case
sauce111
7case.docxInstructions:
Read the "perspective" and then follow the outline for a case analysis in your syllabus. Generally you are analyzing any problems, alternative solutions, your recommendation for solutions and ultimate implementation. Remember to research and support what you think with documented references written in APA format. This is a paper so you will want to write a minimum of 500-1000 words to completely analyze this topic. This is a paper so write in APA format which means double space, 12 pt. font, Times Roman or Courier print. You will want to have a minimum of 4-5 references which are also written in APA format.
Objective: The purpose of this project is for the student to analyze the advertising strategies of an organization by applying concepts learned in the course.
Written Report: Prepare a case study using a case assigned. The case study should be 3-6 typed, double-spaced pages, plus a cover sheet, appendix and bibliography. The cover sheet should include your name, the case study name and the date. Please include any additional material you develop, such as graphs, charts, and diagrams. Be sure to include all resources used in preparing your case as part of the works cited or reference list.
Case studies should include:
Problem (issue) identification
Identify central problem(s) and/or advertising issues
List any important secondary problems/issues
Alternative Development
Develop a minimum of 3 comprehensive alternatives. This means that each alternative must deal with both your stated central problem/issue and any listed secondary problems/issues.
Fully develop each alternative so that the reader can understand exactly what you are suggesting.
Choice and Justification
State which alternative listed is best, restating briefly that alternative.
Then offer justification; tell why this alternative is best.
Implementation Strategy
This section should outline specifically what tasks and responsibilities are necessary to effectively implement the alternative chosen.
Implementation strategy must include discussion of a timetable for completion of the various tasks and some mention of who will be responsible for those tasks.
Marketers and Consumers Learn the Perlis of Promotions
Contests, sweepstakes, and premium offers are often used by marketers to give consumers an extra incentive to purchase their products. However, when these promotions don’t go as planned, they can embarrass a company or even create legal problems. A number of high-profile companies known for their marketing excellence have experienced problems with promotions over the years. Theses botched promotions were embarrassing for the companies and resulted in the loss of goodwill as well as money.
Kraft was one of the first to learn how expensive it can be when a promotion goes awry. In 1989, a printing error resulted in the printing of too many winning game pieces for a match-and-win game promotion. Kraft canceled the promotion but still had to spend nearly $4 million to compensate the winners versus the $36,000 budgeted for prizes. The snafu gave birth to the “Kraft clause,” a disclaimer stating that a marketer reserves the right to cancel a promotion if there are problems and hold a random drawing if there are more winners than prizes.
A few years later, PepsiCo had a major problem when a bottle-cap promotion offering a grand prize of 1 million pesos (about $36,000) went wrong in the Philippines. Due to a computer glitch, the winning number appeared on more than 500,000 bottle caps, which would have made the company liable for more than $18 billion in prize money. When the error was discovered, Pepsi announced that there was a problem and quickly offered to pay $19 for each winning cap, which ended up costing the company nearly $10 million. The furor caused by the botched promotion prompted anti-Pepsi rallies, death threats against Pepsi executives, and attacks on Pepsi trucks and bottling plants. Harrah’s Entertainment, Inc., made a major couponing error that ended up costing the company nearly $6 million. A mailing sent to its Total Rewards cardholders in its loyalty program included a coupon that members could redeem at Harrah’s Joliet Casino near Chicago. Only a small number of the coupons were supposed to be worth $525 each; however, a printing error resulted in 11,000 coupons worth $525 being sent out. The coupons were barcoded but most of the codes did not match the $525 printed on the coupon’s face value and casino staff initially refused to honor the coupons when the bar codes did not match the face value. However, the Illinois gaming board ordered Harrah’s to honor all of the coupons and most were eventually redeemed.
McDonalds’s also ran into a major problem when winning game pieces were embezzled from its popular Monopoly game promotion. McDonald’s ran its first Monopoly game promotion in 1987 and began running it annually in 1991. However, in August 2001 the Federal Bureau of Investigation arrested eight people for embezzling winning game pieces from the Monopoly game as well as the company’s “Who Wants to Be a Millionaire” sweepstakes in order to divert nearly $24 million worth of prizes to co-conspirators.
Fifty-one people were indicted in the case, nearly all of whom pleaded guilty or were convicted following trial. Among those pleading guilty was the director of security for McDonald’s promotional agency, Simon Marketing, who stole the winning tickets and conspired with the others to distribute them to a network of recruiters who solicited individuals to falsely claim they were legitimated game winners. Following the arrests McDonald’s immediately fired Simon Marketing, as did several other of the agency’s clients. The company also created an independent task force comprised of antifraud and game security experts to review procedures for future promotions. McDonald’s began running the Monopoly promotion again in 2003, and it has again become very popular among consumers.
A recent example of a well-intended sales promotion tactic going awry involved an online coupon promotion that KFC was running in China in April 2010 in conjunction with Taobao.com, China’s largest e-commerce site. KFC, which is China’s largest fast food chain with 2,000 outlets, planned to distribute coupons for three different menu items with each offering a 50 percent discount. The coupons could be downloaded on KFC’s online store on Taobao.com at specific time periods. However, a problem arose when news of the discounts circulated around the internet and the coupons were republished on other sites, where they were downloaded and redeemed at restaurants, far surpassing the volume anticipated by KFC. Store employees began refusing coupons arguing that they were illegally produced from unauthorized sites, but the explanations varied from store to store, which added to the problem. Many consumers reacted, and some became violent, and police had to rush to some restaurants to restore order. KFC issued an apology for the problem but the company’s failure to honor the coupons damaged the brand’s relationship with thousands of consumers, many of who criticized KFC on blogs and social media sites in many cities around China.
Marketers are not the only ones who encounter problems with promotions as consumers who win contests and sweepstakes often learn that there may be unexpected tax consequences because the prizes are treated as income by the Internal Revenue Service. For example, in 2004, 276 audience members on The Oprah Winfrey Show each won a Pontiac G6 automobile valued at $28,500. Winners could decline the prize, accept the car and pay the taxes, or immediately sell the car and get the difference in cash and pay taxes on that amount. A winner of recent American Airlines “We know why you fly” contest faced when greater tax liability as the grand prize was 12 round –trip restricted coach tickets for two to anywhere in the world the airline flies. The contest’s official rules explained that winners must pay federal and state income taxes, where applicable on American’s approximated retail value of the 24 tickets, which the airline valued at $2,200 per ticket or $52,800. The New York resident who won the contest was facing taxes on the tickets that could amount to nearly $19,000 and so declined the prized. However, airline promotions offering free travel remain very popular. In January 2008, American launched its DealFinder Travel the World Sweepstakes to build awareness for its online tool, which searches for discounted fares on the airline. The sweepstakes directed people to a special website to register for a chance to win first class air travel for two around the world and a $25,000 Master-Card gift card. American had to temporarily remove the sweepstakes from its website because so many people tried to register for the promotion causing technical problems with the microsite.
