2. Suppose Axe gathered eight 23-year-old males together to have a moderated discussion about what they liked and
disliked about the new Axe body spray fragrance. This is an example of a(n):
a.
In-home personal interview.
b.
Mail survey.
c.
Focus group.
d.
Executive interview.
e.
Web survey.
3. “Which fragrance of Axe body spray do you like the least?” is an example of this type of questionnaire question:
a.
Open-ended.
b.
Dichotomous.
c.
Multiple choice.
d.
Scaled-response.
e.
None of these.
4. According to the case, American males age 20 to 25 represent the _____ for Axe’s market research:
a.
Universe.
b.
Focus group.
c.
Sample.
d.
Big data.
e.
Competitive intelligence.
5. Which of the following represents an example of neuromarketing?
a.
Posing as a customer and buying Axe body spray products in a supermarket.
b.
Using cookies to track the Internet habits of individuals who visit Axe’s Web site.
c.
Interviewing Axe customers at the local mall.
d.
Collecting and analyzing InfoScan data to predict where and when consumers buy Axe products.
e.
Measuring changes in consumers’ heart rates as they watch Axe television commercials.
Chapter 9 ♦ Systems and Marketing Research 19
GREAT IDEAS FOR TEACHING CHAPTER 9
James S. Cleveland, Sage College of Albany
DISCUSSION BOARD TOPICS TO ENCOURAGE PARTICIPATION
Discussion board questions provided to students to encourage them to engage in thinking and writing about the content
of the Principles of Marketing course usually take the form of a provocative statement to which students are asked to
respond. An example of this would be “All PR is good PR.”
Discussion topics such as this one are abstract and often require that the instructor provide an initial reply to show
students what is expected of them in their own replies. For students with limited work experience, this approach may be
quite appropriate. For adult students with extensive experience as employees and consumers, however, the abstract
nature of such topics can be frustrating.
I have developed, therefore, a series of discussion board questions to use with experienced, adult students. These
questions are designed to encourage them to use their experiences as employees and consumers as doorways to better
understand the course material, and to make their own responses more interesting to themselves and to the other students
in the class who will read and comment on them.
Each question has three parts:
1. First, there is a sentence or two from the students’ textbook introducing the topic. By using the text author’s
own words, students are enabled to locate relevant material in the text more easily, the text content is
reinforced, and confusion resulting from use of variant terms or expressions is minimized.
2. Second, there is a reference to text pages the students should review before proceeding. Since the goal of the
exercise is for students to apply the course content to their own experiences, reviewing the content first is
important.
3. Third, there is a request for the students to think about or remember some specific situation in their experiences
to which they can apply the text material, and a question or questions for them to address in their replies.
Here are additional such discussion board questions developed for Chapter 9 of MKTG10. Each is written to fit the same
text cited above but could easily be rewritten and revised to fit another text.
Series A
1. Marketing research is the process of planning, collecting, and analyzing data relevant to a marketing decision.
2. Review the information on the role of marketing research from section 9-2 of your text.
3. Then describe how your employer uses marketing research or, if you do not think your employer does, how it
could use marketing research.
Series B
1. All forms of survey research require a questionnaire.
2. Review the information on questionnaire design from section 9–3c of your text.
3. Suppose you wished to design a questionnaire that could be used by your employer to do marketing research.
Describe what the questionnaire would be designed to find out and write one good closed–ended question that
could be used on it.
20 Chapter 9 ♦ Marketing Research
Deborah C. Calhoun, College of Notre Dame of Maryland
SECONDARY RESEARCH DATA HUNT AND MARKETING STRATEGY DEVELOPMENT
The purpose of this assignment is to acquaint the student with the many diverse business information sources available to
them in their college library as well as introduce them to the types of data marketers often use when making a strategy
decision. As you are aware, the ability to locate and analyze secondary data in an efficient and effective manner is
critical to their success as a business student as well as a future business decision maker. It has been said that “To
manage a business well is to manage its future; and to manage the future is to manage information.” Increasingly,
marketers view information not just as an input for making better decisions, but also as an important strategic asset and
marketing tool.
I write a new data hunt every year around one of the cases in the marketing principles text book and assign it relatively
early on in the semester. I have treated it as either a pass/fail or a graded assignment and both approaches seem to work. I
used to suggest to the students which sources might be consulted in completing each question but found certain logistical
problems with this approach. I now provide the students with a list of sources that includes a brief description of some of
the key sources available. A business library tour and a demonstration on accessing information through the Internet and
the various online indexes are also provided. After the students complete the data hunt, I ask them to analyze the case
using the secondary data they have gathered. The students often aren’t very excited about the assignment in the
beginning but many have indicated on course evaluations later that the data hunt was one of the strengths of the course
and a worthwhile learning assignment. The following is an example of the type of questions I include on the data hunt.
Petco Products Data Hunt
1. Who are Petco Products’ competitors in the dog-food and cat-food industry? Identify the competitors by both brand
name and manufacturer. You may wish to supplement your library research with a trip to the local grocery or pet
store. While at the store, note shelf space allocation, types of product offerings, packaging, and pricing among the
brands.
2. Ralston Purina is one of the largest competitors in the dog– and cat-food market. Develop a profile of the Ralston
Purina Company. Include information such as ownership, history, market share (both domestically and
internationally), and marketing practices such as product/brand offerings.
3. What Standard Industrial Codes (S.I.C.) do dog food and cat food fall under? What S.I.C. codes do pet stores and
dog kennels come under?
4. Before investing a significant sum of money into the “First in Show” (F.I.S.-27) dog food product, Petco Products
needs to further investigate the domestic and international pet food industry, in particular the dog food market. What
are the significant trends and what do sales and profitability forecasts look like for both the consumer market and the
pet store/kennel market?
5. Trade Associations and trade journals are excellent sources of industry specific information. The American Pet
Products Manufacturers Association supplied much of the pet ownership information in the case. What is the
address and phone number of the American Pet Products Manufacturers Association? Should Petco Products join
the Association and why or why not? Does your library carry any of the Association’s publications? Name three
other associations Petco may wish to join.
6. The case describes the characteristics of a pet owner nationally. How would you describe dog and/or cat owners in
your area? How do pet owners in your area differ from pet owners nationally?
Chapter 9 ♦ Systems and Marketing Research 21
Kay Tracy, Gettysburg College
IN-CLASS EXERCISE IN RESEARCH
To illustrate a few of the trials and tribulations of conducting marketing research, I have the students do the following
exercise in class. This exercise is intended to demonstrate, through an experiential approach, how market research should
and should not be conducted.
Students are asked to survey ten of their classmates as to what brand of a personal-use item they own, and to collect
benefit, demographic, psychographic and AIO information from each interviewee. Those students conducting the
“survey” on the same item then meet together, compile the data they have gathered, and, based on the pooled results,
present a short oral report of their findings to the class.
Time Required: One 50-minute class period
Materials: Survey forms for each class member, signs indicating where groups should meet after interviews are
completed
Procedure: Before class, reproduce survey forms for different products based on the format below. You will need
enough different products so that five students are interviewing about the same product. (So, if you have 35 students, you
will need a total of 35 forms, 5 for each of 7 different products.) Substitute products such as toothpaste, stereo system,
shampoo, etc. for the automobile in (1) on the student form below:
MARKETING EXERCISE
Directions
Briefly interview ten of your classmates as to:
1. Which brand of automobile they own
2. Why they own that brand
3. Demographic information (sex, age, fraternity or sorority affiliation, major)
4. Psychographic information (lifestyle)
5. AIO information (favorite type of movie, hobby, music)
After you have interviewed ten individuals, team up with four of your classmates—meet under the sign for the product
about which you are interviewing. Pool the results of your interviews with your research team. Based on the pooled
results:
1. Determine the market segment that the top three brands appear to target (based on demographic data).
2. Do a benefit analysis for the top brand. (Hint: What benefits do people seek from their ownership of a certain
brand?)
3. Prepare a profile of the top brand target market based on the psychographic and AIO data you have collected.
Debriefing
At the conclusion of the various teams’ reports, ask participants if they would care to base a product decision on this
survey. Students are quick to point out the shortcomings of collecting marketing research data in a classroom setting.
They are apt to mention duplication of subjects, social desirability of answers, limited data, failure of interviewers to ask
questions exactly (e.g., “What brand of toothpaste do you like?” rather than “What brand of toothpaste do you use?”),
assumptions on part of interviewer, lack of a random sample, etc. For each of the problems they mention, ask the class to
provide an appropriate solution.
22 Chapter 9 ♦ Marketing Research
Elwin Myers, Texas A&M University – Corpus Christi
COLLECTING, CREATING, AND MARKET RESEARCHING DIRECT MAIL SALES LETTERS
Direct mail advertising continues to comprise a substantial component of the advertising budget. In spite of the large
sums spent on producing millions of pieces of direct mail sales letters, many of those pieces are not read by their
intended readers.
This assignment helps students observe the current writing practices used by direct mail sales letter writers and suggests
ways of improving upon what they observe. The assignment consists of two components; instructors interested in using
the assignment in class may use one or both segments as time and interest permit.
Collecting and Analyzing Direct Mail Sales Pieces
1. Students are required to locate 20 different direct mail sales writing pieces—10 from local advertisers and 10 from
national advertisers. The pieces may be ones received by students, their friends, family, or from the post office trash
receptacle.
2. Students carefully analyze each piece to determine distinctions between local and national advertisers. Students will
notice that the local pieces are more likely to be a single page—often in a postcard format. The national advertisers
are more likely to include an actual sales letter and perhaps several enclosures placed within an envelope.
3. Since many sales letter recipients discard letters unopened, sales letter writers realize the need to include some form
of persuasive message on the outside of the envelopes. Therefore, students should not fail to analyze whether
envelopes include written messages on the outside of the envelope.
Students will notice that some of the written messages may entice or encourage readers to open the envelope while
other messages may distract or annoy potential readers. The better written envelope messages generally contain the
following three elements: 1) a clever verbal or graphic attention getter, 2) a phrase that informs the reader that the
product or service is targeted toward their interests (such as “Attention: For Accomplished Golfers Only”), and 3)
the irresistible word “free” if such an offer is discussed within the letter inside.
4. After examining the sales letters envelopes, students next peruse the sales matter inside the envelope. Although all
enclosed pieces should be inspected, students should concentrate on the actual sales letter itself.
An effective sales letter should be organized as other sales messages: attention, interest, desire, and action. Most
sales letters excel on the first and last sections and flounder on the sections in between.
Conducting Market Research on Student-Written Sales Letters
5. After students have analyzed their 20 sales letters including the envelopes and enclosures, they should be qualified
to identify effective sales letter concepts. Their next assignment is to write a complete sales letter, including
enclosures and an envelope design, incorporating the effective concepts and avoiding the ineffective concepts they
observed during the first part of the assignment.
6. After writing what students think are effective sales letters, their last task is to conduct a marketing research
investigation designed to find out the likely outcome of their creations if they were to be used in a sales campaign.
Chapter 9 ♦ Systems and Marketing Research 23
Gregory S. Martin, University of West Florida
USING SECONDARY DATA FOR MARKETING DECISIONS
Many of us would like our Marketing Principals students to have a direct experience with using market research data as
an input for marketing decision making. Time constraints and large class sizes can make the collection and use of
primary data impractical. (I know, I’ve tried!) Cases can provide a context for the consideration and use of secondary
data, but most deprive the student of the experience of actually doing “research” to develop decision-relevant
information. I’ve found the following exercise to be manageable and at the same time provide some hands-on
experiential benefits. It makes use of one of the most widely available sources of basic secondary market data, the annual
Sales & Marketing Management Survey of Buying Power. The following example assignment is customized for use in
my classes, but variations on the basic format are endless. Students will develop many different variations of the decision
process (e.g., ranking methods, weighting schemes, etc.) that can be discussed and compared in an in-class debriefing
session after completion of the assignment. This discussion does a good job of illustrating the “fuzzy” nature of most
marketing decision processes.
Assignment:
Copies of the Florida section of Sales & Marketing Management Survey of Buying Power are on reserve in the Library.
Use this secondary source of market information to complete your choice of one (1) of the following tasks. Report your
findings in a one-page report.
a. A home electronics company wants to test market a new product in a Florida Metro Area that has a high
proportion of (1) residents age 24 to 31 and 2) household EBIs of around $42,000. Recommend a metro area for
this test market and explain why you made this decision. Be sure to also consider and report median household
EBI, BPI, and an estimate of per capita sales for the retail store group that includes stores selling home
electronics. (Instructor note: Don’t assume that all students understand the concept of “per capita”—many don’t
have a clue.)
b. A growing regional retailer of furniture not currently doing business in Florida wants to expand its market
coverage into two Florida counties by August 1, 2015. The firm’s market planners know from past experience
that a county must have a population of at least 300,000 people to support a store and that the bulk of its sales
are to people between the ages of 27 and 32. Based only on information available in the Survey of Buying
Power, which two counties would you recommend for new stores and why? Be sure to also consider and report
median household EBI, BPI, and an estimate of per capita sales for the retail store group that includes stores
selling furniture.
24 Chapter 9 ♦ Marketing Research
Michael C. Murphy, Langston University at Rogers University
Jon Shapiro, Northeastern State University at Rogers University
STORYTELLING: METAPHOR GENERATION AS A CUSTOMER UNDERSTANDING RESEARCH TOOL
Traditional market research techniques such as surveys and focus groups often fail to reveal the customer’s hidden inner
feelings that are not easily verbalized or quantified. As a result, storytelling is gaining recognition as a useful tool that
gives marketers a richer insight into consumer behavior and attitudes. Researchers such as Gerald Zaitman—the creator
of Harvard’s Metaphor Lab, have successfully utilized variations of storytelling to aid DuPont and other consumer
product companies.
In our classrooms, storytelling is an informative and entertaining way to help students expose non-verbalized feelings as
well as behaviors associated with product usage. We typically work with a class of 30 and proceed as follows. First, we
divide the class into three groups of 10 students, and assign each group one specific product to analyze. (Products such as
backpacks, athletic shoes, cereals, candy bars, pens, sandals, and automobiles typically elicit student interest.
Merchandise such as perfumes, jeans, and undergarments elicit even more interest due to their inherently hedonistic
nature).
Next, each student is instructed to clip out magazine pictures and to assemble them into a collage that serves as a
metaphor for that student’s experiences and emotions associated with the product. We generally give participants three
weeks to create their collages. This allows them time to purchase (if necessary) and experience the product. We believe
that current usage yields a richer description of product–user interaction than past consumer experience(s).
After three weeks, each student brings his or her collage to class, and is allotted several minutes to display it while
explaining why he or she chose certain clips and what they mean (i.e., to tell his or her collage-related story).
In the next learning phase, each product group of 10 meets outside of class to interpret the metaphorical meanings within
the stories. The final task of each group is to produce a paper detailing product uses, consumer preferences and dislikes,
opportunities, and threats. For this phase, students are typically allotted two weeks.
We think both you and your students will have fun utilizing one of the new emergent tools in marketing research—
storytelling!
Part 2 ♦ Analyzing Marketing Opportunities 25
PART 2 – Integrated Case Assignments
MARKETING MISCUES
Four Loko Targets Young College Hedonists
Phusion Projects, LLC was founded in 2005 when three friends from Ohio State University had the entrepreneurial idea
to start their own company. From this company came the Four Loko product that caused much panic in the fall of 2010.
While news reports focus on Four Loko’s ingredients—caffeine and alcohol, the real marketing mistake likely came
from the market segment that enjoyed the product. That is, Four Loko had quickly become the drink of choice for college
students across the United States.
The Product
Referred to as an alcoholic energy drink, Four Loko comes in a 23.5-ounce can, with alcohol content of 12 percent
(comparable to four beers). The Four Loko product, in several fruit-flavored varieties, was displayed on store shelves in
brightly colored cans at a retail price of $2.50 to $3.00. In addition to the alcohol, the energy drink is packed with
caffeine (equivalent to that found in a cup of coffee), taurine, and guarana. What sets Four Loko apart from other energy
drinks, however, is wormwood oil. Wormwood oil is the key ingredient in absinthe, a very high-proof spirit believed to
cause hallucinations. The hallucinogenic aspect of absinthe, from the thujone in the oil, resulted in its prohibition for
years in many countries. However, federal regulators now allow absinthe as long as the thujone has been extracted from
the wormwood oil.
Health advocates contend that the caffeine masks the effects of the alcohol that is being consumed when drinking
Four Loko. Thus, a person is likely to consume more alcohol than he or she would normally. Four Loko and other
caffeinated alcoholic beverages have been referred to as “blackout in a can” and “wide–awake drunk.”
The Target Market
Today’s college students grew up with energy drinks on store shelves. From the high school sports field with Gatorade
and Powerade, today’s younger generation easily graduated to Red Bull, Monster, Rockstar, and AMP. As such, this
twenty-something generation was a primary target market for Four Loko. These energy drink consumers could go away
to college and consume their energy drinks in conjunction with alcohol—premixed—and get drunk quickly and cheaply.
The Panic
According to health experts, ingesting caffeine with 12 percent alcohol can lead to a heart attack, especially for someone
fatigued or with a cardiac condition. The alcoholic energy drink could lead to high blood pressure and arrhythmia. Four
Loko gained national attention in the fall of 2010 when nine university freshmen, ranging in age from 17 to 19, were
hospitalized with blood-alcohol levels from 0.12 percent to 0.35 percent (a blood-alcohol concentration of 0.30 percent is
considered potentially lethal). One of the nine students almost died. All nine had consumed Four Loko in conjunction
with drinking vodka, rum, and beer.
Response
In response to the panic around the safety of Four Loko, law makers in numerous states began lobbying for legislation
prohibiting the product, and universities across the nation banned the drink from campus. In the state of Washington, an
emergency ban was put into effect, with the product pulled from store shelves almost immediately.
In a statement released by Phusion Projects, the company noted that it marketed its products responsibly to those of
legal drinking age and shared the concerns of college administrators about underage drinking and abuse of alcoholic
beverages. However, the company held strongly to its belief that combining caffeine and alcohol was safe and provided
examples such as Irish coffees and rum and cola. Plus, anyone could mix vodka and an energy drink such as Red Bull. In
support of Phusion Projects, some commentators expressed concern over the apparent panic surrounding the
consumption of alcohol and caffeine and, in particular, Four Loko. It was noted that the publicity surrounding Four Loko
was probably one of the best forms of advertising—that is, politicians jumped on the ban-Four-Loko–bandwagon, which
resulted in a lot of press for a product targeted to hedonistic young people that then prompted more and more young
people to sample the product.
Sources: Phusion Projects, www.phusionprojects.com; Shannon Dininny, “Four Loko Sickened Several Central
Washington University Students,” Huffington Post, October 25, 2010, www.huffingtonpost.com/2010/10/25/four–
loko-sickened –centra_n_773597.html; Mike Hughlett, “Caffeinated Alcohol Drinks Stir up Legal Concerns,”
Chicago Tribune, August 24, 2009, http://articles.chicago tribune.com/2009–08-24/news/0908230370_1_caffeine-
energy-drinks –alcoholic; Giselle Phelps, “College Students Going Loco for Four Loko Drink,” October 22, 2010,
www.the33tv.com/news/kdaf-loko-alcoholic-energy-drink -health-story,0,3345148.story; Noah Rosenberg, “Maker
Halts Distribution of Alcoholic Energy Drink,” New York Times, November 14, 2010, www.nytimes
.com/2010/11/15/nyregion/15loko.html; Jacob Sullum, “Loco over Four Loko: The Moral Panic behind the Ban,”
Patriot Post, November 24, 2010, http:// patriotpost.us/opinion/jacob-sullum/2010/11/24/loco-over-four-loko-the –
moral-panic-behind-the-ban.
Open-ended questions
1. Profile the target market for Four Loko.
Age: college student, probably under 21, although should be at least 21 years of age since the product is an alcoholic
2. Outline the consumer decision-making process for Four Loko.
•Need Recognition—internal stimuli: student decides he or she wants to party; external stimuli: friends and depiction of
partiers having more fun
Close-ended questions
TRUE/FALSE
1. University and governmental policymakers responded to consumer behavior rather than the legality of Four Loko.
2. The founders of Phusion Projects went to college together and quickly founded their company after graduation. They did
not need sophisticated market research to know their potential customers.
3. There is no such thing as “bad press.” The banning of Four Loko increased its sales.
Part 2 ♦ Analyzing Marketing Opportunities 27
4. When Phusion Projects defended its product and compared it to mixing rum and Coke, it was actually repositioning Four
Loko.
MULTIPLE CHOICE
1. What consumer value does the Four Loko address that is in the American tradition of such products as the Egg
McMuffin and the breakfast bar?
a.
portability
b.
no waiting
c.
convenience
d.
surprise
e.
colorful packaging
2. Which of the following factors or influences provided a “gateway” to drinking and abusing Four Loko?
a.
sport hydrating drinks consumed in childhood
b.
social class
c.
income
d.
college drinking subculture
e.
all of the above
3. It was the __________, that psychological factor in particular, which made Loko Four seem healthy, even good for you.
a.
convenience
b.
perception
c.
eye candy cans
d.
hierarchical need of thirst
e.
motivation
4. Four Loko is obviously a product that relies on peer pressure and self-image. Does this product depend on
nonaspirational groups in influencing its consumers? Choose the best answer.
a.
No, Four Loko is entirely dependent on its athletic, herbal lifestyle image.
b.
Yes, drinking Four Loko separates its largely male athlete consumers from female college students.
c.
Yes, Four Loko uses legal wormwood extract and thus disassociates the product from drug addicts.
d.
Yes, groups perceived as unhealthy or social pariahs, such as drunken beer drinkers and hard core
alcoholics.
e.
No, Four Loko relies more on the consumer achieving the ideal, athletic drinker self-image.
5. Phusion Products used __________ to make Four Loko attractive to young people mixing and abusing such energy–
alcoholic drink combinations such as Red Bull and Jägermeister.
a.
perceptual mapping
b.
positioning
c.
product differentiation
d.
cannibalization
e.
niche marketing
6. In the end, Phusion Products had to remove caffeine and other stimulants that masked Four Loko’s inebriating effects.
New variations of the product will be an alcoholic beverage. This is an example of __________.
a.
repositioning
b.
cannibalization and repositioning
c.
cannibalization
d.
an FDA ruling
e.
a change of product class
Part 2 ♦ Analyzing Marketing Opportunities 29
CRITICAL THINKING CASE
Mary Kay Inc. Taps into a Changing Demographic
Founded in 1963 by Mary Kay Ash and her son, Richard, Mary Kay Inc. is a company that has long believed in the
power of women. Dedicated to making life more beautiful for women, the company was founded on the Golden Rule of
“praising people to success” and on the principle of placing faith first, family second, and career third. Before her death
in 2001, Mary Kay Ash received numerous awards that exemplified her personal beliefs, which were embedded as the
heart and soul of the company.
Beauty and Personal Care Products and Direct Selling
While the economic situation is such that consumers are scaling back on spending for high-end nonessential items, many
beauty and personal care products are considered necessities. At the same time, beauty and personal care products do not
have country boundaries—such products are universal. According to one report, beauty and personal care products are a
cornerstone of the direct selling industry and, likewise, direct selling is good for the beauty and personal care products
industry. By 2009, direct sellers were capturing more than $10 billion in annual sales of beauty and personal care
products.
Direct selling is a method of distributing products directly to the consumer via person–to-person selling or party plan
selling and away from permanent retail locations. According to the Direct Selling Association, there are an estimated
15.1 million people involved in direct selling in the United States, with more than 66 million people engaged worldwide.
Interestingly, more than 80 percent of direct sellers in the United States are women. The predominance of women in the
direct selling marketplace has proven especially important for direct sellers like Mary Kay Inc.
Mary Kay Inc.
Mary Kay Inc. develops and manufactures beauty and personal care products for both women and men. The company
spends millions of dollars and conducts more than 300,000 product tests to ensure that Mary Kay products meet the
highest standards of quality, safety, and performance. With products ranging from skin care to makeup to spa and body
to fragrances, the company sells its products through its direct sales force of more than two million independent beauty
consultants in countries such as Argentina, Armenia, Australia, Brazil, Canada, China, the Czech Republic, El Salvador,
Finland, Germany, Guatemala, Hong Kong, India, Kazakhstan, Korea, Malaysia, Mexico, Moldova, New Zealand,
Norway, the Philippines, Poland, Portugal, the Russian Federation, Slovakia, Spain, Sweden, Taiwan, Ukraine, the
United Kingdom, the United States, and Uruguay. The company’s worldwide wholesale sales topped $2.5 billion in
2009.
With women as its primary target market, Mary Kay has stayed abreast of changing buyer behavior. For example, the
company knows that the younger generation expects to touch and experiment with products, so the company offers
products, shades, packaging, and forms that both enable and encourage the potential user to try something new. Although
there are geographic differences among preferences (e.g., Asian women focus on skin care, while Latin American and
some European women are more interested in color cosmetics and fragrances), the company has found that, worldwide,
women are more similar than dissimilar in their preferences.
While the company has been successful product-wise with the younger demographic, Mary Kay Inc. has been
particularly astute at tapping into this changing demographic with respect to its independent sales consultants. The
average age of the Mary Kay consultant is now 36 years old, and the company’s fastest growing segment of consultants
is in the 24- to 35-year-old age group. Representing the future of the company, Mary Kay Inc. can provide these women
with the opportunity to meet any goal they are willing to work toward—whether it is additional income or financial
independence.
Yet, the company recognizes that other direct-selling companies want to harness the power and dynamic of this age
group. These young leaders are known for wanting increased flexibility, unlimited earning power, and the freedom to
experiment in their work lives. There is a vast market opportunity for Mary Kay Inc. in the millennial generation, and the
company wants to take advantage of that opportunity to usher in a new era of direct selling of Mary Kay products.
Sources: www.marykay.com; Lauri Dodd, “Youthful [R]evolution,” Direct Selling News, December 2010, 10–21;
Michael Rice, Ivy Carter, and Rebecca Larson, “Beauty Everlasting,” Direct Selling News, October 2010,
www.directsellingnews .com/index.php/site/entries_archive_display/beauty_everlasting (Accessed February 9, 2011);
Barbara Seale, “Younger every Day,” Direct Selling News, October 2010, 24–33.
30 Part 2 ♦ Analyzing Marketing Opportunities
Open-ended questions
1. The younger demographic is important to Mary Kay Inc. both as consumers of the company’s products and
as its sales force. Since the market is one and the same, can the company utilize one marketing strategy targeting
both consumers and sellers? Why or why not?
No, the company cannot use the same marketing strategy to attract both its independent sales consultants and consumers.
2. What are particular characteristics about this younger demographic that Mary Kay Inc. will have to tap into
in order to capture and maintain the segment’s attention?
Close-ended questions
TRUE/FALSE
1. Mary Kay relies on consultants and direct-selling, which is essentially one-to–one marketing.
2. The marketing that exists between Mary Kay and its consultants is not B2B.
3. Mary Kay’s seeking consultants who fit the segmentation of the target market is a form of product user positioning.
4. Mary Kay is not only vulnerable to losing a younger generation of consultants to direct-sellers like itself.
MULTIPLE CHOICE
1. Which of the following segmentations are probably least important to Mary Kay?
a.
ethnic
b.
gender
c.
age
d.
family life cycle
e.
none of the above
2. By designing its products to vary, to seem “new” in shade, scent, forms, even packaging, Mary Kay is counteracting
which aspect of a younger generation of users?
a.
skepticism
b.
disloyalty to brands
c.
less income
d.
the desire for an “experience”
e.
all of the above
3. Mary Kay recognizes geographic and ethnic segmentation. It also sees most women as having similar preferences. These
would probably lead to what strategy?
a.
Continue to create product lines specifically for each target market.
b.
Produce makeup and the like in the most uniform way possible because women tend not to recognize
cultural differences when it comes to beauty care projects.
c.
Treating customers in different countries as reference groups.
d.
Pursue a geodemographic segments to target women in even smaller, more diverse markets.
e.
Produce products with the same formulations yet intensify marketing to individual cultures and the like.
4. Unlike other companies, Mary Kay must compete with other direct-selling firms for ____________ from a business-to–
business perspective.
a.
beauty care product customers
b.
the same demographic segments
c.
a largely female demographic
d.
its beauty consultants
e.
none of the above
5. When a Mary Kay identifies and focuses on the younger age of its largely female clientele, their unlimited earning
power, their preferences for certain product lines, and the like, it is looking at __________.
a.
segmentation descriptors
b.
target market variables
c.
evoked sets
d.
consideration sets
e.
optimizers
6. From reading the Mary Kay case, which of the following would be the least important in its approach to one–to–one
marketing?
a.
loyalty
b.
technology
c.
personalization
d.
time-savings
e.
none of the above