MKTG, 10th Edition Solution Manual

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Chapter 1♦An Overview of Marketing1CHAPTER 1An Overview of MarketingThis chapter begins with the learningoutcome summaries, followed by a set of lesson plans for you to use todeliver the content in Chapter 1.•Lecture (for large sections)on page2•Company Clips (video)on page 4•Group Work (for smaller sections)on page6Review andAssignmentsbegin on page7Review questionsApplication questionsApplication exerciseEthics exerciseVideo AssignmentCase assignmentGreatIdeas for Teaching Marketingfrom faculty around the country begin on page15

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2Chapter 1♦An Overview of MarketingLEARNINGOUTCOMES1-1Define the termmarketingMarketing isthe activity, set of institutions, and processes for creating, communicating, delivering, and exchangingofferings that have value for customers, clients, partners, and society at large.Marketing also requires all facets of acompany to work together to pool ideas and resources. One major goal of marketing is to create an exchange. Anexchange has five conditions, as listed below. Even if all five conditions are met, an exchange might not occur. Peopleengage in marketing whether or not an exchange happens.Five conditions of exchange:1 There must be at least two parties.2 Each party has something that might be of value to the other party.3 Each party is capable of communication and delivery.4 Each party is free to accept or reject the exchange offer.5 Each party believes it is appropriate or desirable to deal with the other party.1-2Describe four marketing management philosophiesThe role of marketing and the character of marketing activities within an organization are strongly influenced by itsphilosophy and orientation. A production-oriented organization focuses on the internal capabilities of the firm rather thanon the desires and needs of the marketplace. A sales orientation is based on the beliefs that people will buy moreproducts if aggressive sales techniques are used and that high sales volumes produce high profits. A market-orientedorganization focuses on satisfying customer wants and needs while meeting organizational objectives. A societalmarketing orientation goes beyond a market orientation to include the preservation or enhancement of individuals’ andsociety’s long-term best interests.1-3Discuss the differences between sales and market orientationsFirst, sales-oriented firms focus on their own needs; market-oriented firms focus on customers’ needs and preferences.Second, sales-oriented companies consider themselves to be deliverers of goods and services, whereas market-orientedcompanies view themselves as satisfiers of customers. Third, sales-oriented firms direct their products to everyone;market-oriented firms aim at specific segments of the population. Fourth,sales-oriented organizations place a higherpremium on making a sale, while market-oriented seek a long-term relationship with the customer. Finally, sales-oriented businesses pursue maximum sales volume through intensive promotion, whereas market-oriented businessespursue customer satisfaction through coordinatedactivities.1-4Describe several reasons for studying marketingFirst, marketing affects the allocation of goods and services that influence a nation’s economy and standard of living.Second, an understanding of marketing is crucial to understanding most businesses. Third, career opportunities inmarketing are diverse, profitable, and expected to increase significantly during the coming decade. Fourth, understandingmarketing makes consumers more informed.TERMScustomerrelationshipmanagement(CRM)exchangeproduction orientationmarket orientationrelationship marketingcustomer satisfactionmarketingsales orientationcustomer valuemarketing conceptsocietal marketing orientationempowermenton-demand marketingteamworkLESSONPLAN FORLECTUREBrief Outline and Suggested PowerPoint Slides:Learning Outcomes and TopicsPowerPoint Slides

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Chapter 1♦An Overview of Marketing3Learning Outcomes and TopicsPowerPoint SlidesLO1Define the termmarketing1-1What Is Marketing?1:An Overview of Marketing2:LearningOutcomes3:What Is Marketing?4:Marketingis…5:American Marketing Association Definitionof Marketing6:Marketing…7:Exchange8:ExchangeLO2Describe four marketing management philosophies1-2MarketingManagementPhilosophies9:Marketing Management Philosophies10:The Four Marketing ManagementPhilosophies11:Production Orientation12:Sales Orientation13:MarketOrientation14:Achieving a Marketing Orientation15:Societal Marketing Orientation16.Who’s In Charge?17:Questions That Help Determine MarketingPhilosophyLO3Discuss the differences between sales and marketorientations1-3Differences between Sales and MarketOrientations18:Differences between Sales and MarketOrientations19:Comparing the Sales and Market Orientations20:The Organization’s Focus21:Customer Value Requirements22:Customer Satisfaction23:RelationshipMarketing24:Building Relationships25:Defining a Firm’s Business26:Knowing the Firm’s Business27: Those to Whom the Product is Directed28: Primary Goals29: Tools the Organization Uses to Achieve ItsGoals30:Sales vs. Market OrientationsLO4Describe several reasons for studying marketing1-4Why Study Marketing?31:Why Study Marketing?32:Why Study Marketing?33:Chapter 1 Video

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4Chapter 1♦An Overview of MarketingSuggested Homework:•This instructor manualcontainsassignments fortheGeoffrey B. Smallvideoand fortheWalt Disneycase.•This chapter’s online study tools include flashcards, visualsummaries, practice quizzes, and other resources that canbe assigned or used as the basis for longer investigations into marketing.LESSONPLANS FORVIDEOCompany ClipsSegment Summary:Geoffrey B. SmallGeoffrey B. Small is a super luxury fashion designer with an eye towards social justice and connecting with his buyers.In this video, Small discusses how he began designing clothes and deciding who and how to connect with his customers.He also discusses the nature of consumer behavior and beliefs in terms of how they purchase fashion and its effect onclothing prices.These teaching notes combine activities that you can assign students to prepare before class, that you can do inclassbefore watching the video, that you can do inclass while watching the video, and that you can assign students tocompleteon their ownafterwatchingthe video.During the viewing portion of the teaching notes, stop thevideoperiodically where appropriate to ask students thequestions or perform the activities listed on the grid. You may even want to give the students the questions beforestarting thevideoand have them think about the answer while viewing the segment. That way, students will be engagedin active rather than passive viewing.PRE-CLASS PREP FOR YOU:PRE-CLASS PREP FOR YOUR STUDENTS:•Preview theCompany Clipsvideo segment forChapter 1. This exercise reviews concepts forLO1, LO2, and LO3.•Review your lesson plan.•Make sure you have all of the equipment neededto show the video to the class, including the DVDand a way to project the video.•You can also stream the videoHERE•Have students familiarize themselves with thefollowingtermsandconcepts:marketing,production orientation, marketing concept, marketorientation,andsocietal marketing orientation.•Have students search for Geoffrey B. Small andread some articles about him. Depending on theamount of controversy/discussion you would liketospark,Small’sarticlesonhisforumatStyleZeitgeist (here)are very informative about hisstance on clothing and politics, but can be highlydivisive.VIDEO REVIEW EXERCISEACTIVITYWarm UpBegin by asking students “What is marketing?”

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Chapter 1♦An Overview of Marketing5In-class Preview•Segue into a discussion of themarketing conceptand the four marketingmanagement philosophies.•Write the four marketing philosophies on the board.•Take an informal class poll to see which model resonates most with students.•Ask students, while writing it on the board: “What does a firmneedto succeedin competitive markets?”•While listening to students’ insights, write the following points on the board.oa clear understanding of what customers wantofocus toproducewhatthe customerwants,rather thanonwhatmanagement thinks should be producedWrite the following viewing questions on the board, or simply prompt students tothink about them as they watch the video.Viewing(solutions below)1.IsGeoffrey B. Smallbest described as having a market orientation or asocietal-marketing orientation?2.How doesGeoffrey B. Smallimplement the marketing concept?Follow-up•Have students reflect on their earlier research into Geoffrey B. Small and havethem write a paragraph on how they think he uses social media to demonstratehis commitment to a societal marketing orientation.•Have students break into groups of up to four students and have each groupbrainstorm a marketing concept for one product, including their intendedcustomer and marketing philosophy.•Outside of class, have students individually create a marketing concept for oneproduct. Have them compose a brief paragraph, to be turned in later, discussinghow they found out what the customer wanted.Solutions for Viewing Activities:1.Is Geoffrey B. Small best described as having a market orientation or a societal-marketing orientation?Geoffrey B. Smallwould be best described as having a societal-marketing orientation becauseSmalltakes the basicmarket orientation focus—what do customers want and need?—and adds a societal, environmental focus—how canwe benefit society?2.How doesGeoffrey B. Smallimplement the marketing concept?Geoffrey B. Smallimplementsthe marketingconcept bycreating clothing that satisfies his customers desire to havelong-living clothing from a company that is driven to protect the environment and civil rights. Small discovered thesmall demographic of wealthy but socially motivated buyers and built clothing that they perceived as having a highvalue. As he says in the video, “you need to give the customer what they need and that they need badly enough thatthey are willing to give you money for it.”

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6Chapter 1♦An Overview of MarketingLESSONPLAN FORGROUPWORKClass Activity–MarketingIs Not Just AdvertisingThe objective of this exercise is to get students to think about what may be involved in marketing a product. They shouldconstruct plans that list the major variables in the marketing mix. This activity will emphasize that marketing is not justadvertising.First, divide the class into small groups offour or fivepeople. Thenask students to assume that they have just purchaseda tennis racquet factory that has been shut down for the last few years. The automated equipment and computer systemare in excellent shape, and the personnel needed to run the factory are readily available. But before jumping intoproduction, what questions need to be asked and answered? What plans need to be made? Which of these plans concernmarketing?The following suggested questions should be brought up after the students suggest theirs. All these questions are aboutmarketing issues.1.What are the needs of tennis players? Do they need more or different styles of tennis racquets?2.How many different categories of tennis players are there? What kind of racquet does each category need? (Handles,sizes, shapes, weights, and prices are factors.)3.Which category of player does this firm want to sell to?4.Estimate how many people are in this chosen category. How many of them will be playing over the next five years?How often will they buy a new racquet?5.When will these customers buy? (Are there seasons or trends?)6.Where are these customers located? Where do they shop for tennis racquets?7.What price are these customers willing to pay? Does this price leave a profit for the company?8.How will the company communicate with potential customers? What type of promotion will reach them?9.How will the racquets be packaged? What type of warranty will they carry? How will the firm provide customerservice?10.How many other companies are making racquets? What kinds and what prices of racquets do competitors offer?11.What is the industry as a whole projected to do in the next five to ten years?All these questions must be answered before beginning production. As the students should now see, marketing strategydrives the business.

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Chapter 1♦An Overview of Marketing7REVIEW ANDASSIGNMENTS FORCHAPTER1REVIEWQUESTION1.Give an example of a company that might be successfully following a production orientation. Why might afirm in this industry be successful following a production orientation?A mature product, such asasmall no-frills calculator, issold basically on price. A production orientation of lowestcost would work for this. In addition, a production orientation may work in a developing country where consumershave fewer options.APPLICATION QUESTIONS1.Your company president has decided to restructure the firm and become more market-oriented. She is goingto announce the changes at an upcoming meeting. She has asked you to prepare a short speech outlining thegeneral reasons for the new company orientation.Students’ answers should focus on 1) customer wants and needs,2) distinguishing the company’s products andservices from competitors’ offerings, and3) the integration of all organizational activities to satisfy customer wantsand needs. The latter point justifies the need for the restructuring. The speech can also contain some of the followingtopics: 1) the commitment of top management to the new market orientation,2) the necessity of competitiveintelligence,and 3) interfunctional coordination needed to satisfy customer wants and needs.2.Donald E. Petersen, chairman of the board of Ford Motor Company, remarked,“If we aren't customer-driven, our carswon’tbe either.”Explain how this statement reflects the marketing concept.Althoughstudents’answers will vary, they should address some of these points. The marketing concept focuses onsatisfying customer needs while meeting organizational objectives. Most prosperous firms, including Ford, haveadopted this management philosophy because experience has taught them that customer satisfaction is crucial totheir success.3.A friend of yours agrees with the adage,“Peopledon’tknow what they want—they only want what theyknow.”Write your friend a letter expressing the extent to which you think marketers shape consumer wants.Althoughstudents’answers will vary, they should address some ofthe followingpoints:Marketers cannot createdemand or make people buy things that theydon’twant or need. Marketing does, however, inform, persuade, andremind people about the availability, features, advantages, and benefits associated with new and existing products.One important task of marketing is to introduce people to products that they otherwise might not know about.4.Your local supermarketuses theslogan is “It’s your store.” However,when you asked one of the stockpeople to help you find a bag of chips,he told you it was not his job and that you should look a little harder.On your way out, you noticed a sign with an address for complaints. Draft a letter explaining why thesupermarket’s slogan will never be credible unlessitsemployees carry it out.Students’answers will vary widely, but they should explain that the marketing orientation, the concern forcustomers, must extend to every member of the organization. And this is very important when the customer hasactual contact with a front-line employee.5.How does Philip Morris handle the sensitive issues associated with marketing tobacco? What kind ofinformation does itsWebsite at http://www.philipmorris.com/ provide about smoking and its negative effectson health? How do you think Philip Morris is able to justify such marketing tactics? After checkingaroundthe site, do you think that approach makes the company more or less trustworthy?

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8Chapter 1♦An Overview of MarketingStudents’answers will vary.6.Write a letter to a friend or family member explaining why you think that a course in marketing will help youin your career in some field other than marketing.Students’ answers will vary, but they should include a discussion of market orientation to the success of the firm andthe role of employees in the delivery of customer value.APPLICATION EXERCISEUnderstanding the differences among the various marketing management philosophies is the starting point forunderstanding the fundamentals of marketing. From reading the chapter, you may be convinced that the marketorientation is the most appealing philosophy and the one best suited to creating a competitive advantage.Not allcompanies, however, use the marketorientation. And even companies that follow it may not execute well in all areas.Activities1.Visit your local grocery store and go through the cereal, snackfood, and dental hygiene aisles. Go up and down eachaisle slowly, noticing how many different products are available and how they are organized on the shelves.2.Count the varieties of product in each product category. For example, how many different kinds of cereal are on theshelves? How many different sizes? Do the same for snack food and toothpaste.3.Now try to find a type of product in the grocery store that does not exhibit such variety. There may not be many.Why do you think there are enough kinds of cereals to fill an entire aisle (and then some), but only a few differenttypes of, say, peanut butter? Can this difference be explained in terms of marketing management philosophy (peanutbutter manufacturers do not follow the marketing concept) or by something else entirely?4.Have you ever wanted to see a particular kind of cereal or snack food on the shelf? Think of product varietals (likegrapefruit-flavored toothpaste or peanut butter–covered popcorn) that you have never seen on the shelf but would beinterested in trying if someone would make it. Write a letter or send an e-mail to an appropriate company,suggesting that it add your concept to its current product line.Purpose:The purpose of this application is to introduce the students to the marketing concept. This exercise sendsstudents to the supermarket to evaluate the range of products and product categories and to draw conclusions about themarketing orientations of particular brands/companies based on what they find.Setting it up:You may want to assign this to pairs of students. That way they can discuss their observations as theymove through the store. There is no single solution for this application.This exercise was inspired by the following Great Idea in Teaching Marketing:Deanna R.D. Mader, Marshall UniversityFred H. Mader, Marshall UniversityGIVE THEM WHAT WE MAKE, OR GIVE THEM WHAT THEY WANT?The following simple in-class exercise can be used either to illustrate the differences between the sales orientation andthe marketing orientation, or as an example of the importance of concept testing in new product development.Task:Divide the class into four groups.Have the groups separate as much as classroom space will allow to minimizeinterference.Tell two of the groups they are the “producers” and their job is to make a product for the other groups. Tellthe remaining two groups they are the “consumers.” Give the two “producer” groups five sheets of paper (each adifferent color) and whisper instructions that they are to build one paper airplane. They must use one sheet of paper, butcolor selection and design must be group decisions. Give each “consumer” group one sheet of white paper. Whisper tothese groups that they are to write, in detail, what kind of paper airplane they want. Upon task completion, compare theresults.

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Chapter 1♦An Overview of Marketing9Outcomes:Invariably, the “producers” do not produce what the “consumers” had in mind. Products and concepts maycome close, but they are never identical. Class discussion is typically spontaneous. Students laugh at the results.“Producers” complain that they were not given instructions as to what the “consumers” wanted and “consumers” defendthemselves by stating they were never asked. The professor can then direct discussion depending on whether orientationor new product development is the focus of the class.ETHICS EXERCISEIn today’s business environment, ethics are extremely important. In recent years, there have been numerous scandals andtrials that stem from a lack of ethical judgment. For this reason, we are including an ethical exercise in every chapter. Abrief scenario will present you with a situation in which the right thing to do may or may not be crystal clear, and youwill need to decide the ethical way out of the dilemma. To help you with these decisions, we willoftenrefer you back tothe AMA’sStatementof Ethics, found onlineat http://www.marketingpower.com. This will give you a resource for theexercise and will also help reinforce the ethical standards that marketers should uphold.Rani Pharmaceuticals is the maker of several popular drugs used to treat high blood pressure and arthritis. Over time, thecompany has developed a positive relationship with many of the patients who use its medications through a quarterlynewsletter that offers all the latest information on new medical research findings and general health and fitness articles.The company has just been acquired by a group of investors who also own Soothing Waters Hot Tubs and Spas. Themarketing director for Soothing Waters would like to use Rani’s mailing list for a direct-mail promotion.Questions1.What should Rani Pharmaceuticals do?In order to avoid the semblance of impropriety, it might be better for the marketing director of Soothing Waters toask Rani to include an information piece about the hot tubs in the quarterly newsletter. The article could include abounce-back card on which the patient could indicate his or her interest in receiving more information about the hottubs directly from Soothing Waters. Although it is not unethical per se for a company to leverage its customerinformation across the organization, a company should always be mindful of how its customers will perceive itsdoing so.2.Do you think it is ethical to use customer information across multiple divisions of the same company?Explain.This is a situation to be handled with caution. Rani’s should not simply hand over customer information.Although itis not unethical per se for a company to leverage its customer information across the organization,it couldjeopardize the positive relationship that Rani’s has developed withitscustomers. One solution may be to include anote in the newsletter about Soothing Waters and customers can request more information.3.To which marketing management philosophy do you think the marketing director for Soothing Waterssubscribes? Explain.The marketing director for Soothing Waters seems to be taking a sales orientation marketing approach. This is anaggressive approach and it may be in Soothing Waters’best interest to redirect and pursue a market orientation.4.Does the AMAStatementof Ethics address using customer information by multiple divisions of the samecompany in itsStatementof Ethics? Go to http://www.marketingpower.com and review the code. Then writea brief paragraph on how the AMA Code of Ethics relates to Rani Pharmaceuticals’dilemmaThe AMA Code of Ethics does not provide specific guidelines for the use of information across an organization. Infact, the lack of principles relative to information collection, archiving, dissemination, and general use indicates thatthe area of marketing information has evolved more rapidly than the Code. [You may wish to have your studentsdraft a sample code of ethics relating to the area of marketing information. This can be done as a group activity or asan individual assignment.]

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10Chapter 1♦An Overview of MarketingVIDEO ASSIGNMENT:Geoffrey B. SmallGeoffrey B. Small is a super luxury fashion designer with an eye towards social justice and connecting with his buyers.In this video, Small discusses how he began designing clothes and deciding who and how to connect with his customers.He also discusses the nature of consumer behavior and beliefs in terms of how they purchase fashion and its effect onclothing prices.1.Geoffrey B. Small takes great pride in offering a high level of handwork in his clothing because:a.it offers higher customer value.b.it is part of his marketing orientation.c.it is how he markets his clothing.d.he can employ more people that way.ANS: ASmall says that the customers value handwork because it provides them a direct link with the people who made theclothes, something that most designers and clothing producers do not take the time or cost to offer their customer.2.Geoffrey B. Small believes that one function of advertising is to make the customer believe what companies say.Therefore, he doesn’t advertise, andlets the clothes speak for themselves.TrueFalseANS: TrueGeoffrey B. Small says that corporate advertising has taught customers that the lower the price the better thebargain. However, he argues that actually costs the customer more, and that he has to re-educate his customers tounderstand that value comes in longevity, eco-friendly , and politically friendly products that work.3.How would Geoffrey B. Small answer the question “what is this firm’s business?”a.Making clothes for environmentally aware customers.b.Offering a great product and great service by honestly communicating with the customer.c.Showing people how clothes should be made--locally.d.Giving the customer something they need badly enough that they will pay for it.ANS: BSmall says that he doesn’t like the word marketing, and that he focuses on offering a great product and great serviceby honestly communicating with the customer, which is the business he is in. Part of that business involves makingclothes which are purchased by environmentally aware customers, but the business is larger than that.4.To which marketing management philosophy does Geoffrey B. Small subscribe?a.Production Orientationb.Marketing Orientationc.Sales Orientationd.Societal OrientationANS: DSmall’s focus on local, sustainable culture, as well as his civil rights focus suggests that he has a societal marketingorientation, which is the idea that an organization exists to not only satisfy customer wants and to meetorganizational goals, but also to preserve or enhance individuals’ and society’s long-term best interests. Productionorientation occurs when the internal capabilities of the firm drive business decisions, rather than the wants and needsof the market.5.When Small describes how his customers choose to purchase his clothes (by evaluating that his brand isenvironmentally conscientious, whereas most other brands are not), which condition of exchange is being met?a.Each party has something of value to the other party.b.Each party is capable of communication and delivery.c.Each party is free to accept or reject the exchange offer.d.Each party believes it is appropriate or desirable to deal with the other party.ANS: D

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Chapter 1♦An Overview of Marketing11By evaluating Small’s brand based on aspects such as environmental concerns, customers are choosing to buy fromSmall because it is desirable to deal with him, since he has similar values as the customer. Both parties do havesomething of value, but this particular aspect of the evaluation process does not apply to that condition of exchange.6.When Small discusses how customers crave personal interaction, knowledge of the person who created the garment,and want unique, humanness in their clothing, what is he describing?a.Avoiding unrealistic pricingb.Having a strong sales teamc.Building relationshipsd.Building trustANS: CSmall is discussing building relationships with his customers by increasing the handwork on his clothing.7.Which aspect of customer value is Small discussing when he refers to cost cutting, dividing the cost of a garmentover the years it is worn, and the money invested in the company?a.Avoiding unrealistic pricingb.Empowering customersc.Using the marketing conceptd.Increasing customer satisfactionANS: ADespite having high initial prices, Small’s work is designed to be worn for more than twenty years, making it an,ultimately, less expensive garment than one purchased at Target that has to be replaced every six months.8.Small’s focus on the longevity of his garments suggests that he is:a.empowering his customers.b.decreasing customer satisfaction.c.offering products that perform.d.harming his business model.ANS: CIf a pair of pants or a coat lasts 25 years, that is a product that performs.9.By providing the customer the top-quality product that lasts for 25 years, Geoffrey B. Small isa.placing a premium on making a sale.b.providing customer satisfaction.c.using the marketing concept.d.developing a deeper understanding of his customers.ANS: BThis is the type of quality and longevity desired by Small’s customers, so he is providing them customersatisfaction.10.Small’s refusal to give in to the pressure to make more, to change methods, to lower prices, in order to keep usinglocal products and maintain a high level of quality indicatesa.a shift to a production orientation.b.a shift in the firm’s primary goal.c.a refusal to use the tools at his disposal.d.his commitment to the societal marketing orientation.ANS: DSmall believes that his methods for creating clothing are in people’s and society’s best long-term interests, and byrefusing to change his methods, he is demonstrating his commitment to the societal marketing orientation.Chapter 1 Case: Walt DisneyThe Walt Disney Company recently announced that it will be implementing firm advertising rules on its televisionchannels, radio stations, and its Web sites. Disney will ban all ads for junk food on its media networks, hoping to get

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12Chapter 1♦An Overview of Marketingkids to eat better by removing the temptation of junk food advertising. The new rules will make Disney a pioneer inrecognizing the force of advertising on consumer behavior. Disney will evaluate a company's broad offerings,beyond the specific product it hopes to advertise on one of Disney's channels.Products such as Kraft’s Capri Sun and Oscar Meyer Lunchables do not meet Disney's nutrition standards.Capri Sun has too much sugar, and Lunchables has high sodium content. Cereal with more than 10 grams of sugar ora meal with more than 600 calories will not meet nutrition standards and cannot be advertised. Companies likeMcDonald's, which is involved in the advertising initiative as part of its support for First Lady Michelle Obama'scampaign to curb childhood obesity, may not make Disney's cut. The rules take effect in 2015, and until then,Disney hopes that with the desire to keep kids interested in their products through advertising, companies willreformulate products to meet nutrition standards.“Disney's New Diet for Kids: No More Junk Food Ads,”Yahoo, June 5, 2012, http://finance.yahoo.com/news/disneys-diet-kids-no-more-junk-food-ads-222602295.html (Accessed March 25, 2013).TRUE/FALSE1.Disney’s decision to implement new rules banning junk food advertisements suggests a societal marketing orientation.ANS:TPTS:1OBJ:LO: 1-2TOP:AACSB: Reflective ThinkingKEY:CB&E Model: CustomerMSC:BLOOMS: Level I Knowledge2.The junk food companies that want to advertise on Disney’s television channels likely have a sales orientation.ANS:TPTS:1OBJ:LO: 1-2TOP:AACSB: Reflective ThinkingKEY:CB&E Model: CustomerMSC:BLOOMS: Level I Knowledge3.The type of advertisements a company chooses to broadcast on its television stations is inconsequential becausemarketing does not play a very large role in society.ANS:FDisney’s decision is consequential because marketing plays a large role in society.PTS:1OBJ:LO: 1-4TOP:AACSB: Reflective ThinkingKEY:CB&E Model: CustomerMSC:BLOOMS: Level I Knowledge4.The goal of junk food advertisers to encourage marketing, whereby people giving up something (money) in order toreceive something they would rather have (junk food).

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Chapter 1♦An Overview of Marketing13ANS:FThis defines an exchange.PTS:1OBJ:LO: 1-1TOP:AACSB: Reflective ThinkingKEY:CB&E Model: StrategyMSC:BLOOMS: Level I Knowledge5.Because it is sold at a low price, junk food provides high customer value.ANS:FCustomer value is not simply a matter of low cost. A low-quality good selling for a low price does not necessarilyprovide value.PTS:1OBJ:LO: 1-4TOP:AACSB: Reflective ThinkingKEY:CB&E Model: StrategyMSC:BLOOMS: Level I KnowledgeMULTIPLE CHOICE1.Which of the following was likely not one of Disney’s considerations when determining its marketing concept?a.Do our customers want to see junk food advertisements on our channels and Web sites?b.How do junk food advertisements affect our long-term goals?c.Will new stricter advertising rules distinguish us from our customers?d.How do our television shows and Web sites affect our bottom line?e.What do customers picture when they think about our television channels?ANS:DWhat a business thinks it produces is not of primary importance to its success. Instead, what customers think they arebuying—the perceived value—defines a business.PTS:1OBJ:LO: 1-2TOP:AACSB: Reflective ThinkingKEY:CB&E Model: CustomerMSC:BLOOMS: Level II Comprehension2.If Disney allowed customers to choose which types of advertising they saw on its Web sites, it would be engaging in:a.realistic pricing.b.co-creation.c.offering products that perform.d.giving the buyers facts.e.providing after-sales support.ANS:BCo-creation allows customers to help create their own experiences.PTS:1OBJ:LO: 1-3TOP:AACSB: Reflective ThinkingKEY:CB&E Model: StrategyMSC:BLOOMS: Level II Comprehension3.Disney customers’ evaluations of the company’s Web sites and television channels in terms of whether those productsmeet their needs and expectations is called:a.customer gratification.b.customer fulfillment.c.customer approval.d.customer agreement.e.customer satisfaction.ANS:EThe customers’ evaluation of a good or service in terms of whether that good or service has met their needs andexpectations is called customer satisfaction.

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14Chapter 1♦An Overview of MarketingPTS:1OBJ:LO: 1-3TOP:AACSB: Reflective ThinkingKEY:CB&E Model: StrategyMSC:BLOOMS: Level II Comprehension4.Which of the following describes a Disney customer service representative who has been given the authority to respondto a complaint about junk food advertisement by pulling the advertisement in question and flagging it for review byDisney’s marketing team?a.The employee is empowered.b.The employee is improving Disney’s customer relationship management.c.The employee is working in a teamwork-oriented environment.d.The employee is operating under a sales orientation.e.The employee is opposed to junk food advertisements.ANS:AEmpowerment is delegation of authority to solve customers’ problems quickly—usually by the first person the customernotifies regarding a problem.PTS:1OBJ:LO: 1-3TOP:AACSB: Reflective ThinkingKEY:CB&E Model: PromotionMSC:BLOOMS: Level III Application5.Who at Disney needs to both be aware of and understand the company’s decision to impose strict junk food advertisingrules?a.The CEO.b.The CEO and his chief advisors.c.The CEO, his chief advisors, and the marketing team.d.The CEO, his chief advisors, the marketing team, and the financial team.e.Every businessperson at the company.ANS:EAll businesspeople, regardless of specialization or area of responsibility, need to be familiar with the terminology andfundamentals of accounting, finance, management, and marketing.PTS:1OBJ:LO: 1-4TOP:AACSB: Reflective ThinkingKEY:CB&E Model: StrategyMSC:BLOOMS: Level II Comprehension

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Chapter 1♦An Overview of Marketing15GREATIDEAS FORTEACHINGCHAPTER1Rich Brown, Freed-Hardeman UniversityHOW SHOULD SERVICE MAKE YOU FEEL AND WHY IS THAT IMPORTANT?A problem in teaching people to be good service providers, or effective managers of them, is many people don’t knowhow intrinsically rewarding it is to truly be of service to another person. Many students have experience inservice-related jobs but not so many have worked in great service environments. Most have experienced, accepted, and expectmediocre service in a great variety of service environments. In the classroom,it is fairly easy to point out the mediocrityof past experiences and communicate the nuts and bolts of delivering good service. What is difficult is finding a way toimpact students so they develop more than the ability to recognize and explain good service,but additionallytodevelopthe desire to serve andtoget others to as well. The purpose of this exercise istodevelop that desire to serve by gettingstudents to think about a time when they were of real service to someone then helping them realize the intrinsic rewardsthat come from serving well.This assignment has two parts. First, you must get the students to think of situationsin whichthey really served anotherperson either at work or in everyday life. Second, discuss the situations in class to see what individuals felt andexperienced before, during, and after providing the service. A list of discussion questions is at the end of this entry.You could ask the students to write about their experiences, but I have found the discussion format to be extremelybeneficial. Most students will have had positive experiences and most will still feel good about what they have done; thistends to snowball, and the reality that providing good service is intrinsically rewarding becomes very clear. It is oftenhard for individual students to get started with ideas for ways typical service jobs can be made more rewarding. In agroup setting, even if I have to get things started, they are soon helping each other come up with useful strategies to helpservice providers see how they really can be of help to their customers in their specific situations.Here is a list of questions to use in starting discussion.•Who did you help and what exactly did youdo for them?•Did they really need the help? Why?•What would their situation have been like ifyou had not helped them?•How was their situation changed becauseyou did help them? Was the change insituation worth the effort it took? Why?•How did your helping them make them feeland how could you tell?•How did helping in this situation make youfeel and how do you feel about it now?Why?•Was this an unusual experience for you?Why?•Was what you did complicated or difficult?•Do you think service in general would bebetter if service providers could feel abouttheir jobs the way you felt after you helpedin this situation? Why?•How could managers of customer serviceproviders help their employees to realize theintrinsic benefits that can result from reallyserving another person?James S. Cleveland, Sage College of AlbanyDISCUSSION BOARD TOPICS TO ENCOURAGE PARTICIPATIONDiscussion board questions provided to students to encourage them to engage in thinking and writing about the contentof the Principles of Marketing course usually take the form of a provocative statement to which students are asked torespond. An example of this would be: All PR is good PR.Discussion topics such as this one are abstract and often require that the instructor provide an initial reply to showstudents what is expected of them in their own replies. For students with limited work experience, this approach may be

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