COMPANY Case Trap-Ease America: The Big Cheese of Mousetraps

CONVENTIONAL WISDOM
One April morning, Martha House, president of Trap-Ease America, entered her office in Costa Mesa, California.
She paused for a moment to contemplate the Ralph Waldo Emerson quote 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.

The National Hardware Show Martha had just returned from the National Hardware Show in Chicago. Standing
in the trade show display booth for long hours and answering the same questions hundreds of times had been
tiring. Yet, all the hard work had paid off. Each year, National Hardware Show officials held a contest to select
the best new product introduced at that year’s show. The Trap-Ease had won the contest this year, beating out
over 300 new products.

Such notoriety was not new for the Trap-Ease mousetrap, however. People magazine had run a feature article on
the trap, and the trap had been the subject of numerous talk shows and articles in various popular press and trade
publications.

Despite all of this attention, however, the expected demand for the trap had not materialized. Martha hoped that
this award might stimulate increased interest and sales.

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

Trap-Ease America contracted with a plastics-manufacturing firm to produce the traps. The trap consisted of a
square, plastic tube measuring about 6 inches long and 1-1/2 inches in diameter. The tube bent in the middle at a
30-degree angle, so that when the front part of the tube rested on a flat surface, the other end was elevated. The
elevated end held a removable cap into which the user placed bait (cheese, dog food, or some other aromatic
tidbit). The front end of the tube had a hinged door. When the trap was “open,” this door rested on two narrow
“stilts” attached to the two bottom corners of the door. (See Exhibit 1.)

The simple trap worked very efficiently. A mouse, smelling the bait, entered the tube through the open end. As it
walked up the angled bottom toward the bait, its weight made the elevated end of the trap drop downward. This
action elevated the open end, allowing the hinged door to swing closed, trapping the mouse. Small teeth on the
ends of the stilts caught in a groove on the bottom of the trap, locking the door closed. The user could then dispose
of the mouse while it was still alive, or the user could leave it alone for a few hours to suffocate in the trap.

Martha believed the trap had many advantages for the consumer when compared with traditional spring-loaded
traps or poisons. Consumers could use it safely and easily with no risk of catching their fingers while loading it.
It posed no injury or poisoning threat to children or pets. Furthermore, with Trap-Ease, consumers avoided the
unpleasant “mess” they often encountered with the violent spring-loaded traps. The Trap-Ease created no “clean-
up” problem. Finally, the user could 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 seemed,
were more willing to buy and use the traditional, spring-loaded trap. The targeted women, however, did not like
the traditional trap. These women often stayed at home and took care of their children. Thus, they wanted a means
of dealing with the mouse problem that avoided the unpleasantness and risks that the standard trap created in the
home.

To reach this target market, Martha decided to distribute Trap-Ease through national grocery, hardware, and drug
chains such as Safeway, Kmart, Hechingers, and CB Drug. She sold the trap directly to these large retailers,
avoiding any wholesalers or other middlemen.

The traps sold in packages of two, with a suggested retail price of $2.49. Although this price made the Trap-Ease
about five to ten 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
99 cents per unit (two units to a package) and estimated that, after sales and volume discounts, Trap-Ease would
produce net revenue from retailers of 75 cents 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 planned to
use the remaining $10,000 for advertising. So far, however, because the mousetrap had generated so much
publicity, she had not felt that she needed to do much advertising. Still, she had placed advertising in Good
Housekeeping (after all, the trap had earned the Good Housekeeping Seal of Approval) and in other “home and
shelter” magazines. Martha was the company’s only salesperson, but she intended to hire more salespeople soon.

Martha had initially forecasted Trap-Ease’s first-year sales at five million units. Through April, however, the
company had only sold several hundred thousand units. Martha wondered if most new products got off to such a
slow start, or if 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
upon whom she called kept their sample mousetraps on their desks as conversation pieces—she wanted the traps
to be used and demonstrated. Martha wondered if consumers were also buying the traps as novelties rather than
as solutions to their mouse problems.

Martha knew that the investor group believed that Trap-Ease America had a “once-in-a-lifetime chance” with its
innovative mousetrap, and she sensed the group’s impatience with the company’s progress so far. She had
budgeted approximately $250,000 in administrative and fixed costs for 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.

BACK TO THE DRAWING BOARD

In these first few months, Martha had learned that marketing a new product was not an easy task. Some customers
were very demanding. For example, one national retailer had placed a large order with instructions that Trap-Ease
America was to deliver the order to the loading dock at one of the retailer’s warehouses between 1:00 and 3:00
p.m. on a specified day. When the truck delivering the order arrived after 3:00 p.m., the retailer had refused to
accept the shipment. The retailer had told Martha it would be a year before she got another chance.

As Martha sat down at her desk, she realized she needed to rethink her marketing strategy. Perhaps she had missed
something or made some mistake that was causing sales to be so slow. Glancing at the quotation again, she thought
that perhaps she should send the picky retailer and other customers a copy of Emerson’s famous quote.

Questions for Discussion:

1. Martha and the Trap-Ease America investors believe they face a once-in-a-lifetime opportunity. What
information do they need to evaluate this opportunity? How do you think the group would write its mission
statement? How would you write it?
2. Has Martha identified the best target market for Trap-Ease? What other market segment might the firm target?
3. How has the company positioned the Trap-Ease for the chosen target market? Could it position the product
other ways?
4. Describe the current marketing mix for Trap-Ease! Do you see any problems with this mix?
5. Who is Trap-Ease America’s competition?
6. How would you change Trap-Ease’s marketing strategy?
 Type of Marketing (Maketing 1.0, Marketing 2.0, & Marketing 3.0)

Dr. Philip Kotler defines marketing as "the science and art of exploring, creating, and delivering value
to satisfy the needs of a target market at a profit. Marketing Identifies unfulfilled needs and desires. It
defines, measures and quantifies the size of the identified market and the profit potential. Kotler says
that most of the companies need a marketing to survive and develop. Kotler defines marketing in three
types, that are Marketing 1.0, Marketing 2.0, and Marketing 3.0. Below, will be explained what are
Marketing 1.0, Marketing 2.0, and Marketing 3.0:

1. Marketing 1.0 (Mind)

Marketing 1.0 is a type of marketing that is owned by the majority of companies. Company with this
type of marketing focused on doing business and generating profits through the products it sells. This
type tends aims to make consumers interested and finally thinking to buy the products offered.

2. Marketing 2.0 (Heart)

Marketing 2.0 is a type of marketing that is contrary to Marketing 1.0, Marketing 1.0 only focusing on
product sales, Marketing 2.0 is more concerned with the customer's wishes. Marketing 2.0 seeks to
captivate customers and tried to close their heart by knowing his wishes.

3. Marketing 3.0 (Spirit)

Marketing 3.0 is the type of company that not only produces a quality product and know your customers
well, but also trying to care for their surroundings. Marketing 3.0 is very concerned with poverty, hunger,
depleting natural resources, environmental degradation, pollution levels are high, and many other
factors. Marketing 3.0 is aimed to create a spirit of consumers to contribute significantly to the
surrounding environment through the products it produces.

Based on the description above, it can be stated that the striking differences of each type of marketing
that is the extent of the responsibilities and roles of the communities. Marketing 1.0 tend to think only
of his own company because they focus on selling the product as much as possible without regard to
the wishes of customers. Marketing 2.0 is already more developed than that Marketing 1.0, Marketing
2.0 has begun to know and understand the wishes of the customer. Marketing 3.0 companies started
aiming to sell products and understand the wishes of our customers and strive to care for the
environment.

Source: https://www.youtube.com/watch?v=6rxj8pGPxZc
 Company Case: Starbucks (Just Who is the Starbuck Customer?)
Company Case 7
Starbucks: Just Who is the Starbuck Customer?

By now, you should be familiar with the Starbucks story. After a trip to Italy in the early 1980s, Howard Schultz
was inspired to transform Starbucks—then just a handful of coffee shops in Seattle into a chain of European-style
coffeehouses. His vision wasn’t based on selling only gourmet coffees, espressos, and lattes, however. He wanted
to provide customers with what he called a “third place” a place away from home and work. As CEO of Starbucks,
Schultz developed what became known as the Starbucks Experience, built around great coffee, personal service,
and an inviting ambiance.

WHAT GOES UP . . .
It wasn’t long before Starbucks became a household word a powerhouse premium brand in a category that
previously consisted of only cheaper commodity products. In 20 years time, Schultz grew the company to almost
17,000 stores in dozens of countries. From 1995 to 2005, Starbucks added U.S. stores at an annual rate of 27
percent, far faster than the 17 percent annual growth of McDonald’s in its heyday. At one point, Starbucks opened
over 3,300 locations in a single year an average of 9 per day. In one stretch of crowded Manhattan, a person could
get their caffeine fix at any of five Starbucks outlets in less than a block and a half. In fact, cramming so many
stores so close together caused one satirical publication to run this headline: “A New Starbucks Opens in the
Restroom of Existing Starbucks.”

For many years, new store growth was what kept Starbucks percolating. As it grew, company sales and profits
rose like steam from a mug of hot java. Growth routinely averaged 20 percent or more each year. And Starbucks
made investors happy with a 25 percent annual increase in the value of its stock for more than a decade. Schultz
confidently predicted that there was no end in sight for the Starbucks boom. Just a few years ago, he announced
his intentions to open 10,000 new stores in just four years and then push Starbucks to 40,000 stores.

But not long after Schultz shocked Wall Street and the industry with his projections, Starbucks’ steam engine of
growth started to slow. Then it started running in reverse. By the end of 2008, the 20 percent annual growth had
dropped to 10 percent, with existing store sales decreasing by 3 percent. Total company profits dropped by a
scalding 53 percent for the year. And for a second year in a row, Starbucks’ stock value dropped by 50 percent to
around $10 a share.

The weakened economy certainly played a role. But for years, many industry observers had worried that the
company was growing too fast. Revenue and traffic at Starbucks began slowing more than a year before anyone
uttered the word recession. In a sign of recognizing a problem, Schultz cut back on the number of new store
openings. Then he did what had previously seemed unthinkable. In 2008, he announced store closures first 600,
then 300 more. In fact, as Starbucks trimmed its 2009 forecast for new store openings to 310, it projected
a decrease in its number of outlets for the first time ever.

THE EVOLUTION OF THE STARBUCKS CUSTOMER

There was no shortage of armchair CEOs willing to give their opinions as to what had gone wrong that led to
Starbucks’ fall from perpetual growth. One issue often mentioned was that Starbucks had developed an identity
crisis with respect to its target customer. In its early years, the Starbucks customer profile was clearly defined.
The typical customer was wealthier, better educated, and more professional than the average American. The
customer was far more likely to be female than male, predominately Caucasian, and between the ages of 24 and
44. It was this customer who fell in love with the Starbucks Experience. She was very loyal, often visiting a store
every day or even more than once a day. She loved the fact that the barista greeted her by name when she came
in and chatted with her while making her custom coffee drink, not caring if it took awhile. She lounged on the
comfy furniture, enjoying the perfect mix of music that always seemed to fit her mood. She met friends or just
hung out by herself reading a good book.

But the more Starbucks grew, the more the Starbucks Experience began to change. With more stores, the place
wasn’t quite so special. As each location filled with more customers, baristas had more names to put with faces.
As the menu expanded with more options, the number of combinations for coffee drinks grew into the hundreds,
leaving baristas less time to chat with customers. As the atmosphere in each store turned to “hustle and bustle,”
it became a less attractive place to hang out.

With all these changes, Starbucks progressively appealed less to the traditional customer and more to a new
customer. This customer shift was inevitable; there simply were not enough traditional customers around to fuel
the kind of growth that Schultz sought. The new breed of customer was less affluent, less educated, and less
professional. Not only was Starbucks drawing in different customers in places where stores already existed, but
it was also putting stores in different neighborhoods, cities, and countries.

As the customer profile evolved, the Starbucks Experience grew to mean something different. To the new breed
of customer, it meant good coffee on the run. It was a place to meet and then move on. The more accessible
Starbucks was, the better. Speed of service was more important than a barista who wanted to talk current events.
This new customer came in much less frequently than the traditional customer, as seldom as once a month. As a
sign of just how much this shift in customer was affecting its business, by 2007, 80 percent of all Starbucks coffee
purchased was consumed outside the store.

SOUL SEARCHING
When Starbucks’ growth first started tapering off, the executives took notice. In a now famous memo to
management, Schultz lamented that “in order to achieve the growth, development, and scale necessary to go from
less than 1,000 stores to 15,000 stores and beyond, [Starbucks had made decisions that may] have led to the
watering down of the Starbucks experience. Stores no longer have the soul of the past and reflect a chain of stores
versus the warm feeling of a neighborhood store.” Starbucks management believed that efforts to recapture that
soul would get the company back on track. At first, however, Starbucks was caught between the conflicting goals
of reestablishing its image as the provider of a holistic experience and offering better value to the cash-strapped
consumer. Starbucks set out to put some water on the fire and get some of its customers back. It added labor hours
and time-saving automated machines to stores. It focused on the quality of its coffee with a Coffee Master training
program for its baristas and a new line of ultra-premium whole-bean coffees. It even tried free Wi-Fi service and
sold its own music.

But none of these actions seemed to address the core problem: Although Starbucks still charged a premium price,
it was no longer a special place. As the recession tightened its grip and more people cut back on discretionary
purchases, the problem grew worse. Compounding the problem was an increase in competition. For years, if you
wanted a latte, Starbucks was about the only option. Not only were Dunkin’ Donuts and McDonald’s selling
premium coffee drinks to the masses, but just about every mini-mart in the country boasted about the quality of
its coffee. All of these competitors had prices considerably lower than those of Starbucks, which made the most
well-known coffee bar much less justifiable to the “grab and go” crowd. As much as Schultz denied being in
direct competition with the lower-status coffee pourers, many critics seemed to be thinking the same thing:
Starbucks had shifted from a warm and intimate coffeehouse to little more than a filling station, battling fast-food
outlets for some of the same customer dollars.

“VALUE” TO THE RESCUE?

Throughout 2009, Schultz continued to direct activities aimed at increasing growth. Starbucks launched a
campaign designed to educate consumers that Starbucks really wasn’t as expensive as they thought it was. That
was followed by something Schultz held back for as long as possible: price reductions. “Breakfast pairings” coffee
cake, oatmeal, and an egg sandwich—soon followed.

All these tactics helped. By the end of 2009, Starbucks was regaining ground. With same-store sales up 4 percent
and profits up 24 percent for the year, Starbucks’ stock price doubled versus the previous year. But Schultz made
it clear that he was just getting started. “What a difference a year makes. We’re going to radically reframe
Starbucks growth strategy.” He outlined a three-pronged growth strategy to illustrate that Starbucks might have
a grip on defining segments of coffee customers after all. In searching for Starbucks’ roots and re-creating the
Starbucks store experience, Schultz also aimed to reach customers outside the store.

The first prong of the new strategy centers on Via, an instant coffee that Starbucks introduced last year. It is
available in singleserve packets at all Starbucks stores and in grocery stores at $1 each or $9.95 for 12 packs. Via
lets Starbucks promote a genuine cup of Starbucks coffee for under a buck. Promotions for the new instant have
made it clear that Starbucks isn’t moving downscale; instant coffee is moving upscale. At a New York taste
testing, Schultz told a group of analysts, journalists, and retailers that he was ready for the critics who say, “This
is desperate, this is a Hail Mary pass, this is off-brand for Starbucks. We are going to reinvent the category. This
is not your mother’s instant coffee.”

Via is off to a good start, having surpassed company expectations. In fact, Via accounted for more than half of
the 4 percent increase in Starbucks’ 2009 same-store sales. According to Annie Young-Scrivner, global chief
marketing officer for Starbucks, half of all Via serving occasions are at home, 25 percent are in the office, and 25
percent are “on the go.” Many Via customers aren’t just out for a cheap coffee fix. (You can mix up a cup of
Folger’s for about 25 cents.) They are people who want premium coffee but are in situations where they don’t
have access to a store or brewing their own. An ad campaign supporting Via is the first concerted advertising
push aimed at grocery customers, who are now accessible through 37,000 retail locations.
 The second prong of Starbucks strategy also focuses on the grocery business but through ground-flavored coffees.
According to NPD Group, four out of five cups of coffee are consumed at home. Starbucks has a very small share
of that market. Via will certainly help. But aiming more directly at the “brew it at home” customer, Starbucks is
partnering with Kraft to launch flavored coffees you can brew yourself. Sixty percent of bagged coffee buyers are
either drinking flavored coffee or adding flavored creamer. Seventy-five percent of those customers said they
would buy a flavored product at the grocery store if Starbucks made one. So after more than two years of testing,
this substantial segment of

Discussion:
1. Using the full spectrum of segmentation variables, describe how Starbuck initially segmented and targeted the
coffee market!
- Starbucks initial segmentation and target:

2. What changed first the Starbucks customer or the Starbucks experience? Explain your response by discussing the
principles of market targeting!
- The Starbucks Customer changed first
- The biggest mistake was they initially targeting a premium coffee store but they grown it up to fast.
- They built to many stores at one place and caused the degradation of its premium sense, it also caused lack of
differentiation which bring it on wrong positioning.

3. Based on the segmentation variables, how is Starbucks now segmenting and targeting the coffee market?
- Now Starbucks makes a more general market segmenting to enlarge their market target.
- Starbucks starts to target several market segments through a Differentiated Market or Segmented Market
Strategy.
- They start to offer various products for various customer such as instant coffee and ground-flavored coffees for
grocery market.
- They purchased Seattle’s Best Coffee and deliver its product for working class

4. Will Starbucks ever return to the revenue and profit growth that it once enjoyed? Why or why not?
- Yes, they will. Starbucks realize that their customer’s behavior had changed and they immediately fix it through
applying a customer-driven marketing strategy in creating value for target customers and that is a great decision
to maintain the company keep profitable.