Marketing Chapter 2 Topic Ahead The Consumer Value Framework And Its Components Market Characteristics Market

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LO: 2-1, 2-4, 2-5

6. Review the customer value framework. At the first glance, what aspects of the customer

value framework do you believe are most relevant in helping you understand that consumer

behavior is useful to study in order to make you a better consumer?

Chapter Video Summary

To view the video case on E-Business at Evo, access the Chapter 2 Media Quiz in CB8

Online (create a course at login.cengage.com).

E-Business at Evo

When ski enthusiast Bryce Phillips launched Evo from his garage in 2001, the sports equipment

company consisted of an Internet connection, used ski gear, and a single employee. Today the

Seattle-based ski-and-snowboard retailer is the premier online destination for closeout-model

equipment and apparel. Consumers of ski and water sport products choose Evo for its online

shopping experience, discounted brand name merchandise, and no-haggle customer service. The

retailer’s website also delivers value through detailed product reviews and Evo-hosted travel

opportunities.

Ask Your Students

1. According to Bryce, what is the heart and soul of Evo?

Answer: Bryce Phillips says, “In many ways the retail environment, the brick-and-mortar,

the physical presence of the store are the heart and soul of the company. You know,

whether it be a customer, or a sales manager or a rep, or whoever it may be; they can come

in and really kind of experience what our brand is all about.”

BUSPROG: Reflective Thinking

DISC: Customer

LO: 2-3

Topic: A-head: Marketing Strategy and Consumer Value

Bloom’s: Knowledge

Difficulty: Easy

2. How does Evo offer value to its customers?

3. Name a significant competitive advantage of Evo.

customers who prefer shopping online. Evo also sells street wear apart from skis,

snowboards, wakeboards, skateboards, and so on. This product differentiation strategy

gives it an upper hand over its competitors.

BUSPROG: Analytic

DISC: Customer

LO: 2-3 | 2-4

Topic: A-head: Marketing Strategy and Consumer Value | Market Characteristics: Market

Segments and Product Differentiation

Bloom’s: Analysis

Difficulty: Challenging

Part 1 In-Text Case Answers

Case 1-1 IDEO: Consumer-Focused Innovation

1. Where does IDEO get inspiration for its product designs?

2. What kind of value do you think successful products deliver to consumers?

3. Why do you think having a product that simply works doesn’t always translate to

consumer acceptance?

4. What is the relative importance of the utilitarian versus the hedonic value of products, as

suggested by the work of IDEO?

5. Do you agree with Edison’s observation that “genius is 1% inspiration and 99%

perspiration”? Explain your answer.

Case 1-2 Born or Reinvented in the “Foreign” Land? Examining Brands and Their

Country of Origin

1. Examine further the “2011 Ranking of Top 100 Brands.” Classify these brands while

considering the product category or sector and the country of origin. Can you detect a

pattern? For example, do you see that strong players in the automotive sector emerge

largely in Western Europe?

2. List all the brands that you have in your home. Then research to find the country of origin

of all the brands on your list. What do you find? How can marketing professionals make

use of the information that you have analyzed?

3. Use the “2011 Ranking of Top 100 Brands” table to test the level of BoK of at least five

people (excluding yourself). Examine and write a short reflection on how the extent of

their knowledge varies with their lifestyles.

4. Your textbook refers to the concept of perceptual maps. Construct a perceptual map using

the following two dimensions: (i) product ethnicity (low versus high) and (ii) level of BoK

(low versus high). Choose at least 10 brands or product categories to represent on the map.

You may use the list of brands/categories available at the Interbrand website to populate a

list for the map. Use the information from question 3 to identify the average level of

knowledge of product ethnicity and extent of BoK.

5. Using the information in question 3, how do you think a company can enhance its

understanding of market segmentation so as to efficiently target a marketing message to its

potential and existing consumers?

Case 1-3 DemandTec®: Using Collaborative Analytics in a Fragmented Latin American

Market

1. Predictive models used by Target identified changes in the purchase behavior of female

shoppers that indicated they might be pregnant, including increased spending on

supplements important to neonatal development as well as unscented soaps and lotions.

What other changes in purchase behavior might indicate that a female shopper is

expecting?

2. How does the use of collaborative analytics provide value to the consumer and help to

facilitate exchanges between buyers and sellers?

3. Based on collaborative analytics, Target created targeted sales promotions for newly

expectant mothers, such as mailing coupons to them for purchasing diapers or baby bottles.

GPA, in Brazil, uses collaborative analytics to optimize prices for their various customer

segments. These are only two of the four marketing mix variables. Can you think of other

ways that companies might use collaborative analytics to fine-tune the other marketing mix

variables?

4. GPA uses collaborative analytics to look at the shopping behavior of their customers. The

next time you purchase food items (groceries), make a list of every item you purchased.

Try to organize the items in a meaningful way. Imagine that a researcher was using

ethnographic methods to analyze your grocery list. What insights might they have about

you based on your purchases?

Answer: Students’ answers will vary. At first, students might list “surface” responses

about the types of products they purchased. However, as they start to think critically about

the list, they may make inferences about their lifestyle choices based on the nature of their

purchased products (i.e., natural, healthy, unhealthy, vegan) or the way these products

might be used (i.e., for entertaining). This question could be adapted to provide students

with a list from an anonymous shopper, which would remove their knowledge of their own

lifestyles and purchase behavior.

BUSPROG: Reflective Thinking

DISC: Customer

LO: 2-4

Topic: A-head: Market Characteristics: Market Segments and Product Differentiation

Bloom’s: Analysis

Difficulty: Challenging

5. Choose a local retailer that is not part of a national or regional chain. Assume they have

decided to expand their efforts internationally and have therefore enlisted the help of

DemandTec. How will the use of collaborative analytics help them to better understand

consumers in this new market?

Case 1-4 Sears: A Dying Company?

1. Describe how some of the trends mentioned in the textbook are affecting Sears.

2. Describe the external and situational influences that steer shoppers like Ashley away from

Sears.

3. Compare the total value concept for Sears and your favorite retailer.