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MKTG, 10th Edition Solution Manual

MKTG, 10th Edition Solution Manual offers structured learning with chapter-wise explanations and key points.

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    Chapter 1 ♦ An Overview of Marketing 1 CHAPTER 1 An Overview of Marketing This chapter begins with the learning outcome summaries , followed by a set of lesson plans for you to use to deliver the content in Chapter 1. • Lecture (for large sections) on page 2 • Company Clips (video) on page 4 • Group Work (for smaller sections) on page 6 Review and Assignments begin on page 7  Review questions  Application questions  Application exercise  Ethics exercise  Video Assignment  Case assignment Great Ideas for Teaching Marketing from faculty around the country begin on page 1 5

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    2 Chapter 1 ♦ An Overview of Marketing L EARNING O UTCOMES 1 - 1 Define the term marketing Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Marketing also requires all facets of a company to work together to pool ideas and resources. One major goal of marketing is to create an exchange. An exchange has five conditions, as listed below. Even if all five conditions are met, an exchange might not occur. People engage 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 - 2 Describe four marketing management philosophies The role of marketing and the character of marketing activities within an organization are strongly influenced by its philosophy and orientation. A production - oriented organization focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace. A sales orientation is based on the beliefs that people will buy more products if aggressive sales techniques are used and that high sales volumes produce high profits. A market - oriented organization focuses on satisfying customer wants and needs while meeting organizational objectives. A societal marketing orientation goes beyond a market orientation to include the preservation or enhancement of individuals’ and society’s long - term best interests. 1 - 3 Discuss the differences between sales and market orientations First, 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 - oriented companies 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 higher premium 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 businesses pursue customer satisfaction through coordinated activities . 1 - 4 Describe several reasons for studying marketing First, 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 in marketing are diverse, profitable, and expected to increase significantly during the coming decade. Fourth, understanding marketing makes consumers more informed. T ERMS customer relationship management (CRM) exchange production orientation market orientation relationship marketing customer satisfaction marketing sales orientation customer value marketing concept societal marketing orientation empowerment on - demand marketing teamwork L ESSON P LAN FOR L ECTURE Brief Outline and Suggested PowerPoint Slides: Learning Outcomes and Topics PowerPoint Slides

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    Chapter 1 ♦ An Overview of Marketing 3 Learning Outcomes and Topics PowerPoint Slides LO1 Define the term marketing 1 - 1 What Is Marketing? 1 : An Overview of Marketing 2 : Learning Outcomes 3 : What Is Marketing? 4 : Marketing is… 5 : American Marketing Association Definition of Marketing 6 : Marketing … 7 : Exchange 8 : Exchange LO2 Describe four marketing management philosophies 1 - 2 Marketing Management Philosophies 9 : Marketing Management Philosophies 10 : The Four Marketing Management Philosophies 11 : Production Orientation 12 : Sales Orientation 13 : Market Orientation 14 : Achieving a Marketing Orientation 15 : Soci et al Marketing Orientation 16. Who’s In Charge? 17 : Questions That Help Determine Marketing Philosophy LO3 Discuss the differences between sales and market orientations 1 - 3 Differences between Sales and Market Orientations 18 : Differences between Sales and Market Orientations 19 : Comparing the Sales and Market Orientations 20 : The Organization’s Focus 21 : Customer Value Requirements 22 : Customer Satisfaction 23 : Relationship Marketing 24 : Building Relationships 25 : Defining a Firm’s Business 26 : Knowing the Firm’s Business 27: Those to Whom the Product is Directed 28: Primary Goals 29: Tools the Organization Uses to Achieve Its Goals 30 : Sales vs. Market Orientations LO4 Describe several reasons for studying marketing 1 - 4 Why Study Marketing? 31 : Why Study Marketing? 32 : Why Study Marketing? 33 : Chapter 1 Video

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    4 Chapter 1 ♦ An Overview of Marketing Suggested Homework: • Th is instructor manual contains assignments for the Geoffrey B. Small video and for the Walt Disney case . • This chapter’s online study tools include flashcards, visual summaries, practice quizzes, and other resources that can be assigned or used as the basis for longer investigations into marketing. L ESSON P LANS FOR V IDEO Company Clips Segment Summary: Geoffrey B. Small Geoffrey 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 on clothing prices. These teaching notes combine activities that you can assign students to prepare before class, that you can do in class before watching the video, that you can do in class while watching the video, and that you can assign students to complete on their own after watching the video. During the viewing portion of the teaching notes, stop the video periodically where appropriate to ask students the questions or perform the activities listed on the grid. You may even want to give the students the questions before starting the video and have them think about the answer while viewing the segment. That way, students will be engaged in active rather than passive viewing. PRE - CLASS PREP FOR YOU: PRE - CLASS PREP FOR YOUR STUDENTS: • Preview the Company Clips video segment for Chapter 1. This exercise reviews concepts for LO1, LO2, and LO3 . • Review your lesson plan. • Make sure you have all of the equipment needed to show the video to the class, including the DVD and a way to project the video. • You can also stream the video HERE • Have students familiarize themselves with the following terms and concepts: marketing, production orientation, marketing concept, market orientation, and societal marketing orientation. • Have students search for Geoffrey B. Small and read some articles about him. Depending on the amount of controversy/discussion you would like to spark, Small’s articles on his forum at StyleZeitgeist ( here ) are very informative about his stance on clothing and politics, but can be highly divisive . VIDEO REVIEW EXERCISE ACTIVITY Warm Up Begin by asking students “What is marketing?”

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    Chapter 1 ♦ An Overview of Marketing 5 In - class Preview • Segue into a discussion of the marketing concept and the four marketing management 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 firm need to succeed in competitive markets?” • While listening to students’ insights, write the following points on the board. o a clear understanding of what customers want o focus to produce what the customer wants, rather than on what management thinks should be produced Write the following viewing questions on the board, or simply prompt students to think about them as they watch the video. Viewing (solutions below) 1. Is Geoffrey B. Small best described as having a market orientation or a societal - marketing orientation? 2. How does Geoffrey B. Small implement the marketing concept? Follow - up • Have students reflect on their earlier research into Geoffrey B. Small and have them write a paragraph on how they think he uses social media to demonstrate his commitment to a societal marketing orientation. • Have students break into groups of up to four students and have each group brainstorm a marketing concept for one product, including their intended customer and marketing philosophy. • Outside of class, have students individually create a marketing concept for one product. Have them compose a brief paragraph, to be turned in later, discussing how 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. Small would be best described as having a societal - marketing orientation because Small takes the basic market orientation focus — what do customers want and need? — and adds a societal, environmental focus — how can we benefit society ? 2. How does Geoffrey B. Small implement the marketing concept? Geoffrey B. Small implements the marketing concept by creating clothing that satisfies his customers desire to have long - living clothing from a company that is driven to protect the environment and civil rights. Small discovered the small demographic of wealthy but socially motivated buyers and built clothing that they perceived as having a high value. As he says in the video, “you need to give the customer what they need and that they need badly enough that they are willing to give you money for it.”

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    6 Chapter 1 ♦ An Overview of Marketing L ESSON P LAN FOR G ROUP W ORK Class Activity – Marketing Is Not Just Advertising The objective of this exercise is to get students to think about what may be involved in marketing a product. They should construct plans that list the major variables in the marketing mix. This activity will emphasize that marketing is not just advertising. First , divide the class into small groups of four or five people. Then ask students to assume that they have just purchased a tennis racquet factory that has been shut down for the last few years. The automated equipment and computer system are in excellent shape, and the personnel needed to run the factory are readily available. But before jumping into production, what questions need to be asked and answered? What plans need to be made? Which of these plans concern marketing? The following suggested questions should be brought up after the students suggest theirs. All these questions are about marketing 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 customer service? 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 strategy drives the business.

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    Chapter 1 ♦ An Overview of Marketing 7 R EVIEW AND A SSIGNMENTS FOR C HAPTER 1 REVIEW QUESTION 1. Give an example of a company that might be successfully following a production orientation. Why might a firm in this industry be successful following a production orientation? A mature product, such as a small no - frills calculator , is sold basically on price. A production orientation of lowest cost would work for this. In addition, a production orientation may work in a developing country where consumers have fewer options. APPLICATION QUESTIONS 1. Your company president has decided to restructure the firm and become more market - oriented. She is going to announce the changes at an upcoming meeting. She has asked you to prepare a short speech outlining the general reasons for the new company orientation. Students’ answers should focus on 1) customer wants and needs , 2) distinguishing the company’s products and services from competitors’ offerings , and 3) the integration of all organizational activities to satisfy customer wants and needs. The latter point justifies the need for the restructuring. The speech can also contain some of the following topics: 1) the commitment of top management to the new market orientation , 2) the necessity of competitive intelligence , 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 cars won’t be either. ” Explain how this statement reflects the marketing concept. Although students’ answers will vary, they should address some of these points. The marketing concept focuses on satisfying customer needs while meeting organizational objectives. Most prosperous firms, including Ford, have adopted this management philosophy because experience has taught them that customer satisfaction is crucial to their success. 3. A friend of yours agrees with the adage, “ People don’t know what they want — they only want what they know. ” Write your friend a letter expressing the extent to which you think marketers shape consumer wants. Although students’ answers will vary, they should address some of the following points : Marketers cannot create demand or make people buy things that they don’t want or need. Marketing does, however, inform, persuade, and remind 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. Y our local supermarket uses the slogan is “It’s your store .” However, when you asked one of the stock people 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 the supermarket’s slogan will never be credible unless its employees carry it out. Students’ answers will vary widely, but they should explain that the marketing orientation, the concern for customers, must extend to every member of the organization. And this is very important when the customer has actual contact with a front - line employee. 5. How does Philip Morris handle the sensitive issues associated with marketing tobacco? What kind of information does its Web site at http://www.philipmorris.com/ provide about smoking and its negative effects on health? How do you think Philip Morris is able to justify such marketing tactics? After check ing around the site, do you think that approach makes the company more or less trustworthy?

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    8 Chapter 1 ♦ An Overview of Marketing Student s’ answers will vary. 6. Write a letter to a friend or family member explaining why you think that a course in marketing will help you in 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 and the role of employees in the delivery of customer value. APPLICATION EXERCISE Understanding the differences among the various marketing management philosophies is the starting point for understanding the fundamentals of marketing. From reading the chapter, you may be convinced that the market orientation is the most appealing philosophy and the one best suited to creating a competitive advantage. Not all companies, however, use the market orientation. And even companies that follow it may not execute well in all areas. Activities 1. Visit your local grocery store and go through the cereal, snack food, and dental hygiene aisles. Go up and down each aisle 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 the shelves? 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 different types of, say, peanut butter? Can this difference be explained in terms of marketing management philosophy (peanut butter 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 (like grapefruit - flavored toothpaste or peanut butter – covered popcorn) that you have never seen on the shelf but would be interested 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 sends students to the supermarket to evaluate the range of products and product categories and to draw conclusions about the marketing 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 they move 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 University Fred H. Mader, Marshall University GIVE 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 and the 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 minimize interference. Tell two of the groups they are the “producers” and their job is to make a product for the other groups. Tell the remaining two groups they are the “consumers.” Give the two “producer” groups five sheets of paper (each a different color) and whisper instructions that they are to build one paper airplane. They must use one sheet of paper, but color selection and design must be group decisions. Give each “consumer” group one sheet of white paper. Whisper to these groups that they are to write, in detail, what kind of paper airplane they want. Upon task completion, compare the result s .

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    Chapter 1 ♦ An Overview of Marketing 9 Outcomes : Invariably, the “producers” do not produce what the “consumers” had in mind. Products and concepts may come 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” defend themselves by stating they were never asked. The professor can then direct discussion depending on whether orientation or new product development is the focus of the class. ETHICS EXERCISE In today’s business environment, ethics are extremely important. In recent years, there have been numerous scandals and trials that stem from a lack of ethical judgment. For this reason, we are including an ethical exercise in every chapter. A brief scenario will present you with a situation in which the right thing to do may or may not be crystal clear, and you will need to decide the ethical way out of the dilemma. To help you with these decisions, we will often refer you back to the AMA’s Statement of Ethics, found online at http://www.marketingpower.com. This will give you a resource for the exercise 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, the company has developed a positive relationship with many of the patients who use its medications through a quarterly newsletter 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. The marketing director for Soothing Waters would like to use Rani’s mailing list for a direct - mail promotion. Questions 1. What should Rani Pharmaceuticals do? In order to avoid the semblance of impropriety, it might be better for the marketing director of Soothing Waters to ask Rani to include an information piece about the hot tubs in the quarterly newsletter. The article could include a bounce - back card on which the patient could indicate his or her interest in receiving more information about the hot tubs directly from Soothing Waters. Although it is not unethical per se for a company to leverage its customer information across the organization, a company should always be mindful of how its customers will perceive its doing 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 it is not unethical per se for a company to leverage its customer information across the organization, it could jeopardize the positive relationship that Rani’s has developed with its customers. One solution may be to include a note 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 Waters subscribes? Explain. The marketing director for Soothing Waters seems to be taking a sales orientation marketing approach. This is an aggressive approach and it may be in Soothing Waters ’ best interest to redirect and pursue a market orientation. 4. Does the AMA Statement of Ethics address using customer information by multiple divisions of the same company in its Statement of Ethics? Go to http://www.marketingpower.com and review the code. Then write a brief paragraph on how the AMA Code of Ethics relates to Rani Pharmaceuticals ’ dilemma The AMA Code of Ethics does not provide specific guidelines for the use of information across an organization. In fact, the lack of principles relative to information collection, archiving, dissemination, and general use indicates that the area of marketing information has evolved more rapidly than the Code. [You may wish to have your students draft a sample code of ethics relating to the area of marketing information. This can be done as a group activity or as an individual assignment.]

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    10 Chapter 1 ♦ An Overview of Marketing VIDEO ASSIGNMENT: Geoffrey B. Small Geoffrey 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 on clothing 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: A Small says that the customers value handwork because it provides them a direct link with the people who made the clothes, 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, and lets the clothes speak for themselves. True False ANS: True Geoffrey B. Small says that corporate advertising has taught customers that the lower the price the better the bargain. However, he argues that actually costs the customer more, and that he has to re - educate his customers to understand that value comes in longevity, eco - friendly , and politically friendly products that work. 3. H ow 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: B Small says that he doesn’t like the word marketing, and that he focuses on offering a great product and great service by honestly communicating with the customer, which is the business he is in. Part of that business involves making clothes 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 Orientation b. Marketing Orientation c. Sales Orientation d. Societal Orientation ANS: D Small’s focus on local, sustainable culture, as well as his civil rights focus suggests that he has a societal marketing orientation, which is the idea that an organization exists to not only satisfy customer wants and to meet organizational goals, but also to preserve or enhance individuals’ and society’s long - term best interests. Production orientation occurs when the internal capabilities of the firm drive business decisions, rather than the wants and needs of the market. 5. When Small describes how his customers choose to purchase his clothes (by evaluating that his brand is environmentally 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 Marketing 11 By evaluating Small’s brand based on aspects such as environmental concerns, customers are choosing to buy from Small because it is desirable to deal with him, since he has similar values as the customer. Both parties do have something 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 pricing b. Having a strong sales team c. Building relationships d. Building trust ANS: C Small 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 garment over the years it is worn, and the money invested in the company? a. Avoiding unrealistic pricing b. Empowering customers c. Using the marketing concept d. Increasing customer satisfaction ANS: A Despite 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: C If 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 is a. 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: B This is the type of quality and longevity desired by Small’s customers, so he is providing them customer satisfaction. 10. Small’s refusal to give in to the pressure to make more, to change methods, to lower prices, in order to keep using local products and maintain a high level of quality indicates a. 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: D Small believes that his methods for creating clothing are in people’s and society’s best long - term interests, and by refusing to change his methods, he is demonstrating his commitment to the societal marketing orientation. Chapter 1 Case: Walt Disney The Walt Disney Company recently announced that it will be implementing firm advertising rules on its television channels, 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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    12 Chapter 1 ♦ An Overview of Marketing kids to eat better by removing the temptation of junk food advertising. The new rules will make Disney a pioneer in recognizing 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 or a meal with more than 600 calories will not meet nutrition standards and cannot be advertised. Companies like McDonald's, which is involved in the advertising initiative as part of its support for First Lady Michelle Obama's campaign 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 will reformulate 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/FALSE 1. Disney’s decision to implement new rules banning junk food advertisements suggests a societal marketing orientation. ANS: T PTS: 1 OBJ: LO: 1 - 2 TOP: AACSB: Reflective Thinking KEY: CB&E Model: Customer MSC: BLOOMS: Level I Knowledge 2. The junk food companies that want to advertise on Disney’s television channels likely have a sales orientation. ANS: T PTS: 1 OBJ: LO: 1 - 2 TOP: AACSB: Reflective Thinking KEY: CB&E Model: Customer MSC: BLOOMS: Level I Knowledge 3. The type of advertisements a company chooses to broadcast on its television stations is inconsequential because marketing does not play a very large role in society. ANS: F Disney’s decision is consequential because marketing plays a large role in society. PTS: 1 OBJ: LO: 1 - 4 TOP: AACSB: Reflective Thinking KEY: CB&E Model: Customer MSC: BLOOMS: Level I Knowledge 4. The goal of junk food advertisers to encourage marketing, whereby people giving up something (money) in order to receive something they would rather have (junk food).

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    Chapter 1 ♦ An Overview of Marketing 13 ANS: F This defines an exchange. PTS: 1 OBJ: LO: 1 - 1 TOP: AACSB: Reflective Thinking KEY: CB&E Model: Strategy MSC: BLOOMS: Level I Knowledge 5. Because it is sold at a low price, junk food provides high customer value. ANS: F Customer value is not simply a matter of low cost. A low - quality good selling for a low price does not necessarily provide value. PTS: 1 OBJ: LO: 1 - 4 TOP: AACSB: Reflective Thinking KEY: CB&E Model: Strategy MSC: BLOOMS: Level I Knowledge MULTIPLE CHOICE 1. 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: D What a business thinks it produces is not of primary importance to its success. Instead, what customers think they are buying — the perceived value — defines a business. PTS: 1 OBJ: LO: 1 - 2 TOP: AACSB: Reflective Thinking KEY: CB&E Model: Customer MSC: BLOOMS: Level II Comprehension 2. 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: B Co - creation allows customers to help create their own experiences. PTS: 1 OBJ: LO: 1 - 3 TOP: AACSB: Reflective Thinking KEY: CB&E Model: Strategy MSC: BLOOMS: Level II Comprehension 3. Disney customers’ evaluations of the company’s Web sites and television channels in terms of whether those products meet their needs and expectations is called: a. customer gratification. b. customer fulfillment. c. customer approval. d. customer agreement. e. customer satisfaction. ANS: E The customers’ evaluation of a good or service in terms of whether that good or service has met their needs and expectations is called customer satisfaction.

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    14 Chapter 1 ♦ An Overview of Marketing PTS: 1 OBJ: LO: 1 - 3 TOP: AACSB: Reflective Thinking KEY: CB&E Model: Strategy MSC: BLOOMS: Level II Comprehension 4. Which of the following describes a Disney customer service representative who has been given the authority to respond to a complaint about junk food advertisement by pulling the advertisement in question and flagging it for review by Disney’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: A Empowerment is delegation of authority to solve customers’ problems quickly — usually by the first person the customer notifies regarding a problem. PTS: 1 OBJ: LO: 1 - 3 TOP: AACSB: Reflective Thinking KEY: CB&E Model: Promotion MSC: BLOOMS: Level III Application 5. Who at Disney needs to both be aware of and understand the company’s decision to impose strict junk food advertising rules? 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: E All businesspeople, regardless of specialization or area of responsibility, need to be familiar with the terminology and fundamentals of accounting, finance, management, and marketing. PTS: 1 OBJ: LO: 1 - 4 TOP: AACSB: Reflective Thinking KEY: CB&E Model: Strategy MSC: BLOOMS: Level II Comprehension

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    Chapter 1 ♦ An Overview of Marketing 15 G REAT I DEAS FOR T EACHING C HAPTER 1 Rich Brown, Freed - Hardeman University HOW 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 know how intrinsically rewarding it is to truly be of service to another person. Many students have experience in service - related jobs but not so many have worked in great service environments. Most have experienced, accepted, and expect mediocre service in a great variety of service environments. In the classroom , it is fairly easy to point out the mediocrity of past experiences and communicate the nuts and bolts of delivering good service. What is difficult is finding a way to impact students so they develop more than the ability to recognize and explain good service , but additionally to develop the desire to serve and to get others to as well. The purpose of this exercise is to develop that desire to serve by getting students to think about a time when they were of real service to someone then helping them realize the intrinsic rewards that come from serving well. This assignment has two parts. First, you must get the students to think of situations in which they really served another person either at work or in everyday life. Second, discuss the situations in class to see what individuals felt and experienced 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 experience s , but I have found the discussion format to be extremely beneficial. Most students will have had positive experiences and most will still feel good about what they have done; this tends to snowball, and the reality that providing good service is intrinsically rewarding becomes very clear. It is often hard for individual students to get started with ideas for ways typical service jobs can be made more rewarding. In a group setting, even if I have to get things started, they are soon helping each other come up with useful strategies to help service 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 you do for them? • Did they really need the help? Why? • What would their situation have been like if you had not helped them? • How was their situation changed because you did help them? Was the change in situation worth the effort it took? Why? • How did your helping them make them feel and how could you tell? • How did helping in this situation make you feel 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 be better if service providers could feel about their jobs the way you felt after you helped in this situation? Why? • How could managers of customer service providers help their employees to realize the intrinsic benefits that can result from really serving another person? James S. Cleveland, Sage College of Albany DISCUSSION BOARD TOPICS TO ENCOURAGE PARTICIPATION Discussion board questions provided to students to encourage them to engage in thinking and writing about the content of the Principles of Marketing course usually take the form of a provocative statement to which students are asked to respond. 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 show students what is expected of them in their own replies. For students with limited work experience, this approach may be

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