Tag Archives: strategy

Foster students brew up delivery solutions for Starbucks

Guest post by Josina Garnham, experiential learning manager

Starbucks winning teamThe warm chocolatey-caramel notes swirling through the air is what you notice first–often times before you even open the door. When you do enter the storefront, you are enveloped by the sound of well-selected jazz, the buzz of the espresso machine and the friendly baristas calling out the names of customers and their made-to-order beverages.

Starbucks, a ubiquitous brand globally and especially here in Seattle, is seeking to extend this experience from their stores to meet its customers’ just-in-time demands. Graduating seniors from the Foster School were invited to join Starbucks in developing solutions on how to deliver fresh beverages without compromising on quality and maintaining the company’s value of “delivering our very best in all we do.”

Each quarter the Foster School partners with a Seattle-based company to develop a customized business case as part of a required capstone course (MGMT430) for all graduating seniors. The case, written by Anna Fung, Foster PhD student, and overseen by Rick McPherson, course coordinator, presents an urgent business issue in a condensed format. The Foster Strategy Development Case Competition is one of the largest single-day case competitions in the world. This winter’s competition with Starbucks featured 54 teams comprised of over 225 students.

For Dave Twehues, director of Global Corporate Strategy, the decision to partner with the Foster School was an easy one: “I think the value of the case competition from Starbucks is twofold. First, the participation of our partners as judges is a great way for Starbucks to connect with future business leaders and second, the exposure to the creative solutions delivered by the student teams brings fresh perspectives to really difficult business problems.”

To develop a winning solution, the students focused on Starbucks’s mission and values: “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” Madeline Sykes, a senior finance major, noted, “it is important to do research on the company’s values and we knew Starbucks values its customers very highly. We started off our presentation by presenting a story about a target customer and the customer’s needs.”

Student teams have three weeks to research the issue and prepare presentations summarizing their recommendations to business leaders—both Foster alumni and Starbucks employees who serve as judges. For Matt Hansen, an accounting major, “the Q&A section…is the hardest part to prepare for. This is one area that our team spent a lot of time focusing on because it is where groups can differentiate themselves by their ability to think on their feet and shows how confident they are in their business proposal/strategy.”

The winning team of Renee Chiang, Allison Gaylor, Matt Hansen, Rebecca Ruh, Kamal Sohal, and Madeline Sykes proposed meeting the challenge of delivering Starbucks beverages with the solution of creating smaller satellite “stores” which would focus on preparing drinks for delivery exclusively. Current stores maintain a brisk business with customers walking in the doors. The student’s research—including frequenting area Starbucks cafes—led them to hypothesize that increasing demands on these storefronts for delivery orders would slow service in both areas. From these small-scale, delivery-focused beverage outlets, bike messengers would be deployed to deliver both hot and cold drinks in specially designed temperature controlled bags.

Beyond understanding the company’s values, having a strong situation analysis, well-justified idea, and presenting their solution in a clear and compelling way, what really differentiates teams are their interpersonal dynamics. Ruh said, “Our success in the case competition was rooted in the relaxed, yet focused environment we created. Our vision developed alongside our team synergy. Taking this experience into the future, the strengths of lightheartedness and creativity, are key components that will define future teamwork endeavors, essential in today’s business world.”

“What I learned about teamwork and team dynamics I will definitely…take with me to my future career” said Renee Chiang. “This was my first time participating in a case competition and it taught me to be confident with myself and my ideas. That confidence would definitely be something I hope to apply to my career—from negotiation to pitching my ideas.”

On March 18, 2015 Starbucks announced the launch of delivery services in Seattle and New York City. Foster School of Business students will be amongst the first to be delighted by having a perfectly prepared, hand-delivered cup of coffee to fuel their last quarter of studies before graduating in June.

To learn more about previous Strategy Development Case Competitions please see our competition webpage and the following Foster Unplugged posts: Alaska Airlines and
Seattle City Light

UW Center for Sales and Marketing Hosts Customer Engagement Workshop

Professionals from around the Northwest attended the Foster Sales and Marketing Center's workshop on Customer Engagement.

Engagement: firms’ initiatives to occupy the attention of an existing customer by providing special benefits and experiences that go beyond the core offering.

            The UW Center for Sales and Marketing Strategy hosted a Designing Customer Engagement Strategies to Increase Customer Advocacy and Performance workshop on Thursday, March 12th. The workshop started at the Burke Museum with drinks and networking, and then the group moved into Paccar Hall for the workshop presentations. Key speakers were Derek Drake, CEO of DriveShop and Colleen Harmeling, Ph.D., a Postdoctoral Research Fellow at the Center for Sales and Marketing. Attendees included representatives from Starbucks, Microsoft, Swedish Medical Center, Sila Solutions Groups, James Hardie Building Products, Accenture, Cats’ Exotics, ACS Technologies, BECU, PACCAR Parts, Geocaching HQ, and many others.

            The presentations started with introductions and examples of engagement. Derek Drake spoke about his company, DriveShop. DriveShop is a leader in automotive engagement strategies. Their motto is: “We create driving experiences that inspire people to fall in love with their next new car.” DriveShop works with automobile manufacturers to set up customer engagement experiences for their cars. The company had experienced huge success due to the effectiveness of their customer engagement programs. Derek Drake spoke about the importance of engagement marketing: 96% of consumers who participate in an engagement activity of some sort are more likely to purchase. This element of promotion is growing; In 2015, experiential engagement investments grew 29% for brand marketers.

            What is an example of customer engagement? DriveShop was hired by Maserati to promote their new 4-wheel drive car. Through extensive customer and market research, DriveShop decided the ideal place to create a customer experience driving the new Maserati would be Aspen Snowmass. Aspen Snowmass is a luxury ski resort in near Aspen, Colorado. DriveShop developed partnerships with hotels, retailers, and restaurants to display the cars in front. The company hosted “après ski” receptions to schedule drive appointments. DriveShop exceeded their goal of 650 1-hour winter drive experience appointments with a professional driver in 3 weeks. The strategy was so effective that Maseratis were being sold on the spot.

            Next, Colleen Harmeling, Ph.D. spoke about the Theory of Customer Engagement. Interest in customer engagement has grown in recent years, and more firms (such as Budweiser, Enterprise, and MasterCard) are hiring Customer Engagement Directors. Firms are switching to service-based models and consumers have a desire for a deep connection with products, that is, they are seeking experiential consumption. Customer engagement can benefit firms by differentiating their product from “me too” products (product that are similar to a competitor’s product in order to prevent that competitor from maximizing their market share.) Also, when a customer has an emotional connection to the brand, rational considerations – like price – play a less important role.

            There are two types of engagement: experiential and activity. Both are important because engagement influences the perception of a company’s core offering. Experiential memories are as important as true product performance or brand connections in a customer’s decision to buy. Colleen talked about each of these types of loyalty, their pros and cons, and how to achieve them in detail.

            The next part of the presentations was 3 Steps for Engineering Effective Engagement. The first step is to generate data-driven insights, both qualitative and quantitative. Next, firms must design engagement programs, selecting the type of experience, target audience, and designing activity-based and experiential-based strategies. Finally, companies should test the programs on a small scale and make any changes necessary before fully implementing them.

            The workshop ended with an invitation to all attendees to join the Customer Engagement Special Interest Group (SIG). Special Interest Groups enable 7 to 10 non-competitive managers interested in the same topic to benchmark and learn from each other and network. SIG’s are led by academics from the Center for Sales and Marketing Strategy, who analyze data and solve problems to help firms achieve their goals.

            The Center for Sales and Marketing Strategy’s mission is to align important sales and marketing problems with academic research and analysis techniques to develop strategies that improve business performance and facilitate business-academic collaboration to create and disseminate sales and marketing knowledge. The business model is that businesses get access to academics with deep knowledge in specific areas from around the world and researchers get access to current problems and rich data sets. Workshops and Special Interest Groups are just two of the many ways the Center for Sales and Marketing accomplishes these goals.

Marketing in healthcare – Special Interest Group recap

The UW Center for Sales and Marketing Strategy was formed to link business professionals and academic researchers. One way to link academics and professionals is through programs like the Healthcare Special Interest Group (HSIG). The purpose of the HSIG is to bring the best marketing minds in healthcare together and come up with projects to develop new knowledge. The meeting was hosted by Robert Palmatier, research director of the Center for Sales and Marketing Strategy. John Henson, the VP of Medical Affairs from Swedish Hospital helped to facilitate the discussion.

The first meeting was designed to set the direction and future for the HSIG. The group decided to focus on creating value by sharing best practices in marketing. They agreed to have a topic for each future meeting and look at challenges facing the companies and healthcare industry. Marketing is often competitive, but the company representatives agreed that it is beneficial to work together.

One topic in the open discussion was the Shift in Marketing in the Healthcare Industry. The shift in marketing is from individuals to employers because employers choose the plan options for their employees. This is enterprise marketing, and healthcare companies have to market to both individuals and employers, and keep consumers involved and engaged. Otherwise the customers will choose a different plan. One example was the pressure from Boeing- healthcare practices changed and the speed of innovation improved. Employees can now choose between two plans: Swedish and UW Medicine

Companies want to market “wellness” so customers don’t visit doctors only when they’re sick. They want to shift the consumer thinking to: “I want to be well.” UW Medicine is only 12 years old, and the brand is 6 years old, so they are relatively new to marketing their company. Healthcare is being run like a business, creating a potential need for healthcare focused EMBA or other programs, but the market is small, so these would only be offered every 2-3 years

One challenge concerns the use of Technology in Medicine. UW Medicine recently introduced a program that allows patients to communicate with their doctors using video chat. Providence launched HealthExpress, a similar program in Washington. Getting consumers to engage with these new technologies requires marketing. Digital Healthcare is the fastest growing segment in healthcare. A problem the HSIG noted was that IT and medicine departments often do not communicate well. An additional concern is how to get customers who are offline to engage with these online offerings.

Behavior Change as a Marketing Endeavor, was another discussion topic as most marketing efforts go to behavior change. Problems included the determent issue with life insurance, financial services, and healthcare, and how companies can deal with the episodic nature of healthcare. The ACA (Affordable Care Act) is bringing thousands of new patients into the healthcare system, many of whom are getting coverage for the first time. One question is how to get them into the doctor for preventative care, rather than to the ER.

Loyalty Programs are very effective at creating behavior change. When using loyalty programs, companies should limit communication and communicate only when they have something new and improved to offer. For example, when airlines use random upgrades, customers feel gratitude (vs. “I earned those miles”). Surprising people is important. A concern for healthcare companies is finding loyalty cards that customers are motivated to use. Regulations about private healthcare data make accessing information about customers difficult. A potential research project would be to get people to volunteer to have health-related data recorded on a card and analyzed.

Finally, every local healthcare company can benefit from making Seattle a Healthcare Hotspot. Economic development attracts new businesses and creates a virtuous cycle. Washington has strong potential and a history of innovation. Seattle could be among the first cities to achieve the Triple Aim in healthcare (improving the patient experience of care, improving the health of populations, and reducing the per capita cost of healthcare.)

Message from the Sales and Marketing Center’s Research Director

Have you ever wondered how other firms are solving sales and marketing problems or if there is a better way to analyze a marketing issue or benchmark best practices? We have designed the Center for Sales and Marketing Strategy to help address these issues by matching business professionals and their sales and marketing challenges with world-leading academic faculty and research as well as with other sales and marketing executives.

After spending over a decade as both a business executive and marketing professor, I am convinced these two groups can and should work together to improve business performance. Yes, they often speak different languages and can work at different speeds, but there is also an opportunity for tremendous synergy. Business professionals know today’s problems, interface with “real” customers and have great access to real-time data. Academic researchers have deep knowledge in their research domain and the motivation and skill to rigorously analyze specific problems, but often lack a connection to real-world business problems, customers and data.

We are committed to building the necessary linkages between business professionals and academics. Help us make sales and marketing research relevant to your business by engaging with the SalesMark Center. You can sign up for our newsletter, attend a conference or networking event, take a one-day class or join a Special Interest Group (SIG) with other executives focused on a specific sales or marketing problem.

Please contact me by email or phone at palmatrw@uw.edu or 206-543-4348 for more information.

Best regards,

Rob Palmatier
Professor of Marketing
John C. Narver Chair of Business Administration
Research Director, Center for Sales and Marketing Strategy

Apple products in cars?

On March 8, 2013 Foster undergraduate students competed in a case competition, which also served as the students’ capstone experience for strategic management—a required course for all Foster undergraduates. The case, “Apple Inc. in 2012,” was developed by Harvard Business School. The premise: Apple, like other firms in technology, has a number of successful products, but they also need to remain competitive. The students had to determine whether Apple can innovate on current products well enough to survive and prosper or whether they need to create new products to remain competitive.

The students had two weeks to analyze the case and develop their recommendations for what Apple should do. In the competition the students presented their analysis of the company, discussed the various paths Apple could take and made their recommendations.

Twenty teams competed and five made it to the final round. The final round teams made varying recommendations for Apple. Several suggested Apple should improve Apple TV, one of its current products. The winning team, however, presented a completely different solution. They recommended Apple create an integrated mobile device for cars, similar to the Ford SYNC® from Microsoft.

Case Competition Winners
Winning team: Shaun Maurer, Cory Scancella, Alex Auerbach, Hadis Ali, and Ben Peven

According to the team, “We compared the various strategies and decided the car system strengthens what Apple already offers, and it stays within one of their core competencies, which is producing disruptive technology. The problem with TV isn’t the set-top box, it’s that the cable companies own all the content.”  They felt Toyota would be an ideal initial partner due to shared corporate values between the two companies. The judges appreciated the team’s comprehensive analysis. Jeff Barden, assistant professor of management said, “They carefully considered the user experience, where people would use the product, and absolutely picked the right partner in Toyota.” Winning team members were Hadis Ali, Alex Auerbach, Shaun Maurer, Ben Peven, and Cory Scancella.

The second place team recommended innovating on Apple TV by focusing on making content available to consumers by forming a strategic alliance with Comcast. They felt a key improvement to the current situation would be to allow customers to consume TV content à la carte. The judges were impressed with how this team tailored their solution to the market. Team members were Gwendolyn Moruzzi, Aaron Dentler, Katie Emoto, and Rachna Hajari.

Rick McPherson, lecturer in management at the Foster School, added the case competition to the strategic management course last fall. He said, “It is an enrichment of the course to give the students real life experiences of analyzing and making recommendations to an upper management team.”

Student Consulting Program – student perspective

Guest post by Rai Huang, Foster undergraduate

BEDC Student Consulting ProgramI initially enrolled in the BEDC Student Consulting Program without really understanding what consulting means; my impression was that consulting is the dream job of many of my peers at the Foster School of Business, yet it wasn’t something I particularly cared for.

I expected to walk away from the class with experience in conducting market research and formulating online marketing/public relations strategies, which is related to my dream career after graduation. And I liked the idea of working with a team; the communication skills learned would prepare me for work in any field. The fact that it would look good on my resume didn’t hurt either.

My team’s assignment is to formulate online marketing and social media strategies for our client, Concourse Concessions, who currently operates a Coffee Bean & Tea Leaf franchise in the Seattle-Tacoma Airport. A newcomer in the Seattle market, they wish to grow brand recognition through traditional and non-traditional public relations methods as they expand to locations outside of the airport within the next year. It was an exciting task to take on, as the overall business environment and market for coffee in Seattle is very saturated, and would require creative thinking to accomplish the mission.

The first step for our team was to identify the strategy and comparative advantage of the franchise.  Coffee Bean & Tea Leaf has only been in operations for about three months, and there was lack of substantial data for us to analyze. Challenged by our advisers and mentors, we were able to take a step back and look at the project from a wider perspective. We learned to think in terms of what is most valuable for the client every step of the way. With the support of our mentor and advisors, we came up with a framework in which every question raised had to be answered in a way that would help the business.

During the research phase of the project we gathered survey data and took a close look at local competitors such as Peet’s Coffee and Tea, Uptown Espresso, Espresso Vivace and Café Vita. We examined how they are utilizing social media and promotion strategies to maximize brand equity. Marketing concepts we’ve seen play out in real life include: how social media is being utilized for Customer Relation Management; how Search Engine Optimization is becoming increasingly intertwined with social media; why it’s essential for all business owners and managers to understand the marketing concept; how to really use a business’ competitive advantage; and how to communicate through interaction with the consumers.

As we come near to the end of the project, I now understand what consulting really comes down to is communication. It is important to practice the art of listening to your client and really hearing their needs, and finding resources and formulating recommendations with your team to create value for them. Through the process of tackling the different obstacles, my team and I have bonded together and grown both professionally and personally.

I look forward to applying the skills I’ve learned to a future career in Public Relations. I now understand what it is like to work with a real client, how to identify their wants and needs, and strategically come up with solutions that would benefit the client and heighten awareness of the brand. The Student Consulting experience is not just a line on my resume, but truly a real-world experience I was fortunate to have as an undergraduate student.

Learn more or become involved in the Student Consulting Program as a client or volunteer advisor.

Former Schwab CMO and “mad woman” illuminates “talk to Chuck” case study in MBA advertising class

It’s Thursday afternoon, and in one of the University of Washington Foster School of Business classrooms, former Charles Schwab Chief Marketing Officer Becky Saeger was talking to MBA students about the experience of digging deep to revitalize a major brand. As the architect and marketing protagonist of the integrated “Talk to Chuck” campaign platform, Saeger had plenty to offer the students on this Harvard Schwab Case.
Former Schwab CMO Becky Saeger (middle) with Associate Dean Dan Turner and Senior Lecturer Elizabeth Stearns

She discussed the importance of the big picture marketing process. From there the focus was on the decision metrics, advertising strategy and execution, and ultimately how that contributed to Schwab’s overall brand objectives.

Saeger’s also great in her capacity as guest lecturer, which was her role in Marketing 540, taught by Elizabeth Stearns, senior lecturer. Saeger brings to life the lay of the land at Schwab. The year was 2004 and the CEO who hired her was replaced by Charles “Chuck” Schwab himself, reclaiming his role as CEO of the $4.2 billion company he founded in 1971. Saeger reinforced the problem as described in the Harvard case, on the potential for losses and eroding customer loyalty, as the company struggles to fulfill its promise to the individual investor.

Following Professor Stearns’ lead, Saeger asked as many questions as she answered. One interesting aspect of this class is that Stearns does not play the role of professor—but rather that of a marketing client. Students have formed teams acting as advertising agencies vying for Stearns’ business. There’s very little handholding – and that’s good, because as any marketing agency veteran will attest, clients expect initiative and brilliance. The students demonstrated considerable chutzpah—one memorable moment occurring when a student agency, Drapers’ Disciples, turned down Saeger’s request for an additional $50 million budget with their excellent ROI analysis.

In the end Saeger won out with exceptional rationale; moreover, she proved success.

This teaching model brings intense realism into the classroom, as do guests like Becky Saeger.  There was an exhilarating quality to the session, and an overwhelming sense that Foster MBAs are getting the best of rigor where it intersects relevance to their futures.

As a side note, there was some irony that the ‘agency’ challenging Saeger’s budget request was “Draper’s Disciples.” As it turns out, she began her career at Ogilvy & Mather in NY, where she made a name for herself with global brand campaigns for American Express, among other clients. A true Madison Avenue prodigy.