978-1337407588 Chapter 1 Solution Manual Part 1

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Chapter 1: An Overview of Marketing

Review Queson

1. Give an example of a company that is successfully following a production orientation.

Why does following a production orientation make a firm in this industry successful?

A mature product, such as a small no-frills calculator, is sold basically on price. A

Applicaon Quesons

1. Your company president has decided to restructure the firm to make it more market

oriented. She is going to announce the changes at an upcoming meeting. She has

asked you to prepare a short speech outlining the general reasons for the new

company orientation.

Students’ answers should focus on (1) customers’ wants and needs, (2) distinguishing the

company’s products and services from competitors’ offerings, and (3) the integration of all

2. Donald E. Petersen, chairman of the board of Ford Motor Company, remarked, “If we

aren’t customer driven, our cars won’t be either.” Explain how this statement reflects

the marketing concept.

Although students’ answers will vary, they should address some of these points. The

marketing concept focuses on satisfying customers’ needs while meeting organizational

3. A friend of yours agrees with the adage “People don’t know what they want—they only

want what they know.” Write your friend a letter expressing the extent to which you

think marketers shape consumer wants.

Although students’ answers will vary, but they should explain that marketers cannot create

demand or make people buy things that they don’t want or need. Marketing does, however,

Chapter 1: An Overview of Marketing

4. Your local supermarket uses the slogan “It’s your store.” However, when you asked one

of the stock people to help you find a bag of chips, he told you it was not his job and

that you should look a little harder. On your way out, you noticed a sign with an

address for complaints. Draft a letter explaining why the supermarket’s slogan will

never be credible unless its employees carry it out.

Students’ answers will vary widely, but they should explain that the marketing orientation,

5. How does Philip Morris handle the sensitive issues associated with marketing tobacco?

What kind of information does its website at http://www.philipmorris.com/ provide

about smoking and its negative effects on health? How do you think Philip Morris is

able to justify such marketing tactics? After browsing the site, do you think that

approach makes the company more or less trustworthy?

6. Write a letter to a friend or family member explaining why you think that a course in

marketing will help you in your career in a field other than marketing.

Students’ answers will vary, but they should include a discussion of the importance of

Applicaon Exercise

Understanding the differences among the various marketing management philosophies is the

Activities

1. Visit your local grocery store and go through the cereal, snack food, and dental hygiene

Chapter 1: An Overview of Marketing

2. Count the varieties of product in each product category. For example, how many different

3. Now, try to find a type of product in the grocery store that does not exhibit such variety.

There may not be many. Why do you think there are enough kinds of cereals to fill an

4. Have you ever wanted to see a particular kind of cereal or snack food on the shelf? Think

of product varietals (like grapefruit-flavored toothpaste or peanut butter-covered popcorn)

Purpose: The purpose of this application is to introduce the students to the marketing concept.

Setting It Up: You may want to assign this to pairs of students. That way they can discuss their

Deanna R. D. Mader, Marshall University

Fred H. Mader, Marshall University

GIVE THEM WHAT WE MAKE, OR GIVE THEM WHAT THEY WANT?

The following simple in-class exercise can be used either to illustrate the differences between the

Task: Divide the class into four groups. Have the groups separate as much as classroom space

will allow to minimize interference. Tell two of the groups that they are the “producers” and that

Chapter 1: An Overview of Marketing

their job is to make a product for the other groups. Tell the remaining two groups that they are

Outcomes: Invariably, the “producers” do not produce what the “consumers” had in mind.

Products and concepts may come close, but they are never identical. Class discussion is typically

Ethics Exercise

In today’s business environment, ethics are extremely important. In recent years, there have been

numerous scandals and trials that stem from a lack of ethical judgment. For this reason, we are

including an ethical exercise in every chapter. A brief scenario will present you with a situation

in which the right thing to do may or may not be crystal clear, and you will need to decide the

ethical way out of the dilemma. To help you with these decisions, we will give you reference to

the AMA’s Statement of Ethics, found online at http://www.marketingpower.com. This will give

you a resource for the exercise and will also help reinforce the ethical standards that marketers

should uphold.

Rani Pharmaceuticals is the maker of several popular drugs that are used to treat high blood

pressure and arthritis. Over time, the company has developed a positive relationship with many

of the patients who use its medications through a quarterly newsletter that offers all the latest

information on new medical research findings and general health and fitness articles. The

company has just been acquired by a group of investors who also own Soothing Waters Hot Tubs

and Spas. The marketing director for Soothing Waters would like to use Rani Pharmaceuticals’

mailing list for a direct-mail promotion.

Questions

1. What should Rani Pharmaceuticals do?

In order to avoid the semblance of impropriety, it might be better for the marketing director

Chapter 1: An Overview of Marketing

2. Do you think it is ethical to use customer information across multiple divisions of the

same company? Explain.

This is a situation to be handled with caution. Rani Pharmaceuticals should not simply

hand over customer information. Although it is not unethical per se for a company to

3. To which marketing management philosophy do you think the marketing director for

Soothing Waters subscribes? Explain.

The marketing director for Soothing Waters seems to be taking a sales-oriented marketing

4. Does the AMA Statement of Ethics address using customer information by multiple

divisions of the same company in its Statement of Ethics? Go to

http://www.marketingpower.com, and review the code. Then write a brief paragraph

on how the AMA Code of Ethics relates to Rani Pharmaceuticals’ dilemma.

The AMA Code of Ethics does not provide specific guidelines for the use of information

across an organization. In fact, the lack of principles relative to information collection,

Video Assignment: Georey B. Small

Geoffrey B. Small is a super luxury fashion designer with an eye toward social justice and

connecting with his buyers. In this video, Small discusses how he began designing clothes and

deciding whom to design clothes for and how to connect with his customers. He also discusses

the nature of consumer behavior. He also mentions his beliefs in terms of how consumers

Chapter 1: An Overview of Marketing

purchase fashion and how this affects clothing prices.

1. Geoffrey B. Small takes great pride in offering a high level of handwork in his clothing

because:

a. it offers higher customer value.

b. it is part of his marketing orientation.

c. it is how he markets his clothing.

d. he can employ more people that way.

2. Geoffrey B. Small believes that one function of advertising is to make the customer believe

what companies say. Therefore, he doesn’t advertise and lets the clothes speak for

themselves.

a. True

b. False

3. How would Geoffrey B. Small answer the question “what is this firm’s business?”

a. Making clothes for environmentally aware customers

b. Offering a great product and great service by honestly communicating with the

customer

c. Showing people how clothes should be made locally

d. Giving the customer something they need badly enough that they will pay for it

4. To which marketing management philosophy does Geoffrey B. Small subscribe?

a. Production orientation

Chapter 1: An Overview of Marketing

b. Marketing orientation

c. Sales orientation

d. Societal marketing orientation

5. When Small describes how his customers choose to purchase his clothes (by evaluating

that his brand is environmentally conscientious, whereas most other brands are not), which

condition of exchange is being met?

a. Each party has something of value to the other party.

b. Each party is capable of communication and delivery.

c. Each party is free to accept or reject the exchange offer.

d. Each party believes it is appropriate or desirable to deal with the other party.

6. When Small discusses how customers crave personal interaction, crave knowledge of the

person who created the garment, and want unique humanness in their clothing, what is he

describing?

a. Avoiding unrealistic pricing

b. Having a strong sales team

c. Building relationships

d. Building trust

7. Which aspect of customer value is Small discussing when he refers to cost cutting, dividing

the cost of a garment over the years it is worn, and the money invested in the company?

a. Avoiding unrealistic pricing

Chapter 1: An Overview of Marketing

b. Empowering customers

c. Using the marketing concept

d. Increasing customer satisfaction

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.

Chapter 1: An Overview of Marketing

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

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

“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

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

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

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

Chapter 1: An Overview of Marketing

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

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

was partly to blame for the rise in childhood obesity in United States.

TRUE/FALSE

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

product.

PTS: 1 OBJ: LO: 1-1 TOP: AACSB: Reflective Thinking

KEY: CB&E Model: Strategy MSC: BLOOMS: Level I Knowledge

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

they will move forward in advertising with a societal marketing orientation.

PTS: 1 OBJ: LO: 1-2 TOP: AACSB: Reflective Thinking

Chapter 1: An Overview of Marketing

KEY: CB&E Model: Strategy MSC: BLOOMS: Level I Knowledge

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

PTS: 1 OBJ: LO: 1-3 TOP: AACSB: Reflective Thinking

KEY: CB&E Model: Strategy MSC: BLOOMS: Level I Knowledge

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

marketing plays a very large role in society.

PTS: 1 OBJ: LO: 1-4 TOP: AACSB: Reflective Thinking

KEY: CB&E Model: Strategy MSC: BLOOMS: Level I Knowledge

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

PTS: 1 OBJ: LO: 1-3 TOP: AACSB: Reflective Thinking

KEY: CB&E Model: Strategy MSC: BLOOMS: Level I Knowledge