SCENARIO: USA World Bank
COMPANY OVERVIEW


 


USA World Bank is a major bank with both an international and domestic presence. With branch locations nationwide, UWB enjoys a large consumer and small business base, and has been successful in several worldwide ventures as well. But, like all international organizations, UWB feels the need to develop profitable new products that will continue to expand its market share. Though new products roll-outs have been successful overall, they’ve been primarily defined within the United States.


 


THE PLAYERS



Brian Allen, President of New Product Development for USA World Bank: Brian has held this position for 13 years. Each year, he and his marketing team are expected to develop and launch a product that will have significant impact on earnings. A confirmed hands-off supervisor, Brian has had some winning products on the market, but not recently. In fact, his past several initiatives have been only marginally successful, and this year, he’s feeling pressure to show some results.


 


Mary Monroe, Vice President of New Product Development: Mary has worked under Brian for the past 10 years and she has a good track record. A favorite of the Board of Directors, she is very collaborative, and knows how to work corporate politics to her advantage. If she has a weakness, it’s that she is not always thorough in her assessment of the research from firms that she hires. Each year, with Brian’s approval, Mary is responsible for deciding which new product to present to the Board. She and Jim Wilson, the Vice President of Marketing Development, don’t always see eye-to-eye on this choice, but she respects him as a person and professional.


 


Jim Wilson, Vice President of Marketing Development for USA World Bank: Jim has been with the company four years and in the past three, he’s increased USA World Bank’s small business segment by 40 percent through successful relationship building with small-business organizations and owners. Jim thinks he is in sync with this business segment because he connects well with relationship managers like Aaron Anderson, Beth Brown, and Charlie Cousins who are a direct link to the customers. A no-nonsense leader, Jim is very focused on building business for the bank.


 


Alexis Andrews, Chairman of the Board of USA World Bank: Before coming to USA World Bank three years ago, Alexis was a successful entrepreneur, owning and managing a small commercial bank. She has a long history of launching successful banking products, and of hiring people who have complemented her strengths, yet compensated for her weaknesses. She is a results-focused leader who has little patience for errors.


 


Bea Hansen, newest member of the Board of Directors at USA World Bank: Bea has been on the Board for three months. A statistics instructor at a local university, she likes to make decisions based on facts. She is not political and will not play like a team member just to reach a decision. She prides herself on being reasonable, however, and will support the decisions made by Alexis Andrews.


 


Tom Araya, Marketing Associate: An employee of Mary’s, Tom is usually called on to help his boss interpret statistical data. He has recently earned his MBA.


 


 


 


 


JANUARY 17
EXECUTIVE MEETING



MARY: I’m sorry that Brian couldn’t be here today, but he did want me to go ahead with this meeting because he‘s interested in your opinions. Given that, I’ll brief you on this year’s recommended product and what the study feedback has been.


 


This year, we’re proposing a credit card that will work like a frequent flier program, where customers can earn rewards as a result of their purchases with the card. We plan to partner with an airline, some hotels and retailers. We’re calling it Instant Rewards, and it’s been compared to small business credit card or a card with discounted interest rates.


 


We’ve had Best Market Research conduct some feasibility studies for this product, and I have the results of those studies here. (Refer to Instant Reward Instrument and Instant Reward Data.) According to Best, this product will be successful in our market. In fact, their research indicates that the card could actually move people to switch from their current bank, if the incentives are strong enough. You’re all in research, so you can see how this objective study supports the introduction of the product.


 


I’m excited about this because we’ve been behind the eight ball when it comes to consumer rewards, and we’ve lost customers to banks who offer them. I agree with Best that there is little question about next year’s new product launch. Are there any questions here?



(Mumbling around the table concerning previously disregarded suggestions for this type of product.)


 


MARY: Do we have your support for this new product?



(A unanimous yes.)



MARY: Good! That went much more quickly than I expected so, since I know how busy you all are, if there are no further comments or questions, our meeting is adjourned.


 


 


JANUARY 24


EXCERPT FROM SENIOR MONTHLY RELATIONSHIP MANAGER MEETING HELD BY JIM WILSON



JIM: Okay, that concludes our regular business. Let‘s discuss our new product for small business owners. What is the status of the analysis on the reward card?


 


AARON ANDERSON: My accounts have told me they’re considering other banks that have quicker access to capital when they need it. If we don’t get this product launched, I’m afraid I’ll lose 40 percent of my customers.


 


JIM: 40 percent? What are you basing such a large loss on?



AARON: The large number of customers giving me feedback. It’s not pretty.



JIM: You’ve discussed these products with them?



AARON: Of course.



BETH BROWN: I’ll venture that about 30 percent of my business owners have been waiting quite a while for something that will enable them to easily buy small capital products, and they like the idea of earning rewards. So I guess I’m hearing the same thing.


 


JIM: Okay, so most of you are hearing the same things. That’s good, but I’d still like some data to back this up. Where are we on the analysis?


 


CHARLIE COUSINS: We each conducted focus groups in our regions, which showed an overwhelming demand for the product. Several small business owners brought up a possible consumer advantage as well, but they want to see the card for small businesses first. When are you presenting this idea?


 


JIM: Tell me more about the focus groups. How were the participants selected? How were groups conducted? Can I see the survey we used?


 


CHARLIE: Yes, sir. It’s right here. (Refer to Small Business Card Instrument.)



JIM: Great! As soon as I have the final results in hand, I’ll move forward. When will you have those?


 


CHARLIE: I’ll have it to you by the end of the week, and I’ll also include our procedure for arranging the groups and selecting the participants.



JIM: Excellent. Thank you all; keep up the great work.


 


 


JANUARY 27


E-MAIL
FROM: Charlie Cousins


TO: Jim Wilson


RE: Results report
CC: USA Relationship Managers



Attached is the report we discussed in the Monday meeting. Please contact me with any questions or recommendations. (Refer to Small Business Card Data.)


 


FEBRUARY 3


DIALOGUE EXCERPT FROM EXECUTIVE STAFF MEETING HELD BY JIM WILSON



JIM: So what do you think? I hope you’re as excited as I am by the outstanding work that my team did in identifying an opportunity for our small business clients. I’m interested in your concerns, questions, or suggestions about launching this product.


 


EXECUTIVE 1: What methodology was used to identify this need?



JIM: My managers used focus groups of small business owners within each of their respective regions. Among them, they cover the entire country, so I‘m confident that their findings represent a nationwide perspective.


 


EXECUTIVE 2: Is there any other potential for this product?



JIM: Actually, there‘s a feeling—even from some of the business owners—that consumers would be interested in a similar product.


 


EXECUTIVE 3: I hear there is a product like that, a new consumer credit card that offers rewards, on track for approval now.


 


JIM: Well, then, we have an opportunity to coordinate our efforts. Let’s defer that point for now.


 


EXECUTIVE 1: Jim, I believe that this product could really grow our small business segment and you have my support. But you’d better move quickly, because Mary will be making her presentation to the Board within a few months, and we’re all aware that only one product will get the year’s big marketing push.


 


EXECUTIVE 2: You have my support as well.



EXECUTIVE 3: And mine.


 


FEBRUARY 4


PHONE CALL BETWEEN JIM WILSON AND MARY MONROE



JIM: Hi, Mary! Do you have a few minutes?



MARY: Just a few, Jim. What‘s up?



JIM: I’d like to submit a product for your consideration based on an analysis that my team has done. It’s a card for small business owners that will allow them—once they qualify—to purchase capital items. The card has a credit line of 0,000, and it also has a reward component.


 


MARY: I’ll be happy to review the analysis, but I will warn you that I‘ve had an independent marketing firm perform a thorough statistical analysis and their findings are for a consumer product that offers rewards.


 


JIM: I’ll send you the analysis. It uses focus groups with clients and small business-owners, as well as statistics. It’s fairly robust.


 


MARY: Like I said, I’ll be happy to review it, but I’ll have trouble disputing the conclusion from the Best Market. I’ve reviewed the report with several executives and they support the consumer product as well. We’re planning to recommend it.


 


JIM: Mary, I also got feedback from many executives. They encouraged me to contact you immediately, because they have a lot of faith in this product. I know time is short, but consider that this card could span into the consumer market as well.


 


MARY: Send me the analysis.


 


 


FEBRUARY 4


E-MAIL
FROM: Mary Monroe
TO: Jim Wilson


RE: New product analysis



Thanks for getting the data to me so promptly, Jim. I’ll look it over and let you know what I think.


 


 


FEBRUARY 10
OFFICE MEETING BETWEEN BRIAN ALLEN AND MARY MONROE



MARY: I held the meeting with the executives, as you suggested, and they agree with Best Market that we should move forward with this product. Let me go through the material with you as I did with them in the meeting.


 


BRIAN: That’s not necessary. I’ve looked at the results.



MARY: Can I help with this any further?



BRIAN: Mary, you know our new products have pretty much tanked in the past couple of years. We’re under a lot of pressure to deliver something that will be profitable and increase market share. Is this going to do it?


 


MARY: I have no reason to doubt Best Market’s results. They’re a prestigious firm with an international presence. I’d like to begin putting together a formal presentation for you. Should we use the same format as last year?


 


BRIAN: Start thinking about it, but don’t go all out just yet. I still haven’t made up my mind about this product.



MARY: We don’t have a lot of time. Do you have specific concerns that I can help with?



BRIAN: No, I just need some time to consider this. I’ll let you know when I decide.



MARY: Okay. In the meantime, I’ll only look for last year’s submission and start creating a format for this year.



BRIAN: Thanks for your review, Mary. I’ll be in touch soon.


 


FEBRUARY 11


E-MAIL


FROM: Jim Wilson
TO: Brian Allen
RE: Small Business Card



Brian,


 


I’d like to request a brief meeting to discuss a new product with great potential: a small-business owner card with a reward component. I’ve met with my executive staff and they are totally onboard with this. In fact, they encouraged a recommendation to you and Mary. I’ve already spoken to Mary, and she is reviewing my team‘s analysis, but I’d like to share it with you as well.


 


I recognize that you are very busy and am willing to meet with you as soon as your schedule permits. I think this is that important.


 


Regards,
Jim Wilson


 


 


FEBRUARY 11


E-MAIL
FROM: Brian Allen
TO: Jim Wilson
RE: Small Business Card



Please come to my office next Tuesday at 10 a.m. to discuss this potential new product.


 


 


FEBRUARY 15
EXCERPT FROM MEETING BETWEEN BRIAN ALLEN AND JIM WILSON



JIM: So that‘s it in a nutshell. The results of the focus groups are conclusive; there is a definite need for a new product that allows small-business owners who qualify to have a high-limit card that can be used to purchase capital items. What do you think?


 


BRIAN: I’m concerned that Mary isn‘t completely onboard with this. She’s the one who’s ultimately responsible, with my approval, for the submission of the new product.


 


JIM: Brian, I wouldn’t have come to you without telling Mary. But I’m here because the executives I shared this with strongly encouraged me to push this product. They see great potential beyond even the small business owners. I’m very concerned, based on the data my managers collected, that if we don’t do this, we‘re not just sacrificing new profits, but old ones; my managers think that their customers will leave us for banks that are offering what they need. Even the executives at my meeting have been hearing rumblings from small business owners looking for new banking opportunities. We’ve been the leader in our industry; can we afford to lose this position and possible market share?


 


BRIAN: I hear what you’re saying, Jim, but I need to review the results carefully. Give me some time to think about it; I won’t take too long.


 


 


MARCH 1


E-MAIL
FROM: Mary Monroe
TO: Jim Wilson
RE: New product decision


 


Jim,


 


Brian asked me to let you know that a decision has been made to recommend the consumer product to the Board. I hope you will support this decision.


 


Regards,


Mary


 


 


MARCH 9
EXCERPT FROM MEETING BETWEEN BRIAN ALLEN AND MARY MONROE



MARY: Here’s the Best Market report I’ve prepared for the Board. Let’s go over it to make sure you don’t have any issues or concerns.


 


BRIAN: If nothing’s changed, then I’m okay with it. We don’t have to go over it all again.


 


MARY: Fine. I’ve also included a copy of the survey and results if the Board wants to see that. Should I go over them?


 


BRIAN: Let’s go over a few.



MARY: Good. Here is a question we asked: “How likely is it that you will sign up for Instant Rewards if it only includes your top-ranked benefit?” The results show that they would choose Instant Rewards. Here’s another: “How likely is it that you will change banks to join Instant Rewards if it only includes your top three ranked benefits?” The results indicate that we would draw new customers. I‘m telling you, this is a winner.


 


BRIAN: I don’t disagree, but I am still concerned that launching this product will be a slap in the face to our small business owners, and that we’re risking losing them. This is going to be a concern for the Board as well. 


 


MARY: We don’t see the small business card as a priority.



BRIAN: I hope you’re right. Thank you for putting this together. I’ll review the rest and let you know if I have any questions. 


 


 


MARCH 10
E-MAIL


FROM: Alexis Andrews


TO: Board of Directors
RE: New Board member


 


Please join me in welcoming Bea Hansen to the USA World Bank Board of Directors. Bea comes to us from the world of academia, where she is professor of statistics. She also has had a very bright career as an author and consultant in the area of statistics. We are very fortunate to have her on our Board. She brings a new skill set to the table, one which we will no doubt find very valuable.


 


APRIL 1
EXECUTIVE BOARD MEETING, ALEXIS ANDREWS PRESIDING



ALEXIS: This meeting will come to order. Regular business has been set aside for today, so that we can give our full attention to Brian’s proposal for next year’s new product. Before we begin, Brian, I’d like to introduce you to Bea Hansen; Bea is a professor of statistics and we are very fortunate to have her sitting on our Board. Bea, Brian is the President of New Product Development for USA World Bank, and he’s been successful over the years in helping us to identify and launch new products that positively impact our bottom line. Brian, the floor is yours.


 


BRIAN: Thank you, Alexis. I’m excited to tell you that we’ve come up with an exciting new product for the upcoming year. Please feel free to make comments or ask questions throughout the presentation. For Bea’s benefit, let me provide a little background.


 


Bea, I have two primary sources for new product development: Mary Monroe has the overall responsibility for new product proposals, and Jim Wilson has nationwide responsibility for the small business segment of our bank. Both are very experienced and effective in assessing needs from either the consumer or small-business owner perspective. Mary accepts new product ideas from anyone in our company. Typically, she commissions a top-notch independent firm to analyze the contenders and recommend a single product that will be most successful for our bank. The proposal is then brought to you for your approval. Our track record has been good with this method.


 


This year, we are proposing the Instant Rewards consumer credit card. (Refer to PowerPoint Presentation.) Our research shows that consumers are looking for a credit card that rewards their loyalty with Instant Rewards that they can choose themselves. Our Marketing Team, in conjunction with our Customer Service Representatives, has been tracking this data for a few years. When Best Market also showed a nationwide demand for such a product, we felt confident in recommending Instant Rewards to you.


 


BEA: Excuse me, Brian, could you please give me an indication of how large a sample was selected to get to this conclusion? Could you also tell me the time frames in which this data was collected?


 


BRIAN: Sure, I have the data right here; give me a second to find it. Okay, here it is. The sample size was about 140,000, and I will have to get back with you on the time frame.


 


BEA: That’s a large sample. How was the data collected?



BRIAN: When consumers log on to our Web site, they’re asked to fill out a survey. We collected more than 140,000 observations that way.


 


BEA: I’m not so sure the sample is representative; the gender percentages look wrong. You can check on the Census Bureau Web site, but I believe there are slightly more females than males in the population. You’re showing a higher percentage of men in this sample, possibly because men are more comfortable with computer technology and therefore more likely to respond to an online survey.


 


BRIAN: I can appreciate what you’re saying, but isn’t it true that with such a large sample any errors in the data will randomize out?


 


BEA: Random error, yes, but not sampling error. Have you ever heard about the classic screw-up in the Literary Digest presidential poll of 1936? Literary Digest was a very reputable, high-brow magazine that confidently predicted that Alf Landon would be elected in a landslide. They had a sample size of more than two million people. George Gallup predicted the opposite; he said that FDR would win in a landslide. His sample was only about 1,500. So how could Literary Digest, with a sample of two million be so wrong? Because they collected their sample from phone books and auto registrations. Who owned a car or had a phone in 1936? My parents didn’t. My father was 22 years old, working on the WPA, with one small child at home and a second on the way. 1936 was the only time in his life that he voted Democratic. In 1936, and today, for that matter, Democrats tend to be more downscale.


 


BRIAN: So you’re doubting these results?



BEA: I would be a lot more confident with a truly random sample. I mention age and income because it’s well-known that tech-savvy people tend to be younger and more upscale.


 


I also would like that timeframe data. If I may, I’d like to bore you again with another historical anecdote, this one about the 1948 election. Remember the classic photograph of Harry Truman holding up the Chicago Tribune with the headline, “Dewey Defeats Truman”? New York governor Thomas Dewey was so far out in front of Truman in August and September that everyone except George Gallup saved a few bucks by stopping their polling activities. But Truman’s aggressive whistle-stop campaign during October turned the election around. The political polls, except Gallup, were wrong because their data was over a month old. The lesson here is that banking business and trends, like everything else in our world, changes quickly. If you can just compare the survey results from February and March of 2004 with those of January and February of 2005, I‘d feel a lot more secure about your data.


 


ALEXIS: Brian, how would you feel about adjourning today and by close of business Monday submitting to each Board member a copy of the market analysis that incorporates the items that Bea brought up today? Board members, when you receive the report, please submit any questions or suggestions to Brian by the end of the week. We’ll reassemble the following week, and Brian can resume his presentation and answer questions to everyone’s satisfaction. Please keep in mind that we only have six months before the new product launch.


 


BRIAN: That sounds good.


 


ALEXIS: Does anyone have any issues with this? If not, the meeting is adjourned.


 


 


APRIL 4
MEETING BETWEEN BRIAN ALLEN AND MARY MONROE



BRIAN: The Board meeting yesterday was nearly a disaster, Mary. If Alexis hadn’t called a quick close to the meeting, I’m not sure we would have had the support for this product.


 


MARY: What happened?



BRIAN: The new Board member is a statistics professor, and she called all of our research into question. I need to understand thoroughly the entire methodology that was employed by Best Market. Do you understand all the details?


 


MARY: I didn’t do a detailed analysis of the results because Best Market has always done a fine job for us.



BRIAN: Well, that’s not good enough! Clear your schedule. By the end of the day, we need to present each Board member with an accurate analysis, summary report, and presentation. You and I will meet again in two days and go over every detail. Is there someone on your staff who understands all of the statistics?


 


MARY: I think so.



BRIAN: Bring that person with you. Are you clear on what has to be done?


 


MARY: Yes, sir. Do we still have an opportunity with this product?



BRIAN: I don’t know. Right now, let’s do what needs to be done. Any questions?



MARY: No, sir, I’ll get right on it.


 


 


APRIL 4


MEETING BETWEEN BRIAN ALLEN AND JIM WILSON



BRIAN: Hey, Jim, I asked you in today because I want to understand the methodology that you used to determine the product for your business community.


 


JIM: We used a focus group study, just like we’ve done before. When we launched the B2B product lines in the past, this is the methodology we employed. You know how successful those products were.


 


BRIAN: I need you to bring to me all the specifics, like the questions used, sample size, how the samples were drawn, over what time period, everything. It’s a shame that we don’t seem to have one company-wide approach to identify products. That may be something to consider in the future. But right now, I need you to provide me with all the details of your study. Can you have that all to me today? I’ll go over it and we’ll meet in two days to review it together.


 


JIM: Sure can, sir. I’ll have it to you in a couple of hours.



BRIAN: Thank you, Jim.



JIM: By the way, I agree with that we could use a consistent methodology for launching new products. Once we’re through this year’s launch, I’d be interested in chairing a committee to that end. See you in two days!


 


 


APRIL 12
EXCERPT FROM EXECUTIVE BOARD MEETING, ALEXIS ANDREWS PRESIDING



BRIAN: If I may, I’d like to pick up where we left off last time.



BEA: Before you do, Brian, I want to point out that your huge sample size may be distorting the results. A significant correlation, such as you found, means that the coefficient, or weight of the mathematical model, is unlikely to equal zero. It means that there is a relationship between age and the likelihood of purchase and the likelihood of changing banks. The information about age helps us estimate purchase and bank changing.


 


How much does it help? This is where the R-squared measure you included comes in. R-squared is a ratio of how much of the variation in the likelihood and change scores is accounted for by age. Another way to look at this is to think about how much our ability to predict a bank change improves if we know age. Not very much for all—only three or four percent. This small amount is “statistically significant,” but because of the huge sample size, it has little practical value. We have to use some common sense here.


 


Even predicting the bank change with the top three benefits is marginal. I’m not sure I would recommend spending millions of dollars marketing this product to young people when age increases our ability to predict by less than 20 percent. We need to look at other variables. We need to get the R-squared up by quite a bit.


 


There is an old saying in my business that an R-squared between 70 and 80 percent is a good working model. R-squared between 80 and 90 percent is excellent. R-squared between 90 and 95 percent qualifies the researcher for the statistician’s hall of fame. And an R-squared above 95 percent means that you are probably lying.


 


BRIAN: If we could just…



BOARD MEMBER 1: Something doesn’t seem right here. I didn’t know that you could do percentages on ranked data. I’m confused, Dr. Hansen.


 


BEA: You’re right about trying to divide ranked data. It is meaningless. But Brian is giving us percentages of the average ranks, which is fine because this is ratio data.


 


Let me back off a bit. There are four levels of measurement: nominal, ordinal, interval and ratio. Nominal is just a name, like the numbers for football players. It is meaningless to say that number 42 is twice as good as number 21.


 


Ordinal data is like the finishers in a marathon. The first and second place people could be seconds apart, while the third guy could be miles back. With ordinal data, there is an order to the numbers but they are not equally spaced. There is no equal interval, so division is meaningless.


Interval data like the Fahrenheit temperature scale has equal intervals, but the zero is just another point on the scale and doesn’t signify the lack of any heat. The difference between 20 degrees and 40 degrees is the same amount of heat as the difference between 40 degrees and 60 degrees. That’s equal interval. But 40 degrees is not half as hot as 80 degrees. Division is meaningless because zero degrees Fahrenheit is not absolute zero.


 


And finally, ratio data, like money, has both equal interval and a meaningful zero point. Addition, subtraction, multiplication, and division are all possible.


 


You brought up a very good point. It is important to remember that when talking about an individual respondent’s rankings, we cannot say that their top-ranked benefit is twice as important as their second-ranked benefit, and three times as important as their third-ranked benefit. There is no equal interval between the ranks. Like the finishing places in a race, one and two could be millimeters apart, while third is miles back.


 


BOARD MEMBER 2: I just noticed something in the questionnaire. Questions IR 3, 4, and 5 ask about both signing up for the Instant Reward card and about changing banks. It seems like these two issues should be in separate questions, doesn’t it?


 


ALEXIS: It seems obvious that we need to clarify a couple of issues before the Board can make any decisions about launching the Instant Rewards product. Bea, will you set up a meeting with Brian and Mary to work out the kinks in this research report?


 


BEA: Tuesday or Wednesday mornings next week look pretty good right now. Brian, can I give you a call on Friday to set something up?


 


BRIAN: That sounds good. I can juggle some things and make ourselves available.



ALEXIS: For the time being, then, let’s consider this meeting adjourned.


 


 


APRIL 13
MEETING WITH BRIAN ALLEN, MARY MONROE, JIM WILSON, AND TOM ARAYA



BRIAN: Well, I don’t ever want to go through that again. If we have to redo the Instant Rewards research, it will take months. We need to have something for the Board, just in case. Jim, explain again how the Small Business Card research was conducted.


 


JIM: We used the same focus group method that we’ve always used in the past. Is it perfect? I don’t know. I shared some of the details with Tom earlier.


 


TOM: I wonder if Dr. Hansen will bring up what is known as “Pygmalion in the Classroom.” It was a study in the ‘50s where teachers were told that a few of their incoming students would “bloom” during the next school year. The children that were supposed to bloom were just randomly selected, but by the end of the school year, these kids actually had made great strides in their school work. How the teachers treated these “special” students seemed to be the key. This wasn’t a fluke; the research has been replicated hundreds of times on everything from lab rats to college sophomores. Dr. Hansen might point out that personal bankers could have been, inadvertently, leading the customers in the direction the personal bankers wanted them to go.


 


BRIAN: How can we fix this?



MARY: We could have Best Market Research conduct focus groups of our business customers.



BRIAN: How long will it take?



MARY: If we’re willing to pay for a rush job, three or four weeks, maybe.



BRIAN: At this point, I don’t really care about the money.



TOM: We need to make sure that we get a sample that represents our customers. Even if we just count the number of positive and negative comments about the product, Dr. Hansen will probably play the random sample card again. Jim, what do you think are the crucial things in small business decisions?


 


JIM: Over the years, the personal bankers have told me that the first priority is the size of the company. Second would probably be whether or not they were the founder of the company. Founders tend to be more emotionally involved in their companies than professional managers.


 


BRIAN: So we need to make sure that the companies the market research company interviews represent a full range of sizes and a good mix of founders and CEOs who came into the business after it had started.


 


TOM: Yes, we can have Best Market Research use these two variables to stratify the sample to represent our customer base and then randomly select companies within each of these cells to be in the focus groups.


 


JIM: As I recall, we interviewed 75 or 80 customers. Will that be a large enough sample to satisfy Bea?



MARY: We’ll check with Best Market Research, but that seems like a good amount.



TOM: But even in focus groups, we have to watch the response rate. If only 25 percent of the companies are willing to take part in the focus groups, Dr. Hansen might say that they somehow are different from the ones who refused. I don’t know what the response rate should be in focus groups, but in survey research, the rule of thumb is that a 50 response rate is considered adequate, 60 percent is considered good, and 70 percent is excellent.


 


BRIAN: While I’ve got you here, I want you to start thinking about something Alexis mentioned the other day. She was wondering where we got our ideas for new products. I told her that the bank presidents and the personal bankers have their ears to the ground. They hear things.


 


JIM: Harry Truman used to say that some politicians spend so much time with their ears to the ground that all they hear from are the grasshoppers.


 


BRIAN: So do we need to be more systematic about how we gather new ideas? Mary and Jim, would you start talking to your colleagues about how other companies in and out of banking think up new products? Another thing is that there seems to be a lot of bickering about consumer versus commercial products. Our Board of Directors only wants to launch one product a year.


 


JIM: Have they ever said why only one?



BRIAN: If there ever was a reason, it has been lost to the ages. I want Jim and Mary to start looking into something. We need to be able to launch both commercial and consumer products at the same time. Maybe we need to separate our market research function into two branches so that the two of you can explore opportunities separately.


 


MARY: Won’t the Board say that we can’t afford to do more than one product a year?



BRIAN: Probably. We need to show them that both can be profitable. I’m going to talk to the accounting and IT people about setting up a system to estimate payback period or ROI or some good measure like that.


 


JIM: You probably also want to include the finance department.



BRIAN: Good point. Mary, Bob and I have to deal with Bea Hanson next week. Mary, you and Jim get together to set up the Small Business Card focus group project. I’ll talk to finance, accounting, and IT about ROI measures. Mary and Jim, start poking around about systems for gathering new product ideas. It is going to be a tough couple of weeks. Jim, Mary, and I will meet again on Friday at 8 a.m. to see where we stand and what barriers need to be overcome.


 


MBA PAPER


 


TITLE: Scenario One Benchmarking Paper


 


NAME: Rozelle L. Hammonds


ADDRESS: 3712 Weaver Rd.


                    Houston, TX 77093


 


Telephone: (713)694-0396 or (281)224-2798


DATE NEEDED: Monday, March 27, 2006


 


NUMBER OF PAGES: 5


 


APA FORMAT


 


INSTRUCTIONS:


 


From the scenario develop at least 2 problem statements. Identify at least 2 particular companies and how they approached a similar problem or opportunity and what the results were. Find best practices to something you are considering. You can do research either by company or by function (marketing, HR, etc.) or by topic (outsourcing, company-union partnerships, stakeholder alignment, etc.). Define the focus and objectives for the paper: Determine what the objectives and title will be for the paper.



Credit:ivythesis.typepad.com


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