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case studies 19

Think design and performance—
think Sunbeam Café Series
Nicole Stegemann, School of Management and International Business,
University of Western Sydney

The history of Sunbeam dates back to
1883 in Chicago, Illinois, when T J Clark
and J K Stewart formed a partnership
to manufacture clipping and grooming
machinery for horses, later expanding
into sheep-shearing equipment.

The Chicago Flexible Shaft Company
In
1910,
diversified into small electrical
appliances and, with the launch of the Princess

Case 19
Case 20
Case 21
Case 22
Case 23
Case 24

Think design and performance—think Sunbeam Café Series
Bangarra Dance Theatre—The Sydney Swans: a ‘Cousins’ relationship
What happened to Pokémon?
The evolution of café groupies
Dick Smith—the great adventurer
Apple’s renaissance— the agreement that works

electric iron, it laid the foundation for the small
electrical appliance industry. The diversification
strategy was aimed at offsetting the seasonal nature
of the sheep-shearing industry.
In 1914, the company purchased the Australian
operation, and the company Cooper Engineering Co.
(CEC) was born. Seven years later, in 1921, the
introduction of the Sunbeam brand reflected CEC’s
core business shift to electrical appliances.
After World War II, CEC changed its company name
to Sunbeam Corporation and it introduced the slogan
‘Best Electric Appliance Made’. The first Australian
appliance, the Sunbeam mixmaster, was launched.
Despite the fact that it cost more than an average
Australian’s monthly wage, it was an immediate success.
Within its first 10 years on the market, the Sunbeam
mixmaster generated sales in excess of 725 000 units.
In 1950, Sunbeam exported its appliances to
New Zealand. With international exposure, the growing
company needed further manufacturing capacity and
it acquired a second manufacturing site in the Sydney
suburb of Campsie. In 1952, with the benefit of its
sustained success, the company listed on the stock
exchange and became Sunbeam Corporation Limited.
Expansion continued with the New Zealand operation
becoming a wholly-owned subsidiary of Sunbeam
Corporation Limited in 1960. Today, Sunbeam is
owned by the United States company, GUD Holdings

Limited, a manufacturer of pumps, filters and security
products. GUD’s acquired Sunbeam in 1996.
After catering for predominately female needs, it was
the male population’s turn to benefit from Sunbeam’s
innovations. The electric shaver—Shavemaster—was
introduced to the market. Despite heavy international
competition, Shavemaster became a market leader
shortly after its launch.
The appliance revolution continued to penetrate
the Australian market. Consumers were introduced
to the pop-up toaster, the electric frypan, and the
dry iron. Over the years, models were replaced and
the Toastermatic was introduced in 1960. In 1972
Sunbeam sold more than 1 million products. By
1973, Sunbeam had sold 3.5 million frypans, one
for every three Australians.
Aiming to be the first in the market with product
innovations, Sunbeam introduced a range of new
appliances—including an iron that featured a patented
safety cut-out mechanism; the first plastic jug-style
kettle and a fast-boil kettle, the Express kettle; the
Oskar food processor; Quantum, a cordless automatic
kettle; and the Toast ’N’ Crumpet toaster. Many of the
new products became top sellers, and their excellence
in design and function was recognised with several
Australian design awards.
Sunbeam realised that to maintain its competitive
edge, its consumers needed more than just an innovative
tangible product. The first 12-months replacement
guarantee was implemented by Sunbeam across its
entire product range, demonstrating Sunbeam’s
commitment to quality and performance.
The inventive smokeless Kettle King, an outdoor
electric barbecue, was also introduced. In this way,
Sunbeam not only catered for the great Australian
barbeque tradition, it developed a product that reflected
changing consumer lifestyles and social trends, such as
an increase in apartment living.
Sunbeam continued to respond to changes in
lifestyles by expanding its product range. An increasing
number of women were looking for alternative ways of

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“

“

Sunbeam is currently

experiencing

overall growth
in all its product
categories

rewarding themselves by giving themselves a rest from
their growing workloads. An increased interest among
consumers with respect to alternative health practices
was another growing trend. Sunbeam’s response came
in the form of Sunbeam’s therapeutics product line,
and its massage and aromatherapy offerings.
Sunbeam continues to lead the market in electrical
appliances, offering more than 250 products to the
market. To date, Sunbeam’s sales exceed A$100 million
from its numerous product categories.
Sunbeam is currently experiencing overall growth
in all its product categories and is gaining solid market
share from its competitors. The market is oligopolistic.
Competitors such as Kenwood, Remington, Ronson,
Krups, and Mistral & Breville are all competing in the
small appliance market.
As of January 2002 Sunbeam held a 20.1 per cent
share of the small appliance market. Its competitor,

Mistral & Breville, has a similar market share, posing
the only real challenge to Sunbeam.
Ongoing new-product development is the key to success
in this market. Sunbeam maintained its reputation as an
innovator by responding to competition and consumer
lifestyle trends with the new Café Style product line.

Café Style
A change in lifestyles towards café lifestyles, and a
renaissance in the demand for high-quality products
prompted Sunbeam to adapt heavy-duty appliances,
that were traditionally found in restaurants and cafés,
for the consumer market. Sunbeam introduced a range
of commercial-style appliances called Café Style. The
range included a variety of new food-preparation and
cooking products that encapsulate the trend towards
a cosmopolitan lifestyle. The product line began with
a limited range of semi-commercial kitchen electrical
appliances, from espresso coffee machines to sandwich
toasters. Sunbeam’s initial target market was food lovers
and those who searched for premium products in terms
of quality and durability. See the complete set of
products in the product range listed in Figure 1.

Market research results suggest changes
After an initial rush to launch the Café Style line into
the market, data was gathered and a focus-group
discussion was conducted. Consumers did not quite
agree with what Sunbeam assumed to be their needs
and wants. The positioning was not as clear to consumers
as Sunbeam had envisaged. Sunbeam positioned the
products through packaging, design and promotional
materials with a serious, no-nonsense tone and manner.

Figure 1 Complete set of products in the product range
MODEL

NAME

DESCRIPTION

PRICE

GR4800

Café Press

4 slice sandwich press

$99.95

GR8410

Café Grill

4 slice sandwich press—grill plates

$99.95

MDF6300

Stainless Deep Fryer

4 litre stainless deep fryer

$159.95

EM4800

Café Crema

pump espresso machine

$399.95

PB8700

Legend

die-cast alloy blender and glass jug

$159.95

MS8500

Milk Bar

die-cast alloy milk shake maker

$99.95

MS8500C

Milk Bar—Chrome

die-cast alloy milk shake maker

$99.95

WW8900

Stainless Professional Wok

7.5 litre stainless heat-wall wok

$199.95

MX8800

Mixmaster Professional

twin-motor bench mixer

$399.95

ES9600

Deli-Slicer

die-cast alloy food slicer

$149.95

The market research results led to a revision of the
range for Christmas 2001, which involved a series of
changes. The name Café Style was changed to Café
Series. Also, the logo was modified strongly to suggest
high-quality electrical appliances that perform at the
highest standards and fit with consumers’ trendy
lifestyles. The marketing communications strategy was
streamlined, as the actual target market was different
from that initially identified.

Café Series users
Sunbeam identified a segment within the AB socioeconomic group as its target market. The 25- to 39-yearold food lovers who have a passion for food and food
preparation represent this segment. They are fashionable

“

people’s homes with a commercially inspired product
range. The name captured the modern city lifestyle
feeling of many people who increasingly eat out in
café-style restaurants.
The Café Style logo emphasised this notion with the
slogan ‘commercial design, guaranteed performance’™.
From market research, it was determined that consumers
believed that while the products were designed to look
like commercial products, this did not mean that the
products would provide the same heavy-duty
performance. Thus, to overcome this problem, the Café
Style range was re-named to Café Series—given that
consumers associated the word ‘style’ with the look
of the range but not its function. The logo was altered
to a three-dimensional image, distinguishing it from the

Research shows that consumers,

“

End of Book Case Studies

depending on their gender,
purchase different products

consumers who ‘must have’ the latest technology in
beautifully designed products. The quality is appreciated
and they are happy to pay a little bit extra, but only if
the products come with the right look.
It sounds like a good strategy but only a small
percentage of consumers bought the Café Series products
just for the look. In reality the segment comprises 25- to
59-year-old consumers from the ABC socio-economic
group. This segment is disenchanted with plastic
appliances. While their purchases do represent socioeconomic aspiration, the latest fashion is less important
than the benefits of long lasting, exceptionally
performing appliances. Other benefits sought from the
products include ease of cleaning and value for money.
Research shows that consumers, depending on their
gender, purchase different products from the Café Series
range. Most women show traditional values and tend to
make purchase decisions with respect to mixmasters, deli
slicers and deep fryers. Practicality and performance is
sought and the focus is on food preparation. The male
population seems to buy blenders and espresso machines.

Café Series function and form
Initially, Sunbeam created the brand Café Style to bring
the atmosphere of the coffee-shop environment to

from the Café Series range.

previous one-dimensional image. The new design aims
to create an association of authenticity and newness
with the brand.
The Café Series products have the following attributes
in common:
• they are manufactured from materials such as
stainless steel, chromed metal, die-cast alloys
and glass
• they have a simple design
• they function and perform on par with commercial
kitchen appliances.
Consumers in this market do not tend to have brand
loyalty, and they make most of their purchase decisions
at the point of sale. For this reason, packaging plays a
crucial part in the marketing strategy of Café Series
products. Research has shown that the previous packaging
was not effective in communicating the benefits of the
product range. In order to connect with its target
market, the Café Series packaging needs to depict more
than just a stainless steel machine. It needs to stimulate
thoughts and feelings associated with the products’
benefits—that is, the creation of colourful, simple yet
stylish beverages, meals and snacks. The packaging has
been changed to show the appliances with images of
food products. The packaging serves as an important

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marketing communications tool as sales personnel are
often unavailable due to the cost cutting undertaken
by most businesses.
Sunbeam has achieved a major breakthrough by
introducing extended five-year motor guarantees,
25-year cooking surface guarantees and one-year
commercial guarantees to most of the Café Series
products. None of its competitors offer comparable
promises. The successful sales figures are partly
attributed to the differentiating appeal of
generous warranties.
At Christmas 2002, the Café Series adopted a
few siblings. A bench mixer, contact grill, deep fryer,
compact sandwich press, and programmable espresso
machine were added to the family. Additional products
like a professional espresso machine, semi-professional
toaster and semi-professional blender may be added
to the range.

Café Series at an affordable price
Pricing is an important aspect for consumers as
they tend to be price sensitive with respect to
electrical appliances. Therefore, the chosen
pricing strategy is set at the top end, which is,
at the same time, less expensive than competing
products. Sunbeam is not going to be caught up
in price wars with its direct competitors—Mistral
& Breville, and Krups—its prices range between
A$260 and A$500. Sunbeam intends to convey
a value-for-money proposition, while creating a
professional kitchen environment that provides
the best performance results. Consumers perceive
that they are purchasing a high-quality product
without a high-price tag.

Where to find the Café Series
Sunbeam realises that distribution is a crucial part of
a sound marketing strategy since most consumers
make their purchase decisions at the point of purchase.
The right retailers reflect the preferences and shopping
behaviour of the target market. They support the
product idea, offer sufficient display space for the range,
and offer sufficient customer assistance. Trade and sales
staff share Sunbeam’s enthusiasm and heavily support
the new range.
The Café Series range is available at specialty
retailers and department stores such as Grace Bros
and David Jones. In addition, some hardware stores
(such as Mitre 10) sell Sunbeam products. This is
because the male portion of the target market prefers
to buy their toasters and blenders at their favourite
hardware stores.

End-of-book: Case studies Q 647

Communicating Café Series to the target market
To communicate Café Series to the target market,
Sunbeam applies an integrated marketing
communications strategy, markets the products
through a variety of media, and utilises a range
of promotional tools.
The advertising campaign was developed to
position the Café Series range as a high-performing
premium brand.
Sunbeam focused on magazine advertising and
point of purchase displays. In addition to the magazine
print campaign, supportive materials were developed—
such as a 12-page brochure, in-pack cross-selling
leaflets, on-pack/product stickering and in-store
merchandising posters. Sunbeam also invested in
sales promotions, with several incentive-based
promotions and special offers.
To build the brand and strengthen the association
between Café Series appliances and Sunbeam, the Café
Series logo was utilised in all Sunbeam’s communication.
This association was even more obvious after attaching
a 3-D effect to the logo, which stressed the unique
combination of strong performance and high-quality
products in a ‘designer skin’.
For the launch of Café Series, the choice of national
magazine titles to feature advertorials included Vogue
Entertaining & Travel, Gourmet Traveller, Home Beautiful,
Elle Cuisine and Marie Claire Lifestyle. However, to more
effectively reach the target market, this media buy was
shifted to cover Gourmet Traveller, Belle Delicious and
Donna Hay. This choice was complemented by local
titles such as the Sydney Morning Herald’s insert
magazine, (Good Living), and the Epicure section
of Melbourne’s The Age. This media strategy aimed
to reflect Sunbeam’s quality positioning.
A brochure was developed to assist retailers in their
personal-selling effort. The brochure introduced the
range and prominently displayed each product. This
brochure provided Sunbeam with the opportunity to
provide more information about its products, rather
than only providing a list of product specifications.
The cross-selling brochure that is included in all Café
Series products accomplishes a similar outcome by
motivating satisfied consumers to make further
purchase decisions before going into a store.
The marketing communications efforts that were
directed at the consumer market were complemented
by a push strategy; whereby, merchandising kits were
provided to key stores that would like to support
Sunbeam’s success story. These kits included banners
of the Café Series products and mobiles of the logo.
Sunbeam’s sales representatives offered to set up the

displays in stores while stores agreed to
purchase a minimum quantity of the
product line.

Results
The new Café Series range did well, it achieved
A$2.3 million sales in the first year. After
streamlining the marketing strategy for the
Café Series range, sales reached A$9.9 million.
At the end of April 2002, sales climbed to
A$12.2 million, representing approximately
10 per cent of Sunbeam’s business.
What is the secret to the success of Café
Series? Its unique design and outstanding
performance supports the aspirational
purchases of the target market. The clear
positioning creates and sustains interest in the
product, which is complemented by the strong
media support. The products are easy to
handle and maintain, and they fit well into
the target market’s lifestyle. The Café Series
showcases the best Sunbeam product in each
category. It endorses Sunbeam’s leadership
and expertise.

QUESTIONS
1 | Describe the marketing strategy planning objectives applied by
Sunbeam. Using the Ansoff matrix, identify which marketing strategy
opportunities the company is pursuing? Are these appropriate
strategy opportunites?
2 | Develop a SWOT analysis comparing Sunbeam with its main
competitors. Can you identify further changes in the marketing
environment that may encourage the company to change its marketing
strategies? Justify your suggestions.
3 | Describe the target markets identified by Sunbeam. Do you agree with
the company’s segmentation strategy? What other possible target
markets can you suggest?
4 | Identify the customer benefits, product attributes and additional features
of a product of your choice within the Café Series range. What is the
difference between customer benefits and product attributes? Of the
three characteristics of a product, which one is most significant in terms
of gaining competitive advantage.
5 | Using the consumer decision-making process, describe how you would
go about purchasing an espresso machine? What psycho-logical
variables should Sunbeam be particularly aware of?
6 | Did Sunbeam utilise push and/or pull strategies? Identify the elements
of the strategies the company applied. Which strategies were most
effective and why?

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20

End-of-book: Case studies Q 649

Bangarra Dance Theatre
—The Sydney Swans: a ‘Cousins’ relationship
Beverley Thompson, School of Marketing and International Business,
University of Western Sydney

Bangarra Dance Theatre, founded in
1989, is regarded as Australia’s leading
indigenous-influenced dance company.
Its work blends traditional Aboriginal and
Torres Strait Islander history and culture
with international contemporary dance
influences to create a uniquely Australian
form of performing art, which blends
the beauty of movement and music with
Aboriginal storytelling and philosophy.
Swans are an Australian Rules
The
Sydney
football team in the Australian
Football League (AFL). Their history commenced in
1874, in Victoria, when they were the South Melbourne
Football Club. They moved to a Sydney base in 1982.
During what can only be described as a history with
fluctuating fortunes, the last few years have seen The
Sydney Swans emerge as the most popular football
team in Australia with more than 1.8 million supporters;
television audiences of major AFL games, featuring The
Swans, that reach the millions; and the highest level of
corporate sponsorship in the AFL.
What, if anything, might these two entities have in
common, you might well ask? In modern Australian
society, one could be forgiven for regarding sport and the
arts as being like ‘chalk and cheese’—poles apart in terms
of content, purpose and advocates. The concept of rowdy
football fans and players appreciating and enjoying the
beauty of dance or ballet is perhaps difficult for many to
comprehend. Equally incredible might be the concept of
arts lovers or ‘culture vultures’, or performers such as
dancers, being fans of the game involving hot and
sweaty bodies pursuing a ball on a football field.
However, in 2001 the Bangarra Dance Theatre and
The Sydney Swans formed a unique and exciting type of

sponsorship agreement, which they termed a
‘Cousins’ relationship. This case study examines
this unusual relationship in some detail.
The case commences by briefly examining the
histories of these two unlikely partners, to search
for the underlying core values that were recognised
as being synergistic elements; thus, facilitating this
exercise in relationship marketing. An examination
of the principles of generic sponsorship relationships,
and the Bangarra–Swans ‘Cousins’ relationship follow.
Then, finally, some principles of relationship
marketing are examined to suggest a generic context
into which this exciting partnership can be placed—
with a view to providing guidelines for other entities
to benefit from the formation of relations hitherto
considered unconventional in the arts, sports or
business world.

Bangarra Dance Theatre—an
overview, history and company profile
The Bangarra Dance Theatre Web site
(www.bangarra.com.au) beautifully and succinctly
describes, with many images of performance excerpts,
the history and company profile of Bangarra Dance
Theatre as follows:
‘Bangarra Dance Theatre is one of the youngest
and oldest of Australia’s dance companies. Its living
traditions go back at least 40 000 years but it also
reflects the lives and attitudes of indigenous peoples
today. This unique company blends traditional
Aboriginal and Torres Strait Islander history and
culture with international contemporary dance
influences to create a truly Australian dance language.
Steps that have pounded the dusty, dry continent
for so long are the source of a truly Australian
dance language.
‘Under the artistic direction of Stephen Page
since 1991, Bangarra has stunned audiences
throughout Australia and the world with electric,

startling and inherently spiritual dance works
of immense theatrical presence.
‘Already a major force in Australian contemporary
dance, Bangarra first galvanised international
audiences with Rites, choreographed to Stravinsky’s
The Rite of Spring performed in collaboration with
The Australian Ballet. The work premiered at the 1995
Melbourne Festival and then toured to overwhelming
acclaim to New York’s City Centre. The company
has also appeared in major cities such as Washington,
Edinburgh, Seoul, and Amsterdam and returned to
New York in 2001 for sold out performances of
Corroboree at the Brooklyn Academy of Music.’ 1
The company now tours far and wide, from football fields
in metropolitan areas, to tribal lands in Arnhem Land,
to sophisticated venues in some of the world’s largest
cities, such as the Sydney Opera House and the Kennedy
Centre in Washington DC. Bangarra Dance has become
a symbol of the connection between indigenous culture
in Australia and the ideals of the Olympic movement,
through its involvement in the 1996 Atlanta Games flag
hand-over to Australia and the Sydney 2000 Olympic
Games’ opening and closing ceremonies. In addition,
during the Olympic Arts Festival, Bangarra Dance
played an integral role in Tubowgule—a three-part
ceremony, choreographed by Stephen Page, portraying
dawn, day and dusk, each part being performed
respectively at La Perouse, the Sydney Botanical Gardens,
and on the Opera House forecourt. Bangarra Dance also
mounted, or premiered, successful world premier festival
seasons of other major indigenous dance productions,
such as Skin, at the Sydney Opera House, and
Corroboree and Walkabout in Brisbane, Sydney
and Melbourne in 2001 and 2002.
Integral to the success of the Bangarra Dance
Theatre is artistic director Stephen Page who has
also been appointed artistic director of the 2004
Adelaide Festival. At the heart of Bangarra’s
uniqueness is Stephen Page’s vision for a theatrical
style that remains true to the indigenous spirit that
is at the core of the company’s work. Bangarra Dance
Theatre speaks with an ancient yet completely
contemporary voice to people everywhere. The
philosophy and purpose of Bangarra is perhaps best
summed up in the words of Stephen Page, as follows:
‘I want to lay down the foundation of the spirit—
and of black communication. I believe that it’s what
keeps kinship together —the constant story telling,
whether you are passing on to children or giving
direction and elder advice to your peers.’2

The Sydney Swans—an overview,
history and company profile3
The Sydney Swans are unique. They are the only Sydney
team competing in the AFL competition, with Victorian
and South Australian teams dominating the competition.
The club has been around for a long time, celebrating
its 125th anniversary in 1999. However, despite its long
history, the club’s progress and continuity have at times
been in doubt.
A quick history of The Sydney Swans reveals that
a form of Australian football was played in Melbourne
in the 1860s. In 1874 a team called The Red and Whites
(the colours of the uniform which continues to this day)
played at South Melbourne. The VFL (Victorian Football
League) formally commenced in 1897 with The Red and
Whites winning their first VFL premiership in 1909.
This team adopted the name ‘The Swans’ during winning
seasons in the 1930s, based on the presence of swans on
Albert Lake, near their home ground.
The decades during the remainder of the 20th century
saw mixed fortunes for The Swans. In fact they reached
very few grand finals during this time; but, nonetheless,
the club battled on with a kind of indomitable spirit on
the part of dedicated administrators and many talented
players (many Brownlow Medals were awarded to
Swans players), becoming known in the 1940s as
‘the club that refused to die’.
In 1982, it became obvious that The Swans could not
survive in the competitive football environs of Melbourne,
so they moved the base of their operations to Sydney;
thus, becoming The Sydney Swans. The ensuing years
saw mixed success. On the field some famous Swans
names emerged including Warwick Capper, Greg
Williams, David Bolton, Merv Neagle, Bernard Toohey,
Gerard Healy and David Murphy—with the awarding
of more Brownlow Medals. However, success on the
field did not translate to finances, memberships or a
sustainable structure. In 1985 Dr Geoffrey Edelsten
bought the Swans for an estimated $6.3 million—an
experiment that lasted less than a year, resulting in
the sale of their licence back to the VFL for less than
$10. Edelsten resigned as chairman in less than
12 months. Capper was sold to Brisbane in 1988 for
$400 000, while two players from the Riverina—John
Longmire and Wayne Carey—were sold, sight unseen,
to North Melbourne. Losses were in the millions. By the
end of 1988 ownership had passed to a group of private
investors, including some well-known Australian names
such as John B Fairfax and Mike Willesee.
During much of the 1990s, success both on and off
the field eluded The Swans, with the media at the time
declaring The Swans dead.4 In October 1992, the AFL

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issued various ultimatums to The Swans, which resulted
in various salvation schemes, ultimately involving the
waivering of debts, the installation of a new board and the
appointment of Ron Barassi as coach in 1995. This was
perhaps the catalyst the club needed to begin its recovery,
with Paul Kelly winning the Brownlow Medal in 1995.
In 1996 The Swans made it to the grand final for the
first time since 1945, which prompted the New South
Wales premier, Bob Carr, to tour with the team and
Sydney civic receptions. Also, in 1996 four Swans
‘legends of the game’ (Cazaly, Pratt, Skilton and Barassi)
featured in the newly established AFL Hall of Fame.
Appearances in finals followed in 1997, 1998 and 1999.
In 2000, The Swans were again grand finalists, losing to
North Melbourne but winning in the hearts of supporters.
The change of fortune for The Swans is reflected in two
headlines from the Sydney Morning Herald:
‘AFL’s ugly ducklings to get the boot’ (12-10-92), and
‘Sydney’s red and white fairytales come true’ (23-9-96).5
The Swans’ difficult history has translated into a spirit,
a heritage, and a set of values that has commonality with
indigenous peoples. As such, the club has tried to develop
a set of values that reaches out to the community, to youth
and to the code as a whole. These values represent the
Aussie battler spirit; demonstrating that passion, pride,
persistence and hard work (often in the face of adversity)
will eventually produce victors.6 The value of long-term
relationships and loyalty are also particularly important.
The Swans’ difficult history and optimism towards the
future is reflected in their credo as:
‘Continual improvement, loyalty, long term
relationships, persistence, community responsibility.’

The Swans’ future and community
involvement
The impact of a successful end to the 20th century for
The Swans has had far reaching implications for the
code in Sydney and New South Wales, especially in
developing a larger youth base and in encouraging
young players at a grass roots level. The new
administration set about learning from past mistakes.
The aim was no longer just to survive but to build both
the club and the code to create a secure future with a
strong membership base, modern business practices
and excellent facilities—culminating in the AFL/state
government underwriting of the re-configuration of
Stadium Australia, at Homebush in Sydney, to
accommodate the AFL from 2001.

End-of-book: Case studies Q 651

The history of The Sydney Swans illustrates that they
have, on many occasions, needed community support at
all levels just to ensure their survival. Conversely, The
Sydney Swans have a strong belief in giving back to the
community. At present, The Swans are a communitybased club, dependant on community support. They
have an obligation and a desire to play a wider role
off the field and to contribute to the development of
the community. This materialised in the form of The
Sydney Swans Community and Code Development
Program. The latter involves a close involvement with
youth in fostering interest in the Aussie Rules code
and in developing youth talent relating to the game.
Coincidentally, The Sydney Swans are involved with
many charities at both the club level and individual
player level.
One relationship that has been especially nurtured
by The Swans is the relationship with their sponsors.
The Swans’ association with their principal sponsor
QBE goes back to 1988 and continues to be an enviable
sponsorship relationship, having endured some troubled
times for the club. Sponsorship has been, and will
continue to be, critical to the success of The Sydney
Swans—as is the case with the Bangarra Dance Theatre.
The unique ‘Cousins’ sponsorship relationship between
these two entities will now be examined.

The Bangarra–Swans ‘Cousins’
relationship
A search through the Web site of Bangarra Dance
Theatre (www.bangarra.com.au) shows a page titled
‘Sponsors’ with listings as follows:
• Funding bodies—mostly government bodies
or agencies.
• Sponsors—including Telstra as the principal sponsor.
• Foundations—such as the Myer Foundation providing
scholarships.
• Cousins special relationships—containing one entry,
The Sydney Swans.7
The curious reader might well ask about the nature of
a ‘Cousins’ sponsorship relationship. Before addressing
this question it is useful to examine the concept of
sponsorship in further detail.
The mention of the word ‘sponsorship’ brings to mind
various notions such as patronage, corporate support,
backing, financial assistance, joint promotions, logos on
programs, signage at venues, and television rights. We
might also recognise that these terms are associated with
relationships between corporations, and bodies, in sport
(such as the Pura Cup Cricket), or the arts (such as the
Telstra Adelaide Festival of the Arts), or charities (such

Exhibit 1 From L–R: Stephen Page, Bangarra’s Artistic Director; Adam Goodes, Sydney Swans player; Victor Bramich,
Bangarra Dancer; Michael O’Loughlin, Sydney Swans player; and Lewis Lampton, Bangarra Dancer.

as Ronald McDonald House). In fact, all of these notions
or concepts are generally associated with sponsorship.
All sponsorship relationships involve an exchange of
some sort that tends to offer mutual advantage to both
the sponsor and the sponsee. The sponsee usually
benefits from a financial or in-kind contribution from a
sponsor, which may mean the survival of the sponsored
entity, while the sponsor benefits from a sense of
goodwill and the potential to exploit, in a synergistic
manner, the identity of the sponsored body.
Return to the list of types of sponsorships enjoyed
by Bangarra Dance Theatre. It can be said that the first
three types—involving funding bodies, sponsors and
foundations—involve the principles discussed thus far.
They involve an injection of cash, or the offering of
a service to Bangarra Dance, either as part of their
governance or sponsorship, which helps to facilitate the
ongoing operations of the dance company’s operations.

However, the previous scenario does not describe
the ‘Cousins’ relationship enjoyed by Bangarra Dance
Theatre and The Sydney Swans, even though it is listed
on Bangarra’s Web site under sponsorships. Now let
us take a look at this interesting and unique type of
sponsorship relationship.
On 27 July 2001, a press release announced that the
QBE Sydney Swans and Bangarra Dance Theatre had
formed an innovative new partnership arrangement
called the ‘Cousins’ program, in what was believed to be
the first ever partnership of this kind between a leading
sports organisation and a leading arts company. The
announcement recognised that The Swans and Bangarra
have much in common. Both organisations operate in
extremely competitive environments; showcase the efforts
of highly-talented and highly-trained individuals who
work as teams and present spectacular performances;
proudly have indigenous players, dancers and leaders as

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key participants; and operate with great commitment
to their communities.8
There was already a good relationship between the
two organisations based on this synergy. The ‘Cousins’
relationship formally recognised many opportunities for
mutual and beneficial programs. The practicalities of the
‘Cousins’ relationship involve no exchange of money or
provision of products or services, but rather a commitment
from each organisation to undertake activities that
mutually assist each organisation, and that foster the
training and development of indigenous youth. Swans
associates, such as members, staff and players are offered
the ‘money can’t buy opportunity’ to attend a special
night at Bangarra, which includes a performance and a
post-show function mingling with Bangarra dancers and
Swans players. The ticket price for such an event is
discounted and all-inclusive. Conversely, Bangarra
associates are issued with special invitations to attend
Swans matches. In addition, the relationship provides
mutual marketing benefits to each of the organisations,
in the form of database sharing, joint sponsorships, joint
involvement in community programs (especially those
involving indigenous youth), performer and player
development programs, joint promotional efforts using
Bangarra dancers and Swans players, and showcasing
opportunities such as when Bangarra dancers perform
at Swans venues prior to a major match with television
and other media. Such activities have the potential
to foster increased public interest in the creative
work of Bangarra.
Bangarra acknowledge the sophistication of The
Sydney Swans sponsorship and marketing efforts, and
the value of their extensive and loyal supporter base.
They also acknowledge that there are many common
areas between a dance group and a sporting club where
mutual support programs could operate, especially when
dealing with young, impressionable people who are often
operating under considerable pressure, particularly
leading up to performances, and upon retirement at
a relatively young age.
At corporate levels, the ‘Cousins’ relationship offers the
further benefits of regular liaison between members of
each organisation, to brainstorm ideas pertaining to such
things as joint promotions, opportunities for supporting
dancers and players, and opportunities for supporting
indigenous youth and culture. The commitment comes
from executives of both organisations, from Bangarra’s
dancers and from indigenous players such as Michael
O’Loughlin and Adam Goode who act as indigenous
ambassadors between the two organisations.
Although this relationship involves no exchange of
money, goods or services per se, it is invaluable to both

The sponsorship represents

a win–win
situation
for each of the

participating
organisations.

companies and is heralded as a unique partnership,
which forges a strong and mutually beneficial relationship
between sport and the arts. The sponsorship represents
a win–win situation for each of the participating
organisations. As such, this sponsorship relationship
displays characteristics that are now being recognised
as the keystones of relationship marketing, a term that
applies to any business interaction that approximates a
human relationship.9 Relationship marketing involves
a move away from transactional marketing—whereby
the emphasis is on the individual sale—towards a focus
on building long-term relationships where the target
customer is encouraged to continue his or her involvement
with the marketer. Relationships evolve over time and
involve learning (about each other’s uncertainties and
abilities); investment (tangible and intangible resources
by both parties), trust and commitment; and ‘distance’
(either deliberate or inadvertent, incorporating social
distance, cultural distance, technological distance or
time distance).10 Each partner in the relationship is
part of a wider network; each having its own support
groups and sponsors but interacting at a new node in
the network and, thus, producing the elements of this
unique relationship.11
The ‘Cousins’ relationship also utilises resource
interfaces, involving a sharing of resources; whereby, the
partners must examine what resources are required and
how the partnership with another entity might help to
maximise the total pool of resources.12 In the Bangarra–
Swans relationship, the resources are primarily the
‘Cousins’—the dancers, players and support staff—
who have much to mutually share and offer their
counterparts on the other side of the partnership,
especially where the common bond of an indigenous
heritage exists. This human resource exchange occurs

through forums such as workshops, youth training,
indigenous support, and game or performance attendance
by sportspeople and artists. As such, the ‘Cousins’
relationship is putting into practice one of the key
elements of The Sydney Swans’ credo—that of
establishing ‘long-term relationships’.

Conclusion
This case has illustrated an unusual sponsorship
relationship between a sporting body and an arts body.
The final conclusion is that both entities benefit by
forming a synergistic relationship that maximises their
respective strengths and commonalities, and possibly
aids areas of their operations where weaknesses might
exist. It is an unusual sponsorship relationship in that
no money, or goods and services, per se, actually change
hands. The elements of the relationship are the invisible,
but nonetheless powerful forces of commonality between
artists and performers, overlaid by their mutually strong
linkage to indigenous cultures.
This framework of sponsorship, based on the principles
of relationship marketing, need not be particularly
unique. Many organisations may benefit by finding
partners in differing fields, in order to work together
positively in the spirit of ancient tribal cooperation.13

QUESTIONS
1 | What principles of relationship marketing are evident in the
Bangarra–Swans relationship? How does this differ from
relationship marketing involving suppliers or customers?
2 | Using a SWOT (strengths, weaknesses, opportunities
and threats) analysis, analyse the Bangarra–Swans
‘Cousins’ relationship.
3 | What are the main principles of the Bangarra–Swans
‘Cousins’ relationship? Are they very different to the
principles involved in a more conventional sponsorship?
4 | Choose another sponsorship relationship of which you are
aware. Indicate the sponsor and the sponsee, and outline
the elements and/or principles of this sponsorship.
Compare and contrast this sponsorship relationship
with the Bangarra–Swans ‘Cousins’ relationship.
5 | One of the key synergistic linkages between Bangarra and
The Swans is their acknowledgment of the importance of
indigenous cultures. Consider how each organisation can
utilise this theme when designing their positioning
strategies as part of their overall marketing strategies.
6 | Compare and contrast the marketing strategies for a sports
organisation and an arts organisation, with which you are
familiar. Do you think that they are essentially similar
products or not? Discuss.

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What happened to Pokémon?
Rowena Holloway, University of South Australia,
updated by Francine Garlin, University of Technology, Sydney

At the end of 1999, Pokémon: The First Movie opened to unprecedented demand in
countries around the world including Australia, Germany, the United Kingdom, Spain, Israel,
Finland, Austria, Switzerland, Norway, Denmark and Portugal. As of April 2000, Pokémon:
The First Movie had a cumulative box-office gross of US$35.6 million. In the United States,
this Warner Brothers movie grossed US$10.1 million in first-day box-office sales, beating
Disney’s Toy Story, which previously held the top spot with a gross record of US$4.8 million
in first-day box-office sales.1 This interest in the movie was reflected in the demand for
Pokémon merchandise, including trading cards, toys and the Gameboy game from which it
originated. Cross-promotion of products with Pokémon also reached unprecedented heights.
For example, Pokémon products were included in Burger King’s ‘Kids’ Meal’ and ‘Value
Meal’, enabling Burger King to break previous sales records within five days of launching
the cross-promotional campaign.2
on from the first movie, Pokémon
Following
2000 was released the next year,
grossing US$43.75 million in the United States and
A$4.53 million in Australia. However, Pokémon 3: The
movie (2001) could not compete with the likes of the
Harry Potter movies, Lord of the Rings, Shrek and Monsters
Inc.—coming in at 107th, in the list of US box office
sales, grossing US$17.05 million. The Australian box
office did not even take A$2 million.3 Competition for
this lucrative and often fickle market was impressive.
During its peak, Pokémon was not only directly
popular in the consumer market. Its success with
children in the 6- to12-years-of-age group generated
interest among other businesses targeting this consumer
group. Hasbro Inc. paid US$325 million to make and
market the Pokémon toys based on the TV show.4 KFC
paid US$12 million to cross-promote Pokémon with its
products.5 Burger King undertook its most extensive
marketing effort ever to cross-promote its products with
Pokémon and in the process it beat McDonald’s, which
had snapped up the lucrative Toy Story 2 franchise.

Burger King had previously been successful with the
first franchise for the original Toy Story, but had lost the
option on the second movie to McDonald’s by refusing
to enter into a long-term agreement with Disney, which
owns the rights to Toy Story.6
The phenomenal success of the first Pokémon movie
is one element of a clever and well-designed approach
to integrated marketing aimed at capturing and
maintaining a large share of the media-savvy,
sophisticated, demanding and fickle children’s toy-andgame market—the same market that was crazy about
Power Rangers not so long ago, and that has now
embraced Digimon, Harry Potter and Dragon Ball Z.
On the launch of the first Pokémon movie, Edward
E Frumkes, president of international distribution
for Warner Brothers Pictures, stated: ‘This film’s
performance against other animated and family fare is a
testament to the outstanding efforts of our international
marketing and distribution staff to create, explore and
utilise all possible opportunities in bringing Pokémon:
The First Movie to the international marketplace. I’m

certain that their efforts will continue to produce
record-breaking openings in the remaining territories’.7
As the box office statistics suggest, subsequent
Pokémon movies have not been able to achieve such
results. Nonethless, a fourth Pokémon movie, Pokémon
4ever (2002), was released in the United States in
October 2002. As of January 2003 it had not grossed
US$10 million.8

What is Pokémon?
Pokémon is an abbreviated term for ‘pocket monsters’.
The Pokémon are creatures that can shrink in size and
be contained in a Pokéball. This makes it easy for them
to be carried around by the 10-year-old hero of the
Pokémon story. The hero, Ash (or Satoshi in Japan), tells
his mother he is embarking on a quest and goes off in
search of Professor Oak who gives him one Pokémon to
train and get started. Ash starts the game with a handicap
as his Pokémon (Pikachu, given to him by Professor
Oak) has behavioural problems and is hard to train.
Undaunted, he sets out to be ‘the best Pokémon trainer
ever’. His task is to capture and train one of each of the
150 Pokémon creatures, interacting (battling) other
players along the way (including his arch rival, Gary).
This is the premise of the game, which was subsequently
transferred into trading cards as well as cartoons and
movies. The success of this role-playing game and
associated products is a mystery to many parents, and
that is part of its appeal—adults do not understand it.
Overall, the TV show (and movies) stress friendship,
fair play and kindness to animals. They are also,
relatively, non-violent—Pokémon who lose matches
simply pass out and they are sent off for rehabilitation.
The central message is one of good triumphing over evil.9

Humble beginnings
Pokémon started as a game for the cartridge-based
hand-held video game Gameboy. It was the brainchild of
Satoshi Tajiri, who wanted to develop a game that could
capture the feel and excitement of his childhood that
was spent collecting insects and other creatures. Tajiri
signed a contract with Nintendo to develop a game
inspired by its technology, which made it possible to link
players via a cable interface between Gameboys. However,
the project took six years to come to fruition, by which
time-cartridge technology had been superseded by the
CD-ROM-based games of Sony’s Playstation.10
An integral part of the Pokémon game is the use of
the networking between Gameboys that enables players
to interact with other players. This, coupled with the

affordability of Gameboys compared to CD-ROM-based
games, led to slow but steady sales of the game in Japan.
The launch of a comic book with free trading cards and
a five-day-a-week animated TV series supported the
Nintendo Gameboy sales—Pokémania was born.
With the games segment in the United States expected
to grow 3.3 per cent between 1998 and 2008 and the
toy-and-game market worth over US$5.5 billion per
annum,11 the United States represented an attractive
opportunity to introduce the Pokémon phenomenon to
the Western world. Yet, Nintendo America was sceptical.
Role-playing games had never been popular with
American children and there was some question as to
how Pokémon would be received. Initial efforts were
also hampered by negative publicity when more than
600 Japanese viewers of the TV series suffered seizures
and nausea after watching a particular half-hour episode
in which strobing effects were used to simulate the
electricity spewing fighting skill of Pikachu, the main
character. The first exposure of American audiences
to Pokémon was the headline ‘Cartoon Monster Attacks
Kids’. Another issue was the absolute ‘Japan-ness’
of the concept. However, the decision was made to
bring Pokémon to American audiences, which was soon
followed with entry into Australia, the United Kingdom
and most of Europe.

The Westernisation of Pokémon
Gail Tilden, vice president of product acquisition and
development at Nintendo America, is quoted as saying,
‘We decided to make an all-out effort to repeat the
Pokémon phenomenon in the Western world’.12 Part of
that success included broadening the age range of the
target group to four- to 15-year-olds and Westernising
the names of the lead characters, as well as giving the
Pokémon characters descriptive names that Western
children could easily remember. Charmander, a
salamander whose weapon is a ball of fire, was formerly
Hitokage; Squirtle, a turtle who squirts water, was
formerly Zenigame; and Bulbasaur, a dinosaur with a
bulb on its head, was formerly Fushigidane. Nintendo
also requested some changes to the TV show to reflect
the ‘political correctness’ of American culture. Violence
and sexual discrimination were toned down or removed,
as were religious scenes. The changes paid off and
Pokémania has since swept the Western world.

To be the best
The key to popularity in Japan was the insightful
inclusion by Tajiri of a 151st character named Mew

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in collecting and
trading Pokémon,

The intense interest

the core of the Pokémon concept,
has resulted in Pokémon trading cards

being banned from schools.

(unknown to Nintendo), who could only be obtained by
the ‘best’ players through interacting with other players.
Rumours of this special creature spread quickly among
Japanese fans and created intense interest in the Pokémon
game. This strategy appealed directly to the competitive
nature of Japanese boys, the main target group.
When the game entered the United States this special
creature was widely known about and so the element of
surprise and excitement was diminished. However, this
strategy was repeated with special ‘rare’ (limited edition)
trading cards. The intense interest in collecting and
trading Pokémon, the core of the Pokémon concept, has
resulted in Pokémon trading cards being banned from
schools. School principals report that the children are
trading instead of doing school work, and even instead
of eating lunch. In the United States, four parents
attempted to sue Nintendo for inciting illegal gambling
by having ‘rare’ cards. These rare cards have a resale
price of about US$70 and their rarity means that
children need to buy multiple packs of cards to obtain
rare cards. Unfortunately, some children took short cuts
to obtain these rare cards and several reports have been
made about delinquent behaviour aimed at ripping-off
less savvy or younger school children (one particularly
entrepreneurial child down-loaded pictures from the
Pokémon Web site and traded with or sold them as
trading cards to other children). There have also been
reports of criminal behaviour such as attacks on other
traders, including one child stabbing another child in
New York over a dispute about trading cards.

Pokémania: gotta catch ’em all!
Based around a tag line that plays on the
competitiveness of children in the target age group and
their desire to be special, Pokémon represents an
integrated approach to developing and maintaining

interest by offering a range of products strongly
associated with the brand Pokémon. These associated
products provided longevity to the original concept by
maintaining interest, awareness and desire, all of which
are reinforced by the strong demand in reseller markets.
To date, the Pokémon range of products includes:
• video games
• toys
• comics and story books
• trading cards
• movies (on DVD and VHS)
• music CDs
• clothing
• Web site.
These products appeal to each element of the target
market. The toys appeal to younger children who can
then move on to cards and then on to various levels of
video games. Although the product may change, the
brand remains. What this target group is buying is a
strongly identifiable brand built on the product concept
of collecting, trading and being the best.
Branding is not the only part of the Pokémania
strategy. Strategic partnering is also an integral part
of the plan.13 Nintendo, the makers of the Pokémon
game, has agreements with Warner Bros to air the
cartoon and develop the movie, and with Hasbro Inc.
to market the toys and other merchandise. There are
also cross-promotional agreements with a range of
resellers. According to Alan Hassenfeld, chairman and
CEO of Hasbro Inc., ‘Pokémon’s phenomenal success
in Japan demonstrates the power of this brand. We are
incredibly excited to bring a wide range of Pokémon
products to the rest of the world’.14 The strength of the
brand contributed to the ability to develop strategic
partnerships with resellers and other manufacturers
who, in turn, increased the consumer’s accessibility to the
Pokémon product and fostered the awareness of the brand.

End-of-book: Case studies Q 657

At the heart of this integrated marketing approach is
the trading card product. This builds on the interactive
nature of the Pokémon game (trading and collecting)
and the rarity of selected cards adds to the ‘be the best’
nature of the concept. According to Brandweek magazine,
‘The show and the inevitable videos are interesting in
that their primary use does not seem to be the
conveyance of stories featuring Pokémon. They are used
as reference material for the card trading game.’15 ‘Gotta
catch ’em all’ was the battle cry of six to 12 year olds in
schoolyards and on street corners the world over.
As previously noted, when the Gameboy product was
first released in Japan in 1996, rumours quickly spread
among fans that a special creature could be ‘caught’ only
when the player was the best—that is, when the player
had caught, trained and battled other players to advance
through the game. This generated immense interest in
Japan and contributed to the success of the product in
that country.16 When Pokémon entered the American
market and spread through the Western world a similar
interest was generated by the rare trading cards.
The cartoon and movies have helped broaden market
appeal. Originally appealing primarily to young boys,
the introduction of a female character to assist Ash on
his journey (and provide some dialogue) has helped
Pokémon to appeal to young girls. However, boys still
remain the largest group within this segment. Toys,
books, comics and other associated products help
reinforce demand for the Pokémon brand.
Despite a significant waning interest in the concept,
the cartoon series remains popular in Australia, as
evidenced by the scheduling of a new series in 2003
on Channel Ten’s children’s morning show—Cheez TV.17

The promotion of Pokémon
The promotion of Pokémon has been cleverly built
around a strong brand. Both producers and resellers
of Pokémon products undertake promotion to
consumers. Nintendo undertook direct marketing to
inform its database of existing Gameboy users about
the Pokémon game. To promote a Pokémon movie, five
winners of a Pokémon contest were awarded a trip to
Japan. There was also a lot of cross-promotion between
producers and resellers. For example, Warner Bros gave
away trading cards with the purchase of movie tickets
(although it underestimated the attractive-ness of this
combination to consumers, many children were left
in tears when it ran out of trading cards); a free
Pokémon player stadium guide was included with each
video bought; and a $3 rebate for each video was
included with each Pokémon stadium game purchased.

The resellers themselves undertook heavy promotion
of Pokémon to encourage the purchase of products—for
example, Burger King and KFC included the toys and
trading cards with their ‘Kid’s Meals’ and Kraft offered
a $3 rebate on four million packages of Kraft Singles
sliced cheese—supported by TV ads and point-of-sale
materials. Heinz offered a $5 video rebate as part of a
freestanding insert in major newspapers and on bottles
of tomato sauce.18 However, this type of promotion has
been less and less apparent in the market over time.

Less time to ‘chill’
Pokémon’s integrated marketing has tapped directly into
a need of the segment to which it is targeted. By making
strong connections between the products, Pokémon has
appealed to children who demand toys that can fit their
multitask play time. Julie Halpin, CEO of Gepetto
Group, a New York-based marketing company, explains
this notion of multitask playing. ‘Play is for children
what work is for adults. It’s the way they learn about the
world, express themselves, socialise, individuate and
mature. When kids have limited time though, marketers
have to be much smarter in their promotional efforts.’19
This is exactly what Pokémania has done, by making
strong connections between products that fit into a
multitask play time.
Children spend their time juggling school time,
work time, play time and family time. As with adults, the
increasing demands on children’s time is very stressful, but
unlike adults, they do not divide their time between these
different demands. Instead, children tend to do several
things at once, so school time can include play time, and
work time can include family time and play time, and so
on. This is what is meant by multitask playing.
This change in play habits and the resulting change
in demand for products is due, in a large part, to the
changing lifestyle and family structure that has emerged
over the last 10 to 15 years. Children spend much more
time in supervised care (school or pre-school) than they
did in the early 1980s. A University of Michigan study
found that in 1997, three to 11 year olds spent six hours
per day in school or pre-school, compared with four hours
per day in 1981. Since 1981, children who are 12 years
and under spend half-an-hour less per day in unstructured play (just hanging out with friends) than they did
in 1981. Children from families where both parents are
breadwinners or children who come from single-parent
families spend more time in structured play environments
than those who come from the traditional two-parent,
one-breadwinner family. There is also increased emphasis
on performance-oriented goals (such as rewards for

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The consumer profile
The central Pokémon concept of collecting and trading
is ideal for the six- to two-year-old age group. Dr Spock
(a child-care guru in the 1960s and 1970s) identified that
starting collections was an ideal way for this age group to
develop orderliness and completeness. Author Joyce
Millman states, ‘the Pokémon start out as cuddly yet
ferocious (when provoked) baby creatures—they’re ideal
fantasy objects for second graders who act tough but still
sleep with teddy bears’.23
The change in lifestyle and family structure means
that many of the children in the Pokémon target group
feel insecure, and the tag line ‘Gotta catch ’em all’ may
have several dimensions for these children.24, 25
‘The more Pokémon you have the better you feel,
The more Pokémon you have the more power you have,
If you don’t collect them all you are a loser.’

The future of the Pokémon brand

22

The success of Pokémon has attracted much competition,
particularly in the influential children’s TV marketplace.
The Pokémon TV show has helped to boost Warner Bros
4 Kids Entertainment top spot among two to 11 year olds
and six to 11 year olds, above Nickelodeons’ Rugrats,
which previously held this position. Fox Kids is tackling
Warner Bros head-on with its own Japanese import
Digimon (digital monsters). Digimon is rapidly growing in
popularity among Pokémon’s largest target group (boys
who are two to 11 years and nine to 14 years), but the
strength and longevity of its appeal has not appeared
to rival the Pokémon craze.26
In this highly lucrative yet unpredictable segment,
competition is hot. The type of success that Pokémon
has enjoyed will always attract criticism and the media
in Australia and the United States, as well as in other
countries experiencing this phenomenon, has been
highly critical of the integrated marketing approach,
labelling it as unethical. The lawsuits and negative
press about its health effects, as well as the criminal
and delinquent behaviour by some Pokémon fans,
provides plenty of scope for detractors. Although
Pokémon has lost momentum, its marketers are
continuing to release Pokémon products, such as new
card packs, games and movies. The original target
market might have outgrown—or been diverted from
—pocket monsters, but perhaps a revival of Pokémania
is possible with a new generation.

Ellen McArthur, University of Sydney

Instant coffee versus fresh coffee
consumption
Australia is one of the few countries where the market
for coffee sold for in-home consumption is dominated
by instant or ‘soluble’ coffee.1 The mix in most developed
coffee-drinking countries is about 50 : 502, but in Australia
the instant coffee category, valued at $500 million,3
accounts for almost 90 per cent of the total coffee market.4
The leading instant coffee brand, Nescafé, launched
in Australia in 1948, and by 1958 it accounted for more
than 63 per cent of the total Australian instant coffee
market. Since that time our consumption of coffee has
quadrupled. Figure 2 shows the changes in trends in the

QUESTIONS
1 | Explain the phenomenon of Pokémania using the concept of
the product life cycle. At what stage in the product life cycle
is the Pokémon brand? What marketing strategy decisions
need to be made?
2 | Using examples from the case, provide arguments for and
against the view that the marketers of Pokémon have been
unethical. What is your view?
3 | Describe the target segment for Pokémon. What factors
might have contributed to the success of Pokémon with
these consumers?
4 | Branding is one of the most important issues to address
in developing a product strategy. How has branding
contributed to the success of the Pokémon
marketing strategy?
5 | Why was the Pokémon concept so attractive to resellers?
Use examples from the case to explain your answer.
6 | What type of major promotion strategy is predominant in the
case study? Do you think this is the most effective way to
promote this brand? Why?

The evolution of café groupies

Rising consumer sophistication is leading
to a rejuvenation of the coffee market in
Australia, and public ideas about ‘good
coffee’ are changing.

SOURCE: APPARENT CONSUMPTION OF FOODSTUFFS,
AUSTRALIA ABS (4306.0); THE AUSTRALIAN DAIRY CORPORATION.

good grades) among six to 17 year olds, increasing from
27 per cent in 1995 to 38 per cent in 1999.
In his paper, Pokémon Consumer Culture (2002), Simon
Leet notes that Pokémon provides a ‘conversational
currency’ for children.20 ‘In effect, these children consume
Pokémon to express their membership in a subculture of
their peers, and it is a subculture precisely because the
complex Pokémon fantasy world excludes adults’. Leet
believes a culture resembling ‘fan culture’ is created from
the ‘strong sense of intellectual and emotional involvement
in Pokémon… This distinguishes Pokémon as being
something more than just another fad, which may
explain popular appeal of the concept, ‘well past the
life expectancy of most fads’.
Fashions and fads among children are by no means
new. Britain’s National Toy Council suggests that the
difference today is that the widespread availability of
consumer goods and the use of mass media in their
promotion makes us much more aware of fads. They
suggest that children today are under much more
pressure to adopt a particular lifestyle and own a
product at a younger age in order to be accepted by
their peers. Peer pressure may be felt at a younger age
than before because children are socialising with other
children at a much earlier age, and are exposed to a great
deal of television and other media at the same time.21
All these changes are resulting in KAGOY (kids are
getting older younger). The implication for marketers
targeting this group is that their target markets are more
sophisticated and demanding. As one mother is quoted
as saying, ‘They know what they want and are often the
driving force behind its purchase’.22

End-of-book: Case studies Q 659

per capita consumption of various beverages from 1938
to 1999. Today, Nescafé brands—including the flagship
Blend 43, Nescafé Decaf, Nescafé Espresso, Nescafé
Gold Blend and Nescafé Mild Roast—account for
around 60 per cent of marketshare in the soluble coffee
category. Nescafé’s leadership is partly explained by
heavy advertising expenditure by parent company Nestlé
(about 90 per cent of the total advertising expenditure
for the instant coffee category), including the successful
‘Valley’ advertising campaign—a ‘soap opera’ that
featured 16 episodes from 1992 to 1998, before
culminating with the wedding of the two main
characters (http://www.nestle.com.au/nescafé/).
The market for coffee consumed in the home,
however, has been changing significantly in recent years.
Preferences are moving away from the value sector
(instant) as consumers trade up. A survey by Retail World
of the main product segments (instant powdered, instant
granules, instant freeze-dried and fresh coffee) found
that over the past three years, ‘powdered instant coffee
has been the big loser, granules were flat, while freeze-

Figure 2 Apparent per capita consumption of foodstuffs in Australia from 1938–39 to 1998–99
UNITS 1938–39

1948–49

AVERAGE AT YEAR END
1958–59 1968–69 1978–79

1988–89

1996–97

1997–98

1998–99

BEVERAGES
Tea

kg

3.1

2.9

2.7

2.3

1.7

1.2

0.8

0.8

0.9

Coffee

kg

0.3

0.5

0.6

1.2

1.6

2.0

2.0

2.3

2.4

Aerated and
carbonated waters

L

—

—

—

47.3

67.4

87.4

114.4

109.0

113.0

Beer

L

53.2

76.8

99.7

113.5

133.2

113.1

95.5

94.5

93.2

Wine

L

2.7

5.9

5.0

8.2

14.7

20.2

19.0

19.7

19.8

Spirits (litres alcohol)

L

0.5

0.8

0.7

0.9

1.2

1.2

1.2

1.3

1.2

L

106.4

138.7

128.7

128.2

100.5

101.7

104.2

103.0

102.4

MILK AND MILK
PRODUCTS
Market milk
(fluid whole litres)

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End-of-book: Case studies Q 661

Figure 4 Freeze-dried coffee
(segment of instant coffee) MAT to Sept 2002

Figure 3 Instant coffee MAT to Sept 2002
$000s

423498.4

$000s growth % YA

1.2

Kgs

11258253.0

Kgs growth % YA

-0.6
$000s
Share of total
instant coffee

$000s

98754.8

$000s growth % YA

17.5

Kgs

1730808.0

Kgs growth % YA

23.0

Kgs
Share of total
instant coffee

$000s
Share of total
freeze-dried coffee

16.7

24.4

Total freeze-dried

< = 50 g

11.5

9.2

Total granules

49.6

51.8

Total freeze-dried 51–100 g

37.5

34.0

Total freeze dried

23.3

15.4

Total freeze-dried 151–200 g

47.0

51.4

5.4

4.9

Total freeze-dried 201–250 g

3.3

4.6

Total de-caf

4.9

3.5

$000s
Share of total
instant coffee

Kgs
Share of total
instant coffee

Total Moccona

17.5

11.7

Total Douwe Egberts Co. instant

17.5

11.7

Total Internat Roast

13.2

18.6

Total freeze-dried 251–375 g

0.2

0.2

Total freeze-dried 376–500 g

0.5

0.6

$000s
Share of total
freeze-dried coffee

Kgs
Share of total
freeze-dried coffee

Total Moccona Classic

33.8

35.7

Total Moccona Indulge

10.2

7.9

Total Nescafé

59.3

56.8

Total Moccona Mystiq

4.5

3.5

Total Nestlé instant

72.5

75.3

Total Moccona Tmption

4.3

3.4

1.9

2.6

Total Douwe Egberts Co.
freeze-dried

52.7

50.5

Total Nes Gold Blend

34.5

37.6

Total Bushells
Total Pablo

0.3

0.4

Total Robert Timms

0.3

0.2

Total Fresh Foods instant

2.5

3.2

Total Maxwell House

3.4

4.4

Total Jacobs

0.8

0.6

Total Lyons

1.0

0.9

Total Kraft Foods instant

5.2

5.9

Total private label instant

2.0

3.6

Total other mfrs instant

0.2

0.3

dried, and roast and ground (fresh coffee) have grown
as consumers have traded up’.5
According to research by Aztec, for the years from
1995 to 2000, fresh coffee consumption grew eight per
cent by volume and 25 per cent by sales value,6 and this
trend is accelerating. In the 12 months to September
2002, the fresh coffee market increased by five per cent
in volume, and 4.2 per cent in value. Sales growth in the
instant coffee market, however, increased by just 1.2 per
cent over the same period, but consumption actually fell
by 0.6 per cent in volume. (A category can be increasing

Total Nescafé Gourmet

6.1

4.7

Total Nestlé freeze-dried

40.6

42.2

Total Fresh Foods freeze-dried

0.4

0.3

Total Kraft Foods freeze-dried

5.4

5.8

Total private label freeze-dried

0.5

0.8

Total other mfrs freeze-dried

0.4

$000s

0.4

in volume but declining in sales value. In the case of
instant coffee, this was mainly due to heavy discounting
promotions by several ‘premium’ or expensive brands,
which tempted consumers to trade up to buy the
discounted premium products, according to Aztec.
Several new products that appealed to the consumers’
search for variety and alternative tastes were also
launched in the premium end of the market in that
period—for example Moccona Temptation.)
In the fresh coffee category, four major companies
(Douwe Egberts, Cantarella Group, Valcorp and Fresh

86306.6

$000s Growth % YA

4.2

Kgs

3948373.3

Kgs Growth % YA

Kgs
Share of total
freeze-dried coffee

Total powder

Total espresso

Figure 5 Roast and ground coffee
(incl. coffee bags) MAT to Sept 2002

5.0
$000s
Share of total
roast and
ground coffee

Total ground bricks

Kgs
Share of total
roast and
ground coffee

72.9

73.0

5.7

5.7

Total beans

10.6

14.3

Total bags

7.8

3.9

Total pulverised

3.1

3.1

$000s
Share of total
roast and
ground coffee

Kgs
Share of total
roast and
ground coffee

Total ground tins

Total Harris incl bags

17.0

19.3

Total Douwe Egberts

0.1

0.1

Total Moccona Branded

5.2

4.8

Total Douwe Egberts Co.
R&G coffee

22.3

24.2

Total Aurora

7.0

11.8

Total Delta (cosmo)

0.4

0.7

Total Oro Nero

0.2

0.2

19.5

18.7

Total Cantarella Bros R&G coffee 27.1

31.3

Total Lavazza

20.2

15.7

Total Valcorp R&G coffee

20.2

15.7

Total Robert Timms incl bags

11.4

8.1

Total Vittoria

Total Bushells reg

1.9

1.7

Total Europa

0.8

1.3

Total Fresh Foods R&G coffee

14.0

11.1

Total Melitta Co. R&G coffee

6.3

6.5

Total Nestlé R&G coffee

2.3

2.3

Total Jacobs

1.2

1.2

Total Kraft Foods R&G coffee

1.2

1.2

Total Private Label R&G coffee

0.9

0.9

Total Other Mfrs R&G coffee

5.7

6.8

Foods) account for about 80 per cent of total retail sales
($86.3 million), with the balance held by about 40 small
brands that are competing mainly on price.7 The largest
fresh coffee distributor is the Cantarella Group, which
now supplies about every third cup of coffee consumed
at home by Australians, under the Vittoria and Aurora
brands (http://www.cantarella.com.au/group.html). Vittoria
is the leading fresh, or ‘pure’, coffee brand with about
20 per cent marketshare, closely followed by Lavazza,
which is distributed by Valcorp Fine Foods
(http://www.lavazza.com.au/lavazza.html).
Les Schirato, managing director of the Cantarella
Group, pioneered the introduction of pure espresso
coffee beans into supermarkets to help stimulate home
consumption ‘at a time when coffee meant an instant
beverage and espresso coffee was considered too strong
for the Australian palate’.8
By 1997, the grinding of fresh coffee beans in
supermarkets had disappeared as manufacturers
attempted to make it easy for instant coffee
consumers to ‘trade up’ to fresh coffee. At the
same time, the introduction of small single serves
and 10-packs had become major tools for enticing the
trial of new varieties—for example, the Harris 1-cup
coffee filter launch and Vittoria’s 50-gram trial pack.
By 2000, the fresh coffee segment was already maturing,
and in supermarket stores a ‘glut’ of brands and ‘me-too’
products were already making it difficult for consumers
to make a choice.9 On top of that, out-of-stocks (empty
shelf space) had become the industry’s ‘biggest’ problem
by 2001, according to Les Schirato. In an industry trade
magazine review of the coffee category in 2001,
Schirato said, ‘The biggest problem is out-of-stocks
at the supermarket store level. There are still far
too many brands in the category, limiting shelf space,
with no real new offer to the consumer. Consequently,
the fastest selling brands end up being out of
stock…Supermarkets will get better results if they
reduce the number of brands and have more shelf
space to also include a small but good selection
of brewing devices such as plungers. Retailers need
to try to change the pure coffee area and turn it into
a café experince’.10

Coffee drinkers support the fresh
coffee market
The rising home ownership of espresso machines,
cappuccino machines and grinders has paralleled
the growth of supermarket brands in the fresh coffee
category. Another indication of the growing popularity
of fresh coffee is the launch of training centres for

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End-of-book: Case studies Q 663

Figure 6 Roy Morgan research chart

America14, and our interest in coffee does not stop at
home. More than 7.3 million people in Australia had
visited a café in the first three months of 2002 for a coffee
or tea—about 300 000 more than in the same period in
2001. Out-of-home consumption of coffee is booming,
as reflected in the popular café scene in Australia, which
consisted of 6000 cafés in 2001, with a market growth
rate of 10 per cent a year—according to BIS-Shrapnel.15
About 90 per cent of the café industry is made up of
independent small businesses employing less than

Population 14+ years
Instant coffee purchasers

30

Fresh coffee purchasers

Profile (%)

25

20

“

Coffee has moved from its

15

relaxation appeal to become a part of a
trendy fast-paced lifestyle.

10

5

0

sales, after only the first nine weeks. Shell is looking
at rolling out a total of 20 cafés by the end of 2002’.19
Apart from office workers and travellers looking for
a quick fix, ‘going out for a coffee’ has now become a
common social way to catch up with friends. But local
café owners are under threat from American coffee
chain giants, and their major marketing campaigns.
Starbucks, Gloria Jean’s, and McDonald’s McCafe
are steaming ahead with plans to capture more of the
market, capitalising on Australia’s growing obsession

“

End of Book Case Studies

11

9

10

Young singles

7

7

9

Young couples

25 26 24

12 11 13

31 31 31

14 16 13

Young parents

Mid-life
families

Mid-life
households

Older
households

coffee connoisseurs. Trade classes teach students how to
operate commercial machines, while consumer classes
focus on coffee usage at home.11 Vittoria opened its
Coffee College in Sydney in 1996, and Lavazza courses
are run in all eastern states of Australia (as well as in
London, Paris and New York).
Surveys of coffee drinkers show marked
differences in the habits and attitudes of coffee
drinkers. Referring to the family life cycle, the
two largest segments of coffee drinkers in Australia,
according to research by Roy Morgan
(http://www.roymorgan.com.au/), are empty nesters
or mid-life households and young parents. Young
singles, young couples, and mid-life families, prefer
to buy fresh coffee. Young parent’s households and
older households, on the other hand, are more likely
than the general population (14+ years) to buy instant
coffee.12 The largest segment—mid-life households—
purchases both types of coffee with equal preference.
See Figure 6, the Roy Morgan chart.
In relation to the cross-purchasing habits of coffee
buyers, the June 2002 survey showed that in the four
weeks prior to the survey, 44 per cent of all fresh
coffee buyers had also purchased instant coffee, but only
14 per cent of instant coffee buyers bought fresh coffee.

The typical fresh coffee consumer is also more
likely, than the general population, to strongly agree
with the following:
• I like to drink wine with my meals.
• I’m a bit of an intellectual.
• I try to buy organic and additive-free food.
• Computers and technology give me more control
over my life.
• I like to entertain spontaneously.
• I believe a percentage of everyone’s income should
go to charities.
Another Roy Morgan survey showed that fresh coffee
drinkers are more likely to be from the upper or ‘AB’
socio-economic group (32 per cent), university-educated
(31 per cent), and aged 35+ years (68 per cent). The age
group most likely to buy fresh coffee is 35 to 49 years.13
Coffee consumers can also be segmented by ethnicity. The
survey found that those who were born in the United
Kingdom, for example, are 22 per cent more likely to be
fresh coffee buyers than those who were born in Australia.

Out-of-home consumption is booming
Australians have the highest per capita consumption of
coffee in the world, outside the United States of

20 people, and almost 80 per cent of café businesses are
located in the eastern states of Australia —New South
Wales, Victoria and Queensland.16 The Cantarella Group
has effectively snared free ‘billboards’ for its Vittoria and
Aurora brands at many of Australia’s independent cafés
through the provision of outdoor umbrellas, coffee cups,
sugar bags and sticks, and other accessories.
One of the fast growing segments in the café industry
is the new tiny outlet that is springing up in central
business districts (CBDs) for take-away coffee sales. Busy
office workers are ‘not sitting down any more’, says one
industry commentator. They ‘want a quick coffee on
their way to work; they haven’t got time to waste and
they want a strong cup that will get them through the
day’.17 This points to the increasing trend of ‘on-the-go’
coffee consumption, a development that petroleum
convenience chains have also recognised—as shown by
the in-store installations of cafés by BP (Café Zip),
Caltex (Starmart), Mobil (On the Run) and Shell (Shell
Café).18 A study of the coffee sales made through these
major petroleum convenience chains found that ‘coffee
has moved from its relaxation appeal to become a part
of a trendy fast-paced lifestyle’. While still at an
experimental stage in Australia, the growth of the
convenience store segment for distributing coffee seems
promising. Shell wanted its Shell Café to be perceived by
customers as a separate entity, and it has ‘released two
versions of its concepts, one for suburban areas and one
for regional areas…While the café concept is still very
new to Shell, it reported a 58 per cent increase in coffee

with coffee.20 Gloria Jean’s already counts Australia as
its biggest market outside the United States.21
At the same time, the Australian-owned Coffee Club
chain—with ‘over 65 stores throughout Australia’—is
considering a public float to finance faster growth in
response to the invasion of American chains.22
Independent cafés have also been responding to the
invasion of the United States-style coffee houses, and
have ‘tellingly adopted American marketing techniques
such as cards that provide free bonus coffees to
frequent sippers’.23
The new coffee chains differ in their marketing
strategies and their appeal to different consumer
segments. Starbucks relies on prominent high street
locations with décor that positions the chain as
sophisticated with the younger demographic. The
chain has also invested in its cool image through
product placements in movies such as You’ve Got
Mail, and send-ups in TV shows such as The Simpsons
and South Park.24
Starbucks (http://www.starbucks.com/) promotes a
relaxed friendly meeting place, with the emphasis on
getting customers to stay. ‘It’s more than just a place
to grab a coffee and run’, says Australian marketing
manager, Ian McKenzie. ‘You can’t buy CDs through
our stores here in Australia (as is the case in the United
States), but we are still using music as a springboard
to get people into our stores’, McKenzie said.25
Customers in about 1200 Starbucks stores in the
United States can also check email, use the Internet,

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watch streaming video or download multimedia
presentations for a fee over the wireless network
service (WLAN), which is 40 to 50 times faster than
standard dial-up Internet access.26 The launch of
WLAN in the US was followed by trials in England
and Germany. Starbuck’s US chairman, Howard
Schultz, said, ‘People use Starbucks not only as a
place to get coffee, but as an extension of their
porch, an extension of their office’.27
In Australia, Starbucks opened its flagship store in
Sydney’s CBD in 2000, and by September 2002 some
50 cafés were operating.28 The chain began co-location
ventures with other companies in late 2001, when
specially designed Starbucks outlets opened within
Borders Books’ chain of book, music and video stores.29
Soon after, Starbucks opened a café within the
Commonwealth Bank’s Circular Quay (Sydney)
branch, in an experiment which may be rolled out
to the bank’s other branches nationally, if successful.
The chain has also introduced a mini-Starbucks site
in Westmead Children’s Hospital that can be staffed
by only four people.30
Starbucks’ Australian managing director, Mark Hofer,
said, ‘The co-location strategy had major advantages for
the Starbucks chain as it established itself in Australia.
As well as providing prime sites for new stores, it also
put the Starbucks experience in front of people that
might otherwise be difficult to reach. There are people
who may never have tried Starbucks or would never go
to a store. This is an opportunity for us to let them see
and smell a Starbucks’.31
The Chicago-based Gloria Jean’s (http://www.gloria
jeanscoffees.com.au/index.asp), with 77 outlets in Australia,32
locates mainly in suburban shopping centres and targets
an older demographic than Starbucks. Gloria Jean’s
more downmarket appeal is expected to do ‘very well
converting instant coffee drinkers’ and attracting firsttime users of brewed coffee. But serious coffee drinkers
‘wouldn’t go there’, says Les Schirato, of the Cantarella
Group.33 The chain, which also retails its range of coffee
beans in take-away packs for home use, launched its first
Australian television advertising campaign in May 2002,
in time for the peak winter season, featuring the tagline
‘Escape the daily grind’.34
McDonald’s McCafé appeals to a broader audience
than some of its competitors, and tends to be more
inclusive. ‘Some coffee shops can be a bit snobbish or
pretentious’, says Vicki Fuller, national McCafé manager.35
The McCafé chain expects to expand to 100 outlets in
Australia by the end of 2002, and it has a longer-term
goal to establish a McCafé in half of Australia’s
700 McDonald’s outlets.36

End-of-book: Case studies Q 665

The ‘mass-produced’ image of United States-style
coffee chains, however, does not appeal to everyone.
The traditional family-run café where the owners
know each customer’s name and preference—that is,
a cappuccino with one sugar—has a genuine appeal
for consumers who want a ‘real’ coffee experience.
Coffee ‘snobbery’ and the loyalty of fresh buyers to
‘real’ coffee will help preserve the place of independent
cafés, at least for the near future.

Is the coffee market exploited?
There is also a growing politicisation of coffee
around the world, and consumer resistance towards
the unfair practices of giant American coffee
buying chains such as Starbucks (see for example
www.resistance.org.au/zine/scumbag2.html). Prices of
coffee are subject to supply and demand in the
world market, and both supply and price are subject
to ‘dramatic fluctuations’ because of climatic effects.
The A$24 billion per annum market is dominated
by countries such as Brazil, Mexico, Indonesia and
Central America, where lower labour costs prevail.
Starbucks is the fifth largest buyer of coffee in the
world (after Nestlé and Procter & Gamble), and has
been criticised for exploiting the world’s coffee
farmers, many of whom have been devastated by
a chronic coffee surplus and historically low prices
in recent years. ‘The chain has a lot to lose if
consumers, especially young ones, see it as a
Third World profiteer.’37
Australia produces less than one per cent of the
coffee consumed here, and in 1996 only 200 tonnes
of green beans (the final stage before roasting) were
produced in this country, compared with the 49 000
tonnes of green beans we imported.38 Australia’s small
domestic production of high-quality Arabica coffee,
which is preferred for the fresh coffee market, is sold
to the higher priced specialty outlets and tourist market
in Australia, while some is blended with imported coffee.
Although freshness, a lower caffeine content, and a clean
or ‘organically grown’ image are attractive qualities of
Australian coffee, according to government agencies
there is not enough coffee produced domestically to
reliably supply major coffee buyers or develop exports.39
The ability to customise products in food-service
outlets has driven the diversity of the types of coffee
now available to consumers.40 In the five years from 1997
to 2002, the number of American consumers drinking
‘gourmet’ specialties increased from 7 million to
27 million.41 Fresh coffee is a breakfast staple in the
United States, and while hot coffee is still the ‘norm’,

iced coffee, flavoured coffee and gourmet coffee are also
appearing on breakfast tables.42 Flavoured coffees such
as hazelnut and vanilla make up 20 per cent of sales for
American chain Dunkin’ Donuts. In Australia, Gloria
Jean’s extensive gourmet range includes caramel nut,
chocolate macadamia, Irish crème, and hazelnut, which
is also available in the decaffeinated coffee range. The
decaffeinated market is one of the fastest growing
segments in the fresh-coffee market with approximately
18 per cent annual growth.43
The proliferation of different types of coffee,
including decaffeinated, was parodied in a movie
starring Steve Martin, LA Story.
Guy with neck-support: I’ll have a decaf coffee.
Trudi: I’ll have a decaf espresso.
Movie critic: I’ll have a double decaf cappuccino.
Policeman: Give me decaffeinated coffee icecream.
Harris K. Telemacher: I’ll have a half double
decaffeinated half-caf, with a twist of lemon.
Trudi: I’ll have a twist of lemon.
Guy with neck-support: I’ll have a twist of lemon.
Movie critic: I’ll have a twist of lemon.
Cynthia: I’ll have a twist of lemon.
The impact of United States coffee chains has
stimulated Australia’s coffee consumption, and both our
in-home and out-of-home consumption is changing.
‘The fact is’, says one industry observer, ‘real coffee is in
and instant is not’.44 That trend should help Australia’s
independent cafés, but the long-term future for the
sector looks grim.

QUESTIONS
1 | Coffee distributors use a variety of ways to segment the
market. Identify the segments in the total coffee market and
defend your selection of segmentation bases. (Use different
bases for segmentation—that is, business versus consumer;
instant versus fresh; consumption versus component
product, image, value, usage rates and so on.)
2 | With reference to the product life cycle, the coffee market
provides an example of how mature markets can be revived.
Explain in your own words the reasons for the rejuvenation
of the coffee market.
3 | Using your own research, develop a SWOT analysis of
the different players in the café market in Australia;
plus, discuss their competitive position.
4 | Develop positioning maps of the different players in the
café market in Australia. Defend your selection of
attributes—for example image, value and so on.
5 | The long-term future for the independent café sector is
under threat. Make specific recommendations regarding
the four Ps for independent cafés in Australia.
6 | You are the assistant to an Australian grower of coffee
beans who is considering a proposal to try and launch a
fresh-coffee brand for distribution through supermarkets.
Undertake primary research of the market for hot beverages
consumed at home by visiting large supermarkets. Write
a description of the product category for your boss, based
on your observations, and make some recommendations
about the proposal. Compare the shelf space allocated to
different types and brands of beverages to the share data
in Figures 3, 4 and 5.

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23

End-of-book: Case studies Q 667

Company mission
As stated in the company’s mission statement, the
substantial difference between Dick Smith Foods
products and the products of many other companies is:

Dick Smith
—the great adventurer
Alvin M Chan, School of Marketing and International Business,
University of Western Sydney

In July 1999, Dick Smith announced his intention to set up a 100 per cent
Australian owned food company to fight back the trend that an increasing
number of Australian brands are now foreign owned. On 29 November
1999, he made the decision to go ahead with Dick Smith Foods
(www.dicksmithfoods.com.au) with a capital of $2 million.
Dick Smith Foods product, Dick
Smith Peanut Butter, was launched
The
first
at the end of February 2000. Since then, Dick Smith has
been successful in engineering consumer support for his
food products by attaching his name to the ‘buy Australian’
cause. On 4 October 2000, Dick Smith Foods announced
that retail sales of $27.8 million had been achieved in
the first nine months of operation, and that the company
was in a profitable situation, having covered all
establishment costs. Dick Smith’s original aim was to
achieve sales of $100 million to support Australian
farmers and manufacturers and he achieved this in just
16 months of operation. As at 31 March 2002, Dick
Smith Foods had achieved $152.65 million in retail sales.
To further expand the already successful Dick
Smith food brand, a 10-year licence was granted to
an independent new subsidiary of the Sanitarium
Health Food Company (www.sanitarium.com.au) to
manage the operations of Dick Smith Foods with
effect from 1 July 2002.
This case looks into the external environmental factors
and the internal marketing strategies of Dick Smith Foods,
which contributed to the success of the new business in
such a short period of time. In fact, Dick Smith is not just
a person; his name is a brand name to many Australians.
This case starts with a brief look at Dick Smith’s life.

Dick Smith’s biography
Dick Smith is a well-known Australian businessman,
aviator, film-maker and explorer. His brief
biography follows:

• Born on 18 March 1944 in Roseville, New South
Wales, Australia.
• Founded Dick Smith Electronics in 1968 and
sold his interests to Woolworths in 1982 to go
into publishing, exploration, aviation
and philanthropy.
• Named Australian of the Year in 1986.
• Made the first sole helicopter flight around the
world in 1983 and made the first helicopter flight
to the North Pole in 1987. First person to fly around
the world via the poles in 1989.
• Founded the quarterly magazine Australian Geographic
in 1986 and returned the Australian Encyclopaedia to
Australian ownership in 1987; sold to John Fairfax
Publications Pty. Ltd. in 1995.
• Held several chairman positions with the
Civil Aviation Safety Authority Board and the
National Centenary of Federation Council
between 1990 and 2000; and, in 1998 was
appointed as Ambassador for the Council for
Aboriginal Reconciliation.
• First non-stop balloon flight to cross the Australian
continent in 1993 and first Trans-Tasman balloon
flight, against the wind, from New Zealand to
Australia in 2000.
• Founded Dick Smith Foods in November 1999.
Dick Smith is a man of many personas. Through his
high-profile and self-promotion activities, Dick Smith
has become a highly-recognised public figure in
Australia. At the time of the republic debate, a poll by
The Sunday Telegraph in October 1999 found that Dick
Smith was the third most popular choice for president.

‘Dick Smith Foods are made in Australian by Australian

owned companies. We believe this is important because
it provides employment for Australians and all the
profits remain here, helping the future of our country.’ 1
The company’s mission is best summarised in its slogan:
‘As Australian as you can get!’

grocery product manufacturers, welcomed Dick Smith’s
entrée to the Australian food industry but regretted his
alleged reasons for doing so, and considered his attack
on foreign owned Australian manufacturers as unfair
and unfounded. Mr Mitchell H Hooke said, ‘We
welcome Mr Smith’s foray into the industry and trust
that he will develop a competitive strength on merit
and not by unsubstantiated denigration of his
potential competitors.’3
An article in the January 2000 issue of the Australian
Made newsletter argued:
‘The real argument in a global economy isn’t one of

Dick Smith’s policy on foreign
investment
The driving force behind the establishment of Dick Smith
Foods was the realisation that in Australia 85 per cent of
the products in a typical supermarket trolley are either
foreign owned or imported. More and more Australian
‘digger’ brands like Vegemite and Arnott’s are now foreign
owned. Dick Smith wants to fight back and see a more
even balance between Australian products and foreign
products in our shopping trolleys.
At the Dick Smith Foods Web site, Dick Smith makes
his policy on foreign investment clear:
‘I believe one of the reasons that Australia has been so
successful is because of foreign investment. However
foreign investment, as we once knew it, consisted of
companies coming to Australia, bringing in capital,
taking risks and creating a new business that actually
increased employment and wealth for Australia.
‘Unfortunately in recent years, foreign investment
tends to mean wealthy overseas companies coming in,
taking over successful Australian companies
(sometimes against shareholder agreement), downsizing
(i.e. putting off, say, 20 per cent of the staff), and then
taking profits out of the country. I’m not sure that this
type of foreign investment is what we really require.
‘I believe we should be looking for a balance. Foreign
investment has given us some great advantages in the
past, however that does not mean that all future foreign
investment is good.’ 2
Figure 7 is a list of famous Aussie food brands now
owned by foreign companies.
Dick Smith’s position on foreign investment is not
without criticism. For example, in a media release of
23 July 1999, Mr Mitchell H Hooke, executive director
of the Australian Food and Grocery Council (AFGC),
the peak representative body for Australia’s food and

ownership. ‘Australian owned’ doesn’t necessarily mean
profits stay on-shore, as supporters claim. And there’s
no guarantee an Australian owned company is
manufacturing here in Australia—it may be
importing.…Many of Australia’s biggest, best known
and best supported brands may well be foreign owned.
These corporations have invested in Australia and
employ Australians. Many support the Australian
Made Campaign.’ 4
Nevertheless, Dick Smith has been influential in raising
the profile of the ‘buy Australian’ campaign. In 1999,
he became patron of Ausbuy (www.ausbuy.com.au)—
a non-profit organisation that aims to create awareness
of the sell-off of Australian icons and brands to
overseas interests.

Consumer behaviour
In the 31 March 2000 issue of B&T Weekly, Drs John
Dawes and Rachel Kennedy from the Marketing Science
Centre, University of South Australia, made the
following comments on the Dick Smith Foods campaign:
‘Intuitively we might think that the idea of “buying
Australian made” or “not supporting foreign
multinationals or cigarette companies” is an appealing
one to consumers.
‘Indeed, if one asks people about issues like these in
market research, most people would exhibit very positive
attitudes. However, there is only a very weak link between
attitudes and behaviour, and a lot of inertia in consumer
behaviour. Inertia favours the big established brands.
‘Therefore, it is unlikely that these appeals will
result in a large chunk of the market changing (its)
buying behaviour.
‘We do actually think Dick’s motives are admirable
and wish him well. But we also think that his new
venture will face immense difficulties.’ 5

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Figure 7 Famous Aussie food brands now owned by foreign companies

Figure 8 Dick Smith food products available in supermarkets as of December 2002

BRAND

ORIGINAL AUSTRALIAN OWNER

NOW FOREIGN OWNED BY

LOCATION

Andronicus Coffee
Billy Tea
Cottee’s Cordials
Ecks
Harris Coffee
Harris Tea
Kinkara tea
Mynor
Nerada
Shelley's (except SA)
Lan-Choo Tea

Andronicus Co
The Tetley Group
Cottee’s Foods
Ecks Soft Drinks
D. E. Harris Pty. Ltd.
D. E. Harris Pty. Ltd.
The Tetley Group
The Mynn Co
Nerada Tea
Shelley's Soft Drinks
Unilever

Nestlé Limited
—
Cadbury Schweppes Plc
Coca Cola Amatil
Douwe Egberts/Sara Lee D-E N.V.
Douwe Egberts/Sara Lee D-E N.V.
—
Cadbury Schweppes Plc
BOH Plantations SDN BHD
Coca Cola Amatil
—

Switzerland
UK
UK
USA
Netherlands
Netherlands
UK
UK
Malaysia
USA
UK

Chiko
Four ’n’ Twenty Pies
Ginger Nut
Herbert Adams Pies
Kettle Chips
Milk Arrowroot
Nannas
Peters
Salada
Sao
Scotch Finger
Streets
Tim Tam

Frances McEnroe
L. J. McLure
Arnotts Biscuits
Herbert Adams Bakeries
Kettle Chip Co
Arnotts Biscuits
Mr & Mrs A Mutch
Peters Ice Cream
Brockhoff Biscuits
Arnott’s Biscuits
Arnott’s Biscuits
Streets Ice Cream
Arnott’s Biscuits

J. R. Simplot & Co.
J. R. Simplot & Co.
Campbell Soup Company
J. R. Simplot & Co.
Campbell Soup Company
Campbell Soup Company
J. R. Simplot & Co.
Nestlé Limited
Campbell Soup Company
Campbell Soup Company
Campbell Soup Company
Unilever
Campbell Soup Company

USA
USA
USA
USA
USA
USA
USA
Switzerland
USA
USA
USA
UK
USA

Butter Menthol
Cherry Ripe
Columbines
Fantales
Freddo Frog
Jaffas
Kool Mints
Minties
Old Gold
Red Tulip
Sherbies
Violet Crumble

Allens
Mac.Robertsons
Mac.Robertsons
Allens
Mac.Robertsons
Allens
Allens
Allens
Mac.Robertsons
Beatrice Australia
Allens
Hoadleys

Nestlé Limited
Cadbury Schweppes Plc
Cadbury Schweppes Plc
Nestlé Limited
Cadbury Schweppes
Nestlé Limited
Nestlé Limited
Nestlé Limited
Cadbury
Cadbury Schweppes Plc
Nestlé Limited
Nestlé Limited

Switzerland
UK
UK
Switzerland
UK
Switzerland
Switzerland
Switzerland
UK
UK
Switzerland
Switzerland

JAMS AND SPREADS Cottee’s Jams
Eta Peanut Butter
IXL
Monbulk
Vegemite

Cottee’s Foods
Kraft Foods/Philip Morris
Henry Jones
Monbulk Jams
Fred Walker Cheese Co

Cadbury Schweppes Plc
—
J M Smucker Co/Suntory
Cadbury Schweppes Plc
Kraft Foods/Philip Morris

UK
USA
Japan
UK
USA

GENERAL GROCERY
ITEMS

Aeroplane Jelly Co
Big Sister Foods
Gordon Edgell & Sons
Bundaberg Sugar
Pillsbury Australia
W. C. Douglas
Klembro
H. J. Heinz & Co.
Pillsbury Australia
H. M. Leggo & Co.
Pillsbury Australia
Pick Me Up Foods
Pillsbury Australia
Safcol Australia
Tom Piper Co
Gartrell White

McCormick & Co Inc
J. R. Simplot & Co.
J. R. Simplot & Co.
Tate & Lyle
Grand Metropolitan/Diageo
Cerebos/Suntory
Cerebos/Suntory
—
Grand Metropolitan/Diageo
J. R. Simplot & Co.
Grand Metropolitan/Diageo
H J Heinz & Co
Grand Metropolitan/Diageo
Tropical Canning Group
H J Heinz & Co
George Weston

USA
USA
USA
UK
UK
Japan
Japan
USA
UK
USA
UK
USA
UK
Malaysia
USA
UK

BEVERAGES

BISCUITS, PIES
AND SNACK
FOODS

CONFECTIONERY

Aeroplane
Big Sister
Edgell Country Gdn
Bundaberg Sugar
Dorato
Fountain
Gravox
Greenseas Tuna
Latina Fresh
Leggos
Noble House
P.M.U
Pioneer
Safcol
Tom Piper
Top Taste

PRODUCT

SIZE

VARIANTS

Asparagus
Breakfast cereal (see variants)
Canola oil
Cheese (block)
Cheese (slices)

340 g
500 g
750 ml & 2 L
500 g
250 g & 500 g slices

Green Spears, Cuts and Tips
Bush Foods Breakfast, and Maxi Grain

Cream cheese spread
Cordial
Diet cordial
Flavoured toppings
Gravy
Hazelnut spread
Helicopter Jelly
Ice cream
Jams
100% fruit spread
OzeChoc
Peanut butter
Savoury biscuits
Sweet biscuits

245 g
750 ml
2L
500 ml
400 g & 120 g
500 g
85 g
2L
450 g
330 g
250 g
375 g, 780 g
250 g, 250 g, 125 g
200–250 g

Tomato & BBQ sauce

600 ml

Block Tasty
Aussie Slices, Extra Light Aussie Slices, Natural Slices
& Tasty Cheese Slices
Regular & Light
Lime, Orange, Raspberry, Tropical
Fruit Cup, Lemon, Orange, Apple & Raspberry
Caramel, Chocolate, Strawberry
Brown Onion, Chicken, Supreme, Roast Meat Instant
—
Lime, Port Wine, Raspberry, Strawberry, Tropical
Vanilla
Apricot, Marmalade, Plum, Strawberry, Three Berries
Apricot, Orange Breakfast, Strawberry, Three Berries
—
Smooth, Crunchy, Super Crunchy (375gm only)
Cracker Biscuits, Water Crackers
Choc Mint Creams, Dark Choc Wheats,
Shortbread Vanilla Creams, TT’s, Mini Mates
—

Despite Dick Smith’s ability to raise the profile of the
‘buy Australian’ cause, it seems that consumers are still
being wooed by brand names that aren’t necessarily
Australian. Kellogg’s and Arnott’s (both American
owned) are the two most popular brands on our
supermarket shelves, proving that brand loyalty is
winning over price and patriotism.
In an interview with A Current Affairs (ACA) on 3 July
2001, with Debbie Kirslake, the marketing director of
A. C. Nielson, it was suggested that it all comes down
to advertising. She said, ‘If the consumer hasn’t heard
about it, generally he or she won’t touch it’.6
One concern about buying Australian products is the
perception that it costs more. On 20 July 1999, ACA put
Aussie products to the price test. In the ACA test, the
grocery basket ($70 worth) full of Australian products
was almost $5 cheaper than the basket of foreign
products. While the ACA test proved that patriotism did
put more money in your pocket, shoppers are confused
as to which products are truly all-Australian. One of the
statements in a focus group conducted by Dick Smith
Foods’ advertising agency was, ‘We are uneasy with
Australian made type programs as we believe they are
manipulated by foreign companies’.7
In an interview with Landline on the ABC, 23 April
2000, Dick Smith also believed, ‘Australians are patriotic
but at the moment the labelling is so deceptive you
don’t know what’s Australian’. He further added, ‘What

I can say to people (is) “if you buy a product with Dick
Smith Foods on it—it’s as Australian as you can get”’.8

Product
Since Dick Smith Peanut Butter was launched at the
end of February 2000, a range of Australian foods
have been added to the product line. Figure 8 is a list
of Dick Smith Foods products available in the
supermarket as of December 2002 and Exhibit 2
shows Dick Smith displaying some of the Dick Smith
Foods product range.
Dick Smith Foods’ product development strategy
is not to set up its own manufacturing plant but to ally
itself with Australian manufacturers, using Australian
produce, to produce products under the Dick Smith
Foods label and to compete against products made
by foreign-owned companies—for example:
• Dick Smith Peanut Butter is produced by Green’s
General Foods Pty. Ltd. at Glendenning in Sydney’s
Western suburbs to compete with Kraft, and ‘Skippy’
brand peanut butter, which is fully imported from the
United States of America.
• Dick Smith biscuits are made by Paradise Food
Industries Pty. Ltd., a Brisbane-based, 100 per cent
Australian owned company, to compete against
Arnott’s—now owned by the Campbell Soup
Company of the United States of America.

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• Dick Smith icecream is made by Norco Co-operative
Limited, based in the Northern New South Wales
country town of Lismore, to compete against Streets,
(owned by the United Kingdom multinational,
Unilever), and Peters, (owned by Nestlé of Switzerland).
Consistent with the theme of Australian-ness, Dick
Smith Foods even renamed their chocolate chip ‘cookies’
to ‘biscuits’ to counter the Americanisation of the
Aussie language.

“

What I can say to people (is)

it is not necessary to deface the Australian Flag to
achieve this goal’.11 Despite the protest by Ausflag, the
Australian flag with Dick Smith’s head on it continues
to appear on all Dick Smith Foods labelling, advertising
and promotional material.

Marketing logistics
As described in the Dick Smith Foods ads, ‘Big
companies can afford to buy the best display positions in
supermarkets. We’re just a small company relying on the
support of Australians’. Dick Smith did not just appeal
to the patriotic Australian supermarket managers to
stock and display Dick Smith Foods products, he also
urged consumers who had trouble finding Dick Smith
Foods to ask the store manager where they were. For
those who had enthused supermarkets to move Dick
Smith Foods products to more prominent positions,
Dick Smith thanked them in the ads.
Today, Dick Smith Foods products can be found in
all major supermarkets, including Woolworths, Coles,
Pick & Pay, FAL, Safeway, Bi-Lo, Foodland, and local
independent stores throughout Australia. They are also
available in most of the smaller independent stores that
purchase stock from Metcash Limited.
Dick Smith Foods products are also available online
from Shopfast (www.shopfast.com.au), Woolworths
HomeShop (www.homeshop.com.au), Coles On Line
(www.colesonline.com.au) and other major retailers.

“

“if you buy
a product

with Dick Smith Foods
on it—it is as

Australian as
you can get”

To generate immediate association between Dick
Smith Foods and Australian ownership, the Dick Smith
Foods label puts Dick Smith’s head and logo on the
Australian flag (see Exhibit 3).
In a media statement issued on 30 January 2001,
the executive director of Ausflag, Mr Harold Scruby,
requested that ‘the Prime Minister and the RSL write
to Dick Smith and demand the immediate removal of
his face and logo from the Australian Flag, which appear
on all his products’.9
Mr Scruby quoted from the Government booklet
entitled Australian Flags, released by the Prime Minister’s
own Department of Awards and National Symbols:
‘When the flag is represented, for example, as an
illustration for commercial or advertising purposes:
• it should be used in a dignified manner and
reproduced accurately;
• it should not be defaced (that is, have superimposed
on it printing or illustration).’ 10
Mr Scruby said, ‘While Mr Smith’s attempts to market
“Genuine Australian Foods” are indeed commendable,

Exhibit 3
Dick Smith
Foods label.

Pricing
Unlike generic brands that are priced cheaper than the
major brands, Dick Smith Foods products are priced at
competitive levels with the major brands. However, the
major pricing issue is not the levels at which Dick Smith
Foods set their prices; the major issue is how competitive
brands are responding to the launch of Dick Smith
Foods. For example, in a letter to the editor of The
Sun-Herald, 30 April 2000, one reader wrote,
‘Following the launch of Dick Smith’s peanut butter
(price $2.99), the local supermarket placed ETA peanut
butter adjacent to Dick Smith’s product at a reduced
price of $1.89, a saving of 80 cents. What chance does the
Australian made and owned product have with help like
this?’12 Dick Smith urges his supporters to write similar
letters to the newspapers if they notice this happening
in their local supermarket.
While it is generally believed that price is the most
important choice criterion used by grocery buyers,
research done by Dick Smith Foods revealed that the
biggest single motivator for consumers is that they are

Exhibit 2 Dick Smith displaying some of the Dick Smith Foods
product range.

helping Australian farmers when they buy Dick Smith
Foods. Research by the Australian Consumers Association
also showed that consumers are more likely to be
influenced by Australian made rather than price
when it comes to choosing a brand.

Marketing communications
Advertising
Dick Smith Foods rely on minimal advertising. Their
largely PR-based advertising is often timed with bursts
of activities aimed at causing a stir. Dick Smith admitted,
‘They (multinationals) can afford to lose money in the
short term, knowing that in 10 years they can make it
again. We, on the other hand, could never push ahead
with a product if we were losing money’.13 The only
major advertising campaign by Dick Smith Foods was
a $1 million campaign launched in April 2002 that
focused on the human face of Dick Smith Foods. This
creative strategy, developed by advertising agency Ad
Partners, was based on research which found that the
major reason as to why consumers bought Dick Smith
Foods was to help Aussie farmers. Featuring a visual
showcase of black-and-white farmer images, the
campaign’s slogan was simple, yet emotive, ‘Helping
Australian farmers leaves a good taste in your mouth’.
Tomato growers, dairy farmers and berry pickers were a

few of the farmers highlighted to give strong branding
to individual Dick Smith Foods products. Over a fourmonth period, eight variations of the campaign were
featured as full-page ads in eight national magazines.
These were supported by advertorial and editorial
opportunities. The new brand advertisements were also
featured on 24 bus sides and bus interiors for buses in
Sydney, Melbourne and Brisbane.
This $1 million press and outdoor campaign fitted
neatly into Dick Smith Foods ongoing strategy of
appealing to patriotic Aussie consumers. Since then,
there has been very little advertising undertaken by
Dick Smith Foods. This is in line with Dick Smith’s
interview with B&T Weekly on 13 November 2000, in
which he said that the largely PR-based advertising for
the brand will cease in the long term and the company
will always remain a small player in the field, because he
is not prepared to spend the mega bucks to make the
brand a big player.14

Public relations
Dick Smith has a high media profile working in his
favour and he knows how to use it to his best advantage.
Whenever he wants some free publicity to promote his
food products, he attracts considerable media coverage.
Below are just some examples of this strategy.
Trans-Tasman balloon flight
The Trans-Tasman balloon flight was initially inspired
by a bet with advertising man John Singleton, who
stated that flying a balloon from New Zealand to
Australia against the wind could not be done, but
Dick Smith insisted that it could be done. Thus, the bet
was set with a wager worth $100 000. Regardless of the
outcome, Reverend Bill Crews’ Exodus Foundation was
to receive the $100 000 from the bet loser.
Although the balloon flight took two years to organise,
the event was nicely timed to coincide with the launch
of the first Dick Smith Foods product, Dick Smith Peanut
Butter. Dick Smith took the peanut butter across to New
Zealand so John Wallington, his co-pilot, and himself
could eat it during the balloon flight. They also had a
prototype jar of Ozemite and some Helicopter Jelly.

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End-of-book: Case studies Q 673

even jumped a double-decker bus over 16 motor bikes,
which gave great news coverage on a quiet Sunday’.15
This tug of war show did give Dick Smith a lot of
coverage in the media ‘on a quiet Sunday’ to publicise
the launch of his Dick Smith Helicopter Jelly and
compete against Aeroplane Jelly—now foreign owned
by McCormick of the United States of America.

Donations and sponsorships
Dick Smith Foods has a philanthropic policy that some
96 per cent of its profits are donated to Australian
charities and other important causes with only a tiny
four per cent put back into the business to maintain its
viability. In just two years, Dick Smith Foods donated
over $1.5 million to the community; recipients included
the Exodus Foundation, Smith Family, Salvation Army,
Care Australia and so on.
To mark the Centenary of Federation, Dick Smith
and his wife, Pip, also gave a personal gift of $1 million
to the nation on 26 January 2001. The donation
was spread among a range of national, social and
conservation institutions and included a number
of special interest projects.
Dick Smith is happy that Aussies are not only
continuing to support Australian owned companies by
purchasing his products, but they are also helping
thousands of under privileged people.

Other sales promotion tools
Exhibit 4 The Great Jelly Tug of War media poster, 3 December 2000.

WANTED
Adventurer to live in a cave in the Himalaya for 48 days and only eat
Dick Smith’s Peanut Butter. Please write to us before contacting
Harry M. Miller. Please apply to Dick Smith Foods Pty Ltd, PO Box 398,
Terrey Hills, NSW, 2084, Australia.

Exhibit 5 Himalaya caveman advertisment.

Dick Smith said he was ‘symbolically bringing the
ownership of food back to Australia’. This balloon flight
was widely covered in the media. On 22 February 2000,
ACA presented a live interview with Dick Smith in his hotair balloon as he floated from New Zealand to Australia.
Himalaya caveman
On 1 April 2000, Dick Smith inserted an advertisement
(see Exhibit 5) in national newspapers.
Although intended as a joke to generate radio talkback interviews to help market the new Dick Smith

Foods products, some 32 people aged from 17 to
70 years of age responded to this advertisement.
A Melbourne roof tiler, 30-year-old Tim Barrot, was
finally selected for this adventure. In addition to Dick
Smith Peanut Butter, Tim had Dick Smith Helicopter
Jelly as emergency rations and he was allowed a Dick
Smith Choc Biscuit for each media interview he did
from the cave. Dick Smith did achieve the objective of
gaining free publicity through talk-back interviews with
himself and Tim Barrot.

Dick Smith Foods T-shirts
As part of their marketing communications activities,
Dick Smith Foods has two different styles of T-shirts
available for sale at a cost of $27.50 each. One style
features the wording ‘Dick Smith Foods—We’re Fighting

Back’ and the other features the wording ‘Dick
Smith’s OzEmite—We’re Fighting Back’ (See Exhibit 6).
The wording appears on both the front and back
of the T-shirts.
Dickheads matches
In October 2000, Dick Smith Foods launched their own
matches called Dickheads. Dickheads matches are not
part of the Dick Smith Foods range but are described by
the company as ‘purely a marketing exercise and a major
protest over the loss of Australia’s manufacturing skills’.
The statement on the box says:
‘We would have to be complete dickheads to let most of our
famous Australian brands be taken over by foreign companies.
Brands such as Vegemite, Aeroplane Jelly, Arnott’s, Speedo
and Redhead Matches are in overseas hands. This means the
profit and wealth created goes overseas and robs our children
and grandchildren of a future.’
A protest from Dick Smith Foods
‘As Australian as you can get’

Dick Smith Foods were not originally planning to
sell the matches but popular demand has forced them
to think again. Dickheads matches are now available
through clubs, hotels, some newsagents and independent
retailers at approximately 30 cents a box.

The way forward
Around the world, the anti-globalisation movement
seems to be gaining momentum. Dick Smith has picked
the social trend before it is apparent to most companies.
More and more companies are now marketing their

Exhibit 7 Dickheads matches.

The Great Jelly Tug of War
Exhibit 4 is the media poster issued by Dick Smith
Foods announcing the ‘Great Jelly Tug of War’ on
Sunday, 3 December 2000, at Bankstown Airport in
Sydney where Captain True Blue (flying Helicopter
Jelly), ate Dick Smith’s bubblegum flavour Helicopter
Jelly and attempted to tug Captain Yankee Doodle
(flying Foreign Plane Jelly), over the line. Dick Smith
said, ‘I once towed an iceberg into Sydney harbour and

Exhibit 6 Dick Smith Foods T-shirts.

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products as being Australian made—multinational
ownership notwithstanding. Dick Smith marketed his
own Dick Smith-branded food products as not just
Australian made but also made by Australian owned
companies, thereby keeping employment and profits
in Australia—threatening the brand image of
rival multinational brands.
We are starting to see the impact of the ‘buy
Australian’ theme on the marketing plans
of multinational companies.

End-of-book: Case studies Q 675

There is no doubt that the launch of Dick Smith
Foods is another successful adventure for Dick Smith
and it has created some disturbance for the multinational
giants. However, in an interview with B&T Weekly,
16 March 2001, Dick Smith himself confessed, ‘I still
tend to agree with the marketing people who say that,
in the long term, the big multinationals will win’.16
We have yet to see the long-term impact of the ‘buy
Australian’ movement in general, and Dick Smith Foods
in particular, in changing consumer inertia.

QUESTIONS
1 | What are the astute marketing opportunities that Dick
Smith identified in establishing Dick Smith Foods?
2 | Identify the major target markets that are most susceptible
to the patriotic appeal of Dick Smith Foods.
3 | What are consumers really buying into when buying
an ‘Australian’ brand? Or, do they really care about
the Australian-ness of a brand? What do you think?
4 | Some critics labelled Dick Smith’s new adventure as ‘nothing
more than a money-making scheme’. What do you think?
5 | Dick Smith Foods placed an ad in national newspapers on
21 and 22 April 2001 headlined, ‘Is Australian ownership of
business simply jingoism?’ The copy of the ad reads:
‘Newspaper journalist, Dennis Shanahan, has been running
a campaign against Dick Smith Foods, claiming that it is
“feeding paranoia” and “jingoism” to promote the
advantages of Australian owned businesses.
‘At the same time Mr Shanahan pushes the advantages
of ‘Australian Made’ especially when promoted by
foreign companies.
THE FIGURES AND EXHIBITS IN THIS CASE STUDY ARE COURTESY OF DICK SMITH FOODS.

‘The reason for this hypocrisy is obvious to most Aussies.
The big foreign companies that exploit the “Australian Made”
logo have enormous advertising clout in the press.
Patriotic Australians are not stupid—we know that while
“Australian made” is good “Australian owned and made”
is even better as the profits stay here creating wealth and
a better future for our children and grandchildren.’ 17
Do you think Dick Smith is hypocritical in making use of
his image of patriotism to brand his products and increase
sales, and denigrate his competitors that are
predominately foreign owned?
6 | Visit the Big Kev’s Limited Web site (www.bigkev.com.au)
and assess its marketing strategy. Building on the same
patriotism appeal, Dick Smith Foods managed to break even
in the first nine months of operation, but Big Kev’s Limited
had a $2.9 million net loss for the financial year 2001 to
2002, compared to a $1.5 million net loss for the previous
year. Compare the marketing strategies of the two
companies and identify the reasons for Big Kev’s failure.18

24

Apple’s renaissance
—the agreement that works
Nitha Palakshappa, Department of Commerce, Massey University,
and Dr Mary Ellen Gordon, Managing Director, Market Truths Ltd

Mal Thompson, managing director of Renaissance Corporation Ltd, sat down to finish
pending paperwork. He has just spent the last few days with management staff from Apple
Computer Australia Pty Ltd. The visit was trouble free and the Australians left happy that
things were going well with the New Zealand distributor. Mal breathed a sigh of relief and
found his thoughts wandering a bit further. The last few years were definitely good to him…
business was good; and, achieving a life–work balance was a continued priority. He smiled
to himself as he realised how much he had changed. ‘I’ve matured and I am nowhere near
the risk taker I was, but I’m still entrepreneurial’, he assured himself. This admission made
him think about all the elements that contributed to the growth within the company and the
success of Renaissance’s agreement with the Australian company.

Background
Renaissance Corporation Limited
Renaissance has been a publicly listed company in New
Zealand since 1968. Though the company has existed
in many forms, its current name was adopted in 1997,
at which time key business concentrations were also
developed. It functions along three key business streams:
(1) distribution, (2) education, and (3) e-business. The
company has built a successful information technology
distribution business with a number of leading
international brands.
Renaissance has, in the past, had exclusive
distribution rights for Apple computer products
in New Zealand. However, the global policy of the
computer manufacturer now prohibits exclusive deals.
Though exclusivity is no longer possible, Renaissance
is still the sole wholesale distributor for Apple locally.
The manufacturer has not moved to cultivate
relationships with other New Zealand distributors
and has expressed no intention to do so in the
future, in spite of the fact that it has done so
elsewhere in the world. Sole distributorship of
Apple products provides Renaissance with a degree
of credibility in the market.

Renaissance achieves economies of scale through the
distribution of multiple brands. The company also has
the distribution rights of brands such as Hewlett Packard,
Microsoft, Epson, Compaq, Toshiba and Techtronics.
Multiple distributorships provide the opportunity for
joint promotions; however, co-marketing is not always
strongly encouraged at the local level.
Conflict of interest between the various distributorships
is avoided by the use of separate product managers and
strong divisional lines, which also help to maintain an
Apple focus. Apple functions as a separate division within
the Renaissance offices. Apple products still benefit from
having access to the other brands that are sold, allowing
for cooperation in an otherwise competitive market.
Education forms a significant part of Renaissance’s
activities, an emphasis that supports Apple’s worldwide
philosophy. Renaissance also plans to develop a new
division to support the exclusive distribution of
educational products imported from the United
Kingdom. This agreement is with a well-known
organisation that currently holds 50 per cent of the
educational software market in the United Kingdom.
A whole new team at Renaissance has been coached
on the Apple ‘way’. Because Renaissance is seen as

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676 Q End-of-book: Case studies

Apple New Zealand, they try to mirror the Australian
operations as much as possible. Apple Australia
considers Renaissance to be its New Zealand office.

Apple Computer Australia Pty Ltd
In order to facilitate its sales, marketing and distribution
network, Apple Computers established various offices
internationally by way of regional offices, subsidiaries
and distribution contracts. Apple Australia is a whollyowned subsidiary of Apple Computers. Apple Australia
is a sales, marketing and distribution organisation that
receives guidelines from Apple Computers in the United
States, which are then shared with Renaissance in
New Zealand. It does not function on a distribution
agreement. Apple Computers previously had its own
distributor in Australia, but adopted the current
operating model from 1981 to 1982.
Morale at Apple Computers and Apple Australia
was low throughout the early 90s, and both
organisations worked hard to rebuild confidence.
As a company, Apple Computers has endured varying
degrees of success over the past decade. It has steadily
rebuilt its reputation and maintained a loyal following
of customers who are truly committed to its products.
This has resulted in fairly large changes within Apple
Computers over the years and a stronger customer
focus. Apple Computers has moved to concentrate
on core technologies with a decreased product range.
Peripherals such as printers and scanners are no longer
manufactured. Other product lines were also culled
during this period. Apple Australia has also undergone
similar changes as a result of this.

Industry-related background
Apple Australia and Renaissance functioned through
the 90s faced with considerable changes in the
information technology environment and significant
reductions in margins. Margin pressures resulted in
business re-engineering—ways to reduce costs and
grow profit.
Now, other external influences include the trend
towards information technology standardisation,
exchange rate fluctuations, and technology
differentiation. Changes to parallel importing
laws in New Zealand could also signal the entry
of new importers, affecting the market structure.
Apple Australia is developing stronger ties with
the universities in Australia, and it is seeking to
increase the number of Apple users within these
institutions. A growing relationship between
universities in Australia and New Zealand
presents an opportunity.

Segmentation and market share
Market share and segmentation are also important for
Renaissance and Apple Australia. Renaissance tends to
exceed Apple Australia in market share. The market
share in the United States has been slightly lower than
the market share in Australia. International Data Group
(IDC) reports are consulted to provide industry-related
information and growth-rate data.1
Renaissance’s quarterly survey measures market share
responses. An industry-based survey also measures the
performance of companies against industry standards.
A key issue is that industry revenue drops easily and
though growth may be satisfactory, margins are often not.
In assessing market segment performance, Apple
Australia examines Renaissance’s financial projections
for each of the market segments and IDC figures for
growth and forecasts. Performance is then measured
against these criteria.

Structuring the agreement
The interaction between Renaissance and Apple
Australia centres on the agreement to distribute
Apple products in New Zealand. The managing
director of Renaissance has played an historical role
in the formation of the relationship between these two
companies. Apple Computers approached CED (a local
New Zealand company dealing in watches at the time) at
a tradeshow in the United States. The current managing
director of Renaissance had a shareholding in CED, and
the relationship progressed from this point.
CED subsequently lost the Apple distribution
business, and the managing director of Renaissance was
personally approached to take over the franchise. His
enthusiasm, drive and innovative approach were, and
still are, considered to be valuable assets. In addition,
Apple Computers were not happy that CED’s board,
that had no experience with computers or the industry,
controlled the distributorship.
Though the relationship is primarily with Apple
Australia, Renaissance also has a few dealings with the
United States. Quarterly reviews are conducted, and
99 per cent of Renaissance’s dealings are with Apple
Australia’s senior management team.
Renaissance has a business division for Apple products
within its organisation structure. The decision to run the
Apple dealership separately was based on the scale of
the Apple business and historical management practice.
Employees within the Apple division are responsible for
both the product and related marketing activities.
The two companies have a standard distribution
agreement that allows Renaissance some control over the

“

End of Book Case Studies

Commitment to the brand

“

has a bigger
impact on the
relationship
with the end user.

New Zealand market and its responsibilities in marketing,
sales and the technical side of the business. Within
this, all of Apples specifications are adhered to. The
relationship is reviewed every few years, dependent
on the management changes within Apple Australia.
Revenue potential is the responsibility of Renaissance,
but these figures are set with some guidance from
Apple Australia. Renaissance consults with Australia
when setting targets and basically works on one-tenth
of Apple Australia’s business. Apple Computers in the
United States occasionally imposes targets.
A major influencing factor in the relationship has
been the fact that Apple, on a worldwide scale, has
moved to non-exclusive agreements. Apple Computers
changed the distribution policy, from around 1997 to
1998. The mandate for the change in agreement
structure originated from the United States, and it was
based on the fact that many of the agreements in Asia
were not working effectively. This re-engineering of
dealerships has changed the supply model and its whole
range of business. In line with this global policy change,
Renaissance continues to be the sole distributor of
Apple products though they no longer have an
exclusive agreement.
After lengthy discussions, Renaissance were granted
a new distribution agreement but the word ‘exclusive’
is no longer used. The distribution agreement between
the two companies is for New Zealand only, though the
product bundles that are made for the local market
would have a reasonable level of saleability in Australia.
Renaissance is considered to be a value-added
distributor performing sales and marketing functions
for Apple Computers in New Zealand. The aim of Apple
Australia is to maximise Apple’s working potential in
New Zealand, and ensure that customer satisfaction
is optimised. Apple Australia continues with the
distribution agreement because an excellent level
of service is provided.

End-of-book: Case studies Q 677

The main activities conducted by Renaissance are
channel management, distribution, marketing, general
brand awareness, major account management,
development of new market segments and development
of new channels. This includes purchasing and shipping,
a financial relationship with Apple, and technical
support. All activities are considered important and
essential in maintaining customer relationships.
Renaissance provides the greatest contribution in the
sales and after sales areas, debtor collection, Internet
solutions and customer service. The product remains
the responsibility of Apple Computers.
Though Apple Australia is responsible for ensuring
product and part availability, local customer satisfaction
is based on the service provided by Renaissance.
The level of experience that Renaissance has with
Apple products is very high, and the enthusiasm of
key employees is also considered crucial in maintaining
an adequate level of sales.
On the whole, it is evident that the relationship
between the two companies has played a large role in its
continuance. However, this has been supported by sound
marketing mix elements.

Product
The ‘devotion’ that many people demonstrate to Apple
products is considered to have been crucial to Apple’s
worldwide recovery—people who use Apple products
appear to have a wholehearted belief in them.
Commitment to the brand has a bigger impact on the
relationship with the end-user. This relates to image,
reaching targets, quality of service and the resurgence
of Apple around the world.
Product restructuring has resulted in new products
being released every six months. The iMac and other
innovative products have had a big influence on
Apple’s turnaround. iMac is a leader in terms of
shape, colour and uniqueness, which appeals to a
certain group of individuals. Product innovations
are continual and secrecy surrounds the development
process. Apple Australia does not receive new product
information in advance, which often impacts on key
account management.
The product is currently sourced directly from
Singapore, and distribution becomes the responsibility
of Renaissance, once it reaches New Zealand warehouses.
This change in supply has resulted in a superior level
of service for the New Zealand market. The product can
now be purchased on a build-to-order basis (which had
a major influence on the schools market in New
Zealand), and stocks are not carried in large quantities.

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End-of-book: Case studies Q 679

Senior management also

“

“

support the channel

relationship

and Apple Australia

is in touch

constantly to ensure that the

supply chain

is sustained.

tailored for both consumer and professional markets.
Desktops are vital and would account for 90 per cent of
the business. Renaissance has a high level of experience
in all of these product areas—except servers, where
continual improvement is required.
A simple ‘in-house’ product quadrant has been
established. This consists of a desktop and portable
in each of the consumer and professional markets
(see Figure 9). Renaissance is most experienced in the
professional desktop range, and it is least experienced in
the professional portable and software areas. The market
for portables has been developed extensively, and the
contribution of portables is likely to increase in the near

Distribution
Renaissance sells Apple products through an established
indirect channel, and it is, therefore, distanced from the
consumer. Contact with end-users is through tradeshows,
brochures and seminars. The divisions within Renaissance
essentially mean that a reseller may see two sales people,
one for Apple products and one for other brands that
are sold through the company.
The company trades with a number of authorised
resellers throughout the country. It deals with about
1500 computer retailers on a regular basis. Renaissance
provides strong support to channel members, but it does
not generally support the public in the first instance.
Many resellers would be unhappy if direct trading
relationships were established with their customers.
Any problems that cannot be resolved through the
channel are referred back to the Apple support
centre within Renaissance.
While sales are typically conducted through resellers,
schools are often approached directly. Experts are
bought in to support resellers when necessary, and
direct support is also provided to the schools in the
form of professional development.
The relationship within the distribution channel
is maintained through customer service personnel,
account managers, product managers and the market
manager. Senior management also support the channel
relationship and Apple Australia is in touch constantly
to ensure that the supply chain is sustained.
Marketing and account management in New Zealand
are primarily the responsibility of Renaissance. The

Figure 9 The Apple computer project quadrant
Consumer

Professional

Portable

future. The iMac is an important product in the
consumer education sector for desktops.
Apple Computers also has a specific market segment
focus. Major segments are education, retail, publishing
and commercial. This is again reflected within the local
New Zealand market. Renaissance has most of
its experience in education and publishing, while
Apple Australia has the least of its experience
in retail. The contribution of Renaissance to the
education market in New Zealand is also very high.
The government is an increasingly important segment
in the Australian market.
Renaissance has a complaints procedure in place in
order to maintain a strong customer focus. In addition,
customer surveys and research are conducted with
regard to the service offered or such things as the
image of the company. Feedback is also provided at
roadshows and via a Web site, which is maintained
by an independent Apple product advocate.

iMac

G4

Desktop

Products can also be built to order through the online
store. This service has been trialled in Australia but it is
not offered in New Zealand.
Mass retail has also been utilised in the Australian
market with less than satisfactory results. The retailer
and Apple were unable to meet each other’s
expectations, consequently consumers suffered.
The relationship with mass merchants has been
maintained and technical staff and account managers
provide training. Based on this experience Renaissance
is hiring one person to be solely responsible for the
training of mass merchants in the New Zealand market.
The Apple Education Centre (within Renaissance)
will also provide training for the entire channel.
Product quality has been an important factor in the
successful ‘re-birth’ of Apple usage. Products included
in this agreement are desktops, laptops, servers,
powerbooks and spares. Portables and desktops are

iBook

Powerbook

experience of Renaissance is high in these areas,
and it is recognised that Apple Australia would not
be able to provide the same level of channel support
in New Zealand.
As previously mentioned, mass retail has been trialled
in the Australian market but it did not produce good
results. Both Harvey Norman and Apple could not meet
each other’s expectations and consequently customers
suffered. A relationship has been maintained with mass
merchants but the large resource investment and training
required for this strategy make it a prohibitive option.

Promotion issues
Internationally, Apple Computers utilises many forms
of advertising and media to promote its product range.
Brand awareness has been enhanced through product
placements in local New Zealand programmes such as
Shortland St, 5:30 with Jude, and Ice TV. Overseas,
placements have appeared in Drew Carey and Sex in
the City. Placements are selected on the basis of fit with
the company image. However, in line with international
Apple policy, Renaissance does not pay for any of these
placements. Apple Computers conducts a lot of Web
advertising in its other overseas markets. This has not
been a major emphasis in New Zealand. However,
overseas marketing efforts and general consumer
perceptions also affect the level of local sales. There has
also been some local promotion in conjunction with Xtra
(Telecom New Zealand’s Internet service provider).

People—nurturing the relationship
An effort is made to maintain strong relationships
between the two companies. An employee in Apple
Australia is responsible for the overall relationship.
Renaissance predominantly deals with two people in
the Australian office. It has detailed knowledge of what

products are sold in the Australian environment,
at what prices and what margins.
The two companies share good communication,
and have a participative agreement. This includes daily
email contact, phone conversations and face-to-face
communication each quarter. The Renaissance team
attends meetings in Australia once a quarter, and its top
management attend Apple Australia executive meetings.
Communications with the Apple group are strongly
emphasised at a strategic level.
Shared values, the focus and commitment of key
individuals, and a high cultural ‘fit’ provide a strong
foundation for this relationship. This is demonstrated
throughout the organisation. According to the managing
director of Renaissance:
‘…The whole culture…the way I do business is all
tightly relationship based…
‘It is an open relationship where everyone is treated
as though they are one of the “group”—Renaissance
effectively became “Apple NZ”. Comments made by
employees of the two companies reflect this:
“…We are all treated like part of Apple and are not
treated as a customer…part of the organisation…very
free and open kind of relationship…
“…The supplier–customer relationship would be
one of the most open I have experienced before…
“…I see this relationship as better than anything
I’ve ever come across…” ’
Trust, total and open disclosure, and long-term
objectives are considered fundamental.
Personnel are considered to be an integral part
of the success of Apple Computers. Staff require an
understanding of Apple products, and the expectations
of consumers. For these reasons Renaissance also
specifically recruit a ‘certain’ kind of person to work
on the Apple account.

Meeting expectations
General outcomes sought by the partners in this
relationship are market share, sales volume, profitability
and strong interactions within all levels of the
organisation. Meeting targets while maintaining the
Apple name, developing a relationship with the enduser and maintaining the quality of service, including
order taking and order filling, are also important.
Renaissance has achieved all these satisfactorily.
Success of the relationship is, in part, attributed
to the ability of Renaissance and Apple Australia to
generate demand and their ability to recruit and retain

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Page 680

680 Q End-of-book: Case studies

dedicated staff. The entrepreneurial nature of key staff
at Renaissance has also been important in achieving this.
As summarised by the finance director of Renaissance,
‘What is becoming more important is a strong
information system…leadership committed to
the success of the relationship and…focus on
the customer…’
Renaissance’s financial services division uses
its financial statements to look at risk assessment,
profitability and the success of the company. In some
financial years Renaissance has delivered in excess of
100 per cent in quota performance. Sales volume is
considered to be the physical volume, in terms of both
the transactions and the dollar measurement of units
sold. Quarterly targets are also assessed.
Outcomes such as image are not measured
formally, but through general feedback from the
channel and end users.
Overall, Apple Australia has been highly satisfied with
the performance of Renaissance, and do not demonstrate
any desire to make changes. As summarised by the
national manager of education at Apple Australia:
‘…Apple Australia and Renaissance have had to
struggle through the 1990s with dynamic changes in
the IT environment and significant reduction in

End of Book Case Studies Q 681

endnotes
margins…Renaissance has done a pretty good job
of getting hold of those issues and moving forward
with them…’
The success of Renaissance is, in part, attributable
to the emphasis on Apple. As the managing
director of Renaissance notes, ‘We became
Apple New Zealand’.

QUESTIONS
1 | Renaissance appears to have retained an arrangement that
captures the spirit of an exclusive agreement. What factors
have played a role in this?
2 | What general trends can you identify that are likely to
impact on Renaissance and Apple?
3 | How important are mainstream promotional activities for
Apple Computers?
4 | Can you identify any new market segments as
potential targets?
5 | With the financial information provided, evaluate
the marketing mix and strategy elements discussed
in this case.
6 | Are there any general suggestions you would make to
ensure the continuance of this distribution agreement?

CASE STUDY 20
1. Clare McGregor, Marketing Communications
Manager, Bangarra Dance Theatre, Sydney Australia,
http://www.bangarra.com.au, accessed November, 2002,
updated continually.

Gary Stevens, ‘All Time Chart Over $10 Million’, Movie
Marshall, Australia, 2003, http://www.moviemarshall.com,
accessed 11 January 2003.

26. Marc Berman, Media Week, 13 March 2000.
4. ABC News Business Archive, ‘Hasbro Inks
“Pokémon” Deal’, 26 May 1998 (more.abcnews.go.com).

2. Clare McGregor op. cit.
5. Scott Hume, Adweek, 14 September 1998.
3. Peter C. White and Associates, September 1999,
‘The Red and the White’, Communications
Department, The QBE Sydney Swans, Sydney
Australia, http://sydneyswans.com.au, accessed
November 2002, updated continually.
4. ‘AFL’s Ugly Ducklings to Get the Boot’, Sydney
Morning Herald, 12 October 1992.
5. ‘AFL’s Ugly Ducklings to Get the Boot’, Sydney
Morning Herald, 12 October 1992; ‘Sydney’s Red and
White Fairytales Come True’, Sydney Morning Herald,
23 September 1996.
6. Communications Department, The QBE Sydney
Swans, Sydney Australia, http://sydneyswans.com.au,
accessed November 2002, updated continually.

25. Philllip Van Munching, Brandweek,
11 October 1999.

6. Vincent Alonzo, Incentive, January 2000, pp. 39–40.
7. Reuters, ‘Pokémon:The First Movie Triumphs
Overseas’, 17 April 2000 (www.excite.news.com).

CASE STUDY 22
1. Anon., ‘Instant to Shrink as Flavour Grows’,
Retail World, 26 June–7 July 2000, pp. 42–44.
2. ‘Coffee Pioneer Finds the Right Blend’, Australian
Financial Review, 20 November 2002, p. 39.
3. ‘Instant Wake-Up Call from Nestlé’, B&T Weekly,
18 October 2002, p. 1.

8. Box Office Report, 2002 Box Office USA, 2003,
http://www.boxofficereport.com/ybon/2001gross.shtm,
accessed 11 January 2003.

4. ‘Glut of “Me-too” Products Stunts Pure Coffee
Growth’, Retail World, 15–26 May 2000, p.19.

9. Joyce Millman, ‘The Secret World of Pokémon’,
6 July 1999 (www.salon.com).

5. ‘Category Review: Coffee Market’, Retail World,
14–25 May 2001, pp. 23–28.

10. Tim Larimer, Howard Chau-Eoan, Time,
22 November 1999.

6. Anon., ‘Instant to Shrink as Flavour Grows’, Retail
World, 26 June–7 July 2000, pp. 42–4.

11. Joan Raymond, American Demographics,
February 2000.

7. Anon., ‘Instant to Shrink as Flavour Grows’, Retail
World, 26 June–7 July 2000, pp. 42–4.

12. Tim Larimer, Howard Chau-Eoan, Time,
22 November 1999.

8. Vittoria, ‘National winner–Entrepreneur of the
Year—Retail, Consumer and Industrial Products’,
Vittoria Coffee Media Release, 26 October 2001.

7. Clare McGregor op. cit.
8. ‘Sydney Swans and Bangarra Dance Theatre
Become “Cousins”’, Sydney Swans and Bangarra
Dance Theatre Press Release, 31 July 2001.
9. David Ford, Lars-Erik Gadde, Haken Hakansson,
Anders Lundgren, Ivan Snehota, Peter Turnbull,
David Wilson, Managing Business Relationships, John
Wiley & Sons, Chichester UK, 1999, pp. 33–34.
10. J. Johanson and F. Wiedersheim-Paul, ‘The
Internationalisation Process of the Firm, Four
Swedish Case Studies’, Journal of Management Studies,
October 1975, pp. 305–322.
11. David Ford, Lars-Erik Gadde, Haken Hakansson,
Anders Lundgren, Ivan Snehota, Peter Turnbull,
David Wilson, Managing Business Relationships, John
Wiley & Sons, Chichester UK, 1999, p. 78.

13. Scott Hume, Adweek, 14 September 1998.
14. ABC News Business Archive, ‘Hasbro Inks
“Pokémon” Deal’, 26 May 1998 (more.abcnews.go.com).
15. Phillip Van Munching, Brandweek, 11 October
1999.
16. Tim Larimer, Howard Chau-Eoan, Time,
22 November 1999.
17. Anon, ‘FTA TV Woos Kids With New Show
Smorgasbord’, B&T Marketing and Media [Online],
Australia, 8 November 2002, http://www.bandt.com.au/
articles/14/0c012514.asp, accessed 11 January 2003.
18. Discount Store News, 21 February 2000.

12. David Ford, Lars-Erik Gadde, Haken Hakansson,
Anders Lundgren, Ivan Snehota, Peter Turnbull,
David Wilson, Managing Business Relationships, John
Wiley & Sons, Chichester UK, 1999, p. 47.
13. Students should not contact Bangarra Dance
Theatre by telephone. For further information,
please visit the Web site (www.bangarra.com.au).
If the Web site does not answer your questions,
please write to Bangarra Dance Theatre, Case Study,
Pier 4 Hickson Road, Walsh Bay, NSW, 2002.
CASE STUDY 21
1. Reuters, ‘Pokémon The First Movie Triumphs
Overseas’, 17 April 2000 (www.excite.news.com).
2. Vincent Alonzo, Incentive, January 2000,
pp. 39–40.
3. Box Office Report, 2001 Box Office USA, 2003,
http:www.boxofficeriport.com/ybon/2001gross.shtml,
accessed 11 January 2003; Paul Boschen and

19. Joan Raymond, American Demographics,
February 2000.
20. Simon Leet, ‘Pokémon Consumer Culture’, article, College of Arts and Sciences, Cornell University,
2002, http://www.arts.cornell.edu/knight_institute/public
ations/Discoveries%20Fa2002/07.,pdf, accessed
11 January 2003.
21. National Toy Council, ‘Understanding Toy
Trends’, London, UK, www.btha.co.uk/publications/
ntc/toytrends.html, accessed 11 January 2003.
22. Joan Raymond, American Demographics,
February 2000.
23. Joyce Millman, ‘The Secret World of Pokémon’,
6 July 1999, www.salon.com.
24. Tim Larimer, Howard Chau-Eoan, Time,
22 November 1999.

9. ‘Glut of “Me-too” Products Stunts Pure Coffee
Growth’, Retail World, 15–26 May 2000, p.19.
10. ‘Category Review: Coffee Market’, Retail World,
14–25 May 2001, pp. 23–28.
11. ‘Lavazza Training Popular’, Retail World,
25–26 May 2000, p. 23.
12. (a) Young singles: head of household is aged
under 45, respondent is single, and household has no
children under 16; (b) Young couples: head of household is aged under 45, respondent is married/de
facto, and household has no children under 16; (c)
Young parents: head of household is aged under 45,
and household has child(ren) under 16 present (also
includes single parents); (d) Mid-life families: head of
household is aged between 45 and 64, and household
has child(ren) under 16 present; (e) Mid-life households: head of household is aged between 45 to 64,
and household has no children under 16; (f) Older
households: head of household is aged 65 or older
or retired.
13. Roy Morgan Single Source Study Ju1y 2001–June
2002, ‘What Sort of Person Buys Fresh Coffee’, Roy
Morgan Research, Retail World, 15–26 May 2000, p. 23.
14. Thomas Liddle, Enterprisewatch, ‘How to
Become a Starbucks Millionaire, Cup by Cup’,
7 February 2001, http://www.enterprisewatch.com.au/r/
article/jsp/sid/760820, accessed 29 October 2002.
15. Thomas Liddle, Enterprisewatch, ‘How to
Become a Starbucks Millionaire, Cup by Cup’,
7 February 2001, http://www.enterprisewatch.com.
au/r/article/jsp/sid/760820, accessed
29 October 2002.

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16. ‘8655.0 Cafés and Restaurants Generate Over
Seven Billion Dollars in Income’, Australian Bureau
of Statistics, Media Release, 19 September, 2000.
17. ‘Fix me a Strong One: Black Gold’s our Drug of
Choice’, Sydney Morning Herald, 3 October 2001, p. 3.
18. Kerry Micallef, ‘Capturing the “On-The-Go”
Coffee Market’, Retail World, 19–30 August 2002, p. 35.
19. Kerry Micallef, ‘Capturing the “On-The-Go”
Coffee Market’, Retail World, 19–30 August 2002, p. 35.
20. Robyn Stubbs, ‘Coffee Chains Gain Ground’,
Australian Financial Review, 12 July 2002, p. 21.
21. ‘Market Reaches Boiling Point as US-Style
Coffee Houses Pour In’, Sydney Morning Herald,
17 January 2002. p. 3.
22. Stephen Wisenthal, ‘Coffee Club Foes Full Steam
Against Rivals’, Financial Review, 2002.
23. ‘Market Reaches Boiling Point as US-Style Coffee
Houses Pour In’, Sydney Morning Herald, 17 January
2002, p. 3.
24. Larissa Kaye, ‘Starbucks Infiltrates Aussie Café
Culture’, B&T Weekly, 23 July 2001.
25. Maria Ligerakis, ‘Starbucks Brews Aussie
Expansion’, B&T Weekly, 18 April 2001.
26. John Sterlicchi, ‘WiFi on Menu at Starbucks’,
The Australian IT Section, 27 August 2002.
27. John Sterlicchi, ‘WiFi on Menu at Starbucks’,
The Australian IT Section, 27 August 2002.
28. ‘Starbucks Mixes Beans with Bucks’, B&T Weekly,
2 October 2002.
29. Rosemary Ryan, ‘Starbucks Brew Beans with
Borders Books’, B&T Weekly, 27 November 2001.
30. Larissa Kaye, ‘Starbucks Infiltrates Aussie Café
Culture’, B&T Weekly, 23 July 2001.
31. ‘Starbucks Mixes Beans with Bucks’, B&T Weekly,
2 October 2002.
32. Robyn Stubbs, ‘Coffee Chains Gain Ground’,
Australian Financial Review, 12 July 2002, p. 21.
33. Robyn Stubbs, ‘Coffee Chains Gain Ground’,
Australian Financial Review, 12 July 2002, p. 21.

36. Danielle Veldre, ‘McDonald’s Brews Strong Push
into Café Market’, B&T Weekly, 1 July 2002.

http:www.dicksmithfoods.com.au/dsf5/news_items/index.htm,
accessed 16 December 2002.

37. ‘For Coffee Growers, Not Even a Whiff of Profits’,
Business Week, New York, 9 September 2002, p. 110.
See for example http://www.resistance.org.au/zine/
scumbag2.html.

8. Australian Broadcasting Corporation, ‘Dick Smith’s
Tasty New Adventure’, 23 April 2000, http://www.abc.
net.au/landline/stories/s119778.htm, accessed
7 February 2003.

38. James Drinnan and David Peasley, Rural
Industries Research & Development Corporation,
‘Coffee’, www.rirdc.gov.au/pub/handbook/coffee.html,
accessed 22 August 2002.

9. Ausflag, ‘Dick Smith Defaces Australian Flag’ Media
Release, 30 January 2001, www.ausflag.com.au/debate/
amr/amr44.html, accessed 7 February 2003.

39. James Drinnan and David Peasley, Rural
Industries Research & Development Corporation,
‘Coffee’, www.rirdc.gov.au/pub/handbook/coffee.html,
accessed 22 August 2002.
40. Industry Search, ‘The Cult of the Ingredient:
Consumer Sophistication Drives Drinks Innovation’,
www.industrysearch.com.au/features/drinks.asp, accessed
22 August 2002.
41. ‘US Coffee Drinking Reaches Highest Level in
Decade’, Nation’s Restaurant News, 1 July 2002, p. 36.
42. ‘Coffee’, Nation’s Restaurant News, 19 August 2002,
pp. B1–B6.
43. ‘Decaffeinated Continues to Grow’, Retail World,
10–21 May 1999, p. 16.
44. ‘How Can Nescafé Fight off Real Coffee Culture?’,
Marketing London, 15 August 2002, p. 11.
CASE STUDY 23
1. Dick Smith Foods, ‘Mission Statement’, 2003,
http://www.dicksmithfoods.com.au/dsf/index.php?d=main
&p=mission, accessed 7 February 2003.
2. Dick Smith Foods, ‘Dick’s Policy on Foreign
Investment’, 2001, http://www.dicksmithfoods.com.au/dsf5
/foreign_investment.htm, accessed 22 November 2002.
3. Australian Food and Grocery Council, ‘Dick Smith’s
Welcome But Not At Other’s Unfair Expense’, 23 July
1999, www.afgc.org.au/Documents/mr026_99.htm,
accessed 7 February 2003.
4. Australian Made Campaign Limited, Australian
Made, Issue 2, January 2000.
5. Drs. John Dawes and Rachel Kennedy, ‘Success
Will Depend on Financial Commitment’, B&T Weekly,
31 March 2000, p. 16.

34. Danielle Veldre, ‘Gloria Jean’s Winter TV Push’,
B&T Weekly, 12 June 2002.

6. A Current Affairs, ‘Supermarket Stakes: Where
Loyalty Wins’, 3 July 2001, http://aca/ninemsn.com.au/
stories/677.asp, accessed 7 February 2003.

35. Robyn Stubbs, ‘Coffee Chains Gain Ground’,
Australian Financial Review, 12 July 2002, p. 21.

7. Dick Smith Foods, ‘Dick Smith Answers “Australian
Made” Newsletter Criticism’, 29 February 2000,

10. Ausflag, ‘Dick Smith Defaces Australian Flag’
Media Release, 30 January 2001, www.ausflag.com.au/
debate/amr/amr44.html, accessed 7 February 2003.
11. Ausflag, ‘Dick Smith Defaces Australian Flag’
Media Release, 30 January 2001, www.ausflag.com.au/
debate/amr/amr44.html, accessed 7 February 2003.
12. G. O’Connor, ‘Letter to the Editor’, Sun-Herald,
30 April 2000, as quoted in Dick Smith Foods, ‘ETA
Peanut Butter Cuts Its Price 80 Cents to Compete’,
12 May 2000, http://www.dicksmith.com.au
/dsf5.news_items/index.htm, accessed 16 December 2002.
13. Maria Ligerakis, ‘Dick and Goliath’, B&T
Marketing & Media [Online], 16 March 2001,
http://www.bandt.com.au/articles/84/0c002e84.asp,
accessed 7 February 2003.
14. Larissa Kaye, ‘Dick Knees Nutri-Grain Where It
Hurts’, B&T Marketing & Media [Online], 13 November
2000, http://www.bandt.com.au/articles/e8/0c002fe8.asp,
accessed 7 February 2003.
15. Dick Smith Foods, Media Release: ‘Great Jelly
Tug of War’, 1 December 2000, http://www.dicksmith
foods.com.au/dsf5/media_releases.htm, accessed
25 November 2002.
16. Maria Ligerakis, ‘Dick and Goliath’, B&T
Marketing & Media [Online], 16 March 2001,
http://www.bandt.com.au/articles/84/0c002e84.asp,
accessed 7 February 2003.
17. Dick Smith Foods, ‘Is Australian Ownership of
Business Simply Jingoism?’, 2001, http:www.dicksmith
foods.com.au/dsf5/ads/media-ad-april-21-22.htm, accessed
2 December 2002.
18. SHAW Stockbroking, ‘Big Kev Excited About Turn
Around’, 11 September 2002, http://www.egoli.com.au/
newsandviews/archives/23734.asp, accessed 7 February 2003.
CASE STUDY 24
1. IDC is part of the IDG (International Data Group),
an IT media and research company. IDC provide
technological intelligence, industry analysis and
strategy advice to companies involved in IT. They
have offices worldwide. For more information refer
to http://www.idg.com.



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