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Chapter 1: Welcome to the World of Marketing
IV. END-OF-CHAPTER ANSWER GUIDE
Chapter Questions and Activities
QUESTIONS: TEST YOUR KNOWLEDGE
1.1. Briefly explain what marketing is.
1-2. List and describe the elements of the marketing mix.
Product: a good, service, idea, place, person—whatever is offered for sale in exchange.
1-3.Define the terms consumer goods, services, and industrial goods.
Consumer goods are the tangible products that individual consumers purchase for personal or family
1-4. Explain needs, wants, and demands. What is the role of marketing in each of these?
A need is the difference between a customer’s actual state and some ideal or desired state. A marketer
1.5. What is utility? How does marketing create different forms of utility?
Utility is the usefulness or benefit received by consumers from a product. Marketing creates several
1.6. Trace the evolution of the marketing concept.
The marketing concept has gone through a few stages throughout the years. These stages include:
The Production Era: a production orientation works best in a seller’s market when demand is
Chapter 1: Welcome to the World of Marketing
1.7. Explain how marketers practice the societal marketing concept and sustainability.
An important trend now is for companies to think of ways to design and manufacture products with a
1.8. Describe the Internet and how Web 3.0 and 4.0 provide greater opportunities for marketers to interact
with their customers.
In the 1990s, the Internet (Web 1.0) was typified by static content provided by a site’s creator. Web 3.0
1.9. To what does the lifetime value of the customer refer, and how is it calculated?
Lifetime value refers to the profit made from each customer, including every purchase made from now
1.10. What does it mean a firm to have a competitive advantage? What gives a firm a competitive
advantage?
1.11. What is involved in market planning?
Firms (or individuals) that engage in marketing planning ask questions like these:
What product benefits will our customers look for in three to five years?
Copyright © 2018 Pearson Education, Inc.
Chapter 1: Welcome to the World of Marketing
ACTIEITIES: APPLY WHAT YOU’VE LEARNED
1-12. In Class, 10–25 Minutes for Teams Assume that you are a marketing consultant employed by a
large retail chain that offers consumers products in a number of brick-and-mortar stores and online.
MyMarketingLab for answers to Assisted Graded Questions.
1-13. In Class, 10–25 Minutes for Teams Successful firms have a competitive advantage because they
are able to identify distinctive competencies and use these to create differential benefits for their
customers. Consider your business school or your university. What distinctive competencies does it
have? What differential benefits does it provide for students? What is its competitive advantage?
What are your ideas as to how your university could improve its competitive position? Write an
outline of your ideas.
1-14. In Class, 10–25 Minutes for Teams As college students, you and your friends sometimes discuss
the various courses you are taking. One of your friends says to you, “Marketing’s not important. It’s
just dumb advertising.” Another friend says, “Marketing doesn’t really affect people’s lives in any
way.” As a role-playing exercise, present your arguments against these statements to your class.
1-15. For Further Research (Individual) Recent reports indicate that consumers including children
and teens are becoming small screen addicts. Develop a series of questions (about 10). Use these to
1-16. For Further Research (Groups) Today’s marketers recognize that the Internet and Big Data have
changed marketing and will continue to change it in the years to come. Your team assignment is to
first find examples of how the Internet and Big Data have improved marketing for some for-profit and
MARKETING METRICS EXERCISE
Copyright © 2018 Pearson Education, Inc.
Chapter 1: Welcome to the World of Marketing
The chapter discusses the growing importance of sustainability, and it notes that companies and
consumers increasingly consider other costs in addition to financial kinds when they decide what to sell or
buy. One of these cost categories is damage to the environment. How can marketers make it easier for
shoppers to compute these costs? The answer is more apparent in some product categories than in others.
For example, American consumers often are able to compare the power consumption and annual costs of
appliances by looking at their EnergyStar™ rating. In other situations, we can assess the carbon footprint
implications of a product or service; this tells us how much CO2 our purchase will emit into the
atmosphere (e.g., if a person flies from New York to London). The average American is responsible for
9.44 tons of CO2 per year! A carbon footprint comes from the sum of two parts, the direct, or primary,
footprint and the indirect, or secondary, footprint:
The primary footprint is a measure of our direct emissions of CO2 from the burning of fossil fuels,
including domestic energy consumption and transportation (e.g., cars and planes).
• The secondary footprint is a measure of the indirect CO2 emissions from the whole life cycle of products
we use, from their manufacture to their eventual breakdown.
Although many of us are more aware today that our consumption choices carry unseen costs, there is still
a lot of confusion about the best way to communicate the environmental costs of our actions—and in
many cases consumers aren’t motivated to take these issues into account unless the costs impact them
directly and in the short term.
1-17. As a consumer, what other metrics would you suggest that might reflect benefits of sustainability
initiatives that would motivate you to purchase from one provider or the other?
1-18. Would you buy from a demonstrably more expensive provider just because they exhibited a
higher level of commitment to sustainability?
CHOICES: WHAT DO YOU THINK?
1.19 Critical Thinking Journalists, government officials, and consumers have been highly critical of
companies for gathering and storing large amounts of data on consumers (i.e., Big Data). Others
argue that such practices are essential for firms to provide high-quality, affordable products that
satisfy consumers’ varied needs. What do you think? Should the government regulate such
practices? How can such practices hurt consumers? How can these practices help consumers?
In answering this question, the student should be encouraged to examine their life personally and
relate marketing to their daily activities and events. Areas that should be mentioned in this discussion
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Chapter 1: Welcome to the World of Marketing
1-20. Ethics Despite best efforts to ensure product safety, products that pose a danger to consumers
sometimes reach the marketplace. At what point should marketers release information about a product’s
safety to the public? How should marketers be held accountable if their product harms a consumer?
1-21. Critical Thinking The marketing concept focuses on the ability of marketing to satisfy customer
needs. As a typical college student, how does marketing satisfy your needs? What areas of your life
are affected by marketing? What areas of your life (if any) are not affected by marketing?
In answering this question, the student should be encouraged to examine their life personally and
relate marketing to their daily activities and events. Areas that should be mentioned in this discussion
are consumer purchases (such as buying food, clothes, supplies at the bookstore, and major purchases
1-22. Critical Thinking Many consumers are concerned about the environment. They demand
green marketing activities and more green products. Still, most do not buy green products because they
are a few cents more expensive. How do you explain this? What are marketers doing wrong? Should
government intervene? What are your suggestions for successful green marketing?
1-23. Critical Thinking Consumer-generated commercials seem to be part of a broader trend
toward consumer-generated content of all sorts. examples include MySpace, Flickr
(where users post photos and comment on others’ pictures), blogging, and video-
sharing sites like YouTube. Do you think this is a passing fad or an important trend? How
(if at all) should marketers be dealing with these activities?
1.24. Ethics The American Psychological Association does not yet recognize Internet
addiction as a problem. Should it? Why and why not?
1.25. Ethics Crowdsourcing has a lot of upside—for the company initiating the crowdsourcing anyway.
The company gets to generate buzz among its fans as well as generate new product ideas and
inventive advertising campaigns for little to no investment. Is there an upside to crowdsourcing
for the customer, or are companies exploiting their users?
Copyright © 2018 Pearson Education, Inc.
Chapter 1: Welcome to the World of Marketing
MINI-PROJECT: LEARN BY DOING
The purpose of this mini-project is to develop an understanding of the importance of marketing to
different organizations.
1.26. Working as a team with two or three other students in your class, select an organization in your
community that practices marketing. It may be a manufacturer, a service provider, a retailer, a
1.27 Divide the following list of topics among your team and ask each person to be responsible for
developing a set of questions to ask during the interview to learn about the company’s program:
• What customer segments the company targets.
• How it determines customer needs and wants.
• What products it offers, including features, benefits, and goals for customer satisfaction
• What its pricing strategies are.
• How it uses interactive content to engage customers.
• How it distributes products and whether it has e countered any problems.
• How it determines whether the needs and wants of customers are being met.
• Explain what marketers mean by the “societal marketing concept” and “sustainability” and ask if
1.28 Develop a team report of your findings. In each section of the report, share what you learned that is
new or surprising to you compared to what you expected.
1.29 Develop a team presentation for your class that summarizes your findings. Conclude your
presentation with comments on what your team believes the company was doing that was
particularly good and what was not quite so good.
This project will help students understand the difficulty, but yet the necessity, of focusing on a value
proposition in an organization. Obviously, some firms do this better than others do. However, all
firms must consider what they deliver to the customer and how the customer accepts this proposition.
If there is disparity between what the consumer expects, what the consumer perceives or sees, what
the organization says it will provide or do, and what is actually received, problems will arise. This
basic project will aid the student in understanding the need to obtain information from the
marketplace and focus on delivering value to customers.
Copyright © 2018 Pearson Education, Inc.
Chapter 1: Welcome to the World of Marketing
V. MARKETING IN ACTION CASE: REAL CHOICES AT
COCA-COLA
Summary of Case
What do you do when your customer starts to shrink, both literally and figuratively? The sale of soft
drinks in the U.S. is not what it used to be. The $98 billion soft-drink industry is being challenged by
changes in consumers’ attitudes toward both sugar-sweetened and diet drinks. Historically, soft drinks
have been a significant portion of the American diet and sales have grown year after year. In the United
States the rates of obesity, diabetes, and other weight-related health issues are on the rise. In 2014, the
Centers for disease Control and Prevention found that 35 percent of U.S. adults were obese. And the
problem is not limited to adults; with distressing regularity children are being diagnosed as obese.
Although obesity and its related issues are complicated and have many different causes, soft drink
manufacturers, like Coca-Cola, have been forced to bear a large share of the blame. This combined with
the current consumer trend toward a healthier lifestyle has dealt a blow to the beverage industry. Since the
1990s, the sales of soft drinks have fallen by more than 25 percent.
The association of obesity and soft drinks has become so much of a problem that in some cities,
politicians are proposing “soda taxes” to reduce the amount of sugar consumed. For now the soft-drink
manufacturers are winning the political battles but are in jeopardy of losing overall. One of the
consequences of these policy fights is that consumers are being reminded that soft drinks may not be the
healthiest choice.
Suggestions for Presentation
This case could be assigned for various online or in-class discussion activities.
Online Assignment Suggestions
Research companies such as PepsiCo, Dr. Peer, Evian, Perrier, Aquafina, and other competitors. What is
Coca-Cola’s competitive advantage?
Determine how each competitor’s product would be ranked in terms of product, price, place, and
promotion.
Visit the Coca-Cola website at www.coca-colacompany.com/ and report on the most recent marketing
strategies that are being accomplished.
In-Class Assignment Suggestions
In groups or as individuals, discuss the marketing strategy that Coca-Cola should consider, due to
increased obesity issues facing soft-drink companies.
Divide the class into groups of three to five students and have each group conduct a strengths,
weaknesses, opportunities and threats (SWOT) analysis to determine how Coca-Cola can develop
strategies to overcome adverse findings.
You Make the Call
1-30. What is the decision facing Coca-Cola?
How will this ongoing concern by public health officials effect how Americans feel about soft
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Chapter 1: Welcome to the World of Marketing
drinks in the long run? Will soft drinks ever attain the negative status of tobacco products,
which many consumers have abandoned? Will Coca-Cola be able to reclaim its former
position as market leader or must coke change its focus to something else?
Students may come up with a number of different decisions that Coca-Cola might make such
as:
1.31 What factors are important in understanding this decision situation?
The following factors are important in understanding this decision situation:
1.32 What are the alternatives?
Students might recommend a variety of different marketing strategies and/or revisions to current
marketing strategies discussed in the case. Some possibilities include:
1-33. What decision(s) do you recommend?
1-34. What are some ways to implement your recommendations?
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Chapter 1: Welcome to the World of Marketing
WEB RESOURCES
Michael Baumwoll (Real People, Real Choices, Decision Time vignette): https://twitter.com
Coca-Cola: www.coca-colacompany.com/
Craigslist (online classifieds website): www.craigslist.org
The Sims (online virtual community): www.thesims.com/
Second Life (a 3-D virtual world created by its residents): www.secondlife.com
The SmartWay brand (identifies products and services that reduce transportation-related emissions):
www.epa.gov
Avon Foundation (to improve the lives of women globally): www.avoncompany.com
Girls Inc. (inspiring all girls to be strong, smart, and bold): www.girlsinc.org
Blogger.com (a small team in Google focusing on helping people have their own voice on the web and
organizing the world’s information from the personal perspective): www.blogger.com
Subaru: www.subaru.com
LinkedIn (professional network online community): www.linkedin.com
Ad Roll (lets publishers “connect” through a social network-style matching system to “roll-up” their ad
space into highly targeted packages that advertisers can buy across): www.adroll.com
Wikipedia (a multilingual, web-based, free content encyclopedia): www.wikipedia.org
Google (online search engine): www.google.com
YouTube (allows people to easily upload and share video clips): www.youtube.com
MediaPost (the media, marketing and advertising professional’s resource for complete news coverage,
engaging events, a focused social network, and comprehensive industry jobs, directories and research):
www.mediapost.com
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