We have discussed the concept of The Wheel of Social Media Engagement? in Chapter 03, which comprises the fundamental drivers

06 Mar We have discussed the concept of The Wheel of Social Media Engagement? in Chapter 03, which comprises the fundamental drivers

Posted at 08:11h in Business & Finance /Marketing by

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.

Because learning changes everything.®

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?

Because learning changes everything.®

www.mheducation.com

Because learning changes everything.®

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?

Because learning changes everything.®

www.mheducation.com

Because learning changes everything.®

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.

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06 Mar We have discussed the concept of The Wheel of Social Media Engagement? in Chapter 03, which comprises the fundamental drivers

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