(Solved by Humans)-Being selected to manage a major advertising account is a

Question

Being selected to manage a major advertising account is a difficult but enriching process. For instance, consider the case of Atlanta-based Charter Behavioral Systems. Charter is the largest provider of alcoholism and depression treatment services in the United States. The goal was to select an agency to handle a $20 million television advertising account. Charter identified some basic goals and developed a selection process that included the criteria to use in the screening process. The six agencies identified for initial screening were McCann Erickson, BBDO, Rubin Postaer, Carat ICG, Tauche Martin, and Bates USA. The initial screening process was based on the following items:

• Size
• Capabilities
• Credentials and references
• Documented experience and past successes

Tauche Martin was dropped from the list because it was too small. Although the management team at Charter believed the staff at Tauche Martin consisted of some very bright people, the size of the account would have overwhelmed the firm. Bates USA was rejected, because Bates? major client was Korean. A recent lag in the Asian economy caused the leaders of Charter to fear that Bates might be forced to close its Atlanta office if it lost its Korean client. Charter eliminated another agency based on reference checks. From television station reps to media buyers, the consistent word was ?run!? At the end of the initial screening process, two agencies remained: Rubin Postaer and Carat ICG.

Rubin Postaer is a $550 million full-service agency based in Los Angeles. The firm is known primarily for work with Honda, Charles Schwab, and <emphasis>Discover</emphasis> magazine. Carat ICG is a $600 million agency with clients such as Ameritech, Midas, Primestar, and DHL Worldwide.

To decide between Rubin Postaer and Carat ICG, Charter asked each to make a creative pitch addressing a series of 10 questions. They were further instructed to think of it as a ?mock buy? in the Atlanta market. The companies were asked to provide their projected list of media buys and the rationale for the buys. The most challenging aspect of the creative pitch requirement was a roundtable discussion with at least five of the agency?s media buyers. Although each agency?s management team could be present, the managers were told not to answer questions posed to the buyers.

Carat ICG included employees in the final presentation who were not going to be part of the account team. Although Charter?s management team felt that it was flattering to have Carat ICG?s chairman present for the 3-hour presentation, Charter believed ICG?s approach was more of a sales presentation than a mock media buy.

ICG demonstrated a solid command of the strategies the agency believed Charter should use in the Atlanta market. Unfortunately, ICG skimped on some logistical details. Charter?s leaders also thought that when ICG presented the mock buy, its representatives were quick, superficial, and had not spent a great deal of time laying out a total approach. On the positive side, ICG?s senior vice president Jim Surmanek led the agency?s presentation. Surmanek, the author of a media textbook, knew the media issues extremely well. In the final evaluation, Charter concluded ICG clearly was superior at developing an advertising strategy. The agency?s recommendations highlighted the company?s deep understanding of Charter?s business.

In contrast, Rubin Postaer made a presentation using employees who would be servicing the account. Chairman Jerry Rubin did not attend the meeting, although he did meet with Charter?s management briefly to assure them of his commitment. Charter felt Rubin Postaer made a serious mistake during the presentation. The presentation team did not bring in a buyer for the direct-response media. ICG did. At the same time, Rubin?s vice president of spot buying, Cathleen Campe, grasped quickly what was most important. Campe flew in buyers from Chicago, New York, and Los Angeles to assist in the presentation. These buyers spoke often, expressing their views. Charter concluded that Rubin was more powerful in ?branding? its media style with a label called ?active negotiation.? Rubin?s basic philosophy was that the toughest negotiations begin after buying the media time. Rubin made the claim that the agency was willing to spend more time monitoring media purchases than making the actual purchases. This advantage was substantiated by all of the references.

(1)??????? Which agency should Charter Behavioral Systems hire? Justify your answer.

(2)??????? Should Carat ICG do anything differently the next time they make a presentation? Why or why not?

(3)??????? Should Rubin Postaer do anything differently the next time they make a presentation? Why or why not?

(4)??????? Should "fuzzy" variables like trust and confidence be the deciding factor in choosing an advertising agency? Why or why not?