top solution: a. Discussion Questions 1. We have discussed the concept of “The Wheel of Social Media Engagement

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a. Discussion Questions

1. We have discussed the concept of “The Wheel of Social Media Engagement” in Chapter 03, which comprises the fundamental drivers of social media engagement as five related effects. Discuss these five drivers with the help of suitable examples.

2. How can firms use customer demographics like income, market size, education, and ethnicity to market to their customers better? Discuss with the help of suitable examples.

b. Critical thinking

1. When companies that sell coffee they develop their marketing strategy, do they concentrate on satisfying their customers’ needs or wants? What about a utility company, such as the local power company? A humanitarian agency, such as Doctors without Borders? Critically examine based on the concepts of needs and wants discussed.

2. Visit the website of Kashi (www.kashi.com). Using the four Ps of Marketing mix, critically examine how Kashi creates value for customers with their Kashi Bars.

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Chapter 5

Analyzing the Marketing

Environment

Learning Objectives

Learning Objective 5.1 Outline how customers, the

company, competitors, corporate partners, and the

physical environment affect marketing strategy.

Learning Objective 5.2 Explain why marketers must

consider their macroenvironment when they make

decisions.

Learning Objective 5.3 Identify various social trends that

impact marketing.

Learning Objective 5.4 Examine the technological

advances that are influencing marketers.

Exhibit 5.2: Understanding the Marketing
Environment

Access the text alternative for slide images.

Exhibit 5.2: The Immediate Environment

Company Capabilities

Successful marketing

firms focus on

satisfying customer

needs that match their

core competencies.

Corning initially made its name by producing the glass enclosure to encase

Thomas Edison’s lightbulb. But by successfully leveraging its core

competency in glass manufacturing while also recognizing marketplace

trends toward mobile devices, Corning shifted its focus.

Somchai Som/Shutterstock 6

Competitors

Know their strengths,

weaknesses, and likely

reactions to firm’s

marketing activities.

10’000 Hours/Getty Images 7

Corporate Partners

Parties that work

with the focal firm.

Nau works with

manufacturers to

develop clothing

from sustainable

materials.

Nau works with its corporate partners to develop socially

responsible outdoor (left) and urban (right) apparel.

(Left): Philipp Nemenz/Getty Images; (right): PeopleImages/Getty Images 8

Physical Environment

Sustainable development:

Includes land, water, air, and

living organisms.

Products and services are

influenced by how they are

used in the physical

environment, and in turn they

can also influence the physical

environment.

Examples:

• Energy Trends.

• Greener Practices and

Green Marketing.

• Greenwashing.

Caia Image / Image Source 9

17 Global Goals of Sustainable Development

EXHIBIT 5.3 Global Goals of Sustainable Development

From the United Nations, “Sustainable Development Goals: 17 Goals to Transform Our World,” Last Modified March 18, 2019. The content of this

publication has not been approved by the United Nations and does not reflect the views of the United Nations or its officials or Member States.

https://www.un.org/sustainabledevelopment/news/communications-material/.

Access the text alternative for slide images.

PROGRESS CHECK (1 of 2)

1. What are the components of the immediate

environment?

Macroenvironmental Factors

EXHIBIT 5.4 The Macroenvironment

Culture

Shared meanings, beliefs, morals, values, and customs of a group of

people transmitted by words, literature, and institutions.

Country Culture

• Subtler aspects can be difficult to navigate.

• Sometimes best answer is to establish universal appeal within specific

identities of country culture.

Regional Culture

• For national and global chains, particularly important to cater to

regional preferences.

• McDonald’s – slightly different variations of staple menu.

Demographics

Characteristics of the human

population and segments,

especially those used to

identify consumer markets.

Provides an easily

understood snapshot of the

typical consumer in a specific

target market.

Marketers use data about

consumers to target offers.

census.gov

Shutterstock / astel design 14

http://www.census.gov/

Exhibit 5.5: Generational Cohorts

Generational

cohort Gen α Gen Z Gen Y Gen X

Baby

Boomers

Range of birth years
2010–

2025

1997–

2009

1981–

1996

1965–

1980

1946–

1964

Age in 2020 0–10 11–23 24–39 40–55 56–74

Millennials and the Rise of the ‘Experience Economy’

Access the text alternative for slide images.

https://www.youtube.com/watch?feature=player_embedded&v=YFN2vcBuGyQ

Income

Purchasing power is tied

to income.

Marketing opportunities

exist across the broad

range of income

distribution.
SC Johnson targets the bottom of the

income pyramid by selling pest control

products in Ghana.

NNehring/iStock/Getty Images 16

Education

Education is related to income, which determines

spending power.

Monkey Business Images/Shutterstock 17

Gender

Male/female roles have

been shifting.

Marketing has changed

to reflect these shifts.

• Firms may need to be

careful about gender

neutrality in

positioning their

products.

Gorodenkoff/Shutterstock 18

Ethnicity

Approximately 80% of

all population growth in

the next 20 years is

expected to come from

minority communities

By 2030 the Hispanic

population in the U.S. is

expected to reach more

than 72 million.

Image Source/Getty Images 19

Social Trends

Sustainability

Health and Wellness

Efficient Utilization and
Distribution of Food

Sustainability

UN Sustainable

Development Goals

focus on social issues

for basic needs.

Certifications from

various agencies may

be important.

pixelliebe/Shutterstock 21

Health and Wellness

Child and adult obesity

New markets focused

on healthy living

Mobile apps that

support health and

wellness

Shutterstock/Rawpixel.com 22

Efficient Utilization and Distribution of Food

Diet-related Products

Reducing Hunger

Reducing Food Waste

Steve Cukrov / Alamy 23

Technological Advances

Technology impacts every aspect of marketing:

• New products and services.

• New forms of communication.

• New retail channels.

Growing importance of mobile devices

New cutting-edge technology:

• Artificial Intelligence.

• Robotics.

• Internet of Things (IoT).

• Privacy Concerns.

Pepper the robot is used in restaurants, hotels, and coffee shops.

Dani Metaz/Shutterstock 24

Economic Situation

Affects the way consumers buy products and services and

spend money.

Monitor the economic situation in home country and abroad.

Major factors to monitor:

• Inflation.

• Foreign currency fluctuations.

• Interest rates.

Customers formed in line to bank counter

Consumer Confidence Index

Hiya Images/Corbis/Getty Images 25

http://www.conference-board.org/data/consumerconfidence.cfm

Political/Legal Environment1

Comprises political parties,

government organizations,

and legislation and laws.

Firms must understand and

comply with

legislation regarding:

• Fair competition.

• Consumer protection.

• Industry-specific regulation.

olegdudko © 123RF.com 26

Exhibit 5.6: Consumer Protection Legislation
(1 of 2)

Year Law Description
1906 Federal Food and Drug Act Created the Food and Drug Administration (FDA);

prohibited the manufacture or sale of adulterated or

fraudulently labeled food and drug products.

1914 Federal Trade Commission Act Established the Federal Trade Commission (FTC) to

regulate unfair competitive practices and practices that

deceive or are unfair to consumers.

1966 Fair Packaging and Labeling Act Regulates packaging and labeling of consumer goods;

requires manufacturers to state the contents of the

package, who made it, and the amounts contained

within.

1966 Child Protection Act Prohibits the sale of harmful toys and components to

children; sets the standard for child- resistant

packaging.

1967 Federal Cigarette Labeling

and Advertising Act

Requires cigarette packages to display this warning:

“Warning: The Surgeon General Has Determined That

Cigarette Smoking Is Dangerous to Your Health.”

1972 Consumer Product Safety Act Created the Consumer Product Safety Commission

(CPSC), which has the authority to regulate safety

standards for consumer products.

Exhibit 5.6: Consumer Protection Legislation
(2 of 2)

Year Law Description
1990 Children’s Television Act Limits the number of commercials shown during

children’s programming.

1990 Nutrition Labeling and Education

Act

Requires food manufacturers to display nutritional

contents on product labels.

1995 Telemarketing Sales Rule Regulates fraudulent activities conducted over the

telephone. Violators are subject to fines and actions

enforced by the FTC.

2003 Controlling the Assault of Non-

Solicited Pornography and

Marketing Act of 2003 (CAN-

SPAM Act)

Prohibits misleading commercial e-mail, particularly

misleading “subject” and “from” lines.

2003 Amendment to the

Telemarketing Sales Rule

Establishes a National Do Not Call Registry, requiring

telemarketers to abstain from calling consumers who

opt to be placed on the list.

2003 Do Not Spam Law Created to reduce spam or unwarranted e-mails.

2010 Financial Reform Law Created the Consumer Financial Protection Bureau,

whose aim is to enforce appropriate consumer-oriented

regulations on a number of financial firms such as banks,

mortgage businesses, and payday and student lenders.

It also set up the Financial Services Oversight Council to

act as an early warning system.

Responding to the Environment

Implement strategies

that respond to multiple

environmental forces.

Marketers that succeed

are the ones that

respond quickly,

accurately, and

sensitively to

consumers.

t_kimura/Getty Images 29

PROGRESS CHECK (2 of 2)

1. What are the six key macroeconomic factors?

2. Differentiate between country culture and

regional culture.

3. What are some important social trends shaping

consumer values and shopping behavior?

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Chapter 7

Business-to-Business

Marketing

Learning Objectives

Learning Objective 7.1 Describe the ways in which

business-to-business (B2B) firms segment their

markets.

Learning Objective 7.2 List the steps in the B2B buying

process.

Learning Objective 7.3 Identify the roles within the buying

center.

Learning Objective 7.4 Describe the different types of

organizational cultures.

Learning Objective 7.5 Detail different buying situations.

Exhibit 7.1: B2B Markets

Manufacturers and Service Providers

Buy raw materials, components, or parts.

Manufacture their own goods and ancillary services.

German-based Volkswagen Group, the largest auto

manufacturer in Europe, owns and distributes numerous brands.

rvlsoft/Shutterstock & Alexander Kirch/Shutterstock 5

Resellers

Resellers are marketing
intermediaries that resell
manufactured products
without significantly
altering their form.

• Wholesalers

• Distributors

• Retailers

Syda Productions/Shutterstock 6

Institutions

Hospitals, educational

institutions, and

religious organizations

Examples of purchases

by institutions:

• Textbooks.

• Capital construction.

• Equipment.

• Supplies.

• Food.

• Janitorial services.

Witthaya Prasongsin/Moment/Getty Images 7

Government

In most countries,

government is one the

largest purchasers of goods

and services.

Local, state, and federal

governments.

The U.S. government

spends approximately $4

trillion annually; Department

of Defense works with

cybersecurity firms.

Wright Studio/Shutterstock 8

PROGRESS CHECK (1 of 4)

1. What are the various B2B markets?

The B2B Buying Process

EXHIBIT 7.2 Business-to-Business Buying Process

Access the text alternative for slide images.

Stage 1: Need Recognition

The B2B process begins

with need recognition.

Can be generated

internally or externally.

stockbroker/123RF 11

Stage 2: Product Specification

After recognizing the

need and considering

alternative solutions,

create a list of potential

specifications.

Used by

suppliers/vendors to

develop proposals.

Getty Images/Hero Images 12

Stage 3: RFP Process
Request for Proposal

Vendors or suppliers are invited to bid on supplying

required components and services.

Purchasing company may simply post its RFP

needs on its website, work through various B2B web

portals, or inform their preferred vendors directly.

Contracts Opportunities

https://beta.sam.gov/

Step 4: Proposal Analysis, Vendor
Negotiation, and Selection

The buying organization

evaluates all the

proposals received in

response to an RFP.

Often several vendors

are negotiating against

each other.

Considerations other

than price play a role in

final selection.
Shironosov/Getty Images 14

Step 5: Order Specification

Firm places the order

with its preferred

supplier (or suppliers).

The exact details of the

purchase are specified,

including penalties for

noncompliance.

All terms are detailed

including payment.

Shutterstock / Bacho 15

Stage 6: Vendor Performance Assessment
Using Metrics

EXHIBIT 7.3: Evaluating a Vendor’s Performance

(1)

Key Issues

(2)

Importance

Score

(3)

Vendor’s

Performance

(4)

Importance ×

Performance

(2) × (3)

Customer Service 0.40 5 2.0

Issue Resolution 0.20 4 0.8

Delivery 0.10 5 0.5

Quality 0.30 3 0.9

Total 1.0 4.2

PROGRESS CHECK (2 of 4)

1. Identify the stages in the B2B buying process.

2. How do you perform a vendor analysis?

The Buying Center
Exhibit 7.4: Buying Center Roles

Example of Buying Center Roles for a Hospital

Initiator: Doctor

Influencer: Medical device supplier, pharmacy

Decider: Hospital

Buyer: Materials manager

User: Patient

Gatekeeper: Insurance company

Organizational Culture
EXHIBIT 7.5 Organizational Buying Culture

Building B2B Relationships

There are a multitude of ways to enhance B2B

relationships, including the following examples:

• Blogs and social media (LinkedIn, Twitter, Snapchat)

can:

• Build awareness.

• Provide search engine results.

• Educate clients about products and services.

• “Warm up” a seemingly cold corporate culture.

• White papers prepared by B2B marketers provide

information while not appearing as promotion.

PROGRESS CHECK (3 of 4)

1. What are the six buying roles?

2. What are the types of cultures that exist in

buying centers?

Buying Situations
EXHIBIT 7.6 Buying Situations

New Buy

Most likely when purchasing for the first time.

Usually quite involved.

The buying center will probably use all six steps in

the buying process and involve many people in

the buying decision.

Modified Rebuy

Purchasing a similar

product but changing

specifications such as

price, quality level,

customer service level,

options, etc.

Current vendors have

an advantage.

Shutterstock/BabLab 25

Straight Rebuys

Buying additional units of products that have been

previously purchased.

Most B2B purchases fall into this category.

Usually, the buyer is the only member of the buying

center involved.

Identify the Type of Buying Situation

The manager for a Kroger supermarket considers re-

ordering items for his store. He will negotiate price

concession and quality improvements. The manager

is engaging in a(n) blank situation.

Denise is sharing with coworkers, “This customer just

made another big order, and they just keep on

coming.” Denise is likely selling to a customer in what

kind of buying situation?

Benjamin, the new sales manager for Burns &

Company, was alarmed that the representatives used

paper to track customer information. He made a

decision to upgrade to a CRM system. For Benjamin,

this represented a(n) blank situation.

PROGRESS CHECK (4 of 4)

1. How do new buy, straight rebuy, and modified

rebuy differ?

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Chapter 1

Overview of Marketing

Learning Objectives

Learning Objective 1.1 Define the role of

marketing.

Learning Objective 1.2 Describe the evolution of

marketing over time.

Learning Objective 1.3 Describe how marketers

create value for a product or service.

Water Bottles

CD_works27/Shutterstock 4

What Is Marketing?

Marketing is the activity, set of institutions, and processes

for creating, capturing, communicating, delivering, and

exchanging offerings that have value for customers, clients,

partners, and society at large.

Alejandro Rivera/Getty Images 5

Exhibit 1.1 Core Aspects of Marketing

Access the text alternative for slide images.

Marketing Is about Satisfying Customer
Needs and Wants

How does Dove offer value?

• Dove added the Dove

Men+Care line and expanded

into products for babies.

• In advertising to male

consumers, Dove seeks to

acknowledge and recognize

modern men’s caregiving roles,

so it can link these

communications to its baby care

products too.

• Dove seeks to acknowledge

and recognize modern men’s

caregiving roles, so it can link

these communications to its

baby care products.

Dove seeks to acknowledge and recognize

modern men’s caregiving roles, so it can link

these communications to its baby care

products.

Source: Unilever 7

Exhibit 1.2: Exchange: The Underpinning of
Seller-Buyer Relationships

Exhibit 1.3: The Marketing Mix

Source: McGraw-Hill Global Education Holdings, LLC 9

Marketing Creates Value through Product,
Price, Place, and Promotion Decisions

The Marketing Mix:

The controllable set

of decisions or

activities that the firm

uses to respond to

the wants of its target

markets.

• Product.

• Price.

• Promotion.

• Place.

Product: Creating Value

The fundamental purpose of

marketing is to create value

by developing a variety of

offerings, including goods,

services, and ideas, to

satisfy customer needs.

• Goods.

• Services.

• Ideas.

Marketing creates value by promoting

ideas, such as bicycle safety.

Source: Street Smart, a public safety campaign of Metro, the District of Columbia, Maryland, and Virginia. 11

Price: Capturing Value

Price is everything a

buyer gives up (money,

time, energy) in

exchange for the

product or service.

If you don’t mind sitting in a middle seat and

putting all your baggage under your seat, flying on

low-cost carriers like Frontier is a good value.

Kateryna Kukota/Alamy Stock Photo 12

Place: Delivering the Value Proposition

Place represents all the

marketing processes

necessary to get the product to

the right customer when that

customer wants it.

Place more commonly deals

specifically with retailing and

marketing channel

management, also known as

supply chain management.
Hertz creates customer value by using biometrics to

create a function that recognizes loyal customers

using facial, iris, or fingerprint scans.

Jeff Martin/AP Images 13

Promotion: Communicating the Value
Proposition

Promotion is

communication by a

marketer that informs,

persuades, and reminds

potential buyers about a

product or service to

influence their buying

decisions and elicit a

response.

Babar books wanted to celebrate the 80th anniversary of the series.

It initiated a $100,000 campaign, working in collaboration with toy

stores and bookstores.

BananaStock/Alamy Images 14

Exhibit 1.4: Marketing Can Be Performed by
Individuals and by Organizations

Marketing Impacts Various Stakeholders

Customers.

Supply Chain Partners.

Employees.

Industry.

Society.
The Great American Milk Drive, run in conjunction with

Feeding America, seeks to ensure that local food banks are

sufficiently stocked with nutritious, frequently requested items.

Source: America’s Milk Companies 16

PROGRESS CHECK (1 of 3)

1. What is the definition of marketing?

2. Marketing is about satisfying blank and

blank.

3. What are the four components of the marketing

mix?

4. Who can perform marketing?

Exhibit 1.5 Marketing Evolution:
Production, Sales, Marketing and Value

Access the text alternative for slide images.

Photos (left to right): Ryan McVay/Photodisc/Getty Images; Clement Mok/Photodisc/Getty Images; Lawrence Manning/Corbis/Getty Images; Ryan McVay/Photodisc/Getty Images;

Mark Dierker/McGraw-Hill

Value-Based Marketing

A Lipstick Option for Those Who Dream of a
Hermès Bag

Value-Based Marketing Era

PROGRESS CHECK (2 of 3)

1. What are the various eras of marketing?

How Does Marketing Create Value and
How Do Firms Become More Value Driven?

Build relationships with customers.

Gather and analyze information.

Balance benefits and costs.

Connect with customers using social and

mobile media.

Access the text alternative for slide images.

Value Stems From Four Main Activities

Adding Value

Using Marketing Analytics

Embracing Social and Mobile Marketing

Ethical and Societal Dilemma: Engaging in
Conscious Marketing

Access the text alternative for slide images.

Marketing Analytics

Companies collect massive amounts of data about

how, when, why, where, and what people buy.

Kroger collects massive amounts of data about how, when, why, where, and what people buy and

then analyzes those data to better serve its customers.

Connecting With Customers Using Social
and Mobile Marketing

Social media ad

spending is growing,

increasing by 32 percent

in 2018 alone.

3.26 billion people link

to some social media

sites through their

mobile devices.
Make travel arrangements online either

through Facebook or hotels’ mobile app and

check-in is a breeze.

Erik Isakson/Blend Images/Getty Images 25

Resolving Ethical and Societal Dilemmas

Conscious Marketing

Socially Responsible

Firms

Making socially

responsible activities an

integral component of

corporate strategies.
Too Good To Go is a UK-based app that has

partnered with 1,381 food stores to match

hungry customers to restaurants and stores

with surplus food that would otherwise go to

waste.

Guillaume Payen/SOPA Images/LightRocket/Getty Images 26

PROGRESS CHECK (3 of 3)

1. Does providing a good value mean selling at a

low price?

2. How are marketers connecting with customers

through social and mobile media?

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Chapter 2

Developing Marketing

Strategies and a Marketing

Plan

Learning Objectives

Learning Objective 2.1 Define a marketing strategy.

Learning Objective 2.2 Describe the elements of a marketing plan.

Learning Objective 2.3 Analyze a marketing situation using SWOT
analyses.

Learning Objective 2.4 Describe how a firm chooses which consumer
group(s) to pursue with its marketing efforts.

Learning Objective 2.5 Outline the implementation of the marketing
mix as a means to increase customer value.

Learning Objective 2.6 Summarize portfolio analysis and its use to

evaluate marketing performance.

Learning Objective 2.7 Describe how firms grow their business.

PepsiCo

The development at PepsiCo reflects careful

analysis of the market and efforts to ensure that it

continues to attract a wide range of consumers.

VStock / Alamy, Shutterstock/VDB Photos 4

What is a Marketing Strategy?

A marketing strategy

identifies:

• A firm’s target market.

• A related marketing

mix.

• The bases on which

the firm plans to build

a sustainable

competitive

advantage.

Shutterstock / SergZSV.ZP 5

Exhibit 2.1: Macro Strategies for Developing
Customer Value

Access the text alternative for slide images.

Customer Excellence

Retaining loyal

customers.

Providing outstanding

customer service.

Disney’s My Magic system enables users to

swipe their MagicBand wristbands to get on

rides, make purchases, and open their hotel

room door

parrysuwanitch/123RF 7

Operational Excellence

Efficient

operations

Excellent

supply chain

management

Strong

relationship

with

suppliers

Product Excellence

Provide products with high

perceived value and

effective branding and

positioning.

Bloomberg Businessweek’s

top global brands:

• Apple, Google,

Microsoft, Coca-Cola,

Amazon, Samsung,

Toyota, Facebook,

Mercedes, IBM.

Locational Excellence

Especially important for retailers and service providers.

Many say, “The three most important things in retailing are

location, location, location.”

Competitive advantage based on location is not easily

duplicated. Starbucks makes it difficult for competitors to

enter a market and find good locations.

Multiple Sources of Advantage

A single strategy (low

prices or excellent service)

is usually not enough to

build a sustainable

competitive advantage.

Southwest Airlines

• Provides good service

at a good value (on-

time flights that are

reasonably priced).

Carlos E. Santa Maria/Shutterstock 11

PROGRESS CHECK (1 of 3)

1. What are the various components of a marketing

strategy?

2. List the four macro strategies that can help a

firm develop a sustainable competitive

advantage.

Exhibit 2.2: The Marketing Plan

Access the text alternative for slide images.

Step 1: Define the Business Mission

PepsiCo’s Mission Statement:

“To provide consumers around the world with delicious,

affordable, convenient and complementary foods and

beverages from wholesome breakfasts to healthy and

fun daytime snacks and beverages to evening treats.”

Coke’s Mission Statement:

“To refresh the world … To inspire moments of optimism

and happiness … To create value and make a

difference.”

Step 1: Conduct a Situation Analysis Using
SWOT Analysis

Internal

Strengths

External

Opportunities

Internal

Weaknesses

External

Threats

Exhibit 2.3: Examples of Elements in a SWOT
Analysis (1 of 2)

Environment Evaluation

Positive Negative

Pepsi Internal Strengths
• Diverse brand portfolio

• Strong celebrity endorsers

• Successful marketing

campaigns with music

industry

• Commitment to social and

environmental charitable

causes

Weaknesses

• Lower brand awareness than

rival Coca-Cola

• Less market share than rival

Coca-Cola

• Environmentally unfriendly

packaging

External Opportunities

• Expanding health food market

• Growth in global market share

• Acquisition of new brands

Threats

• Water scarcity

• Popularity of reusable water

bottles

• Soda taxes

• Increasing competition in the

snack food market

Sources: Bitesh Bhasin, “SWOT Analysis of Pepsi—PepsiCo SWOT Analysis,” Marketing91, April 3, 2019; Hitesh Bhasin, “SWOT of Coca-Cola,” Marketing91, 2018.

Exhibit 2.3: Examples of Elements in a SWOT
Analysis (2 of 2)

Environment Evaluation

Positive Negative

Coca-

Cola

Internal Strengths

• High market share

• Strong brand

• Strong global presence

• Excellent customer loyalty

• Supply chain

Weaknesses

• Low diversification

• Few healthy beverages

External Opportunities

• Emerging countries

• Diversifying products

• Bottled water

Threats

• Water scarcity

• Potential market

saturation

• Changes to labeling

regulations

• Increasing competitors

Sources: Bitesh Bhasin, “SWOT Analysis of Pepsi—PepsiCo SWOT Analysis,” Marketing91, April 3, 2019; Hitesh Bhasin, “SWOT of Coca-Cola,” Marketing91, 2018.

Step 3: Identifying and Evaluating
Opportunities Using STP

Segmentation

Targeting

Positioning

Exhibit 2.4: Hertz: Market Segmentation
Illustration

Segment 1 Segment 2 Segment 3 Segment 4 Segment 5

Segments Single thrill
seekers and

gear heads on

vacation

Adrenaline

Collection

Business

customers

and families

who prefer a

luxurious ride

Prestige

Collection

Environmental

ly conscious

customers

Green

Traveler

Collection

Families

SUV/Mini

van/4×4

Collection

Commercial

customers

Commercial

Van/Truck

Collection

Cars

Offered

Corvette ZHZ

Chevrolet

Camaro

Infiniti QX56

Cadillac

Escalade

Toyota Prius

Ford Fusion

Toyota RAV4

Ford Explorer

Ford Cargo

Van

Market Positioning

Choose which segments to

pursue, then how to position

within those segments.

Define the marketing mix

variables so target customers

have a clear, distinctive, and

desirable understanding of the

product compared to competition.

Hertz positions itself as a quality

car and truck rental company that

is the first choice for each target

segment.

Shutterstock/MuchMania 20

Step 4: Implement Marketing Mix and Allocate
Resources

Product and Value

Creation

Place and Value
Delivery

Price and Value
Capture

Promotion and

Value

Communication

Product and Value Creation

Successful products and services are those that

customers perceive as valuable enough to purchase.

Dyson creates value with its innovative products (left). It can therefore charge significantly more than

the price charged for conventional fans (right).

Access the text alternative for slide images.

(Left): Source: Dyson, Inc.; (right): Stockbyte/Getty Images 22

Price and Value Capture

Price is what the customer is willing to pay for

a product they perceive as good value.

Shutterstock / RUBEN M RAMOS 23

Place and Value Delivery

The product must be

readily accessible

when and where the

customer wants it.

• Dyson provides

product and place

value.

• Where are Dyson

fans available?

Top: Shutterstock/TotallyMJ , Bottom: Shutterstock/Maxx-Studio 24

Promotion and Value Communication

Advertising

Personal
selling

Sales
promotion

Public
relations

Direct
marketing

Online
marketing
(including

social
media) Integrated

marketing
communications

(IMC)

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Step 5: Evaluate Performance Using
Marketing Metrics

A metric is a measuring

system that quantifies a

trend, dynamic, or

characteristic.

Metrics are used to

explain why things

happened and also

project the future.

Shutterstock / NicoElNino 26

Evaluating Performance

Who is accountable for

performance?

• Performance

Objectives, Marketing

Analytics, and Metrics.

• Financial Performance

Metrics.

• Portfolio Analysis.

EXHIBIT 2.5 Performance Metrics: Coke vs. Pepsi

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Source: MarketWatch, Inc. 27

Exhibit 2.6 Boston Consulting Group Matrix

Photos (top left): DenPhotos/Shutterstock; (top right): Kicking Studio/Shutterstock; (bottom left): Sushiman/Shutterstock;

(bottom right): David Caudery/Tap Magazine/Getty Images

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P&G

Website

http://www.pg.com/

Which Quadrant?

Whether a product is

classified as a star or

a question mark has

profound implications

on how it is treated

and supported within

the firm.

Top: Ksander/Shutterstock; Bottom: Denis Rozhnovsky / Alamy Stock Photo 29

PROGRESS CHECK (2 of 3)

1. What are the five steps in creating a marketing

plan?

2. What tool helps a marketer conduct a situation

analysis?

3. What is STP?

4. What do the four quadrants of the portfolio

analysis represent?

Growth Strategies
Exhibit 2.7: Markets/Products and Service Strategies

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Market Penetration

Current marketing mix,

Current customers

Marvel used a market

penetration strategy by

expanding the distribution of

its films:

• Theaters.

• Xfinity.

• DVDs (in a variety of retail

locations).

Shutterstock/Nestor Rizhniak 32

Market Development

Current Products or

Services.

New Markets.

Marvel pursues such a

market development

strategy when it enhances

the viewing of its movies by

expanding into more global

markets.

Klaus Vedfelt/Getty Images 33

Product Development

New product or service.

Current target market.

Marvel launched several

successful series on Netflix,

including Jessica

Jones, Daredevil, Iron

Fist, and Luke Cage.

• By developing series designed

for this format, Marvel can

connect with its customers in a

new and important way.

Left: Dragon Images/Shutterstock, Right: Makistock/Shutterstock 34

Diversification

New product or service.

New market segment.

Related vs. unrelated

diversification.

• Marvel has pursued related

diversification with its home décor.

• If Marvel ventured into the child

day care service industry, it would

be an unrelated diversification

because it is so different from its

core business and therefore very

risky.

Photos (top): Interior Design/Shutterstock; (bottom): Ariel Skelley/Photodisc/Getty Images 35

PROGRESS CHECK (3 of 3)

1. What are the four growth strategies?

2. What type of strategy is growing the business

from existing customers?

3. Which strategy is the riskiest?

Because learning changes everything.®

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Because learning changes everything.®

Chapter 3

Digital Marketing: Online,

Social, and Mobile

Learning Objectives

Learning Objective 3.1 Describe the 4E framework of digital
marketing.

Learning Objective 3.2 Examine the seven critical elements of online

marketing.

Learning Objective 3.3 Understand the drivers of social media
engagement.

Learning Objective 3.4 Understand various motivations for using
mobile applications.

Learning Objective 3.5 Recognize and understand the components of
a digital marketing strategy.

Learning Objective 3.6 Understand the central factors in picking an
influencer partner.

Hilton

Regien Paassen/Shutterstock 4

Exhibit 3.1: The 4E Framework for Digital
Marketing

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Excite the Customer

Offer must be relevant

to its targeted customer.

Relevancy can be

achieved by providing

personalized offers.

Marketers use many kinds of digital offers to excite customers,

and to excite them, an offer must be relevant to its targeted

customer. Lush Cosmetics encourages customers to post

pictures of themselves using its products on social media by

promising that if they use #LushLife, they might find

themselves featured on its official page.

Source: Lush Cosmetics/Instagram

Educate the Customer

Golden opportunity to

educate about the

product’s value

proposition and

communicate offered

benefits.

When marketing

ideas, the goal is to

improve people’s

well-being, along with

selling the underlying

concept.

To educate women about how to perform breast self-exams, the #KnowYourLemons

campaign posted pictures of a dozen lemons to teach people about 12 shapes and lumps

they should be looking for when they themselves for cancer each month.

Source: Worldwide Breast Cancer 7

Experience the Product or Service

Provide vivid information

about a firm’s goods and

services.

Simulate real experiences.

Sephora maintains its own YouTube channel with dedicated videos that

demonstrate how to use specific products like bright pink eyeshadow.

Source: Sephora USA, Inc. 8

Engage the Customer

Action, loyalty, and

commitment.

Positively engaged

consumers lead to more

profitability.

Engagement can also

backfire.
IKEA engages customers with its “Place” app that enables

customers to select an item from its catalog and then, by

using the camera within the app, visualize the item in their

home or office.

Source: IKEA Systems B.V. 9

PROGRESS CHECK (1 of 6)

1. What are the 4 Es?

2. What social media elements work best for each

of the 4 Es?

EXHIBIT 3.2: The 7C Online Marketing Framework

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1. Core Goals

The basis of any

marketing strategy is its

goals.

Determine specific

goals.

Align the goals with the

target market and align

the 7Cs with the goals. Hasbro has embraced online marketing to reflect its core goals. To
introduce this new brand called Hanazuki, it developed an entire

series that viewers can watch on YouTube. The Hanazuki page is

filled with animation, movement, and bright colors, encouraging

visitors to take their time exploring the different characters, watching

videos, downloading apps, and perhaps shopping too.

Source: Hasbro, Inc. 12

2. Context Elements

Design.

Navigation.

Must be in alignment

with the target market.

Because Walmart’s core goal is to encourage purchases, its commerce-

oriented website features a simple look and feel. Looking closely at the

design and color scheme, notice that Walmart’s home page aligns with its

adult target market. It is more traditionally focused on selling Hanazuki

merchandise than Hasbro, Inc. with little concern for the brand itself.

Source: Walmart Stores, Inc. 13

3. Content

Monitor to ensure

relevancy.

Devise appropriate

keywords to improve

organic search.

Implement SEM and

paid search.
The content of these messages must resonate with its target market, but

need not always showcase merchandise or services, as in the Facebook

post from the jewelry firm, Alex and Ani. The company is not showcasing its

jewelry per se, but rather providing a motivational quote that resonates with

young females, its primary target market.

Source: Alex and Ani, LLC 14

4. Community

Allow customers to

interact.

Use corporate and

professional blogs.

Engage in

Crowdsourcing.

Betabrand uses crowdsourcing by having its customers submit clothing

design ideas and feedback on items before they are manufactured.

Source: Betabrand 15

5. Communication

Clear, helpful, meaningful content enables effective

communication.

Enables interacting with, engaging, and educating

site visitors.

Provide a mechanism for customers to

communicate with the firm.

6. Commerce

Desktop usage is greater,

and conversion rates

higher, for online

purchases.

The most loyal customers

use multiple channels.

Customers want a range of

online purchase options.
Through Sephora’s mobile app, Beauty Insider account holders can check their

loyalty points, access past purchase behavior, receive personalized

recommendations, scan items while in stores, and much more.

Source: Sephora USA, Inc. 17

7. Connection

Engage customers and

provide a call to action.

Allow customers to

interact with the firm

continuously.

Enable positive

engagement.
A good website or blog engages customers and provides them with a

call to action. Warby Parker connects customers with four call-to-action

buttons inviting visitors to: get started, order frames to try on at home,

take a quiz, and shop online.

Source: Warby Parker 18

PROGRESS CHECK (2 of 6)

1. Describe the components of the 7C online

marketing framework.

2. Differentiate between organic and paid search.

Exhibit 3.3:
The Wheel of Social Media Engagement

The Information Effect

Outcome in which relevant

information is spread by

firms or individuals to other

members of the social

network.

BigTunaOnline/Shutterstock 21

The Connected Effect

Outcome that satisfies humans’ innate need to connect with

other people.

Source: William Perugini/Shutterstock 22

The Network Effect

Outcome in which every post is spread instantaneously

across social media.

Source: Shutterstock/Metamorworks 23

The Dynamic Effect

Information is exchanged to network participants through

back-and-forth communications.

Examines how people flow in and out of networked

communities as their interests change.

Rawpixel.com/Shutterstock 24

The Timeliness Effect

Firms must engage with the customer at the right

place and time.

Using beacon technology, Coca-Cola is able to engage customers in

a timely manner by offering moviegoers a free Coke at the moment

they walk into a movie theater.

Source: SeongJoon Cho/Bloomberg/Getty Images 25

PROGRESS CHECK (3 of 6)

1. What are the five drivers of social media

engagement described in the Wheel of Social

Media Engagement?

Going Mobile and Social
Exhibit 3.4: Seven Primary Motivations for Mobile App Usage

Need for “Me Time”

Need to Socialize

Need to Shop

(showrooming)

Need to Accomplish

Need to Prepare

Need to Discover

Need to Self-Express

With more than 3 billion downloads, Candy Crush Saga clearly fulfills for

many people an important need for unproductive “me time.”

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Source: Alexat25/Shutterstock 27

App Pricing Models

PROGRESS CHECK (4 of 6)

1. What are the seven types of customer

motivations for using mobile apps?

2. What are the four options for pricing mobile

apps?

3. What are some of the most popular types of

mobile applications?

How Do Firms Engage Their Customers?
Exhibit 3.4: Social Media Engagement Process

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Listen

Listening helps

determine digital

marketing objectives and

strategies.

Sentimental analysis

allows marketers to

analyze and determine

consumers attitudes and

preferences.

Other companies perform their own analyses, effectively leveraging their

existing capacities for listening to customers. Zappos is known for its

remarkable customer service and attracts plenty of buzz about its

offerings. It takes the information it gathers from listening to customers to

design strategies that emphasize what they like most.

Source: Zappos.com, Inc. 31

Analyze

Exhibit 3.5: How to Do a Digital Marketing
Campaign

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Develop and implement

campaigns using social

media.

Effective implementation

based on social and

mobile media activity.

EXHIBIT 3.6 Example Facebook Targeting Choices

Source: Facebook 34

PROGRESS CHECK (5 of 6)

1. What are the components of a digital marketing

strategy?

Influencer Marketing

A marketing strategy that uses

opinion leaders, popular on social

media, to drive marketing

messages to a targeted audience.

Firms hire (or encourage) these

well-known names to promote

brand messages to their networks

of followers.
Big-time influencers like

Ariana Grande have millions

of followers and can

command almost a mil-lion

dollars for a sponsored post.

Source: Lev Radin/Shutterstock 36

Assessing the Efficacy of Influencers

Relevance

Response

Reach

Return

Influencers like Selena Gomez can reach millions of potential

customers for Coca-Cola with an Instagram post like this one, which

depicts her drinking a Coke with the lyrics from one of her songs on

the bottle.

Source: Selena Gomez/Instagram 37

Exhibit 3.8: Influencer Marketing Chain of
Events

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Exhibit 3.9: Types of Influencers

Type of Influencer Definition Example Key Channels Average Cost per Post

Celebrity Large following, widely

recognized

Nespresso relies heavily on

George Clooney to promote its

products in marketing across

platforms, leveraging his cool

image to enhance its appeal but

also his reputation for

environmental sustainability to

promote its own efforts along these

lines

Social media, print,

television

$3,000–$500,000

Micro Modest following, niche

interest

NUX Active (athletic clothing

brand) worked with Sydney

Loveleigh Nelson, whose health

and fitness posts have earned her

about 21,000 followers

Posts on social media

sites, shared promo codes

$80–$500

Blog Writes for a blog and has

attracted readers and

subscribers with that

content

The FaceGym spa sponsored a

blog post by lifestyle blogger

Hannah Bronfman to provide

information about its services and

treatments

Reviews on blog, guest

blog posts

$400–$5,500

Social media Popular on social platforms

(Instagram, YouTube,

Twitter) among followers in

specific target audiences

LaCroix worked with nutritionist

Joy Bauer to create a Twitter post

of a recipe she had created, using

the product

Pictures posted with the

product, shared hashtags,

videos featuring the

product

$100–$500,000

Specialized Key opinion leader or

expert in a specific field

BoxyCharm, a subscription beauty

box service, worked with Kandee

Johnson, a professional makeup

artist, to make videos that

explained each product included in

a box

Social media, tutorials,

reviews, blog posts,

top solution: a. Discussion Questions 1. We have discussed the concept of “The Wheel of Social Media Engagement

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