* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Video Correlation Grid Marketing Video Gallery 2006 Marketing, 4th
Marketing research wikipedia , lookup
Marketing communications wikipedia , lookup
Digital marketing wikipedia , lookup
Food marketing wikipedia , lookup
Consumer behaviour wikipedia , lookup
Direct marketing wikipedia , lookup
First-mover advantage wikipedia , lookup
Street marketing wikipedia , lookup
Marketing mix modeling wikipedia , lookup
Service parts pricing wikipedia , lookup
Brand equity wikipedia , lookup
Product lifecycle wikipedia , lookup
Multicultural marketing wikipedia , lookup
Brand loyalty wikipedia , lookup
Integrated marketing communications wikipedia , lookup
Target audience wikipedia , lookup
Pricing strategies wikipedia , lookup
Brand ambassador wikipedia , lookup
Product placement wikipedia , lookup
Visual merchandising wikipedia , lookup
Customer satisfaction wikipedia , lookup
Youth marketing wikipedia , lookup
Predictive engineering analytics wikipedia , lookup
Supermarket wikipedia , lookup
Emotional branding wikipedia , lookup
Market penetration wikipedia , lookup
Green marketing wikipedia , lookup
Neuromarketing wikipedia , lookup
Target market wikipedia , lookup
Customer engagement wikipedia , lookup
Segmenting-targeting-positioning wikipedia , lookup
Advertising campaign wikipedia , lookup
Global marketing wikipedia , lookup
Marketing strategy wikipedia , lookup
Marketing channel wikipedia , lookup
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 1 X 2 3 4 5 6 X 7 X X 8 X X X 9 X 10 11 X 12 13 14 15 X 16 X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Dunkin' Donuts Honest Tea Nextel 10:30 mins 7 mins 9:45 mins X X X X X X X X X X 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