CBS 171 Assignment (I)– 30%16th July, 2004

CBS 171 Assignment (I) – 30% Due Date: 16th July, 2004 Name: Kevin Wong

Marketing Management

Case One: Sneakers

  1. What implications do the demographic changes for segmenting the sneaker market? (15m)

Ans. There is a great change in the past 25 years. In 1960s, a little population was purchased sneakers for function, which was the younger population from 15 to 29. In 1970s, a strong adult health and physical fitness movement began; a lot of people aged 20 to 39 participated in the marathons and weekend jogging practice. In 1980s, a survey indicated that over 90% of the U.S. population has at least one pair of athletic shoes, and over 70% buy a new pair each year, which show that the age range may as wide as 10 to 50, including most of the population. A wider and wider market of sneakers can be seen above in the past 30 years.

From a market research in the late 1980s, 30% were Pragmatist, who concerned with economy, comfort, durability; 30% were Performance conscious, who focused on competition and athletic performance, mostly young adult males; 25% were appearance conscious, who interested in style, color, and wardrobe coordination; and 15% were Fashion leaders, who want to set the trend, be the first to buy the new product.

The implication is that sneakers are more and more accepted by the people and they prefer it instead of other kinds of shoes. Also, it shows that more and more people can afford the price. And that means technology in producing the sneakers have improved so that it lowered the cost of making the shoes. So it attracts more sneaker producer. As people start wearing sneakers not only for functional use, but also for style, healthy and comfort.

So during the 30 year, initially the younger people aged about 10 starts wearing the sneakers. As they grow bigger, they still like to wear the sneaker, at about 20 to 30, they then more consider for the comfortable sneakers and more stylish one. So the sneaker market follows the population to make it suitable to the older one, as well as targeting the population of the new generation. And so the elderly wear sneakers on the street as the youngster did.

  1. The U.S. market for sneakers was stimulated by a change in the social / cultural environment. Is something similar happening or likely to happen elsewhere in the world? How should the sneaker manufacturers prepare for developments outside the U.S.? (15m)

Ans. Yes, the sneakers market in U.S. was stimulated by changes in social and cultural environment. As more and more people (about 70% or above) wear the sneaker without the need for running, which had change from functional to fashioned wardrobe staple. And the market is recently become an even more concern in performance, fashionable and marketing strategies one.

A similar market happening is the “Hikerequipment” market, like the special designed bag, with an extra volume and functional hooks, and a special designed burden reliving system which is designed for the hikers to bring more luggage with a lighter burdening (less loaded). However, such kind of should-bag can now be seen on the Mongkok Street, wearing by most of the teenagers, who is not a hiker, some even didn’t try hiking before. What their reason to wear the bag is just for fashion. We can see most of the bags they wearing have a large volume but only a little content inside. That’s again a product change from functional to fashionable.

For the sneaker manufacturers who want to expand their market outside of the U.S... They must first keep a good brand name as well as the quality of the sneakers they produced. Secondly, they need to look into their target country’s cultural and social environment like, what color, price and style they prefer, and what is the function most of the people are using for with the sneaker. Is for fashion? Or function?

Something more, is the marketing strategy,that endorser with the testimonial approach can be more convincible to the population, and more familiar with more people,which are factors manufacturers need to be prepared before getting into the new market.

  1. Which product-market strategies appear to be the most appropriate for sneaker marketers? How will the marketing-mix components be affected by the choice of a strategy? (20m)

Ans. The product-oriented approach, testimonial approach and marketing-oriented approach are the three mostly used strategy by the sneaker market. And the four marketing-mix components “4P” are Product; Pricing; Promotion and Place (distribution) which for marketing the product.

For the product-oriented approach was that well designed, performance-enhancing product would create its own market. It gives less concern about pricing, promotion and distribution.

For the testimonial approach, it relies on a type of reference group influence that is used on a much larger scale today by most athletic equipment marketers. Since the approach was still at a commencing stage at that moment, both their sales and profit increased up to 75% per year within 5 years time. But after a period, the more functional designed shoes may seems to be consider as unfashionable with highly functional but unattractive. However, with the overlooking of the market by the manufacturers. The profit and sales cannot be kept constant.

For the marketing-oriented approach, which product more consider about the appearance, style, and image. The design elements and functional characteristics of the product are just part of the overall marketing process. Some well-known games player like Jordon was employed as the endorser of the company as a powerful kind of promotion, which shows people great performance with a great sneaker. On the other hand, Jacksonwas employed by another company who help more emphasis on good style with stylish sneakers. The pricing system waschangeable and elastic that somehow became fickle and unpredictable. Since, the behavior of the endorser affects the sales of the market a lot. So for the distribution of the product market, would have mainly three areas with significant pricing difference. Like Nike take consumer as concern in performance, quality and value, so they take the price at $50 range. But L.A. Gear, who prefer an image of reliable, better quality and stylish, so they take the price at $40 to $60 range. For Reebok, it takes the price over $150, because their sneaker has special function, like an air pump to make the sneaker much more fit and comfortable.

So above distribution shows different kind of sneakers have marketed their own area. And overall situation demonstrate that marketing-oriented approach do give the most appropriate strategies for sneakers market.

Personnel and Performance Management

Case Two: Click Commerce

  1. Explain the advantages and disadvantages of Ferro’s motivational approach using Maslow’s hierarchy of needs theory, reinforcement theory, and expectancy theory. (20m) Advantage & Disadvantage of each and compare to Ferro’s

Ans. Ferro’s unusual motivational approach involves taking employees out of their normal working environment and requiring them to do something completely different as a form of “punishment”.

He created a so-called “The Penalty Box” for the programmers who were always isolated and were burn out or acting overly cocky. In fact, it let the programmer to have a temporary assignment in the company’s sales department, which is a totally unfamiliar environment for the programmer to experience. However, Ferro thinks that it can provide employee a new experience and to broadens their responsibilities. What the employee in the “Box” required is to wear professional business attire (with suits and ties).

However, it may be a rather humiliating experience to the casual style programmer who used to wears T-shirt and jeans. In addition, programmers who enjoy their insulated life style do not relish giving up the cloistered existence of working full-time states.

The Maslow’s theory is a hierarchy of five human basic needs in ascending order: (1) Physiological needs; (2) Safety needs; (3) Social needs; (4) Esteem needs; and (5) Self-actualization needs. He argue that, each levelin the hierarchy must be substantially satisfied before the next is activated and that once a need is substantially satisfied it no longer motivates behavior.

In this case, the first two needs have been satisfied, although the employee need to move to another department for further training, it is good that he still secure his job. For the third one, it may be a discourage that he has lose his belongingness in his position, and may not be accepted by the new colleagues, time and courage by the employee himself will be need to help building up this level. For the fourth and the fifth one, the employee’s self-esteem maybe given a discounted, and need to be satisfied further, and he has not achieve his self-actualization, if the employee thinking in a positive way, he will get extra experience from the new working environment. If not, he may dislike the job, even the boss.

The reinforcement theory says that behavior is a function of its consequences. It argues that behavior is externally caused. The key is to ignore factors such as goals, expectations, and needs. Instead, it focuses solely on what happens to a person when he or she takes some action. So that, manager can influence employees’behavior by reinforcing actions they deem desirable. However, since the emphasis is on positive reinforcement, not punishment, managers should ignore, not punish, unfavorable behavior. Even though punishment eliminates undesired behavior faster than by not reinforcement does, it effect is often only temporary and may later have unpleasant side effects like conflict between colleagues.

As we behave in response to what we see as the consequences of our behavior. It would be effective that fewer programmers in Click would become over cocky if they do not want to lose their cloistered working environment. And that is good for employees who burn out since they can face another working environment with working towards different people, as the company’s chief technology officer said “…dealing with customer will sometimes come up with great ideas that can actually be implemented.

The disadvantage is, if the punished employee dislikes the “punishment” very much. He would be discouraged to improve on his programming work, and may even frustrate by the temporary but new working environment with new people.

The expectancy theory states that an individual tends to act in a certain way based on the expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. It included (1) Expectancy (effort-performance) linkage; (2) Instrumentality (performance-reward) linkage; (3) Valence (attractiveness) of reward. It recognizes that there is no universal principle for explaining what motivates individuals and, thus, stresses that managers must understand why employees view certain outcomes as attractive or unattractive. And of course, individual prefer reward with those things they value positively.

Also, it’s important to the employees that if they know how they will be evaluated. And the theory concern with perceptions, because an individual’s own perceptions of performance, reward, and goal satisfaction outcomes, not the outcomes themselves, will determine his or her motivation (level of effort).

It would surely be a good thing if the programmer understands that the “punishment” could broaden their working experience. To a certain extend, some programmer may consider this kind of punishment as a form of “reward”, which may attract them to request for a “punishment” whenever they work till a burned-out state.

In spite of that, if programmer does not know this is an instrumentality linkage that use by their boss to motivate them in this “unusual” way, they may really have the feeling of humiliating.

  1. If you were a Click programmer, what would you think about being assigned to the penalty box? (10m)

Ans. If I were one of the programmer assigned to the penalty box. I would first make a review that what I have done wrongly in the past period. For example: Am I doing too much, so that my boss thinking I am burned out? Or am I acting over cocky in my working? Some unhappiness may appear in my mind, but I believe that the feeling would soon be vanished after I have made clear of my problem and the requirement of my company. I would not consider myself to be an insulted one. However, I would try myself to take the chance to learn in another department, whichoriginally I do not have any chance getting in since I was employed as a programmer. Also, I believe I would become more professional and inspired by the people that I am going to approach and communicating with. I would not think myself as an inferior one but try my best to transform the “punishment” into a “reward”. As the goal is to doing better so that when I complete the temporary assignment, my company would discover my improvement during this period. Yet, I understand that is what my company desires me to be and I can benefit from it, too!

  1. Log on to Click Commerce’s Web site ( and find the information on careers. Click on two of the job titles listed there and assess these jobs according to the job characteristics model. (10m) Instead, use ( and list two specific requirement of jobs (1) Research & Development Engineer / Manager; (2) Sales, Customer Services & Marketing Specialist.


  1. Job Descriptions

 (I) Source Found: Recruit@20-07-2004(Tue) ~ R & D Manager

A fast growing and well-established watch & jewelry company urgently requires:

R & D Manager

University graduate in Marketing / Merchandising / Design or related discipline

3 – 5 years solid experiences in watch, jewelry or fashion field

Technical experience is preferable

Fluent in written & spoken English

Aggressive, good communication and interpersonal skills

Occasional trip to China

(II) Source Found: Jiu Jik@20-07-2004(Tue) ~ Sales Executive

A computer firm is currently seeking self-motivated individuals to fill the following positions:

Sales Executive (Local Market)

Secondary or above education.

Knowledge in computer hardware.

Basic skills in PC usage.

On-job training will be provided.

Experience in handling corporate account will be preferred.

  1. Convert it to E-commercerecruitments

(I) E-commerce RD Manager (Suggested E-commerce recruitment)

  1. University graduate in electrical Engineering Studies or related discipline.
  2. At least 1 to 2 years solidexperience in Technical E-commerce.
  3. Fluent in written English and Chinese.
  4. Aggressive, independent, good communication and interpersonal skillsand need working under pressure.
  5. Team player attitude and self-motivated.
  6. Word processing, internet communication knowledge is essential.
  7. Experience in doing research and survey through electronically means is an advantage.
  8. Experience in computerized Management means is an advantage.

(II) E-commerce Sales Executive (Suggested E-commerce recruitment)

  1. Degree Holder in IT / Business / Marketing or related disciplines.
  2. At least 1 year in software or IT products sales experience with proven track record.
  3. Excellent written and spoken English & Chinese, Mandarin is preferable.
  4. Good communication and interpersonal skills with technical electronic communicational means.
  5. Aggressive, independent with strong initiative to achieve goals.
  6. Excellent electronicallycommunication & presentation skills.
  7. Less experience will be considered as Senior Sales Executive.
  1. Comment the Advertisement

The original recruiting advertisement are lack of requirement related to E-commerce, such as the basic skills of communicating using computer, and the experience in dealing work with electronically means.

Since the E-commerce is doing business major through the internet, so traveling is not an important means in the recruitment.

For the language, written in English and Chinese is good enough, since it is less need to communicate by personal interview or phone calls.

However, aggressive and independent working attitude still need in the area.

Lastly, a thoroughlysense of E-commerce and sensitive mind is need with updated information about the electronic market.

  1. At a time when most managers are encouraged to be nice to their employees, would you suggest to Ferro that he changes his motivational approach? Explain your answer. (10m)

Ans. In fact, there is a trend that managers are encouraged to be nice to their employees, so that to keep a good relationship with smooth communication among the organization.

We cannot denied that Ferro‘s means do have its advantage and is workable in his company. But I would still suggest him to change… that is to improve his motivational approach. Since everything that we give to our worker gets returned to employer in terms of efficiency, quality, loyalty, and innovation. To be a smart business, especially an E-commerce with high technology Company, things changes rapidly according to trends, cultural, and social problems, etc. We need to make our company an elastic one, which can face the rapid changes.

For Ferro’s, the policy may seems a little bit harsh to some programmers. However, we do all know that the motive of Ferro is a positive one. What his “unusual approach” did have effective result, like the chief technology officer, Heising did.

It is believed that Ferro can induce other kinds of motivational approach into his business, like the reinforcement theory states that; we behave in response to what we see as the consequences of our behavior. If the manager shows the employee that they are being cared and concerned by their superior for what is going on with them. The sprit of the whole company, no matter what kind of business is running, would surely be uplifting.

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