Exam International Business & Supply chain Marketing 2019/2020 (first chance)
Question 1: Customer Value Model
Question 1
The Green Company produces a new fertilizer: GreenGrow®. The company is convinced that the new fertilizer
outperforms the competitor product RoundSup®. The company assumes that Greengrow® is more
environmentally friendly. In addition, GreenGrow® will lead to higher crop yield than the competing product. To
get a deeper understanding of the value the new concept delivers to customers in the cauliflower segment, Tim
Timothy, the marketing director of the Green Company, has conducted intensive tests with five customers. The
results of these tests are presented in Tables 1 and 2.
An increased crop yield means that the agricultural firm can sell more products. In the cauliflower segment,
products can be sold for € 1.10 per kg. The typical customer has 20 hectares. Customers have to sign a three-
year contract with either GreenGrow® or RoundSup®.
Cauliflower segment
Effect per hectare per year, when used GreenGrow® Crop yield increases by 1,800 kg
Use of GreenGrow® per hectare per year Twice a year (April and October),
3 liter per hectare
Price GreenGrow® € 13.00 per liter
Table 1 - Main crop and effects of GreenGrow®
Tim Timothy also found relevant information about RoundSup®, the most important competing product in the
cauliflower segment.
Cauliflower segment
Effect after using RoundSup®, per hectare per year Crop yield increases by 1,500 kg
Use of RoundSup® per hectare per year Twice a year (April and October), 1.5 liter
per hectare
Price RounSup® € 8.00 per liter
Table 2 - Main crop and effects of RoundSup®
a)
Construct a customer value model for GreenGrow vs. RoundSup for the cauliflower segment. [21 points]
Take into account the following:
▪ Use word equations to illustrate your calculations.
▪ Provide a summary table (value spreadsheet) with
placeholders
▪ Calculate the net present value for 3 years at an interest
rate of 9%.
If you make assumptions, describe them well.
b)
Please develop a value proposition for GreenGrow in the cauliflower segment. [5 points]
Hint: If you experience difficulties with the value model in part a), you may answer this
question based on the other information available in the case. [max 40 words]
,Path: p
Words:0
26 points
● Question 1 of 1
● Click Submit to complete this assessment.
,QUESTION 2: SOLUTION SELLING
Rolls-Royce Enters Total Care Agreement with Air Canada
Rolls Royce has recently entered a “Total Care” agreement with Air Canada. The agreement will focus on
ensuring availability of the Rolls-Royce Trent 700 engine until fleet retirement. The Rolls Royce Trent 700,
which first entered service in 1995, powers Airbus A330-200 and 300 variants. The engine first entered service
in 1995.
“Total Care” is a Rolls Royce product designed to benefit owners and operators of mature engines. According to
Rolls Royce, Total Care covers predictive off-wing maintenance planning, and work scope creation/management.
As part of the Total Care Agreement, Rolls Royce can complete an engine swap, a full engine overhaul to maximize
on-wing time, or a partial engine overhaul to bring the engine to retirement. Essentially, Total Care allows
operators of mature engines to contain engine maintenance costs to a fixed level as an engine reaches
retirement.
According to Adair Swan, Rolls-Royce’s Program Director for mature large engines, the agreement with Air
Canada “is further evidence of our commitment to transform our services, providing the right care at the right
time for our customers’ engines. The Trent 700 is our most successful engine program and kicked off the Trent
family success story. As it reaches maturity, we can provide operators with this innovative and flexible service to
guarantee the performance of the engine, right up to the aircraft’s final day in service.” Thus, the Total Care
program constitutes a major shift in Rolls Royce business model which initially focused on selling engines.
The agreement was also praised by Richard Steer, Air Canada’s Vice President of Operations, who said in a press
release, “We are pleased to be the first Trent 700 operator to adopt Total Care with a long-standing, reputable
supplier such as Rolls-Royce. This further extends the strong business partner relationship already established
over the years Air Canada has operated the fleet of A330 aircraft, and furthers Air Canada’s goal to operate
mature fleets in a cost-effective manner.”
To date, Air Canada’s Trent 700 powered A330s have flown for over 700,000 hours with some reaching
approximately 20 years in service. With its robust offering of engine maintenance options, Total Care will
undoubtedly allow Air Canada to efficiently operate its Trent 700 powered A330 fleet to retirement. In addition
to the Trent 700, Rolls-Royce also offers Total Care for its Trent 500 and 800 engines, which power the Airbus
A340-500/600 and Boeing 777, respectively.
1.
Your text is automatically saved every 2 minutes. You can manually save your text any time. After saving you can
continue to write your text (until the assignment is closed). All access is logged!
2. a), number of words allowed: ; maximum score: 15 points
Please discuss the following issues:
How would you qualify the Rolls Royce shift from selling engines to the Total Care Program. Please check whether
this represents a service-transition strategy or qualifies as a solution selling approach. [max 250 words]
, Path: p
Words:0
3. b), number of words allowed: ; maximum score: 19 points
Irrespective of your answer to the prior bullet point, please assume that the Rolls Royce Total Care program
would qualify as a solution. Please reflect on the different aspects of B2B marketing which we covered in this
course. Compared to selling standardized engines, what changes does such a shift require for a) sales people
management, b) price management and c) customer relationship management). [max 300 words]
Path: p
Words:0
Click on 'Save as draft' to save your work so you can make further changes (you will be returned to
the previous page). "Save and Finish" saves your assignment and marks it as finished; making
access and further changes impossible
