Research Topics: USA World Bank

SCENARIO: USA World Bank

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

SCENARIO: USA World Bank

SCENARIO: USA World Bank COMPANY OVERVIEW USA World Bank is a major bank with both an international and domestic presence. With branch...

Bench Marketing

USA World Bank, UWB, is an international major bank, with branches across the country as well as in several locations worldwide. The company has a large consumer base including small business organizations. UWB has been so far successful in its ventures and has already positioned itself in the market.             Being an international major bank with a reputation, UWB has an opportunity to further expand its market through different strategies. To address this issue, every year, like most companies do, UWB launches a new product to increase its market share. The new product needs to be profitable and something that will excite customers and an advantage to every sector of the market. During the past years, the products that the company had launched were just marginally successful and the board members of the company are demanding for some winning products. The most significant challenge now is to launch and develop new product that will definitely be successful and profitable for the company. However, there are some problems that hinder the company to overcome this challenge. The focus of this paper is to identify these problems and to identify business practices such as benchmarking that seems to be the solution to the problems base on other existing companies today to determine the usefulness of such practices. The paper aims to present the importance of benchmarking and how it can help a business firm such as UWB.             USA World Bank, for the past years, has not been very successful with its launched products. The past several initiatives of the New Product Development President have been only marginally successful. This year, the new product development team is obliged and pressured by the board of directors to launch and develop a winning product to be able for the company to achieve its goal of further increasing its market share. The team president initiated the Instant Reward Card, a card which is basically a credit card where customers can earn rewards from their purchases with the card and is comparable with a business credit card with discounted interest rates.   In the scenario, it was mentioned that the idea was formulated based on what the bank presidents and personal bakers hears. As stated in the scenario, ‘bank presidents and the personal bankers have their ears to the ground’. This is one of the problems of UWB, having no system or standards of gathering ideas in product development. With the instant reward card, the team had based the idea on hearsay. They initiated the idea and proposed it without establishing clear understanding if that is the product that the customers really needed and wanted.   Aside from that, the company has no standard methodology used when conducting research. Research is a very necessary tool for the company to establish facts especially when creating new products. According to American Marketing Association, marketing research is the systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services (SBA, 2006). Research gives a company a view on the potential of the product to be developed based on the potential market, the size of the market, or the marketing strategy to be used to effectively promote the product. Market research will also identify trends that affect sales and profitability. Although, the new product development team conducted research to determine the potential of the product, the team has not clearly understood the methodology used and how reliable the research is.   Moreover, UWB also does not have external perspective on opportunities for the product. For example, they did not study other banks or the competitors if these banks already have a product that can be compared to the instant reward card. If other banks have it already, they should have been study on how the product is doing in the market, the benefits it gives the customers, its disadvantages and how the product has been profitable so far to the banks who has that product. By doing that, UWB can be able to add value to its instant reward card, making it more attractive to the customers. This technique to measure an organization against other organization and identify opportunities and approaches to improve is called benchmarking (Crow, 1999). Benchmarking is the process of identifying, understanding, and adapting outstanding practices from organizations anywhere in the world to help a company improve its performance (TBE, 2006). As noted above, it is a tool to improve, and any business process can be improved and benchmarked, including new product development. Benchmarking is basically comparison of a company’s practices with other companies, not necessarily within an industry but also with other industry. For example, Ford Motor Co. as part of its Ford 2000 strategy to reduce production cost, studies and observed operations not only of rival auto manufacturers such as GM and Toyota but also other companies which show excellence like GE, McDonald’s, and Xerox to find best practices currently practiced for each particular operation that are applicable to Ford (Penman, 1999). Ford Motor’s benchmarking is a continuous process and one of its key implementation is the “American Keiretsu”. As the name implies, Keiretsu is first modeled by Toyota (Kotabe, 1998) and currently being practiced by GE, Microsoft and others. With American Keiretsu, suppliers become involved in the design and development of products (Penman, 1999). Another company who uses benchmarking is IBM. By 1993, IBM experienced straight decline in revenues brought about by change in the marketplace because of its creation of new products such as PCs that had lower profit margin than some of the firm’s traditional offerings (PDBPR, 2002). This event has led IBM to make analysis and benchmarking of some of the best practices in market planning and product development. IBM found out a suit of practices, from within the company and outside the company which offered the best opportunity for IBM to move forward (PDBPR, 2002). Practices such as structured process; team based management; asynchronous development and business tiers; and customer $APPEALS which is a psychographic method developed by Peter Marks to understand what motivates customers to buy a product (PDBPR, 2002), helped IBM established new approach to product development. Because of benchmarking, IBM became committed to develop only those that had the best chance to win the market and say no to other opportunities. The problems of UWB can be solved by using the approaches made by the companies mentioned above. They can consider observing other companies in the bank industry and in other industries to determine the best practices in launching a new product such as the methodologies used in formulating new ideas and the effective methodologies used in determining the market, its size and other factors that can affect the profitability of the product. After observation and studying of other companies, UWB can now formulate its own standard. Moreover, they should also observe within UWB itself. In the scenario it was stated that the VP for marketing development had successful relationship with one of the market segment of the company. The VP might have some best practices that should also be benchmarked and considered to be adapted by the team in creating and developing new products. References: Crow, Kenneth (1999), Benchmarking Product Development,             DRM Associates Online             <http://www.npd-solutions.com/bmpd.html> Kotabe, Masaaki et al (1998) Ford Motor Company and Die Development,             University of Texas at Austin Graduate School of Business Penman, Bob (1999) Ford Motor Company, Management of International Operations MGMT 222 Product Development Best Practices Report (2002), IBM’s Journey Back  to Profitability; Integrated Product Development Plays Key Role, online < http://www.roundtable.com/PDBPR/IBM.html> The Benchmarking Exchange online date retrieved: March 24, 2006             <http://www.benchnet.com/wib.htm>             United States Small Business Administration, Marketing Research,             Online Date Retrieved: March 24, 2006             <http://www.sba.gov/starting_business/marketing/research.html>   Credit:ivythesis.typepad.com

Bench Marketing

USA World Bank, UWB, is an international major bank, with branches across the country as well as in several locations worldwide. The compa...

Scenario One Problem Solution Paper USA World Bank

USA World Bank are developing new products and services that will solve business problems and create business value at the same time to find the resources, knowledge and energy that will make development a success that will impact customer loyalty and new markets to develop a matrix of opportunities for the UWB’s business to identify and capture.   The situation including opportunities and challenges   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 opportunity to launch a better product development that could help in meeting the needs of the customers through the realization of the credit card that will work like a frequent effort program, where customers can earn rewards as a result of their purchases with the card, called Instant Rewards, and it’s been compared to small business credit card or a card with discounted interest rates and having the services for Best Market Research that will conduct some feasibility studies for this product and have the needed results of those studies.   The opportunity and the possibility of acquiring Instant Reward Instrument and Instant Reward Data as this product will be successful in UWB’s market as the research indicates that the card could actually move people to switch from their current bank, if the incentives are strong enough. It’s a card for small business owners that will allow them to purchase capital items. The card has a credit line of 0,000 and has a reward component. There needs to consider the focus groups that 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. The challenge to pursue on the Instant Rewards consumer credit card as research shows that consumers are looking for a credit card that rewards their loyalty with Instant Rewards that they can choose themselves.                       The Problem   Upon analyzing the scenario for UWB there has been several crucial problems that needs to be in due time before the situation of the bank situation gets worst that could negatively affect their reputation in the society as well as in the domestic and international presence within established business organizations. The one problem that UWB is facing recently involves to their respected key players that serves as the main structure for the success of their New Product Development, as the several initiatives of Mr. Brian Allen have been only marginally successful and that Brian is feeling pressure to show some results. Mary Monroe on the other hand, does not always thorough in her assessment of the research from firms that she hires even if she is very collaborative. UWB may involve problems as Mary and Jim Wilson, the Vice President of Marketing Development, don’t always see eye to eye to discuss important matters regarding choices for the new development. 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 sense leader, Jim is very focused on building business for the bank that could be a major problem in the process.         Moreover, Alexis Andrews is a results-focused leader who has little patience for errors. Bea Hansen, newest member of the Board of Directors at UWB, 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 and will support the decisions made by Alexis Andrews in turn, can possibly adhere to the to a poor product development in having effective ways to maintain good principles of their business and be able to survive the future situations that may cause the bank to be off in the customers’ preferences in lieu to some market situations.  The major problem for UWB could be the problem in establishing out for the best fitted methodology regarding which of the product development is of clear and suitable implication to the customers as needed as possible for the launching of a new product that could be a good potential to the UWB’s domestic and international presence involving the customers and the small business owners respectively.                   Desired future state and goals which to evaluate alternatives   The need to discuss a new product with great potential: a small-business owner card with a reward component. Thus, there has been a lack of doing a detailed analysis of the results because Best Market has always done a fine job for the UWB as Mary said. As Jim and his team used a focus group study, just the launching of the Business to Business (B2B) product lines with the success of the methodology being employed as the products gained a successful remark. There needs to review and analyze the sample size being used for the feasibility of the study in terms of limiting its size to just reachable and valid process in order to avoid in distorting of results. There is a reliability in applying the significant correlation that the weight of the mathematical model is equal to 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 UWB estimate purchase and bank changing. The ample 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 CEO’s who came into the business after it had started.           Potential Solutions   This part of the presentation will have to present, identify and discuss alternatives that will give emphasis to the issues of concern that UWB is involved into. There will be two to four potential solutions that will be able to allow the bank to evaluate the best possible alternative to be implemented and in order for the players of UWB to effectively evaluate the alternatives and possibly come up with better applicable decisions regarding the realization of essential solutions to support and justify the issues in quick process so that the development of a new product will aspire growth and stability in the market where the bank is to function its role in achieving for a better business position.                         Solution 1: The realization of the Instant Rewards consumer credit card: Application of the Reward Instrument for the integration of effective Research Results   The first alternative being proposed is the realization of the Instant Rewards consumer credit card: Application of the Reward Instrument for the integration of effective Research Results that is crucial in determining good relations among UWB’s small business owners and its customers so as to give the latter a good product satisfaction within its process development and the need to integrate research results in order to keep every factual information valid as needed as possible to have the best plan of action effective to the market and its designated banking sectors and organizations. Thus, the realization of the Instant Rewards consumer credit card, UWB can positively adapt a good research implication of its basic need to the customers as it is needed to pursue the banks planning goal of deciding what plans are to be realized and what are to be terminated in the process assessment.               Solution 2: Providing of a Detailed Analysis of the research made by the Best Market Research    The second alternative proposed is the Providing of a Detailed Analysis of the research made by the Best Market Research as this process is important because it may positively open a new channel for UWB’s development of new products that will impact successfully within the small business owners in enhancing useful credit cards that will increase the profit standards of their business. This is possible because Best Market Research has been supportive to the banks’ goals and purposes in launching of their successful products as detailed analysis will involve the whole package, complete with research evidences and gathered data with enough research function and its paradigm to continue improving its research ways to provide basis in justifying information within its research findings and discussion of results to really emphasize that research is still the most effective tool in looking for truth among relationship ideas and concepts in order to get things started at the right phase of the process that will strengthen the present situation.         Alternative 3:  The Application of a suitable Methodology in strengthening a better product development through credit cards             Methodology is an important tool that will guide the players to a good decision in  handling out relevant ways to have a nice product development launching by means of giving importance to the materials and resources being used in the actual measure within the purpose of understanding the situation playing a vital role with an in-depth approach which was suitable for conducting the focus group study and analysis in grasping a complex subject and help to explain why certain decisions were made, how they were implemented and with what results (Chetty, 1997). The choice of launching credit card involves fierce competition, high product development that have been thoroughly studied through valid research interviews (Eisenhardt, 1989). Methodology can lead UWB in contact with other interesting groups for various reasons to the unavailability of people who could provide proper information or the information received being incomplete.           Alternative 4: The Consideration of the essential variables needed in setting up Small Business Card Focus in relation to the ROI measures for gathering new product ideas in order to see where the bank stand and what barriers are to overcome.   It is proper to have consideration of the essential variables needed in setting up Small Business Card Focus in relation to the ROI measures for gathering new product ideas in order to see where the bank stand and what barriers are to overcome as UWB face the challenge of making the business case for better product development. Most small business owners have neither the capability to develop better technology nor the marginal resources to have such practices in terms of enhancing customer loyalty and market position by taking stewardship for the product though its life-cycle as the potential for new product and market development is really so big, the answer is risk. to both risk and reward (Day 1998). It shows why UWB should pursue new product development even though the instant rewards may be significant. The risks have just been too high.         Assessment of the Alternative Solutions   UWB needs to decide on how to go on with the process of Small Business Card focus in order to foster and enhance their product development within a desirable research sample that needs to be randomly selected through the effective market research in order to have a good fit in the banking system in the US. Henceforth, the above initiatives are considered necessary for USA World Bank to truly move on within their specific planning goals as potential solutions are a big part for the pursuance of their Rewards credit card proposal. Thus, time constraint is a hanging factor in the inadequacy of the alternatives in the process even if the focus group approach seems great to UWB within the integration of effective  research process.                       Risk Assessment Emerging resource constraints are changing the risk-reward ratio and other issues–the risks also rise of engaging in banks protection activities. Although the risks of pre-emptive actions are rising, the risks of new product development are falling as pressures in the market grow. UWB knows that process are responding by developing products that will help customers reduce their expensive needs. These products would find very small niches today but, when the anticipated policy changes take place, the bank will be well positioned in a better market. The changing risk–reward relationships are making it more important than ever for UWB to begin to look for opportunities as the change is taking place that can capitalize on some of the business opportunities in new product development.                   Recommended Solution and Rationale   The implementation process will adhere to the following discussions below. Protecting Business’s Right to Operate UWB do not comply risk being closed believe the positive effect of having a reputation within its credit card option working with the best people as UWB will enjoy privileged access to new markets and generate greater trust from research leaders and socially responsible ways because of the personal values of their key executives. (Bonifant 1994) UWB can invest in Small Business Card Focus projects to enhance the reputation and the market for the good of the company and ensure the continued right to operate. UWB should be successful in attempts to introduce the credit card products so that they cannot lost sight of customer value. Most customers will not make a meaningful sacrifice to protect the situation but they always tend to respond to price, performance and convenience. When marketing concerns create product development and that may reduce the market appeal of a certain product.         The approaches represent different ways of creating credit benefits which also create customer value. They are presented in ascending order of difficulty and investment with the recognition that most businesses inadvertently create environmental problems for their customers. Most products consume resources, and these products allow customers to produce better product line to continue the stream of products and eliminate the negative impacts without creating new and perhaps bigger business problems. Moving toward the Customer The evolution from product to offering requires that the bank knows its customers well. The services that help the customer become more efficient in applying for reward cards will lead to stable sales. If the purchasing relationship is changed so that the supplier is paid not for gallons of paint but for the number of vehicles painted, then the incentive to reduce material flow through the system increases. The supplier has an interest in reducing paint use through thinner coatings and higher transfer efficiency, The overall business system becomes more efficient, and everyone benefits.         It is also a must for UWB to adopt any agenda will use it to develop new markets for entirely different streams of technology and services that substitute knowledge for material and connect people as UWB should assess its technical and business capability for new markets assuming not only that connectivity will continue to rise, but that new markets will have tremendous demand for their products. (World Bank 1998 p. 176). However, UWB has to find a way both of tapping into latent consumer needs and of strengthening the credit card’s potential in the market in partnership with several international investors from the plans to expand the service into new markets and can use this connection to a large untapped populace to promote its banking and other services.   Expected Impact and Value The expected impact and value is of high rate because the market values of credit cards usage incorporates both the different types of debt and their sectoral distribution and the relation between market and par value series are analyzed. The methodology incorporates both the different classes of the rewards card as well as their product distribution when the process is measured at market value. In assessing current credit card conditions may be the best indicator, while the outstanding stock may be more useful in evaluating the product capacity that clearly involves par values, yet market values may provide better indicators of servicing burdens.   Thus, market value estimates are useful in evaluating credit card capacity and in assessing inflation and interest rate wealth effects. It also is true that problem in development may be capitalized in the value of the underlying asset, so that marking both assets and liabilities to market may involve double-counting. UWB need have to use to estimate the market value of consumer credit card and it should be noted that the levels of small business card focus is larger than the product value to the extent that contract interest are below current rates having a substantial amount of consumer credit card balance represents an interest-free loan to those consumers who pay their outstanding monthly balances in avoiding finance charges.                 Summary for the implementation approach for the recommended solution and measuring its effectiveness The use of the Best Market Research and be able to use the two variables to stratify the sample to represent UWB’s customer base and randomly select companies within each of these cells to be in the focus groups. The need to launch both commercial and consumer products at the same time within the separation of the market research function into two branches so that Jim and Mary will be able to explore opportunities separately in terms of setting up of the Small Business Card focus group project in relation to the ROI measures and start to have systems for gathering new product ideas in order to see where the bank stand and what barriers are to overcome. As might be expected, the pursuance of credit cards exhibit greater volatility as well as trend influences are controlled with the related business values engaged in UWB as the researches has assumed and does not suggest inherent concept of the de3velopment process within data do indicate a rising volume of customers and to relate to the small business owners.           References Anderson JC, H Hakansson and J Johanson, (1994). Dyadic Business Relationships Within a Business Network Context, Journal of Marketing, 58 (October), 1-15. World Bank (1998) World Development Indicators 1998 (Washington, DC: World Bank). World Bank (1998b) World Development Report 1998/99 (New York: Oxford University Press). Cherty S, (1997). The Case Study Method for Research in Small- and Medium-sized Firms, International Small Business Journal, 15(1), 73-85. Chetty S and Blankenburg Holm D, (2000). Internationalisation of Small to Medium-sized Manufacturing Firms: A Network Approach, International Business Review, 9, 77-93. Cohen WM and DA Levinthal, (1990). Absorptive Capacity: A New Perspective on Learning and Innovation, Administrative Science Quarterly, 35, 128-152. Eisenhardt KM and CB Schoonhoven, (1996). Resource-based View of Strategic Alliance formation: Strategic and Social Effects in Entrepreneurial Finns, Organisation Science, 7(2), 136-150. Hitt MA, RE Hoskisson and JS Harrison, (1991). Strategic Competitiveness in the 1990s: Challenges and Opportunities for US executives. Academy of Management Executive, 5(2), 7-22. Hofstede G, (1991). Software of the Mind: Intercultural Cooperation and Its Importance for Survival, London: McGraw-Hill Book Company. Yin RK, (1994). Case Study Research: Design and methods, Beverly Hills, CA: Sage. Credit:ivythesis.typepad.com

Scenario One Problem Solution Paper USA World Bank

USA World Bank are developing new products and services that will solve business problems and create business value at the same time to f...