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Chapter 01 - Creating Customer Relationships and Value Through Marketing
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c. Society as a whole. Marketing raises the standard of living for a country’s
citizens by:
• Enhancing competition. • Lowering prices.
• Improving product quality. • Providing jobs.
5. How Do Consumers Benefit? Marketing creates utility, the benefits or customer
value received by users of the product. Four different utilities are created:
a. Form utility. Producing the product or service.
b. Place utility. Having the offering available where needed.
LEARNING REVIEW
1-7. What are the two key characteristics of the marketing concept?
1-8. What is the difference between ultimate consumers and organizational buyers?
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APPLYING MARKETING KNOWLEDGE
1. What consumer wants (or benefits) are met by the following products or services?
(a) 3M Post-it® Flag Highlighter, (b) Nike running shoes, (c) Hertz Rent-A-Car,
and (d) Amazon online shopping.
Answers: Consumer wants or benefits met by each of four products or services include:
a. 3M Post-it® Flag Highlighter. Enabling college students to study more effectively.
b. Nike running shoes. Safety enhanced by a running tread; cushioning for the foot;
status.
2. Each of the four products, services, or programs in question 1 has substitutes.
Respective examples are (a) a Bic® highlighter, (b) regular tennis shoes,
(c) an Uber or Lyft ride, and (d) a department store. What consumer benefits might
these substitutes have in each case that some consumers might value more highly than
those products mentioned in question 1?
Answers: Consumer wants or benefits that these four substitute products might provide
include:
a. A Bic® highlighter. Low cost; more colors; Seal Guard that prevents “dry out;”
rubberized grip; more and brighter fluorescent ink.
3. What are the characteristics (e.g., age, income, education) of the target market
customers for the following products or services? (a) National Geographic magazine,
(b) Chobani Greek yogurt, (c) New York Giants football team, and (d) Facebook.
Answers: The demographic characteristics of the target market for each product or service
are:
a. National Geographic magazine. Older age group; high income; highly educated.
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4. A college in a metropolitan area wishes to increase its evening offerings of business-
related courses such as marketing, accounting, finance, and management. Who are
the target market customers (students) for these courses?
Answer: Target market customers or students for business-related courses offered by a
metropolitan-area college at night include both those pursuing a degree and those not
pursuing a formal degree.
a. Students pursuing a degree might seek degree-related courses that could aid them in
acquiring or earning an Associate’s degree, a Bachelor’s degree, or an MBA degree.
5. What actions involving the four marketing mix elements might be used to reach the
target market in question 4?
Answers: Marketing mix actions to reach these target market customers include:
6. What environmental forces (uncontrollable variables) must the college in question 4
consider in designing its marketing program?
Answers: Environmental forces or uncontrollable variables for the college to consider are:
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7. Does a firm have the right to “create” wants and try to persuade consumers to buy
products and services they didn’t know about earlier? What are examples of “good”
and “bad” want creation? Who should decide what is good and bad?
Answers:
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BUILDING YOUR MARKETING PLAN
If your instructor assigns a marketing plan for your class, don’t make a face and
complain about the work—for two special reasons. First, you will get insights into trying to
actually “do marketing” that often go beyond what you can get by simply reading the
textbook. Second, thousands of graduating students every year get their first job by
showing prospective employers a “portfolio” of samples of their written work from
college—often a marketing plan if they have one. This can work for you.
This “Building Your Marketing Plan” section at the end of each chapter suggests
ways to improve and focus your marketing plan. You will use the sample marketing plan
in Appendix A (following Chapter 2) as a guide, and this section after each chapter will
help you apply those Appendix A ideas to your own marketing plan.
The first step in writing a good marketing plan is to have a business or product that
enthuses you and for which you can get detailed information, so you can avoid glittering
generalities. We offer these additional bits of advice in selecting a topic:
a. Do pick a topic that has personal interest for you—a family business, a business,
product, or service you or a friend might want to launch, or a student organization
needing marketing help.
b. Do not pick a topic that is so large it can’t be covered adequately or so abstract it
will lack specifics.
1. Now to get you started on your marketing plan, list four or five possible topics and
compare these with the criteria your instructor suggests and those shown above.
Think hard, because your decision will be with you all term and may influence the
quality of the resulting marketing plan you show to a prospective employer.
In Question 1, a key factor students should consider in choosing a topic for their marketing
plan is whether they can find enough useful information to provide the necessary detail in
the completed plan. For example, a plan done for an existing family business builds on an
immediate base of past revenues, marketing activities, etc. In contrast, a plan for a
Here are examples of successful marketing plans students have submitted for our classes:
• Family business. Sand and gravel business, small manufacturing shop, two-chair
barber shop, summer resort.
• Local small business. Garage, flower shop, corner grocery, interior-design decorating
shop.
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• Student organization or university activity. Marketing club, campus blood drive,
increasing attendance at college sporting events, student counseling center.
2. When you have selected your marketing plan topic, whether the plan is for an actual
business, a possible business, or a student organization, write the “company
description” in your plan, as shown in Appendix A (following Chapter 2).
In Question 2, if the company already exists, the company description highlights the recent
history and recent successes of the organization. So, students should seek to:
a. Recent history.
1. Provide a brief introduction about when the organization was founded (if relevant),
identify who the founders or key management personnel are that will assist you, and
b. Recent successes. Where possible, identify and briefly describe what recent activities
or results show how the organization has been successful in terms of sales (dollars or
units), market share, quality, new product introductions, and so on.
Helping with Common Student Problems
Enthusiastic students often pick marketing plan topics that are simply too grandiose to be
completed in the time available—a new brand of car or a new airline to serve small U.S. cities.
A subtler problem—alluded to above—is in picking a marketing plan topic that requires an
inordinate amount of effort to obtain useful data. For this latter problem, when having students
select a marketing plan topic, ask them to first write down 4 or 5 topic ideas and then 10 or 12
words for each topic about what key sources of information they need to obtain and where are
they likely to obtain it.
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TEACHING NOTE FOR VIDEO CASE VC-1
Chobani: Making Greek Yogurt a Household Name
Synopsis
Show Slide 1-32. Hamdi Ulukaya, a Turkish immigrant, bought an old Kraft yogurt
plant in New Berlin, New York, in 2005. After eighteen months of perfecting the recipe, he and
his five-person team introduced Chobani Greek Yogurt in 2007. An authentic strained Greek
yogurt, Chobani is thicker, creamier, and is higher in protein than regular yogurts.
Starting with his new-product launch, Hamdi Ulukaya fought to gain distribution in the
regular dairy cases of major supermarkets and grocery chains. He did not want to be confined to
the specialty or health food sections of these chains or solely in smaller, niche stores because he
wanted to reach the mass market of American consumers.
By 2013, Chobani had achieved over $1 billion in annual sales. Besides the U.S., its
Greek Yogurt was distributed nationally in the United Kingdom and Australia. Since its
founding, it has added additional product lines to reach more consumers: Chobani Champions
line of yogurt for kids; Chobani Bite for a mindfully indulgent snack; and Chobani Flip with
curated mix-ins for creative gourmands.
For his achievements, Ulukaya won the 2013 Ernst & Young World Entrepreneur of the
Year award.
Teaching Suggestions
Before teaching the Chobani Greek Yogurt video case, consider asking a series of
questions to determine student's consumption of yogurt and awareness and consumption of
Chobani Greek Yogurt:
1. How many of you eat yogurt in a typical month?
2. How many cups of yogurt do you typically eat in a month? 0 cups? 1-5 cups? 6-10
cups? More than 10 cups?
3. What kind of yogurt do you eat? A traditional yogurt? A Greek yogurt?
4. How many of you have tried or eat Chobani Greek Yogurt?
5. Among those of you that eat Chobani Greek Yogurt, what are the main reasons you buy
and eat this yogurt? [NOTE: Consumers often divide into (1) healthy eating and (2) like-
the-taste market segments.]
6. Have you ever tried Chobani Bite? Chobani Flip?
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Answers to Questions
1. From the information about Chobani in the case and at the start of the chapter,
(a) who did Hamdi Ulukaya identify as the target market for his first cups of Greek
Yogurt and (b) what was his initial “4Ps” marketing strategy?
Answers:
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2. (a) What marketing actions would you expect the companies selling Yoplait, Dannon,
and PepsiCo yogurts to take in response to Chobani’s appearance and (b) how might
Chobani respond?
Answers:
3. What are (a) the advantages and (b) the disadvantages of Chobani’s Customer
Loyalty Team that handles communications with customers—from phone calls and
e-mails to Facebook and Twitter messages?
Answers:
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4. As Chobani seeks to build its brand, it opened a unique retail store in New York City:
Chobani SoHo. Why did Chobani do this?
Answer:
5. (a) What criteria might Chobani use when it seeks markets in new countries and
(b) what three or four countries meet these criteria?
Answers:
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Epilogue
In February 2014, Chobani aired its first Super Bowl ad to introduce a 100-calorie Greek
yogurt that will use only natural sweeteners (stevia, which is the main ingredient in Truvía—see
ICA 3-1). For many potential yogurt customers, 100 calories is an important psychological
selling point.
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TEACHING NOTE FOR APPENDIX D CASE D-1
3M’s Post-it® Flag Highlighter: Extending the Concept!
Synopsis
3M relies on its inventors like David Windorski to convert their creative ideas to
marketable products to keep it the world leader in technology involving adhesives. In
Windorski’s case this involved combining the adhesive technology in Post-It® Flags with
highlighters and pens to produce two revolutionary new 3M products.
Windorski did this by researching how college students study and take notes and the
products they use. Using clay, wood, and plastic mockups, Windorski developed several
hundred highlighters-and-Post-It® Flag combinations that were used and then evaluated by actual
college students. With the resulting design improvements, this became the 3M Post-It® Flag
Highlighter, which has sold millions around the world. Windorski and his team were recognized
with a 3M award for their successful invention.
Teaching Suggestions
The 3M Post-It® Flag Highlighter product and the video case have the advantage of
involving an activity that every college student is intimately involved with—studying! But each
student in your class may have a very different approach to how they study and what products
(notebooks, pens, highlighters, Post-It® Notes, laptops, iPads, etc.) they use. So the instructor
may want to ask these questions to lead off the video case discussion:
1. Do you take written notes to summarize key points in the textbook or classroom lecture
and discussion?
2. Do you underline, highlight, or flag the key points you want to remember?
3. When studying, have you ever used:
• A highlighter (Accent, etc.)?
• A Post-It® Note?
• A Post-It® Flag?
• A Post-It® Flag Highlighter?
4. In terms of the Post-It® Flag Highlighter, how many of you:
• Have heard of it before this video case?
• Have ever tried using one?
• Use one now when you study?
5. OPTIONAL: Pass out copies for each student, either in hard copy or electronically, of the
“3M’s Post-it® Flag Highlighter: Extending the Concept!” Appendix D Case D-1.
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Answers to Questions
1. (a) How did 3M’s David Windorski get ideas from college students to help him in
designing the final commercial version of the Post-it® Flag Highlighter? (b) How were
these ideas important to the success of the product?
Answers:
2. What (a) special advantages and (b) potential problems did 3M have in introducing a
new highlighter-with-flags product for college students?
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3. Visit your college bookstore before you answer. (a) Where would you display the
Post-it® Flag Highlighter in a college bookstore, and (b) how can the display increase
student awareness of the product?
Answers:
4. In what ways might 3M try to promote its Post-it® Flag Highlighter and make
students more aware of the product?
Answers:
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5. What are (a) the special opportunities and (b) potential challenges for 3M in taking its
Post-it® Flag Highlighter into international markets? (c) On which countries should
3M focus its marketing efforts?
Answers:
Epilogue
On January 15, 2008, David Windorski and 3M’s Post-It® Flag Highlighter experienced a
public relation department’s wildest dream: a five-minute appearance on The Oprah Winfrey
Show!
