978-0134492513 Chapter 20 Solutions Manual

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Discussion Questions

 20-1 Compare and contrast how the marketing concept, the societal marketing concept, and the

sustainable marketing concept, meet the needs of consumers and companies. (AASCB:

Communication)

20-2 What are the major social criticisms of marketing? How do marketers respond to these

criticisms? (AACSB: Communication; Reflective Thinking)

Answer:

Critics charge that marketing’s potentially negative impact on individual consumers includes

the following:

High prices due to three factors—high costs of distribution, high advertising and

promotion costs, and excessive markups.

Deceptive practices fall into three groups—promotion, packaging, and pricing.

Critics charge that marketing’s potentially negative impact on society as a whole includes the

following:

False wants and too much materialism—Critics have charged that the marketing

Critics charge that marketing’s potentially negative impact on other businesses includes the

following:

Acquisitions of competitors—Some acquisitions can be good for society. But

acquisitions can also be harmful and therefore are closely regulated by the

government

Marketing receives much criticism. Some of this criticism is justified; much is not. Marketers

respond to criticism by recognizing that most businesses try to be fair and do the right thing

for consumers, society, and other businesses. That’s how strong, long-term customer

relationships are built.

 20-3 Discuss the two major grassroots movements that work to keep companies’ sustainability

efforts in line. (AACSB: Communication)

20-4 What is environmental sustainability? How should companies gauge their progress toward

achieving it? (AACSB: Communication)

Answer:

Simply put, environmental sustainability is about generating profits while helping to save the

planet. Today’s enlightened companies are taking action not because someone is forcing them

to or to reap short-run profits but because it’s the right thing to do—because it’s for their

customers best interests, the company’s well-being, and the planet’s environmental future.

20-5 Describe the sustainability principles marketers can use to operate in a responsible and

ethical manner? (AACSB: Communication)

Answer:

Companies have grown to embrace sustainability principles as a way to both create

immediate and future customer value and to strengthen customer relationships. Under the

sustainable marketing concept, a company’s marketing should support the best long-run

performance of the marketing system. It should be guided by five sustainable marketing

Critical Thinking Exercises

 20-6 Figure 20.4 outlines a societal classification of products. Identify two products for each of

the four categories and explain why they are deficient, pleasing, salutary, or desirable

products. (AACSB: Communication; Reflective Thinking)

20-7 Suppose that you are leading PepsiCo’s environmental sustainability efforts. How would

you gauge the effectiveness of these programs? How would you communicate your efforts to

loyal consumers of your brand? (AACSB: Communication, Use of IT, Reflective Thinking)

Answer:

20-8 In a small group, discuss each of the morally difficult situations in marketing presented in

Table 20.1. Which ethics philosophy is guiding your decision in each situation? (AACSB:

Communication; Ethical Reasoning)

Answer:

Students’ responses will vary but they should demonstrate an understanding of the two

ethical philosophies. One philosophy is that ethical issues are decided by the free market and

legal system. Under this principle, companies and their managers are not responsible for

APPLICATIONS AND CASES

Online, Mobile, and Social Media Marketing: Teens and Social Media

Facebook recently announced that it will let teens’ posts become public. Before the change,

Facebook would only allow 13- to 17-year-old users’ posts to be seen by their “friends” and

“friends of friends.” Now, however, their posts can be seen by anyone on the network if the teen

chooses to make their posts “public.” Twitter, another social medium gaining popularity with

teens, has always let users, including teens, share tweets publicly. But because of Facebook’s

20-9 Is Facebook acting responsibly or merely trying to monetize kids as critics claim? (AACSB:

Communication; Ethical Reasoning)

Answer:

Student answers may vary. Some are likely to think that there is no reason to have ever

restricted teens’ posts, while others are as likely to think Facebook is making a bad decision.

20-10 Come up with creative ways marketers can reach this demographic on Facebook without

alienating their parents. (AACSB: Communication; Reflective Thinking)

Answer:

Marketing Ethics: Milking the International Market

Since the 1970s, Nestlé and other companies have faced criticism about their marketing of infant

formula to families in under- developed countries. Their marketing has positioned formula as

superior to breast milk and as a more modern way of feeding babies despite emerging research

findings that breast milk usually led to healthier outcomes for babies. Third-world women grew

dependent on infant formula to feed their babies but began watering it down to make it last

longer and save money, often with contaminated water. This too often resulted in child

malnourishment and other serious health problems and even death in some cases.

Nestlé has been accused by some child watchdog groups of using overly aggressive marketing

tactics to sell its infant formula products. Nestlé targeted many new mothers with tactics such as

providing samples, promoting products directly in hospitals and communities, and giving gifts to

health-care workers and new moms. Other infant formula companies even hired salesgirls in

nurses’ uniforms to drop by homes unannounced and sell potential customers on using baby

formula rather than breastfeeding.

In April 2012, Nestlé acquired Pfizer’s infant nutrition unit, making it the biggest player in the

infant formula market. According to The Guardian, this business unit generates approximately

85 percent of its revenues from emerging markets, demonstrating that Nestlé and other infant

formula companies are still capitalizing on consumers in emerging economies. An International

Nestlé Boycott Committee was started in 1984 to address this global issue and is still active

today.

20-11 In a small group, conduct research on this topic and formulate a sustainable, responsible

marketing plan for marketing infant formula across the globe. Present your plan. (AACSB:

Communication, Use of IT, Ethical Reasoning)

Answer:

Students may access the following websites as resources for background information on the

infant formula market:

20-12 Is it wrong for marketers to create wants where none exist in the marketplace in order to

make profits? Support your answer. (AACSB: Communication, Ethical Reasoning)

Answer:

The function of marketing is to deliver value to the customer. Responsible marketers discover

Marketing by the Numbers: The Cost of Sustainability

Kroger, the country’s leading grocery-only chain, added a line of private label organic and

natural foods call Simple Truth to its stores. If you’ve priced organic foods, you know they are

more expensive. For example, a dozen conventionally farmed Grade-A eggs at Kroger costs

consumers $1.70, whereas Simple Truth eggs are priced at $3.50 per dozen. One study found

that, overall, the average price of organic foods is 85 percent more than conventional foods.

However, if prices get too high, consumers will not purchase the organic options. One element of

sustainability is organic farming, which costs much more than conventional farming, and those

higher costs are passed on to consumers. Suppose that a conventional egg farmer’s average fixed

costs per year for conventionally farmed eggs are $1 million per year, but an organic egg

farmer’s fixed costs are three times that amount. The organic farmer’s variable costs of $1.80 per

dozen are twice as much as a conventional farmer’s variable costs. Refer to Appendix 2,

Marketing by the Numbers, to answer the following questions.

20-13 Most large egg farmers sell eggs directly to retailers. Using Kroger’s prices, what is the

farmer’s price per dozen to the retailer for conventional and organic eggs if Kroger’s margin

is 20 percent based on its retail price? (AACSB: Communication; Analytical Reasoning)

Answer:

20-14 How many dozen eggs does a conventional farmer need to sell to break even? How many

does an organic farmer need to sell to break even? (AACSB: Communication; Analytical

Reasoning)

Answer:

Company Case Notes

adidas: Athletic Apparel With Purpose

Synopsis

Global athletic footwear and apparel giant adidas has established itself as a leader in just about

every sport. But the area that the company has achieved the most greatness has little to do with

basketball, baseball, or even soccer. adidas has emerged as one of the global leaders in

sustainable practices. Last year, the Germany-based sports giant ranked third among the Global

100 Most Sustainable Corporations. While many companies have attempted to jump on board

with sustainability practices, such are engrained in adidas’ DNA and have been for a long time.

In fact, adidas strongly contends that having a strategic plan built on sustainable practices has

made it a better financial performer.

Teaching Objectives

The teaching objectives for this case are to:

1. Define sustainable marketing.

2. Understand the common social criticisms of marketing.

3. Apply the five principles of sustainable marketing.

4. Analyze a product according to the Social Classification of Products.

5. Gain a perspective on corporate and organizational objectives that goes beyond making a

profit.

Discussion Questions

20-18 Give as many examples as you can for how adidas defies the common social criticisms of

marketing.

Shoddy, harmful, and unsafe products. There is no basis for this where adidas is concerned.

In fact, the company drives quality throughout and focuses on innovation.

Planned obsolescence. Focusing on sustainable materials in its products and creating better

products through innovation can hardly be classified as planning obsolescence, even in the

fashion industry.

Too few social goods. A strong focus on people (employees and communities). Kept a factory

open after owners abandoned it. Uses sustainable materials in products. Is driven (and

drives suppliers) to minimize its environmental impact by achieving ISO 14001 certification.

20-19 Of the five sustainable marketing principles discussed in the text, which one best describes

adidas’s approach?

The sustainable marketing principle that seems to best fit adidas based on the information

20-20 Analyze adidas’s business according to the Societal Classification of Products (Figure

16.4).

adidas products have high immediate appeal, which classifies the products as either pleasing

20-21 Would adidas be more financially successful if it were not so focused on social

responsibility? Explain.

This is the age-old question—can a company do well by doing good? The case sites many

companies that think that it is not only possible but doable. But this is a very difficult thing to

Teaching Suggestions

Have students get into groups. Give them the task of estimating how many new shoe and apparel

items they purchase in a given year (they can attach a dollar amount as well). Then, have them

determine the social and environmental costs of their purchases. Finally, have them estimate how

long they will keep and use their purchased goods. Are the outcomes of these tasks troubling to

them? Is there any reason they should make reductions in their purchases? How else might they

minimize the social and environmental impact of their clothing purchases?

This case was designed for use with Chapter 20. This case can also be used with the branding

chapter (Chapter 8) and the global marketing chapter (Chapter 19).

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

20-22 How can marketing practices create barriers to entry that potentially harm other firms? Are

these barriers helpful or harmful to consumers?

20-23 Discuss the principles that will guide marketing managers to determine the moral

importance of each situation they face.

ADDITIONAL PROJECTS, ASSIGNMENTS, AND EXAMPLES

Projects

1. From a marketing concept point of view, is it wrong to sell cigarettes? Defend your

position. (Objective 2)

2. What is planned obsolescence? Think about the fashion industry. How (or is) planned

obsolescence employed in this industry? If it is, do you believe its practice to be ethical?

(Objective 2)

3. Examine the urban area of your town. Do you find examples of what you would consider

redlining? Explain. (Objective 2)

4. Discuss the statement “Marketing creates false wants and too much materialism.”

(Objective 2)

5. Environmentalism has really become a major movement in recent years. Why do you

think it has taken so long for businesses and consumers to really pay attention?

(Objective 3)

6. In your town, find an example of a company you believe is practicing sustainable

marketing. (Objective 4)

Small Group Assignments

1. Form students into groups of three to five. Each group should read the opening vignette

to the chapter on Unilever. Each group should then answer the following questions and

share their answer with the class. (Objectives 1 and 3)

a. What are some of the ways in which Unilever promotes sustainability through its

products and global initiatives?

b. Can Unilever’s philosophy be adopted by other industries? Which ones? Provide

examples and explain.

c. Where does Unilever go from here? How is it doing so far? From an environmental

sustainability standpoint, what might be next for the company?

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

questions and share their answers with the class. (Objective 4)

a. What is consumer-oriented marketing? Give two examples of companies you believe

practice this principle.

b. What is customer-value marketing? Give two examples of companies you believe

practice this principle.

c. What is innovative marketing? Give two examples of companies you believe practice

this principle.

d. What is sense-of-mission marketing? Give two examples of companies you believe

practice this principle.

e. What is societal marketing? Give two examples of companies you believe practice

this principle.

Individual Assignments

1 Traditional buyers’ rights include the following three items:

a. The right not to buy a product that is offered for sale.

b. The right to expect the product to be safe.

c. The right to expect the product to perform as claimed.

Do you believe these rights are sufficient to adequately protect consumers? Defend your

answer. If you do not believe the rights are sufficient, what additional rights would you

suggest and why? (Objective 3)

2. Table 20.1 lists some difficult ethical issues that marketers could face during their

careers. How would you answer each of the questions raised in this table? (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 sustainable marketing? Do you believe it is a realistic business

goal? (Objective 1)

2. What is really the difference between sustainable marketing and societal marketing?

(Objectives 1 and 4)

3. What is planned obsolescence? Do you believe marketers make a habit of using this

concept? (Objective 2)

4. How would you define consumerism? (Objective 3)

5. Do you believe marketers should be responsible to their shareholders or to

environmentalists? Why? (Objective 5)

Outside Examples

1. People for the Ethical Treatment of Animals, known as PETA, claims animals have

rights, and humans have no right to eat them, use them to produce clothing (leather goods

and furs, for example), or to use them for testing purposes. They are against practices

they say are cruel and barbaric, including everything from corporate animal farming to

breeding dogs and cats to supply our nation’s pet supply.

The organization targets high profile companies and their practices, recently targeting

Perdue Farms and KFC for cruelty to chickens. Their activists have been known to break

into test labs and release the animals. Others have released dogs that were with their

owners at dog shows.

Some have decried PETA as the lunatic fringe, although others praise their efforts to force

us all to treat animals humanely.

Read about PETA (www.peta.org). What do you think about the organization, their goals,

and their methods? (Objective 3)

Possible Solution:

2. A lot of things have changed since the advent of the Internet. Communication is much

different than it used to be. Consumers have a lot more access to information. But, is

everything as it seems on the Web? Guerilla marketing is the practice of applying

unconventional marketing techniques in order to get maximum results from minimal

resources. In many ways, the Internet has provided numerous opportunities for

companies to engage in very effective guerilla marketing. But are all guerilla techniques

ethical? Consider the following two examples and be the judge. (Objective 5)

Dodge’s Ram truck made a splash with a Web site that fans supposedly generated to

organize drag races in several cities. The site features amateurishly shot footage of a

drag race and contains no reference to the Dodge connection, just a shot of the Ram’s

grill. Staged drag races were held where, of course, only Ram trucks emerged

victorious. To enhance the “outlaw” image of this activity, the company sent bogus

letters to editors of local newspapers protesting the rise in street racing and

mentioning the Dodge Ram involvement. Supposedly, the guerrilla campaign was so

hush-hush even the top brass at the car company were kept in the dark.

When RCA records wanted to create a buzz around then new-on-the-scene pop singer

Christina Aguilera, it hired a team of young people to swarm the Web and chat about

her on popular teen Web sites. Posing as fans, they posted entries raving about her

new material. Just before one of her CDs debuted, RCA also hired a direct-marketing

company to e-mail electronic postcards filled with song snippets and biographical

information to 50,000 Web addresses. The CD quickly went to number one on the

charts.

Possible Solution: