Use Key Term Customer Equity here.
Use Figure 1.5 here.
Use Linking the Concepts 2 here.
Use Discussion Question 1-4 here.
Use Marketing by the Numbers here.
THE CHANGING MARKETING LANDSCAPE
This section looks at five major developments: the digital age, the changing economic
environment, the growth in not-for-profit marketing, rapid globalization, and the call for
sustainable marketing practices.
The Digital Age
More than 3 billion people—42 percent of the world’s population—are now online; 58 percent of
all American adults own smartphones.
At the most basic level, marketers set up company and brand Web sites that provide information
and promote the company’s products.
Beyond brand Web sites, most companies are also integrating social and mobile media into their
marketing mixes.
Social Media Marketing
Nearly 90 percent of all US companies now use social media as part of their marketing mix, and
71 percent believe that social marketing is core to their business.
Online social media provide a digital home where people can connect and share important
information and moments in their lives.
Mobile Marketing
Mobile marketing is perhaps the fastest growing digital marketing platform.
Marketers use mobile channels to stimulate immediate buying, make shopping easier, and enrich
the brand experience.
Most marketers are still learning how to use them effectively.
The Changing Economic Environment
The Great Recession of 2008-2009 and its aftermath hit American consumers hard.
After two decades of overspending, consumers tightened their purse strings and changed their
buying attitudes and habits.
More than ever, marketers are emphasizing the value in their value propositions.
Use Chapter Objective 5 here.
Use Key Term Digital and social media marketing here.
Use Online, Mobile, and Social Media Marketing here.
Use Discussion Question 1-5 here.
The Growth of Not-for-Profit Marketing
The nation’s nonprofits face stiff competition for support and membership. Sound marketing can
help them to attract membership and support.
Government agencies have shown an increased interest in marketing. Various government
agencies are now designing social marketing campaigns.
Rapid Globalization
Almost every company, large or small, is touched in some way by global competition.
The skillful marketing of European and Asian multinationals has challenged American firms at
home.
McDonald’s now serves 70 million customers daily at more than 36,000 restaurants worldwide—
some 68 percent of its revenues come from outside the United States.
Today, companies are buying more supplies and components abroad.
Sustainable Marketing—The Call for More Environmental and Social Responsibility
Marketers are being called upon to take greater responsibility for the social and environmental
impact of their actions and to develop sustainable marketing practices.
Corporate ethics and social responsibility have become hot topics for almost every business.
Forward-looking companies view sustainable marketing as an opportunity to do well by doing
good.
Use Marketing Ethics here.
SO, WHAT IS MARKETING? PULLING IT ALL TOGETHER
Marketing is the process of building profitable customer relationships by creating value for
customers and capturing value in return.
The first four steps in the marketing process create value for customers.
The final step in the process allows the company to capture value from customers.
In building customer and partner relationships, marketers must harness marketing technologies in
the new digital age, take advantage of global opportunities, and ensure that they act sustainably
in an environmentally and socially responsible way.
Figure 1.6 shows a model of the marketing process.
Use Figure 1.6 here.
Video Case Teaching Notes
Video Case Chapter 1 – Eskimo Joe’s
Video Summary
Since 1975, Eskimo Joe’s has been a popular watering hole in Stillwater, Oklahoma. Through
word of mouth and a popular logo spread via T-shirts, it rapidly became a favorite place to grab a
beer for students at Oklahoma State. But what started as a basic beer joint has grown into
something much more.
When the drinking age changed from 18 to 21 in the 1980s, Eskimo Joe’s had to decide how it
would move forward. That challenge helped the company to recognize that its product is much
more than just a cold mug of beer. Instead, people flocked to Eskimo Joe’s for the fun
atmosphere and customer-friendly service. This realization led to an expansion into different
businesses that have now spread the Eskimo Joe’s logo all over the planet.
After viewing the video featuring Eskimo Joe’s, answer the following questions:
Questions
1.1. Describe Eskimo Joe’s market offering?
1.2. What is Eskimo Joe’s value proposition? How does its value proposition relate to its
market offering?
1.3. How does Eskimo Joe build long-term customer relationships?
Company Case Teaching Notes
Cases appropriate for this chapter include:
Case 1, FedEx: Making Every Customer Experience Outstanding.
From the time FedEx opened for business over 40 years ago, the company strategy has
been built on a foundation of obsessive customer focus.
Case 4, Campbell’s: Watching What You Eat.
Through extensive marketing research, Campbell’s maintains its customer focus.
Alibaba: The World’s Largest E-Tailer Is Not Amazon.
Alibaba is on track to hit $700 billion in annual revenues within two years by providing
everything customers need and desire.
MyMarketingLab
If assigned by your instructor, complete these writing sections from your Assignments in the
MyLab.
1-18. Compare and contrast needs, wants, and demands. Which one(s) can marketers
influence? (AACSB: Communication; Reflective Thinking)
1-19. Is it fair to single out specific products for restrictions such as when New York City
proposed size cap on soft drinks? Discuss this argument from all sides of this issue:
government, soft drink marketers, and consumers. (AACSB: Written and Oral
Communication; Reflective Thinking)
GREAT IDEAS
Barriers to Effective Learning
1. For most students, this will be their first introduction to marketing and
all its ramifications. To most of them, marketing is nothing more than selling and/or
advertising, and this gets reinforced daily when they see “marketing” job ads that are
really sales positions. It helps to get students talking about what marketing is, and to give
examples of what they think is really good marketing. Try to bring in contemporary
examples that the students can relate to.
2. Building relationships can sometimes be easy to understand in a
business-to-business transaction, but it can be much more difficult to comprehend in
consumer businesses. Use examples such as Amazon.com that do a wonderful job of
developing one-on-one relationships with millions of customers through their tracking of
customer purchases and analysis of these purchases to recommend additional items. Ask
students to discuss how they feel about the companies they buy from. Have any
developed relationships with them that have made them loyal to the brand or store?
3. Societal marketing is something that can be a little unclear to students.
Why should fast food chains, for instance, be responsible for the nation’s obesity (just
one very topical discussion point)? Understanding how one should balance the need for
profits with what some might consider “soft” issues can be difficult at times. And that can
be made even more difficult among the politically astute students, as they can easily lead
the class into a left versus right discussion on individual versus corporate versus
governmental responsibility. Try to not let that happen, instead focusing on how
companies can actually increase their revenue and profits by showing that they care about
their customers and their communities. Newman’s Own is a brand that could be
discussed, as most profits are donated to charities, and the company has moved strongly
into ensuring a sustainable environment.
4. Traditional-age undergraduates have spent their entire lives with
technology, and so some of them can actually snicker when the discussion turns to how
technology has changed business in general and marketing more specifically. A
discussion of the difficulties of connecting to consumers without the Internet is
warranted. How would the students approach a one-on-one relationship with millions of
customers if they didn’t have social media (Facebook or Twitter), email, or the Internet?
5. At this stage, students are very apprehensive about the course. When
they walked into class, they thought they might learn about selling and advertising, and
now they’ve discovered that there is much more to marketing than just those two
subjects. Ease their minds and make them look forward to learning more by talking about
how much fun it is to be the center of the company and to know more about customers
than any other functional area in the company. Emphasizing that marketing combines
both the analytical and the creative can also ease some tension. The accounting and
finance majors will find that there is something in it to suit their more analytical frame of
reference, and the artists and designers who hope to become fashion mavens can also rest
assured that although they will need to understand the more logical areas of the subject,
their intuition can still reign supreme.
Student Projects
1. What does the term “marketing” mean to you? Think about an automobile you would like
to have (realistically) when you graduate. Write about how each phase of the marketing
process is addressed by that vehicle.
2. Why is it important to truly understand the customer? Make a list of 10 “wants” that you
have. What would have to occur to move each of these from “wants” to “needs?”
3. Not everyone can be part of your market. Go take a look at CBS online (www.cbs.com).
Who would you say is their market? Why?
4. Review the five alternative concepts under which organizations design and carry out their
marketing strategies. Now, take a look at one of the auto dealers in your town. Which one
of these five concepts do you believe they are typically employing? Why?
5. Think of a product or retailer to which you are loyal. What has caused this loyalty? What
could a competing product/retailer do to break this loyalty?
Small Group Assignment
Form students into groups of three to five. Each group should read the opening vignette to the
chapter on Nike. Each group should answer the following questions:
1. How has Nike managed to create such intense customer loyalty?
2. What can Nike do to ensure that customer loyalty remains at current high levels?
Each group should then share its findings with the class.
Individual Assignment
Companies are realizing that losing a customer means more than losing a single sale. It means
losing a stream of revenue from that customer over their lifetime. Reread the story of Stew
Leonard (under Capturing Value from Customers).
Is it possible to take his idea of “the customer is always right” too far so that it becomes a
negative for the company? Why or why not?
Think-Pair-Share
Consider the following questions, formulate answers, pair with the student on your right, share
your thoughts with one another, and respond to the questions from the instructor. These questions
could also be given as out-of-class assignments.
1. Do marketers create needs?
2. What is British-based Lush’s value proposition (under the Societal Marketing Concept)?
3. How is marketing different from selling?
4. What are two companies with which you have an emotional bond? Describe that bond.
Classroom Exercise/Homework Assignment
Five core customer and marketplace concepts are critical to success: (1) needs, wants, and
demands; (2) market offerings (products, services, and experiences); (3) value and satisfaction;
(4) exchanges and relationships; and (5) markets.
Take a look at Sea Ray boats (www.searay.com). Answer the following questions:
1. What needs, wants, and/or demands is Sea Ray attempting to fill?
2. Describe their marketing offers.
3. How are they providing value?
4. Describe the relationships they have with their customers.
5. What are their markets?
Classroom Management Strategies
The first chapter of this textbook sets the stage for the rest of the content. It outlines the major
topics and principles that will be discussed in each of the following chapters, and gives students
a good grounding in what to expect in their journey into the world of marketing.
First classes are always difficult, both for the instructor and for the students. Therefore, using
examples students can easily relate to is always a good idea when starting out.
In reviewing the material in class, a good way to break it down follows. This assumes a typical
one-hour structure; if the class is longer, you can work through the Marketing Application in
class. If shorter, you can either break the chapter over two sessions, or shorten each topic’s
allotted discussion time.
1. Ten minutes should be spent on discussing what marketing really is. Many students will
come into class thinking they are going to be learning all about advertising, or all about
selling. Ask students to talk about what they think marketing is, and to use examples of
what they’ve encountered in their own lives.
2. Ten minutes can also be spent on the second major topic of the chapter, understanding the
marketplace and consumer needs. Discussing the differences of needs, wants, and
demands, and how they relate to marketing, can greatly enhance the students’
understanding of the basis of marketing. Also included in this section are the notions of
market offerings, satisfaction, and relationships. You can discuss the various ways
companies develop relationships with their customers. Using Nike, the company
discussed in the opening pages of the chapter, can really help the students understand that
a company with thousands of customers can still easily develop relationships with each
and every one of them.
3. Another 10 minutes can be spent on designing customer-driven marketing strategies.
Many students will still not understand how needs, wants, and demands can drive
companies’ product development, but this section of the chapter will help them see it a
little more clearly.
4. Preparing a marketing plan and program can be covered in 5 minutes. This section shows
how everything they learn in marketing will be pulled together, but it is too soon in the
semester to be spending a lot of time on the topic.
5. Customer relationships are the heart of the chapter and the entire text. Spend 15 minutes
discussing this topic, and use examples that the students will appreciate. Discussing the
difference in the relationships they have with their hairdresser or barber and that of
www.amazon.com or another one of the Internet merchants can drive home the
importance of holding on to good customers. Students will also be well aware of
frequency marketing programs, and examples of those will also be beneficial.
6. The final 10 minutes can be spent discussing the future of marketing and the development
of customer relationships. Spend time talking about the recent economic meltdown and
how it has impacted business. Next, remember that the majority of students will never
have known an era without the Internet. Asking them how they would have developed
relationships with their customers without the assistance of technology is always a good
way to get a discussion started on how marketing programs are developed. Then you can
talk about how the advent of email and the Internet has opened the entire world for even a
small retailer, as well as raised some ethical issues, such as marketing American culture
to the entire world, regardless of the mores and cultures of other societies.
If time permits, revisit the question of “what is marketing?” The students should now
have a greater appreciation of the science behind marketing, as well as the creativity
necessary to develop successful marketing programs.
PROFESSORS ON THE GO
Marketing: Creating and Capturing Customer Value
Key Concepts
Needs, wants, and demands
Market offerings
Customer value and satisfaction
Copy or clip three advertisements from newspapers or magazines. What customer
needs are the advertisers trying to meet?
Many people have purchased products through Amazon.com. Certainly, the product
purchased is important, but describe the complete market offering of Amazon.com.
What services, information, or experiences are included?
This chapter discusses the concepts of customer value and satisfaction. Building on
this knowledge, is it logical to assume that if you increase the perceived customer
value for a product that there is a corresponding increase in customer satisfaction?
Under what conditions might this not occur?
Key Concepts
Choosing a value proposition
Marketing management orientations
Contrast the following marketing management orientations: “The Selling Concept”
and “The Marketing Concept.” Can you name a market or market category where
“The Selling Concept” is still the most popular marketing management orientation?
How is your college positioned in the marketplace?
Key Concepts
Relating to customers
Relating to partners
Creating customer loyalty and retention
Customer loyalty and retention programs are important in building customer
relationships and customer equity. Discuss why a national grocery chain such as
Safeway or Kroger would choose a “club” program over a “frequency” program.
“Today, most marketers realize that they don’t want to connect with just any
customers.” Do you agree with this statement? Why? Which company would be more
likely to follow this creed, Sephora or Chanel?
Think of a product or brand that you buy over and over. What might your customer
lifetime value be, assuming the product or brand continues to delight you?