Chapter 12: Deliver the Customer Experience: Bricks and Clicks
12-20 Creative Homework/Short Project Because of increased competition in its
community, you have been hired as a marketing consultant by a local restaurant. You know that the
characteristics of services (intangibility, perishability, variability, and inseparability) create unique
marketing challenges. You also know that these challenges can be met with creative marketing
strategies. Outline the challenges for marketing the restaurant created by each of the four
characteristics of services. List your ideas for what might be done to meet each of these challenges.
a. Intangibility
Service intangibility means that customers cannot see, touch, or smell a service.
b. Perishability
Service perishability means that a firm cannot store its services. It is a case of “use it or
lose it.”
c. Variability
Service variability refers to the inevitable differences in a service provider’s performance
from one day to the next.
d. Inseparability
A service can only take place at the time the service provider performs an act on either
the customer or the customer’s possession.
Services cannot be detached from those that provide them.
12-21 In Class, 10–25 Minutes for Teams You are currently a customer for a college education, a
very expensive service product. You know that a service organization can create a
competitive advantage by focusing on how the service is delivered after it has been
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Chapter 12: Deliver the Customer Experience: Bricks and Clicks
purchased—making sure the service is efficiently and comfortably delivered to the
customer. Develop a list of recommendations for your school for improving the delivery of
its service. Consider both classroom and nonclassroom aspects of the educational product.
12-22 Creative Homework/Short Project As a soon-to-be college graduate, you be will be
looking for a full-time job in your field. As part of this process, you will need to learn to
successfully market yourself. Prepare an outline for your marketing plan. First, list the special
problems and challenges associated with marketing people rather than a physical product. Then
outline your ideas for each of the four Ps.
People are products, too. They craft a “brand identity” and use the same strategies marketers use to
ensure that their products make an impression on consumers, including memorability, suitability,
and distinctiveness. Students can develop creative ways to present themselves in a marketing plan.
In addition to branding efforts, other strategies to “sell” a person include:
12-23 In Class, 10–25 Minutes for Teams Address the same issues in item 12-22 for a
marketing plan for the town or city where your college is located. How would you market
this town or city and the surrounding area as part of the overall college experience to
potential students?
►CHOICES: WHAT DO YOU THINK?
12.24 Critical Thinking Most retail store shrinkage can be attributed to shoplifting, employee
theft, and retail borrowing. What are some ways that retail store managers can limit or stop
shrinkage? What are some problems inherent in security practices? Should retailers create
stricter merchandise return policies?
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Chapter 12: Deliver the Customer Experience: Bricks and Clicks
retailers reduce shrinkage.
12.25 Ethics Studies have shown—and court rulings have confirmed—that “customer profiling” does
take place in U.S. retail stores, whether intentional or not. Have you ever been the victim of
profiling? What were the circumstances? Did you make a complaint? Why or why not? As the
store manager of an employee who is accused of profiling, what actions would you take for both
the customer and the employee?
MyMarketingLab for answers to Assisted Graded Questions.
12.26 Critical Thinking Experts predict the future of B2C e-commerce to be very rosy indeed, with
exponential increases in Internet sales of some product categories within the next few years. What
effect do you think the growth of e-retailing will have on traditional retailing? In what ways will
this be good for consumers, and in what ways will it not be so good?
MyMarketingLab for answers to Assisted Graded Questions.
12.27 Critical Thinking Most U.S. consumers have purchased a product online at one time or another.
What products have you ever purchased online? How did you pay for these products? Do you
consider a site’s security methods at the time of purchase? Why or why not? Should retailers be
required to post information about how they’re keeping your information secure? How should
retailers be held accountable if the personal information they keep on you is hacked?
12.28 Critical Thinking Disintermediation is becoming more commonplace in the service
industry, often eliminating a customer’s interaction with, for example, bank tellers or
supermarket clerks. How does this lack of interaction affect the customer’s experience? How
does this lack of interaction affect a firm’s ability to provide superior customer service?
Disintermediation means removing the “middleman” and thus eliminating the need for customers to
interact with people at all. Students need to think about what they gain and what they lose from
12.29 Critical Thinking Sometimes service quality may not meet customers’ expectations.
What problems have you experienced with quality in the delivery of the following services?
a. A haircut
b. A dental visit
c. Computer repairs
d. Your college education
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Chapter 12: Deliver the Customer Experience: Bricks and Clicks
What do you think is the reason for the poor quality? How would you improve the quality
of service?
12.30 Critical Thinking There has been a lot of criticism about the way politicians have been marketed
in recent years. What are some of the ways marketing has helped our political process? What are
some ways the marketing of politicians might have an adverse effect on our government?
Most students should have some sort of opinion about the role of marketing in politics and
government. Critics point out that political marketing is deception at its finest. They claim that
candidates tell voters whatever they want to hear just to get their vote. Though perhaps true in some
12.31 Ethics Many not-for-profit and religious organizations have found that they can be more
successful by marketing their ideas. What are some ways that these organizations market
themselves that are similar to and different from the marketing by for-profit businesses? Is it
ethical for churches and religious organizations to spend money on marketing? Why or why not?
12.32 Critical Thinking Many developed countries, including the United States, have in recent decades
become primarily service economies; that is, there is relatively little manufacturing of goods, and
most people in the economy are employed by service industries. Why do you think this has
occurred? In what ways is this trend a good and/or a bad thing for a country? Do you think this
trend will continue?
APPLYING MARKETING METRICS
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Chapter 12: Deliver the Customer Experience: Bricks and Clicks
Inventory management is an important aspect of retail strategy. For example, it is important to know
when it is time to reorder and how much to order at a time, a metric called reorder point.
As consumers buy a product day after day, the inventory level declines. The question for retailers is how
low they should allow the inventory level to decline before they place an order; that is, when is the
optimal time to reorder? If you order too late, you take a chance of losing sales because you are out of
stock. If you order too soon, consumer tastes may change, and you will be stuck with excess and
unsellable merchandise. And generally, retailers do not want more inventory on hand than is necessary to
avoid stock-outs because inventory ties up cash.
Hence, the decision of when to order and how much to order is critical to a retailer’s bottom line.
The simplest formula to determine the reorder point is the following:
Reorder point = Usage rate × Lead time
Usage rate is basically how quickly the inventory sells, and lead time is the length of time from reorder to
delivery. Retailers tend to keep a little extra stock on hand—“safety stock”—just in case their historical
data on usage rate and lead time might vary from any one particular reorder experience. Adding in safety
stock, the formula becomes the following:
Reorder point = (Usage rate × Lead time) + Safety stock
Sam’s 24-Hour Gas ‘n’ Sip sells 97 large sodas a day. It takes five days to place an order and
receive a new shipment of large cups. But to be prepared for the possibility of extra sales or a
late shipment, they need to have a safety stock equal to three days of sales.
12-33 What is the reorder point for large cups for Sam’s gas station?
MyMarketingLab for answers to Assisted Graded Questions.
MINI-PROJECT: LEARN BY DOING
Select a good that you, as a consumer, would like to purchase in the next week or so. Shop for
this product both online and at a physical retailer.
12-34 As you shop, record the details of both shopping experiences, including the following:
a. Type of retailer
b. Clerks available to assist you
c. Website or physical facilities
d. Product variety
e. Product availability
f. Product price
g. Store hours
h. Ease of transaction
i. Ease of return
12-35 Explain why you would be more likely to purchase this product online or at a physical
retailer in the future.
The purpose of the mini-project listed in the chapter is to get students to analyze a service
they use and review the service encounter.
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Chapter 12: Deliver the Customer Experience: Bricks and Clicks
Through three specific questions (or exercises), individuals (or teams) are asked to review the
marketing practices of a local service provider. Students are asked to visit the service provider and
review all aspects of the service delivery process as seen by a typical service recipient. Students
conclude the exercise by recommending improvements to the service encounter. Students should
write a descriptive report of their findings and experiences.
Instructors may wish to extend the deadline for this assignment so students have many opportunities
to visit, write their report, and report their findings.
.
Mini-project 2
Theme and entertainment parks like Universal Studios fall in the middle of the goods/services continuum
—half goods and half services. To be successful in this highly competitive market, a park must position
its product? Visit the websites of three of the top theme park organizations: Walt Disney World
(www.disneyworld.disney.go.com), Six Flags parks (www.sixflags.com)
and Universal’s Orlando Theme Park (www.universalorlando.com)
Theme-Parks/World-Class-Theme-Parks.aspx).
12-36 How is this positioning communicated through the website?
12-37 What changes or improvements would you recommend for each website?
V. MARKETING IN ACTION CASE: REAL CHOICES AT
ALIBABA
Summary of Case
Initially, Alibaba was a business-to-business portal to bring together Chinese exporters, manufacturers,
and entrepreneurs with overseas buyers. Today, the Alibaba Group, called the Chinese Amazon, is a
leading online and mobile marketplace in retail and wholesale trade, cloud computing, and other services.
As of 2016, the group’s retail businesses had more than 423 million active users, 12.7 million annual
orders in its marketplace, and 86.2 percent of the Chinese mobile shopping market.
Only 19 percent of rural China is using online buying services. Due to the constraints of lower incomes,
dispersed populations, and poor logistics, rural traditional retail options are limited, have higher prices,
and inferior product quality. These limitations make for tremendous prospects for expansion of online
sales. To take advantage of this opportunity, Alibaba’s e-commerce business, Taobao, has opened service
centers in many rural villages. Alibaba has committed to investing over USD$1.5 billion on logistics,
hardware, and training in more than 100,000 villages. The company recently acquired a controlling stake
in a Singapore e-commerce firm. The portals are online shopping and selling destinations . Of course,
there are still challenges. China is struggling with slowing development. Alibaba also faces growing
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Chapter 12: Deliver the Customer Experience: Bricks and Clicks
competition from Amazon, eBay, JD.com, and Baidu.
Suggestions for Presentation
This case could be assigned for various out-of-class or in-class discussion activities.
Out-of-Class
Use the Internet to investigate Alibaba and its competition. Research Alibaba’s competitors such as
Amazon.com, eBay, JD.com, and Baidu.
As an out-of-class project, ask student groups to develop a new advertising campaign for Alibaba. The
campaign should begin with identifying the target audiences and should include the development of an
advertising message and budget objectives.
Evaluate the pros and cons of Alibaba’s expansion into less populated areas.
In-Class
You Make the Call
12-38 What is the decision facing ALIBABA?
12-39 What factors are important in understanding this decision situation?
The following factors are important in understanding this decision situation:
China’s economy has slowed.
There are infrastructure problems in rural areas of China which present an opportunity for online
shopping.
12-40 What are the alternatives?
Students might recommend a variety of different marketing strategies. Some possibilities are:
12-41 What decision(s) do you recommend?
Students may focus on several of the alternatives developed. Students should be encouraged to think
about the strength of the Alibaba brand image, the effect of the weakened economy in China, and what
the impact of any recommended strategy.
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Chapter 12: Deliver the Customer Experience: Bricks and Clicks
12-42 What are some ways to implement your recommendation?
►MYMARKETING LAB
Go to mymktlab.com for Auto-graded writing questions as well as the following assisted-graded writing
questions:
12.43 Today, traditional bricks-and-mortar retailers are faced with competition from B2C E-
commerce. What are some of the benefits and limitations of B2C E-commerce?
12.44 In this chapter, we learned that the characteristics of services are intangibility,
perishability, variability, and inseparability. Explain each of these characteristics and how
they create challenges for marketing services.
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