978-0134129938 Chapter 2 Solution Manual

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REVIEW

2-1. What are business ethics, and why is this an important topic?

Business ethics are rules of conduct that guide actions in the marketplace. These are the

(2 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

2-2. The economics of information perspective argues that advertising is important. Why?

(2 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

2-3. State two important criticisms of marketing and provide the pros and cons for each.

Some feel that marketers contribute to the moral breakdown of society when they promote

Another criticism of marketing is that it manipulates the masses. This includes online

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

2-4. Give two examples of important legislation that relate to U.S. consumers.

(2 minutes, Chapter Objective 2, AACSB: Application of Knowledge)

2-5. Define social marketing, and give an example of this technique.

(1.5 minutes, Chapter Objective 2, AACSB: Application of Knowledge)

2.6 What is the primary difference between transformative consumer research and other kinds

of consumer research?

Transformative consumer research promotes research that includes the goal of helping

(2 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

2-7. Why is market access an important aspect of consumer well-being? What are some

important reasons why consumers can experience limited market access?

minutes, Chapter Objective 2, AACSB: Reflective Thinking)

2-8. What is greenwashing, and why is it a problem for marketers?

Greenwashing is the promotion of environmentally friendly products, but often, the claims

(2 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

CONSUMER BEHAVIOR CHALLENGE

Discuss

2-9. The Culture Jammers Manifesto proclaims opposition to the “mind-polluters”: “On the

rubble of the old culture, we will build a new one with non-commercial hear and should. “

What’s your take on “culture jamming;

do advertisers deserve to be parodied?

Students will have mixed views about this topic. Students should identify parody and culture

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

2-10. Should scientists who study consumer behavior remain impartial, or is it appropriate for

them to become involved in the topics they research like those who adhere to the

transformative consumer research perspective?

Students will have varied opinions on this topic. Students should be able to identify and

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

2-11. Because of higher competition and market saturation, marketers in industrialized

countries try to develop third-world markets. Asian consumers alone spend $90 billion a

year on cigarettes, and U.S. tobacco manufacturers push relentlessly into these markets. We

find cigarette advertising, which often depicts glamorous Western models and settings, just

about everywhere – on billboards, buses, storefronts, and clothing – and tobacco companies

sponsor many major sports and cultural events. Some companies even hand out cigarettes

and gifts in amusement areas, often to preteens. Should governments allow these practices,

even if the products may be harmful to their citizens or divert money that poor people

should spend on essentials? If you were a trade or health official in a third-world country,

what guidelines, if any, might you suggest to regulate the import of luxury goods from

advanced economies?

Students will have a variety of views on this topic. Student should indicate regulations and

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

2-12. The chapter discusses the practice of serial wardrobing, where people return an outfit

after they wear it for a special occasion such as a formal. What do you think of this practice?

Is it OK to use an expensive product once and then get your money back?

Students should explain how serial ward robing constitutes consumer theft and fraud.

(20 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

2-13. “College students’ concerns about the environment and vegetarianism are just a passing

fad: a way to look ‘cool.’ ” Do you agree?

Students will have mixed views about this subject. What they need to see is that a fad that

(20 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

2-14. A case involving Wendy’s fast-food chain made national headlines when a woman claimed

she had found a finger in her bowl of chili. The restaurants became the butt of jokes (some

said they served nail clippers with their food instead of forks), and sales dropped dramatically

at the company’s franchises. This forced layoffs and reduced hours for many employees –

until the woman was arrested for fraud. Consumers commonly file lawsuits against

companies to claim damages if a product or service didn’t work as expected. In some cases,

the defendant just settles the suit to make it go away because it costs more to mount a defense

than to just pay damages. Do we have too many frivolous lawsuits? Does our justice system

adequately meet the needs of both consumers and companies in terms of how it awards

damages?

Student responses will vary but the instructor can use this discussion to address major

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

2-15. Nonprofit organizations routinely rely on generous corporate donations, and it is common to

name facilities after benefactors. The Nationwide Children’s Hospital in Ohio is no exception;

its name recognizes the insurance company’s $50 million donation. Now the hospital is adding

the Abercrombie & Fitch Emergency Department and Trauma Center and there is the Limited

Too & Justice Main Lobby. The Campaign for a Commercial-Free Childhood opposes this

partnership. The group’s director commented, “Abercrombie & Fitch is really among the worst

of corporate predators. A company with such cynical disregard for children’s well-being

shouldn’t be able to claim the mantle of healing. . . . And, personally, I find it very concerning

that they named their hospital after an insurance company.” What do you think? Is this over

the line, or does it matter where the money comes from so long as the result is beneficial?

Students will vary in their response to this challenge as both sides present important points.

(5 minutes, Chapter Objective 1, AACSB: Ethical Understanding and Reasoning Abilities)

2-16. From time to time advertisers use dark humor to get their messages across, as when a lonely

calorie, repairman, or robot considers suicide. Or, an ad may imply that a shoppers are

“mentally ill” if they pay retail prices. Are these appeals a legitimate way to communicate a

message, and if so under what circumstances?

(3 minutes, Chapter Objective 1, AACSB: Ethical Understanding and Reasoning Abilities)

Apply

2-17. Will consumers trade lower prices for less privacy? Car owners now can let insurance

companies monitor their driving using a new technology in exchange for lower rates. Customers

who sign up for Progressive’s TripSense program get a device the size of a Tic Tac box to plug

into their cars. The device will track speed and how many miles are driven at what times of day.

Every few months, customers unplug the device from the car, plug it into a computer, download

the data, and send them to the company. Depending on results, discounts will range from 5 to 25

percent. In Great Britain, a major insurer is testing a program called Pay as You Drive. Volunteers

will get a device the size of a Palm computer installed in their cars. The gadget will use global

positioning satellite technology to track where the car goes, constantly sending information back

to the insurance company. Cars that spend more time in safer areas will qualify for bigger

discounts. Of course, the potential downside to these efforts is that the insurance companies may

be able to collect data on where you have driven, how long you stayed in one location, and so on.

Conduct a poll of 10 drivers of various ages where you describe these programs and ask

respondents if they would participate to receive a discount on their insurance premiums. What

reasons do they give pro and con?

This question of exchanging privacy for lower prices (or convenience, or any of a number of other

(10 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning Abilities)

2-18. Many college students “share” music by downloading clips from the Internet. Interview at

least five people who have downloaded at least one song or movie without paying for it. Do they

feel they are stealing? What explanations do they offer for this behavior? Try to identify any

common themes because of these interviews. If you were devising an ad campaign to discourage

free downloading, how might you use what you have learned to create a convincing message?

Obviously, ethical issues of right and wrong should emerge here. These issues should reflect the

persuade consumers that their justified behavior is wrong.

(5-10 minutes, Chapter Objective 2, AACSB: Ethical Understanding and Reasoning Abilities)

CASE STUDY TEACHING NOTES

Chapter 2 Case Study:

Marketing Responsibility: Patagonia and P&G’s Always

Redefine What It Means to Be Transparent and Authentic

Summary of Case

Marketing faces challenges and criticism on many fronts. As identified in Chapter 2 questions

directed at the marketing field include:

Does marketing create materialism? Does it lead to confusion between needs and wants?

Is it ethical to market products that may have a negative impact on consumers’ health?

Do marketers mislead consumers or perpetuate stereotypes with their marketing

messages?

Does marketing lead to an invasion of computer privacy?

Do companies and brands misuse natural resources for products and packaging? Do they

engage in greenwashing?

Do companies take advantage of questionable labor practices in their quest to keep costs

and prices down?

Three companies that have recently been in the spotlight about their work to change

perceptions about the role of marketing are Panera Bread, Patagonia, and Proctor & Gamble

with its’ Always brand.

Patagonia:

Patagonia, an apparel and sporting goods company, has long been regarded as cutting-edge when it

comes to environmental and social responsibility. In fact, it is an accredited and founding member of

the Fair Labor Association. Now Patagonia is taking on a difficult task of trying to be even more

transparent about its’ supply chain and related labor practices in an industry knows for its abuses of

workers.

As Gillian White details in “Your Clothes Are Made With Exploited Labor”, since 2007 Patagonia

has worked diligently, along with Verite, a nongovernmental organization that works on labor issues,

to make improvements in the practices of the company’s first-tier suppliers. There are the suppliers

with whom Patagonia works directly to product its’ apparel. Through these efforts it was able to

reduce the number of first-tier suppliers from 108 to 75, which improved the company’s ability to

have more control over how these companies treat workers.

However, in 2011 Patagonia’s own extensive audits uncovered new supply chain problems with

human trafficking, forced labor, and exploitation. They are now trying to go beyond the gains made

in their previous work with the first-tier suppliers. Their new focus is on suppliers buried more

subtly in the complicated apparel supply chains: mills and suppliers of raw materials. Patagonia has

asked Verite to help with additional audits. They have also increased their overall corporate social

responsibility effort. In 2013 they invited industry peers for a discussion of forced labor issues in the

apparel industry, unfortunately only 7 of the 40 invited companies chose to participate.

Patagonia’s COO Doug Freeman commented, “We think people will be disappointed at ongoing

issues in Patagonia’s supply chain, but feel that our transparency will pay off. We want to be really

honest and dive deeply into this issue, breaking trails for the rest of the industry.” Clearly they have

a lot at stake because their branding identity is so closely tied to their leadership in social

responsibility.

According to Gillian White, “Patagonia’s admission stands out in that it comes from a brand

considered a leader in the movement of ethical production.” However, the good news as she

describes it is that “Patagonia’s name continually comes up as one of the few brands that seek to

take the high road by choice rather than by necessity. By comparison, many companies aren’t

prepared or proactive when it comes to rooting out forced labor at all levels”

And Dan Viederman, CEO of Verite, confirms that “there are few, if any, brands that have taken up

the mantle of eradicating trafficking, at any level, without first being prodded by potentially

embarrassing and illegal findings.” Patagonia appears to be one of those few.

For now, Patagonia continues the difficult struggle to monitor and actively work to improve

conditions throughout every level of its supply chain. They remain determined to set the bar high

and to live up to their mission statement: Build the best product, cause no unnecessary harm, use

business to inspire and implement solutions to the environment crisis.

P&G’s Always

P&G’s Always feminine care campaign, “Like a Girl,” has generated a great deal of attention in the

marketplace recent: 58 million views on YouTube and the first feminine care product Super Bowl

ad. In addition, the campaign has won a number of prestigious awards, including being the sole

winner in the 2015 Effie Awards GoodWorks Brand category. The award was created to recognize

marketers using their platform for good through purpose-driven marketing campaigns. At the

Cannes Lions International Festival of Creativity, considered the Academy Awards for advertising,

the campaign won a Glass Lion prize and the Grand Prix award in the PR category. The Glass Lion

prize is a new category, introduced in 2015, to honor campaigns that address issues related to gender

inequality and prejudice.

P&G is working to target women with more realistic and empowering messages. The campaign

focuses on what young women, boys, and girls think it means to do something “like a girl.” This is

an especially important question given the fact that research has documented a drop in self-esteem

as girls grow into young women. The ads have connected well with women and sparked a great deal

of conversation, much of it driven by the hashtag #LikeAGirl. The campaign’s message is all about

changing the like-a-girl phrase from an insult into something that empowers and inspires.

Allison Arden points to a comment about the campaign made by Ken Wheaton in an Advertising

Age column. Wheaton said, “It’s an eye-opener-which is something you don’t often get in

advertising of any kind. It made me-a 21st century, non-PC male born and raised in the South—

reconsider my own word choices.” Arden shared reflections from several experts on why the Always

campaign is a good example of effective purpose-driven marketing. Their comments included the

campaigns ability to identify its own insight to create a purpose of its own, create a compelling

message that will be meaningful over an extended period of time, and understand the importance of

unusual media placements that put the message in front of audience in a way that made a statement.

Arden praises the campaign for “effectively setting the Always brand apart, while also changing

behaviors and making us pause to consider the power of our words.”