Concept explainers
Case summary:
Company W manufactures the bicycles that are sold through the retail bicycle shops in Country U. The firm has 2 salespeople and they maintain good relationship with the bicycle shops to better meet the customer’s requirements. The firm’s owner is planning to maximize it to rest of the country, which requires more salespeople to be hired. Every salesperson gets $40,000 in addition to 2% commission on every yearly sales. Another way is to utilize the sales agents for which they will be paid 5% of sales.
Characters in given case:
Company W
To compute: The level of sales and explain the benefits and disadvantages of utilizing the own sales force company versus the independent agents.
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- Located in the picturesque Berkshire Mountains of Western Massachusetts, Ski Butternut has been a family-owned, family-oriented ski destination for more than 50 years. The resort includes 22 trails for downhill skiing and snowboarding, two terrain parks for riding, and a dedicated area for snow tubing. Although Ski Butternut hosts some non-ski events during summer and fall, its business goes into high gear when snowy weather arrives, bringing skiers and riders from across Massachusetts, Connecticut, New York, and New Jersey. Matt Sawyer, Ski Butternuts director of marketing, says the primary target market has always been families with young children who are seeking affordable skiing. Everything from the snack-bar menus to the ski-shop merchandise is presented with families in mind. So that parents can have fun in the snow without worry, the resort has a Childrens Center for children who are too young to ski or have no interest. Fifth-graders are invited to ski for free when accompanied by an adult who buys an adult lift ticket. The resort also created two terrain parks for young snowboarders who were clamoring for a more exciting riding experience. Without the terrain parks, Sawyer says, these boarders would have asked their parents to take them to competing mountains in Vermont. Ski Butternuts research shows that first-timers are a particularly important segment, because they tend to have a strong allegiance to the resort where they learn to ski. First-timers typically visit the resort seven times before seeking out more challenging mountains. As a result, Ski Butternut has made teaching first-timers to ski or snowboard one of its specialties. For this market, the resort bundles ski or board rentals, lift tickets, and also offers a wide range of individual and group lessons for all ages and abilities at a value price. Because Ski Butternut has trails for different skill levels, beginners can challenge themselves by changing trails within the resort once they feel confident. Ski Butternut also targets seniors and college students. Knowing that weekends are the busiest period, the resort offers special midweek prices to attract seniors who have free time to ski on weekdays. College students are particularly value-conscious, and they often travel to ski resorts as a group. As a result, Ski Butternut offers weekend and holiday discounts to bring in large numbers of students who would otherwise ski elsewhere. Thanks to Facebook, Twitter, and other social media, students quickly spread the word about special pricing, which enhances Ski Butternuts ability to reach this key segment. In addition, the resort highlights discount pricing for families when targeting specific segments, such as scout troops, military personnel, emergency services personnel, and members of local ski clubs. Another segment Ski Butternut has selected for marketing attention is ski racers. The resort features professional coaching, lessons, and programs for ski racers in the age group of 8 to 20. Sawyer notes that these ski racers are extremely dedicated to training, which means theyre on the slopes as often as possible, a positive for the resorts attendance and revenue. To stay in touch with racers, Ski Butternut has a special website and a dedicated Facebook page. Sawyer conducts up to 1,200 customer surveys every year to better understand who his customers are and what they need. He also compares the results with skiers who visit mountains of a similar size in other areas. Digging deeper, he analyzes data drawn from the ski shops rental business to build a detailed picture of customers demographics, abilities, and preferences. Based on this research, he knows that the typical family at Ski Butternut consists of two children under age 18 who ski or ride, and at least one parent who skis. Because they can obtain so much information from and about their customers, Sawyer and his team are able to make better decisions about the marketing mix for each segment. By better matching the media with the audience, they get a better response from advertising, e-mail messages, and other marketing communications. As one example, they found that 15 percent of the visitors to Ski Butternuts website were using a smartphone to access the site. Sawyer has now created a special version of the site specifically for mobile use and created a text-message contest to engage skiers who have smartphones.16 Of the four categories of variables, which one seems to be the most central to Ski Butternuts segmentation strategy, and why?arrow_forwardLocated in the picturesque Berkshire Mountains of Western Massachusetts, Ski Butternut has been a family-owned, family-oriented ski destination for more than 50 years. The resort includes 22 trails for downhill skiing and snowboarding, two terrain parks for riding, and a dedicated area for snow tubing. Although Ski Butternut hosts some non-ski events during summer and fall, its business goes into high gear when snowy weather arrives, bringing skiers and riders from across Massachusetts, Connecticut, New York, and New Jersey. Matt Sawyer, Ski Butternuts director of marketing, says the primary target market has always been families with young children who are seeking affordable skiing. Everything from the snack-bar menus to the ski-shop merchandise is presented with families in mind. So that parents can have fun in the snow without worry, the resort has a Childrens Center for children who are too young to ski or have no interest. Fifth-graders are invited to ski for free when accompanied by an adult who buys an adult lift ticket. The resort also created two terrain parks for young snowboarders who were clamoring for a more exciting riding experience. Without the terrain parks, Sawyer says, these boarders would have asked their parents to take them to competing mountains in Vermont. Ski Butternuts research shows that first-timers are a particularly important segment, because they tend to have a strong allegiance to the resort where they learn to ski. First-timers typically visit the resort seven times before seeking out more challenging mountains. As a result, Ski Butternut has made teaching first-timers to ski or snowboard one of its specialties. For this market, the resort bundles ski or board rentals, lift tickets, and also offers a wide range of individual and group lessons for all ages and abilities at a value price. Because Ski Butternut has trails for different skill levels, beginners can challenge themselves by changing trails within the resort once they feel confident. Ski Butternut also targets seniors and college students. Knowing that weekends are the busiest period, the resort offers special midweek prices to attract seniors who have free time to ski on weekdays. College students are particularly value-conscious, and they often travel to ski resorts as a group. As a result, Ski Butternut offers weekend and holiday discounts to bring in large numbers of students who would otherwise ski elsewhere. Thanks to Facebook, Twitter, and other social media, students quickly spread the word about special pricing, which enhances Ski Butternuts ability to reach this key segment. In addition, the resort highlights discount pricing for families when targeting specific segments, such as scout troops, military personnel, emergency services personnel, and members of local ski clubs. Another segment Ski Butternut has selected for marketing attention is ski racers. The resort features professional coaching, lessons, and programs for ski racers in the age group of 8 to 20. Sawyer notes that these ski racers are extremely dedicated to training, which means theyre on the slopes as often as possible, a positive for the resorts attendance and revenue. To stay in touch with racers, Ski Butternut has a special website and a dedicated Facebook page. Sawyer conducts up to 1,200 customer surveys every year to better understand who his customers are and what they need. He also compares the results with skiers who visit mountains of a similar size in other areas. Digging deeper, he analyzes data drawn from the ski shops rental business to build a detailed picture of customers demographics, abilities, and preferences. Based on this research, he knows that the typical family at Ski Butternut consists of two children under age 18 who ski or ride, and at least one parent who skis. Because they can obtain so much information from and about their customers, Sawyer and his team are able to make better decisions about the marketing mix for each segment. By better matching the media with the audience, they get a better response from advertising, e-mail messages, and other marketing communications. As one example, they found that 15 percent of the visitors to Ski Butternuts website were using a smartphone to access the site. Sawyer has now created a special version of the site specifically for mobile use and created a text-message contest to engage skiers who have smartphones.16 What role do geographic variables play in Ski Butternuts segmentation and targeting?arrow_forwardLocated in the picturesque Berkshire Mountains of Western Massachusetts, Ski Butternut has been a family-owned, family-oriented ski destination for more than 50 years. The resort includes 22 trails for downhill skiing and snowboarding, two terrain parks for riding, and a dedicated area for snow tubing. Although Ski Butternut hosts some non-ski events during summer and fall, its business goes into high gear when snowy weather arrives, bringing skiers and riders from across Massachusetts, Connecticut, New York, and New Jersey. Matt Sawyer, Ski Butternuts director of marketing, says the primary target market has always been families with young children who are seeking affordable skiing. Everything from the snack-bar menus to the ski-shop merchandise is presented with families in mind. So that parents can have fun in the snow without worry, the resort has a Childrens Center for children who are too young to ski or have no interest. Fifth-graders are invited to ski for free when accompanied by an adult who buys an adult lift ticket. The resort also created two terrain parks for young snowboarders who were clamoring for a more exciting riding experience. Without the terrain parks, Sawyer says, these boarders would have asked their parents to take them to competing mountains in Vermont. Ski Butternuts research shows that first-timers are a particularly important segment, because they tend to have a strong allegiance to the resort where they learn to ski. First-timers typically visit the resort seven times before seeking out more challenging mountains. As a result, Ski Butternut has made teaching first-timers to ski or snowboard one of its specialties. For this market, the resort bundles ski or board rentals, lift tickets, and also offers a wide range of individual and group lessons for all ages and abilities at a value price. Because Ski Butternut has trails for different skill levels, beginners can challenge themselves by changing trails within the resort once they feel confident. Ski Butternut also targets seniors and college students. Knowing that weekends are the busiest period, the resort offers special midweek prices to attract seniors who have free time to ski on weekdays. College students are particularly value-conscious, and they often travel to ski resorts as a group. As a result, Ski Butternut offers weekend and holiday discounts to bring in large numbers of students who would otherwise ski elsewhere. Thanks to Facebook, Twitter, and other social media, students quickly spread the word about special pricing, which enhances Ski Butternuts ability to reach this key segment. In addition, the resort highlights discount pricing for families when targeting specific segments, such as scout troops, military personnel, emergency services personnel, and members of local ski clubs. Another segment Ski Butternut has selected for marketing attention is ski racers. The resort features professional coaching, lessons, and programs for ski racers in the age group of 8 to 20. Sawyer notes that these ski racers are extremely dedicated to training, which means theyre on the slopes as often as possible, a positive for the resorts attendance and revenue. To stay in touch with racers, Ski Butternut has a special website and a dedicated Facebook page. Sawyer conducts up to 1,200 customer surveys every year to better understand who his customers are and what they need. He also compares the results with skiers who visit mountains of a similar size in other areas. Digging deeper, he analyzes data drawn from the ski shops rental business to build a detailed picture of customers demographics, abilities, and preferences. Based on this research, he knows that the typical family at Ski Butternut consists of two children under age 18 who ski or ride, and at least one parent who skis. Because they can obtain so much information from and about their customers, Sawyer and his team are able to make better decisions about the marketing mix for each segment. By better matching the media with the audience, they get a better response from advertising, e-mail messages, and other marketing communications. As one example, they found that 15 percent of the visitors to Ski Butternuts website were using a smartphone to access the site. Sawyer has now created a special version of the site specifically for mobile use and created a text-message contest to engage skiers who have smartphones.16 How is Ski Butternut applying behavioristic variables in its segmentation strategy? Explain your answer.arrow_forward
- Aubree Multinational Corporation is a large manufacturer and distributor of pharmaceuticalsupplies. It is based in the United States (New York-Headquarters), Trinidad, Jamaica and theUnited Kingdom. It sends supplies to various companies throughout the four countries. It marketsits supplies through periodic mass mailings of catalogues to those companies. Its clients can alsomake orders over the phone and they ship the supplies upon demand.The main competition for Aubree Multinational Corporation in the United States comes from oneU.S. firm and one Canadian firm. A British firm has a small share of the U.S. market but is at adisadvantage because of its distance. The British firm’s marketing and transportation costs in theU.S. market are relatively high. In Jamaica and Trinidad, they have approximately 80% of themarket share.a) Aubree Multinational Corporation plans to penetrate either the Canadian market or two otherCaribbean Countries (Haiti and Guyana). What factors deserve to be…arrow_forwardAubree Multinational Corporation is a large manufacturer and distributor of pharmaceuticalsupplies. It is based in the United States (New York-Headquarters), Trinidad, Jamaica and theUnited Kingdom. It sends supplies to various companies throughout the four countries. It marketsits supplies through periodic mass mailings of catalogues to those companies. Its clients can alsomake orders over the phone and they ship the supplies upon demand.The main competition for Aubree Multinational Corporation in the United States comes from oneU.S. firm and one Canadian firm. A British firm has a small share of the U.S. market but is at adisadvantage because of its distance. The British firm’s marketing and transportation costs in theU.S. market are relatively high. In Jamaica and Trinidad, they have approximately 80% of themarket share.a) Aubree Multinational Corporation plans to penetrate either the Canadian market or two otherCaribbean Countries (Haiti and Guyana). What factors deserve to be…arrow_forwardAubree Multinational Corporation is a large manufacturer and distributor of pharmaceuticalsupplies. It is based in the United States (New York-Headquarters), Trinidad, Jamaica and theUnited Kingdom. It sends supplies to various companies throughout the four countries. It marketsits supplies through periodic mass mailings of catalogues to those companies. Its clients can alsomake orders over the phone and they ship the supplies upon demand. The main competition for Aubree Multinational Corporation in the United States comes from oneU.S. firm and one Canadian firm. A British firm has a small share of the U.S. market but is at adisadvantage because of its distance. The British firm’s marketing and transportation costs in theU.S. market are relatively high. In Jamaica and Trinidad, they have approximately 80% of themarket share. Question 1 Given that one-third of the company sales are exports to the United Kingdom and invoices forexports are in US dollars, the demand for its exports is…arrow_forward
- Distribution Network Planning. The distribution system for the Herman Company consists of three plants, two warehouses, and four customers. Plant capacities and shipping costs per unit (in $) from each plant to each warehouse are as follows: Warehouse Plant 1 2 Capacity 1 4 7 450 2 8 5 600 3 5 6 380 Customer demand and shipping costs per unit (in $) from each warehouse to each customer are as follows. MLO 3 Customer Warehouse 1 2 3 4 1 6 4 8 4 2 3 6 7 7 Demand 300 300 300 400 Formulate a linear programming model of the problem. Solve the linear program to determine the optimal shipping plan.arrow_forwardDuncan Multinational Corporation is a global manufacturer and distributor of household appliances. It is basedin China, United States, Trinidad, and the United Kingdom. Sixty percent (60%) of supplies are sent to variouscompaniesthroughout the four countries. It also markets its supplies through social media and brand ambassadorand retail clients can make orders over the phone and they ship the supplies upon demand.The main competition for Duncan Multinational Corporation comes from one U.S. firm and one Canadianfirm. The U.S firm and Canadian firm have approximately 45% market share in Barbados, Guyana andJamaica. The marketing and transportation costs in these countries are very high. in 700 words, How can interest rates be a supply related factor, that may influence exchange rate movements in Jamaica and Barbados. (Tie your description to the specific Duncan Multinational Corporation case background provided here).arrow_forwardThe MGMT Insurance Ltd. accepts payments on various insurance policies fromemployees of businesses across the island. These businesses deduct payments fromemployees’ salaries and pay the insurance company a lump sum each month. This totalamount deducted is shown on each employee’s payslip.Deductions are due at the end of each month and each participating business submits onepayment for its employees to the insurance company via online payments through thebank. However, if payments were received after 11:00 a.m., the bank does not processthem until the next business day. At the beginning of each month an administrativeassistant at MGMT Insurance Ltd. downloads the deductions for each company andallocates payments to the various policies. These payments include the client’s uniquenumber along with his/her relevant policy numbers and amounts due.However, recently there has been some complaints that payments for some policies werenot being allocated correctly. Additionally, assume that one…arrow_forward
- The MGMT Insurance Ltd. accepts payments on various insurance policies fromemployees of businesses across the island. These businesses deduct payments fromemployees’ salaries and pay the insurance company a lump sum each month. This totalamount deducted is shown on each employee’s payslip. Deductions are due at the end of each month and each participating business submits onepayment for its employees to the insurance company via online payments through thebank. However, if payments were received after 11:00 a.m., the bank does not processthem until the next business day. At the beginning of each month an administrativeassistant at MGMT Insurance Ltd. downloads the deductions for each company andallocates payments to the various policies. These payments include the client’s uniquenumber along with his/her relevant policy numbers and amounts due.However, recently there has been some complaints that payments for some policies werenot being allocated correctly. Additionally, assume that…arrow_forwardThe MGMT Insurance Ltd. accepts payments on various insurance policies fromemployees of businesses across the island. These businesses deduct payments fromemployees’ salaries and pay the insurance company a lump sum each month. This totalamount deducted is shown on each employee’s payslip.Deductions are due at the end of each month and each participating business submits onepayment for its employees to the insurance company via online payments through thebank. However, if payments were received after 11:00 a.m., the bank does not processthem until the next business day. At the beginning of each month an administrativeassistant at MGMT Insurance Ltd. downloads the deductions for each company andallocates payments to the various policies. These payments include the client’s uniquenumber along with his/her relevant policy numbers and amounts due.However, recently there has been some complaints that payments for some policies werenot being allocated correctly. Additionally, assume that one…arrow_forwardThe MGMT Insurance Ltd. accepts payments on various insurance policies fromemployees of businesses across the island. These businesses deduct payments fromemployees’ salaries and pay the insurance company a lump sum each month. This totalamount deducted is shown on each employee’s payslip. Deductions are due at the end of each month and each participating business submits onepayment for its employees to the insurance company via online payments through thebank. However, if payments were received after 11:00 a.m., the bank does not processthem until the next business day. At the beginning of each month an administrativeassistant at MGMT Insurance Ltd. downloads the deductions for each company andallocates payments to the various policies. These payments include the client’s uniquenumber along with his/her relevant policy numbers and amounts due.However, recently there has been some complaints that payments for some policies werenot being allocated correctly. Additionally, assume that…arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,