PART II
CASE SOLUTIONS
CASE 2-1 BMW TAPS THE EMERGING CHINESE LUXURY MARKET
1) There is often a natural tendency to assume that in collectivist cultures such as that in China,
luxury products would not be popular.
a) Explain how luxury products such as the BMW automobile might fulfill needs even
within the traditional collectivist value set of China.
Luxury products and brands are important to consumers in both individualistic and
collectivistic cultures but for different reasons as discussed in Chapter 2 and summarized in
2) Develop a sample advertisement for BMW in China. Include the major theme, the key copy
points, and the visual that you would utilize. Explain and defend your choices based on the
case and materials in Chapter 2.
This question builds nicely on Question 1. Students who choose to target older wealthy
Chinese should note that collectivist values are likely to dominate. Ad themes and copy
3) Growth in car ownership is expected to explode in China within the next 20 years. This will,
for many Chinese, involve buying and owning a car for the very first time. In terms of
adoption of innovation (see Chapter 7) for these first-time buyers:
a) What type of innovation is the car for Chinese consumers who have never owned one?
Explain.
Discontinuous. Because it requires major changes of significant importance to the
Nature of group
5
Given low ownership rates, the nature of the Chinese
consumer group as a whole is likely to be
conservative or even risk-averse to this product.
Marketing effort
9
BMW is a heavily-marketed and well-known brand
name that stands for luxury, tradition and quality.
Compatibility
2
Not at all compatible for those who have never
owned a car. A MAJOR barrier.
Relative advantage
2
Another major hurdle. Those using more traditional
modes of transportation may see more disadvantages
(traffic jams, parking, driving itself) than advantages
for a car in general.
High complexity of all the interrelated processes that
must be learned is again a barrier.
Perceived risk
2
Risks are high both financially and socially. These
risks could be barriers to adoption.
d) Do you think the values and desires of later adopters in china will be different from the 5
percent who currently own cars?
4) The automobile is an innovation that is not as widespread in China as in other countries.
Chapter 7 discusses the innovation process and factors affecting the spread of innovations.
Figures 7-7 through 7-9 give examples of various diffusion curves based on different
5) BMW and other foreign automakers are adapting their products to better suit the Chinese
market. To what extent should BMW customize its offerings to local tastes and preferences?
What are the risks of extreme customization?
Students’ answers may vary from recommending major customization to only minor
customization. An argument for major customization is that China is already the biggest
6) Developing guanxi is a vital part of business in China. Using the text and case, explain how a
Western company could build guanxi with its Chinese business partner.
As defined in the text, guanxi is personal connections/relationships on which an individual
can draw to secure resources or advantages when doing business as well as in the course of
social life. Its main characteristics are (1) the notion of a continuing reciprocal relationship
7) China is not the only Asian country with a large population that represents opportunity for
new customers who have their own unique tastes. Similar to BMW Brilliance, BMW India
serves the Indian market and launches certain models especially for India. Discuss factors
that make India attractive to BMW. Compare and contrast India and China in terms of the
key elements that BMW must address.
Clearly, like China, India is a developing East-Asian country with a large population and a
growing middle and upper class. Such trends favor luxury products such as a BMW
CASE 2-2 CVS CAREMARK DISCONTINUES THE SALE OF TOBACCO
PRODUCTS
1) What type of marketing strategy is CVS using?
Cause-related marketing is the type of strategy in this case. You may note to students that
this is a broader type of cause-related approach in that many CRM programs link directly to
2) Chapter 2 deals with global nonverbal communication which can find application in specific
regions and countries as well. Which nonverbal category does cigarette smoking fall under?
Cigarette smoking relates to the nonverbal communication category of etiquette. In the U.S.,
while in the past it was acceptable to smoke indoors in public places, it is usually considered
3) Chapter 3 discusses several American cultural values. Smoking can relate to individual
values from each of the three categories. Decide which of the values in each of the following
categories best relates to smoking and describe that relationship.
a) Other-oriented values,
b) Environment-oriented values
c) Self-oriented values
a) In self-oriented values, smoking relates to individualism/collectivism. The choice to
smoke is an individual choice to behave in a way that does not conform to group norms
4) What impact do you think CVS’s decision to stop selling tobacco products will have on a)
it’s long-term sales and b) smoking trends in America?
a) Answers will vary here. Some students may point out the lost revenue that was once
smoking cessation programs.
5) The case mentions a trend since the 1950s that there has been a cultural trend away from
smoking. Young people today may have a different perceptions and level of exposure to the
shifts in cultural norms dealing with smoking that those in other generations. Perform a brief
interview with members of different generational groups to find out how perceptions may
differ for different age cohorts. Compare and contrast their perceptions and stories of how
smoking was normally treated in different periods of American history. Interviewees should
be drawn from at least three of the following generations
a) Pre-Depression Generation
6) What type of reference group would best describe smokers today? How would your answer
differ if you were referring to smokers in the early to mid-1900s?
In today’s society, smokers are often a dissociative reference group. This group now has a
7) Which groups have the highest incidence of lung/bronchus cancer (in terms of ethnicity and
gender)? Would this group be a good target market for CVS Caremark?
8) What effect has CVS Caremark’s decision had on public perceptions of the retailer?
9) Do you feel that the consumers who are fully-engaged, indifferent, or actively disengaged
represent the best target market for CVS Caremark? Why?
Answers may vary and each group could be correct given sufficient explanation. One
10) Based on your answers for questions 7 and 9, devise a marketing strategy for CVS Caremark
to market their smoking cessation program to an ideal target market (as described by
demographic, ethnicity, and level of engagement). Make sure to consider the sections of
chapter five that discuss nuances of ethnic subcultures.
CASE 2-3 BEATS BY DR. DRE’S RISE TO THE TOP
1) Please reference the other-oriented, environment-oriented, and self-oriented values in the
text. Choose a few of these values and explain how they are relevant to Beats by Dr. and
Beats Music?
Answers will vary, but here are some possible solutions:
a) Youth/Age: Cultures that value youth will be attracted to the youthful “cool factor” of
Beats.
2) Refer to the generation groups and social classes in chapter 4, the ethnic subcultures in
chapter 5. With all of these concepts in mind, describe an ideal target market segment for
Beats Music?
Answers will vary. However, here is one possible answer:
a) Generation Z, because they are the most digital savvy generation and many own smart
3) Refer to Table 5-2 in chapter 5, entitled, “African American Segments Identified by
Yankelovich.” Imagine that Beats has decided to target African Americans. Which of these
segments would be the best target market for Beats? Explain your answer.
Several answers may be correct, given that the student provides a good rationale. However,
4) Refer to the three categories of innovation in chapter 7. Which category of innovation are the
following products? Justify your answer
a) Beats headphones?
b) Beats Music?
a) Beats Headphones are a continuous innovation. They plug into existing products and are
placed on the head just as pre-existing headphones operated. No new learning is required
5) Think in terms of family decision making from chapter six. What members of the household
are likely to play each of the following roles in the purchase decision for Beats Music of
Beats headphones?
a) Initiators
b) Information gatherers
c) Influencers
d) Decision makers
e) Purchasers
f) Users
Several members of a household could play each of these roles. Here is an example of a
common answer:
a) Children, teens, and young adults and/or parents
6) Reference the section of chapter 7 on reference group influence.
a) Are Beats headphones a necessity or nonnecessity?
b) Are Beats headphones visible or private?
c) Given your answers for a and b, how has beats by Dr. Dre capitalized on this in the past?
d) Do you feel reference group influence will play an important role in the success of Beats?
Explain your answer.
a) Beats headphones are a nonnecessity.
7) Review the section of chapter 7 on marketing strategy, WOM, and Opinion Leadership.
Which strategy or strategies of those listed has Beats by Dr. Dre used to become so popular
in its market?
CASE 2-4 HOW SOCIAL MEDIA NEARLY BROUGHT DOWN UNITED
AIRLINES
1) When Dave Carroll posted his video on YouTube, it went viral. What American value do
you feel motivated consumers to pass along this “video complaint” to others?
One of the American values discussed in chapter three that applies to this situation is the
value of problem-solving. Many Americans take pride in solving problems and feel that most
2) Of the three groups of influencers identified by Forrester, which group or groups do you
think were most likely responsible for Dave Carroll’s video going viral? Explain.
The group of influencers that would most likely be responsible for Carroll’s video going viral
3) Based on your answers to 1 and 2, develop a marketing strategy for United to “recover” from
their service failure. Specifically, address the following:
a) What “message” should United be sending to the general public?
United Airlines was shamed (and their stock took a dive) in response to Dave Carroll’s
videos telling the world how they provide terrible service from the baggage handlers to
b) What “media” outlets (traditional, online, social) should they be using?
Because the attack on their brand was launched via online social media, that same outlet
c) Develop a video or ad concept that United could place on social media that could help
offset consumer anger over its service failure.
d) Identify which of the three Forrester groups United should focus on with its recovery
campaign and defend your answer.
Of the three Forrester groups, United should focus on the Mass Influencers because it is
4) Chapter 7 defines and discusses opinion leaders. Are the individuals that create viral
complaint video opinion leaders? Why or why not?
The key aspect of opinion leaders is that they are product specific based on enduring
5) Chapter 7 also discusses guiding principles that marketers should use when engaging in
social media. How have United Airlines or other companies who have had similar issues
operate based on these principles?
The text lists three guiding principles: transparency, being part of the community, and
leveraging the unique characteristics of the venue.
6) Several companies are using crowdsourcing as a way for customers to help solve one
another’s problems. How might companies harness the power of crowdsourcing to combat
instances of viral negative WOM?
Companies can use crowdsourcing in multiple beneficial ways. The most relevant to this case
is for companies to set up forums in which customers can seek advice from one another,