MBA PROGRAM

MASTER OF BUSINESS ADMINISTRATION

Instructor’s Name  Instructor’s Name 

Ashenafi Haile (Ph.D) Gashaw Tibebe (Ph.D)

Adanech Gedefa(Asst. Prof)

Instructions: Please carefully read the instructions below

2 You can work on the exam for 48 hrs. Please submit the exam answer file typed in a word document or
scanned image to your course instructor via email only BEFORE 1:59 PM ON TUESDAY, June 30, 2020.
Unequivocally no postponements - Late submissions are totally unacceptable. The only option for
submission is by email. Email problems will not be accepted for any case. It is your responsibility to make
sure that your email works properly and that your instructors receive the submission on time.

3 While sending the email, write your section and program (extension/weekend) in the subject line

4 Once exam answer file is submitted for grading, no requests for amendments or supplements will be
permitted.

5 Once you submit your exam answer file, you will receive a confirmation email from your course instructor.
If you have not received confirmation email within two hours of sending your email, please contact your
instructor.

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 Date of Exam: June 28, 2020

Maximum Marks Allotted: 50%

INSTRUCTION: ATTEMPT THE FOLLOWING QUESTIONS (50%)

1. Discuss briefly the effect of COVID-19 on your buying and consumption behaviour (5 PTs)
2. How undertaking the legal/political and economic analysis affect the marketing practices of
the automotive market in Ethiopia (5 PTs)

Case Study # 1: Trap-Ease: The Big Cheese of Mousetraps

One April morning, Martha House, president of Trap-Ease, entered her office in Moncton, New
Brunswick. She paused for a moment to contemplate the Ralph Waldo Emerson quotation that
she had framed and hung near her desk: “If a man [can] make a better mousetrap than his
neighbor … the world will make a beaten path to his door.” Perhaps, she mused, Emerson knew
something that she didn’t. She had the better mousetrap—Trap-Ease—but the world didn’t seem
all that excited about it.

Martha had just returned from the National Hardware Show in Toronto. Standing in the trade
show display booth for long hours and answering the same questions hundreds of times had been
tiring. Yet, this show had excited her. Each year, National Hardware Show officials hold a
contest to select the best new product introduced at the show. Of the more than 300 new
products introduced at that year’s show, her mousetrap had won first place. Such notoriety was
not new for the Trap-Ease mousetrap. Canadian Business magazine had written an article about
the mousetrap, and the television show MarketPlace and trade publications had featured it.
Despite all this attention, however, the expected demand for the trap had not materialized.
Martha hoped that this award might stimulate increased interest and sales.

A group of investors who had obtained worldwide rights to market the innovative mousetrap
had formed Trap-Ease in January. In return for marketing rights, the group agreed to pay the

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inventor and patent holder, a retired rancher, a royalty fee for each trap sold. The group then
hired Martha to serve as president and to develop and manage the Trap-Ease organization.

The Trap-Ease, a simple yet clever device, is manufactured by a plastics firm under contract
with Trap-Ease. The trap consists of a square, plastic tube measuring about 15 cm long and 4 cm
square. The tube bends in the middle at a 30degree angle, so that when the front part of the tube
rests on a flat surface, the other end is elevated. The elevated end holds a removable cap into
which the user places bait (cheese, dog food, or some other tidbit). A hinged door is attached to
the front end of the tube. When the trap is “open,” this door rests on two narrow “stilts” attached
to the two bottom corners of the door.

The trap works with simple efficiency. A mouse, smelling the bait, enters the tube through the
open end. As it walks up the angled bottom toward the bait, its weight makes the elevated end of
the trap drop downward. This elevates the open end, allowing the hinged door to swing closed,
trapping the mouse. Small teeth on the ends of the stilts catch in a groove on the bottom of the
trap, locking the door closed. The mouse can be disposed of live, or it can be left alone for a few
hours to suffocate in the trap.

Martha believed that the trap had many advantages for the consumer when compared with
traditional spring-loaded traps or poisons. It appeals to consumers who want a humane
alternative to spring traps. Furthermore, with TrapEase, consumers can avoid the unpleasant
mess they encounter with the violent spring-loaded traps—there are no clean-up problems.
Finally, the consumer can reuse the trap or simply throw it away.

Martha’s early research suggested that women were the best target market for the Trap-Ease.
Men, it seems, were more willing to buy and use the traditional spring-loaded trap. The targeted
women, however, did not like the traditional trap. They often stay at home and take care of their
children. Thus, they want a means of dealing with the mouse problem that avoids the
unpleasantness and risks that the standard trap creates in the home.

To reach this target market, Martha decided to distribute Trap-Ease through national grocery,
hardware, and drug chains such as Safeway, Zellers, Canadian Tire, and Shoppers Drug Mart.

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She sold the trap directly to these large retailers, avoiding any wholesalers or other
intermediaries.

The traps sold in packages of two, with a suggested retail price of $2.99. Although this price
made the Trap-Ease about five times more expensive than smaller, standard traps, consumers
appeared to offer little initial price resistance. The manufacturing cost for the Trap-Ease,
including freight and packaging costs, was about 31 cents per unit. The company paid an
additional 8.2 cents per unit in royalty fees. Martha priced the traps to retailers at $1.49 per unit
and estimated that, after sales and volume discounts, Trap-Ease would realize net revenues from
retailers of $1.29 per unit. To promote the product, Martha had budgeted approximately $60,000
for the first year. She planned to use $50,000 of this amount for travel costs to visit trade shows
and to make sales calls on retailers. She would use the remaining $10,000 for advertising.
Because the mousetrap had generated so much publicity, however, she had not felt the need to do
much advertising. Still, she had placed advertising in Chatelaine and in other home magazines.
Martha was the company’s only salesperson, but she intended to hire more salespeople soon.

Martha had initially forecast Trap-Ease’s first-year sales at 500,000 units. By the end of April,
however, the company had sold only a few thousand units. Martha wondered whether most new
products got off to such a slow start, or whether she was doing something wrong. She had
detected some problems, although none seemed overly serious. For one, there had not been
enough repeat buying. For another, she had noted that many of the retailers kept their sample
mousetraps on their desks as conversation pieces—she wanted to traps to be used and
demonstrated. Martha wondered whether consumers were buying the traps as novelties rather
than as a solution to their mouse problems.

Martha knew that the investor group believed that Trap-Ease had a once-in-a-lifetime chance
with its innovative mousetrap. She sensed the group’s impatience. She had budgeted
approximately $150,000 in administrative and fixed costs fore the first year (not including
marketing costs). To keep the investors happy, the company needed to sell enough traps to cover
those costs and make a reasonable profit.

In the first few months, Martha had learned that marketing a new product is not an easy task.
For example, one national retailer had placed a large order with instructions that he order was to

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be delivered to the loading dock at one of its warehouses between 1:00 and 3:00 p.m. on a
specified day. When the truck delivering the order had arrived late, the retailer had refused to
accept the shipment. The retailer had told Martha it would be a year before she got another
chance. Perhaps, Martha thought, she should send the retailer and other customers a copy of
Emerson’s famous quotation.

Questions:

A. Martha and the Trap-Ease investors believe they face a once-in-a-lifetime opportunity.
What information do they need to evaluate this opportunity in the marketing
environment? How do you think the group would assess the working environment?(5pts)
B. Has Martha identified the best target market for Trap-Ease? What other market segments
might the firm target (5pts)
C. How has the company positioned the Trap-Ease relative to the chosen target market?
Could it position the product in other ways? (5pts)
D. Describe the current marketing mix for Trap-Ease. Do you see any problems with this
mix? (5pts)

Case Study # 2
BC Company has been producing beer for about ten years. It is producing massive amount
of its products by assuming that customers will buy whatever the company produces.
However, the environment is deteriorating and there is also explosive population growth.

A) Which marketing concept/philosophy is currently being implemented by the company?

B) As a professional, only by considering the above information, what additional marketing

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 Case Study #3: Schott: Positioning for Success

SCHOTT, THE GERMAN MANUFACTURER OF glass for industrial and consumer products,
had a problem deciding how to position its innovative product, Ceran, in the American market.
The product, a glass-ceramic material made to cover the cooking surface of electric ranges,
seemed to have everything going for it, It was completely non-porous (and thus stain resistant),
easy to clean and long-lasting. Best of all, when one burner was lit, the heat didn't spread; it
stayed confined to the circle directly above the burner. And after ten years, hobs made of Ceran
still looked and performed like new.

Schott anticipated some difficulty in igniting demand for Ceran in US markets. First it would
have to win over American cooker manufacturers, which would then have to promote Ceran to
middle markets — dealers, designers, architects and builders. These middle-market customers
would, in turn, need to influence final consumers. Thus, Schott's US subsidiary set out to sell
Ceran aggressively to its target of 14 North American appliance manufacturers. The subsidiary
positioned Ceran on its impressive technical and engineering attributes - showing cross-sections
of stoves and using plenty of high-tech talk - then waited optimistically for the orders to roll in.
The appliance companies listened politely to the rep's pitch, ordered sample quantities — 25 or
so of each available colour - and then ... nothing. Absolutely nothing.

Research by Schott's advertising agency revealed two problems. First, Schott had failed to
position Ceran at all among the manufacturers' customers. The material was still virtually
unknown, not only among final consumers but also among dealers, designers, architects and
builders. Second, the company was attempting to position the product on the wrong benefits.
When selecting a hob to buy, customers seemed to care less about the sophisticated engineering
that went into it and more about its appearance and clean - ability. Their biggest questions were
'How does it look?' and 'How easy is it to use?'

Based on these findings, Schott repositioned Ceran, shifting emphasis towards the material's
inherent beauty and design versatility. Arid it launched an extensive promotion campaign to
communicate the new position to middle-market and final buyers. Advertising had themes like

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'Formahvare for your kitchen', which presented the black hob as streamlined and elegant as a
tuxedo. As a follow-up, to persuade designers to add Geran to their palette of materials, Schott
positioned Ceran as 'More than a range top, a means of expression'. To reinforce this beauty and
design positioning, ads featured visuals, including a geometric grid of a hob with one glowing
red burner.

In addition to advertising, Schott's agency launched a massive public relations effort that resulted
in substantial coverage in home improvement publications. It also produced a video news release
featuring Ceran that was picked up by 150 local TV stations nation-wide. To reinforce a weak
link in the selling chain — appliance salespeople who were poorly equipped to answer customer
questions about Ceran - the agency created a video that the salespeople could show customers on
the TVs in their own appliance stores.

The now properly and strongly positioned Ceran is selling well. All 14 North American
appliance makers are buying production quantities of Ceran and using it in their hobs. All offer
not one, but several smooth-top models, Schott is the major smooth-top supplier in the United
States, and smooth tops now account for more than 15 per cent of the electric stove market. And
at a recent Kitchen & Bath Show, 69 per cent of ail range models on display had smooth tops.
Schott recently introduced Ceran topped portable units as an interesting design alternative to
traditional hot plates. Also positioned on aesthetics and ease of cleaning, the tahletop units are
rapidly gaining popularity in both residential and commercial markets. To keep up with
increasing demand Schott has built a US plant just to produce Ceran for the North American
market.

QUESTIONS

A. Why did one succeed and the other fail? (5 PTs)

B. Explain how steps of positioning actually implemented by Scott? (5 PTs)