Chapter 1 Defining Marketing for the 21st Century

1. The Internet has given today's companies a new set of capabilities. Among those
capabilities is the ability to operate a new information channel. Describe how information
can be used by the marketer in this new channel.
Answer: Companies can operate a powerful new information and sales channel, the
Internet, with augmented geographical reach to inform and promote their businesses and
products worldwide. By establishing one or more Web sites, a company can list its
products and services, its history, its business philosophy, its job opportunities, and other
information of interest to visitors. This provides consumers with a direct access to the
company. Almost all Web sites include a "contact us" section that enables consumers to
put forth their queries and interact with the company directly. This in turn allows
marketers to be aware of people's opinions and preferences.
2. The digital revolution has placed a whole new set of capabilities in the hands of
consumers and businesses. Describe the advantages that you as a consumer have today
that your parents or grandparents didn't have.
Answer: Responses to this question should include: (1) a substantial increase in buying
power, (2) a greater variety of available goods and services, (3) a great amount of
information about practically anything, (4) greater ease in interacting and placing and
receiving orders, and (5) an increased ability to compare products and services.
3. Discuss the concept of social responsibility marketing and how it impacts both companies
and consumers.
Answer: The social responsibility marketing concept holds that the organization's task is
to determine the needs, wants, and interests of target markets and to deliver the desired
satisfaction more effectively and efficiently than competitors in a way that preserves or
enhances the consumer's and society's long-term well-being. Many companies actively
engaged in corporate social responsibility campaigns to both motivate employees and
attract consumers. As goods become more commoditized, and as consumers grow more
socially conscious, some companies are adding social responsibility as a way to
differentiate themselves from competitors, build consumer preference, and achieve
notable sales and profit gains. They believe customers will increasingly look for signs of
good corporate citizenship.

Chapter 2 Developing Marketing Strategies and Plans

1. Good marketing is the art of finding, developing, and profiting from marketing
opportunities. What are the three primary methods for uncovering possible product or
service improvements?
Answer: Methods for uncovering possible product or service improvements include (1)
the problem detection method , which asks consumers for their suggestions; (2) the
ideal method, which asks consumers to imagine an ideal version of the product or
service; and (3) the consumption chain method, which asks consumers to chart their steps
in acquiring, using, and disposing of a product.
2. Critics of Nike often complain that its shoes cost almost nothing to make, yet they are
priced so high. Identify the elements of providing and communicating value that add to
Nike's cost structure and result in the high price of Nike shoes.
Answer: Although the raw materials and manufacturing costs of a sneaker are relatively
cheap, marketing the product to the consumer is quite expensive. Providing value
includes R&D costs and the costs associated with shipping to retail locations and the
retailers overhead. Communicating value includes obtaining celebrity endorsement and
extensive advertising. Nike must also pay for a sales force that communicates the
products value to retailers and helps ensure that products are available in retail locations
convenient to end consumers
3. The firm's success depends not only on how well each department performs its work, but
also on how well the various departmental activities are coordinated to conduct core
business processes. List and briefly describe the five core business processes.
Answer: The core business processes include (1) the market-sensing processall the
activities involved in gathering market intelligence, disseminating it within the
organization, and acting on the information; (2) the new-offering realization processall
the activities involved in researching, developing, and launching new high-quality
offerings quickly and within budget; (3) the customer acquisition processall the
activities involved in defining target markets and prospecting for new customers; (4) the
customer relationship management processall the activities involved in building deeper
understanding, relationships, and offerings to individual customers; and (5) the
fulfillment management processall the activities involved in receiving and approving
orders, shipping the goods on time, and collecting payment .

Chapter 3 Collecting Information and Forecasting Demand

1. Briefly describe the methods of forecasting future demand on the basis of past sales.
2. List and briefly describe the five main ways in which marketers can find relevant online
information on competitors' strengths and weaknesses.
Answer: the four ways: (1) independent customers goods and service review forums; (2)
distributor or sales agent feedback sites; (3) combo-sites offering customer review and
expert opinions; and (4) customer complaint sites
3. What are the various steps a company can take to improve the quality of its marketing
intelligence function?
Answer: the steps are: (1) a company can train and motivate the sales force to spot and
report new developments; (2) a company can motivate distributors, retailers, and other
intermediaries to pass along important intelligence; (3) a company can network
externally; (4) a company can set up a customer advisory panel; (5) a company can take
advantage of government data resources; (6) a company can purchase information from
outside suppliers, and (7) a company can use online customers feedback systems to
collect competitive intelligence.
Chapter 4 Conducting Marketing Research
1. What is the chief advantage of using each of the following contact methods: mail
questionnaire, telephone interview, and personal interview?
Answer: Thechiefadvantageofeachcontactmethodmentionedis(1)
mailquestionnaire=the bestwaytoreachpeoplewhowouldnotgivepersonal
interviewsorwhoseresponsesmightbebiasedordistortedbytheinterviews,(2)
telephoneinterviews=thebestmethodforgatheringinformationquicklyandthe
interviewerisalsoabletoclarifyquestionsifrespondentsdonotunderstandthem,
and(3)personalinterview=themostversatilemethodbecausetheycan
askmorequestionsandrecordadditionalobservationsabouttherespondent.
2. Discuss the different ways which can be adopted by small manufacturing firms to
conduct market research.
Answer:Thesmallfirmscanadoptthefollowingwaystoconductmarketresearch:
1) Theycanengagestudentsorprofessorstodesignandcarryoutprojects.2)Theycan
collectconsiderableinformationatverylittlecostbyexaminingcompetitors'Web
sites,monitoringchatrooms,andaccessingpublisheddata.3)Theownersofsmall
businessfirmscanroutinelyvisitcompetitorstolearnaboutchangestheyhavemade.

4)Bytappingintomarketingpartnerexpertise.
3. Explain what qualitative research is and why it might be useful to marketers. What are its
major drawbacks?
Answer:Qualitativeresearchtechniquesarerelativelyunstructuredmeasurement
approachestopermitarangeofpossibleresponses,andtheyareacreativemeansof
ascertainingconsumerperceptionsthatmayotherwisebedifficulttouncover.Becauseof
thefreedomitaffordsbothresearchersintheirprobesandconsumersintheirresponses,
qualitativeresearchcanoftenbeanspeciallyusefulfirststepinexploringconsumers'
brandandproductperceptions.Itisindirectinnature,soconsumersmaybelessguarded
andrevealmoreaboutthemselvesintheprocess.Qualitativeresearchdoeshaveits
drawbacks.Marketersmusttempertheindepthinsightsthatemergewiththefactthatthe
samplesareoftenverysmallandmaynotnecessarilygeneralizetobroaderpopulations.
Anddifferentresearchersexaminingthesamequalitativeresultsmaydrawverydifferent
conclusions.
Chapter 5 Creating Long-Term Loyalty Relationships
1. A key driver of shareholder value is the aggregate value of the customer base. Identify the
five strategies employed by winning companies to improve the value of their customer
base.
Answer:Winningcompaniesimprovethevalueoftheircustomerbasebyexcellingat
thefollowingfivestrategies:
1.Reducingtherateofcustomerdefection
2.Increasingthelongevityofthecustomerrelationship
3.Enhancingthegrowthpotentialofeachcustomerthroughshareofwallet,cross
selling,andupselling
4.Makinglowprofitcustomersmoreprofitableorterminatingthem
5.Focusingdisproportionateeffortonhighvaluecustomers
2. What are the five problems that can prevent a company from using CRM effectively?
Answer:FivemainproblemscanpreventafirmfromeffectivelyusingCRM.Theyare:
1.Somesituationsarejustnotconducivetodatabasemanagement.
2.Buildingandmaintainingacustomerdatabaserequiresalarge,wellplacedinvestment
incomputerhardware,databasesoftware,analyticalprograms,communicationlinks,and
skilledstaff.
3.Itmaybedifficulttogeteveryoneinthecompanytobecustomerorientedandusethe
availableinformation.
4.Notallcustomerswantarelationshipwiththecompany.
5.TheassumptionsbehindCRMmaynotalwaysholdtrue.

3. Explain customer-perceived value.

Answer:Customerperceivedvalue(CPV)isthedifferencebetweentheprospective
customersevaluationofallthebenefitsandallthecostsofanofferingandtheperceived
alternatives.Totalcustomerbenefitistheperceivedmonetaryvalueofthebundleof
economic,functional,andpsychologicalbenefitscustomersexpectfromagivenmarket
offeringbecauseoftheproduct,service,people,andimage.Totalcustomercostisthe
perceivedbundleofcostscustomersexpecttoincurinevaluating,obtaining,using,and
disposingofthegivenmarketoffering,includingmonetary,time,energy,andpsychological
costs.Customerperceivedvalueisthusbasedonthedifferencebetweenbenefitsthe
customergetsandcostsheorsheassumesfordifferentchoices.Themarketercanincrease
thevalueofthecustomerofferingbyraisingeconomic,functional,oremotionalbenefits
and/orreducingoneormorecosts.
Chapter 6 Analyzing Consumer Markets
1. What four strategies can marketers of low-involvement products employ in an effort to
convert their products into ones of higher involvement?
Answer: The four strategies are: (1) linking the product to some involving issue; (2)
linking the product to some involving personal situation; (3) designing advertising to
trigger strong emotions related to personal values or ego defense; and (4) adding
important features to the product.
2. People can emerge with different perceptions of the same object because of three
perceptual processes. List and briefly characterize these processes.
Answer: The three processes are selective attention, selective distortion, and selective
retention. Selective attention occurs because a person cannot possibly attend to all the
stimuli that he or she is exposed to during an average day. Some will be screened out.
Selective distortion is the tendency to interpret information in a way that will fit our
perceptions. Selective retention occurs because people will fail to register much
information to which they are exposed in memory, but will tend to retain information that
supports their attitudes and beliefs
3. Frederick Herzberg developed a two-factor theory that distinguishes dissatisfiers and
satisfiers. How does Herzberg's theory affect sellers' marketing strategy?
Answer: Herzberg's theory has two implications. First, sellers should do their best to
avoid dissatisfiers (for example, a poor training manual or a poor service policy).
Although these things will not sell a product, they might easily unsell it. Second, the
seller should identify the major satisfiers or motivators of purchase in the market and then
supply them. These satisfiers will make the major difference as to which brand the
customer buys.