14.11 Cases and Problems

Learning on the Web (AACSB)

The Economics of Online Annoyance

You’ve just accessed a Web page and begun searching for the information you want to retrieve. Suddenly the page is plastered from top to bottom with banner ads. Some pop up, some float across the screen, and in some, animated figures dance and prance to inane music. As a user of the Internet, feel free to be annoyed. As a student of business, however, you should stop and ask yourself a few questions: Where do banner ads come from? Who stands to profit from them?

To get a handle on these questions, go to the How Stuff Works Web site (http://computer.howstuffworks.com/web-advertising.htm) and read the article “How Web Advertising Works,” by Marshall Brain. When you’ve finished, answer the following questions from the viewpoint of a company advertising on the Web:

1. What are the advantages and disadvantages of banner ads? Why are they less popular with advertisers today than they were about ten years ago?
2. What alternative forms of Web advertising are more common today? (For each of these alternative forms, describe the type of ad, explain how it’s more effective than banner advertising, and list any disadvantages.)
3. Why are there so many ads on the Web? Is it easy to make money selling ads on the Web? Why, or why not?
4. Assume that you’re in charge of Web advertising for a company that sells cell-phone ring tones. On which sites would you place your ads and what type of ads would you use? Why?

Ethics Angle (AACSB)

Pushing Cigarettes Overseas

A senior official of the United Nation’s World Health Organization (WHO) claims that the marketing campaigns of international tobacco companies are targeting half a billion young people in the Asia Pacific region by linking cigarette smoking to glamorous and attractive lifestyles. WHO accuses tobacco companies of “falsely associating use of their products with desirable qualities such as glamour, energy and sex appeal, as well as exciting outdoor activities and adventure” (Agence France Presse, 2008). WHO officials have expressed concern that young females are a major focus of these campaigns.

The organization called on policymakers to support a total ban on tobacco advertising saying that “the bombardment of messages through billboards, newspapers, magazines, radio and television ads, as well as sports and fashion sponsorships and other ploys, are meant to deceive young people into trying their first stick” (Associated Press, 2008). WHO stresses the need for a total ban on advertising as partial bans let tobacco companies switch from one marketing scheme to another.

WHO officials believe that extensive tobacco advertising gives young people the false impression that smoking is normal and diminishes their ability to comprehend that it can kill. Representatives of the organization assert that the tobacco industry is taking advantage of young people’s vulnerability to advertising.

Instructions: Read the following articles and provide your opinion on the questions that follow:

• Agence France Presse (AFP), “WHO: Half a Billion Young Asians at Risk from Tobacco Addiction,” May 30, 2008, http://afp.google.com/article/ALeqM5hfIqvMVfuC5AIdasEdZ20BsmiDfQ.

Provide your opinion on the following :

• U.S. laws prohibit advertising by the tobacco companies. Should developing countries in which cigarette smoking is promoted by the international tobacco companies follow suit—should they also ban tobacco advertising?
• Are U.S. companies that engage in these advertising practices acting unethically? Why or why not?
• Should international policymakers support a total ban on tobacco advertising? Why or why not?
• If tobacco advertising was banned globally, what would be the response of the international tobacco companies?

The Global View (AACSB)

Made in China—Why Not Sell in China?

One of Wow Wee’s recent robots, Roboscooper, is manufactured in China. Why shouldn’t it sell the product in China? In fact, the company has introduced its popular robot to the Chinese market through a Toys “R” Us store in Hong Kong. Expanding into other parts of China, however, will require a well-crafted, well-executed marketing plan. You’re director of marketing for Wow Wee, and you’ve been asked to put together a plan to expand sales of Roboscooper in China. You can be introduced to Roboscooper by going to the product section of Wow Wee’s site: http://www.wowwee.com/en/products/toys/robots/robotics/roboscooper. To get some background on selling toys in China, go to the Voice Of America Times Web site (https://www.voanews.com/archive/china-could-soon-become-booming-toy-market) and read the article “China Could Soon Become Booming Toy Market.” Then, draw up a brief marketing plan for increasing sales in China, being sure to include all the following components:

• Profile of your target market (gender, age, income level, geographic location, interests, and so forth)
• Proposed changes to the company’s current marketing mix: modifications to product design, pricing, distribution, and promotional strategies
• Estimated sales in units for each of the next five years, including a list of the factors that you considered in arriving at your projections
• Discussion of threats and opportunities posed by expansion in the Chinese market