978-0134728391 Chapter 13 Part 2

13–16

 Remind students of the flexibility and adaptability of direct (or interactive) marketing in

targeting very specific customers.

 Make sure that students understand the difference between publicity and public relations,

as these two concepts are often confused.

QUICK QUESTIONS

 What are some types of sales promotions?

 What are some differences between personal selling for consumer products or industrial

products?

Use In-Class Activity 2: Up for Debate: Getting a Stimulus Boost with Promotion

Time Limit: 30 minutes

Learning Catalytics is a “bring your own device” student engagement, assessment,

and classroom intelligence system. It allows instructors to engage students in class

with realtime diagnostics. Students can use any modern, web-enabled device

(smartphone, tablet, or laptop) to access it. For more information on using

Learning Catalytics in your course, contact your Pearson Representative.

IN-CLASS ACTIVITIES

In-Class Activity 1: Ice-Breaker: Why Do They Sell Where They Do?

Activity Overview:

This activity asks students to consider distribution strategies behind some well-known competing

products.

Time Limit: 30 minutes

What to Do:

1. Divide the class into small groups and ask each group to come up with four sets of competing

products or services; in most cases, students will select products that are similar, but carry a

2. Ask students to discuss the place each product is sold and be able to explain the reasoning for

3. Reassemble the class as a whole and ask for each group’s input. (10 minutes)

Don’t Forget:

Students will come up with a variety of reasons for differing products being sold where they are

In-Class Activity 2: Up for Debate: Getting a Stimulus Boost with Promotion

Activity Overview:

This activity asks students to discuss how firms are changing their distribution messages during

economic downtimes.

Time Limit: 30 minutes

What to Do:

2. Divide the class into small groups to discuss their pros and cons of premiums, direct (or

interactive) marketing, and integrated promotion and distribution. Do the pros outweigh the

cons? (10 minutes)

3. Reassemble the class to debate the pros and cons as a group. Do the pros outweigh the cons?

In-Class Activity 3: Up for Debate: What’s the Best Way to Reach Them?

1. Divide the class into four-member groups and ask each group to consider marketing a solar–

powered vacuum cleaner to working women with fast-paced, on-the-go lifestyles. In their

discussions, groups should consider the following: (15 minutes)

a. Which elements of the promotional mix should be utilized?

b. What are the best ways/places to promote this product to this specific target market?

2. Reassemble the class and discuss each group’s promotion suggestions. (15 minutes)

Don’t Forget:

ANSWERS FOR END OF CHAPTER ACTIVITIES

QUESTIONS FOR REVIEW

13-1. Describe the types of distribution channels that may be used to get products from

manufacturers to end users, and give an example of each.

The channels of distribution are as follows: Channel 1 involves direct sales to consumers

13-2. What are the three distribution strategies of market coverage? When is each most

appropriate?

Intensive distribution means distributing through as many channels and channel members as

possible (both wholesalers and retailers) for low-cost consumer goods such as snacks and

13-3. Compare each of the major modes of transportation and identify at least one advantage of

each.

The advantages of trucks include flexibility for any-distance distribution, fast service, and

dependability. Air is the fastest mode of transportation for physical goods. Online

transmission is a newer, faster, and less expensive means of distribution than all other modes.

13-4. Select four different kinds of advertising media and compare the advantages and

disadvantages of each.

Answers can vary widely, but might include statements such as the following:

Newspapers provide excellent coverage, but have poor reproduction quality and are highly

impermanent, but readership has decreased dramatically.

Television provides wide geographic coverage and reaches a number of consumers but is expen-

sive and tends to confuse viewers with many short commercials.

Direct mail allows a marketer to select its audience and personalize its message but is expensive

and often regarded as junk mail.

13-5. What are the steps in the personal selling process?

The first step is prospecting and qualifying: the process of identifying potential customers

and then prospects must be assessed to determine whether they have the authority to buy and

QUESTIONS FOR ANALYSIS

13-6. Describe the four forms of non-store retailing. Give examples of products that would be

most appropriate for each, and discuss the reasons why that product would do well with that

particular form.

Nonstore retailing includes direct-response retailing, in which firms contact customers

directly to inform them about products and to receive sales orders. This kind of marketing

companies that have stores in the malls, with an emphasis on clothing and gift items. These

are often familiar items with little actual learning required by the buyer. The catalog reminds

the receiver about the company and gives them information in advance of shopping about

current products.

Less popular in recent years because of do-not-call registries, outbound telemarketing uses

something that the customer will want to see and touch and feel before purchasing. This

approach lends itself to a great exchange of information between the seller and the potential

customer. At home-selling parties, feedback from others (not the salesperson) is a key

advantage to the buyer.

Students should provide specific examples for each form (such as Mary Kay cosmetics for

direct selling.)

13-7. What are the major types of product line and bargain retailers? Identify at least one

example of each type.

Retailers that feature broad product lines include department stores, which are arranged into

specialized departments and handle a wide range of goods; supermarkets, which offer a

related products.

Bargain retailers carry wide ranges of products and come in many forms: discount houses,

13-8. Identify the major tools of sales promotion. At which stage of the consumer buying

process is each most important? Why?

The major tools of sales promotion are samples and coupons, premiums, loyalty programs,

and point-of-sale displays.

Samples are important at the need recognition stage, and especially at the information

Loyalty programs reward repeat purchasers. Therefore, the purchase decision stage and the

post-purchase evaluation stage matter the most. If a consumer does not make the repeat

APPLICATION EXERCISES

13-9. In addition to being a major online retailer, Amazon.com acts as an e-intermediary for

many small to medium-sized businesses. Imagine that you are interested in selling

refurbished cell phones. Using the information on Amazon’s website, how would you

become a seller on Amazon? What costs are associated with selling your products through

Amazon? If you decided to sell your products through your own website instead, what would

be the pros and cons?

As a member of a supply chain, the company’s marketing mix has to be consistent with its

partners’ strategy. A company cannot make unilateral decisions without considering the other

13-10. Search for some of the best viral marketing videos of all time and chose one to analyze.

What is the product being marketed, and who is the target market? How does the

advertisement appeal to the target market? Why do you think this particular video was

effective?

Student answers will vary based on both the product and the video. For instance, Dollar

BUILDING A BUSINESS: CONTINUING TEAM EXERCISE 13-11 TO 13-15

(Learning Objectives 1, 4, 5, 6 – AACSB – interpersonal relations and teamwork, analytical

and reflective thinking, application of knowledge)

In this exercise students continue to develop their marketing plan by adding an appropriate

distribution and promotional plan to their marketing mix. Determining promotion objectives and

strategies leads to choosing the specific appropriate tools to successfully achieve the objectives.

Choosing the appropriate distribution mix relies on having earlier correctly identified your target

market and the characteristics of the buyers. Knowing the costs of the tools you choose will help

you stay within your budget.

TEAM EXERCISE: MAKING A DIFFERENCE 13-16 TO 13-19

(Learning Objectives 5, 6 – AACSB – interpersonal relations and teamwork, analytical and

reflective thinking, application of knowledge)

13-16. As a group, develop your promotional objectives. What are the initial objectives of your

promotional campaign? Will these change over time?

13-17. What role will each element of the promotional mix play in your promotional plan?

13-19. Do you think that the promotional mix will change over time? How might it be different

in three years? Be sure to address this in your proposal.

As students examine the guidelines, they must determine whether the objectives are the same for

promotions.

EXERCISING YOUR ETHICS: THE CHAIN OF RESPONSIBILITY

(Learning Objective 4 – AACSB – ethical understanding and reasoning, reflective

thinking)

13-20. What are the responsibilities of each party—the customer, the store, and the delivery

firm—in this situation?

The responsibilities of each party in this situation are as follows:

 Customer: To provide correct delivery information to the store.

13-21. From an ethical standpoint, in what ways is the store manager’s action right? In what

ways is it wrong?

From an ethical standpoint, the store manager’s action is right and wrong as follows:

13-22. If you were appointed to settle this matter, what actions would you take?

CASES:

THE CHANGING LANDSCAPE OF COMMERCE

(Learning Objectives 3, 4, and 5 – AACSB – application of knowledge, reflective thinking)

13-23. Why are online retailers taking so much market share from the traditional brick-and-

mortar stores?

Online retailers have become experts at collecting and collating individual and marketplace

13-24. Do you think that legacy stores such as Macy’s and even WalMart will be able to compete

with online stores in the future? How would they have to change in order to be more

competitive?

Legacy stores can compete by providing services that directly compete with online retailers.

These services include the ability to inform and sell to consumers conveniently. Promotional

13-25. How have changes in physical distribution changed the marketplace? How has the

marketplace changed the distribution networks?

13-26. If everything were available to purchase online, would there still be products and services

you would want to buy in person? How can online retailers become more competitive against

traditional stores for items that people still prefer to buy in person?

Answers will vary depending on students’ comfort with buying various products online.

They will want to ―touch‖ some products, where other products are easier to learn about

THE LONG TAIL, REVISITED

(Learning Objectives 5 and 6 – AACSB – application of knowledge, reflective thinking)

13-27. What kinds of products do you think you would find in Anderson’s ―long tail‖? Give

examples.

13-28. Do you think the long tail theory is still applicable? Why, or why not?

13-29. Would you start a niche marketing business? If so, why and how would you market your

products or services? If not, why not?

Answers will vary depending on students’ risk tolerance. Students should address the value

13-30. Do you think it is ethical for companies like Amazon to collect third party data? How

would you feel, and what would you do, if your product suddenly became mainstream and

Amazon started carrying it, selling it, and fulfilling those sales? What are the issues? What

are the pros and cons?

Answers will vary about the ethics of companies collecting third party data. Students may be

BUSINESS PLAN PROJECT: PART 4

The business plan project for Business Essentials is divided into six parts, corresponding to the

book’s six main parts. The fourth part of the project is found on the following three pages. It is

now time to get students working on Part 4…

CRAFTING A BUSINESS PLAN

PART 4: PRINCIPLES OF MARKETING

Assignment Overview:

This part of the business plan asks students to think about marketing’s ―Four Ps‖—product,

price, place (distribution), and promotion—and how they apply to their business. Students will

list features and benefits as well as the points of difference for their product or service. After

Files to Provide Students:

For this part of the project, students will be asked to complete Part 4: Principles of Marketing. If

students have already started working on the business plan project, they should continue using

the student template they began working on in Parts 1 to 3. A copy of the marketing template is

available on the following page.

Estimated At-Home Completion Time:

If done well, this section will require a minimum of 3 to 5 hours. Instructor feedback will

improve the quality of student responses, so you may wish to spend class time working on the

plan.

Homework Deliverable from Students:

The length of student responses in this part of the plan will vary greatly, as critical or creative

thinkers will often begin to distinguish themselves. At a minimum, you should expect 3 to 5

STUDENT BUSINESS PLAN PROJECT TEMPLATE

PART 4: PRINCIPLES OF MARKETING

TARGET MARKET

Describe your target market in terms of age, education level, income, and other demo–

graphic variables.

Hint: Refer to Chapter 11 for more information on the aspects of target marketing and market

segmentation that you may want to consider. Be as detailed as possible about who you think your

customers will be.

PRODUCT FEATURES AND BENEFITS

Describe the features and benefits of your product or service.

Hint: As you learned in Chapter 11, a product is a bundle of attributes—features and benefits.

What features does your product have—what does it look like, and what does it do? How will

your product benefit the buyer?

PRODUCT DIFFERENTIATION

How will you make your product stand out in the crowd?

Hint: There are many ways to stand out in the crowd, such as a unique product, outstanding

service, or a great location. What makes your “great idea” special? Does it fill an unmet need in

the marketplace? How will you differentiate your product to make sure that it succeeds?

PRICING

What pricing strategy will you choose for your product, and what are the reasons for this

strategy?

Hint: Refer to Chapter 12 for more information on pricing strategies and tactics. Since your

business is new, so is the product. Therefore, you probably want to choose between price

skimming and penetration pricing. Which will you choose, and why?

PLACE (DISTRIBUTION) ISSUES

Where will customers find your product or service? (That is, what issues of the distribution

mix should you consider?)

Hint: If your business will sell its product directly to consumers, what types of retail stores will

sell your product? If your product will be sold to another business, which channel of distribution

ADVERTISING

How will you advertise to your target market? Why have you chosen these forms of

advertisement?

Hint: Marketers use several different advertising media—specific communication devices for

carrying a seller’s message to potential customers—each having its advantages and drawbacks.

Refer to Chapter 12 for a discussion of the types of advertising media you may wish to consider

here.

PROMOTIONS

What other methods of promotion will you use, and why?