By Terence R. Nevett
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Extra resources for Cases in Advertising Management
Cycles had some excess capacity on its assembly lines for Ulysses-the company's highvolume bicycle brand. Ulysses, a largely unadvertised brand, had an extremely positive image among users in the urban working-class and rural markets, due in part to its reputation for quality and to its venerable history, which dated back several decades. However, in recent years Ulysses had been subject to extreme pricecompetition from leading national brands such as Hero and Atlas. I. Cycles wanted to launch a smaller version of its Ulysses roadster aimed at the school-going youth in these markets.
Instead they have tried to generate more ''commercial anniversaries,'' such as Secretary's Day, on which it would be appropriate to buy flowers. Page 13 Heavy concentration on anniversaries and special occasions, when prices are generally raised, has led to unfavorable public perceptions of florists generally and complaints about price gouging. Flowers are a discretionary purchase. As long as promotional efforts are focused on special occasions, flowers must compete with other ways of marking those occasions.
Even allowing for the effects of inflation, agency managements faced with the need to reduce staffing levels after the loss of a major account have little fat left to cut. Richard Thomas, president of the New York based Englander agency, pondered this fact as he considered what action to take following the loss of a major cosmetic account which, in the previous year, had accounted for about $25 million of the agency's $115 million billings. Even before losing the account, the agency's 193 employees had accounted for about 65 percent of Englander's operating costs.