School of Journalism

UNIVERSITY OF MISSOURI-COLUMBIA	



                                       

                             WBUZ'S SALES DILEMMA *



                       Brewery or Hospital Commercials?



     WBUZ's general manager John Glover was spending his evening

watching the Springfield Hornets, the Class AA affiliate of the

Minneapolis Twins.  Glover was having a good time, primarily because

the Hornets were winning, so he bought his third beer from a young

vendor and slouched down to enjoy the game.  The Hornets were also a

big winner for WBUZ-AM, which broadcast all of the Hornet's games, as

it had for the past 22 years. 

     WBUZ was doing very well in the ratings.  It had gotten a solid

6.5 12+ share 6:00 a.m.-12 Midnight, Monday-Sunday, in the latest

winter Arbitron, which gave the station an overall number-three rank

position in the market.  In the most recent summer Arbitron, WBUZ had

tied for first place with a 9.0 12+ share, due largely to its

broadcasts of the Hornets.  WBUZ was the town's leading news and

sports radio station; its main competitors were a Contemporary Hit

and a Country Music station. 

     A major sponsor of the WBUZ baseball games was the Barrel

Brewery, the largest company in Springfield, a town of 95,000.  The

brewery employed more people than any other single employer in

Springfield.  The brewery owned the Hornets and was consistently the

largest advertiser on WBUZ, including partial sponsorship of the

Hornets broadcasts and regular spot schedules throughout the year. 

     John Glover had been general manager of the station for the past

ten years.  He modeled the programming of the station after KMOX

radio, the AM news-talk powerhouse in nearby St. Louis.  Glover did

all that he could to see that the station got heavily involved in the

community.  He was proud of the station's solid reputation for

community leadership and for being Springfield's most credible source

of news and information. 

     Unfortunately, one of the biggest social problems in Springfield

was a higher-than-national-average alcoholism rate.  Considering the

high alcoholism rate, Glover sometimes felt uneasy that the station's

largest advertiser was the local brewery.  However, he was grateful

for the revenue from Barrel Beer. 

     The previous day, Andrew Hargrove, the director of the town's

largest hospital, Springfield General, had visited Glover at the

station with a business proposition.  Glover re-played the

conservation in his mind as he watched the Hornets score another run. 

Hargrove: "How's business?"

Glover:   "Never been better, actually.  How's your business?" 

Hargrove: "We're doing very well, thanks.  The healthcare market in

          town is quite competitive, but we're still number one."     

Glover:   "What can I do for you today?"

Hargrove: "We'd like to run a campaign on WBUZ to alert people about

          the high alcoholism rate in Springfield.  The campaign will

          perform a major community service and will promote our

          hospital's excellent de-toxification facilities."

Glover:   "Sounds like a great public service to me." 

Hargrove: "However, there's one stipulation.  I want you to stop

          accepting Barrel Brewery advertising.  We can't run an

          effective health campaign with those beer ads on the same

          station."

Glover:   "Are you serious?  The Barrel Brewery is our largest

          advertiser.  If I got rid of the beer ads, I'd not only lose

          advertising revenue, I'd lose the baseball broadcasts, which

          give me great ratings.  I simply can't afford that."

Hargrove: "I understand that you may lose some money, but we're willing

          to make it worth your while." 

Glover:   "What do you mean, make it worth my while?" 

Hargrove: "Let's face it, we're conducting the campaign to serve the

          community, but we're also doing it to get alcoholics where

          they belong--in our de-tox center.  We know you have the

          largest audience in town, and naturally we want to reach the

          most people.  We also know that you are committed to public

          service and that your audience believes in WBUZ.  We're

          willing to pay at least three times your normal price for

          commercials on WBUZ."

Glover:   "But I don't know whether that will generate as much revenue          

           as the brewery advertising does.  Also, I need the baseball 

           ratings."

Hargrove: "Well, if you aren't willing to take our public service

          business, some other stations will be delighted.  Also, if

          the community knew you're more interested in money than

          serving the public, wouldn't this hurt your image."

Glover:   "Well, I do have to make a living, but I also have to think

          about my station's image and credibility.  Maybe we can work

          something out."     

Hargrove: "I hope we can."





     "Strike three, you're out," hollered the umpire.  Glover snapped

out of his thoughts and back to the baseball game.  He scanned the

ballpark and thought, "I sure would hate to lose baseball."  As he

weighed Hargrove's proposition and implied threat, he felt torn and

anxious.  He understood the benefits of going either way, but he

couldn't see how he could get out of making a decision for one

alternative or the other--the brewery or the hospital.  This was one of

the most difficult decisions he had faced since becoming the general

manager of WBUZ.



* This case was prepared by Charles Warner

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