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Explain the concept of guerrilla marketing and give an illustration of how this promotion/communication technique might work. Be specific in your comments.
On Jun 09, 2024
Guerrilla marketing is the concept of using unconventional locations and intensive word-of-mouth campaigns to push products.
Example: The students are free to designate their own examples unless otherwise specified by the instructor. Examples used in the text were:
Today, many organizations are buying into guerrilla marketing strategies. These tactics are relatively affordable (compared to traditional print and television advertising) and they do an excellent job at getting the consumer's attention! For example, Unicef's Dirty Water campaign placed vending machines across cities in North America and offered a wide range of "dirty water" flavours that would be available in developing nations. Passers by were shocked to see options such as "Malaria" water and "Typhoid" water. The technique was innovative and low cost, but it really got attention from the public as well as the media.
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The controller of Getaway Corporation has prepared and summarized the following information for her company (all in millions of $):
External sales Inter-segment sales Operating profit (loss) Total assets Hotels 975891,050 Car rentals 51265642 Guided tours 205(25)221 Bus tours 17310011250 Cruises 98‾50‾(15)‾95‾ Total 1,963‾150‾125‾2,258‾\begin{array} { | l | r | r | r | r | } \hline& \text { External sales } & \begin{array} { r } \text { Inter-segment } \\\text { sales }\end{array} & \begin{array} { r } \text { Operating } \\\text { profit (loss) }\end{array} & \text { Total assets } \\\hline \text { Hotels } & 975 & & 89 & 1,050 \\\hline \text { Car rentals } & 512 & & 65 & 642 \\\hline \text { Guided tours } & 205 & & ( 25 ) & 221 \\\hline \text { Bus tours } & 173 & 100 & 11 & 250 \\\hline \text { Cruises } & \underline { 98 } & \underline { 50 } & \underline { ( 15 ) } & \underline { 95 } \\\hline \text { Total } & \underline { 1,963 } & \underline { 150 } & \underline { 125 } & \underline { 2,258 } \\\hline\end{array} Hotels Car rentals Guided tours Bus tours Cruises Total External sales 975512205173981,963 Inter-segment sales 10050150 Operating profit (loss) 8965(25)11(15)125 Total assets 1,050642221250952,258 Required:
Identify which segments are reportable. Also discuss any ethical issues related to reporting of segmented information.
On Jun 08, 2024
(All discussion in millions of dollars.)
Based on total revenues (including external and internal)of $2,113, any segment with more than $211 of revenues will be reportable. This test results in hotels, car rentals, and bus tours being reportable based on the revenue.
Based on total profits, the threshold is 10% of $165 ($89 + $65 + $11), which is $16.50. Hotels, car rentals, and guided tours are reportable segments based on the profit threshold test.
Based on the asset threshold test, any segment with assets of $226 is reportable. Based on this test, only the hotels, car rentals, and bus tour segments are reportable.
Based on the above analysis hotels, car rentals, guided tours, and bus tours are reportable.
From an ethical perspective, companies may attempt to hide poor operating results by combining segments. It is up to management to define the segments, which could be based on products, services, geographies, or customers. It may be that segregation by products/services would show some segments to show losses and some profits. On the other hand, segmentation by customer type (business and residential, for example)might report all segments being profitable, which would provide a more favourable picture.