Chapter 15 Strategic Marketing Planning QUESTIONS AND ANSWERS TO END-OF CHAPTER MATERIAL Hands-on…Apply Your Knowledge Strategic Marketing Planning Assignment webTactics uses strategic planning and marketing to develop recruitment programs for a number of different organizations. This chapter’s opening vignette outlines steps in the strategic planning process. Assume you have been approached by a major sports entertainment network to help recruit from colleges and universities across Canada. Using the ideas from the vignette and Figure 15-5 as a guide, outline a strategic marketing plan to recruit students for this organization. Answer: These assignments give students the opportunity to apply chapter material to a real-life example, using the chapter’s opening vignette as a foundation. There are no specific answers, but encourage students to provide detailed rationale of each step of the strategic marketing process. Strategic Marketing Plan Outline: 1. Market Research: Conduct surveys and focus groups with students and career services at universities to understand preferences and interests. 2. Target Audience: Identify and segment potential candidates by major, extracurricular activities, and career aspirations relevant to sports and entertainment. 3. Positioning: Develop a compelling value proposition highlighting career growth, unique opportunities, and the network's impact on the industry. 4. Marketing Tactics: Utilize social media, campus events, and partnerships with student organizations to promote internships and job openings, ensuring alignment with student interests and engagement channels. Video Clip …Questions IBM recently celebrated its 100th anniversary! Its record of success is testimony to the resilience of a business model that encourages long-term strategies that can say “Welcome to a Smarter Planet.” Review the IBM video on creating a smarter planet. Reflecting on this perspective, answer the following questions: - What is IBM’s “Smarter Planet” business strategy? How does this strategy relate to IBM’s mission and values? Answer: IBM’s “Smarter Planet” business strategy focuses on leveraging technology and data to create more efficient, sustainable, and intelligent systems across various sectors, from cities to industries. This strategy aligns with IBM’s mission and values by emphasizing innovation, long-term impact, and solving complex global challenges. - Conduct a SWOT analysis for IBM’s Smarter Planet initiative. What are the relevant trends to consider for the next three to five years? Answer: SWOT Analysis for IBM's Smarter Planet Initiative: • Strengths: Strong brand reputation, advanced technology, extensive global network. • Weaknesses: High costs of implementation, complexity of solutions. • Opportunities: Growing demand for smart city solutions, increasing focus on sustainability. • Threats: Rapid technological changes, competition from agile startups. Relevant Trends: Increased focus on sustainability, smart city developments, advancements in AI and IoT. - How can IBM communicate its strategy to companies, cities, and governments? Answer: IBM can communicate its strategy through targeted presentations, case studies showcasing successful implementations, and partnerships with industry leaders. Utilizing thought leadership content and engaging in collaborative projects can also effectively convey its vision and impact. - What are the benefits of the Smarter Planet initiative to (a) society and (b) IBM? Answer: a) Society: The Smarter Planet initiative enhances efficiency, sustainability, and quality of life through smart infrastructure and data-driven insights. b) IBM: It positions IBM as a leader in innovation, drives new business opportunities, and strengthens client relationships through advanced technological solutions. - How should IBM measure the results of the Smarter Planet strategy? Answer: There are no specific answers, but keep the discussion focused around IBM’s key values of: (1) dedication to every client’s success, (2) innovation that matters—for our company and for the world, and (3) trust and personal responsibility in all relationships. IBM should measure the Smarter Planet strategy's success by tracking key performance indicators such as improved operational efficiency, increased client satisfaction, and the impact on sustainability goals. Additionally, assessing financial returns and market share growth will provide insight into the initiative's overall effectiveness. Infographic… data analysis The Infographic explaining how the candidate job search has changed over the years illustrates the importance of being able to execute and adjust a marketing strategy well. Using more recent insights about job-seeking tactics, add them as extensions to the Infographic and suggest what might be the next change that recruitment advertisers may need to be ready for. Answer: These assignments give students the opportunity to apply chapter material to a real-life example, using the chapter’s opening vignette as a foundation. There are no specific answers, but the brainstorming session will allow students to prepare their own job-seeking strategy. Recent insights show job seekers increasingly use AI-driven platforms and virtual reality (VR) for immersive company previews. Recruitment advertisers should prepare for the next change: integrating AI and VR into their strategies to enhance candidate engagement and provide a more personalized hiring experience. QUESTIONS AND ANSWERS TO ONLINE ACTIVITIES: APPLYING MARKETING CONCEPTS AND PERSPECTIVES 1. (a) Explain what a mission statement is. (b) Create a mission statement for your own career. Answer: Consumer wants or benefits met by each of four products or services include: a. A mission statement defines the organization’s scope, often identifying its customers, markets, products, technology, and values. b. An example of a mission statement for a student’s career might be: “To be recognized as an outstanding, ethically and environmentally responsible, global marketing executive.” 2. What competencies best describe (a) your college or university, (b) your favorite restaurant, and (c) the company that manufactures the computer you own or use most often? Answer: Some competencies for each of these organizations might be: a. Your college or university. A world-class research institution for biotechnology; student-oriented faculty. Flexible course scheduling to accommodate the special needs of part-time and working students. Specific programs offered by that institution and not by others. b. Your favourite restaurant. Genuine French cuisine. A family menu at a reasonable price. Exceptional service. c. The company that manufactures the computer you own or use most often. A 24-hour, 1-800 number help line. Capability of new computer models to run all software designed for older models. Online ordering and the ability to configure a system that meets your specific needs. 3. Why does a product often start as a question mark and then move counterclockwise around BCG’s growth-share matrix shown in Figure 15-3? Answer: When a product is introduced, it is usually a “question mark” because it is “new” and there is uncertainty about consumers’ acceptance of them. After a period of time, depending on the product category, the “not-so-new” product could be classified as a “star” if its growth rate is sizeable and had a significant share of the product category. If the growth rate in the product category falls substantially and there is great competition from competing brands, the product probably will fall in the “cash cow” category. If, however, the product isn’t supported with an effective marketing program, it could become a “dog.” This result can also be affected by the product lifecycle. 4. Many Canadian universities or colleges have traditionally offered an undergraduate degree or diploma in business (the product) to full-time 18- to 22-year-old students (the market). How might they use the four market-product expansion strategies shown in Figure 15-4 to compete in the twenty-first century? Answer: a. Market penetration. Obtain a greater share of the full-time 18- to 22-year-old students in the geographic area served by the college or university. b. Product development. Offer new courses at either the undergraduate or master’s degree level in areas such as business, computers, or law. c. Market development. Offer existing business courses to new markets in the form of distance learning via the Internet, part-time courses for evening, etc. d. Diversification. Offer new courses in business or computers to new markets, such as employees of local companies. 5. What is the main result of each of the three phases of the marketing plan: (a) planning, (b) implementation, and (c) evaluation? Answer: The results of each phase of the marketing plan are: a. Planning phase. Results are formal marketing plans that identify specific objectives to be achieved by a particular time and the specific actions to achieve those objectives. b. Implementation phase. Results are formal measurements of the results achieved, which can be compared with the plans established in the planning phase to determine if any deviations from plans occurred. c. Evaluation phase. Results are new actions taken to exploit opportunities where deviations from plans are better than expected or corrective actions where deviations from plans are worse than expected. 6. The goal-setting step in the planning phase of the marketing plan sets quantified objectives for use in the evaluation phase. What actions are suggested for a marketing manager if measured results are below objectives? Above objectives? Answer: If the marketing manager discovers a planning gap, which is a difference between the projection of the path to reach a new goal and the projection of the path of the results of a plan already in place for the marketing program, he or she can take the following actions: a. Below objectives: Correct a negative deviation by making minor or major changes to the existing marketing program of a product to better reflect future expectations in the marketing environment. b. Above objectives: Exploit a positive deviation by strengthening strategic partnerships, engage in a market development or product development strategy, etc. to maintain or enhance the firm’s position QUESTIONS AND ANSWERS TO ONLINE ACTIVITIES: DISCUSSION FORUM Imagine that you have just launched a new company called Escapade Travels, which is designed to organize trips to faraway, rarely-heard-of destinations with adventure-type activities, such as igloo building in Greenland and sand-dune racing in the desert in Dubai. You have just graduated with your marketing degree or diploma, so you want to make sure that you follow the strategic marketing process you learned. Think about what you want your company to be and discuss the following issues with your class/colleagues: 1. What should go into your mission statement? Draft one, limiting it to no more than 60 words. Answer: Mission Statement: "Escapade Travels offers unique, thrilling adventures to hidden destinations around the globe, providing exceptional experiences through authentic, immersive activities that push boundaries and create lifelong memories." 2. What business units will your company have? Who will your company’s stakeholders be? Answer: Business Units and Stakeholders: Units will include adventure travel planning, customer service, and marketing. Stakeholders are customers, travel partners, adventure guides, and suppliers. 3. What planning decisions will take place at the corporate level? At the business unit level? At the functional level? Answer: Planning Decisions: At the corporate level, decide on the overall vision and goals. At the business unit level, focus on market positioning and product offerings. At the functional level, implement tactical plans for marketing, operations, and customer service. 4. Sketch out a SWOT analysis, a market-product focus, and at least six goals for your new company. Answer: SWOT Analysis: Strengths - unique experiences; Weaknesses - high cost; Opportunities - growing adventure tourism market; Threats - economic downturns. Market-Product Focus: Target niche adventure travelers. Goals: 1) Achieve 20% market share in adventure travel, 2) Develop partnerships with 10 local guides per region, 3) Increase social media engagement by 50%, 4) Expand to 5 new destinations within 2 years, 5) Achieve 90% customer satisfaction rate, 6) Increase repeat bookings by 30%. 5. Choose an important target market for your company, and outline a suitable marketing mix. Answer: Target Market: Affluent adventure seekers aged 25-45. Marketing Mix: Product - exclusive adventure packages; Price - premium pricing; Place - online bookings and travel expos; Promotion - social media campaigns, influencer partnerships, and targeted ads. Note: These discussions are meant to generate class discussion and a lively debate of issues raised, as well as a general review of the opening case or concepts discussed within the chapter. There are no correct or incorrect answers. QUESTIONS AND ANSWERS TO ONLINE ACTIVITIES: INTERNET EXERCISE Starbucks has always believed that businesses can – and should – have a positive impact on the communities they serve. So ever since Starbucks opened their first store in 1971, they dedicated themselves to earning the trust and respect of their customers, partners and neighbors. How? By being responsible and doing things that are good for the planet and each other Go to the Starbucks website at http://www.starbucks.com/responsibility. You’ll find five areas that are discussed. They are community, environment, ethical sourcing, wellness and diversity. Summarize the main points from each of these areas. Answer: Community: From the neighborhoods where their stores are located, to the ones where their coffee is grown – Starbucks believes in being involved in the communities they are a part of. Bringing people together, inspiring change and making a difference in people's lives – it's all part of being a good neighbor. And it's a commitment rooted in the belief that Starbucks can use their size to bring about positive change. Environment: Starbucks shares their customers' commitment to the environment and believes in the importance of caring for our planet working with and encouraging others to do the same. As a company that relies on an agricultural product, it makes good business sense. And as people living in the world, it is simply the right thing to do. Ethical Sourcing: Starbucks has always believed in buying and serving the best coffee possible. It’s their goal for all of their coffee to be grown under the highest standards of quality, using ethical trading and responsible growing practices. Starbucks thinks it’s a better cup of coffee that also helps create a better future for farmers and a more stable climate for the planet. Wellness: Starbucks commitment to wellness begins with the foods and beverages they offer in their stores. From coffee, tea, smoothies and skinny lattes to fresh fruit, salads, whole grains and reduced fat pastries, Starbucks offers a variety of delicious options to meet customer’s needs. And you can feel good knowing that all of their foods are no more than 500 calories and free from unnecessary ingredients like high fructose corn syrup, artificial flavours, dyes, and artificial trans fats. Diversity: Aside from extraordinary coffee, Starbucks has made a business out of human connections, community involvement and the celebration of cultures. Starbucks is committed to upholding a culture where diversity is valued and respected. So it’s only natural that as a guiding principle, diversity is integral to everything Starbucks does. BRING IT TO LIFE: VIDEO SYNOPSIS & TEACHING SUGGESTIONS IBM: USING STRATEGY TO BUILD A "SMARTER PLANET" Synopsis “‘Smarter Planet’ is not an advertising campaign, it’s not even a marketing campaign, it is a business strategy,” explains Ann Rubin, vice president of Advertising at IBM. The “Smarter Planet” strategy is based on the idea that the next major revolution in the global marketplace will be the instrumentation and integration of the world’s processes and infrastructures, generating unprecedented amounts of data. The data captured and analyzed in industries such as banking, energy, health care, and retailing will allow IBM to help businesses be more efficient, productive, and responsive. Teaching Suggestions Review the Video Clip… Questions at the end of the chapter to help students with the two questions prepare a comprehensive response to the questions in the video case. BRING IT TO LIFE: VIDEO CASE – PRINTOUT IBM: USING STRATEGY TO BUILD A "SMARTER PLANET" “‘Smarter Planet’ is not an advertising campaign, it’s not even a marketing campaign, it is a business strategy,” explains Ann Rubin, vice president of Advertising at IBM. The “Smarter Planet” strategy is based on the idea that the next major revolution in the global marketplace will be the instrumentation and integration of the world’s processes and infrastructures, generating unprecedented amounts of data. The data captured and analyzed in industries such as banking, energy, health care, and retailing will allow IBM to help businesses be more efficient, productive, and responsive. THE COMPANY Founded in 1911, IBM has a history of innovation and focus on customers. The blue covers on its computers, blue letters in the IBM logo, and dark blue suits worn by IBM salespeople led to the now popular company nickname, “Big Blue.” Today, it has over 400,000 employees in more than 200 countries. Forbes magazine ranks IBM as the fourth most valuable brand in the world. The company is a leading developer of new business technologies, receiving more than 5,000 patents each year. Some of its well-known inventions include the automated teller machine (ATM), the hard disk drive, the magnetic stripe card, relational databases, and the Universal Product Code (UPC). In addition, IBM recently gained attention for its artificial intelligence program called Watson, which challenged two Jeopardy! game show champions, and won! VALUES, MISSION, AND STRATEGY Recently, IBM initiated a project to facilitate online discussions of key business issues among 50,000 employees to identify common themes and perspectives. According to Sam Palmisano, current CEO of IBM, “We needed to affirm IBM’s reason for being, what sets the company apart, and what should drive our actions as individual IBMers.” The results were three underlying values of IBM’s business practices: (1) dedication to every client’s success, (2) innovation that matters—for our company and for the world, and (3) trust and personal responsibility in all relationships. These values now come to life at IBM in its “policies, procedures, and daily operations,” explains Palmisano. IBM’s core values also help to define its mission, or its general function in society. In clear, concise, inspirational language IBM’s mission statement is: ● At IBM, we strive to lead in the invention, development and manufacture of the industry’s most advanced information technologies, including computer systems, software, storage systems, and microelectronics. ● We translate these advanced technologies into value for our customers through our professional solutions, services, and consulting businesses worldwide. The mission, and the values it represents, helps define the organizational culture at IBM. Executives, managers, and all employees create the culture through the strategies they select and the detailed plans for accomplishing them. IBM’s strategies are based on its assessment of fundamental changes in the business environment. First, IBM sees global changes such as fewer trade barriers, the growth of developing economies, and increasing access to the World Wide Web. These changes necessitate a new type of corporation that IBM calls the “globally integrated enterprise.” Second, IBM foresees a new model of computing that includes computational capability in phones, cameras, cars, and other appliances and allows economic, social, and physical systems to be connected. This connectivity creates a “smarter planet.” Finally, IBM predicts a growing demand for custom-made technological solutions that help organizations measure and achieve specific outcomes. As a result, IBM began to shift from commodity-based businesses such as PCs and hard disk drives, to “customizable” businesses such as software and services. The change in IBM was so substantial that it has described its plan in a document called the 2015 Road Map. The Map describes four strategic opportunities: (1) growth markets such as China, India, Brazil, and Africa, (2) business analytics and optimization, (3) cloud and smarter computing, and (4) the connected, “smarter” planet. These opportunities suggest a strategy that delivers value through business and IT innovation to selected industries with an integrated enterprise. The overarching strategy that highlights IBM’s capabilities is called “Building a Smarter Planet.” BUILDING A SMARTER PLANET The Smarter Planet initiative is designed for clients who value IBM’s industry and process expertise, systems integration capability, and research capacity. A smarter planet, while global by definition, happens on the industry level. It is driven by forward-thinking organizations that share a common outlook: they see change as an opportunity, and they act on possibilities, not just react to problems. John Kennedy, vice president of Marketing, explains, “‘A Smarter Planet’ actually surfaced from observing what was happening in our clients. They were looking to take the vast amount of data that was being generated inside their companies and looking to better understand it.” To IBM “smart” solutions have three characteristics. They are instrumented, they are intelligent, and they are interconnected. Millions of digital devices, now connected through the Internet, produce data that can be turned into knowledge through advanced computational power. IBM believes that this knowledge can help reduce costs, cut waste, improve efficiency, and increase productivity for companies, industries, and cities. Since introducing the Smarter Planet strategy, IBM has collaborated with more than 600 organizations around the globe. The success of the strategy is evident in the broad range of industries where “smart” solutions are being implemented. They include banking; communications; electronics, automotive and aerospace; energy and utilities; government; health care; insurance; oil and gas; retailing; and transportation. Each industry has reported a variety of applications. In a study of 439 cities, for example, smart solutions such as ramp metering, signal coordination, and accident management reduced travel delays by more than 700,000 annually, saving each city $15 million. A study by the U.S. Department of Energy found that consumers with smart electric meters cut their power usage and saved 10 percent on their power bills. Retailers who implemented smart systems to analyze buying behavior, merchandise assortment, and demand were able to cut supply chain costs by 30 percent, reduce inventory levels by 25 percent, and increase sales by 10 percent. THE BUILDING A SMARTER PLANET MARKETING PLAN Marketing and communications professionals at IBM have developed the marketing plan for IBM’s “Smarter Planet” strategy. The general goal is to describe the company’s view of the next era of information technology and its impact on business and society. The execution of the plan includes messaging from Palmisano, an advertising campaign, an Internet presence, and public relations communications. In addition, IBM measures and tracks the performance of the marketing activities. The importance of the Smarter Planet strategy was first communicated through a message from the top. Palmisano prepared a “Letter from the Chairman” for the annual report. His message was a powerful statement. Smarter Planet, according to Palmisano, “is not a metaphor. It describes the infusion of intelligence into the way the world actually works.” IBM also used a print and television advertising campaign to add detail to Palmisano’s message. The ads focused on the ability to improve the world now, with IBM’s help. “I think what’s different about Smarter Planet,” says Ann Rubin, “is that it was not inward facing, it was looking out at what the world needed. We felt like we could go out there and influence the world for the better.” IBM recently celebrated its 100th anniversary! Its record of success is testimony to the resilience of a business model that encourages long-term strategies that can say “Welcome to a Smarter Planet.” Questions 1. Create a positioning statement for IBM. Answer: Positioning Statement for IBM: "IBM positions itself as the leader in innovative information technology solutions, dedicated to creating a smarter, more efficient planet by delivering cutting-edge technology and expert consulting services that drive transformative change for businesses and society." 2. Describe the target market for IBM. Answer: Target Market for IBM: IBM targets large enterprises and governments globally, focusing on industries such as finance, healthcare, and manufacturing that require advanced technology and strategic consulting to drive digital transformation and operational efficiency. BRING IT TO LIFE: VIDEO CASE WORKSHEET IBM: USING STRATEGY TO BUILD A "SMARTER PLANET" Name: Section: This video looks at IBM’s Smarter Planet initiative. Please answer the following question once you have watched the video and read the case: 1. Create a positioning statement for IBM. Answer: Positioning Statement for IBM: "IBM empowers businesses and governments to create a smarter planet by leveraging our pioneering technology and innovative solutions to address complex global challenges, enhance operational efficiency, and drive sustainable growth." 2. Describe the target market for IBM. Answer: Target Market for IBM: IBM targets large enterprises, governments, and public sector organizations worldwide, focusing on industries that require advanced technology, data analytics, and consulting services to transform their operations and achieve strategic objectives. BRING IT TO LIFE: VIDEO CASE – ANSWERS TO QUESTIONS IBM: USING STRATEGY TO BUILD A "SMARTER PLANET" 1. Create a positioning statement for IBM. Answer: Encourage students to share their positioning statement before you share your example. IBM is a forward thinking technology company. The company provides products and services that are instrumented, intelligent and interconnected and helping their clients meet their everchanging business needs. 2. Describe the target market for IBM. Answer: Encourage students to share their target markets before you share your example. The target market for IBM is businesses who value the strengths offered by IBM’s industry and process expertise, systems integration capability, and research capacity. BRING IT TO LIFE: NEWSFLASHES AND FOCUS ON ETHICS SYNOPSIS AND DISCUSSION QUESTIONS An interesting NewsFlashes and a Focus on Ethics are included in this chapter. Discussing these NewsFlashes in class can bring the material to life for the students in an interesting, relevant, and timely fashion. They can be used as ice-breakers to launch into a relevant subject. Many of the topics are interesting to students and may be familiar. A. MEC BELIEVES ACCOUNTABILITY IS KEY TO CORPORATE SOCIAL RESPONSIBILITY Mountain Equipment Co-op (MEC) set challenging goals for itself in 2013. When sourcing its apparel materials, it focused on using facilities with environmental management systems and products with environmentally preferred materials. The additional steps MEC made for the benefit of the environment were not in vain. It surpassed its targets with respect to how it designs its products, how it operates as an organization, and how it supports the community. Questions 1. Give some examples of other companies practicing corporate social responsibility? Answer: Examples of Companies Practicing Corporate Social Responsibility: • Patagonia: Known for its commitment to environmental sustainability, using recycled materials, and supporting fair labor practices. • Ben & Jerry's: Focuses on ethical sourcing, social justice, and environmental stewardship. • Tesla: Promotes sustainable energy solutions through electric vehicles and solar products. 2. Would you pay more for more environmentally friendly apparel? Discuss. Answer: Willingness to Pay More for Environmentally Friendly Apparel: • Yes, I would be willing to pay more for environmentally friendly apparel. Supporting sustainable practices aligns with personal values and contributes to reducing environmental impact. Note: These discussion questions are meant to generate lively in-class discussion and critical thinking on the chapter material. There are no correct or incorrect answers. B. THE NETFLIX LAUNCH AND ITS CONTINUALLY CHANGING BUSINESS MODEL The Netflix DVDs-by-mail model delivered movies on DVD to customers for a fixed monthly fee—and drove Blockbuster to seek bankruptcy protection. But the Netflix business model changed over eight months in 2008: from “Watch now,” enabling subscribers to watch any of 1,000 streaming movies on a PC, to partnering with TiVo, Xbox, and others to enable their systems to let you see one of about 12,000 movies on your television. Questions 1. Netflix’s leadership was able to foresee the change from watching movies on DVD to watching movies over the Internet. How does this success validate the final words from Mike Jackson in this chapter’s opening vignette? Answer: Validation of Mike Jackson's Final Words: • Mike Jackson’s final words emphasized the importance of adapting to changing technologies and consumer behaviors. Netflix's shift from DVDs to streaming validates this by demonstrating how foresight and innovation can drive success and disrupt traditional business models. 2. What media do you access to get your news and entertainment? How can Netflix reach consumers like you? Answer: Media Access and Netflix's Reach: • I access news and entertainment through streaming services, social media, and online news outlets. Netflix can reach consumers like me by leveraging targeted advertising, partnering with digital platforms, and creating engaging, personalized content recommendations. Note: These discussion questions are meant to generate lively in-class discussion and critical thinking on the chapter material. There are no correct or incorrect answers. BRING IT TO LIFE: NEWSFLASH PRINTOUT AND WORKSHEET Name: Section: MEC BELIEVES ACCOUNTABILITY IS KEY TO CORPORATE SOCIAL RESPONSIBILITY Mountain equipment Co-op (MEC) set challenging goals for itself in 2013. When sourcing its apparel materials, it focused on using facilities with environmental management systems and products with environmentally preferred materials. The additional steps MEC made for the benefit of the environment were not in vain. It surpassed its targets with respect to how it designs its products, how it operates as an organization, and how it supports the community. MEC did not stop at achieving some of its goals. It held itself accountable through an accountability report shared with the public. This report highlighted where it succeeded and where it needed to improve. Furthermore, to ensure that results were conveyed in an unbiased yet fair manner, MEC looked to its stakeholders to form an account- ability review panel to help compile and submit the findings. Mountain equipment Co-op is not the only company focused on corporate social responsibility. According a recent article in Maclean’s, applying socially responsible practices makes good business sense and adds to the bottom line of many Canadian companies. Questions 1. Give some examples of other companies practicing corporate social responsibility. Answer: Examples of Companies Practicing Corporate Social Responsibility: • Patagonia: Focuses on environmental sustainability and fair labor practices. • Ben & Jerry's: Supports social justice initiatives and environmental causes. • Toms Shoes: Donates a pair of shoes for every pair sold, enhancing global access to footwear. 2. Would you pay more for more environmentally friendly apparel? Discuss. Answer: Paying More for Environmentally Friendly Apparel: • I would consider paying more for environmentally friendly apparel if the quality and sustainability benefits are clearly communicated. The premium price is often justified by the positive environmental impact and ethical production practices. BRING IT TO LIFE: NEWSFLASH PRINTOUT AND WORKSHEET Name: Section: THE NETFLIX LAUNCH AND ITS CONTINUALLY CHANGING BUSINESS MODEL If in 1997 a customer had been charged a late fee of $40 for a VHS tape of Apollo 13, what might she or he have done? Maybe just grumble and pay it? In the case of Reed Hastings, he was embarrassed, apparently paid the $40 late fee, and—this is where he’s different—got to thinking that there’s a big market out there. “So I started to investigate the idea of how to create a movie-rental business by mail,” he told a Fortune magazine reviewer. The Original Business Model “Early on, the first concept we launched was rental by mail, but it wasn’t subscription-based so it worked more like Blockbuster,” says Hastings, the founder and chief executive officer of Netflix. It wasn’t very popular. So in 1999, he relaunched his idea with a new business model—as a subscription service, pretty much the mail business you see today. “We named the company Netflix, not DVDs by Mail, because we knew that eventually we would deliver movies directly over the Internet,” Hastings says. Netflix’s Changing Business Model The Netflix DVDs-by-mail model delivered movies on DVD to customers for a fixed monthly fee—and drove Blockbuster to seek bankruptcy protection. But the Netflix business model changed over eight months in 2008: from “Watch Now,” enabling subscribers to watch any of 1,000 streaming movies on a PC, to partnering with TiVo, Xbox, and others to enable their systems to let you see one of about 12,000 movies on your television. The movie distribution channel has also expanded with web-ready TVs such as Sony’s Bravia, game consoles such as Xbox 360, and tablets such as Apple’s iPad. With Netflix breaking a series of technology barriers, its “any movie, any time” business is just around the corner. In mid-2011, Netflix introduced controversial new pricing options: DVD only, streaming only, or both. Then in late-2011, when customer reaction exploded, Reed Hastings cancelled the plan to separate Netflix’s DVD-by-mail business from its movie streaming service. Change is a constant in the Netflix business model. Netflix alters its “business model” to respond to changing consumer demand and technologies. Many organizations need to continually improve their businesses in order to stay ahead of the changes that are evident now and predicted for the future. Questions 1. Netflix’s leadership was able to foresee the change from watching movies on DVD to watching movies over the Internet. How does this success validate the final words from Mike Jackson in this chapter’s opening vignette? Answer: Validation of Mike Jackson’s Vignette: • Netflix's foresight in transitioning from DVDs to online streaming illustrates Jackson's point about the importance of adapting to technological changes and consumer preferences. Successful businesses anticipate trends and pivot their strategies to stay relevant and competitive. 2. What media do you access to get your news and entertainment? How can Netflix reach consumers like you? Answer: Media Access and Netflix’s Reach: • I access news and entertainment through streaming services, social media, and digital news outlets. Netflix can reach consumers like me by leveraging targeted advertising on social media platforms, partnering with digital news sites, and offering tailored content recommendations. BRING IT TO LIFE: IN-CLASS ACTIVITY MARKETING YOURSELF – INSTRUCTIONS Learning Objective To show students, especially non-marketing majors, that marketing is applicable to their future by using the strategic marketing process and marketing mix when looking for a job. Description of In-Class Activity •Have students apply the strategic marketing process (see Figure 15-5) to themselves as they seek employment. •This activity lends itself more to as an individual one as opposed to a group activity. Estimated class time: 1 hour. Preparation before Class •Read the section on the Strategic Marketing Process in chapter 15. •Make copies of the “Marketing Yourself” handouts and worksheets. In-Class Implementation •Relevant Chapter Content – Prior to conducting this in-class activity you will need to review the following chapter material with your students: ○ Go over the following terms with students (they are referred to in this in-class activity): Strategic Marketing Process: The approach whereby an organization allocates its marketing mix resources to reach its target markets. Points of Difference: Are those characteristics of a product that make it superior to competitive substitutes. Positioning: The place an offering occupies in a consumer’s mind with regard to important attributes relative to competitive offerings. Situation Analysis: Taking stock of where the firm or product has been recently, where it is now, and where it is headed in light of the organization’s plans and the external factors and trends affecting it. Marketing Mix: 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. SWOT Analysis: An acronym describing an organization’s appraisal of its internal strengths and weaknesses and external opportunities and threats. •In-Class Instructions – Hand out the “Marketing Yourself” handouts and worksheets. Go over the handout with your students. Have them add a few extra notes to the handout based on what you are going to tell them next. They can then use the handout with the extra notes to help them complete the worksheet, either in class or at home. ○ Start by referring students to the Situation Analysis, which is the first item on the first page of the handout. Tell the students that they will be conducting a SWOT analysis, which should be used to appraise their personal strengths and weaknesses as well as their opportunities for and threats (or barriers) to successful employment. a. To conduct an internal analysis, ask students what some of their strengths and weaknesses are in terms of the courses taken and grades received, work experience, extra-curricular activities involvement, honours received, etc. b. To conduct an external analysis, ask students which industries or types of jobs are growing or in demand that may be opportunities. Further, ask them what advantages or “points of difference” they have relative to other “competitors” (other students) seeking the same job opportunities, such as taking this marketing course, the reputation of this educational institution, etc. Finally, ask them what other external forces can impact their job search, for example a downturn in the economy, the need to be computer literate, etc. This type of focused approach helps to define potential market segments that can be targeted. o Refer students next to the Focus and Goal Setting section which is on the middle of the first page of the handout. Ask students about the type of jobs they hope to land after graduation and how they intend to find these jobs. Most students will describe a “shotgun approach” of aiming at any job without any focused or targeted effort at specific careers (product management, marketing research, advertising, sales, etc.) or positions (assistant product manager, marketing research analyst, etc.). Contrast the difference between a shotgun approach and a targeted marketing effort. This is a good opportunity to explain how research can help students develop information to identify alternative “target markets.” For example, students can learn about potential opportunities through networking, internships, informational interviewing, and many secondary sources. ○ Refer students next to the Marketing Program section which follows the Focus and Goal Setting section on the first page of the handout. Ask students to identify elements of their marketing mix: a. What type of “product” do you have to offer? b. What sort of “pricing” is appropriate? c. What “promotion” will be utilized? d. What type of “place” or channel will be used? These include intermediaries such as on-campus career services, networking, employment agencies, and even the Internet, with firms such as Workopolis. ○ Assuming that your students are not looking for work imminently, they can dispense with the Implementation Phase and Evaluation Phase found on page 2 of the handout until they are actually looking for a job. ○ Allow students 20 minutes to complete the worksheet. ○ Call on students and ask them to share portions of their personal marketing plan with the class. •Handout – The students have the “Marketing Yourself” handouts and “My Own Marketing Plan” worksheets which were distributed in the section above. •Evaluation – Collect the worksheets from students for evaluation purposes. BRING IT TO LIFE: IN-CLASS ACTIVITY MARKETING YOURSELF – HANDOUT Situation Analysis • Internal Assessment: What are your strengths and weaknesses? What can you do to enhance your strengths and minimize your weaknesses? What points of difference or competitive advantage do YOU have? If you don't have one, can you develop one? • External Analysis: What are the trends in the environmental factors that could impact your job search and career development? These consist of: socio-cultural, economic, technological, competitive, and regulatory factors. What type of background, experiences, strengths, and weaknesses do your competitors have? What market segments (job opportunities) have you identified as having the best potential? How do you fit into these markets? Focus and Goal Setting • What are your objectives? Make them specific and measurable! • What is your target market? Examples might be large public accounting firms, business-to-business sales, and marketing research for a consulting firm, etc. Marketing Program • Product: YOU. Know yourself well. Continually improve yourself. Understand how you can meet the needs of your target market—prospective employers! • Pricing: What salary and compensation package do you want? What are you willing to settle for? What’s the average salary received by competitors in your target market? • Promotion: Very important. Think about the buying process. How will you create awareness for yourself? What can you do to “break through the clutter” and get the opportunity for an interview? Your personal selling skills will be important for telephone contacts and face-to-face interviews. Probe to find out about the needs of the organization before that “sales call” and during the interview. Have your questions prepared. •Place: What channels have you developed to access your target market, such as associations, personal contacts, professors, etc.? Do some careful research on these. Don’t assume that intensive distribution is necessarily the way to go. Focus your efforts to those target markets that hold promise. Implementation Phase Develop a timetable and budget for research, wardrobe, résumés, and travel. Carry out your program. Contact your target market opportunities. Follow-up consistently. Remember that looking for a job requires a significant commitment of your time and effort. Evaluation Phase Follow-up on all leads. Find out why you did or didn’t make the cut. Ask at an interview what it was about your résumé that interested them. Even if you don't get the job, you have more insight. Similarly, when you call to follow-up on those cover letters and résumés that you sent out, ask when decisions will be made, when it would be appropriate to call back (and then do it). If you are rejected, call back and ask why. If you exhaust all possibilities in a given target market, go back to your situation analysis and identify new segments. Always send a “Thank You” note. BRING IT TO LIFE: IN-CLASS ACTIVITY MARKETING YOURSELF – WORKSHEET STRATEGIC MARKETING PROCESS MY OWN MARKETING PLAN P L A N N I N G P H A S E Situation Analysis (SWOT) Location of Factor Kind of Factor Favourable Unfavourable Internal: Me • Personality • Formal Education • Job Experience • Motivation • Other: My Strengths: My Weaknesses: External: • Economic • Technical • Legal • Other: Opportunities For Me: Threats Affecting Me: Focus and Goal Setting My Goals Upon Graduation Personal Goals: My Desired Position Job Description: My Target Industries, Organizations, and Locations Industries: Organizations: Geographical Areas: My Uniqueness (Points of Difference) Personality: Education & Experience: Other: My “Positioning” How I Compare to Other Job Applicants: MARKETING PROGRAM MY OWN MARKETING PLAN P L A N N I N G P H A S E • Product Strategy (Actions to Improve My “Marketability”) Formal Education/Courses: Job Experiences/Projects Completed: Extra-Curricular/Volunteer Activities: Obstacles To Overcome: • Price Strategy Compensation Sought: • Promotion Strategy Résumé, Personal Interviews, and Letters/Telephone Calls: • Place Strategy Networking for Contacts and References: I M P L E M E N T A T I O N • Schedule/Budget Actions to Take/Budget Deadlines Marketing Actions (Courses to take, summer jobs to get, résumés to write, clothes to buy, travel arrangements to make, etc.) 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. E V A L U A T I O N • Evaluation What Did and Didn’t Work: • Act on deviations How to Modify Strategy: BRING IT TO LIFE: IN-CLASS ACTIVITY SALES FORECASTING – INSTRUCTIONS Learning Objectives 1. To understand each of the three the different sales forecasting techniques 2. To answer questions on the inherent problems of using each of these techniques. Description of In-Class Activity The handout contains the explanations of the three sales forecasting techniques as well as questions that students should answer. Estimated class time: 20 minutes. In-Class Instructions Give the sales forecasting handout to the students, describe each of the three sales forecasting techniques, and then give students the worksheet to answer the questions. Answers for this activity are given below. Jury of executive opinion What do you think are some of the problems in believing the sales forecasts from production, finance and purchasing executives? Answer: As some of these executives may have little contact with outside market influences, their estimates may be not reflected in reality of the marketplace. Surveys of knowledgeable groups Why would you have more confidence in a salesperson’s estimate of the sales forecast as opposed to a production manager or finance manager? Answer: Because salespeople are in contact with customers and are likely to know what customers like and dislike, one can trust their estimates of the sales forecast. What problems are inherent when you ask a consumer whether he or she plans to buy the product in the future? Answer: It's one thing for consumers to say that they plan to buy the product, but these are just words and they may not reflect reality. What consumers say they will do and what they really do can be two different things. Statistical methods If, for example, a company’s sales have been increasing 10% a year for the last three years, the marketer may decide to forecast a 10% sales growth for the next year. Why might this approach not be accurate as a sales forecast tool? Answer: What happened in the past is not necessarily a reflection of what is going to happen in the future. For example, a future recession can affect sales of a product. This should be taken into consideration in forecasting for the following year. The company may want to increase its sales forecast by only 5%, for example. BRING IT TO LIFE: IN-CLASS ACTIVITY SALES FORECASTING – HANDOUT Three main sales forecasting techniques are often used: (1) jury of executive opinion, (2) surveys of knowledgeable groups, and (3) statistical methods. 1. Jury of executive opinion One of the oldest and simplest methods of forecasting is the jury of executive opinion which combines the opinions of experienced executives, perhaps from different departments such as marketing, production, finance, and purchasing. Each executive on their own estimates the sales forecast for the coming year. Then they try to work out a consensus. What do you think are some of the problems in believing the sales forecasts from production, finance and purchasing executives? Answer: Believing sales forecasts from production, finance, and purchasing executives can be problematic because each department may have a limited perspective and bias based on their focus. For example, production might overestimate due to optimistic capacity assumptions, finance might be conservative to safeguard budgets, and purchasing might base forecasts on inventory levels rather than market demand. These conflicting views can lead to inaccurate forecasts if not properly reconciled. 2. Surveys of knowledgeable groups One example of surveying knowledgeable groups is to ask salespeople for a sales forecast. A sales force forecast involves asking the firm's salespeople to estimates sales during the coming period. Why would you have more confidence in a salesperson’s estimate of the sales forecast as opposed to a production manager or finance manager? Answer: Another example of surveying knowledgeable groups involves asking prospective customers if they are likely to buy the product during some future time period. You'd have more confidence in a salesperson’s estimate because salespeople are directly in contact with customers and have firsthand knowledge of market conditions and customer preferences. They are likely to have a better grasp of real-time sales trends and potential customer demands compared to production or finance managers, who might rely on broader, less detailed data. What problems are inherent when you ask a consumer whether he or she plans to buy the product in the future? Answer: When asking consumers about their future purchasing intentions, problems include: 1. Overestimation: Consumers may overestimate their likelihood to buy due to social desirability or optimism, leading to inflated forecasts. 2. Change in Preferences: Consumer preferences can change rapidly, making future intentions unreliable. 3. Uncertain Factors: External factors such as economic conditions or unexpected events can impact actual buying behavior, which may not be captured in a survey. 3. Statistical methods The best known statistical method of forecasting is trend extrapolation, which involves extending the pattern observed in past data into the future. If, for example, a company’s sales have been increasing 10% a year for the last three years, the marketer may decide to forecast a 10% sales growth for the next year. Why might this approach not be accurate as a sales forecast tool? Answer: Trend extrapolation may not be accurate because: 1. Market Changes: It assumes past trends will continue unchanged, not accounting for shifts in market conditions or consumer behavior. 2. External Factors: It overlooks potential external factors like economic downturns or new competitors that could impact future sales. 3. Data Anomalies: It may not consider anomalies or irregularities in past data, which can skew the forecast. BRING IT TO LIFE: IN-CLASS ACTIVITY SALES FORECASTING – WORKSHEET Name: Section: What do you think are some of the problems in believing the sales forecasts from production, finance and purchasing executives? Answer: Sales forecasts from production, finance, and purchasing executives can be problematic because: 1. Bias: Each department may have biases or limited perspectives that skew forecasts based on their priorities. 2. Lack of Market Insight: They may lack direct market feedback or customer insights, leading to unrealistic projections. 3. Conflicting Objectives: Their forecasts might reflect departmental goals rather than accurate market conditions, causing discrepancies. Why would you have more confidence in a salespersons estimate of the sales forecast as opposed to a production manager or finance manager? Answer: 1. Direct Customer Interaction: Salespeople have firsthand knowledge of customer preferences and buying intentions. 2. Market Insight: They are on the front lines and can provide up-to-date feedback on market conditions and trends. 3. Real-Time Feedback: Salespeople can quickly adapt forecasts based on recent sales activities and customer interactions. What problems are inherent when you ask a consumer whether he or she plans to buy the product in the future? Answer: 1. Overestimation: Consumers might overestimate their likelihood to buy due to social desirability or lack of commitment. 2. Change in Preferences: Future intentions may not align with actual future behavior due to shifting preferences or circumstances. 3. Uncertain Economic Conditions: Economic factors may change, influencing consumers’ purchasing decisions unpredictably. If, for example, a company’s sales have been increasing 10% a year for the last three years, the marketer may decide to forecast a 10% sales growth for the next year. Why might this approach not be accurate as a sales forecast tool? Answer: 1. Market Changes: External factors like new competitors, economic shifts, or changing consumer preferences can impact future sales. 2. Saturation: Sales growth might slow as the market becomes saturated or reaches its limit. 3. Anomalies: Past growth may include anomalies or unusual spikes that aren't sustainable. BRING IT TO LIFE: METRICS ASSIGNMENT CALCULATING SELLING PRICES BASED ON MARKUPS ON COST OR SELLING PRICE – WORKSHEET Name: Section: How to calculate selling price based on markup based on cost: Assume a cost price of $50 and a markup based on cost of 40%. The cost price = $50.00 + 40% of $50 = $50.00 + $20.00 = $70.00. The selling price is thus $70.00. 1. Assume a cost price of $30 and a markup based on cost of 20%. Calculate the selling price. How to calculate selling price based on markup based on selling price: Assume a cost price of $70 and a markup based on selling price of 15%. To calculate the selling price, use the following formula: Answer: Cost price + markup based on selling price x selling price = selling price. Here are the calculations: $70.00 + 15% x selling price = selling price. Let us call the selling price SP. $70.00 + 0.15SP = SP Using a little algebra, 0.85SP = $70.00. SP = 70 / 0.85 = $82.35 The selling price is thus $82.35. 1. For a cost price of $30 with a 20% markup based on cost: • Selling Price = $30.00 + (20% of $30.00) = $30.00 + $6.00 = $36.00. 2. To calculate selling price based on a 15% markup on selling price: • Selling Price = Cost Price / (1 - Markup Percentage) = $70 / (1 - 0.15) = $70 / 0.85 = $82.35. 2. Assume a cost price of $100 and a markup based on selling price of 20%. Calculate the selling price. Answer: To calculate the selling price based on a markup percentage of the selling price: 1. Let S be the selling price. 2. The markup is 20% of S so the cost price C is S - 0.20S = 0.80S. Given the cost price is $100, we set up the equation: 100 = 0.80S So, the selling price is $125. BRING IT TO LIFE: METRICS ASSIGNMENT CALCULATING SELLING PRICES BASED ON MARKUPS ON COST OR SELLING PRICE – ANSWERS 1. Assume a cost price of $30 and a markup based on cost of 20%. Calculate the selling price. Answer: The cost price $30.00 + 20% of $30 = $30.00 + $6.00 = $36.00. The selling price is thus $36.00. 2. Assume a cost price of $100 and a markup based on selling price of 20%. Calculate the selling price. Answer: To calculate the selling price, use the following formula. Cost price + markup based on selling price x selling price = selling price. $100 + 20% x selling price = selling price. Let us call the selling price SP. $100.00 plus 0.20SP = SP Using a little algebra, 0.80 SP = $100.00. SP = 100 / 0.80 = $125. The selling price is thus $125. Solution Manual for Marketing: The Core Roger A. Kerin, Steven W. Hartley, William Rudelius, Christina Clements, Harvey Skolnick, Arsenio Bonifacio 9781259030703, 9781259269264, 9781259107108
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