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Ameritech Publishing, Inc 275-284_58420.CH.07.CASE_II-2 8/14/01 1:39 AM Page 275 CASE STUDY II-2 Ameritech Publishing, Inc. Ameritech Publishing, Inc., a subsidiary of Ameritech Corp- play ad is about $11,000 in a city the size of Bloomington, oration, publishes Ameritech PagesPlus telephone directories Indiana, but can range up to almost $30,000 in Detroit or for the Ameritech Bell telephone companies in Indiana, Cleveland. Michigan, Ohio, and Wisconsin. Ameritech Publishing also has Ameritech Publishing is in a very competitive business, with subsidiaries that produce 14 Ameritech Industrial Yellow other companies publishing similar directories in every one of Pages books covering 33 states and publish about 70 its markets. Moreover, Ameritech Publishing must compete directories in 10 states outside the Ameritech area, English with newspapers, radio, television, cable TV, and direct mail for language directories for Tokyo and Osaka, and German, a portion of each customer’s advertising budget. It has a sales Austrian, and Swiss industrial directories. Publishing and force of about 700 people who are paid on a commission distributing approximately 40 million copies of 484 different basis. directories in 1990, Ameritech Publishing had $866.4 million in revenues and provided about one-fourth of Ameritech’s History of Ameritech Publishing profits in 1990. Ameritech Publishing’s primary business is publishing yel- Ameritech Corporation was formed in 1984 as one of seven low pages telephone directories. Yellow pages advertising does regional holding companies created from the divestiture of not generate demand, but a person who has decided to buy AT&T. Prior to divestiture, each of the Bell companies was something often looks in the yellow pages to decide where to responsible for its own telephone directories and yellow pages, buy it. Because almost everyone has access to the yellow but Ameritech quickly decided that there was great potential for pages, and the average person uses them about 100 times growth in yellow pages revenues and that this potential could each year to decide where to obtain something he or she best be exploited by separating the directory operations from already wants, it can be a very productive form of advertising. the local telephone company’s responsibilities and centralizing As shown in Exhibit 1, there are two different types of yel- them in a wholly owned subsidiary. Therefore, in 1984 low pages advertising. The entries in the column in the upper Ameritech Publishing was formed by combining the directory left of Exhibit 1 are in-column ads, which vary in size and form, publishing organizations from Indiana Bell, Michigan Bell, Ohio as described in Exhibit 2. The large ads in Exhibit 1 are display Bell, and Wisconsin Bell. Illinois Bell (which is part of ads, and (although it is not apparent in this black-and-white Ameritech) was excluded because Ameritech decided to han- reproduction) they may be black on yellow or contain several dle directory operations in Illinois through a joint venture with colors. For example, the elaborate border of the “Fields of R. H. Donnelley. Although the telephone directory part of the Flowers” ad is green, and the name Fields of Flowers and the Ameritech business was centralized, the five state telephone telephone number are bright red. Display ads are more com- companies continued to operate as stand-alone entities. pletely described in Exhibit 3. The yearly cost of a full-page dis- Leo Egan, a general manager from Michigan Bell, was the first president of Ameritech Publishing. His mission was to build This case was prepared by Professor E. W. Martin as the basis for an organization while at the same time improving the prof- class discussion rather than to illustrate either effective or ineffective itability of the ongoing directory operations. To mold an organi- handling of an administrative situation. Its development was sup- zation out of the pieces of four previous groups, Egan orga- ported by the Institute for Research on the Management of nized the company functionally, with most of the field Information Systems (IRMIS), Kelley School of Business, Indiana University. Copyright © 1992 by E. W. Martin. No part of this publica- personnel reporting to publishing and sales vice presidents. He tion may be reproduced, stored in a retrieval system, or transmitted in also established staff positions in the finance, information ser- any form or by any means without the permission of the author. vices, human resources, and legal areas. 275 275-284_58420.CH.07.CASE_II-2 8/14/01 1:39 AM Page 276 276 Part II Applying Information Technology EXHIBIT 1 Ameritech Yellow Pages In-Column and Display Ads Florists-Retail (Cont'd) FLOWER BOWL THE We Honor Major Credit Cards 756 S. Walnut 332-9343 (See Ad This Clasification) FLOWER STUDIO THE 619 E Audubon Dr 333-7394 FLOWERS BY JANA RENEE Redbud Terrace 988-8900 FLOWERS & INTERIORS INC of FLOWERS Crosstown Shopping Center 333-6433 (See Ad This Clasification) Fields HAMMOND'S FLORIST 173 N Fletcher Av 829-3537 FLOWERS FOR ALL OCCASIONS JUDY'S FLOWERS & GIFTS All Major Credit Cards • WEDDINGS • BIRTHDAYS • ANNIVERSARIES 4015 W 3rd 339-7673 (See Ad This Clasification) • FUNERAL • BALLOONS • FRESH, DRIED, SILK MARY M'S FLOWERS & PLANTS CITY WIDE DELIVERY 406 W 2 336-3222 (See Ad This Clasification) REDBOOK MELICK FLORIST Florist Services COMPLETE FLORAL SERV WORLDWIDE WIRE SERVICES • FRESH FLOWERS FOR ALL OCCASIONS HOURS • • • • BALLOONS • • • • 8:30AM TO 6:00PM • SILK AND DRIED ARRANGEMENTS • GREEN & POTTED PLANTS • WEDDINGS • FRUIT BASKETS FTD Mon - Fri 8:30 AM-5PM 331-0161 Sat - 8:30 AM-Noon 421 E 3RD SUITE 6 IN COLSTONE SQUARE 201 W Morgan 829-6503 MICHAEL'S FLOWERS Jefferson Nashvl 988-7758 Continued Next Page Yellow Pages ads get action YOUR FULL THE DOWNTOWN FLORIST SERVICE ALL OCCASION FLORIST Buds & Branches The “FLOWERS FOR ALL OCCASIONS” Little STUDENT DISCOUNTS Shop With • CUSTOM MADE FLORAL DESIGNS The Big • WIDE VARIETY OF FRESH FLOWERS • DRIED & SILK ARRANGEMENTS CEMETARY • OFFICE • ANNIVERSARY • PLANTS & PLANTERS PERSONAL • WEDDINGS • HOLIDAYS PARTIES • CHURCH MYLAR N & Free Delivery HSKS SILK & FRESH FLOWERS LATEX To Area HSKSJ/Hoks8idj PLANTS MYLAR BALLOONS Funeral Homes HSKSJ/Hoks8idj • Fourth BALLOONS & Hospitals (Walkers • Latest Fads • Characters) Fourth Worldwide Wire Service HSKSJ/H P FREE CITY DELIVERY TO THE HOSPITAL, FUNERAL HOMES, MasterCard 112 FOUNTAIN SQ & NURSING HOMES MON-FRI 9AM-5:30PM ALL MAJOR CREDIT CARDS BLOOMINGTON IN 47401 SAT 9AM-2PM ACCEPTED 332-BUDS 332-2837 1-800-326-1132 The four Bell companies from which the Ameritech ries. He felt that this required standard computer systems to sup- Publishing personnel were drawn had been typical telephone port the publication and sales functions. Egan agreed on the companies with typical telephone company attitudes, but each need for these systems and supported their development, but had its own distinct corporate culture. Each of the Bell compa- his main focus was on the profitability of current operations, not nies did things its own way, which carried over to the yellow on standardizing them. Having accomplished his mission of cre- pages as well. The layouts of the pages, the pricing, the con- ating a new company from fragments of four Ameritech tele- tracts with advertisers, and the sales compensation plans were phone companies and getting it off to a profitable start, Egan all different from one Bell company to another. retired in 1986. He was replaced by Barry Allen, a young, ener- The new publishing vice president, Donald J. Frayer, was con- getic executive from Ameritech with marketing experience and vinced of the need to standardize the publication of the directo- an MBA from the Darden School at the University of Virginia. 275-284_58420.CH.07.CASE_II-2 8/14/01 1:39 AM Page 277 Case Study II-2 Ameritech Publishing, Inc. 277 EXHIBIT 2 Ameritech Yellow Pages In-Column Ad Descriptions LISTINGS: TRADE MARKS: The most basic form of for Brand Name Identification Yellow Pages Identification Headings in Yellow pages Headings Appear in 10 Pt Trade Mark Headings "tie-in" describe the product, service Bold Type with National Advertising & BRAND NAME IN BOLD TYPE or profession so that users Promotion. can find a firm by knowing DESCRIPTIVE TEXT the phrase or word that or describes its type of APPROPRIATE TradeMark business. SALES MESSAGE LISTINGS are for IDENTIFICA- Optional Line "WHERE TO BUY IT" TION under all applicable Captions distinguish between Dealer headings. manufacturer-dealer- Firm Name in Regular Type distributor, etc. One Service Listing is provid- Dealer Name in Regular or ed with business phone ser- Address .......................000-0000 Dealer Name & Telephone BOLD TYPE vice. Additional listings pro- Address .......................000-0000 vide the very minimum in Number in Bold is optional. complete Yellow Pages iden- Trade Name Listings identify BRAND NAME IN BOLD TYPE tification. DEALER NAME IN REGULAR brands, but do not provide CAPITAL LETTERS Bold Telephone Numbers add FIRM NAME IN BOLD CAPITAL LETTERS space for Trade Marks or Address .......................000-0000 Address .......................000-0000 prominence & convenience text matter. to Column Indentification. Extra Line Information About Extra Lines provide a means Trade Extra Lines, Alternate Products or Services Up to 5 Call Listings, and Trade of emphasizing descriptive in- Words Per Line. formation. Directional Extra Lines are available under the Dealers Alternate Call Listing pro- name, subject
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