any deviation from plan, up or down, the plant manager is expected to provide the group an explanation, and a description of corrective actions. The headquarters group can drill down from executive level to refinery level and individual System operator level displays of performance.
Valero's Refining Dashboard has been so successful that the firm is developing separate dashboards that show detailed statistics on power consumption for each unit of the fum, and each plant. Using the shared data, managers will be able to share best practices with one another, and make changes in equipment to reduce energy consumption while maintaining production targets. The dashboard system has the unintended consequence of helping managers learn more about how their company actually operates, and how to improve it.
But how much do Valero's executive dashboards really make a difference? One of the dangers of real time management is not measuring the right things. Dashboards that display information unrelated to the firm's strategic goals might be largely irrelevant, although pretty to look at. Valero's goals and measures of performance were inspired by Solomon benchmark performance studies used in the oil and gas industry. How helpful were they?
Valero's stock price fell from a high of $80 in June 2008, to about $20 in November 2010. As it turns out, Valero's profits are not strongly related to small changes in its refining efficiency. Instead, its profitability is largely determined by the spread between the price of refined products and the price of crude oil, refined to as the "refined product margin." The global economic slowdown beginning in 2008 and extending through 2010 weakened demand for refined petroleum products, which put pressure on refined product margins throughout 2009 and 2010. This reduced demand, combined with increased inventory levels, caused a significant decline in diesel and jet fuel profit margins.
The price of crude and aggregate petroleum demand are largely beyond the control of Valero management. The cost of refining crude varies within a very narrow range over time, and there are no technological breakthroughs expected in refining technology. Although Valero's dashboard focuses on one of the things management can control within a narrow range (namely refining costs), the dashboard does not display a number of strategic factors beyond its control, which nevertheless powerfully impact company performance. Bottom line: a powerful dashboard system does not tum an unprofitable operation into a profitable one.
Another limitation of real-time management is that it is most appropriate fur process industries such as oil refining where the process is relatively unchanging, well known and understood, and central to the revenues of a firm. Dashboard systems say nothing about innovation in products, marketing, sales, or any other area of the firm where innovation is important. Apple Corporation did not invent the Apple iPhone using a performance dashboard, although it might have such a dashboard today to monitor iPhone manufacturing and sales. Managers have to be sensitive to, and reflect upon, all the factors that shape the success of their business even if they are not reflected in the firm's dashboards.
CASE STUDY QUESTIONS
1. What management, organization, and technology issues had to be addressed when developing Valero's dashboard?
2. What measures of performance do the dashboards display? Give examples of several management decisions that would benefit from the information provided by Valero's dashboards.
3. What kinds of information systems are required by Valero to maintain and operate its refining dashboard?
4. How effective are Valero's dashboards in helping management pilot the company? Explain your answer.
5. Should Valero develop a dashboard to measure the many factors in its environment that it does not control? Why or why not?