978-0134492513 Chapter 17 Solutions Manual

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Discussion Questions

17-1 Discuss the benefits of direct and digital marketing to buyers and sellers. (AACSB:

Communication)

Answer:

 17-2 Define omni-channel retailing. How are retailers responding to the omni-channel

consumer? (AACSB: Communication)

 17-3 What are blogs, and how are marketers using them to market their products and services?

What advantages and disadvantages do blogs pose for marketers? (AACSB: Communication)

 17-4 Discuss how the traditional forms of direct marketing continue to be important

promotion tools. (AACSB: Communication)

17-5 What is phishing, and how does it affect internet marketing? (AACSB: Communication;

Reflective Thinking)

Answer:

Critical Thinking Exercises

17-6 In a small group, search the internet to locate a controversial or failed social media

campaign. Present an analysis of the failed campaign. Make a recommendation on how to

address the controversy. (AACSB: Use of IT, Communication, Reflective Thinking)

Answer:

When attempting to fix a social media error, marketers should consider the issue, who is

affected, how the brand is affected, and which teams (management, PR, legal, HR) should be

involved. If possible, delete the social media post in question. The best thing may be to offer

a genuine apology but until ready to offer a statement in regards to the mistake, the company

should remain silent. It should spend time to fix the damage with some hard work.

 17-7 Review the Telephone Consumer Protection Act and discuss a recent case in which a

marketer was fined for violating the act. (AACSB: Communication; Use of IT; Reflective

Thinking)

17-8 Although mobile advertising makes up a small percentage of online advertising, it is one of

the fastest-growing advertising channels. But one obstacle is measuring return on investment

in mobile. How are marketers measuring the return on investment in mobile advertising?

Develop a presentation suggesting metrics marketers should use to measure effectiveness of

mobile advertising. (AACSB: Communication; Use of IT; Reflective Thinking)

Answer:

APPLICATIONS AND CASES

Online, Mobile, and Social Media Marketing: “Buy” Buttons

Amazon is the big gun in e-commerce that has disrupted traditional retailing. But now, it seems,

Amazon is in for some disruptive competition itself. With global e–commerce sales expected to

reach almost $2 trillion a year, Google and social media sites such as Facebook, Twitter,

Pinterest, and Instagram want to get in on the action. Several social media sites are

experimenting with “Buy” buttons on their sites that let consumers purchase directly through the

social medium. Google is experimenting with “Buy” buttons on search results to counter the

almost 40 percent of consumers who now start their shopping searches on Amazon instead of

search engines like Google. The biggest game changer, however, might be Pinterest. Pinterest

started in 1999 as a sharable bulletin board where participants “pin” pictures of things they like.

It is now a multibillion-dollar company with 70 million monthly visitors who have saved more

than 50 billion objects on a billion Pinterest bulletin boards. Lots of people would like to be able

to buy some of those pinned objects, so Pinterest has added a “Buy” button to its mobile app.

Users had already been able to click through to a marketer’s website, but now they can purchase

any of more than 2 million products from retailers such as Macy’s, Bloomingdales, and

Nordstrom directly through Pinterest without leaving the site. Payments are processed through

Pinterest’s partners Stripe, Brainstorm, or Apply Pay, but the seller provides the order fulfillment.

In the future, Pinterest users may see an appetizing recipe, click the “Buy” button to order the

ingredients from Fresh Direct, and have them delivered to their homes in less than an hour.

17-9 What competitive advantage does Pinterest (www.pinterest.com) have over other social

media that might make its “Buy” button more successful? (AACSB: Communication;

Reflective Thinking)

Answer:

17-10 Discuss advantages and disadvantages of “Buy” buttons for social media sites like

Pinterest and search engines like Google. What are the advantages and disadvantages for

marketers making their goods available through “Buy” buttons on these sites? (AACSB

Communication; Reflective Thinking)

Answer:

Marketing Ethics: #Fail

According to one survey, 92 percent of U.S. companies now claim that social media marketing is

important for their businesses. Fashion designer Kenneth Cole took advantage of the trend in

2011 by posting the following tweet: “Millions are in uproar in #Cairo. Rumor is they heard our

new spring collection is now available online at http://bit.ly/KCairo -KC.” Kenneth Cole was

criticized on social media for capitalizing on the strife of the Egyptian revolution to promote his

website. The offensive tweet was deleted, and Cole apologized by tweeting: “Re Egypt tweet: we

weren’t intending to make light of a serious situation. We understand the sensitivity of this

historic moment -KC.”

Most marketers would not make the same mistake twice. However, in September 2013, as the

United States deliberated military action in Syria, Cole tweeted the following: “‘Boots on the

ground’ or not, let’s not forget about sandals, pumps and loafers. #Footwear.” To justify this

action, Cole told Details magazine, “Billions of people read my inappropriate, self-promoting

tweet. I got a lot of harsh responses, and we hired a crisis management firm. If you look at lists

of the biggest Twitter gaffes ever, we’re always one through five. But our stock went up that day,

our e- commerce business was better, the business at every one of our stores improved, and I

picked up 3,000 new followers on Twitter. So on what criteria is this a gaffe? Within hours, I

tweeted an explanation, which had to be vetted by lawyers. I’m not even sure I used the words

I’m sorry—because I wasn’t sorry.”

17-11 Kenneth Cole believes that his controversial tweets improve business and provoke

conversation and awareness. Is this an effective use of social media to engage customers with

the brand? Why or why not? (AACSB: Communication, Reflective Thinking)

Answer:

Social media outlets are excellent locations to create brand communities. However, many

companies are still experimenting with how to use these platforms most effectively. Social

17-12 Many marketers are still learning how to use social media platforms effectively to engage

customers in meaningful relationships. Locate three social media platforms used by the

Kenneth Cole brand to engage customers. Is the brand’s marketing message consistent across

all platforms? Explain. (AACSB: Communication; Use of IT; Reflective Thinking)

Answer:

Kenneth Cole uses Twitter, Facebook, Instagram, Google+, Pinterest, and Snapchat. Students

should discuss how the marketing messages change based on the platforms. For example, the

Marketing by the Numbers: Field Sales versus Telemarketing

Many companies are realizing the efficiency of telemarketing in the face of soaring sales force

costs. Whereas an average cost of a business-to-business sales call by an outside salesperson on

17-13 Refer to Appendix 2, Marketing by the Numbers, to determine the marketing return on

sales (marketing ROS) and return on marketing investment (marketing ROI) for Company A

and Company B in the chart below. Which company is performing better? Explain. (AACSB:

Communication; Analytical Reasoning; Reflective Thinking)

Company A

(sales force only)

Company B

(telemarketing only)

Net sales 1,000,000 $850,000

Answer:

17-14 Should all companies consider reducing their sales forces in favor of telemarketing?

Discuss the pros and cons of this action. (AACSB: Communication; Reflective Thinking)

Answer:

Students will likely agree that it may not be appropriate for all companies to carry out the

selling function solely by telemarketing. However, telemarketing can reduce selling costs by

performing many of the cold calling and qualifying tasks for the sales force. That way,

Company Case Notes

Alibaba: The World’s Largest E-Tailer Is Not Amazon

Synopsis

As U.S. consumers rapidly add products to their carts on Amazon, Walmart.com, and various

other online retail sites, most have never even heard of Alibaba. But while all the others have

gone about building massive only businesses, Alibaba has been hard at work creating an

enormous online empire. It has done so with one little advantage—1.3 billion potential

customers in its home market. Under the direction of visionary founder Jack Ma, Alibaba has

taken a somewhat different approach to e-commerce than its global counterparts, one that has the

potential to expand and allow Alibaba to become the most pervasive provider of products and

services in the world.

Teaching Objectives

The teaching objectives for this case are to:

1. Illustrate how quickly the Internet changes and how possible it is for startup companies to

have such a huge influence.

2. Introduce elements of ecommerce and show which factors have the greatest influence on

fueling ecommerce.

3. Fuel discussion as to how companies can take advantage of an ever-increasing palette of

Internet tools as a means of integrating their brands into the social structure and

conversation of consumers.

4. Analyze the nature of customer value when it comes to direct and e-marketing.

Discussion Questions

17-18 As a digital retailer, how does Alibaba provide value to Chinese consumers? What sets of

values are unique to the Chinese market?

There is a key quote from the case: “E-commerce in the U.S. is like a dessert. It’s just

supplementary to your main business,” Ma said recently. “In China, because the

17-19 Given that Alibaba does not own or distribute any of the merchandise exchanged on its

sites, describe what factors had to develop for the company to succeed.

If Alibaba were to have taken an Amazon approach where they fill their own warehouses with

merchandise they purchase from vendors and suppliers, most of the burden for developing

17-20 Analyze Alibaba’s business model relative to all the different forms of digital and online

marketing covered in this chapter.

There are many different forms of digital and online marketing covered in this chapter.

Among them are:

Websites. Unlike most e-tailers, Alibaba has developed and acquired many different

e-commerce websites and established major divisions. Taobao.com is a site that helps

small businesses and private parties sell merchandise. Alipay is akin to PayPal. Tmall is

Online advertising. We don’t have much information available here. What we do know is

Email marketing, videos, blogs, and mobile marketing. There is no information on these

Social media marketing. It can be assumed that Alibaba relies heavily on social media

17-21 Can Alibaba succeed in countries outside of China? Why or why not?

This case outlines that Alibaba has been a tremendous success almost entirely because of its

singular focus on the Chinese market, which was underdeveloped and hungry for commerce

of any kind. Alibaba moved quickly to fill the voids. When Alibaba introduced the concept to

the Chinese market, it was not previously known. However, as it eyes the U.S. and U.K.

markets, it will face a dramatically different environment – one in which every single product

line that it has in China is already alive and thriving in these developed markets. Alibaba has

already made small-scale efforts to penetrate the U.S. market and has not had any notable

success. It is also not yet clear how Alibaba can provide any kind of value to U.S. customers

Teaching Suggestions

Before having students read the case, ask them what they know about Alibaba. Likely, this

discussion will be very brief. It isn’t on their radar and they don’t care. Then, ask them if they

think there is room for more e-tailers in the U.S. market. Responses to this may vary. Finally, ask

them what kinds of gaps they perceive in the U.S. market (what kinds of needs are not being

served?). Perhaps, this may provide the context for an opportunity for e-commerce entrants.

This case was designed for use with Chapter 17. This case can also be used with the retailing

chapter on (Chapter 13) and the global marketing chapter (Chapter 19).

Go to mymktlab.com for the answers to the following Assisted-graded writing questions:

17-22 What public policy issues are related to direct and digital marketing?

17-23 Compare and contrast a marketing website and a branded community website.

ADDITIONAL PROJECTS, ASSIGNMENTS, AND EXAMPLES

Projects

1 You are the owner of a small hometown brick-and-mortar gourmet meat store. What, if any,

advantage do you see in setting up an online presence? In what ways could this possibly help

your business? Or could it? (Objective 3)

2 What do you believe to be the future of traditional catalog marketing? Find examples of

companies that have discontinued their printed catalog in favor of a fully online version. Has this

been successful for them? (Objective 2)

3 Take a look at the three following similar click-and-mortar companies: The Poisoned Pen

(www.poisonedpen.com/), The Mysterious Bookshop (http://www.mysteriousbookshop.com/)

and The Mystery Bookstore (www.mystery-bookstore.com/). Talk about their similar approaches

(and differences) to online retailing. (Objective 3)

4 How does your college/university use the internet to attract quality prospective students? Are

they doing a good job? What suggestions would you make to your college or university to

improve their web appearance? (Objective 4)

5 Find an example of a company that appears to be doing an absolutely terrible job of connecting

with customers via the web. Make recommendations to improve their “web appeal.” (Objective

Small Group Assignments

1 Form students into groups of three to five. Each group should read the Real Marketing

17.2: Mobile Marketing: Customers Come Calling, and then answer the following

questions and share their answers with the class. (Objective 3)

a Who do you believe the mobile marketing movement helps more—the marketer or

the consumer? Why?

b Do you believe that smartphones will remain the tool of the 18– to 34-year-old age

group, or will older consumers adapt them too? Explain your answer.

c Rather than irritating consumers, how can marketers develop more useful mobile

applications that make customers say, “Do call me, please—or, I will call you!”?

2. Form students into groups of three to five. Each group should answer the following

questions and share their answers with the class. (Objective 2)

a. Discuss mobile phone marketing. What are the pros and cons of this form of direct

marketing medium?

b. What do you think about the future of interactive TV? Why do you believe it has not

taken off to the extent that visionaries were expecting?

c. Much has been made about the use of podcasts as a direct marketing tool. How

effective do you believe podcasts to be? What would you suggest as a method to

increase its use and effectiveness?

Individual Assignments

1. Go onto to Dell’s website (www.dell.com) and that of major competitor Hewlett-Packard

(www.hpshopping.com). “Build” your ideal laptop on each. Compare the competitors on

product offerings, price, and website ease of navigation, appeal, and use. Who wins?

Why? (Objective 4)

2. Go to the government’s Internet Crime Complaint Center (www.ic3.gov/default.aspx).

Read and report on some of the many Internet crime schemes. (Objective 5)

Think-Pair-Share

Consider the following questions, formulate an answer, pair with the student on your right, share

your thoughts with one another, and respond to questions from the instructor.

1 How would you define direct marketing? (Objective 1)

2 What are the benefits of direct marketing to customers? To companies? (Objective 1)

3 How are companies using online marketing to deliver greater value to consumers?

(Objective 1)

4 What are the major forms of direct marketing? (Objective 2)

5 Give three examples of consumer-to-business (C-to-B) online marketing. (Objective 3)

6 What are some of the significant ethical issues raised by the use of direct marketing?

(Objective 4)

Outside Examples

1. The University of Phoenix’s “online campus” was established in 1989, well before the

advent of and widespread use of the World Wide Web. Since then, the University of

Phoenix has exploded, and more and more adults are earning their Bachelor’s, Master’s

and even Doctoral degrees online.

Because this model has proven so successful, traditional universities have added online

options to their degree programs. Sometimes courses are only “web-enhanced,” meaning

that the students still gather in a traditional classroom, but some work takes place on the

internet. Many colleges and universities, however, are moving at least some of their

courses completely online. This allows them to reach many non-traditional students, and

students who simply cannot relocate to the city in which their campus is located.

(Objective 4)

a. How has the University of Phoenix affected the college experience? Be specific.

b. What are the benefits of obtaining a degree online? What are the disadvantages, if

any?

c. Visit their website at www.phoenix.edu. Is it an effective website? Defend your

answer.

Possible Solution:

a. The University of Phoenix ushered in a new era of content delivery in higher

education. Before the University of Phoenix, the college experience remained the

b. The benefits of obtaining a degree online are mostly tied to convenience and

c. The University of Phoenix’s website is one of the better college or university sites. It

2. Take a hard look at your university’s web presence. What kind of job are they doing in

reaching and supplying the information needed by their various publics? How easy is it to

accurately navigate? What suggestions would you give to the web designers of your

university to assist in making the web presence more “user friendly”? (Objective 4)

Possible Solution: