978-1337116800 Chapter 1 Solution Manual Part 2

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Chapter 1: An Overview of Marketing

8. Small’s focus on the longevity of his garments suggests that he is:

a. empowering his customers.

b. decreasing customer satisfaction.

c. offering products that perform.

d. harming his business model.

9. By providing the customer a top-quality product that lasts for 25 years, Geoffrey B. Small

is:

a. placing a premium on making a sale.

b. providing customer satisfaction.

c. using the marketing concept.

d. developing a deeper understanding of his customers.

10. Small’s refusal to give in to the pressure to make more, to change his methods or to lower

prices, in order to keep using local products and maintain a high level of quality, indicates:

a. a shift to a production orientation.

b. a shift in the firm’s primary goal.

c. a refusal to use the tools at his disposal.

d. his commitment to the societal marketing orientation.

Case Assignment: The Coca-Cola Company

They have over one million likes on Facebook, over 800,000 followers on Twitter, over

8,000,000 views on YouTube, and over 20,000 followers on Instagram. Ninety-four percent of

people can recognize their iconic red and white logo. But none of that is too surprising given that

Chapter 1: An Overview of Marketing

the Coca-Cola Company is the world’s largest beverage company, featuring 3,800+ products

worldwide spanning across 20 brands.

The Coca-Cola Company has been in business for over 130 years. Established in 1886 in

Atlanta, Georgia by John Pemberton, the Coca-Cola Company’s daily average servings in their

first year were just 9 people. Now, their products sell in over 200 countries, and their daily

average servings are 1.9 billion people.

“The Coca-Cola Company is steeped in history and tradition, where heritage is honored

and values are respected. We are a global family of people working together to bring your family

a wide array of beverage choices to meet your beverage needs every day,” says Coca-Cola on

their website. “The Coca-Cola Company is dedicated to offering safe, quality beverages,

marketing those beverages responsibly and providing information consumers can trust. The

Coca-Cola Company has always taken seriously its commitment to market responsibly, across

the globe, across all advertising media, and across all of our beverages.”

With that in mind, the Coca-Cola Company adopted a strict marketing policy in

September 2015. The policy, which covers all their beverages, states that no products will be

directly marketed to children under 12.

The Responsible Marketing Policy, which is available on the company’s website, states

that the company will avoid advertising in “all media which directly targets children under 12,

including television shows, print media, websites, social media, movies, and SMS/email

marketing.” They consider media directly targeted toward children if 35 percent or more of the

audience is composed of children under 12.

The policy also states that no marketing communications will be designed to directly

appeal to children under 12. Specifically, communications created after the adoption of the

policy will not use “celebrities or characters whose primary appeal is to children under the age of

12 (with the exception of brand equity characters already in use), movie tie-ins related to movies

of primary appeal to children under 12, games or contests designed to appeal primarily to

children under 12, branded toys whose primary appeal is to children under 12, images of our

products being consumed by children under 12 without an adult, branded sponsorship of sporting

and entertainment events which primarily target children under 12.”

Finally, in a full commitment not to advertise to children under 12, the policy says, “As a

global business, we respect and recognize the unique learning environment of school and believe

Chapter 1: An Overview of Marketing

in commercial-free classrooms. We will not commercially advertise in primary schools.” Coca–

Cola products are also not available for sale in primary schools, unless requested by a school

authority. These school guidelines apply to schools not only in the United States but also in

Europe, Canada, New Zealand, and Australia.

The Responsible Marketing Policy was adopted amid growing complaints that Coca-Cola

was partly to blame for the rise in childhood obesity in America.

Sources: The Coca-Cola Company, “Coca–Cola At A Glance,” Coca-Cola, accessed October 21,

2016, http://www.coca-colacompany.com/our-company/infographic-coca-cola-at-a-glance; The

Coca-Cola Company, “Responsible Marketing,” Coca-Cola, September 20, 2016, accessed

October 21, 2016, http://www.coca-colacompany.com/stories/responsible-marketing; The Coca-

Cola Company, “Who We Are,” Coca-Cola, accessed October 21, 2016, http://www.coca-

colacompany.com/careers/who-we-are-infographic.

TRUE/FALSE

1. The desired outcome of Coca-Cola’s advertising is for people to exchange money for their

product.

2. The Coca-Cola Company’s decision to adopt a Responsible Marketing Policy indicates they

will move forward in advertising with a societal marketing orientation.

3. There are no major differences between sales and market orientations.

4. The type of advertisements a company chooses to create are very important because marketing

plays a very large role in society.

5. Since Coca-Cola is sold at a low cost, it provides high customer value.

MULTIPLE CHOICE

1. Marketing is the activity, set of institutions, and processes for __________ offerings that have

value for customers, clients, partners, and society at large.

a. creating

b. communicating

c. delivering

d. exchanging

e. All of these

2. Prior to the Responsible Marketing Policy, Coca-Cola used a __________ orientation for its

advertising.

a. production

b. sales

c. market

d. societal marketing

3. If Coca-Cola decides to no longer use their iconic polar bears in holiday season advertising

and they ask employees to submit ideas for replacement mascots, this would be an example of

__________.

a. relationship marketing

b. empowerment

c. teamwork

d. co-creation

4. Customer relationship management (CRM) is a company-wide business strategy designed to

optimize __________ by focusing on highly defined and precise customer groups.

a. profitability

b. revenue

c. customer satisfaction

d. A and B

e. All of these

5. Who at Coca-Cola needs to fully understand the company’s new Responsible Marketing

Policy?

a. the marketing team

b. the CEO and his advisors

c. the accounting and finance departments

d. everyone in the organization

Chapter 1: An Overview of Marketing

Rich Brown, Freed-Hardeman University

How Should Service Make You Feel, and Why Is That Important?

A problem in teaching people to be good service providers, or effective managers, is that many

people don’t know how intrinsically rewarding it is to truly be of service to another person.

Many students have experience in service-related jobs but not so many have worked in great

service environments. Most have experienced, accepted, and expect mediocre service in a great

variety of service environments. In the classroom, it is fairly easy to point out the mediocrity of

past experiences and communicate the nuts and bolts of delivering good service. What is difficult

is finding a way to impact students so that they develop not only the ability to recognize and

explain good service, but also the desire to serve and to get others to do this as well. The purpose

of this exercise is to develop that desire to serve by getting students to think about a time when

they were of real service to someone and helping them realize the intrinsic rewards that come

from serving well.

This assignment has two parts. First, you must get the students to think of situations in which

they really served another person either at work or in everyday life. Second, discuss the

situations in class to see what individuals felt and experienced before, during, and after providing

the service. A list of discussion questions is provided at the end of this entry.

You could ask the students to write about their experiences, but I have found the discussion

format to be extremely beneficial. Most students will have had positive experiences and most

will still feel good about what they have done; this tends to snowball, and the reality that

providing good service is intrinsically rewarding becomes very clear. It is often hard for

individual students to get started with ideas for ways typical service jobs can be made more

rewarding. In a group setting, even if I have to get things started, they are soon helping each

other come up with useful strategies to help service providers see how they really can be of help

to their customers in their specific situations.

Here is a list of questions to use while starting a discussion.

• Whom did you help, and what exactly did you do for them?

• Did they really need the help? Why?

• What would their situation have been like if you had not helped them?

• How has their situation changed because you helped them? Was the change in situation

worth the effort it took? Why?

• How did they feel about you helping them, and how could you tell?

• How did you feel about helping them in this situation, and how do you feel about it now?

Why?

Chapter 1: An Overview of Marketing

• Was this an unusual experience for you? Why?

• Was what you did complicated or difficult?

• Do you think service in general would be better if service providers could feel about their

jobs the way you felt after you helped in this situation? Why?

• How could managers of customer service providers help their employees to realize the

intrinsic benefits that can result from really serving another person?

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 as

follows: 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’ textbooks 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 the text pages that the student 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 student to think about or remember some specific situation

in their experience to which they can apply the text material and there is a question or

questions for them to address in their reply.

Chapter 1: An Overview of Marketing

The following example is for Chapter 1 of MKTG11. The three parts have been separated here so

they are more readily visible.

1. Four competing philosophies strongly influence an organization’s marketing activities.

These philosophies are commonly referred to as production, sales, market, and societal

marketing orientations.

2. Review these four philosophies in section 1-2 of your text.

3. Then describe an experience you’ve had recently as a customer or an employee that

illustrates one of these philosophies.

Stephen Baglione, Saint Leo University

Relationship Marketing Made Easy

Before discussing the impact of packaging, I bring a bag of dirt to class and tell the students that

it is a cake mix. It is a clear plastic bag that has a piece of paper taped to it that indicates the

brand name and basic information like nutritional value, the address and telephone number of the

manufacturer, a suggested retail price, etc. I then place the bag on a student’s desk and ask him

or her whether he or she would buy this mix. Few students will. I then tell them that it will cost

25% less than a boxed mix because it is in a plastic bag instead of a fancy box. Still few, if any,

will buy it. We then discuss their perceptions of the bag: it is of poor quality, it does not show

what the product can do (i.e., the promise to bloom into an enticing cake), it can be tampered

with, etc. Assuring them that tampering is not possible, I ask again how many would buy it.

What if it was the brand you currently buy at the same price? Students unanimously refrain from

buying what they perceive as an inferior product. This serves as a springboard into discussing

what function a package serves. I also show them a real box of cake mix to simulate their

thinking by contrasting the two.

Ira S. Kalb, University of Southern California

Effective Strategies Using a Universal Marketing Structure

The Universal Marketing Structure (UMS)™ is designed to teach students and clients to create

consistent and competent marketing. The system has worked, and student teams have been

consistently creating excellent marketing campaigns for organizations in the Los Angeles area.

Most recently, the students created an advertising campaign for the City of Los Angeles to attract

businesses and tourists to Los Angeles after a period of civil unrest. They received a Certificate

of Commendation for their efforts on this project.

Chapter 1: An Overview of Marketing

The Universal Marketing Structure™ is displayed in this table and on the following page.

Because five times as many people read

the headline compared to the rest of the

piece, the greatest effort and thought

should go into creating the headline.

The structure of a good ad (or any

marketing piece) follows the UMS™.

Headline—This part contains the main

message(s) of the piece or hooks the

reader into reading the main

message(s). Studies show that five

times as many people read or pay

attention to the headline compared to

the rest of the piece.

Body text should not be thought of as

filler. It should be limited to what is

essential to explain your main message(s)

and to tell a good story. A good rule of

thumb is when in doubt, cut it out.

Body Text—This part supports, clarifies,

and explains the headline for those

readers who want more information. It

concentrates on benefits over features

since (1) benefits are what really

matter to the reader, (2) the ad does

not have enough space or time to do

justice to all product features, and (3)

the best most ads can hope for is to

begin the courtship rather than prompt

the marriage (if it is love at first sight,

all the better, but this does not

typically happen with high-tech or

more expensive products).

The last point left with the reader should

include the main message.

Close—This part reinforces the headline

(the main point(s) of the ad), ends the

ad, solicits action, and provides system

for measuring response.

Similar to your signature on a letter or

petition.

Signature—This part proudly takes

responsibility for the ad by signing the

company’s name, logo and/or

attaching its corporate slogan.

Chapter 1: An Overview of Marketing

A picture is worth 1,000 words. Make sure

the graphic enhances the words instead of

detracting the viewers from reading your

main message(s).

Photo/Graphic—This part reinforces the

headline and main points of the piece.

It makes the product more tangible and

shows it in the best light possible, and

it also serves to break up the text so

that it is easier to read.

The best messages can be lost forever and

never be read if the format isn’t good.

Even if they are read, bad formats dilute or

work against the messages.

Format—This part facilitates the reading

of the ad. It allows busy readers to

quickly pick out the main point(s)

without reading the entire ad. It also

makes the ad attractive and inviting to

read.

Intangibles—This part corresponds to

creativity and uniqueness. They give

the ad something special that makes

the ad more attractive, entertaining,

and enjoyable to read.

Marketing Principles

The following seven main principles are the building blocks of marketing: the Five Ps, Corporate

Image, and the Marketing Information System.

The Five Ps

• Positioning—finding a unique image for the product (or a window) in the minds of

prospects (market targets)

• Product—the goods and services developed to meet target market needs

• Pricing—the amount of money for which the product is sold to most target market needs to

fit the product’s position and achieve company goals

• Place (Distribution)—providing the product to the marketplace in a way which makes it

convenient for prospects to find, buy, and use the product

• Promotion—communicating the benefits of the product to market targets to trigger a

buying action

Keeping corporate image and the

positioning of the product

separate proved important to

Procter & Gamble when rumor

circulated that their corporate logo

Corporate Image

Unlike positioning, which relates to the image

of the product, corporate image relates to the

image of the company. While positioning and

corporate image are closely related and affect

Chapter 1: An Overview of Marketing

is a satanic symbol.

each other, they should be considered

separately. If they are not, the following

problems could result:

1. A tarnished company image could

adversely affect sales of the product and

vice versa.

2. A strong identification with one product

will limit the company’s ability to sell

other products.

Not keeping them separate proved

to be a problem for Suzuki with

negative reports about the

Samurai and for Dow Corning

with reports of breast implant

leakage.

Marketing Information System (includes

Market Research)

• Market Intelligence—complaints,

compliments, competition, market

needs and wants

• Measure Performance—performance

of marketing strategies, programs, ads,

marketing pieces, etc.

• Corrective Action—action to improve

performance

Nancy Ryan McClure, University of Central Oklahoma

James L. Thomas, Jacksonville State University

Marketing in Action

Marketing majors and non-majors alike persist in thinking that marketing is selling. To overcome

this misperception, a marketing course was developed that took students out of the classroom

and into the real world. A study tour was offered between semesters that took the students to a

major metropolitan area (Dallas/Ft. Worth, Texas) for two purposes: (1) to see the variety of

activities involved in the marketing discipline and (2) to expose students to multiple career

opportunities.

The tour was designed to provide students with maximum exposure to some of the best in the

field of marketing. Each of the organizations involved developed extensive presentations within

their particular area of marketing specialization. The organizations that participated included The

Texas Rangers (sports marketing), Baylor Medical Center (healthcare marketing), Chili’s Grill

and Bar (hospitality marketing), Dallas Market Center and World Trade Center (apparel and

Chapter 1: An Overview of Marketing

home furnishings wholesaling), DDB Needham (advertising agency), Frito-Lay (snack food

manufacturing), Neiman-Marcus (upscale retailing), Randall’s/Tom Thumb (grocery distribution

center), and the West-End Association (non-profit organization).

This course was offered for two hours of either undergraduate or graduate credit (with

Fundamentals of Marketing as a prerequisite). The students stayed in the Dallas area in January

from Monday through Friday between semesters. Upon returning to the university, students were

required to write thank-you notes to each of the organizations and to take a final exam. One of

the questions, naturally, was “Marketing is selling. Discuss.” It was evident from the students’

responses that they had clearly learned that marketing is much more than selling.

While there is nothing novel about field trips, the combination of organizations and the class

format permitted a more in-depth learning experience for the students than they could ever have

had just reading a book. Unfortunately, the way most courses are designed, field trips are

untenable because of classes scheduled before and after the course in which you would like to

take advantage of a field trip. The students appreciated having an elective opportunity presented

between the two terms. This tour resulted in two internships being offered.

It should be noted that the first time such a course is offered, a great deal of time and planning

must be devoted to the development of the course. The authors found that the process of simply

contacting the appropriate individuals, much less completing the details with these individuals,

requires an extensive number of telephone calls, faxes, emails, etc. In order to ensure the

efficient coordination of the class, it is highly recommended that instructors allow roughly six

months for development prior to the beginning of the course. For future iterations of the course,

less time is likely to be required; however, the authors advise against continually asking the same

organizations to participate because of the commitment of time and human resources required of

the organizations involved.

Rich Brown, Freed-Hardeman University

An Assignment That Ties the Principles of Marketing Course Together

The purpose of this assignment is to cause students to connect the different parts of the Principles

of Marketing course. The assignment is a three- to five-page paper. It begins with the

identification of a target market and ends with the student assuming the role of a marketing

consultant suggesting ways to improve the effectiveness of the marketing mix being used to

attract it. Feedback from students is overwhelmingly positive and indicates that completing the

assignment really helps them to “put it all together.” My written instructions to the students are

as follows:

Chapter 1: An Overview of Marketing

1. Choose an organization that does marketing. Make it easy on yourself, and choose an

organization that you can observe the marketing efforts of and are familiar with. If you

2. After choosing an organization, your next step is to identify and describe the target market

for the products(s) about which you are writing. Do not say something like “young, mid-to–

upper class women who wash their hair,” but consider the target market identified and

3. After discussing the target market, you should then discuss the marketing-mix (the four Ps)

4. After discussing the firm’s marketing mix, you should assume the role of a marketing

consultant and make specific suggestions for improving the firm’s effectiveness. These

suggestions can be in the form of changes to any part of the current marketing mix to fix

Sheri Carder, Lake City Community College

Chapter 1: An Overview of Marketing

Lemonade from Lemons Marketing—Consumerism Exercise

As a consumer, you expect quality products and good service. But sometimes things go wrong. If

you’re unhappy with your purchase or the service you received, do you know how to obtain

satisfaction?

Consider yourself an active consumer. Choose a company or service with which you’ve recently

been disappointed. Write them a letter, using the following guidelines, to explain the problem

and what you would like to see happen. Make two copies—one to mail to the company and one

to put in our class file as we compare responsiveness rates among the various companies. When

you receive a reply, share it with the class.

We will make this a research project, measuring how responsive companies are to their

customers. Are companies really concerned with total quality? We will note the amount of time

it took for companies to respond and the companies’ efforts to satisfy their customers. Writing

the initial letter is the assignment; bringing the reply in is for extra points. You may certainly

write more than one letter if you wish. You might try writing a letter of praise for one product as

well as a letter of disappointment for another. You’ll get better results if they believe you’re an

adult consumer, so type the letter rather than writing in pencil on notebook paper.

1. Describe the problem and what (if anything) you’ve already done to resolve it. List

pertinent information including the date and place of purchase, serial or model number, etc.

2. Send sales receipts, repair orders, warranties, etc. (copies, not originals) to make your case.

Chapter 1: An Overview of Marketing

organization. You can approach the Better Business Bureau, a trade association related to

the business, arbitration agencies (in some states), small claims court, or the attorney

general’s office of consumer affairs.