Download market segment - McGraw

DEVELOPING CUSTOMER RELATIONSHIPS AND
VALUE THROUGH MARKETING
CHAPTER CONTENTS
PAGE
MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION .................................. 1-2
STUDENT LEARNING OBJECTIVES ................................................................................ 1-4
KEY TERMS AND CONCEPTS ........................................................................................... 1-4
LECTURE NOTES

After Huge Success…What’s Next? .............................................................................. 1-5

What Is Marketing?........................................................................................................ 1-6

How Marketing Discovers and Satisfies Consumer Needs ........................................... 1-7

The Marketing Program: How Customer Relationships Are Built ................................ 1-8

How Marketing Became So Important ......................................................................... 1-10
ANSWERS TO “APPLYING MARKETING CONCEPTS AND PERSPECTIVES” .... 1-14
ANSWERS TO “INTERNET EXERCISE”......................................................................... 1-17
SUPPLEMENTAL LECTURE NOTES (SLN)

SLN 1-1: The Marketing Challenges Facing Rollerblade®, Inc. .................................. 1-18

SLN 1-2: Marketing Countries, States, Charitable Actions, and Causes...................... 1-20
IN-CLASS ACTIVITIES (ICA)

ICA 1-1: What Is Marketing? ....................................................................................... 1-21

ICA 1-2: What Makes A Better Mousetrap? ................................................................ 1-29
VIDEO CASE 1 TEACHING NOTE (TN)

Rollerblade®: Benefits Beyond What People Expect ................................................... 1-35
POWERPOINT THUMBNAILS .......................................................................................... 1-39
1-1
Chapter 1
MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION
PowerPoint
Slidesa
Transparenciesb
Handoutsc
Textbook Figures
Figure 1-1
Number of in-line skaters in the United States ........ 
Figure 1-2
The see-if-you’re-really-a-marketing-expert test ..... 
Figure 1-3
An organization’s marketing department relates
to many people, groups, and forces ........................ 

Marketing’s first task: discovering
consumer needs ....................................................... 

Marketing’s second task: satisfying
consumer needs ....................................................... 

Figure 1-4
Figure 1-5
Figure 1-6

Marketing programs for two of Rollerblade’s
skates, targeted at two distinctly different
customer segments: recreational
skaters and children................................................. 
Supplemental Figures and Advertisements
Figure 1-A
Summary of factors that affect an organization’s
marketing program .................................................. 
Figure 1-B
A Rollerblade ad from the early 1990s to show
in-line skating as giving both exercise and fun ...... 

A Rollerblade ad from the late 1990s to show
specific benefits of a Rollerblade skate .................. 

Figure 1-C
Figure 1-D
An UltraWheels ad from the late 1990s for its
Xpander line of expandable skates ......................... 
Figure 1-E
Cover of 2003 Rollerblade brochure sent to
distributors that describes the product line ............. 
Figure 1-F
The Segway HT (Human Transporter) and its
inventor, Dean Kamen ............................................ 
a
b
c
“PowerPoint Slides” are available on a CD-ROM and appear as “PowerPoint Thumbnails” within this chapter
of the Instructor’s Manual.
100 “Transparencies” are available to textbook adopters by request of their local McGraw-Hill/Irwin sales
representative.
Instructors may choose to reproduce some figures and hand them out to each student in the class to enhance
discussion. These “Handouts” are shown with a check in the right column.
Chapter 1
1-2
MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION
PowerPoint
Slidesa
Transparenciesb
Handoutsc
Supplemental Figures and Advertisements (Continued)
Figure 1-G
Heelys sneaker with an embedded detachable
wheel in the heel ..................................................... 
Figure 1-H
Marketing an entire country: Austria ....................... 
Figure 1-I
Marketing a state: Alabama ..................................... 
Figure 1-J
Marketing a special consumer service: Kinko’s
pickup and delivery service .................................... 
Figure 1-K
Marketing a cause: The Nature Conservancy .......... 
In-Class Activity (ICA) Figures
ICA 1-1, Figure 1 2003 Rollerblade Collection: Segments,
Benefits, Trends, and Marketing Programs
Handout (Aggressive/Fitness Segments) .......... 

ICA 1-1, Figure 2 2003 Rollerblade Collection: Segments,
Benefits, Trends, and Marketing Programs
Handout (Recreation/Kids Segments)............... 

ICA 1-2, Figure 1 Why Did the New Plastic Mousetrap Not
Meet Sales Expectations? ................................. 
ICA 1-2, Figure 2 Which of the Markets (A, B, C, or D) Was the
Largest for Mousetraps 20 Years Ago? ............ 
a
b
c
“PowerPoint Slides” are available on a CD-ROM and appear as “PowerPoint Thumbnails” within this chapter
of the Instructor’s Manual.
100 “Transparencies” are available to textbook adopters by request of their local McGraw-Hill/Irwin sales
representative.
Instructors may choose to reproduce some figures and hand them out to each student in the class to enhance
discussion. These “Handouts” are shown with a check in the right column.
1-3
Chapter 1
STUDENT LEARNING OBJECTIVES
After reading this chapter students should be able to:

Define marketing and explain the importance of (1) discovering and (2) satisfying
consumer needs and wants.

Distinguish between marketing mix elements and environmental factors.

Describe how organizations build strong customer relationships using current thinking
about customer value and relationship marketing.

Explain the meaning of ethics and social responsibility and how they relate to the
individual, organizations, and society.
KEY TERMS AND CONCEPTS
customer value
marketing program
environmental factors
organizational buyers
exchange
relationship marketing
market
societal marketing concept
market orientation
target market
marketing
ultimate consumers
marketing concept
utility
marketing mix
Chapter 1
1-4
LECTURE NOTES
Chapter Opening
Photo: Rollerblade
CHAPTER OPENING EXAMPLE
After Huge Success…What’s Next?
Slide 1-7
Rollerblade has the classic marketing problem of any innovative firm
that has created an entire industry: What does it do for an encore? What does it
do to provide new products and to build loyal customer relationships? The
answer: Exciting new models of its in-line skates! Some history:
A New Idea That Wasn’t So New

Early 1700s. In-line skates were invented by a Dutchman who attached
spools in a single row to his shoes.

1980. Two hockey-playing brothers found an old set of in-line skates,
improved the design, and sold them to off-season hockey players and
skiers out of the back of their truck. In the mid-1980s, they sold their
business to an entrepreneur.

1986. Mary Horwath joined the startup company to market Rollerblade
skates.

Today. Jeremy Stonier’s goal: “Provide benefits in Rollerblade skates
beyond what people expect.”
Understanding the Consumer
Horwath’s informal marketing research showed that using Rollerblades:




Figure 1-1
No. of U.S.
in-line skaters
Slide 1-8, T
Was incredible fun.
Was a great aerobic workout.
Was far different from traditional roller skating.
Appealed to others besides off-season hockey skaters and skiers.
Success Invites Danger, Which Invites Innovation
Rollerblade’s success in launching a new industry brought its own
dangers: major competition in terms of not only more than 30 other skate
manufacturers but also competing sports like skateboarding, biking, and
snowboarding. Rollerblade has 35% of the industry sales, but the number of inline skaters in the U.S. has flattened from its 1997 peak.
Rollerblade Skates, Marketing, and You
SLN 1-1: The
Marketing
Challenges
Facing
Rollerblade®
Rollerblade marketing team’s strategy to grow sales will be described
later in the chapter, but the principles they follow are what the book and course
are about.
1-5
Chapter 1
Figure 1-2
The marketing
expert test
Slide 1-10
Features for in-line
skate segments
I. WHAT IS MARKETING?
Common sense and personal experience as consumers usually help us
analyze marketing decisions. However, experience can mislead us,
which is one reason for an in-depth study of marketing.
Figure 1-2 Answers: 1. true; 2. (c) $2,327; 3. true; 4. (c) plastic bottles.
One of Rollerblade’s strategies is to market skates designed for the
special needs of different groups, or segments, of in-line skaters.
A. Marketing: Using Exchanges to Satisfy Needs
Slide 1-11
ICA 1-1:
What is
Marketing?
Marketing is the process of developing, pricing, promoting, and
distributing goods, services, and ideas to satisfy the needs of
consumers. To serve both buyers and sellers, marketing seeks:
1. To discover the needs and wants of prospective customers.
2. To satisfy these needs and wants.
The key to achieving these two objectives is the idea of exchange,
which the trade of things of value between buyer and seller so that
each is better off.
Figure 1-3
Marketing dept.
relates to people &
forces
Slide 1-12, T
B. The Diverse Factors Influencing Marketing Activities
A variety of other people, groups, and forces interact with marketing
to shape the nature of its activities. These include:
1. The organization itself, whose mission and objectives determine
what business it is in and what goals it seeks.
2. The organization’s customers, shareholders, suppliers, and other
organizations.
3. Environmental forces such as social, technological, economic,
competitive, and regulatory factors.
4. Society as a whole.
The interests of these individuals and groups sometimes conflict,
so the organization must strike a continual balance among them.
CONCEPT CHECK
1. What is marketing?
Answer: Marketing is the process of developing, pricing, promoting, and
distributing goods, services, and ideas to satisfy the needs of consumers.
2. Marketing focuses on _________ and _________ consumer needs.
Answer: discovering, satisfying.
Chapter 1
1-6
ICA 1-2:
What Makes
a Better
Mousetrap?
Wheaties
Dunk-A-Balls
Winning New
Product?
II. HOW MARKETING DISCOVERS AND SATISFIES
CONSUMER NEEDS
A. Discovering Consumer Needs
Marketing’s first objective is discovering the needs of prospective
consumers.
1. The Challenge of Launching Winning New Products.
Slide 1-16
Toro iMow
Robotic Mower
Winning New
Product?
Discovering and satisfying needs can be difficult. Many
companies, including General Mills and Toro, invest huge sums
on marketing and technical research that reduces, but cannot
eliminate, new-product failures.
2. Consumer Needs and Consumer Wants.
Slide 1-17


Figure 1-4
Discovering
consumer needs
Slide 1-18, T
A need occurs when a person feels physiologically deprived
of basic necessities, such as food, clothing, and shelter.
A want is a felt need that is shaped by a person’s knowledge,
culture, and personality. Marketing does not create the need
for a product, but shapes a person’s wants.
Discovering needs involves looking carefully at prospective
customers. A firm’s marketing department must understand
what its customer needs, industry trends, competitors’ products,
and needs of a customer’s customer.
ETHICS AND SOCIAL RESPONSIBILITY ALERT
Student Credit Cards:
Ultimate Benefit Or A Disaster Waiting To Happen?
Do students carry
too much debt?
Tens of thousands of college students and other adults across the U.S.
are drowning in credit card debt. Eighty-three percent of college students have
at least one credit card with an average balance of $2327. When adding student
loans (exempt from bankruptcy), rent, car payments, utilities, telephone, taxes,
and interest, few college graduates’ starting salaries will be high enough to
cover much beyond minimum payments on their credit card debt.
Slide 1-19
Some universities offer on-campus financial counseling. Some students
find debt management tools by logging onto www.nelliemae.com. Financial
counselors offer students this advice: (1) reduce the number of credit cards you
have and (2) pay cash.
3. What a Market Is.
Potential consumers make up a market, which consists of
people with both the desire and the ability to buy a specific
product.
1-7
Chapter 1
B. Satisfying Consumer Needs
An organization does not have the resources to satisfy the needs of
all consumers. It focuses on the needs of its target market—one or
more specific groups of potential consumers toward which an
organization directs its marketing program.
1. The Four Ps: Controllable Marketing Mix Factors.
Having selected target market consumers, a marketing
department must develop a complete marketing program to
reach consumers by using a combination of four tools, often
called the four Ps.
The elements of the marketing mix are the marketing
manager’s controllable factors—product, price, promotion, and
place—that can be taken to solve a marketing problem.




Figure 1-A
Factors affecting
the marketing
program
Slide 1-21
Product. A good, service, or idea to satisfy the consumer’s
needs.
Price. What is exchanged for the product.
Promotion. A means of communication between seller and
buyer.
Place. A means of getting the product to the consumer.
2. The Uncontrollable, Environmental Factors.
Environmental factors are uncontrollable by the marketing
department that involve:





Social forces.
Economic forces.
Technological forces.
Competitive forces.
Regulatory forces.
III. THE MARKETING PROGRAM: HOW CUSTOMER
RELATIONSHIPS ARE BUILT
Wal-Mart
What kind of
customer value?
Slide 1-23
Chapter 1
A. Customer Value: Developing Loyal Customers
Intense competition has prompted many firms to focus on providing
customer value. Firms try to place a dollar value on a loyal,
satisfied customer.
Customer value is the unique combination of benefits received by
targeted buyers that includes quality, price, convenience, on-time
delivery, and both before-sale and after-sale service.
1-8
Lands’ End
What kind of
customer value?
Slide 1-24
Three strategies that may be used to deliver value include:
1. Best price.
2. Best product.
3. Best service.
B. Relationship Marketing and the Marketing Program
1. Relationship Marketing: Easy to Understand, Hard to Do.
Relationship marketing links an organization to its individual
customers, employees, suppliers, and other partners for their
mutual long-term benefits.
Relationship marketing is critical in developing effective
customer relationships, but in practice it is difficult to implement
on a continuing basis.
With today’s Internet purchases, much of the personal
relationships between seller and buyer that existed in the past
may be lost.
Figure 1-5
Satisfying
consumer needs
Slide 1-25, T
Rollerblade in-line
skates & segments
2. The Marketing Program.
Ideas for serving consumer needs must be translated into a
tangible marketing program—a plan that integrates the
marketing mix to provide a good, service, or idea to prospective
buyers. This process is continuous: Consumer needs trigger
product concepts that become actual products that stimulate
further discovery of consumer needs.
C. A Marketing Program for Rollerblade
1. Listening to Consumers to Stay Ahead of the Trends.
Consumer tastes change rapidly. Rollerblade continues to
innovate as trends and tastes change in the marketplace.
Slide 1-27
Figure 1-6
Rollerblade
marketing program
Slide 1-28
2. Focusing the Marketing Program on Four Key Segments.
Rollerblade’s challenge is to find new venues, new reasons for
people to skate. Building marketing programs to reach these
new settings rests on two key elements:


Finding the right benefits—or competitive points of
difference—to stress in reaching potential buyers.
Targeting key segments of prospective customers and
satisfying them with the specific kinds of Rollerblade brands
of in-line skates they want. Some examples:
1-9
Chapter 1
–
–
–
–
TRS™ skates for street skaters, the aggressive segment.
Lightning™ skates for really serious fitness skaters.
Fusion™ skates for people seeking fun and recreation.
MX 900™ skates for children whose feet are growing.
3. Exploiting Strengths in Technology.
In 2003, Rollerblade was sold to Tecnica, whose experience in
producing Nordica and other sporting goods equipment will add
to Rollerblade’s technology base for designing in-line skates.
Some examples:


CoolMax®. A performance fabric to keep a skater’s feet dry
and cool.
ABT Lite®: A braking system that allows skaters to brake by
sliding their heel downward.
CONCEPT CHECK
1. An organization can’t satisfy the needs of all consumers, so it must
focus on one or more subgroups, which are its_________________ .
Answer: target markets.
2. What are the four marketing mix elements that make up the
organization’s marketing program?
Answer: product, price, promotion, place
3. What are uncontrollable variables?
Answer: Environmental factors the organization’s marketing department
can’t control. These include social, economic, technological,
competitive, and regulatory forces.
IV. HOW MARKETING BECAME SO IMPORTANT
A. Evolution of the Marketing Orientation
Although they overlap, four distinct stages can be identified in the
life of a firm:
1. Production Era.
Goods were scarce, and buyers would accept almost anything.
The central notion was that products would sell themselves.
Businesses focused on production, not marketing. This era
continued through the 1920s.
Chapter 1
1-10
2. Sales Era.
Firms could produce more goods than their regular buyers could
consume. Focus was on hiring salespeople to find new buyers
for the firm's existing products. This era continued into the
1960s.
3. The Marketing Concept Era.
In the 1960s, the policy became: “We are in the business of
satisfying needs and wants of consumers.” This is the
marketing concept, the idea that an organization should:


Strive to satisfy the needs of consumers
While also trying to achieve the organization’s goals.
Launched in GE’s 1952 annual report, the marketing concept era
started gaining acceptance in the 1960s. Many firms have found
implementing the concept very difficult.
4. The Marketing Orientation Era.
An organization that has a market orientation focuses its
efforts on:



Continuously collecting information about customers’ needs;
Sharing this information across departments; and
Using it to create customer value.
An important outgrowth of this market orientation is customer
relationship management (CRM), the process of identifying
prospective buyers, understanding them intimately, and
developing favorable long-term perceptions of the organization
and its offerings so that the buyers will choose them in the
marketplace.
B. Ethics and Social Responsibility: Balancing Interests
Organizations consider the ethical and social consequences of their
actions.
1. Ethics.
Many marketing issues are not specifically addressed by existing
laws and regulations. Many companies, industries, and
professional associations have developed codes of ethics to
assist managers.
1-11
Chapter 1
2. Social Responsibility.
Some marketing experts stress the societal marketing concept,
the view that an organization should discover and satisfy the
needs of its consumers in a way that also provides for society’s
well-being.
Danny Glover and
Reading
C. The Breadth and Depth of Marketing
Marketing affects every person and organization.
1. Who Markets?
Slide 1-35
SLN 1-2:
Marketing
Countries,
States,
Charitable
Actions, and
Causes
Every organization markets. This is true for both profit-making
business firms and for nonprofit organizations. Places,
organizations associated with special events or causes, and
individuals also use marketing programs.
2. What is Marketed?
Goods, services, and ideas are marketed.
3. Who Buys and Uses What Is Marketed?
Two groups do:


Ultimate consumers are the people who use the goods and
services purchased for a household.
Organizational buyers are units such as manufacturers,
retailers, or government agencies that buy goods and services
for their own use or for resale.
4. Who Benefits?
Three specific groups benefit from effective marketing in our
free-enterprise society:



Consumers who buy.
Organizations that sell.
Society as a whole.
5. How Do Consumers Benefit?
Marketing creates utility, the benefits or customer value
received by users of the product. Four different utilities are
created:


Chapter 1
Form utility. The production of the good or service.
Place utility. Having the offering available where consumers
need it.
1-12


Time utility. Having the product or service available when
needed.
Possession utility. Getting the product to consumers so they
can use it.
CONCEPT CHECK
1. What are the two key characteristics of the marketing concept?
Answer: An organization should (1) strive to satisfy the needs of
consumers (2) while also trying to achieve the organization’s goals.
2. What is the difference between goods and services?
Answer: Goods are physical objects, such as iron ore, apples, a computer,
or an airplane. Services include things as diverse as legal advice, a
college education, or airline travel.
1-13
Chapter 1
ANSWERS TO “APPLYING MARKETING CONCEPTS
AND PERSPECTIVES”
1.
What consumer wants (or benefits) are met by the following products or services?
(a) Carnation Instant Breakfast, (b) Adidas running shoes, (c) Hertz Rent-A-Car,
and (d) television home shopping programs.
Answer: Consumer wants or benefits met by each of four products or services include:
2.
a.
Carnation Instant Breakfast. Time saving in preparing a breakfast; nutrition
and vitamins.
b.
Adidas Running Shoes. Safety through having a running tread; cushioning for
the foot; status.
c.
Hertz Rent-A-Car. Time saving for business or vacation travelers who may fly
to a destination and need local transportation without being able to use local buses
or rail transit.
d.
Television Home Shopping Programs. A variety of hard and soft goods; low
prices; convenience of shopping from home; delivery to any location.
Each of the four products, services, or programs in question 1 has substitutes.
Respective examples are (a) a ham and egg breakfast, (b) regular tennis shoes,
(c) taking a bus, and (d) a department store. What consumer benefits might these
substitutes have in each case that some consumers might value more highly than
those products mentioned in question 1?
Answer: Consumer wants or benefits that these four substitute products might provide
include:
a.
Ham and Egg Breakfast. More filling; extra protein; a breakfast perceived to be
more likely to “stay with you” until the midday meal.
b.
Regular Tennis Shoes. Low cost; possibility of the shoes being used for another
sport.
c.
Taking a Bus. Low cost; avoiding the need to find parking for a car; avoiding
inconvenience of picking up and delivering the rental car and the accompanying
paperwork.
d.
A Department Store. More help from sales clerks in making a purchase
decision; greater likelihood of accepting returns of unacceptable merchandise;
servicing of the product sold.
Chapter 1
1-14
3.
A college in a metropolitan area wishes to increase its evening-school offerings of
business-related courses such as marketing, accounting, and finance. Who are the
target market customers (students) for these courses?
Answer: Target market customers or students for business-related courses offered by a
metropolitan-area college at night include both those pursuing a degree and those not
pursuing a formal degree. Students pursuing a degree might seek degree-related courses
that could aid them in acquiring or earning an Associate’s degree, a Bachelor’s degree, or
an MBA degree. In contrast, many prospective students in these courses may be more
interested in particular subject areas that can assist them in their job rather than in degree
credits. For example, engineering personnel might want introductory courses in
marketing or finance or accounting to familiarize them with principles from these courses
that might apply to their job. Owners of small businesses might seek work-related
courses that enable them to develop a business plan, design an accounting/record-keeping
system, or write more effective advertising copy.
4.
What actions involving the four marketing mix elements might be used to reach the
target market in question 3?
Answer: Marketing mix actions to reach these target market customers include:
5.
a.
Product. The content of each course offered to target market customers.
b.
Price. The tuition or charge for taking the course.
c.
Promotion. Course catalogs, direct mail informational brochures, posters, and
ads run in local newspapers or on local radio stations are examples of the kind of
promotional activities a college often undertakes.
d.
Place. This includes the place and time at which the course is offered.
Increasingly, colleges and universities are taking their courses to the location of
their students rather than asking students to come to the campus itself.
What environmental factors (uncontrollable variables) must the college in
question 3 consider in designing its marketing program?
Answer: Environmental factors or uncontrollable variables for the college to consider:
a.
Social Factors. Formal college degrees are required for an increasing number of
jobs, so colleges must recognize this in designing their courses. In addition, some
employers require a certain number of work-related course units every year to
have their employees maintain skills. Colleges often try to design curricula to
reflect this.
b.
Economic Factors. Price of the course and its potential benefits to the students,
either in terms of leading to a degree or providing work-related benefits, are
important economic considerations.
1-15
Chapter 1
6.
c.
Technological Factors. Many colleges are offering both credit and noncredit
courses online or through television–either on cable channels available to the
public or through programs transmitted directly to employees of specific
companies. An increasing number of courses take the form of computer-related
work, which affects curriculum design decisions.
d.
Competitive Factors. The college must recognize a number of ways for students
to get roughly equivalent courses: those offered by other colleges or universities
in the area, courses offered internally by large employers, and courses offered by
correspondence or online distance learning.
e.
Regulatory Factors. Degree courses must often meet standards imposed by
outside groups, such as those standards established by the Association to Advance
Collegiate Schools of Business for Bachelor and Masters degree programs in
business.
Rollerblade is now trying to grow in-line skating globally. What are the advantages
and disadvantages of trying to reach new global markets?
Answer:
a.
Advantages: (1) Potential to increase sales revenues and profits, (2) potential to
achieve production scale economies by having central production of some models
that are sold globally, and (3) opportunity to enter other countries where
competition is not as fierce as in the U.S.
b.
Disadvantages: (1) Danger of “losing focus”—of spreading resources across
various countries and losing a large part of U.S. market, (2) possibility of not
being able to bring profits back from some foreign nations (the situation with
many Eastern European and developing nations), (3) possibility in some unstable
countries of production plants being nationalized, and (4) currency fluctuations.
Chapter 1
1-16
ANSWERS TO “INTERNET EXERCISE”
Internet Exercise
Segway HT Video
Slide 1-40
Internet Exercise
Segway HT Models
“It!” “Ginger!” “Jetson’s scooter!” These were early names given
the revolutionary Segway™ Human Transporter (HT), a technology
shrouded in secrecy until it was launched in 2001. The Segway HT relies
on computers and gyroscopes to control its speed, balance, and direction.
It can travel up to 15 miles on a six-hour battery charge. A commercial
version is expected to sell for $8,000, but the consumer version may sell for
$3,000.
Go to the Segway HT website (www.segway.com). View both the
consumer and business models.
1.
Slide 1-41
What do you see as the advantages and disadvantages of the Segway
HT?
Answers:
2.
a.
Advantages: A rider can move three times faster than the
average walker with a range of about 16 miles on a single charge
(up to 17 miles in optimum conditions). Two fit into the trunk
of a mid-sized sedan, allowing commuters to move from parking
lot to their office and back.
b.
Disadvantages: Riders would be a hazard to walkers on a
crowded sidewalk, but riders would be vulnerable to cars,
cycles, and other vehicles on the street. The battery needs to be
charged regularly. Ice and snow as well as uneven pavement and
curbs would be difficult to negotiate. Riders would lose the
benefits of walking as exercise.
For businesses, what applications could the Segway HT be used for?
Answers: Business applications include delivery of mail and small
packages. The Tampa Post Office is testing the Segway HT on “park
and loop” residential delivery routes where a portion of deliveries are
made by a letter carrier on foot to approximately 500 addresses. The
Segway HT might also be helpful in superstores, airline hangars, and
military bases.
3.
Why would consumers want to buy a Segway HT?
Answers: To cover more ground; to be more productive; and to have
fun.
1-17
Chapter 1
SLN 1-1: SUPPLEMENTAL LECTURE NOTE
The Marketing Challenges Facing Rollerblade®, Inc.

The fortunes and challenges of Rollerblade®, Inc. have changed
dramatically from the “guerrilla marketing” strategies of 1986 to today.
The product life cycle (PLC) and the strategies of managing the PLC are
not introduced until Chapter 11 in the text, but these are the issues faced
by Rollerblade today.

The number of in-line skaters in the U.S (see Figure 1-1 in the text) shows
a pattern remarkably similar to a traditional product life cycle. This
pattern is also reflected in the nature of the promotional efforts of
Rollerblade and its competitors over the last decade and in the kinds of
products that are now competing with in-line skates. For example, many
advertisements by Rollerblade and its competitors have shifted from
(1) gaining awareness for the excitement of in-line skating among
prospective skaters to (2) stressing competitive advantages of a brand in
ads targeted at skaters and brochures describing the product line targeted
at distributors. These changes can be illustrated below with ads, a photo,
and an overview of Rollerblade’s changing strategy:

Rollerblade ad from the early 1990s (Figure 1-B). As in-line skating
moved into its high-growth period in the early 1990s (see Figure 1-1),
a Rollerblade ad targeted at prospective skaters sought to increase
awareness of the benefits of exercise and fun from in-line skating.

Rollerblade ad from the late 1990s (Figure 1-C). By the late 1990s, more
in-line skate manufacturers were entering the market and Rollerblade
stressed one of its competitive advantages in this ad–stopping with its new
Active Brake Technology.

UltraWheels ad from the late 1990s (Figure 1-D). UltraWheels, a
competitor, used the ad to show families how its “Xpander Line” of skates
for children would “grow” as the child grows. This line competes with
Rollerblade’s “MX 900” line today, described in Figure 1-6 in the text.

Cover of 2003 Rollerblade brochure (Figure 1-E). This brochure shows
its product line that is targeted at distributors. With increasing
competition, Rollerblade has shifted much of its promotion from targeting
skaters to targeting distributors.
Figure 1-B
Early 1990s
Rollerblade ad
Slide 1-46, T
Figure 1-C
Late 1990s
Rollerblade ad
Slide 1-47, T
Figure 1-D
Late 1990s
UltraWheels ad
Slide 1-48
Figure 1-E
2003 Rollerblade
distributor brochure
Slide 1-49
Chapter 1
1-18
Figure 1-F

Photo of Segway HT (Figure 1-F). Today Rollerblade faces competition
not only from other in-line skate producers, but also from a number of
other “wheeled” competitors, such as skateboards, scooters, and mountain
bikes. It also faces curious competition in special situations from the
Segway HT (Figure 1-F and the Chapter 1 Internet Exercise) and
“Heelys”—sneakers with an embedded detachable wheel in the heel
shown in Chapter 9 of the text (Figure 1-G).

Rollerblade’s marketing actions today versus its “guerrilla marketing”
days in 1986. As the number of in-line skaters in the U.S. flattens
(Figure 1-1), Rollerblade’s marketing strategies have changed to target
and focus on very specific market segments (Figure 1-6).
Segway HT &
Dean Kamen
Slide 1-50
Figure 1-G
Heelys sneaker with
embedded wheel
Slide 1-51
1-19
Chapter 1
SLN 1-2: SUPPLEMENTAL LECTURE NOTE
Marketing Countries, States, Charitable Actions, and Causes
Figure 1-H
Marketing a
country: Austria
Students and the general public often think of marketing only in terms
of marketing products such as soft drinks, cars, and television sets. But other
kinds of organizations use marketing when they are trying to communicate a
message to special market segments. Advertisements for some of these nontraditional marketers are shown below:

Marketing an entire country. The Austrian ad (Figure 1-H) encourages
business firms interested in doing business in Europe to invest in “Austria,
Heart of Europe” by visiting its website.

Marketing a state. The Alabama ad (Figure 1-I) encourages
vacationers—especially golfers–to consider Alabama.

Marketing a special consumer service. The Kinko’s ad (Figure 1-J)
points out the time-saving benefits of using its pickup and delivery
service.

Marketing a cause. The Nature Conservancy ad (Figure 1-K) seeks
contributions for its activities in “saving the last great places”—such as
deserts, rain forests, and prairies.
Slide 1-53
Figure 1-I
Marketing a state:
Alabama
Slide 1-54
Figure 1-J
Marketing a
service: Kinko’s
Slide 1-55
Figure 1-K
Marketing a cause:
Nature Conservancy
Slide 1-56
Chapter 1
1-20
ICA 1-1: IN-CLASS ACTIVITY
What Is Marketing?
Learning Objective. To identify the many activities that make up marketing.
Definitions. The following marketing terms are referred to in this in-class activity (ICA):

Marketing: The process of developing, pricing, promoting, and distributing of goods,
services, and ideas to satisfy consumer needs.

Marketing Mix: The marketing manager’s controllable factors—product, price,
promotion, and place that can be taken to solve a marketing problem.

Marketing Program: A plan that integrates the marketing mix to provide a good,
service, or idea to prospective buyers.

Target Market: One or more specific groups of potential consumers toward which an
organization directs its marketing program.
Nature of the Activity. To facilitate class discussion of students’ perceptions of
marketing. Use the Chapter 1 opening example about Rollerblade® and the discussion of the
inline skating industry.
Estimated Class Time. 20 minutes.
Materials Needed.

The Core01.ppt file from the Core PowerPoint CD in the Core Instructor’s Box.

Copies of the Blank 2003 Rollerblade Collection: Segments, Benefits, Trends, and
Marketing Program Handout for each student (“Aggressive/Fitness”).

Copies of the Completed 2003 Rollerblade Collection: Segments, Benefits, Trends,
and Marketing Program Handout for each student (“Recreation/Kids”).
Preparation Before Class. Follow the steps below:
1. Read the Chapter 1 opening example, which contains a description of Rollerblade’s
marketing program and the current state of the inline skating industry.
2. Make copies of the 2003 Rollerblade Collection: Segments, Benefits, Trends, and
Marketing Program Handout.
3. Review the PowerPoint slides.
1-21
Chapter 1
Instructions. Follow the steps below to conduct this ICA:
1. Give the following mini-lecture on Rollerblade:
“Rollerblade invented the inline skate and has encouraged the ‘fitness
& fun’ lifestyle ever since. Rollerblade has developed several lines of
inline skates to target specific groups of customers. In May 2003,
Tecnica SPA, an Italian sporting goods firm, purchased Rollerblade
from the Benetton Group. According to Nicholas Skally, PR &
Marketing Manager, ‘Tecnica’s sporting goods expertise will be an
incredible asset to Rollerblade as it continues to led the inline skating
industry.’”
2. Ask students what comes to their mind when they hear the word
“marketing.” If they have not yet read Chapter 1, they are likely to
mention “advertising” or “selling.” If they have read Chapter 1,
they may also mention the four P’s of the marketing mix.
3. Create a list of all the words/activities that students mention, which
will provide a good starting point for discussing the many activities
that make up marketing.
4. Ask students about their inline skating behavior and have them cite
examples of marketing activities used by Rollerblade or others in the
inline skating industry (K2, Salomon, UltraWheels, etc.) based on
advertising or personal experiences.
ICA 1-1
2003 Rollerblade
Consumer brochure
Slide 1-58
5. Show Slide 1-58. The 2003 Rollerblade Collection brochure
describe the market segments Rollerblade has targeted, the products
it has developed to meet the needs of these segments, and the ads it
has designed to reach particular segments.
6. Give students the Blank 2003 Rollerblade Collection: Segments,
Benefits, Trends, and Marketing Program handout for the
“Aggressive” and “Fitness” segments.
7. Show Slide 1-59 and Slide 1-60 (“Aggressive” segment).
Chapter 1
ICA 1-1
ICA 1-1
Aggressive segment
TRS Estilo skate
Slide 1-59
Slide 1-60
1-22
8. Show Slide 1-61, Slide 1-62, and Slide 1-63 (“Fitness” segment).
ICA 1-1, Figure 1
Aggressive/Fitness
Handout
Slide 1-64
ICA 1-1
ICA 1-1
ICA 1-1
Fitness segment
Aero 9 skate
Aero skate ad
Slide 1-61
Slide 1-62
Slide 1-63
9. Show Slide 1-64. Have students write down and then briefly discuss
the benefits sought by, the trends affecting, and marketing program
developed for “Aggressive” and “Fitness” segments.
10. Give students the Completed 2003 Rollerblade Collection:
Segments, Benefits, Trends, and Marketing Program Handout that
focuses on the “Aggressive” and “Fitness” segments to identify the
marketing program Rollerblade has developed to reach these target
market segments.
11. Give students the Blank 2003 Rollerblade Collection: Segments,
Benefits, Trends, and Marketing Program Handout for the
“Recreation” and “Kids” segments.
12. Show Slide 1-65 and Slide 1-66 (“Recreation” segment).
ICA 1-1
ICA 1-1
Recreation segment
Fusion skate
Slide 1-65
Slide 1-66
13. Show Slide 1-67 and Slide 1-68 (“Kids” segment).
ICA 1-1 Figure 2
Recreation/Kids
ICA 1-1
ICA 1-1
Kids segment
MX900 skate
Slide 1-67
Slide 1-68
14. Show Slide 1-69. Have students write down and then briefly discuss
the benefits sought by, the trends affecting, and marketing program
developed for “Recreation” and “Kids” segments.
Slide 1-69
1-23
Chapter 1
15. Give students the Completed 2003 Rollerblade Collection:
Segments, Benefits, Trends, and Marketing Program Handout that
focuses on the “Recreation” and “Kids” segments to identify the
marketing program Rollerblade has developed to reach these target
market segments.
Marketing Lessons. This exercise introduces students to the elements of the marketing
mix. Most students will conclude that (a) marketing is much more than their initial perceptions,
(b) they already know about marketing from their experiences as consumers, in this case, with
inline skates, (c) most firms develop unique products for specific segments to meet their needs,
and (d) firms such as Rollerblade select specific segments to target due to resource and
marketing considerations.
Website. Rollerblade’s website is www.rollerblade.com.
Chapter 1
1-24
ICA 1-1, FIGURE 1
2003 Rollerblade Collection: Segments, Benefits, Trends, and
Marketing Program Handout
BENEFITS,
TRENDS, AND
MARKETING
PROGRAM
MARKET SEGMENT
AGGRESSIVE
(STREET/VERT)
FITNESS
Benefits and
Trends
Product
Price
Promotion
Place
1-25
Chapter 1
ICA 1-1, FIGURE 2
2003 Rollerblade Collection: Segments, Benefits, Trends, and
Marketing Program Handout
BENEFITS,
TRENDS, AND
MARKETING
PROGRAM
MARKET SEGMENT
RECREATION
Benefits and
Trends
Product
Price
Promotion
Place
Chapter 1
1-26
KIDS
ICA 1-1, FIGURE 2
2003 Rollerblade Collection: Segments, Benefits, Trends, and
Marketing Program Handout
MARKET SEGMENT
BENEFITS,
TRENDS, AND
MARKETING
PROGRAM
Benefits and
Trends
AGGRESSIVE
(STREET/VERT)







Comfort
High tech features
Performance
Image
Style similar to skateboard shoes
New skate parks opening
Now a sport: Gravity Games &
X Games
FITNESS
 Get a serious workout
 Cross-train for hockey, ice
skating, & figure skating
 Large and fast-growing segment
 Focus on technology that allows
for greater comfort and
movement in ankles and legs
 Ultra-light weight
 Premium components
 Customizable frames
 Rollerblade Models: TRS
Estilo; TRS Detail; TRS Access;
Swindler
 Most firms have 1 to 3 skates in
its product line
 Other marketers: K2, Razors;
Roces; Salomon; USD
 Rollerblade Models:
Lightning—09, 07, 05; Aero—
9, 7
 Most firms have several skates
in its product line
 Other marketers: K2; Nike;
Salomon; UltraWheels
 Most prices: $90 - $350
 Most prices: $150 - $400
Promotion
 Inline skating events (skate
ramps, street skating, etc.)
 Sponsored athletes
 Ads in local publications
 E-mail customers about new
products
 Point-of-purchase display
 Sponsor X- Games
 Ads/signs in video games
 10-week Workout Plan and
Calorie Usage Chart on website
 Target health & fitness
magazines
 E-marketing through multimedia
website
 Point-of-purchase display
 Sponsor inline skating
marathons
Place
 Specialty inline skate shops
 Sporting goods stores
 The Internet
 Specialty inline skate shops
 Sporting goods stores
 The Internet
Product
Price
1-27
Chapter 1
2003 Rollerblade Collection: Segments, Benefits, Trends, and
Marketing Program Handout
BENEFITS,
TRENDS, AND
MARKETING
PROGRAM
Benefits and
Trends
Product
Price
Promotion
Place
Chapter 1
MARKET SEGMENT
RECREATION
KIDS




Fun
Large and fast-growing segment
Value-oriented
Focus on the combination of
greater comfort and support
 ABT Lite system for controlled
braking









 Rollerblade Models:
Aero—9, 7, 5; E7 TI;
EVO 07; Fusion
 Most firms have several skates
in its product line
 Other marketers: K2; Nike;
Roces; Salomon; UltraWheels
 Rollerblade Models:
MX 900 & BX 10
 Other marketers: K2; Salomon;
UltraWheels; private label
 Most prices: $50 - $200
 Most prices: $20 - $150
 Tips For Beginners on how to
start inline skating
 Target health & fitness
magazines
 Point-of-purchase display
 Grassroots program—Blade
School; weekly skate events,
skate lessons
 Show kids inline skating and
having fun
 Developed 600 Skate in School
program to boost youth fitness
and self-esteem
 Developed 18 Blade Schools™
to teach kids how to skate








Specialty inline skate shops
Sporting goods stores
Mass-merchandisers
The Internet
1-28
Fun
Fitness/coordination
Sports conditioning
Self-confidence
Growing segment
No ice skating in summer
Durability
Value-conscious
Protective gear bought in
conjunction with skates
 Skates adjust as kid grows
Specialty inline skate shops
Sporting goods stores
Mass-merchandisers
The Internet
ICA 1-2: IN-CLASS ACTIVITY
What Makes A Better Mousetrap?
Learning Objectives. To have students (1) discover the importance of “points of
difference” in meeting consumer wants and needs and (2) see how they vary by market segment.
Definitions. The following marketing terms are referred to in this in-class activity (ICA):

Customer Value: The unique combination of benefits received by targeted buyers that
includes quality, price, convenience, on-time delivery, and both before-sale and aftersale service.

Market Segments: The groups that result from the process of market segmentation;
these groups ideally (1) have common needs and (2) will respond similarly to a
marketing action.

Points of Difference: Those characteristics of a product that make it superior to
competitive substitutes.
Nature of the Activity. To have the instructor lead students through a humorous and
involving mini-case in which students do in-class “marketing research” on why a better
mousetrap failed more than two decades ago.
Estimated Class Time. 20 minutes.
Materials Needed.

The Core01.ppt file in the Core PowerPoint CD from the Core Instructor’s Box.

A transparency of ICA 1-2, Figure 1: Why Did the New Plastic Mousetrap Not Meet
Sales Expectations?

A transparency of ICA 1-2, Figure 2: Which of the Markets (A, B, C, or D) Was the
Largest for Mousetraps 20 Years Ago?
Preparation Before Class. Follow the steps below:
1. Read the material below to give a background lecture.
2. Make transparencies or show the following PowerPoint slides of:
a. ICA 1-2, Figure 1 (Slide 1-74).
b. ICA 1-2, Figure 2 (Slide 1-75).
3. Review the PowerPoint slides.
1-29
Chapter 1
Instructions. Follow the steps below to conduct this ICA:
Ralph Waldo
Emerson Quote
1. Show Slide 1-71. Give students this background mini-lecture:
“If a man...makes a better mousetrap, the world will beat a path to
his door.” Ralph Waldo Emerson
Let’s excuse Mr. Emerson for his sexist statement, written over a
century ago! But let’s see if he was right!”
Slide 1-71
(Show Slide 1-72) “Over 20 years ago, Dick Woolworth, president
of the Woodstream Corp., decided to take Emerson’s adage to heart.
Woodstream Corp.’s product was a 100 year-old wooden mousetrap
that sold under the Victor® brand name in which peanut butter or
cheese was placed on the metal bait pedal connected to the springloaded trap bar.
ICA 1-2
Victorious Mouse
Slide 1-72
Show Slide 1-73. Pass around a Victor® Metal Bait Pedal
mousetrap.
ICA 1-2
Victor Bait Pedal
mousetrap
Woolworth decided that what the company needed to do was to
build “a better mousetrap and wait for the world to beat a path to its
door.” He asked his engineers and scientists to study the eating,
sleeping, and crawling habits of mice. They did and came up with a
better mousetrap—one made of plastic.
Slide 1-73
If we compare the new versus the old, the original Victor® Metal
Bait Pedal trap sold in a package of 2 for 15 cents and was
moderately efficient. The plastic trap sold individually for 25 cents
and was very efficient. Thus, if 100 mice stepped on the old
wooden trap, assume that 50 got caught (50% efficiency) while with
the new plastic trap, assume that 90 got caught (90% efficiency).
Woodstream Corp. introduced the new plastic trap in stores across
the country. Now, for the sake of argument, suppose that the
following problem emerged: Sales of the new better, plastic
mousetrap did not meet sales expectations! Why do you suppose
that happened?”
ICA 1-2, Figure 1
Mousetrap
Expectations
Slide 1-74
2. Show the transparency of ICA 1-2, Figure 1 or Slide 1-74). Ask
students to take 5 minutes to discuss their answers to the questions
listed on the transparency with those sitting next to them. Call on
the students to answer the following sequence of questions:

Question 1: What triggers the decision to buy a mousetrap?
Answer: Seeing nibbled boxes of cereal or mouse droppings on the
floor triggers the “buy” decision.
Chapter 1
1-30

Question 2: Who in the family makes the decision to buy?
Answer: The decision maker is the person most bothered by the
mouse—often the “Mom” about 20 years ago, when the case takes
place.

Question 3: Who actually buys the mousetrap?
Answer: The purchaser is the person asked to “take care of the
problem”—often the “Dad” about 20 years ago, when the case takes
place.

Question 4: Where does the person buy the mousetrap?
Answers: Mousetraps might be purchased in hardware stores (Ace),
supermarkets (Safeway), mass-merchandisers (Wal-Mart, Target),
home improvement stores (Home Depot), or the Internet (Chagnon’s
Outdoor World). This points out the need for different outlets for
different buyers in the family, or different market segments.

Question 5: Who in the family uses the mousetrap and how do
they use it?
Answers: This is the key question and should turn up two distinct
market segments: (1) the “disposers” who dispose of the dead mouse
and the trap by throwing both of them into the trash, and
(2) the “reusers” who throw the dead mouse into the trash but reuse
the trap.

Question 6: What features do users want in a mousetrap?
Answers: The “disposer” market segment wants a cheap and
relatively efficient way to handle its mouse problem. So the
important “points of difference” in its buying decision are low-cost
and disposability. The “reuser” segment wants greater efficiency in
resolving its persistent mouse problem and may be willing to pay
more for a trap as a result.
The key message: What potential buyers see as “better” is more
important than what the scientists and engineers designing the
product see as “better.”

Mousetrap
Market Segments
Question 7: Why did sales of the “better” plastic mousetrap not
meet sales expectations? [AGAIN, THIS IS FOR
EDUCATIONAL PURPOSES.]
Slide 1-75
Answers: Let the students suggest their answers and write them
down on the blackboard. Then show the transparency of
ICA 1-2, Figure 2 or Slide 1-75. The answers are described below.
ICA 1-2, Figure 2
1-31
Chapter 1
3. Twenty years ago, “efficiency” (the key “point of difference” or
benefit) of the plastic trap was not an important feature to most
buyers. The “disposer” segment was especially reluctant to throw
the dead mouse and the 25-cent plastic trap into the trash can, but
not at all hesitant to throw away the 7.5-cent wooden trap. If the
wooden trap missed the mouse, these users just reset it. So the
wooden trap provided greater customer value for most buyers. And
because the largest market segments were “A” and “C” in the table
above, the new “better” plastic traps gathered dust on retail shelves
across the country. The plastic traps also had a very practical
problem: disposing of a live mouse can be tricky (if the lid opened,
the mouse may jump out) or time consuming (need to find a place
far away from home to release the mouse).
[NOTE: ICA 1-2, Figure 2 is really a “market-product grid” that will
be introduced in Chapter 9. However, this tool can help in this ICA
since it allows students to answer the question: “What do we sell to
whom?”]
Marketing Lessons. Customers define what a “better” product is and not the seller or its
engineers! So, in a sense, Mr. Emerson was wrong! Key features or “points of difference” in the
product provide customer value to users or market segments. These “points of difference” must
be important to consumers and communicated to them in terms of (1) benefits to customers,
(2) advantages relative to substitute products from competitors, and (3) features, which are given
to the firm’s R&D engineers. Different market segments of buyers exist with different needs,
but sometimes it is not possible to reach tiny market segments profitably.
Website. To view Woodstream Corp.’s current product line of Victor® Brand
Mousetraps, go to www.victorpest.com.
Chapter 1
1-32
ICA 1-2, FIGURE 1
WHY DID THE NEW PLASTIC MOUSETRAP NOT
MEET SALES EXPECTATIONS?
OLD WOODEN TRAP
NEW PLASTIC TRAP
Wood
Plastic
2 for 15¢
25¢ each
50% efficiency
90% efficiency
Some Key Marketing Questions
1. What triggers the decision to buy a mousetrap?
2. Who in the family makes the decision to buy?
3. Who actually buys the mousetrap?
4. Where does the person buy the mousetrap?
5. Who in the family uses the mousetrap and how do they
use it?
6. What features do users want in a mousetrap?
7. Why did the “better” plastic mousetrap not meet sales
expectations?
1-33
Chapter 1
ICA 1-2, FIGURE 2
WHICH OF THE MARKETS (A, B, C, OR D) WAS THE
LARGEST FOR MOUSETRAPS 20 YEARS AGO?
Market
Segment
Product: Kind of Mousetrap
Wooden Trap
Plastic Trap
“Disposers”
A
B
“Reusers”
C
D
Chapter 1
1-34
TN: VIDEO CASE 1
Rollerblade®: Benefits Beyond What People Expect
Video Case 1
Synopsis:
Rollerblade
Slide 1-77
Rollerblade, Inc. invented in-line skating in the 1980s and is still
considered the market leader today. However, it has come up against some stiff
competition from both in-line skates (K2, Salomon, etc.) and other recreational
products (skateboards, scooters, and Heely’s—a shoe with an embedded wheel.
To remain the market leader, Rollerblade must continue to develop key
technological innovations for its in-line skates and promote in-line skating for
new market niches. With respect to technology, Rollerblade has developed the
industry-leading ABT (Active Braking Technology) Lite system; the Total Fit
System that tightens or loosens the skate for maximum performance, comfort,
and fit; and the MX 900, an extendable in-line skate for kids; among others.
Students are asked to assess how successful Rollerblade has been in dealing
with its new competition and changes in its marketing environment and suggest
ways that it can stay ahead of its competitors and future trends.
Teaching Suggestions:
This video case may be utilized to introduce a variety of marketing
topics, such as an overview of marketing and the marketing process
(Chapters 1 and 2), the changing marketing environment (Chapter 3), and
market segmentation (Chapter 9). Because in-line skating has been popular
with college students in the past, the instructor may want to ask students the
following questions to lead off the discussion of the video case:
1. How many of you have ever in-line skated? This question identifies
the incidence of in-line skating.
2. Of those that in-line skate, how many own or have skated with a
skate from K2, Rollerblade, Salomon, UltraWheels, or other
manufacturer? Which of you own a Rollerblade-branded in-line
skate? These two questions provide an indication of Rollerblade’s
market share within the class.
3. For all in-line skate owners: What features made you choose the
brand you own? This question gets students thinking about the
points of difference that they considered when buying their
particular brand and model of in-line skate.
4. How could Rollerblade increase awareness and purchase of its inline skate brands to college students such as you? This question gets
students thinking about the marketing mix actions (product, price,
promotion, and distribution tactics) that Rollerblade could take to
reach college students regarding its in-line skates.
1-35
Chapter 1
Answers to Questions:
1. What trends in the environmental forces (social, economic, technological,
competitive, and regulatory) identified in Figure 1-3 in the chapter (a) work for
and (b) work against Rollerblade’s potential growth in the twenty-first century?
Answers:
ENVIRONMENTAL
FACTOR
Social
Economic
Technological
Competitive
Regulatory
Chapter 1
(a) Work For Growth
(b) Work Against Growth
 In-line skating has become a
mainstream popular
recreational sports for young
people that also includes
mountain biking, scooters,
skateboarding, etc.
 In-line skating provides a fun
and exciting way to work out
with family and friends.
 In-line skating is a healthy
fitness activity.
 In-line skating is perceived to
be dangerous and/or difficult to
learn.
 In-line skating may be a “fad,”
whose attractiveness is
decreasing.
 Still an affordable sporting
activity. Relatively low cost to
participate.
 Once the initial investment is
made, in-line skating can be
enjoyed on streets or trails
open to the public.
 The profitability of the in-line
skating industry provides an
opportunity for powerful
competitors to enter the
market.
 Cost of ownership includes
accessories, parts, fees, etc.
 Over 200 patents provide some
protection from competition.
 Innovations may not be fully
appreciated by target
consumers.
 Rollerblade is still the industry
leader, setting technological
and quality standards.
 Rollerblade is synonymous
with in-line skating.
 Stiff competition from existing
in-line skate marketers.
 New competition from outside
the in-line skate industry.
 Leader in ensuring in-line
product and skater safety.
 Rollerblade has developed
programs to encourage in-line
skaters to wear protective gear.
 Limits to in-line skating access
(such as with skateboarding).
 Ongoing efforts to protect the
Rollerblade brand from
becoming a generic term for
in-line skating.
1-36
2. Compare the marketing goals for Rollerblade (a) in 1986 when Rollerblade was
launched and (b) today?
Answers:
a. Initially, the objective was to develop demand for a product category (stimulating
primary demand) as well as for the brand (stimulating selective demand).
Objective focused on creating awareness of the Rollerblade brand and in-line
skating, educating consumers to the fun and excitement of in-line skating, as well
as the availability of the Rollerblade in-line skates.
b. Today, the product category is well established. Rollerblade’s primary objective
is to stay ahead of the competition in technological innovations, create new
market niches, and stay visible in the consumers’ mind as the industry leader by
engaging in such marketing activities like sponsoring the ESPN X-Games. With
the flattening of the number of in-line skating participants in the United States
during the past few years (see Figure 1-1), Rollerblade must find ways to extend
its product life cycle—a topic covered in Chapter 11.
3. What kind of focused communication and promotion actions might Rollerblade
take to reach (a) the recreational and (b) children market segments? For some
starting ideas, visit www.rollerblade.com.
(a) RECREATION
MARKET SEGMENT
(b) KIDS MARKET SEGMENT
 Use demo vans.
 Have sports & movie celebrities wear
Rollerblade skates.
 Place skates in TV shows.
 Advertise in health & fitness
magazines.
 Use point-of-purchase displays and
signage in sporting goods stores.
 Create a ‘how to in-line skate’ video.
 Include website address in all
communications (brochures, etc.).
 Show venues where in-line skating is
popular (parks, trails, beach, college
campuses) in ads.
 Show adults having fun together inline skating.
 Stress comfort, safety of Rollerblade
skates in ads, POP, brochures, etc.
 Participate in sporting goods, outdoor
trade shows.
1-37
 Expand Skate in School program.
 Create a kids performance team.
 Offer free kid skate rental at in-line
skate specialty shops.
 Show kids having fun in-line skating
with parents, friends, etc.
 Show kids using protective gear to
promote safe in-line skating.
 Promote the extendible feature of the
MX900 in-line skate.
 Place a Rollerblade logo, sign, and/or
skate in a video game.
Chapter 1
4. In searching for global markets to enter, (a) what are some criteria that
Rollerblade should use to select countries to enter and (b) what three or for
countries meet these criteria best and are the most likely candidates?
Answers:
Background. In 2003, the Italian apparel firm Benetton Group sold Rollerblade to
another Italian firm, Tecnica, which owns the Nordica brand (skis, ski boots,
bindings, etc.). Thus, Rollerblade is already a part of a global marketing enterprise.
a. Suggested criteria for selecting which countries to enter with Rollerblade in-line
skates include the following: Youthful culture that enjoys outdoor activities and
exercise; an adequate system of parks/paved roads; perhaps a history of
ice/hockey skating; sufficient disposable and discretionary income for consumers
to be able to purchase recreational sporting equipment; access to reasonably
priced media to promote the benefits of in-line skating in general and the
Rollerblade brand in particular; and access to distribution channels (wholesalers
and retailers) and their willingness to carry Rollerblade brand in-line skates.
b. Today, Rollerblade sells its in-line skates in most European countries, some South
American countries (Brazil, Argentina, Venezuela, Chile), Middle East (Israel,
Saudi Arabia), and Pacific (Australia, New Zealand, Japan, Taiwan, Singapore,
and Korea). Potential markets to target in the near future would be Eastern
Europe (Poland, Hungary, Czech Republic, Baltic countries of Estonia, Latvia,
and Lithuania, etc.) due to their growing economies and the two most populous
countries in the world—India and China, where the number and discretionary
incomes of consumers are increasing.
Video Case 1
Rollerblade
Generic ad
Slide 1-82
Chapter 1
Epilogue
Rollerblade’s website shows its continued concern about the generic use of
“Rollerblading” to cover both the activity of in-line skating and the name of its
products. For more information about Rollerblade and its products, visit the
website, which is www.rollerblade.com.
1-38
POWERPOINT THUMBNAILS
Slide 1-1
Slide 1-2
Slide 1-3
Slide 1-4
Slide 1-5
Slide 1-6
Slide 1-7
Slide 1-8
Slide 1-9
Slide 1-10
Slide 1-11
Slide 1-12
1-39
Chapter 1
Chapter 1
Slide 1-13
Slide 1-14
Slide 1-15
Slide 1-16
Slide 1-17
Slide 1-18
Slide 1-19
Slide 1-20
Slide 1-21
Slide 1-22
Slide 1-23
Slide 1-24
1-40
Slide 1-25
Slide 1-26
Slide 1-27
Slide 1-28
Slide 1-29
Slide 1-30
Slide 1-31
Slide 1-32
Slide 1-33
Slide 1-34
Slide 1-35
Slide 1-36
1-41
Chapter 1
Chapter 1
Slide 1-37
Slide 1-38
Slide 1-39
Slide 1-40
Slide 1-41
Slide 1-42
Slide 1-43
Slide 1-44
Slide 1-45
Slide 1-46
Slide 1-47
Slide 1-48
1-42
Slide 1-49
Slide 1-50
Slide 1-51
Slide 1-52
Slide 1-53
Slide 1-54
Slide 1-55
Slide 1-56
Slide 1-57
Slide 1-58
Slide 1-59
Slide 1-60
1-43
Chapter 1
Chapter 1
Slide 1-61
Slide 1-62
Slide 1-63
Slide 1-64
Slide 1-65
Slide 1-66
Slide 1-67
Slide 1-68
Slide 1-69
Slide 1-70
Slide 1-71
Slide 1-72
1-44
Slide 1-73
Slide 1-74
Slide 1-75
Slide 1-76
Slide 1-77
Slide 1-78
Slide 1-79
Slide 1-80
Slide 1-81
Slide 1-82
1-45
Chapter 1