120 Part 1 Designing Customer-Oriented Marketing Strategies
Difficulty: Easy
7. Describe how firms can alleviate some of the privacy concerns of online shoppers.
Answer: A Do Not Track list would allow consumers request online sellers to not track their online habits.
Search engines can also avoid behavioral targeting. By displaying logos such as TRUSTe (Internet
8. What is purchase fraud?
Answer: Purchase fraud, or payment fraud, refers to credit card purchases in which merchandise is
shipped, and then the buyer claims to have never placed the order or received the merchandise and
9. How can companies benefit from blogs and avoid their downsides?
Answer: Blogs are Web pages that serve as publicly accessible journals for companies. Unlike email,
they allow readers to post comments or ask questions, so they’re much more interactive than other Web
formats. They often include wikis, Web pages that any reader can edit and change, and podcasts, audio
Difficulty: Easy
10. Describe the issues that go into developing a successful website. How does the purpose of the
website affect its implementation and cost?
Answer: Marketers need to ask certain questions when planning a website: What is the company’s goal
for the website? What is the scope of the site? Should the site be created and maintained in-house or
through outside developers? What name will reflect the company and its products and will be easy to
Projects and Teamwork Exercises
1. Answer: Students should have some interesting results to their research. Have them discuss the
benefits (and possible drawbacks if they discovered some) of buying products online. A few suggestions:
a. Tablet computers—comparison shopping among multiple manufacturers, ability to build your own
computer, personalization of the final product, special discounts, free delivery
2. Answer: Students will have a number of creative ideas for an online clothing retailer, particularly one
that also has traditional retail stores. What did they find out about its target market? Have them discuss
the nature of its customers, their preferences, and the ways they shop both online and in stores. What
kind of changes did students suggest to be made in the virtual storefront? What did they want to change
in the brick-and-mortar stores? Student suggestions could include 3D product use demonstrations for the
changes to be made in the virtual storefront.
Point value: 1
3. Answer: Online communities are groups of people who share common interests, and students should
be able to find quite a few examples. Companies use several formats to create communities that offer
advantages to both users and organizations: Online forums are Internet discussion groups in which users
can send comments and questions or receive information from other forum members (Example:
American Express Online, business travel topics). Newsgroups are noncommercial Internet versions of
forums that are topic-specific, resembling two-way conversations (example: check Google Groups for
4. Answer: Have students share which local company they chose that had little or no online presence.
What specific suggestions did they make in their proposals to start or significantly expand its online
presence? Have them share their sketches and outlines depicting what the firm’s Web site should look
like and the functions it should perform. Remind them that in the design of a site, marketers should
consider their target audience including demographics and geographic indicators, the way visitors might
5. Answer: Have pairs of students share what they found in visiting 10 e-business websites. Roughly
what percentage of sites visited were B2B and B2C sites? Which did they think had the highest and
lowest conversion rates? What suggestions do they have to increase conversion rates of all 10 sites?
How did suggestions vary based on whether the site was B2B or B2C? Make sure students chose sites
from different categories like clothing, technology, travel, professional services, etc. Do the conversion
rates differ by product category?
Chapter 5 E-Business: Managing the Customer Experience 123
Critical-Thinking Exercises
1. Who are typical online buyers and sellers? What are some of the strategic implications of these facts
to online marketers?
Answer: The typical Internet user is now likely to be between 18 and 64 years of age. In 2000, men made
up the majority of online shoppers. Today, women out shop men online. Some observers predict that to
keep up with rising expectations, e-business firms will have to continually update their offerings at
2. Some marketers argue that search marketing is a more effective means of using the Web to advertise
than traditional pop-up or banner ads. Research the concept of search marketing. What are some of the
benefits of using search marketing?
Answer: Search marketing refers to an arrangement whereby a marketer pays a search engine—such as
Google—a fee to have its website or ad pop up after a computer user enters certain words into the
3. Assume that you work for a U.S. company that markets its products throughout the world. Its current
online presence outside the United States is limited. Outline some steps the company should take to
expand its online presence internationally.
Answer: The chapter lists some steps marketers should take when expanding their firms’ online presence
globally. You may show students some examples (Toyota is an excellent one) of how firms have adapted
4. Visa offers a service called Verified by Visa. The purpose is to reduce Internet-related fraud
(MasterCard and American Express have similar services). Research “Verified by Visa” and prepare a
report summarizing the program and how it protects both buyers and sellers.
Answer: This program allows cardholders to create a password that will be verified whenever the card is
used for an online transaction with participating retailers. Any program that helps to insure the integrity of
5. One factor that appears to impede growth in online sales is consumers’ fear of receiving unsolicited
email after a purchase is made. Given that fear, should companies continue to use email to communicate
with customers? If so, how?
Answer: Student opinions will vary on whether companies should continue using email marketing or not.
Students could discuss the advantages of email marketing. They argue that email marketing is cost-
effective, hassle–free, easy to track, and has quick response cycles, wider reach, allows customization.
Ethics Exercise
One of the lingering impediments to e-business revolves around privacy concerns. Virtually all websites
collect user data. Internet service providers, for example, can track where users go on the Web and store
that information. Search engines keep detailed data on Internet searches by users. Those arguing that
additional privacy laws and regulations are needed claim that users never know exactly what information
Chapter 5 E-Business: Managing the Customer Experience 125
Assume that your company collects and stores personal information about its online customers. The
company’s privacy policy allows the company to give limited amounts of that information to “selected”
third parties.
1. Is this policy, in your opinion, appropriate and adequate? What ethical issues does your company’s
policy raise?
2. How would you change the privacy policy to reflect your ethical concerns?
3. From strictly an economic perspective, is the company’s existing policy adequate and appropriate?
Answer: Privacy issues relating to e-commerce, especially those that relate to the use of personal
Internet Exercises
1. Online shopping. Assume you’re in the market for a new notebook computer. Visit at least two of the
websites listed below and review shopping suggestions and model ratings. Next, list your top two models
and, using a shopping site like Shopping.com (http://www.shopping.com), search for online retailers
offering the best combination of price, user ratings, shipping, and other relevant criteria. Prepare a report
summarizing your experience. What did this exercise teach you about the benefits and challenges of
online retailing?
2. Marketing uses of social networking. Choose two online retailers and two manufacturers. Go to
each website. Compare and contrast how all four firms use social networking sites (such as Facebook
and Twitter) to market their products. Which, in your opinion, uses social networking most effectively?
Answer: Students are expected to visit the websites of a few online retailers and manufacturers. Noting
the various ads displayed in social networks will help them trace the presence of these retailers and
3. Search marketing. Visit the website listed below. Prepare a brief report outlining how to optimize the
use of search marketing. Be sure to include a discussion on measuring the effectiveness of search
marketing.
http://www.toprankblog.com/2009/03/charting-search-engine-optimization/
Answer: Students should visit a few websites that give information on search marketing, search engines,
and search engine optimization. The discussion should be based on their perspectives on the use of
Case 5.1 Walgreens Masters E-Commerce —Questions for Critical Thinking
1. According to a recent Nielsen survey, there has been a significant increase in the number of
consumers 65 and older using smartphones. How can Walgreens take advantage of this demographic as
the company expands its online retail presence?
Answer: Students answers will vary. With older consumers becoming technologically savvy and using
smartphones and other mobile devices, Walgreens should be marketing more of their brands and
2. Walgreens took a majority stake in Alliance Boots, a European pharmacy retailer, for more than $6
billion. What effects will this partnership have on the company’s e-commerce strategies?
Answer: Student opinions will vary. With its global expansion via Alliance Boots, Walgreens now has the
opportunity to reach many more consumers in Europe and beyond. Creating a Web presence that is
Video Case 5.2 Hubway: Boston’s Online Bike-Sharing System —Questions for Critical Thinking
1. What are the benefits of e-marketing for Hubway? What are the potential drawbacks?
Answer: The benefits of using e-marketing include the fact that Hubway can extend its physical reach
(adding more bikes and stations) without significantly increasing its costs; reach more potential and
2. Thus far, Hubway essentially engages in business-to-consumer (B2C) e-marketing. Cite two or three
examples of ways in which Hubway might branch out into business–to-business (B2B) e-marketing.
Answer: Hubway could market itself to different Boston companies with incentives for their employees to
Part 1 Video Case: Cooking Up Social Media Strategies—Questions for Critical Thinking
1. What steps could Scripps and Food Network take to avoid marketing myopia? Create a company
motto for them reflecting your ideas.
Answer: Since Food Network has such a targeted audience, it would be easy to fall into marketing
myopia. Gathering ideas from viewers themselves—including those who don’t watch Food Network
3. How might Scripps and Food Network contribute to the highest level of the social responsibility
pyramid—philanthropy?
Answer: To be good corporate citizens, Scripps and Food Network could use their marketing power
through television and social media to assist local food banks and community gardens; offer
4. What strategies might Scripps and Food Network use to become as well known for entertainment in
digital and social media as they are for educating and inspiring people about food and cooking?
Answer: To become better known for entertainment in social and digital media, Scripps and Food
COLLABORATIVE LEARNING EXERCISES
Information and the Internet: Urban Legends
Purpose:
To help students recognize urban legends and understand the importance of checking the facts
Background:
College students are surprisingly gullible with regard to urban legends, especially given their
heavy use of email for daily communication. While most urban legends are harmless, many can
Relationship to Text:
Functions of the Internet
Estimated Class Time:
About 10 minutes
Preparation/Materials:
Each student will need paper and a pencil or pen
Exercise:
Ask your students to number their papers from 1-10, and give them the urban legends quiz below:
Which are true and which are false?
2. Coca-Cola was once considered anti-Semitic for refusing to do business in Israel. (True)
http://www.snopes.com/cokelore/israel.asp
3. Naugahyde is made from the skins of nauga, an odd yet engagingly friendly creative
5. Domino’s Pizza financially supports Operation Rescue, an anti-abortion group. (False)
http://www.snopes.com/politics/business/dominos.asp
7. The Gap takes its name from the gay pride slogan “Gay and Proud.” (False)
http://www.snopes.com/business/names/names.htm
8. A clever consumer earned a lifetime of free air travel by taking advantage of a Healthy
(All of these urban legends are taken from Snopes.com. If you have Web projection capability,
you may want to click on each of the specific sites for the interesting—and often very funny—back
story.) Ask your students to score their quizzes, and share results—which will probably vary
Questions for Reflection:
• On a more personal level, what can each student do to determine the veracity of this kind of
email? (Possibilities include a quick check on www.snopes.com or http://hoaxbusters.org.
Simply considering the source is often enough as well.)
• What are the ethical implications of forwarding such email without checking?
Online Sellers
Purpose:
To explore the brand-building potential of the Internet
Background:
While the range of product availability online has expanded dramatically in the last couple of
years, e-commerce does not currently make financial sense for a number of product categories.
This exercise is designed to explore how marketers can use the Web to build their brands without
including the e-commerce option.
Relationship to Text:
Online Buyers and Sellers
Estimated Class Time:
130 Part 1 Designing Customer-Oriented Marketing Strategies
About 10 to15 minutes
Preparation/Materials:
None needed
Exercise:
Brainstorm with your students a list of products that they believe are fundamentally inappropriate
for e-commerce. Convenience products (e.g., mustard, pet food, diapers) and experiential
products (e.g., a rock-climbing gym, a massage) typically dominate the list. Break your students
into small groups and ask each group to choose three of the products on the list. How could each
Questions for Reflection:
• Should every company invest in a website? Why or why not?
• Mention some examples of strong sites on the Web that are not related to e-commerce. (If you
Online Communities
Purpose:
To demonstrate the importance of creating and managing Web communities
Background:
Creating an active Web community can give a significant competitive edge to virtually any Web
business (eBay has done this especially well). But understanding the meaning of Web
Relationship to Text:
Online Communities
Estimated Class Time:
About 15 minutes
Preparation/Materials:
Develop a list of business types for your students to analyze in small groups. This project is most
effective with a broad mix of businesses that would clearly use the Web in different ways.
Possibilities include a guitar shop, a day spa, a car insurance company, a university, a cell phone
provider, an ice cream parlor, a vintage clothier, a pet shop, etc.
Exercise:
Divide the class into small groups and assign a different business type to each group. Ask the
groups to consider what community could be included in their website, and to develop a strategy
to create an active community. Encourage them to be creative. (A pet store site, for example,
Chapter 5 E-Business: Managing the Customer Experience 131
could sponsor an information exchange for lost animals; an ice cream store site could sponsor a
contest to name a new sundae.) As each group presents to the class, encourage constructive
Questions for Reflection:
• Can a community section of a website be used for marketing research? How?
• Ask students if they have personally participated in a Web community (e.g. chat rooms, message
boards, eBay seller reviews)? What worked well? What would improve the experience?
Designing a “Sticky” website
Purpose:
To highlight tools that will help build more effective websites
Background:
A successful website depends to a large extent on current and meaningful content, clear and
easy navigation, and excellent search capability. But beyond those fundamentals, site
Relationship to Text:
Building an Effective website
Estimated Class Time:
About 15 minutes
Preparation/Materials:
None needed
Exercise:
Ask your students what websites they surf most often (only the PG-rated ones). Why? What sites
do they bookmark? Why? Most classes quickly uncover the core issues of a great site (content,
navigation, search), but guide them to also consider the compelling extra features. Possibilities
• A small law firm
• An acupuncture clinic
• A local board sports store (skateboarding, snowboarding, surfing)
• A specialty wine store
• A trendy clothing boutique
• A college bookstore
132 Part 1 Designing Customer-Oriented Marketing Strategies
• A national weekly news magazine site
• A large department store
Ask each group to share their five favorite ideas with the class. Usually their ideas are very
creative and vary widely among groups.
Questions for Reflection:
E-Business
Purpose:
To help students understand how to increase e-marketing effectiveness
Background:
Sometimes students find it easier to understand e-marketing strategies by examining those that
don’t work rather than those that do. The exercise is designed to help students uncover
opportunities to improve the effectiveness of e-marketing for a product or service that they
currently do not seek on the Web.
Relationship to Text:
E-Business
Estimated Class Time:
About 20 minutes
Preparation/Materials:
None needed
Exercise:
Divide your students into small groups and ask each group to choose a product or service that
most or all of them would not currently purchase via the Web. Give them about ten minutes to
answer the following questions:
Questions for Reflection:
• What B2B products could be better marketed on the Web?
• What are the career opportunities that stem from this potential?
Chapter 5 E-Business: Managing the Customer Experience 133
To help students understand the challenges faced while using e-marketing strategies
Background:
Students will be able to understand e-marketing strategies better by examining its advantages.
The exercise is designed to help students analyze the areas that pose challenges in e-commerce.
Relationship to Text:
Challenges in E-Business and E-Marketing
Estimated Class Time:
About 20 minutes
Preparation/Materials: