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END OF CHAPTER MATERIAL
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)
Answer: Student answers will vary based on their personal response. Refer to the MyLab for
20-2 Explain how marketing can be perceived as having a negative impact on the consumer.
(AACSB: Communication)
Answer:
Students may cite a series of criticisms that are leveled at marketing. These can include high
20-3 How would you distinguish between consumerism and environmentalism in terms of
scope and influence? (AACSB: Communication)
Answer: Consumerism is a social movement that aims to strengthen the power of the
consumer in terms of their relationship with businesses. It has three strands: information,
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
Figure 20.2 shows a grid that companies can use to gauge their progress toward
environmental sustainability. It includes both internal and external greening activities that
will pay off for the firm and environment in the short run, and beyond greening activities that
20-5 What is sense-of-mission marketing, and how does it impact on a business? (AACSB:
Communication)
Answer:
Sense-of-mission marketing suggests that the business needs to define its mission in a
broader way. Rather than being product (or organization) oriented, it needs to see itself in a
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)
Answer: Student answers will vary based on their personal response. Refer to the MyLab for
20-7 Assume that you are the marketing director of a new retail chain. From the outset, you want
to be environmentally sustainable. Research how other retailers achieve this and create a
checklist. (AACSB: Communication; Use of IT; Reflective Thinking)
Answer:
There are many ways that the student can approach this. There are existing policies for all the
major retailers, and these can be found on their websites. A good checklist should include
actions under the following headings:
Supply chain and purchasing (reducing delivery and transportation impacts)
Green products (selling and using them)
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
vast reach, privacy advocates are very concerned about this latest development, particularly
when it comes to children’s safety. Online predators and bullying are real safety issues facing
youth. Other criticisms of Facebook’s decision boil down to money—some argue that this is just
about monetizing kids. Facebook will be able to offer a younger demographic to advertisers
wanting to reach them. Facebook defends its actions, saying the change in policy is due to
teenagers wanting the ability to post publicly, primarily for fundraising and promoting
extracurricular activities such as sports and other school student organizations. Facebook has
added precautions, such as a pop-up warning before teens can post publicly and making “seen
only by friends” as the default that must be changed if the teen desires posts to be public.
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.
It should be interesting to discover whether the focus on making money for Facebook is
20-10 Come up with creative ways marketers can reach this demographic on Facebook without
alienating their parents. (AACSB: Communication; Reflective Thinking)
Answer:
Students’ answers will vary. Obviously, promoting controversial products, such as
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:
www.theguardian.com/sustainable-business/nestle-baby-milk-scandal-food-industry-standard
s and www.businessinsider.com/nestles-infant-formula-scandal-2012-6?op=1.
Students should address socially and environmentally responsible ways to market infant
formula, including but not limited to appropriate global pricing strategies and the avoidance
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
what consumers want and respond with market offerings that create value for buyers and
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:
price cost
Markup percentage on price = ——————
price
so,
The retailer’s cost for conventional eggs = $1.70 ($1.70 0.20) = $1.36 per dozen, which
The retailer’s cost for organic eggs = $3.50 ($3.50 0.20) = $2.80 per dozen, which is the
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:
total fixed costs
Breakeven volume = ————————
For the conventional farmer, total fixed costs are $1,000,000 and the organic farmer’s total
breakeven volumes rounded up to the nearest whole dozen are:
$1,000,000
Breakeven volumecon = ———————— = 2,173,914 dozen
($2.80 – $1.80)
Thus, the organic farmer would have to sell about 27% more eggs than a conventional farmer
to break even.
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.
Planned obsolescence. Focusing on sustainable materials in its products and creating better
Too few social goods. A strong focus on people (employees and communities). Kept a factory
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
provided is societal marketing. This is clearly a company that has developed a very holistic
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
products or desirable products. The question then is, which one? Do adidas products hurt
consumers in the long run? Given that they are fashion products, a case can be made that
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
quantify. Just what portion of a company’s revenue and profits can be attributed 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:
The answer to this question definitely depends on the student’s point of view. You can
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:
Although doing nothing illegal, both companies engaged in practices that, at best, could
be called “questionable.” By giving the impression that these actions were initiated and
