Download Video Correlation Grid Marketing Video Gallery 2006 Marketing, 4th

Video Correlation Grid
Marketing Video Gallery 2006
Marketing, 4th Edition
Solomon/Marshall/Stuart
Title
Reebok
American Express
NFL
Burke
Wild Planet
Eaton
Swiss Army
Motorola
Marriott
Song Airlines
Sony Metreon
AFLAC
eGO Bikes
Hasbro
Duration
8:50 mins
9:00 mins
9:00 mins
8:30 mins
9:00 mins
9:30 mins
10 mins
14:30 mins
9 mins
8:50 mins
9:30 mins
8:05 mins
7 mins
9:30 mins
Chapter
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2
3
4
5
6
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7
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X
8
X
X
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9
X
10
11
X
12
13
14
15
X
16
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X
X
X
X
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X
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X
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X
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Dunkin' Donuts
Honest Tea
Nextel
10:30 mins
7 mins
9:45 mins
X
X
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VIDEO GUIDE
Marketing Video Gallery 2006
Marketing 4th edition
Solomon/Marshall/Stuart
Title: Reebok
Speaker: Pat Lore
Applicable Chapters: 7, 9, and 15
Summary:
Reebok has reinvented itself from one fitness craze to the next, from aerobics, to Step, to
hip-hop. Today, the company is focused on creating a pop culture around its product. It
even went as far as creating a new brand (RBK) targeted at the teen market. The strategy
is to start the customer relationship earlier and develop that loyalty over the years. To rebrand Reebok, the company signed big-name rappers to represent the brand. Instead of
taking the athletic approach, Reebok is taking the lifestyle approach because rappers are
as influential as big-name athletes.
The lifestyle approach is a significant differentiator for Reebok compared to other sports
shoe companies. The results of the new brand have been staggering with product launch
events as well attended as record releases. Reebok is creating product lines based on the
rappers’ preferences and styles, which are directly targeted at the teen market. Due to the
rapid change in trends, Reebok has had to learn how to launch products faster and speed
up the product development cycle. Additionally, Reebok has expanded its distribution
channels to include a larger variety of retailers.
Discussion Questions:
#1 – What is brand loyalty and how does Reebok hope to gain it from teen customers?
Brand loyalty is a pattern of repeat product purchases, accompanied by an
underlying positive attitude toward the brand that is based on the belief that the
brand makes products superior to its competition. Reebok is hoping to start this
process early with its customers so they grow with the brand as they get older.
#2 – What did Reebok do to rebrand itself? Why?
The original brand had lost its marketplace relevance. While it kept up with the
trends from the 80s, it did not transition well in to the 90s. The company took an
innovate approach to leverage the existing brand, but give it a new look. Tactics
included changing the name to RBK, signing celebrity rappers, redesigning the
product, and approaching the product from a lifestyle perspective instead of an
athletic perspective.
1
#3 – What is Reebok’s target market strategy? Undifferentiated, differentiated,
concentrated, or customized?
Based on the information in the video, Reebok’s target market strategy is
concentrated. The company is focusing all of its efforts on offering one or more
products to a single segment. More than likely, Reebok also targets other
segments in the market, but these activities were not addressed in the video.
Teaching Suggestions:
Have students list ten brands, preferably in sports and sporting goods, then discuss why
each brand is significant. What are the elements that make the brand strong? What are the
marketing activities that are associated with reinforcing the brand? Have students list the
names of five bad or poor brands. Why is the brand conceived negatively?
2
Title: American Express
Speaker: Pat Lore
Applicable Chapters: 2, 7, 10, and 11
Summary:
Consumers are choosing how and when they want information from organizations, like
American Express. Marketers need to be where consumers want them to be when they
want to hear about their product or services. With the thousands of messages people are
bombarded with daily, getting through to customers is becoming a huge challenge for
American Express.
American Express is an established brand that defines itself by the needs and wants of its
customers. It has responded to the market over the years by leveraging its brand name
into different customer segments through different card and program offerings. Even with
this niche segmentation strategy, it still had an image challenge to overcome.
Consumers thought of American Express only for special occasions, but American
Express wanted customers to use the card all the time. The company launched a big
promotional campaign to change public perceptions and consumer behavior, as well as
add a new product for a new customer group. The promotional campaign was highly
successful at repositioning the brand. To maintain its position, the company is always
looking at how to provide more value to its customers, such as its differentiated rewards
program. The key to American Express’ success is to stay close to the customer,
understanding his/her needs and wants, and creating programs/products that create value.
Discussion Questions:
#1 – How does the company offer value through this customer commitment and
segmentation? Do you think the customer segmentation is apparent to the consumers? If
so, how? If not, how might American Express better communicate this strength to
potential clients?
According to the video, American Express is solely devoted to meeting customer
needs. It does so by customizing offerings and services provided to specific
customer segments. American Express offers specific types of cards, services, and
reward programs to specific customer groups. Students’ perceptions of American
Express may be different and answers will vary.
#2 – How does marketing management differ between products, such as cell phones, and
services, such as those provided by American Express?
Products are tangible while services are intangible. Marketers of products need to
manage the product and product mix, labeling, packaging, product support
services, and other uses of the brand name outside of the product itself. Marketers
of services need to manage the entire service-profit chain to position themselves
strongly in their market.
3
Teaching Suggestions:
Understanding what customer value really means is critical for students to grasp, as it is
the building block for successful companies. Ask students to think of a company,
product, or service that they really like, purchase often (if applicable), and would tell
their friends about. What are benefits they receive from the product? How does the
product meet their needs? What does the company do to continue to meet those needs?
What suggestions would the student have to improve the company’s customer value?
The video referred to the launch of American Express’ new card – Blue. Ask students to
develop a mini integrated marketing communications plan for Blue using Figure 12.4 as a
guide. Students should use a complete promotional mix in their plan.
4
Title: NFL
Speaker: Pat Lore
Applicable Chapter: 3
Summary:
The NFL is more than just an association of football players and teams. It is an
organization that supports and emphasizes community involvement through community
service, outreach, volunteerism, and fundraisers. Each team takes on a different nonprofit cause, and nationally, the NFL has a partnership with the United Way. The NFL
understands that the success of its organization comes from the communities that support
it, which is why it is so important for the NFL to give back. Its community giving is
inline with its corporate values. If a corporation is going to be successful, it has to give
back and be a good corporate citizen. The power behind the NFL’s activism is that fans
have an emotional tie with their teams. The NFL uses this strength to not only motivate
its players to support charitable work, but to get other people to do the same. The strong
initiative to be a good corporate citizen comes from the top of the NFL. By setting a good
example for its players, the players set a good example for the fans.
Discussion Questions:
#1 – Why is it important for businesses to be active and support their communities? What
are some examples of companies that you know that are giving back?
Student answers will vary.
#2 – What do some of the NFL teams do to be good corporate citizens?
Teams support a variety of different charities including United Way, elder homes,
and public service such as building parks, education, and healthcare. It also
created a campaign to get fans involved, “Join the Team,” and directly donates
through auctions of merchandise.
#3 – Do you think that the community service emphasized by NFL management
positively impacts the company overall? Does it change the way you think about the
NFL?
Student answers will vary, but it is important to guide the discussion around
whether philanthropy helps the core business. Also, help students discuss their
own consumer perceptions of the NFL. Some will be fans and some will think the
players are greedy.
Teaching Suggestions:
Ask students to look up www.jointheteam.com and learn about how and what the NFL is
doing through this effort. Based on this information, ask students to pick a company and
develop a community service program that is inline and supports the company’s values
and ethics.
5
Title: Burke
Speaker: Mary Mendoza
Applicable Chapters: 2 and 4
Summary:
Burke is a century-old market research firm that uses a reliable research process and
cutting-edge technology to helps its clients. Burke does not just provide data collection,
but takes clients full circle in the market research process. The first, and most important
step, is to define the research problem. Burke works with clients to help them identify
what information is needed to make a decision they are facing. With a series of creative
methods, Burke makes sure that what the client thinks is the problem, really is the
problem. Once the research question is defined, Burke develops a blueprint for the
research process.
The blueprint guides everyone through the research process and it includes 1) a problem
audit, 2) identification of the objectives, and 3) field research. Roughly 70% of the data
collection is done through telephone studies. Other methods include mall intercepts, Web
surveys, and direct mail. To provide clients with faster information and results, Burke
uses a Digital Dashboard, which allows the client to see the results as the data is
collected, and analyze it after the collection is complete. Finally, Burke produces a
summary report, which is not just a summary of the data, but provides a decision to the
problem that was defined. Burke emphasizes the following four points to successful
market research: 1) a clear line of questioning, 2) attention to detail, 3) clear
communication with the client, and 4) efficient use of technology.
Discussion Questions:
#1 – What is the difference between primary and secondary market research? Which does
Burke do?
Secondary research is information that already exists somewhere, which has been
collected for another purpose. Primary research is collected for a specific purpose
at hand. Burke does primary research for its clients. It researches and collects data
to answer a specific question.
#2 – What are the three different types of objectives a market research problem might
have? What is an example of each?
1) Gathering preliminary information that will help define a problem or suggest a
hypothesis – exploratory research. Example: Why are sales for Sims Online
lagging?
2) Describe things like market potential or attitudes – descriptive research.
Example: What is the potential market size for the new Tablet PC?
3) To test the hypothesis about a cause-and-effect relationship – causal research.
Example: If Sprint reduces its long-distance rates, will it see an increase in
customer to offset the reduction?
6
Teaching Suggestions:
Ask students to imagine they are the marketing manager for VW, which is looking into
developing and producing an electric car for the 18-24-year-old U.S. market. In small
teams, students need to define the research problem, establish the research objectives, and
develop a research plan (how to collect the data) in order to help VW decide if this is a
good product idea.
In this digital era of information overload, data collection is becoming increasingly
difficult. Ask students to discuss the pros and cons of each of the following primary data
collection methods: mail, telephone, personal interview, focus groups, and online. What
are some additional primary research methods that students think might be more
effective?
7
Title: Wild Planet
Speaker: Pat Lore
Applicable Chapter: 5
Summary:
Wild Planet is more than a toy company; the company thinks of itself as selling a positive
play experience. Its products are more than just toys; they are created to make kids think,
take them outdoors, and explore the world around them. To keep innovating and creating
more toys that are attractive to kids, the company continually does market research. In
fact, it interviews and works with more than 5,000 children per year, executing
ethnographic and exploratory research.
So what makes a toy successful? According to Wild Planet, being the schoolyard buzz is
the best product developers and marketers can ask for. With thousands of toys competing
for attention, a winning product needs to be so successful that kids will tell their friends
about it. These successes are found only because Wild Planet focuses on obtaining
feedback from their consumers every step of the way.
Discussion Questions:
#1 – For Wild Planet, market research is a key activity for all product development. What
are the different ways the company collects market research?
Wild Planet has a kids advisory panel, a database of families who will test toys in
their homes or at play groups, the kids inventory challenge, and the kids shopper,
where children are given $30 to spend and their decision making is observed.
#2 – Analyze the likely buying behavior of these buyers. Who are they? Why are they
interested in Wild Planet? What prompts them to buy?
Wild Planet knows that children are the influencers in the buying process, but
ultimately the parents make the decisions. Therefore, the products need to be cool
enough for kids, but also appeal to parents. According to the video, kids buy Wild
Planet toys because they are so different than other toys on the market. They
appeal to a different side of kids and push their imagination. In addition to being
cool, toys have to be appealing to the child’s peer group because they have a big
influence on buyer behavior.
Teaching Suggestions:
Finding good online resources for secondary research can be difficult, and primary
research can be expensive. Ask students to find three broad online kids’ consumer
resources. What types of questions can these resources help answer? What types of
questions can they not answer? Instructors can combine all students’ resources to provide
a set of data sources for future research students will have.
Ask students to compare www.wildplanet.com to www.hasbro.com. What are the
similarities between these to companies’ marketing strategies? What are the differences?
8
Ask students to look closely at each of the 4Ps for both companies. Which do they think
is
more
appealing
to
kids?
Why?
9
Title: Eaton
Speaker: Pat Lore
Applicable Chapters: 6 and 15
Summary:
Eaton Corporation is a large business-to-business industrial manufacturer. With over $8
billion in sales, the company manufactures everything from car valves to circuit breakers.
Words such as trusted, reliable, quality, and high value are used to describe Eaton, a
brand that enhances other products. It has four main product groups with 10,000+
products total. Eaton’s challenge is to communicate consistently, yet segmented, across
its departments and product categories.
B2B is a very sophisticated marketing environment with educated customers often
playing a big role in product development. Additionally, there is often more than one
decision maker in the customer’s organization. Eaton’s marketing department has to
understand who all the influencers are on a purchasing decision and reach each one.
Trust, confidence, and problem solving are more important than price to most of Eaton’s
customers. They want to know Eaton can help them if something critical goes wrong.
Overall, Eaton is successful at beating out its competition because it focuses on
understanding its customers’ business needs, meeting that need, and providing additional
value in its solutions through product innovation.
Discussion Questions:
#1 – Eaton’s marketing department understands there are multiple decision makers in
their customers’ companies. Based on the chapter, what are the six different roles in a
business-buying center? Does Eaton deal with all six roles in all buying situations?
The roles are 1) the initiator, 2) the user, 3) the gatekeeper, 4) the influencer, 5)
the decider, and 6) the purchaser. Depending on the type of buying decision,
Eaton may deal with six different individuals. However, more importantly, its
marketing material needs to communicate messages that address each role in the
buying process.
#2 – How might physical distribution decisions enhance relationships with channel
partners? How might such decisions erode those relationships?
Channel partners are not only part of a company’s supply chain; they are also
customers because companies need to sell not only through them, but also to and
with them. Channel partners are an integral part in marketing logistics. Supply
chain management must positively affect customer and partners alike. If a supply
chain is well managed, channel partner relationships will be enhanced. If not,
those relationships may likely erode.
Teaching Suggestions:
Understanding the magnitude and depth of distribution channels can be a difficult
concept for students to embrace because supply chains are behind the scenes. A practical
10
application can be helpful for students to visualize channel partners. Ask students to pick
a simple retail product, such as a clothing item. Using Figure 15.3, ask students to list
each member of the supply chain from production to the retail store. How does the supply
chain change sourcing material from more than one location? How many potential points
of delays or failures are there? Why are good relationships with supply chain partners so
important?
The video explains how Eaton must have a thread of consistent brand messaging with
targeted product information. Go to Eaton’s Web site at www.eaton.com. Ask students to
find Eaton’s brand message and one product message. How does this compare to
consumer marketing? Do students think it is easier or harder for B2B marketers?
11
Title: Swiss Army
Speaker: Pat Lore
Applicable Chapters: 7, 8, 9, and 15
Summary:
Swiss Army is an example of a company that has grown by basing its product expansion
on established brand equity. The brand has its roots in its history of knife development
from the 1800s. The knife became wildly popular in the United States when soldiers
brought the knives back at the end of World War II. With 92% brand awareness in the
United States alone, it has a strong worldwide reputation built on quality and reliability.
Leveraging the success of the knife, the company expanded into apparel, travel gear, and
other product categories. The launch of the Swiss watch was an overnight success, and
now 1 out of 5 watches under $500 in the United States is Swiss. The company enjoyed
similar success with its travel gear and expects to do the same with apparel. In addition to
building on an established brand, Swiss executives believe in building a long and lasting
relationship with its customers. Before any product development occurs, the company
talks to its customers to understand what values and attributes they associate with Swiss
Army products. Armed with this information, Swiss Army develops products that reflect
the values its customers hold about the brand. This has allowed a century-old company to
grow with the times without growing old.
Discussion Questions:
#1 – The president of Swiss Army mentions the success of the new product expansions is
based on the company’s brand equity. What is brand equity?
Brand equity is defined as the positive differential effect that knowing the brand
name has on customer response to the product or service. The Swiss Army brand
is a very strong asset because customers, for the most part, are willing to pay
more for the brand. It also provides a company with a strong competitive
advantage. Swiss Army leveraged this competitive advantage to move into other
product lines.
#2 – What is the concern that channel retail outlets might have with Swiss Army opening
its own stores?
Swiss Army sells its products wholesale to select retail outlets. These merchant
wholesalers are the primary method of distribution for the company where the
relationships are critical to the company’s success. The concern loyal retailers
might have is lost sales to the Swiss Army-owned retail store. The retailer no
longer has an exclusive relationship with Swiss Army, and this may erode the
channel. Further, Swiss Army might experience cannibalization between
channels.
12
#3 – What are the product attributes of a Swiss Army knife?
Core Benefit: What is the buyer really buying? A buyer of a Swiss Army knife is
buying preparedness. The owner is prepared for any situation where he/she might
need any one of the tools on the knife.
Actual Product: What are the actual features, design, brand name, and packaging
of the product? A Swiss Army knife is a functional tool with multiple uses,
designed for ease of use, reliability, and noticeability.
Augmented Product: How is the product supported? Swiss Army supports the
product with a strong warranty, customer service, and repair.
Teaching Suggestions:
The video refers to the fact that Swiss Army product expansion was based on the success
of the knife. The attributes and values that customers relate with Swiss Army are
incorporated into all product expansions. Ask students to work in groups to identify the
core, actual, and augmented product for one of the new Swiss product lines based on
Figure 8.2.
Based on the values of quality, reliability, adventure, and having an active lifestyle, how
does Swiss Army translate these values into its product expansions? Ask the students to
research the Swiss Army product lines on the company’s Web site to answer this
question.
13
Title: Motorola
Applicable Chapters: 3, 4, 8, and 12
Summary:
Motorola's new Moto phone is used to illustrate how advertising helps to build a global
brand. The launch is based on a set of core ideas that represent the brand. The regional
areas were allowed to take those core ideas and build on them to fit their geographic and
local perspective. The basis of the branding started with the brand name. The name
“Moto” came from a trend in the Taiwan market, where the Motorola name was
shortened to Moto. While this name seemed to have staying power, it was important for
the advertising agency to ensure the name fit with the overall business and marketing
strategy.
After the name was selected, the integrated marketing communications strategy was
developed. The purpose of IMC is to build a brand through every customer touch point.
While every activity communicates the brand, everything also has to be integrated and
synergistic. The IMC process from beginning to end is very detailed and complex. This
video provides a good look at a real-world example of IMC.
Discussion Questions:
#1 - If you were to design an integrated marketing communications plan for the Moto in
the United States, using billboards, the Internet, radio, and print, what features and
benefits of the cell phone would you play up in each of these media? Why? What needs
to be consistent across the media? What could differ?
Theory suggests that the detailed, technical features must be made available via
the media that allow consumers to read at their own pace in order to think about
products thoughtfully, and to review information as necessary. These elements of
consumer learning suggest that Web pages and print ads would be best suited to
describe technical features. In contrast, sex-appeal types of general benefits
(“Isn’t this a cool phone?”) are best displayed vividly—for example, via
billboards, a page on the Web, perhaps radio, and probably TV. What needs to be
consistent is the brand name and the brand essence—the basics of what the
company
wants
people
to
know
about
its
brand.
#2 - How would you modify your plans to promote the phone in China? In Finland
(home of Nokia)? In Brazil (big youth market)?
Motorola is familiar to people in these countries. The Chinese might find U.S.built phones attractive. They might appreciate value. Finnish customers might
not be won until the Moto is truly a cooler-looking phone than the Nokias that are
available. The young Brazil crowd is a great example of what Motorola sought in
general,
to
appeal
to
a
younger
segment.
#3 - Has Motorola “succeeded”? Do you consider it or its phones to be “cool”?
Motorola is regaining market, so yes, it has been successful. Whether or not
Moto is cool is a matter of taste.
14
Teaching Suggestions:
Most of your students probably have a cell phone. Ask them why they chose a particular
brand/service. Ask students to go online in search of a new phone service. Would they
make the same choices—for example, would they choose the same brand? The same type
of
call
package?
Why
or
why
not?
15
Title: Marriott
Speaker: Trish McShane
Applicable Chapters: 4, 7, 9, and 10
Summary:
Quality and consistent service is Marriott’s main focus and keeps the company in the top
position in its industry. The company is responsible for pioneering segmentation in the
hospitality industry. With a wide array of hotels, Marriott meets the needs of various
customer segments. Before developing any additional hotel chains and their respective
brands, the company always tests properties first. Marriott is active in soliciting feedback
from its customer base and focuses on really understanding its customer targets.
A few of Marriott’s brand extensions are the Fairfield Courtyard for the business traveler,
Residence Inn and Townplace Suitor for extended stay, and the Renaissance line
overseas. Marriott’s newest line is Springhill Suites, which was developed based on
feedback from extended-stay clients. In business for 75 years and with over 2,500
properties worldwide, Marriott carefully manages the different communication messages
about each brand. By focusing on differentiating each property, Marriott feels it does not
create confusion in the customer’s mind. Each brand has its own loyal following, with
some crossover. What is most important to Marriott is to meet the customer’s travel need,
which may vary over time.
Discussion Questions:
#1 – Is Marriott a product or a service?
Marriott is a service for the following reasons:
Intangibility: Services cannot be seen, tasted, heard, or smelled before purchase.
A Marriott customer does not see the service before entering the front doors.
Inseparability: Services cannot be separated from their providers. It is the
employees of Marriott that deliver the service.
Variability: The quality of services depends on who provides them and when,
where, and how much. The video mentions how the service is different at each
hotel and how each service has its own uniqueness.
Perishability: Services cannot be stored for later use. Once the hotel stay is over,
the interaction with the customer is over.
#2 – The video emphasizes how Marriott makes a point of differentiating each hotel
chain. What is differentiation and is there enough difference between the chains to make
it worthwhile?
Students’ answers may vary.
Differentiation is points of differences in the company’s marketing offer that give
the consumer more value than the competitors.
16
The criteria for establishing differences are as follows:
Important: The difference delivers a highly valuable benefit to target
buyers. A business traveler is looking for different value than a leisure
traveler.
Distinctive and Superior: Competitors do not offer the difference. The
difference is superior to other ways that customers might obtain the same
benefit. The video does not cover Marriott’s competitors, but ask students
to discuss this point.
Communicable: The difference is communicable and visible to buyers.
Marriott produces different promotional material and locates the properties
in specific areas based on the chains’ customer target.
Affordable: Buyers can afford to pay for the difference. Marriott focuses
on price to differentiate between the luxury and the low-end brands.
Profitable: The company can introduce the differences profitably. Marriott
is seeing crossover between brands, which is increasing customer loyalty.
Teaching Suggestions:
Based on the information in the video, ask students to create a customer profile for each
of the brands mentioned. Students may use Table 7.1 as a guide on types of profiles.
Students may combine some of the items listed in this table or create their own. Once the
students have created a specific profile, ask them to write a one-sentence position
statement, which answers the question: How does Marriott want the brand positioned in
the mind of the customer?
The video mentions that Marriott actively solicits feedback and input from its customers
to develop additional brand extensions. Ask students to develop a list of primary and
secondary research methods Marriott uses. Students need to be specific to define how the
information is collected and recommend additional methods the company can employ.
17
Title: Song Airlines
Speaker: Pat Lore
Applicable Chapters: 7, 10, and 11
Summary:
Song Airlines is a Delta Air subsidiary launched without the bureaucracy and debt load of
its parent company. The new company capitalized on Delta’s knowledge of highly
frequented routes by reducing its breakeven point – flying bigger planes to highly popular
destinations. Song was able to reduce operating expenses by reducing the turnaround
time of each plane, which in turn keeps fixed costs low and increases the utilization of
expensive assets. It also changed the model of its workforce, allowing for more hours per
day, but more time off over the month.
Most importantly, Song targeted female customers in its service development because its
research showed that more than 75% of women make leisure travel decisions. These
consumers are looking for low fares, but are not willing to give up amenities. Song offers
healthy meals, in-flight entertainment, more legroom, and low fares. Volume, according
to Song executives, outweighs the costs associated with high-end amenities. Even though
Song competes in a tough market, it is growing and changing the face of low-cost air
travel.
Discussion Questions:
#1 – How does Song’s service compare to Southwest? How does it differ?
Song and Southwest both offer low fares, quick turnaround flights, and no first
class. While Southwest offers a no-frills service, Song is offering the opposite.
Not all in-flight options are free, but the airline creates an atmosphere that is
upscale. Healthy meals and in-flight movies are not part of the low fare, but
satellite TV is.
#2 –What are the risks of just targeting female consumers?
Student answers will vary, but the instructor can lead a discussion on target
marketing vs. mass marketing. Companies can be concerned that by focusing on
one market segment, it may be missing out on other opportunities. In this case
study, the target marketing has worked exceptionally well because the female
market is the primary influencer in purchasing services offered by Song.
#3 – What are the service elements that make up the customer experience?
Song has created a corporate culture that is hip and attractive, making travel fun
instead of a dreaded necessity. The company chose current bright colors,
attractive clothing for employees, leather seats, high-end electronics for in-flight
entertainment, and gourmet health foods. Song offers all this and a low fare. The
company examined all negative customer experiences associated with flying and
changed them into a positive in order to attract and create loyal customers.
18
Teaching Suggestions:
Ask students to create their own airline to compete with Song. What routes, amenities,
pre-flight services, and in-flight services would be offered? Who would the target
customer be? How would they attract that customer group?
Song operates in a highly competitive industry. There are numerous large companies that
sell products in the airline industry. Ask students to develop a SWOT for Song. First,
students must list the company’s strengths and weaknesses, then opportunities and
threats. Emphasize Southwest as well as other competitors and their potential effects on
the business.
19
Title: Sony Metreon
Speaker: Pat Lore
Applicable Chapters: 5, 7, 11, and 16
Summary:
The Metreon is an innovative approach to building customer relationships. Sony built the
Metreon to create an experience for its customers by enabling interaction with its
products in unique ways. Sony believes there is a trend to interact with and touch the
customer on a deeper level. All of its products — newest movie releases, a Playstation
bar, imaginative playhouse, and much more — are all under one roof. By doing this, the
company has created an arcade and technology place all together. The company wants to
make a lasting impression on its customers and through this impression build
relationships.
Additionally, the Metreon gives Sony an opportunity to see how people use their products
and how the products work together. For example, there are mini living rooms where
people can watch TV on the newest screens. Sony can observe the habits and behavior of
people watching TV. Partnerships with Bundi, the Discovery Channel, and Jelly Belly
have added to the interactivity of the Metreon. There are weekly events, virtual games,
and a real life “Where the Wild Things Are.” Learning and playing is a new model of
experience. Sony believes people are looking for connections and an extension of who
they are in their product purchases. The Metreon was created to meet this need.
Discussion Questions:
#1 – By creating memories and experiences, Sony is building relationships with its
customers. How is the company taking advantage of viral marketing?
Viral market is word-of-mouth marketing that is started by an event or an
experience that is so infectious customers want to pass it along to their friends.
Viral marketing is powerful because potential customers are more receptive to the
messenger and it is inexpensive. By creating lasting impressions on its customers,
Sony is using viral marketing to spread the word about its products and services.
#2 – Sony sells numerous products and product lines, most of which are expensive and
are big purchases. Of the four types of buying-decision behaviors, which is the type Sony
customers most likely fall into?
Most customers undertake complex buying behavior when considering buying a
Sony product. They are highly involved with the purchase and perceive
significant differences among brands. Sony realizes this is the behavior of its
customer base and is attempting to make the process easier with the Metreon.
Now customers can touch and feel the products, see the different products in a
line, and use it before purchase. By understanding its customers’ behaviors, the
company is giving customers the information they need to make a complex
decision.
20
#3 – Sony collected market research real-time as customers interact with its products at
the Metreon. What type of market research method is used? See Figure 4.5 for a list of
research methods.
Sony’s marketers are employing exploratory research, a technique used to
generate insights for future, more rigorous studies. In this case, the company is
coming up with new ideas for additional offerings and solving problems with
current products.
Teaching Suggestions:
Sony developed a handful of very strong strategic alliances to be part of the Metreon.
Some of the companies mentioned in the video include Discover Channel, Jelly Belly,
and Bundi. Strategic alliances can be the key to a successful product or service. They can
also be the undoing of a potentially successful venture. Ask the students to form small
groups to identify two more partners that Sony should provide space to in the Metreon.
For each company, ask students to identify why the company was selected and how it fits
in with the Metreon consumer decision-making experience. Ask students to reference
Figure 5.4.
The Metreon was created to provide customers an experience and interaction with
different products. Additionally, Sony learns how potential customers use its products –
an ideal study in consumer behavior and primary market research. Ask students to
identify a few other companies or products that can be improved by creating customer
experience and interaction.
21
Title: AFLAC
Speaker: Tom Hendry
Applicable Chapters: 10, 12, 13, and 14
Summary:
That wacky quacky duck brought AFLAC to a high spot among most recognizable ads
and brand names. The insurance company is growing quickly as a result of this greater
name recognition. It achieved 89% brand recognition in a relatively short time, resulting
in $10 billion in sales and about a 25% compound growth rate.
AFLAC had spent millions of dollars on advertising with little or no effect and almost no
market awareness. Clearly, the current strategy was not working. This led the
management team to decide to try something bold to increase market awareness. The
advertising agency came up with many different ideas, but one crazy one – a duck.
AFLAC tested the ad concepts and, as we know today, the duck yielded the highest
results. The goal of the advertising is to create awareness, while the actual sale comes
from the agents selling the complicated insurance products.
Discussion Questions:
#1 - What other industries, products, or brands have used humor to help position
themselves in the marketplace? Do you think the strategies have worked? Where
wouldn’t humor work?
Humor wouldn’t work all that well with serious purchases (e.g., health), but one
might think it wouldn’t have worked with something as serious (boring?) as
insurance. Might that be because the humor is associated only with the name and
not the insurance company’s attributes? B2B might be a place where humor
might not seem appropriate (chemicals, machines), yet it might cut through the ad
clutter.
#2 - Now that AFLAC is a widely known brand name, do you think the company should
drop the duck? What else might it feature?
Once the name recognition is strong, most consumer behavior models suggest the
company would have created a hunger for more information, as in the following
scenario: "Yeah, okay, the duck. I know the name is AFLAC because it sounds
like that duck, but what does AFLAC do? Oh, insurance. Well, what kind of
insurance? My company doesn’t make AFLAC available. How do I know it’s
better? How would I convince my company that we need that option? Could I
buy AFLAC for my other insurance needs? How would AFLAC policies and
prices compare to the insurance policies I already have? Where do I go for more
information?” It is obvious that AFLAC probably needs to move beyond the
duck. (The company is not going to get much above 89 percent brand awareness;
Coca-Cola
is
“only”
at
95
percent.)
22
#3 - What do you think the sales force’s reaction was when it first saw the duck? Is it
necessary for a sales force to buy into a campaign, or can it be shown later that a
campaign is working?
The sales force probably was worried, and usually it’s important to have it on
board. Perhaps the salespeople knew, though, that the name wasn’t being
recognized and they were desperate for anything that would work.
Teaching Suggestions:
Rather than investigating marketing content related to insurance, which would probably
be boring for students, focus on the humor in advertising element of this case. Have
students pick one product category that seems ideally suited to humor and one product
category for which humor is unlikely to work, perhaps because it would be insensitive or
offensive in some way. Have students mock up two ads to support their conclusions.
Have students do an analysis of other ad gimmicks, such as using old songs in a TV ad,
using black-and-white photos in a print ad, and so on, with an eye toward “When should
it work, and when shouldn’t it work?” as well as “Why and why not?”
23
Title: eGo Bikes
Speaker: Pat Lore
Applicable Chapters: 8 and 13
Summary:
The eGO Bikes Company manufactures and sells electric bicycles. There are challenges
in classifying this new-to-the-world product: It’s not quite a bike, not quite a motorcycle.
It’s definitely environmentally friendly, though. The product serves a specific market
need of reducing traffic congestion by reducing the number of big cars on the road
making short trips and errands.
The video explains how the eGo Bike was developed from prototype to production. After
the first prototypes were produced, the owners tested the market to see if people were
interested in the product. They executed rounds of market research and found out that the
market greatly favored the product. The result is a booming company, driving sales
through word-of-mouth, and huge public relations. The distribution channel has been
more difficult to determine. The majority of sales comes through direct sales online and
in their stores, rather than through retailers. While the company is not yet profitable, it
continues to push innovative marketing strategies in order to increase market awareness.
Discussion Questions:
#1 - How does one introduce new products to consumers in the marketplace? How do
you, as a marketer, approach the problem if you have a new music CD to sell? A new
flavor of Coca-Cola? A new car?
The product life-cycle stages might be reviewed here, along with the classes of
segments, e.g., early adopters, etc., to prompt a consideration of who is likely to be
eGO’s first customers, how to keep them satisfied, and so on. The marketing of CDs
or soft drinks, even cars, as complicated as they are, are fairly straightforward.
Customers know the categories, so they don’t need much by way of marketing
education about the product. The products also might be easily sold through existing
channels. The push through the channel is then accelerated via the marketing mix
variables.
#2 - How do these strategies and tactics vary if you’re introducing a so-called new-to-theworld product (like eGO Bikes, or DVD players or Palm Pilots when they were new,
etc.)?
Product introductions typically require greater advertising expenditures to “teach”
consumers about the new product—for example, how a DVD player is somewhat like
a VHS video player but better, like a CD player but pictures as well, and so forth.
The real miracle of eGO Bikes is that the viral marketing (word of mouth) is
accomplishing
even
this
part
of
advertising
for
them.
24
#3 - What is eGO Bikes’ likely target segment(s)? What are your reasons for these
suppositions?
People who care about the environment (given the bike’s primary benefit), moped
owners (given the similarity between the products), perhaps young people, such
as college students (given the relatively low price) and perhaps the elderly (the
bike
won’t
go
too
fast
but
helps
get
around
town).
#4 - Could eGO sell to motorcycle owners? Bicycle owners? Car owners? Walkers (e.g.,
New York City dwellers)? City dwellers (e.g., Los Angeles)? How would eGO appeal
vary with the audience?
Certainly eGO could go after most of these markets (except probably Los Angeles
because of its specific transportation needs), but the comparative strengths it
would need to play up in advertising (or prompting via word of mouth) would
clearly vary.
Teaching Suggestions:
Have the students go to the Web site to learn more. Who exactly is the company's
immediate competition? In a more general way, who else is its competition?
If an eGO Bikes distributor is located in your area, have the company bring a show bike
to class. They’ll be willing—students are almost certainly a good bet as a target.
25
Title: Hasbro
Speaker: Pat Lore
Applicable Chapters: 9, 14, 15, and 16
Summary:
Hasbro is a worldwide leader in entertainment products and services, such as GI Joe,
Candy Land, the Easy Bake Oven, and Monopoly. Hasbro is a $3 billion company with
brands in 100 countries and launching 1,000 new products each year. The company
attributes its success to staying ahead and anticipating the changing needs of the
marketplace by making games consistently relevant to consumers. Even with big brands
and successful products, Hasbro knows that if its marketing and distribution strategies are
not executed correctly, the products will fail. World-class logistics and an efficient supply
chain are critical for Hasbro to remain competitive and work with powerful retail stores.
Primarily, the company distributes through big-box retailers such as Wal-Mart, Target,
and Toys “R” Us. Due to this concentrated distribution strategy, it is easier for Hasbro to
make changes and launch products, resulting in a tighter supply chain. It would be
substantially harder with a lot of little retailers. However, the company does use alternate
distribution channels to reach consumers where they shop, such as drugstores, wholesale
clubs, online and smaller toy stores. In these alternate distribution channels, Hasbro
knows that it needs to provide a different product or different packaging to compete.
Certain items may be bundled together, resulting in a higher ticket item, but appropriate
for the channel. Hasbro works with the channel members to make sure their brand is
marketed correctly, but the company also makes sure its products fit correctly in retailers’
product mix and merchandising.
Discussion Questions:
#1 – What are the foundations of Hasbro’s success?
The video emphasizes that Hasbro is successful because it stays connected with
the marketplace and leverages its brands to stay relevant for today’s consumer
trends. Another important aspect of the company’s success is how efficiently it
manages the supply chain. Its executives know the big role its retailers play in the
success or failure of a product launch. By shortening its supply chain, it can get
products to market faster and beat the competition.
#2 – What is the name of the newest target market for Hasbro?
Hasbro aggressively targets the Tween market, roughly ages 12 to 16. To reach
this target group, Hasbro has to stay on top of rapidly changing trends and reach
the young consumers where they want to shop. The company is selling toys and
games in clothing stores to reach this market.
26
#3 – The video mentions that Hasbro has a global team that works on modifying existing
products for international markets. What type of product modifications might be
necessary?
Student answers will vary but could include packaging, naming, language,
clothing for toy dolls, instruction manuals, etc.
Teaching Suggestions:
Channel cannibalization is a major concern for many retailers who are considering an
online presence or different distribution channels. Based on the video, ask students to list
all the distribution outlets through which Hasbro is or should be distributing. With this
list in mind, ask students to discuss whether channel cannibalization is a problem for
Hasbro. How might it differentiate the channels even more to minimize potential
cannibalization? Do more channels benefit or hinder Hasbro overall?
27
Title: Dunkin’ Donuts
Speaker: Pat Lore
Applicable Chapters: 8, 9, 10, and 15
Summary:
Dunkin’ Donuts has many strengths (quality and freshness, flavor and variety, good
value, convenient locations, strong brand presence). However, the company has to deal
with powerful, new competitors, including Starbucks and Krispy Kreme.
The company continues to be a major brand with over $3 billion in sales expected this
year. Success is attributed to extensive market research conducted before a product is
launched. Additionally, corporate training enforces the company standards to deliver a
consistent product year after year and across all restaurants and franchises. Dunkin’
Donuts does not target one customer segment; rather, it reaches across all demographic
strata. Its promotional campaigns and diversity of locations support this strategy. To meet
market demand, the company is expanding into the coffee market by offering specialty
coffee drinks in addition to its standard drip coffee. But Dunkin’ Donuts will not deviate
from its original product offering and continues to offer the consumer quality,
convenience, and variety.
Discussion Questions:
#1 - Would you say that Dunkin’ Donuts is product oriented or customer oriented? Why?
At one point in the video, a Dunkin’ Donuts manager claims that new flavor ideas
often come from customers and that the new doughnut types are then tested on
customers. However, most of what the company says is actually product oriented
(e.g.,
freshness,
location
of
stores,
prices,
etc.).
#2 - What would you guess Dunkin’ Donuts’ mission statement is? What are its corporate
goals?
This is not clear. Presumably, a company as big as Dunkin' Donuts wouldn’t have a
mission statement that was as literal as “Best coffee–doughnuts.” But which of their
attributes would they feature? Most convenient breakfast? Least expensive snack on
the road? This question is good for illustrating that even a company with a relatively
straightforward market offering can have a corporate mission statement that is so
abstract
as
to
be
unclear.
#3 - How would you tackle the issues of Starbucks and Krispy Kreme invading Dunkin’
Donuts’ turf?
The case provides several suggestions (one-stop convenience, good location,
better value, etc.). This discussion will force students to identify that different
segments will value different features.
28
Teaching Suggestions:
This case provides a prime opportunity for a road trip. Have the students go to Dunkin’
Donuts first, then to a Starbucks and a Krispy Kreme, if they can be found nearby. If not,
it may appear that the competition is moot, but students can still be instructed to go
online to research whether or not there are plans for expansion nearby. In any case, have
students go to Dunkin’ Donuts again for primacy and recency, making impressions of
Dunkin’ Donuts the first and last ones received. How do students think the competitors
compare overall and on the nitty-gritty — coffee and doughnuts?
Encourage the students to think about advertising, marketing, and branding. Thus far,
Krispy Kreme and Starbucks have extraordinarily little marketing presence, whereas
Dunkin’ Donuts advertises relatively heavily. Will that brand heritage make the
company immune to a competitor's attacks?
29
Title: Honest Tea
Speaker: Trish McShane
Applicable Chapters: 2, 3, 9, and 16
Summary:
The founder of Honest Tea started by meeting his own desire to have an organic soft
drink. Armed with a simple product sample, Seth Goldman pitched his new tea to a buyer
of Whole Foods. The buyer signed his first order and Honest Tea was founded. Now,
there are 11 varieties sold in thousands of retail outlets around the country. The company
recently hit breakeven and expects to continue growing at current rates.
More important than Honest Tea’s successful launch is its focus on social responsibility.
Honest Tea has become a role model of philanthropic business practices. Although the
company is barely at breakeven, it has already donated several thousand dollars to lowincome communities. Seth has partnered with South African farmers and the Crow
nation, both areas with high unemployment, to farm and sell crops for tea production. Not
only does the purchase of the crops benefit the farmers, Honest Tea donates 1% of all
sales in royalty fees for community development. Seth believes a social mission is not
only socially responsible, but also financially sustainable because it enhances customer
loyalty. The hope is for Honest Tea to become a well-known national brand and have
impact around the world.
Discussion Questions:
#1 – The video mentions that Honest Tea only recently hit breakeven, yet the company
donates money to various organizations and groups. Ask students to discuss the pros and
cons of social responsibility in light of financial stability. Which is more important and
why?
Answers will vary based on the student discussion.
#2 – Does Honest Tea’s corporate vision direct the company toward the solution of social
and environmental problems? Are they thinking globally, but acting locally?
Honest Tea’s mission is to create and promote great tasting, truly healthy, allnatural beverages made the way their cultures of origin intended. “We strive to
grow our business with the same honesty and integrity we use to craft our
products.” Honest Tea does practice social responsibility by donating a
percentage of revenue back to the communities in which it operates, all around the
globe.
#3 - Does Honest Tea’s vision guide the development of new technologies, markets,
products, and processes?
This video does not cover all parts of Honest Tea production, but it is developing
new markets by working with farmers in impoverished areas. The company has
created a 100 percent organic product based on its sourcing, ingredients, and
bottling process. It also promotes its social responsibility in all of its marketing
material, labeling, and product lines.
30
Teaching Suggestions:
Social responsibility is a growing trend in business today. Ask students to develop a
broad code of ethics that, in an ideal world, marketers should adhere to. Students can use
the text, the Honest Tea Web site, and other socially responsible companies mentioned in
Chapter 3 for reference. Student teams should develop a list of 5-10 recommended
socially responsible and ethical guidelines.
Honest Tea operates in a highly competitive industry. There are numerous large
companies that sell products in the soft drink space. Ask students to develop a SWOT for
Honest Tea, using the outline in Chapter 2. First, students must list the company’s
strengths and weaknesses, then opportunities and threats. Emphasize the company’s
competitors and their potential effects on the business.
31
Title: Nextel
Applicable Chapters: 10 and 11
Summary:
The cell phone market is massive, with between 50 and 80 percent market penetration
worldwide. As evidenced by the big promotional campaigns, it is a very competitive
marketplace with 100 carriers in the U.S. alone. About six carriers control 85 percent of
market and they are all competing for the same subscribers. The consumer holds the
power, forcing carriers to provide hundreds of choices of phones, plans, etc. To compete,
carriers need to differentiate their services to win the consumers.
Nextel is one of the six major cell phone service providers. It targets business customers
and believes it’s safe in charging these customers premium prices because it offers
something unique. Its premium price point may be difficult to sustain in such a
competitive industry.
Nextel is very different from the others, based on the fact that it took an unusual
approach. The company solely targets business consumers by pushing a product
differentiation strategy. Due to the differentiated service offering, Nextel can charge a
premium for its service. However, the company still struggles with market pressures and
pricing trending downward. How will it stay competitive? Nextel will continue to offer
additional services to keep the average revenue per user up and increase profits overall.
Discussion Questions:
#1 - Do most business customers pay for their own phones? Does this matter?
Of course it matters. If my business pays for my phone, I won’t care how much it
costs. Instead, I’ll want the fanciest, coolest, most high-tech gadget phone that I can
get, with all the bells and whistles. Businesses, of course, can absorb these costs, but
if an in-house buyer started adding up the monies devoted to this class of purchases, a
reconsideration might lead to choosing, on behalf of all the business employees,
another carrier.
Corporate buyers are often motivated by price.
#2 - Have you switched cell phone carriers? Why did you switch? What might have kept
you loyal? Are carriers a commodity, or might branding and product differentiation
succeed in this industry?
Students might not have excessive experience in switching carriers, but they will be
able to relate to the price sensitivity, as well as to the appearance that most of these
carriers offer largely the same services, at somewhat the same prices. Hence, even
though they’re not yet one of Nextel’s business customers, they might wonder
whether Nextel is kidding itself that it has loyal customers who are perfectly willing
to
pay
for
the
extra
features.
32
#3 - Using the basic pricing principles from Chapter 11, how would you price a phone
(with which bundle of features)? How would you price the calling plan service (with
which bundle of features)?
This exercise can run the gamut from penetration to skimming price points.
Comparison data about competitors would be useful, for both the phone
equipment (other carriers, electronics stores) and for the phone service (again,
other carriers, but also phone and cable companies, DHL services, etc., for rough
estimates).
Teaching Suggestions:
Economists tell us that a marketplace full of choice is better for the customer. Have
students go online and conduct a search and choice process for a cell phone service
provider. The number of choices is overwhelming, and information is typically not
presented in a form that allows for easy comparison among brands (or even among a
provider’s own services). With this information in mind, ask the students to explain how
they would provide information on Nextel’s service offerings.
33