Hi-Power Beverage Company
Written Case Study Analysis（Hi-Power Beverage Company）
1 Overview of Situation (150 words)
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2.0 Statement of Main Problem: Level of Analysis and Problem Type.(100 words)
2.01 Level of analysis
2.02 Problem type
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3.0 List of Critical Factors(400 words)
Critical Factor #1
Critical Factor #2:
Critical Factor #3:
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4.0 Alternative Solutions(450words)
Alternative Solution 1
Advantages and disadvantages
Alternative Solution 2
Advantages and disadvantages
Alternative Solution 3
Advantages and disadvantages
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5.0 Recommendation (100words)
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6.0 Rationale and Justification (150words)
By Professor William Swinyard, Brigham Young University, Salt Lake
City, Utah (U.S.A.) and Professor Charles H. Patti, School of Advertising,
Marketing and Public Relations, Queensland University of Technology,
Brisbane (Qld), Australia
Charles Iverson, Hi-Power Beverage‘s Brand Manager, knew the next advertising campaign
for Hi-Power could well determine the future for the company. Late one Friday afternoon,
Iverson was looking over the data from a series of TV commercial tests. Knowing that he
would have to submit his recommendation on Monday morning, he decided to study the data
one more time over the weekend.
INTRODUCTION AND BACKGROUND
Hi-Power Beverage Company produces and markets several carbonated and noncarbonated
lines of canned fruit- and cola-flavored soft drinks. The Company has been recently focusing
on its Upper C brand, a vitamin-enriched fruit drink line sold in the canned juice sections of
grocery and convenience stores. The key promotional tool for the line was network television
advertising supplemented with spot TV in seasonally appropriate markets.
Iverson’s usual procedure in the development of campaign strategy was to turn the
challenge, with relevant market data, over to the company’s advertising agency. The agency’s
account manager, Katherine Cordero, would review the data, consult with Iverson in
deciding upon a selling proposition, and then work with the agency’s account planning team
to develop an idea that they would present to Iverson and Paul Waters, Hi-Power’s Group
Product Manager.
Katherine and other members of the agency’s account planning team were excellent
presenters of ideas. They were knowledgeable about the industry and about advertising and
other forms of marketing communication. Frequently, this meant that Iverson and others
would accept the agency’s single idea. Sometimes Iverson would suggest a few minor
changes and then the agency would move quickly to the production and media scheduling
phases of the campaign.
Recently, Charles Iverson began questioning this approach. He often felt uncomfortable
about seeing only one idea. Surely, he thought, there must be a better way to approach the
development of advertising campaigns for his brands. Iverson realized that the agency could
either: (1) move quickly through the creative strategy development stages and on to
scheduling, thus maximizing the company’s media expenditures, or (2) spend far more time
and money in the development and production of three or four alternative creative
executions, copytest them, pick the highest-scoring execution, and then move to media
placement.
In a conversation between Iverson and Waters, Iverson said, “Maybe if we spent more
money in developing and testing alternative ideas, we could come up with a better
campaign.” While there was nothing particularly unique about this concept, Hi-Power had
never done this before. Several reasons seemed to explain this: (1) Hi-Power’s advertising
agencies had never recommended it; (2) Hi-Power marketing executives had little familiarity
with copytesting procedures and in interpreting copytesting results; (3) the time involved in
testing two or three alternative ideas could delay production; and (4) the cost of testing would
exceed the Company’s normal advertising budget allocation (3 percent of the total
advertising budget) for research.
A NEW APPROACH
After further discussions between Iverson and Waters, they agreed that they would try a new
approach for the selection of the advertising for the Upper C brand. Iverson called Katherine
Codero and they met early one morning. At that meeting, Charles Iverson explained,
“Katherine, Paul and I want to approach the selection of the advertising
approach for Upper C in a different way. We want you to develop at least
three alternative executions for a new campaign for Upper C. We don’t just
want three ideas or storyboards, we want three distinctly different
concepts—each developed into finished, or near-finished, commercials. We
know this will be more expensive for us in the short-term; however, we
believe that by testing three alternative ideas we have a better chance of
being more effective and efficient in the development of a long-term strategy
for Upper C.”
At first, the agency resisted Iverson’s idea, but soon agreed to move forward with the
development and testing of three alternative strategies and executions. In preparation for the
work of the agency, Hi-Power’s marketing research department provided recent survey data
about the relative importance of product attributes for Upper C’s product class. Iverson and
Cordero examined a summary table of these data (see Table 1). They concluded that the
product’s nourishment offered the most potential for positioning the brand. They translated
this attribute into the selling proposition of vitamin enrichment.
TABLE 1
Consumer Perceptions of Enriched Drinks
CONSUMER EVALUATIONS1
Attribute
Attribute
Importance
Weight2
HiPower (Upper
C)
Brand
A
Brand
B
Brand
C
Taste
.40
8
9
7
4
Calorie
Content
.18
7
5
7
4
Price
.15
6
8
6
10
Color
.02
6
7
7
6
Nourishment
.25
9
6
8
5
1
On a 10-point scale, where 10 is the preferred rating
Refers to the relative salience of each attribute to consumers in discriminating between the purchase of one brand versus
another.
2
2
Choosing among alternatives
Five months and $90,000 later the agency presented three, finished, 30-second commercials—
each with a completely different theme (see Exhibit 1). “These are all solid campaign
concepts,” Cordero said. Iverson had to agree, but he did feel that Pantomime Man was an
especially effective execution.
EXHIBIT 1
Summary of the Three Upper C Commercials
NAME OF COMMERCIAL
Pantomime Man
Saturday
Afternoon
Show Girls
BRIEF DESCRIPTION
A 30-second commercial in which the video depicts the
silhouette of a gymnast jumping on a trampoline, doing rolls,
flips, and other intricate maneuvers. The trampoline is not
seen—the video is cropped well above it. A voiceover speaks
about Upper C’s energy power, vitamins, and minerals, which
combine to provide energy for, and a pick-me-up after,
physical activity. The camera closes on a slow zoom-in on a
can and glass of Upper C.
A 30-second commercial that portrays a plot line in which a
grade-schooler comes into the kitchen, tosses his baseball
glove on the table, screen door slamming. His mother and he
exchange delighted phrases about his baseball victory, while
she makes a display of getting Upper C from the refrigerator,
opening the can, and pouring him a large glass. The Upper C
label is in constant view. The final scenes show the boy
drinking from the glass, with his mother saying, “It makes me
happy that you like things that are so good for you as Upper
C.” Close on slow zoom in on a can and glass of Upper C.
A 30-second commercial that depicts the parade walk of
showgirls in Las Vegas costume. Voiceover on low-level
audience noises speaks of the wear and tear of a tough day—
and how refreshing a pick-me-up would be . . . that even
adults need a full supply of vitamins. The final scene is in the
dressing room of a showgirl, where she pours a glass of
Upper C, samples it, looks at the camera, and says, “It sure
helps out after a tough day.”
The next step was to submit the commercials to a copytesting organization. Although HiPower had used one such organization from time to time, Iverson wanted more information
about what services were available. He went to the company’s marketing research department
for advice.
He thought that he would have to ask only, “Which advertising copytesting service is best?”
but he found that the answer was not at all straightforward. As the senior researcher put it,
“That all depends on what you mean by ‘best’ and on which model of behavior change you
believe characterizes your product.” Three popular services were described to him (see
Exhibit 2 for details). The researchers shrugged and suggested that he might start with
copytesting Service A.
3
EXHIBIT 2
Description of Three Copytesting Techniques
COPYTESTING
SERVICE
Service A:
In-theatre
viewing
Service B:
Pupilometrics
Service C:
Parking Lot
BRIEF DESCRIPTION
Service A is an in-theater viewing using local groups (from churches and other organizations).
Respondents view a TV pilot, interspersed at expected intervals with commercials. Among the
commercials is the test commercial. Respondents, who believe that they are at the theater to
evaluate the TV pilot, complete a questionnaire about the pilot at the conclusion of the show.
Twenty-four hours later, interviewer telephones each of the respondents “to collect some
additional information.” At this point, the interviewer questions the respondent about recall of
commercials shown with the pilot, using open-ended questions such as, I’m going to read, you a
list of products, some of which were advertised last night and some of which were not. Please
think about each product and tell me whether you recall seeing that product advertised last
night. Do you recall a commercial for . . .? Respondents who claim recall are asked the brand
advertised. The percentage of respondents recalling correctly form an awareness ‘score’ for the
test commercial, which can be evaluated against a norm, or average for the product class.
Service B uses pupilometric techniques, supplemented with attitudinal responses. One
respondent at a time is exposed to several commercials, which the respondents view by peering
in a light box. While they watch the ads, a motion picture camera continuously photographs their
left eye, recording changes in pupil size throughout the “control’ commercials and test
commercial. Firm B has experimentally established that pupils respond to emotional activity.
Up to one hundred respondents participate in each test, and the pupil response, along with some
paper and pencil attitude measurements for the brand, are combined for the entire sample of
respondents. These are then transformed into an indexed score, which is compared with a norm
for the product class.
Service C’s technique involves a behavioral response measure, acquired by moving a wellequipped viewing-room (contained in a motor home) to the parking lot of a large supermarket.
Shoppers are invited to participate in the test as they approach the store. In the motor home they
are shown a series of commercials. In some cases (test condition), the test commercial is
included in those shown. In other cases (control condition), the respondents see all commercials
except the test commercial. After viewing, all respondents are given a complimentary booklet
of cents-off coupons—good for 50¢ to $1 off on specific grocery products. Among the coupons
is one redeemable on the test product. The respondents then proceed with their shopping. At the
close of the day, Service C collects all redeemed coupons, which had been coded to reflect
whether they had been given during the test condition or control condition. A comparison is then
made on differential redemption rates of test versus control coupons. The differences between
test condition redemption and control condition redemption are transformed into a percentile
score, in which the norm for the product class is 50 percent.
Results
Two weeks later, when the Service A test scores had come in, Iverson looked at them with
some dismay (see Table 2,). They simply did not confirm his expectations of the performance
of the commercials. Waters, too, was disturbed, for his personal favorite of Show Girls came
in well below Saturday Afternoon, which he felt was relatively mundane commercial.
4
TABLE 2
Test Scores from Three Copytesting Services
COMMERCIAL
Pantomime Man
Saturday
Afternoon
Show Girls
SERVICE A:
IN-THEATRE
Score
Norm3
3
10
17
10
4
SERVICE B:
PUPILOMETRICS
Score
Norm
5.4
3.8
1.5
3.8
10
6.5
3.8
SERVICE C:
PARKING LOT
Percentile4
34
73
20
Neither of the two men was satisfied. They decided to have the three commercials tested by
another copytesting agency. “We have spent over $90,000 on the production costs of these
commercials,” Iverson said, “so few thousand extra for testing is hardly consequential.” They
set up a test with Service B. When the results came in (Table 2, Service B), Iverson and
Waters were simultaneously delighted and puzzled. On the one hand, the test results
confirmed their own expectations—both Pantomime Man and Show Girls were highly
evaluated—but these results directly contradicted the scores from testing Service A. In
addition, the previously high-scoring Saturday Afternoon now scored quite low.
Their feelings of confusion became those of bewilderment when they tested the
commercials a third time—this time with Service C (see Table 2, Service C).
Waters turned to Iverson: “Saturday Afternoon is getting scores like a yo-yo, and Show
Girls is back down near the bottom again. Surely our friends in the marketing research
department will help us understand what’s happening here.” “I hope so,” Iverson replied. “Or
we’ll be forced right back into our old system of one idea, one commercial. We just have to
reconcile this dilemma.”