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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