Marketing Management MT631
Final Examination for Fall 1996

This is a take home exam consisting of two sections. You must include with your returned materials a signed affirmation that states that you have neither received nor given any assistance on this exam. You must work/answer two (2) out of the three (3) problems/questions in section one. Each of these problems/questions is worth 25 points. You must answer each of the questions in the second section. Collectively the answers in the second section are worth 50 points. Thus the total value for this examination is 100 points. Be reminded that your demonstrated work is as important as your answer. Limit all responses to one standard 8.5X11 inch ruled note page per problem/question.

For on-site students:
All exams must be returned no later than 7:30 PM on December 12, 1996. Earlier returns will be appreciated. All returns must be stapled and sealed within a standard 9.5X12.5 envelope and either hand delivered to the instructor during normal office periods or slipped under the office door (BB 234).

For off-site, video students:
You must complete and have your Proctor return this exam (have the return postmarked) to Ms. Susan Davis in the outreach office within eight working days of the receipt of the last tape for this quarter.

SECTION ONE - Case Presentations and Reviews

  1. (25 points)

    During the presentation of the epilogue to the Zoecon case it was noted that after licensing the roach IGR from Zoecon, Black Flag introduced the product in 1986 as Black Flag Roach Ender. At the same time Shulton Division of American Cyanamid launched a non-IGR roach bait under the name Combat that was far more compatible with consumers' perceptions regarding insecticide usage. As a result market shares stabilized at 7% for Black Flag's IGR and 25% for the Combat brand bait.

    These events shift our focus away from Zoecon to Black Flag. Before the introduction of these two products (Roach Ender and Combat) Black Flag was the second largest competitor with 12% share. If we assume that the two new entrants draw from all other existing brands (including those cannilbalized from there own) at proportions equal to the initial distribution of market shares, what are the expected market shares for all competitor firms after the introduction of Roach Ender and Combat?

  2. (25 points)

    During the presentation of the Marshall Museum of Art (MMA) case we used an activity/mission fit and financial expectations matrix that was adapted from Lovelock and Weinberg's book entitled Public and Nonprofit Marketing to evaluate the normative position for six different auxiliary activities. Our focus was primarily on the gift shop and the buffet. Some concern was voiced however at placing parking in the break-even column when this activity was responsible for substantial levels of profit for the MMA. If the conceptualization is valuable in assessing those cells that are below expectations, it should also provide insight for those cells where expectations are exceeded. Assuming for the moment that parking should be placed in the break-even column and that the underlying normative theory is correct, what does this tell you about the MMA's operation?

  3. (25 points)

    Our analysis of the Tyler Pet Foods case utilized a "chain" extension whereby we shifted known national proportions onto a subregion (here we used the Boston area). Holding on to the assumption regarding a 25% retailer markup, recalculate the break-even share under the following changes:

      Assume that a penetration price of $1 per 15 ounce tub was used (recall Tyler did introduce the product at 99 cents) and,
      the product was targeted at the soft and the moist segments exclusively and,
      Tyler felt that its promotional plan would compete with the dominate brands (this assumption says don't limit your analysis to the "also rans") and,
      a budget of $300000 was used (that is what Tyler did).
    You may assume that all other relevant proportions are unchanged.

    SECTION TWO - Carrington Carpet Mills

  4. (15 points)

    What is the estimated total cost of wholesale distribution?

  5. (15 points)

    What is the estimated total cost of direct distribution?

  6. (10 points)

    It might be argued that the amount by which the estimated cost of wholesale distribution exceeds the estimated cost of direct distribution is a direct opportunity loss for Carrington Carpet Mills. But what other considerations are involved in this analysis?

  7. (10 points)

    Epilogue: In the "real world" Carrington Carpet Mills did decide against direct distribution because of those considerations sited above (despite the rather substantial difference in the estimated costs). This still left hanging the issue of the disgruntled wholesaler (see the last paragraph of the case). How would you recommend that this wholesaler be handled?