George Stein sat in his large office overlooking Chicago’s Michigan Avenue. As CEO of Gold Coast Advertising, he seemed to always be confronted with one problem or another. Today was no exception. George had just come out of a long meeting with Jim Gerard, head of the board for the small advertising agency. Jim was concerned about a growing problem with lowered sales expectations and a decreasing customer base. Jim warned George that something had to be done quickly or Jim would have to go to the board for action. George acknowledged that sales were down but attributed this to general economic conditions. He assured Jim that the problems would be addressed immediately. As George pondered his next course of action, he admitted to himself that the customer base of GCA was slowly decreasing. The agency did not quite understand the reason for this decrease. Many regular customers were not coming back, and the rate of new customers seemed to be slowly declining. GCA’s competitors seemed to be doing well. George did not understand the problem. What Do Customers Want?
GCA was a Chicago-based advertising agency that developed campaigns and promotions for small and medium-sized firms. Its expertise was in the retail area, but it worked with a wide range of firms from the food service industry to the medical field. GCA competed on price and speed of product development. Advertising in the retail area was competitive, and price had always been important. Also, since retail fashions change rapidly, speed in advertising development was thought to be critical. George reminded himself that price and speed had always been what customers wanted. Now he felt confused that he really didn’t know his customers. This was just another crisis that would pass, he told himself. But he needed to deal with it immediately. 1. What is wrong with how Gold Coast Advertising measures its quality? Explain why Gold Coast should ask its customers about how they define quality. 2. Offer...
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