Services Marketing Concepts, Strategies, & Cases 4th edition Douglas Hoffman, john Bateson - Solutions

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How do you personally feel about the continuity of management at Boeing during these difficult times? Should some heads have rolled? What criteria would you use in your judgment of whether to roll heads or not?Management shake-ups during adversity can range from practically none to widespread
Since 2005, sales have been robust for both Boeing and Airbus with their various planes. In early January 2008, their combined orders were for nearly 7,000 planes, valued at more than $750 billion before discounts. As the world moved toward a recession due to the mortgage crisis, they faced several
Do you think Boeing should have anticipated the impact of Asian economic difficulties long before it did?
If it had more quickly anticipated the drying up of the Asian market for planes, could Boeing have prevented most of the problems that confronted it? Discuss.
A major stockholder grumbles, “Management worries too much about Airbus, and to hell with the stockholders.” Evaluate this statement. Do you think it is valid?
Discuss synergy in mergers. Why does synergy so often seem to be lacking despite expectations?
You are a skilled machinist for Boeing and have always been quite proud of participating in the building of giant planes. You have just received notice of another lengthy layoff, the second in five years. Discuss your likely attitudes and actions.
How wise do you think it was for Airbus to “bet the company” on the super-jumbo A380, the world’s largest jet?
Do you think Airbus’s more passenger-friendly planes gave it a significant competitive advantage? Why or why not? Discuss as many aspects of this as you can.
How can arrogance in an organization be combatted?
A business columnist writes: Boeing could “have told customers ‘no thanks’ to more orders than its factories could handle . . . [It] could have done itself a huge favor by simply building fewer planes and charging more for them.” (Holman W. Jenkins Jr., “Boeing’s Trouble: Not Enough
Herb Kelleher has just retired and you are his successor. Unfortunately, your personality is far different from his: you are an introvert and far from flamboyant, and your memory for names is not good. What would be your course of action to try to preserve the great employee dedication of the
Herb Kelleher has not retired. He is going to continue until 70, or later. Somehow, his appetite for growth has increased as he has grown older. He has charged you with developing plans for expanding into longer hauls, and maybe to South and Central America, and even to Europe. Be as specific as
How would you feel personally about a five-hour transcontinental flight with only a few peanuts, and no other food or movies? Would you be willing to pay quite a bit more to have more amenities?
Why do you think the major airlines so badly overlooked the possibilities in short hauls at low prices?A strategic window is an opportunity in the marketplace, one not at present well served by competitors, that fits well with the firm’s competencies. Strategic windows often last for only a short
Do you think there is a point where a low-price/no frills strategy would be detrimental to customer satisfaction? What might it depend on?Southwest consistently earned high ratings for its customer satisfaction, higher than those of its giant competitors. Yet, these major airlines all offered more
Assume you are to give a lecture to your class on the desirability of a niche strategy, and you cite southwest as a classic example. But suppose a classmate asks: “If a niche strategy is so great, why didn’t the other airlines practice it?” How will you respond? In deciding what specific
In what ways might airline customers be segmented? Which segments or niches would you consider Southwest’s prime targets? Which segments probably would not be?
Discuss the pros and cons for expansion of Southwest beyond short hauls. Which arguments do you see as most compelling?
Evaluate the effectiveness of Southwest’s unions.
On August 18, 1993, a fare war erupted. To initiate its new service between Cleveland and Baltimore, Southwest announced a $49 fare (a sizable reduction from the then standard rate of $300). Its rivals, Continental and US Air, retaliated. Before long, the price was $19, not much more than the tank
A price cut is the most easily matched marketing strategy, and usually provides no lasting advantage to any competitor. Identify any circumstances where you see it desirable to initiate a price cut and potential price war.
Do you think it likely that Southwest will remain dominant in its niche despite the array of discount carriers? Why or why not?
The Thanksgiving Day nonstop transcontinental experiment went fairly well, although customers and even flight attendants expressed some concern about the long, five-hour flight with no food and no entertainment. No one complained about the price.Debate the two alternatives of going ahead slowly
The so-called Legacy Airlines saw revenues and profits resurging by the end of 2007, to the detriment of Southwest and the other discount carriers. What is your assessment of this situation from Southwest’s standpoint? Is this only a short-term phenomenon, or is the discounter model—low fares
Philip Knight is concerned about the criticisms of labor abuses in some of his Asian contractors. He fears that Congress will enact punitive and restrictive legislation. He charges you with getting to the heart of the problem, and proposing remedies. This will have to be done quickly since Knight
It is 1985, and you are a staff assistant to CEO Fireman of Reebok. Reebok’s production of shoes can hardly meet the burgeoning demand. The future seems unlimited. However, you sense a danger on the horizon, and that is not paying sufficient attention to your major customers, particularly Foot
Be a Devil’s Advocate (one who argues an opposing viewpoint to test the decision). Array all the rationale you can for not deemphasizing the swoosh. Be persuasive.
Given that you think the demands of a major retailer are completely unreasonable, what would you do if you were Mr. Fireman: give in completely, hold to your principles, negotiate, or what?Recognizing the importance of major customers has come belatedly to some sellers, probably none more belatedly
In your judgment, do you think Nike could have achieved its present success without this unique but simple logo? The Nike “swoosh” is one of the world’s best-recognized logos. In the very early days of Nike, a local design student at Portland State University was paid $35 for creating it. The
“The success of Nike was strictly fortuitous and had little to do with great decision making.” Evaluate this statement.
In recent years Nike has moved strongly to develop markets for running shoes in the Far East, particularly in China. Discuss how Nike might go about stimulating such underdeveloped markets.
How could anyone criticize Fireman for signing up Shaquille O’Neal to a lucrative endorsement contract? Discuss.
Do you think the swoosh logo has become too widespread, that it is turning off many people?
Given that all decision makers will sometimes make bad calls, how might the batting averages of correct decisions be improved? Can they really be improved?
Do you think the athletic goods industry has limited potential? Or is it still a growth industry? Your opinions, and rationale, please.
Is there a danger in catering too much to major customers? Discuss.
Debate the issue of endorsements for athletes. How much is too much? Where do we draw the line? Should we go only for the few famous? Or should we gamble on lesser-knowns eventually making it big and offer them long-term contracts? Argue the two sides of the issue: aggressive and conservative.
You are John Brennan, CEO. It is 2009, and TIAA-CREF is turning out to be a formidable competitor, and is gaining fast on your first-place position in the industry. What actions would you take, and why? Discuss all ramifications of these actions that you can think of?
You do not have to agree with Bogle’s planning strategy. Playing the devil’s advocate (one who argues for the opposite viewpoint), persuasively present another perspective. (You may want to do some research on American Funds, and also review Chapter 17, the exploits of Edward Lampert, hedge
“The success of Vanguard is due to media exploitation of what would otherwise be a very ordinary firm.” Discuss.
Why do you think people continue to buy front-end load mutual funds with 5–6 percent commission fees when there are numerous no-load funds to be had?
What are the differences in passive and active fund management? How significant are they?
“Vanguard seems too good. There must be a downside.” Discuss.
Can publicity ever take the place of massive advertising expenditures?
You have been given the assignment by Edward Rensi in 1993 to instill a recommitment to improved customer service in all domestic operations. Discuss in as much detail as you can how you would go about fostering this among the 13,700 domestic outlets.
As a McDonald’s senior executive, what long-term expansion mode would you recommend for your company?
As a Starbucks senior executive, what strategy would you recommend to combat McDonald’s invading your turf?
Be a Devil’s Advocate (and argue a dissenting view). Develop all the persuasive arguments you can that Cantalupo’s limited expansion policies will doom the company’s growth and invite competitive inroads.
“The high-growth, market-share policy should not bother any franchisee. It simply creates opportunities to invest in more restaurants.” Evaluate this statement.In 1980 Wayne Kilburn and his wife, Mary Jane, took over the only McDonald’s in Ridgecrest, California, a town of 26,000. The
Are you surprised that such an American icon as McDonald’s is so successful in Russia?Do you agree with the very “disciplined” approach to store openings in Russia?At lunch time on a recent day, Khamzat Khasbulatov was sitting in the world’s busiest McDonald’s in Pushkin Square in Moscow,
What explanation can you give for competitors’ inability for so long to match the standards of McDonald’s?Some strategies are easily countered or duplicated by competitors. Price cutting is the most easily countered. A price cut can often be matched within minutes. Similarly, a different
How do you account for the reluctance of competitors to imitate the successful efforts of another firm in their industry? Under what circumstances is imitation likely to be embraced?
To date McDonald’s has shunned diversification into unrelated food operations as well as nonfood options. Discuss the desirability of such diversification efforts.
“Eventually—and this may come sooner than most think—there will no longer be any choice locations anywhere in the world for new hamburger outlets. As a McDonald’s stockholder, I’m getting worried.” Discuss.
Does the size of McDonald’s give it a powerful advantage over its competitors? Why or why not?
What do you think is McDonald’s near-term and long-term potential? What makes you think this?
Is it likely that McDonald’s will really realize $1 billion in additional revenues coming from imitating Starbucks?
Discuss the importance of market share in the fast-food industry.
Debate this issue: McDonald’s is reaching the limits of its ability to grow without drastic change. (The side that espouses drastic change should give some attention to the most likely directions for such, and be prepared to defend these expansion possibilities.)
Debate the issue of a “get-tough” attitude of corporate management toward franchisees even if it riles some, versus involving them more in future directions of the company. In particular, be prepared to address the challenge of bringing customer satisfaction up to traditional standards.
Debate this contention: Market share is overemphasized in this industry. (Both sides in their debate may want to consider whether this assertion may or may not apply to other industries.)
Be a Devil’s Advocate (One who opposes a position to establish its merits and validity). Your mutual fund has a major investment in Harley- Davidson, and you are concerned with Vaughn Beals’s presence at motorcycle rallies hobnobbing with black-jacketed motorcycle gangs. He maintains this is
As a vice president at Harley-Davidson in the 1990s, you believe the recovery efforts should have gone well beyond the heavyweight bikes into lightweights. What arguments would you present for this change in strategy, and what specific recommendations would you make for such a new course of action?
As a staff assistant to Vaughan Beals when he first took over, you have been charged to design a strategy to bring a mystique to the Harley-Davidson name. How would you propose to do this? Be as specific as you can, and defend your reasoning.
How would you feel about devoting an hour or more to quality circle meetings every week or so, on your own time? If your answer is, “No Way,” do you think this is a fair attitude on your part? Why or why not?Invitation to Research: Can you find any U.S. firms that are still using quality
How do you personally feel about motorcycles? Do you have one? Would you rent one?Would a rally attract you?Imagine this: It is an early week in August 2006, and your town of Sturgis, with all of 6,500 people, situated on the rolling Dakota plains nestled against the Black Hills, is playing host to
Do you think Harley-Davidson made the right decision by expanding conservatively? Why or why not? Defend your position.The sales forecast—the estimate of sales for the periods ahead—serves a crucial role because it is the starting point for all detailed planning and budgeting. A volatile
Do you think Beal’s rejuvenation efforts could have been better handled? Support your conclusions.
Do you see any limitations to the viability and growth of Harley in the future? Discuss how these might be countered.
How durable do you think the Rubbies’ infatuation with the heavyweight Harleys will be? What leads you to this conclusion?
A Harley-Davidson stockholder criticizes present management: “It is a mistake of the greatest magnitude that we abdicate a decent share of the European motorcycle market to foreign competitors simply because we do not gear up our production to meet the demand.” Discuss.
Given the resurgence of Harley-Davidson in the 1990s, would you invest money now in the company? Discuss, considering as many factors bearing on this decision as you can.
“Harley-Davidson’s resurgence is only the purest luck. Who could have predicted, or influenced, the new popularity of big bikes with the affluent?” Discuss.
“The tariff increase on Japanese motorcycles in 1983 gave Harley-Davidson badly needed breathing room. In the final analysis, politics is more important than management in competing with foreign firms.” What are your thoughts?
A major schism has developed in the executive ranks of Harley-Davidson. Many executives believe a monumental mistake is being made not to gear up production to meet the burgeoning worldwide demand for Harleys. Others see the present go-slow approach to increasing production as more prudent.
It is 1994 and Bethune has just taken over. He has asked you as his staff adviser to prepare a report on improving customer service as quickly as possible. He has also asked you to design a program to inform potential business and nonbusiness customers of this new commitment. Be as specific as
You are the leader of the machinists’ union at Eastern. It is 1986 and Lorenzo has just acquired your airline. You know full well how he broke the union at Continental, and rumors are flying that he has similar plans for Eastern. Describe your tactics under two scenarios:a. You decide to take a
Can a corporate climate be too upbeat? Discuss.A corporate or organizational culture can be defined as the system of shared beliefs and values that develops within an organization and guides the behavior of its members.6 Such a culture can be a powerful influence on performance and customer
Which is better? With the success of Bethune in motivating his employees for strong positive change in the organization, one would think Theory Y is the only way to go. McGregor certainly thought so and predicted that giving workers more participation, freedom, and responsibility would result in
Gordon Bethune’s approach to salvaging Continental seems almost too good to be true. Surely he has shown some management flaws or missteps? What could he have done better? Your recommendations please.
Could Lorenzo’s confrontation with Continental’s unions have been more constructively handled? How?
Compare Bethune’s handling of employees with that of Kelleher of Southwest Airlines in Chapter 18. Are there commonalities? Contrasts?
Compare Bethune’s management style with Lorenzo’s. What conclusions can you draw?
Bethune gave great credit to his open-door policy when he became CEO. Do you think this was a major factor in the turnaround? How about changing the paint of the planes?
How do you motivate employees to give a high priority to customer service?
Evaluate the causes and the consequences of frequent top executive changes such as Continental experienced in the days of Lorenzo?
How can replacement workers—in this case, pilots and skilled maintenance people hired at substantially lower salaries than their unionized peers at other airlines—be sufficiently motivated to provide top-notch service and a constructive esprit de corps?
Bethune was quoted as saying, “You can make an airline so cheap nobody wants to fly it.” Debate this issue, and the related issue of how can an airline make itself sufficiently unique so that it can command higher prices than competitors.
Define the following terms: goods, services, products.
What can be learned from the service imperative?
Why is it difficult to distinguish between many goods and services? Use the scale of market entities and the molecular model concept to explain your answer.
How does the organization and systems dimension of the Servuction Model differ from the other three dimensions? What is the purpose of the organization and systems dimension?
As you consider the table that provides Worldwide GDP information, a mix of countries comprise the top 10 service economies. These countries sometimes differ greatly, yet still generate large service economies. Please explain.
Discuss the keys to delivering effective self-service technologies.
Discuss online services that help humanize the online experience.
Discuss the four approaches to utilizing sustainability as an effective business positioning strategy.
1. Based on the Scale of Market Entities, is health care tangible dominant or intangible dominant? Please explain.2. Using the Servuction model as a point of reference, categorize the factors that influenced this service encounter. (Typical responses should be similar to those provided in Exhibit
Rank and discuss the projected growth rates of the nine service supersectors. What do you believe is driving the growth of the three most highly ranked supersectors?
Explain how a service supersector can have minimal projected growth yet still have many job opportunities available.

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