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Principles of Marketing, Global 17th Edition Solution Manual

Principles of Marketing, Global 17th Edition Solution Manual offers a comprehensive guide to solving every question in your textbook, helping you master the material.

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    Chapter 1 MARKETING: CREATING CUSTOMER VALUE AND ENGAGEMENT MARKETING STARTER: CHAPTER 1 Emirates ’ Customer Value - Driven Marketing : Engaging Customer s and Building Brand Community Synopsis Founded in 1985, the Emirates Group operates across six continents and 144 cities. It is the largest international airline in the world. Emirates set out to be an innovative, modern, and customer - oriented provider of high - quality air travel services. Through the years, it has successfully and continuously created a customer - focused value proposition by offering a combination of products, services, information, and experiences customized for its market demographics for each of its destinations. Examples are the ICE system and the Skywards Program, which have allowed Emirates to deliver its value proposition to its customers and support its mission statement of committing to high standards. As competitors continued to discount air fares to loss - making levels, Emirates maintained fares while managing healthy yields supported by excellent load factors. The company was able to do this because of its customer - value driven marketing approach and its service proposition, for which customers continue to be willing to pay a premium. Beyond the functional benefit of air travel, Emirates marketed its services as “The Emirates Experience,” a genuine passion for comfort and attention to detail. Customers didn’t just fly Emirates; they experienced it. In these digital times, Emirates is forging a new kind of customer relationship, a deeper, more personal, more engaging one. Emirates uses online, mobile, and social media to connect with its customers and creates brand “tribes” — large groups of highly engaged users — with the help of social media platforms such as Facebook, Twitter, Instagram, YouTube, and Pinterest. The company’s “Hello Tomorrow” campaign, launched in 2012 in over 80 markets, presented Emirates’ new mindset, which celebrates global travel, conveying its commitment to connect with people and help them realize their potential through travel. The “Hello Tomorrow” campaign reached 43 million viewers across 85 countries. Emirates’ consideration jumped from 38 percent to 69 percent among viewers and an impressive 84 percent of them reportedly believe Emirates was a brand that sought to connect the world and “create a brighter future.” Emirates has become the world’s most valuable airline brand with an estimated value of $6.6 billion, according to the 2015 Brand Finance Global 500 report. Through its campaigns, Emirates has demonstrated commitment, authenticity, relevance, and differentiation, and has successfully changed the way it reaches out to its customers by moving away from the product and creating a discourse of global customer engagement. Discussion Objective An active 10 - minute discussion of the Emirates story will help link students to key foundational marketing conc epts. Emirates provides an excellent vehicle for introducing the overall marketing framework presented in Chapter 1 and throughout the text: Good marketing is all about creating value for customers and building strong customer relationships in order to capture value from customers in return.

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    Starting the Discussion To start the discussion, ask the class who has flown Emirates before. Based on the show of hands, ask for students to share their experience with the brand . What attract ed them to Emirates ? What is it about the customer experience that is so enticing? Next, pull up Emirates ’ Facebook pages . Working with students, search for a few specific sports pages that interest them. Click on articles and links to further explore . Together, note the variety of approaches Emirates takes and the focus on customers. Investigate Emirates ’ other social media feeds, including the company’s Web site, Twitter, Snapchat, and YouTube. In what ways does Emirates ’ obsession with customer service show through in every way ? You should b e familiar with th e s e Web site s in advance so that you can move purposefully to keep the discussion moving. But let the class discussion interactively guide the site s that you explore, taking you deeper into each page. Start with the first question below, and then ask other questions as the discussion allows. Throughout the discussion, keep your objective firmly in mind: to emphasize that good marketing is all about creating value for customers and managing customer relationships in order to capture value from customers in return. The final question leads the class into Chapter 1 and the discussion for the day. Have fun with this one! Discussion Questions 1. The first marketing story in the text is about Emirates . Let’s take a quick look at the “ About Emirates ” link at the bottom of the Emirates home page and see what we can learn about the company and how it operates. Just looking at this Web pa ge, what stands out about Emirates ? Go to Emirates’ other social media outlets to r einforce the idea that e verythi ng points to Emirates’ obsession with its customers — it’s all about connecting the company and the customers. 2. How has what we are seeing on th e s e site s contributed to Emirates ’ performance? How h a s Emirates been successful? ( As indicated in the Emirates story, the company has grown astronomically in market share and strength of customer relationships , due largely to its obsession with customer satisfaction and customer experience . Thus, by creat ing value for customers, Emirates has captured value from customers in return.) 3. Why did the authors choose Emirates as the very first company to highlight in the first chapter of the text? How does this opening story relate to the major points made in the rest of the chapter? (This question should lead naturally into major Chapter 1 concepts: What is marketing and what is the marketing process? What is customer - driven marketing ? W hy are customer value, customer satisfaction, and customer relationships so important?) CHAPTER OVERVIEW Use Power Point Slide 1 - 1 Here In this chapter, we introduce the basic concepts of marketing. It starts with the question, “What is marketing ? ” S imply put, marketing is managing profitable customer relationships. The aim of marketing is to create value for customers and to capture value from customers in return. Next, the five steps in the marketing process are discussed — from understanding customer needs, to designing customer - driven marketing strategies and integrated marketing programs, to building customer relationships and capturing value for the firm. Finally, there is a discussion of the major trends and forces affecting marketing in this age of customer relationships. CHAPTER OBJECTIVES Use Power Point Slide s 1 - 2 h ere 1. Define marketing and outline the steps in the marketing process. 2. Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.

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    3. Identify the key elements of a customer value - driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. 4. Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. 5. Describe the major trends and forces that are changing the marketing landscape in this age of relationships. CHAPTER OUTLINE p. 26 INTRODUCTION When you think of air travel in the Middle East , chances are good that you think first of Emirates . The flight experience features an array of product offerings such as its onboard ICE system as well as exclusive lounges for its clientele. From the start, Emirates has grown steadily and strongly . As competitors continued to discount air fares close to loss levels, Emirates maintained fares while managing healthy yields . To its core, the company is relentlessly customer driven , for which customers continue to be willing to pay a premium . Emirates’ social media marketing makes the brand experience special by focusing on building relationships and connections . Emirates’ successfully concentrates on delivering customer value through its efforts to develop special and deep experiences . p. 27 Photo: Emirates aircraft ➢ Opening Vignette Questions 1. Many companies claim to be obsessed with cu stomer service. What sets Emirates apart from the others? 2. In your opinion, is it possible to spend heavily on media advertising and also successfully market through digital and social media ? Explain. 3. Do you believe that customers really want long - term relationships with a company and other customers ? If so, how does Emirates build these relationships? 4. What if a close online competitor came al ong, offering comparable items and se rvice? Do you think most Emirates customers would remain

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    loyal to Emirates ? Defend your answer. PPT 1 - 3 PPT 1 - 4 p. 28 p. 29 Define marketing and outline the steps in the marketing process. WHAT IS MARKETING? A simple definition of marketing is engaging customers and managing profitable customer relationships . Marketing must both attract new customers and grow current customers. Every organization must perform marketing functions, not only for - profit companies. Nonprofits (colleges, hospitals, churches, etc.) also must perform marketing. Marketing Defined Most people think of marketing only as selling and ad vertising or “telling and selling.” Marketing must focus on satisfying customer needs. We define marketing as the process by which companies engage customers, build strong customer relationships , and create customer value in order to capture value from customers in return. Learning Objective 1 p. 29 Key Term: Marketing p. 29 Photo: Social media marketing on mobile devices ➢ Assignments, Resources Use Discussion Question 1 - 1 here ➢ Troubleshooting Tip For most students, this will be their first introduction to marketing and all its ramifications. To most of them, marketing is nothing more than selling and/or advertising, and this gets reinforced daily when they see “marketing” job ads that are really sales positions. It helps to get students talking about what marketing is, and to give examples of what they consider good marketing. Try to bring in contemporary examples that the students can relate to.

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    p. 30 PPT 1 - 5 The Marketing Process Figure 1.1 shows the five - step marketing process. 1. Understand the marketplace and customer needs and wants. 2. Design a customer value - driven marketing strategy. 3. Construct a n integrated marketing program that delivers superior value. 4. Engage customers, b uild profitable relationships , and create customer delight. 5. Capture value from customers to create profits and customer equ ity. In the first four steps, companies work to understand consumers, create customer value, and build strong customer relationships. In the final step, companies reap the rewards of creating superior customer value. By creating value for consumers, they in turn capture value from consumers in the form of sales, profits, and long - term customer equity. Review Learning Objective 1: Define marketing and outline the steps in the marketing process. p. 30 Figure 1.1: The Marketing Process: Creating and Capturing Customer Value ➢ Assignments, Resources Use Think - Pair - Share 1 here p. 30 PPT 1 - 6 PPT 1 - 7 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS Five core customer and marketplace concepts are critical: (1) needs, wants, and demands ; (2) market offer ing s (products, services, and experiences) ; (3) value and satisfaction ; (4) exchanges and relationships ; and (5) markets . Customer Needs, Wants, and Demands As the first step in the marketing process, the company must fully understand consumers and the marketplace in which it operates. The most basic concept underlying marketing is that of Learning Objective 2 p. 30 Key Terms: Needs, Wants, Demands p. 30 Photo: Target

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    human needs . Human needs are states of felt deprivation. They include physical, social, and individual needs. These needs were not created by marketers; they are a basic part of the human makeup. Wants are the form human needs take as they are shaped by culture and individual personality. A typical American needs food but wants a Big Mac. When backed by buying power, wants become demands . The best marketing companies go to great lengths to learn and understand their customers’ needs, wants, and demands. ➢ Assignments, Resources Use Additional Project 1 here Use Think - Pair - Share 2 here p. 31 PPT 1 - 8 Market Offerings — Products, Services, and Experiences Needs and wants are fulfilled through market offerings — some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Market offerings include products and services — activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything. Marketing myopia occurs when a company becomes so taken with their own products that they lose sigh t of underlying customer needs. p. 31 Key Term: Market o fferings p. 31 Photo: American Girl p. 31 Key Term: Marketing m yopia p. 31 p. 32 Customer Value and Satisfaction Customers form expectations about the value and satisfaction that various market offerings will deliver and buy accordingly. Satisfied customers buy again and tell others about their good experiences. Dissatisfied customers switch to competitors and disparage the product to others. Customer value and customer satisfaction are key building blocks for developing and managing customer relationships.

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    PPT 1 - 9 Exchanges and Relationships Exchange is the act of obtaining a desired object from someone by offering something in return. Marketing consists of actions taken to build and maintain desirable exchange relationships with target audiences. p. 33 Key Term: Exchange p. 33 PPT 1 - 10 PPT 1 - 1 1 Markets A market is the set of actual and potential buyers of a product. Marketing means managing markets to bring about profitable customer relationships. Figure 1.2 shows the main elements in a modern marketing system. Review Learning Objective 2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. p. 33 Key Term: Market p. 34 Figure 1.2: A Modern Marketing System ➢ Assignments, Resources Use Discussi on Question 1 - 2 here Use Outside Example 1 and 2 here p. 34 PPT 1 - 1 2 PPT 1 - 1 3 Identify the key elements of a customer value - driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. DESIGNING A CUSTOMER VALUE - DRIVEN MARKETING STRATEGY AND PLAN Marketing management is defined as the art and science of choosing target markets and building profitable relationships with them. The marketing manager must answer two important questions: 1. What customers will we serve (what’s our target market)? 2. How can we serve these customers best (what’s our value proposition)? Learning Objective 3 p. 34 Key Term: Marketing m anagement p. 34 Selecting Customers to Serve A company must first decide whom it will serve. It does this by dividing the market into segments of

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    customers ( market segmentation ) and selecting which segments it will go after ( target marketing ). Marketing managers know they cannot serve all customers. By trying to do so, they end up not serving any well. Marketing managers must decide which customers they want to target and on the level, timing, and nature of their demand. ➢ Assignments, Resources Use Discussi on Question 1 - 3 here Use Critical Thinking Exercise 1 - 6 here ➢ Troubleshooting Tip The concept of not serving all customers may be confusing to students. Most of them have not yet encountered anything like it. However, t he light bulb seems to go on with a discussion of crowded national parks and the efforts made to have people visit them during off - peak travel times. Having students come up with their own examples will increase the level of understanding. p. 35 PPT 1 - 1 4 p. 35 PPT 1 - 15 Marketing management is customer management and demand management. Choosing a Value Proposition A company’s value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs. (BMW promises “the ultimate driving machine.”) Such value propositions differentiate one brand from another. Marketing Management Orientations Marketing management wants to design strategies that will build profitable relationships with target consumers. But what philosophy should guide these marketing strategies? There are five alternative concepts under which organizations design and carry out their marketing strategies . The Production Concept p. 35 Photo : Hyatt Regency p. 35

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    p. 35 The production concept holds that consumers will favor products that are available and highly affordable. Management should focus on improving production and efficiency. The Product Concept The product concept holds that consumers will favor products that offer the most in quality, performance, and innovative features. Under this concept, marketing strategy focuses on making continuous product improvements. The Selling Concept The selling concept holds that consumers will not buy enough of the firm’s products unless the firm undertakes a large - scale selling and promotion effort. The concept is typically practiced with unsought goods — those that buyers do not normally think of buying, such as insurance or blood donations. These industries must be good at tracking down prospects and selling them on product benefits. The Marketing Concept The marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors . Under the marketing concept, customer focus and value are the paths to sales and profits. Rather than a “make and sell” philosophy, it is a customer - centered “sense and respond” philosophy. The job is not to find the right customers for your product , but to find the right products for your customers. Customer - driven companies research current customers deeply to learn about their desires, gather new product and Key Terms: Production c oncept, Product c oncept p. 36 Key Term: Selling c oncept p. 36 Key Term: Marketing c oncept

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    PPT 1 - 16 p. 37 PPT 1 - 17 service ideas, and test proposed product improvements. Customer - driven marketing requires understanding customer needs even better than customers themselves do and creating products and services that meet existing and latent needs. Designing a Customer Value - Driven Marketing Strategy Figure 1.3 contrasts the selling concept and the marketing concept. The selling concept takes an inside - out perspective. It starts with the factory, focuses on the company’s existing products, and calls for heavy selling and promotion to obtain profitable sales. It focuses primarily on customer conquest — getting short - term sales with little concern about who buys or why. In contrast, the marketing concept takes an outside - in perspective. The marketing concept starts with a well - defined market, focuses on customer needs, and integrates all the marketing activities that affect customers. In turn, it yields profits by creating relationships with the right customers based on customer value and satisfaction. The Societal Marketing Concept The societal marketing concept questions whether the pure marketing concept overlooks possible conflicts between consumer short - run wants and consumer long - run welfare . The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer’s and society’s well - being. As Figure 1.4 shows, companies should balance three considerations in setting their marketing strategies: company profits, consumer wants, and society’s interests. p. 36 Figure 1.3: Selling and Marketing Concepts Contrasted p. 37 Key Term: Societal m arketing c oncept p. 37 Figure 1.4: Three Considerations Underlying the Societal Marketing Concept p. 37 Photo: Door to Door Organics ➢ Assignments, Resources Use Think - Pair - Share 3 here Use Additional Project 2 here Use Marketing Ethics here ➢ Troubleshooting Tip Societal marketing is also something that can be a

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    little unclear to students. Why should fast food chains, for instance, be responsible for the nation’s obesity (just one very topical discussion point)? Understanding how one should balance the need for profits with what some might consider “soft” issues can be difficult at times. That can be even more difficult among the politically astute students, as they can easily lead the class into a left versus right discussion on individual versus corporate versus governmental responsibility. Try not to let that ha ppen by focusing on how companies can increase revenue s and profits by showing that they care about customers and communities. Newman’s Own is a potential brand to discuss because the company donates most profits t o charities and strives to ensure a sustainable environment. p. 38 PPT 1 - 1 8 PREPARING AN INTEGRATED MARKETING PLAN AND PROGRAM The company’s marketing strategy outlines which customers the company will serve and how it will create value for these customers. Next, the marketer develops an integrated marketing program that will deliver the intended value to target customers. The marketing program consists of the firm’s marketing mix , the set of marketing tools the firm uses to implement its marketing strategy. The marketing mix tools are classified into the four Ps of marketing: product, price, place, and promotion. The firm blends these marketing mix tools into a comprehensive integrated marketing program that communicates and delivers the intended value to chosen customers. Review Learning Objective 3: Identify the key elements of a customer value - driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.

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    p. 38 PPT 1 - 19 PPT 1 - 20 PPT 1 - 21 p. 39 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. ENGAGING CUSTOMERS AND MANAGING CUSTOMER RELATIONSHIPS Customer Relationship Management Customer relationship management is perhaps the most important concept of modern marketing. Customer relationship management is the overall process of building and maintaining profitable customer relation - ships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping, and growing customers. Relationship Building Blocks: Customer Value and Satisfaction The key to building lasting customer relationships is to create superior customer value and satisfaction. Customer - perceived value is the customer’s evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers. Customers often do not judge values and costs “accurately” or “objectively.” Instead, customers act on perceived value. Customer satisfaction depends on the product’s perceived performance relative to a buyer’s expectations. If the product’s performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted. Although the customer - centered firm seeks to deliver high customer satisfaction relative to competitors, it does not attempt to maximize customer satisfaction. Learning Objective 4 p. 38 Key Term: Customer r elationship m anagement p. 38 Key Term: Customer - p erceived v alue p. 39 Key Term: Customer s atisfaction p. 39 Photo: Steinway piano

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    p. 40 A company can always increase customer satisfaction by lowering its price or increasing its services. But this may result in lower profits. The purpose of marketing is to generate customer value profitably. Customer Relationship Levels and Tools Companies can build customer relationships at many levels. At one extreme, a company with many low - margin customers may seek to develop basic relationships with them. At the other extreme, in markets with few customers and high margins, sellers want to create full partnerships with customers. Many companies offer frequency marketing programs that reward customers who buy often or in large quantities . Companies sponsor club marketing programs that offer members special benefits and create member communities. (For example, Harley - Davidson sponsors the Harley Owners Group [H.O.G.].) p. 39 Photo: L.L.Bean p. 39 Photo: JetBlue p. 41 PPT 1 - 22 Customer Engagement and Today’s Digital and Social Media Yesterday’s big companies focused on mass marketing to all customers at arm’s length. Today’s companies are building deeper, more direct, and more lasting relationships with carefully selected customers. The new marketing is customer - engagement marketing , fostering direct and continuous customer involvement in shaping brand conversations, brand experiences, and brand community. It involves using a rich mix of online, mobile, and social media marketing that promotes engagement and conversation. Customer - engagement marketing goes beyond just selling a brand to consumers. Its goal is to make the brand a p. 41 Photo: Customer engagement marketing

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    p. 42 PPT 1 - 23 meaningful part of consumers’ conversations and lives. The burgeoning Internet and social media have given a huge boost to customer - engagement marketing. Today’s consumers are better informed, more connected, and more empowered than ever before. Newly empowered consumers have more information about brands, and they have a wealth of digital platforms for airing and sharing their brand views with others. The marketing world is now embracing customer - managed relationships. Companies can no longer rely on marketing by intrusion . Companies must practice marketing by attraction — creating market offerings and messages that involve consumers rather than interrupt them. Consumer - generated marketing has become a significant marketing force. Here, consumers themselves are playing a bigger role in shaping their own brand experiences and those of others. As consumers become more connected and empowered, and as the boom in digital and social media technologies continues, consumer brand engagement, whether invited or not, will be an important marketing force. Brands must embrace this trend or risk being left behind. p. 41 Key Term: Customer - e ngagement m arketing p. 42 Key Term: C onsu mer - g enerated m arketing p. 43 Photo: Mountain Dew ➢ Resources, Applications Use Real Marketing 1.1 and 1.2 here Use Video Case here Use Small Group Assignment 1 and 2 here Use Additional Project 3 here Use Think - Pair - Share 4 here p. 43 PPT 1 - 24 Partner Relationship Management Today’s marketers know they must work closely with others inside and outside the company to jointly bring more value to customers. Today, firms are linking all departments in the cause of creating customer value. In today’s connected world, every functional area in the organization can interact with p. 43 Key Term: Partner r elationship m anagement

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    customers. Rather than assigning only sales and marketing people to customers, firms are forming cross - functional customer teams. Marketing channels consist of distributors, retailers, and others who connect the company to its buyers. The supply chain describes a longer channel, stretching from raw materials to components to final products that are carried to final buyers. Through supply chain management , many companies today are strengthening their connections with partners all along the supply chain. p. 44 p. 44 PPT 1 - 25 CAPTURING VALUE FROM CUSTOMERS The first four steps in the marketing process involve building customer relationships. The final step involves capturing value in return. By creating superior customer value, the firm creates highly satisfied customers who stay loyal and buy more. Creating Customer Loyalty and Retention The aim of customer relationship management (CRM) is to create both customer satisfaction and customer delight. This means that companies must aim high in building customer relationships. Customer delight creates an emotional relationship with a product or service, not just a rational preference. Companies are realizing that losing a customer means losing more than a single sale. It means losing customer lifetime value. p. 44 Photo: Stew Leonard p. 44 Key Term: Customer l ifetime v alue ➢ Resources, Applications Use Marketing by the Numbers here Use Individual Assignment 1 here

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