END OF CHAPTER MATERIAL
Discussion Questions
17-1 Discuss the benefits of direct and digital marketing to buyers and sellers. (AACSB: Communication)
Answer:
For buyers, direct and digital marketing are convenient, easy, and private. They give buyers
anywhere, anytime access to an almost unlimited assortment of goods and a wealth of product and
For sellers, direct marketing often provides a low-cost, efficient, speedy alternative for reaching their
markets. Direct and digital marketing also offer sellers greater flexibility. It lets marketers make
17-2 What are the main purposes of a marketing Web site? (AACSB: Communication)
Answer: They are designed so that they can communicate with customers and move them closer to a
17-3 How does viral marketing work? Is it effective? Are there aspects about it that mean that the
business cannot control it? Is this a problem? (AACSB: Communication)
Answer: Viral marketing is a strategy that encourages individuals to pass on marketing messages to
others. The idea is that there is the potential for exponential growth like the spreading of a virus.
There is certainly potential for viral marketing to get out of control as once it has been released there
17-4 With a dominant Internet presence, is there still a place for catalog marketing? (AACSB:
Communication)
Answer: Some students are likely to dismiss the importance of catalog marketing, but it is still a huge
and effective area for sales and marketing. Often, the catalogs are bundled with other print media or
17-5 What is phishing, and how does it affect internet marketing? (AACSB: Communication; Reflective
Thinking)
Answer:
One common form of internet fraud is phishing, a type of identity theft that uses deceptive emails and
fraudulent online sites to fool users into divulging their personal data. For example, consumers may
receive an email, supposedly from their bank or credit card company, saying that their account’s
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:
Students can search the following resources for controversial content:
“The 5 Worst Twitter Fails of 2014,” www.entrepreneur.com/article/240696.
“The Top 10 Most Embarrassing Social Media Fails from 2015,”
socialmediaweek.org/blog/2016/01/most-embarrasing-social-media-fails-2015/.
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
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)
Answer: Student answers will vary based on their personal response. Refer to the MyLab for an
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:
Because this is a growing advertising medium, students should be able to find many sources of
information. For example, see “How Marketers Are Measuring Their Mobile Efforts,” May 15, 2014,
APPLICATIONS AND CASES
Online, Mobile, and Social Media Marketing: On the Move
According to Google’s Consumer Barometer, an interactive digital consumer insights tool, some 35
percent of UAE and Saudi Arabian under-35s go online using either smartphones or tablets. The 2016
data suggests that 30 percent of UAE residents prefer mobile devices compared to traditional desktops; in
Saudi Arabia, this is 32 percent. In both countries, over 70 percent of smartphone owners prefer to carry
out tasks, including product searches and purchases, using their smartphones. Despite some continued
reluctance over online security and product quality, 24 percent of the population of the United Arab
Emirates had recently made a purchase online. In Saudi Arabia, this figure was 33 percent. Consumers in
both countries use mobile Internet connections to search for information and reviews of local businesses
in addition to making enquiries and purchases abroad. In the United Arab Emirates, 54 percent of users
searched for prices of local products online, in Saudi Arabia this was lower at 45 percent. It does mean
that local as well as international businesses have potential opportunities in the United Arab Emirates and
Saudi Arabia. Typically, consumers were interested in contact information, location, and business hours.
For businesses, there are encouraging signs in the younger generations. Some 85 percent of under-25s in
Saudi Arabia researched a recent purchase using their smartphone. In the United Arab Emirates, this
figure was 57 percent but showed all signs of future growth.
17-9 What local businesses in your community are using online, social media, or mobile marketing?
Interview the owner or manager of one of the businesses to learn how he or she uses these marketing
activities and how satisfied he or she is with the activities. (AACSB: Communication; Reflective
Thinking)
Answer:
Student answers will vary. Students should learn about how the businesses use marketing activities,
17-10 Mobile marketing can be confusing for a small business owner. Develop a presentation for small
business owners that describes mobile marketing, its advantages and disadvantages, and examples of
how small businesses are using mobile marketing. (AACSB: Communication; Reflective Thinking)
Answer:
Students’ presentations will vary. Points to make include the widespread adoption of mobile devices
making it easy to connect with customers. A mobile device is a handy shopping companion, providing
product information, price comparisons, advice and reviews, and access to instant deals and digital
Risks include not using mobile marketing responsibly, which can risk angering ad-weary consumers.
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 media can be viewed
Students may argue that “any press is good press” but that is a myth. Companies involved in
controversy may suffer and not recover. Managing a brand’s social media efforts can be a major
undertaking and presents challenges. Most large companies are now designing full-scale social media
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 Kenneth Cole
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 average costs
$600, the cost of a telemarketing sales call can be as little as $20 to $30. And telemarketers can make 20
to 33 decision maker contacts per day to a salesperson’s four per day. This has gotten the attention of
many business-to-business marketers, where telemarketing can be very effective.
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
Sales expenses $300,000 $100,000
Answer:
net marketing contribution (NMC)
Marketing ROSA= ———————————
net sales
net marketing contribution (NMC)
Marketing ROIA= ———————————
marketing expenses
NMC = net sales cost of goods sold marketing expenses
In this case, the only marketing expenses considered are sales expenses.
So, for Company A:
net marketing contribution $200,000
Marketing ROSA= ——————————— = ————— = 0.20 = 20%
net marketing contribution $200,000
Marketing ROIA= ——————————— = ————— = 0.67 = 67%
For Company B:
NMCB = $850,000 $425,000 $100,000 = $325,000
net marketing contribution $325,000
Marketing ROSB= ——————————— = ————— = 0.38 = 38%
net marketing contribution $325,000
Marketing ROIB= ——————————— = ————— = 3.25 = 325%
Even though Company B’s net sales are lower than Company A, it realizes a higher net marketing
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
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 infrastructure of [traditional retail]
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 the
Additionally, parcel services and delivery intermediaries have had to develop. We take UPS and
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
Online advertising. We don’t have much information available here. What we do know is that
Email marketing, videos, blogs, and mobile marketing. There is no information on these types of
Social media marketing. It can be assumed that Alibaba relies heavily on social media marketing
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,
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 4)
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 same for decades (or
b. The benefits of obtaining a degree online are mostly tied to convenience and flexibility. Now
students who are unable (or unwilling) to travel to a centralized campus and sit in class for
c. The University of Phoenix’s website is one of the better college or university sites. It is
engaging, easy to navigate, and provides the viewer/reader with a wealth of information in a
condensed format. No doubt, their web presence is another reason for their ongoing and
growing success. Other universities could take a lesson.
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:
Student responses to this question will vary widely. It is important that the instructor concentrate
on the students providing positive useful feedback on their university’s website. All web