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7. Describe the significance of the shift from transaction-based marketing to relationship marketing.
When does relationship building begin?
Answer: Transaction-based marketing operated under the traditional view of marketing as a simple
exchange process, focusing on producing an item, attracting a customer, and closing the deal. Over time
the focus shifted toward consumers as they found more shopping options, became more sophisticated
about making purchase decisions, and were increasingly bombarded with endless advertising and
marketing messages. The shift is significant because marketers realized they needed to understand the
8. How has social media like Twitter and Facebook changed marketing communications?
Answer: Social media is now the top online activity. With almost 1.2 billion monthly active users, it’s
estimated that if Facebook were a country, it would be the third most populous in the world, right after
India. And, after going public with its recent IPO, Twitter announced that its 200 million active users post
an average of 400 million tweets a day. Over three-fourths of the Fortune 100 companies have joined
Twitter, and more than 70 percent use Facebook. “Adding Social to all of our platforms makes our
Difficulty: Moderate
9. How do ethics and social responsibility help a firm achieve marketplace success?
Answer: Ethics are moral standards of behavior expected by society. Social responsibility refers to the
philosophies, policies, procedures, and actions of a firm—including philanthropy and charitable giving—
10. What motivates firms to develop sustainable products?
Answer: Sustainable products, those that can be produced, used, and disposed of with minimal impact
on the environment, are another goal of socially responsible firms. Many such firms have added annual
sustainability reports and a top-level executive position to develop and promote their sustainability efforts.
Other sustainability and social responsibility officers agree that sustainability must permeate the firm’s
Projects and Teamwork Exercises
1. Answer: Each firm’s goods and/or services can create different types of utility in various ways. Though
marketing technically creates three of the four utilities, form utility is also included below as one that is
created by these businesses. Some ideas:
a. American Express, Visa, or MasterCard—they create ownership utility by making sales of
goods and services in exchange of currency/credit card/debit card, time and place utility by
allowing consumers buy anything, anywhere, anytime in the world.
16 Part 1 Designing Customer-Oriented Marketing Strategies
2. Answer: Students may use the suggestions given (Papa John’s Pizza, Zumba, StubHub, Katy Perry, or
Bass Pro Shops) or they may find a different U.S.-based company whose products could do well in
overseas markets. Their plans will probably vary in length and detail, but should contain some basic
elements and address some broad concerns. The plan should demonstrate on how the students would
target and communicate with overseas markets.
Point value: 1
BUSPROG: Analytic
3. Answer: Students should be able to form a brief summary of the firm’s current status and create some
strategies for avoiding marketing myopia and expanding the scope of business over the next ten years.
Stress that to avoid marketing myopia, firms need to broadly define organizational goals oriented toward
consumer needs in the present and future, rather than just focusing on their current products. Students
should have some creative suggestions for these firms:
a. FedEx—scope: air express transportation of goods between countries, door-to-door delivery to
virtually any address
b. Six Flags—scope: amusement and entertainment for families
4. Answer: Encourage students to think creatively and imagine all types of relationships with these
organizations. Remind them that not all partners seem an obvious match at first, but some of the most
interesting and successful alliances have been between seemingly polar entities. Below are a few
possible partners for strategic alliance ideas to match each of the not-for-profit organizations provided:
a. Adopt-A-Pet—pet food manufacturers, pet supply chains, veterinarian hospitals and practices
5. Answer: Students should be able to understand the importance of sustainable products and safe
disposal. Reviewing the sustainable programs of leading companies across the world, initiatives,
measures, and success stories will help students to come up with better ideas on sustainable products.
Toshiba America believes that employees are their most valuable asset, and they constantly strive to
create an environment, both within their companies and in the communities in which they operate, that
18 Part 1 Designing Customer-Oriented Marketing Strategies
Critical-Thinking Exercises
1. How does an organization create a customer?
Answer: Organizations create customers by applying the marketing concept and adhering to customer
orientation. They anticipate needs and provide innovative products and services to satisfy those needs.
This means that organizations need to research the marketplace and demonstrate a companywide
2. How can marketers use interactive and social marketing to convert needs to wants and ultimately build
long-term relationships with customers?
Answer: Back and forth communication is the key to building a relationship with customers. Keep
customers informed and seek feedback from them. Interactive marketing allows customers immediate
access to information and also allows a company to create customized communications. Technology
3. Why is utility such an important feature of marketing?
Chapter 1 Marketing: The Art and Science of Satisfying Customers 19
Answer: Effective marketing converts needs into wants. Form, time, place and possession utility are ways
that a good or service can satisfy the wants of consumers. Marketers need to consider these various
4. What benefits—monetary and nonmonetary—do social responsibility programs bring to a business?
Answer: Improved customer relationships, enhanced employee loyalty, and a positive image in the
5. Why is determining the lifetime value of a customer an important analysis for a company to make?
Answer: It is easier and less costly to satisfy and keep existing customers than it is to acquire new ones.
6. Why is it important for a firm to establish high ethical standards for sustainability? What role do you
think marketers play in implementing these high standards?
Answer: Firms stand to gain needed credibility from their efforts to protect the environment by reducing
waste and pollution. Not only has the recent economic downturn made it important for them to cut waste
20 Part 1 Designing Customer-Oriented Marketing Strategies
Difficulty: Moderate
Ethics Exercise
At a local coffee shop you run into a friend who works for a social media firm that competes with yours.
After a brief conversation he remembers an errand he has to run, and he rushes off with a hasty good-
bye. As you gather your things to leave a few minutes later, you realize your friend left a file folder on the
chair; inside is a report about a client. Your company is very interested in doing some work for this client
in the future.
1. Would you take a quick look inside the folder before you return it to your friend? Why or why not?
2. Would you share any information in the report with anyone in your office? Why or why not?
3. When you return the folder to your friend, would you mention the report and offer your own
commentary on it? Why or why not?
Answer: Student responses to the ethical situation presented may vary and with most of the ethics
exercises in Contemporary Marketing, there aren’t necessarily right or wrong answers.
Internet Exercises
1. Marketing terminology. Like many subjects, marketing appears to have a language of its own. Visit
the website of the American Marketing Association. Click on “Resources” and then “AMA Dictionary.”
Define the following terms: A/B testing, dating, never-out list, and will-call.
2. Event marketing. The Westminster Kennel Club runs the nation’s largest dog show. Go to the event’s
website. Review the website and prepare a brief report relating what you learned to the material on event
marketing in the chapter. Make sure to describe sponsor tie-ins and other joint marketing efforts.
3. Sustainability. Johnson & Johnson engages in a major effort to incorporate sustainability into its wide-
ranging business activities. Visit the website listed here and read about the firm’s recent activities. How
Case 1.1 Kraft Focuses on Brand Building—Questions for Critical Thinking
1. Are there more ways Kraft Foods can tailor its structure, its products, or its communication efforts to
better satisfy customers? If so, what are they?
Answer: Students may have varying opinions. However, in general, marketing is an organizational
function and a set of processes for creating, communicating, and delivering value to customers and for
2. How do you think splitting the company into two units will help Kraft meet its customers’ needs? Can
you think of any disadvantages to this split?
Answer: Student answers will vary. However, splitting up the company into two firms will allow each to
concentrate its business and marketing efforts on a smaller group of products and expand its social reach
Video Case 1.2 Geoffrey B. Small Is Big on Quality, Customers, Community—Questions for
Critical Thinking
1. Why is the link between relationship marketing and social responsibility so important to Small’s
business success?
22 Part 1 Designing Customer-Oriented Marketing Strategies
Answer: The link between relationship marketing and social responsibility is important to Geoffrey Small’s
2. Geoffrey B. Small is an avant-garde designer and unconventional businessperson. What examples
does he set, and what might marketers for large corporations learn from his views and practices?
Answer: Large corporations can learn from Geoffrey B. Small’s belief that businesses should produce the
highest-quality goods and services possible—instead of rolling out as many pieces as cheaply as
COLLABORATIVE LEARNING EXERCISES
Avoiding Marketing Myopia
Purpose:
To enable students to recognize and avoid instances of marketing myopia
Background:
In a world in which technology develops very quickly, older technologies are frequently replaced
by newer technologies. Some companies adjust to these changes, while others cannot, and go
under. This exercise will help students grasp the concept of marketing myopia
Relationship to Text:
Avoiding Marketing Myopia
Estimated Class Time:
Less than twenty minutes
Preparation/Materials:
Online research
Exercise:
Ask the students to research the slogans or mission statements of several common brands or
Chapter 1 Marketing: The Art and Science of Satisfying Customers 23
Questions for Reflection:
• How can a company avoid marketing myopia?
Not-For-Profit Marketing
Purpose:
To highlight a key challenge of not-for-profit marketing
Background:
While nearly 10 percent of the U.S. workforce either works or volunteers at not-for-profit
organizations, many students do not recognize that marketing plays a critically important role at
Relationship to Text:
Characteristics of Not-for-Profit Marketing
Estimated Class Time:
About 10 minutes
Preparation/Materials:
Marker and white board
Exercise:
NOTE: This exercise is only relevant for nonprofit public or private colleges and universities
(which compose the vast majority of the higher education market).
Ask your students to brainstorm the various “publics” that your school targets. Students should be
able to quickly identify the various publics as students and faculty, but it often takes them a
Questions for Reflection:
• Why do not-for-profit organizations often need to serve multiple publics?
• Does this characteristic make them more or less effective? Why?
Person Marketing
Purpose:
To demonstrate the prevalence and power of person marketing in pop culture
Background:
24 Part 1 Designing Customer-Oriented Marketing Strategies
Relationship to Text:
Person Marketing
Estimated Class Time:
About 15 minutes
Preparation/Materials:
None needed
Exercise:
Brainstorm with your class a list of high-profile people who need an image makeover (essentially
celebrities who are in trouble). Encourage them to consider athletes, actors, musicians,
entertainers, and politicians who have legal problems, substance abuse issues, or just a tendency
to do or say the wrong thing. Briefly explain why each person needs help. When you have a list of
Questions for Reflection:
• What are the unique challenges to person marketing?
• Who has done an especially strong job with person marketing? Why?
Place Marketing
Purpose:
To stimulate student thinking about the potential impact of place marketing
Background:
Over the past ten years, place marketing has blossomed, as a growing number of cities and
states have actively marketed themselves to both businesses and tourists. Among the high profile
Relationship to Text:
Place Marketing
Estimated Class Time:
About 15 to 20 minutes
Preparation/Materials:
Chapter 1 Marketing: The Art and Science of Satisfying Customers 25
None needed
Exercise:
Divide your class into small groups and challenge them to develop a plan to lure businesses and
tourists to their city. Questions to consider (and you might want to write these on the board):
• What would their slogan be?
• What qualities and attractions would they promote, and why?
• What challenges would they need to overcome?
• What companies or organizations might they choose as partners and why?
Social Marketing
Purpose:
To emphasize the importance of social marketing in today’s market
Background:
In today’s hyper-competitive marketplace, businesses must ensure that their marketing efforts are
visible to their target customers and stand out from the clutter of competing messages.
Relationship to Text:
Social Marketing
Estimated Class Time:
About an hour
Preparation/Materials:
Group work for a week prior to class
Exercise:
Divide your class into groups and ask each group to pick a public service message they would like to
popularize. Students could pick charities, raise awareness about an issue, or encourage people to take
some action. Instruct the groups to use online methods to spread their message. They could use social
Questions for Reflection:
• How can social marketing help marketers build relationships with their customers?
• Discuss possible products, services, or ideas which cannot be effectively marketed using
social media.
