The widely varying responses of the affiliate companies, from strict alignment to Facebook's position to admitting that the programme had potential
privacy concerns associated with it shows how fragmented the perception of
just how ethical this concept was to begin with was perceived in the
affiliate companies. The marketing objective of creating and advertising
based model that capitalized on social networking and attempted to get a
viral effect going on advertising content failed due to a lack of
transparency of how the program worked and why it would benefit site users.
Contrast this to a typical Google introduction of a free service, for
example, Google Reader or Google Mail and the differences are striking.
Facebook will have to re-launch the Beacon programme with much more
transparency and disclosure associated with it. Most troubling about the
initial launch of this program was its secrecy, difficulty of opting out,
and lack of clear benefits to the users who were being tracked, many times
without their knowing it, for the gain of Facebook's potentially lucrative
advertising business model. The entire programme needs to be re-thought
from the perspective and orientation of the Facebook user and provide them
with benefit in exchange for their affiliate site activity, ranging from
simple site visits to purchasing products. Facebook needs to also study
the AdWords business model more closely and see how the Google business
model looks to enrich the value of the search and online experience. In
addressing that aspect of the Beacon business model, Facebook will need to
re-think how to increase the value delivered to users first. Only after
that specific aspect of the Beacon programme is defined should Facebook re-
launch the programme.

5. Retailers are devoting more shelf space to private brands. These private-
label products are direct competition for the national brands. In recent
years many retailers, such as Shoppers Drug Mart, have copied not only
the products produced by national brands, but also the colours, shapes
and even complete packaging. Why are retailers adopting this strategy?
How should the national brand companies react?

Private brands are giving retailers an opportunity to control the
financial, supply chain, and marketing strategies of high volume consumer
packaged goods (CPG) products without having to contend with the potential
conflicts of working with consumer packaged goods manufacturers. As gross
margins on high volume CPG products become more and more thin, retailers
are reverting to their own private brands in an attempt to retain as much
gross margin and profits as possible. What's made this possible for
retailers is that there are secondary and tertiary sources of products
available from suppliers willing to work with retailers and re-brand them
to their specific merchandising requirements and needs. In addition to
retaining gross margins, retailers often have conflicts with CPG
manufacturers (or national brand companies) on product timing and decisions
on product lifecycles of high-volume consumer products. By sourcing,
merchandising and selling these private label products, retailers have the
freedom to define product lifecycles that are best attuned to their known
sales cycles. The combination of increased gross margins and freedom of
product-related decisions are making private label products much more
prevalent than before.
For national brands to compete effectively against private label products
from retailers, the emphasis needs to first be on brands these
manufacturers have spent years and millions of dollars to produce as the
foundation for keeping customers loyal. Brand loyalty is the best defence
of CPG manufacturers against private label brands, followed by the use of a
series of highly targeted marketing and promotional campaigns to reward
brand loyal customers and keep them from reverting to only price as the
means of deciding which specific product to purchase. Third, CPG
manufacturers need to accelerate their new product development and
introductions, as innovative new products will be very difficult for
private label providers selling to retailers to replicate. These three
strategies taken together are giving CPG manufacturers the ability to
maintain customer loyalty that would have been lost to private label
products which are sold mainly on price and availability as a trust
substitute to a national brand.

Mini-Case (Answer should be no more than 2 to 4 pages long.) (50 marks)

Nokia has failed to achieve the same success with its products in North
America as it has in the rest of the world. Now the company is planning to
concentrate more on the North American market. (See article below.)
Evaluate Nokia's chances of success and identify the key obstacles that you
feel the company will face and propose solutions.

Nokia's chances for success in North America will continue to be limited
based on the number and magnitude of the company's key obstacles that are
made all the more challenging by the company cultures' ethnocentric
attitudes and engineering-driven product development. In previous attempts
to enter the North American market, Nokia has held a decidedly ethnocentric
attitude that their...

In addition, Nokia is an engineering-driven company that sees innovation as
the highest priority over and above listening to customers and aligning
technologies and solutions to their needs. The combination of a strong
ethnocentric attitude regarding their company's superior approach to
technology and how to use it, and an unwillingness to apparently modify
their products for North American customers' preferences due to perceived
superiority combine to create a major roadblock in Nokia's efforts to re-
enter the market. When these factors are taken into account the key
obstacles Nokia needs to overcome in order to gain entry into the North
American market are made all the more difficult to overcome.
These key obstacles Nokia has to overcome in order to successfully enter
the North American market include addressing their weakness at successfully
partnering with service providers in general and content providers
specifically; the need for speeding up new product development and
considering outsourcing production to concentrate entirely on expanding
their brand as their North American rivals already are doing; concentrating
more on collaboration with convergence partners versus considering this
superfluous to their strategies; and evaluating how Nokia can create its
own communications and entertainment platform for enabling customers' use
of social networking applications and websites, in addition to broad
Internet access.
First, the apparent weakness of Nokia to successfully partner for the long-
term both with service providers in general and content providers
specifically is exemplified by the efforts to create an iTunes-like service
based on a partnership with the Universal Music Group. This partnership is
yet to deliver significant results, just as Club Nokia and Ovi have had
limited success in the past. The partnership with Vodafone appeared to be
subsidized by Nokia in an attempt to attain success in a service
partnership. What is most troubling in this area however is the inability
of Nokia to sustain strong, permanent partnership with Google and be
included in the Open Handset Alliance. As Google is a potential
convergence partner, this key obstacle is discussed as the fourth point in
this analysis.
The second key obstacle emanates from Nokia's engineering-centric internal
culture and the belief that their own technologies are superior to any
other, which leads to branding and marketing messaging that at times
stresses pure technology over benefits for customers. This second obstacle
is also evidenced by the need Nokia has for speeding up new product
development and considering outsourcing production to concentrate entirely
on expanding their brand as their North American rivals already are doing.
Contract manufacturing is now pervasively used by cellular telephone
providers so that their company's resources can be focused on building
brand equity and strength. Nokia's weakness is that it would find this
very difficult to do from how engineering-centric the culture of the
company is internally. While the article discusses this has happened once,
the shift from a philosophical basis is going to be very difficult for
Nokia. Yet to compete in the North American market where product life
cycles are much faster and marked with in-depth convergence of features,
Nokia may have no choice but follow this strategy. Today this lack of a
strategy for how to use contract manufacturing as a competitive advantage
is slowing down Nokia and potentially limits their ability to compete in
North America effectively.
The third key obstacle is the need Nokia has for concentrating more on
collaboration with convergence partners versus considering this superfluous
to their strategies, and is a potentially major one given its lack of
participation with Google on key initiatives. Google's role in redefining
the Internet as a convergence platform accessible through cellular phones
and the implications of this new computing platform is clear, and the lack
of progress in making this specific partnership work is a strategic
weakness that Nokia has today. Nokia has the potential of building their
own telecommunications platform and also has the confidence from an
engineering standpoint to complete it, as can be seen from the comments
from Nokia executives in the article. Going in this direction form a
strategy standpoint however would lead to conflicts with Google at a
platform level; and ultimately Google has much more market momentum and
capital to promote their own standard. Clearly Nokia needs to get these
weaknesses in partnerships as exemplified by their lack of coordination
with Google, in better order if they are to attain their growth potential.
This first weakness directly influences the fourth, which is creating a
convergence platform and supporting social networking websites and broader
Internet access. Nokia will need to embrace a much more collaborative
mindset if it is to succeed in the 21rst century; purely relying on
technology without a focus on integration already is limiting the company's
growth potential.
In summary, Nokia must work to overcome its own…