158. Subway is a large chain of franchise sandwich shops. Marcia owns three Subway stores in a large city. At the end of the year, she notes that sales rose from two to five percent over last year's sales at Stores 1 and 2, but fell two percent at Store 3. Marcia decides to give large bonuses to the managers of Stores 1 and 2, and to put Store 3's manager on probation. Critique Marcia's evaluation of her stores' performance. What would you have done differently? Be specific. The major problem with Marcia's evaluation is that her only point of comparison seems to be last year's sales figures. She should attempt to obtain information on sales trends at other Subway sandwich shops, and if possible, at competing sandwich shops in her city. For example, perhaps her competitors and/or fellow franchisees saw much larger gains, perhaps due to an improving economy. She should also seek to understand whether or not there might be an explanation for the reduction in sales at the third store. Perhaps it is located in a shopping center that has been losing tenants, which would be beyond the manager's control and therefore shouldn't factor into a performance evaluation. Analytic Blooms: Evaluate Difficulty: 3 Hard Learning Objective: 02-06 Summarize portfolio analysis and its use to evaluate marketing performance. Topic: Step 5: Evaluate Performance Using Marketing Metrics
158. Subway is a large chain of franchise sandwich shops. Marcia owns three Subway stores in a large city. At the end of the year, she notes that sales rose from two to five percent over last year's sales at Stores 1 and 2, but fell two percent at Store 3. Marcia decides to give large bonuses to the managers of Stores 1 and 2, and to put Store 3's manager on probation. Critique Marcia's evaluation of her stores' performance. What would you have done differently? Be specific. The major problem with Marcia's evaluation is that her only point of comparison seems to be last year's sales figures. She should attempt to obtain information on sales trends at other Subway sandwich shops, and if possible, at competing sandwich shops in her city. For example, perhaps her competitors and/or fellow franchisees saw much larger gains, perhaps due to an improving economy. She should also seek to understand whether or not there might be an explanation for the reduction in sales at the third store. Perhaps it is located in a shopping center that has been losing tenants, which would be beyond the manager's control and therefore shouldn't factor into a performance evaluation. Analytic Blooms: Evaluate Difficulty: 3 Hard Learning Objective: 02-06 Summarize portfolio analysis and its use to evaluate marketing performance. Topic: Step 5: Evaluate Performance Using Marketing Metrics
Test-Bank-Marketing-4th-Editio-Grewal.docx