Finline case historyMs. Yambedi is the

Finline case history
Ms. Yambedi is the Marketing director of Finline, a small financial services company. Ms. Yambedi is defining
the company’s marketing plan, or to be precise, she is deciding which products to offer to the clients, which
tariffs to apply and how to advertise the services offered by the company. As far at the latter is concerned,
every year the company’s president designates a budget that Yambedi can spend on marketing. For 2004 the
budget is $100,000. The objective that Yambedi proposes in the marketing plan is to maximise revenues
derived from the number of customers (estimated at $1000 per client).
Yambedi must decide what type of media to use, which marketing message to put across, in which countries
to launch the advertising campaign and which target audience to aim at. There are various factors which can
influence the success of the advertising campaign: above all the receptivity of the clients, which strongly
depends on the global economic climate; secondly the ability of the media used to reach a high number
potential clients, which can for example be measured with indicators such as the number of newspapers sold
or the number of television viewers or radio listeners; and finally, the aggressiveness of the advertising
campaigns launched by its competitors. Following a careful analysis of the sales data of past years and
information about its present clients, Yambedi has identified three possible alternatives:
• The first is an advertising campaign carried out with the main newspapers. This alternative costs
$88,000 and has a fairly certain return as the number of selected newspapers sold is high and quite
stable, and Yambedi could precisely calculate a rate of expected return. With this method an average
number of 10,000 clients per year can be expected, with a standard deviation of 3,000 per year.
• The second alternative involves advertising on an internet site of the company, where various services
are offered. The cost of this method is higher, at $100,000 which is mainly due to the design and
maintenance of the site. The expected return is higher - 18,000 clients per year, but uncertainty is high
because the number of hits to expect, and their possible return is not precisely known (the standard
deviation is 15.000).
• Lastly, Yambedi has identified the possibility to use specialist newspapers and conventions of the main
operators. The expected value of the number of clients is 8,000 per year, with a fairly high variability of
5,000 per year, due to the lack of knowledge of these channels of communication. The cost of this
method is $66,000.
Yambedi has actually identified a fourth alternative, which seems to be in a dominant position as far as the
expected returns and level of risk is concerned (expected return value of 25,000 clients per year and standard
deviation of 10,000 per year). This is to associate the company’s image with a company of international
standing, in particular Beldiline, and to transmit the advertising message in connection with those released by
the larger company. This alternative has, however, a high cost of $250,000, well over the budget available.
1. Highlight the objectives, constraints and limits of the Yambedi’s decision-making process.
2. Reconstruct Yambedi’s decision-making process, highlighting important variables, their causative
relationships and finally, the alternatives generated.
3. Which criteria might Yambedi use for her decision?
4. Suppose that Yambedi wants to weigh up the expected value with the risk of each alternative, which
approach and thus which alternative will she choose?
5. In your opinion, is it possible, with some modifications to the current decision-making process, for
Yambedi to consider the alternative of the partnership with Beldiline? If yes, what modifications are
necessary and in what conditions is it possible to carry out this campaign? What alternative would you
choose if the latter was possible?