Devereaux-Deering Group Dashing to catch a cab at the corner of Sixth and Vine, the account team was exhilarated. After a quick exchange of high fives, three of the four jumped into the backseat of a cab to return to the Manhattan offices of Devereaux-Deering, a global advertising agency with offices in New York, Hong Kong, and Paris. The team couldn’t wait to tell their team leader, Kurt Lansing, that they had won the BMW account that morning. The fourth team member, Brad Fitzgerald, stood apart from the animated group, studying his BlackBerry and then hailing a cab for an afternoon flight out of LaGuardia. After a two-year slump in sales, Devereaux-Deering needed a big score like the BMW account. To drive new business and land high-profile accounts like this one, the company had hired Kurt Lansing, an MBA from Wharton, with prominent status in the advertising industry. His job was to lead a new business team to study the market, develop strategies, and acquire major accounts. Lansing hand-selected four high achievers for his team that represented each area of the business: Brad Fitzgerald, creative director; Trish Roderick, account services; Adrienne Walsh, production manager; and Tyler Green, brand strategy. “That was a shocker!” said Roderick as she scooted across the backseat of the cab to make room for her teammates. “The client didn’t seem too impressed with our presentation until Fitzgerald presented the last set of slides describing the global campaign. They loved it. I think he single-handedly clinched the deal when he presented the tag line for the Asian market,” she said excitedly. “He’s a real whiz, alright,” muttered Green.” The eighth wonder of the world.” Sighing deeply and losing his earlier exuberance, Green said, “We couldn’t have bagged the deal without him, and I know we’ll all get credit. But none of us knew he planned to present that last part of the global campaign. I know he was working on that tag line late last night, but there was plenty of time this morning to get team input on it. I hate surprises in front of the client. I felt like a fool, even if we did win the business.” “He’s a regular white knight’” chuckled Walsh, “riding in at the last minute to save the day. I suppose we should appreciate him, but he’s just so irritating. He snapped at me last week for not telling him about a client who was upset about delays in their ad campaign. I reminded him that I had told him about it in our status meeting, but he wasn’t listening at the time. He was glued to his precious BlackBerry, as usual. Why have team meetings if he isn’t going to participate?” Roderick was surprised by her teammates’ reaction to Fitzgerald. She thought they had been working well together. She was quickly discovering, however, an undercurrent of resentment. This was the first time that she had been exposed to the conflict that was simmering below the surface. No doubt, Fitzgerald did have a strong ego and aggressive personality. A previously successful entrepreneur, Fitzgerald had a track record of success and was very ambitious. However, she did notice that he didn’t show respect for differing opinions or invite collaboration on ideas. She wondered if he was placing his own success above his team’s. But why complain if the team was sharing the credit and earning fat bonuses along with him? She was content to go with the status quo. “You know,” she said, “we’re darn lucky to be on his team.” She stared out the cab window at the passing traffic and listening to her two teammates continue to grouse. “I should have known something was up when I walked past his office last night and saw him working with the new copywriter. They must have been hashing out the new tag line,” smirked Green. “We are a team, aren’t we? The system is bigger than the individual, remember? He doesn’t seem too concerned about the welfare of the team – only his own.” “Well, let’s all have a heart-to-heart with Mr. Whiz,” said Walsh sarcastically. “I’m sure he’ll see things our way. We’ll give him a brief overview of Teamwork 101. That will go over great!” As the cab pulled to the curb, they tossed the driver a $20 bill and headed to their offices on the 40th floor. They would all stop to see the team leader, Kurt Lansing, first. In the meantime, Lansing smiled broadly when he received Fitzgerald’s text message that they had won the BMW account. Sinking back in his chair, he marveled at the cohesiveness and success of his team. All that time building a shared vision and building trust was starting to pay off. Questions 1. What factors do you think are affecting this team’s cohesiveness? Explain. 2. If you were the team leader, what could you do to bring Fitzgerald into the team more and foster better relationships among the team members? 3. As a team member, what would you do? Should the three members of the team confront Fitzgerald with their concerns? Should they inform Kurt Lansing? Explain your answer

Universal Bank is located in a northeastern US city; its business is largely focused on the city and its surrounding metropolitan area. It has roughly 80,000 checking account customers and it would like to expand its business by offering these customers personal loans secured by home equity. On average, the stream of interest payments generated by a personal loan amounts to roughly $1000 per customer.
Under the direction and management of a marketing consultant, the bank has done an experiment with 4000 checking account customers, attempting to draw them into applying for the loan. It sent them an offer for “no-fee-anywhere” ATM services for one year, coupled with a personal line of credit secured by home equity. Those accepting the offer don’t get the ATM deal unless they also supply some details relative to their need/qualification for the loan, then the bank will extend (or not extend) the loan as a line of credit. The customer is not obligated to use the loan.

Costs: The promotion costs $1 apiece to mail, but this is not the biggest cost driver. The ATM deal, when you account for the fees to other banks that Universal must cover, plus the setup and transaction costs, costs about $105 per customer. To this must be added the processing/review costs of the loan information, about $35 per customer.

The ATM deal is a powerful offer – about 50% of the offer recipients accept it. However, only about 19% of those customers end up using the personal loan (380 out of the original mailing, to be exact).

COST:
4000 mailed $1 apiece or $4000

2000 accept ATM offer $140 per customer, or $280,000

So the total cost = $4000 + $280,000 = $284,000

REVENUE:
380 take the loan, $1000 apiece or $380,000
PROFIT = $380,000 – $284,000 = $96,000
So the promotion is profitable – if applied to all 80,000 customers the results would be
COST:
$80,000 mailing

$140 * 40,000 cost of fulfilling offer = $5,600,000

So the total cost = $80,000 + $5600,000 = $5,680,000

REVENUE
0.19 * 40,000 * $1000 = $7.60 million
Management is anxious about the costs associated with the project. Someone points out that the profit is projected a $1.92 million, but there is considerable uncertainty about this. If customers fall short on either the rate at which they accept the loan offer, or the average size of the loan, the profit could shift to loss.
The marketing consultant suggests building a predictive model, to better target the offer at those likely to accept it. While overall revenue might be less, the profit would be greater and the risk reduced.
ASSIGNMENT

You are the analyst working with the marketing consultant, tasked to proceed with this project. Conduct the analysis as you think best, and present a recommendation that includes a technical discussion that would allow another analysts later to understand what was done and replicate or modify it, as well as a management discussion of the financial implications.