CASE ANALYSIS- SPRINGFIELD

Case Analysis- Springfield

Case Analysis- Springfield

Identification of the strategic issues and problems

1. How should we define product-market competition for the Nor'easters? Product form? Product category? Generic? Budget?

2. Evaluate the research study undertaken by the League Sports Association and by Larry Buckingham. Consider each step in the process. How effective was the study in determining customer value?

3. Using Case Exhibit 6, develop a weighted average estimate of customer value for different ticket packages (see the CustomerValue worksheet in the Springfield spreadsheet). What additional insights does this process provide for determining the price for Springfield tickets and concessions? (Hall, 1980)

4. What are the key considerations in setting new offering prices (Iaco pp. 101-103, 116)? Which pricing strategy is most consistent with the Nor'easters' competitive advantage? What do the price elasticity estimates for each ticket package tell you? 5. Provide pro formas for Penetration, Value, and Prestige pricing strategies (see the ProForma worksheet in the Springfield spreadsheet). Which strategy do you recommend?

6. Design a ticket pricing plan for Nor'easters' first season. Be very specific, and be prepared to justify key assumptions. For example, what is the market size? What percentage of the Springfield population or households is part of the target market? How should you adjust for people or households that can't afford tickets? How should you adjust for people or households who wouldn't go to a baseball game if it were free? How can you estimate the number of times single ticket buyers will come back - i.e., attend more than one game? 7. Under the pricing plan you have designed and given assumptions regarding concession sales, will the team breakeven in the first year? If not, what assumptions are necessary to reach breakeven? What is the likelihood?

Analysis and evaluation

Specialized Marketing Capabilities (Porter, 1980)

Product Strategy & Management

o NPD, Positioning, Brand-building, Portfolio management

Communications Strategy & Management

o Reach, Attract & Convert w/Advertising, Internet, Selling, Sales Promotion

Channel Strategy & Management

o Distribution; influence & motivate downstream collaborators

Customer (Relationship) Management

o Segmenting, Targeting… & Retention thru customized interactions

Pricing Strategy & Management

o Yield management, Economic/Customer value analysis & delivery

Dynamic & Architectural capabilities:

Data Collection & Interpretation

Marketing Program Planning & Management

Key Takeaways

The value of marketing research in projecting demand for an incrementally new product and determining the best positioning concept and brand name.

The importance of positioning. Three questions

o Clear frame of reference

o Leverage points of parity

o Compelling points of difference

Implement a marketing mix that is consistent with the positioning concept.

The relationship between A&P expenditures, awareness, distribution coverage, trial rates & ultimate market share.

The relationship between PLC stage for the product category and for the product form and how to incorporate that information into strategy formation.

Pricing Strategies

According to McKinsey, “80 to 90 percent of all poorly chosen prices are too low… Companies habitually charge less than they could for new offerings. It's a terrible habit.”

Springfield Nor'easters

Key Decisions:

o Define product-market competition.

o Estimate customer value for different ticket ...