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MARKETING FUNDAMENTALS

PAGE STUDENT LEARNING OBJECTIVES

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1-2 KEY TERMS, CONCEPTS & MARKETING TIPS

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1-2 LECTURE NOTES & ANSWERS TO ‘ASK YOURSELF & ADALYZE’

 Opening Vignette – LG Touch Phones ..........................................................................

1-3

 The Essence of Marketing .............................................................................................

1-4

 The Marketing Process ..................................................................................................

1-5

 The Evolution of Business Philosophies........................................................................

1-6

 The Progression of Marketing & Evolving Areas .........................................................

1-7

 Marketing Careers ..........................................................................................................

1-9 QUESTIONS AND ANSWERS TO ON-LINE ACTIVITIES

 Applying Marketing Concepts and Perspectives .................................................................

1-10

 Discussion Forum ............................................................................................................

1-12

 Internet Exercise ...........................................................................................................

1-12 BRING IT TO LIFE VIDEO - EARTH HOUR - AN HOUR FOR ENERGY AWARENESS

 Synopsis & Teaching Suggestions ................................................................................

1-13

 Video-Case – Printout and Worksheets ........................................................................

1-14

 Answers to Questions ...................................................................................................

1-18 NEWSFLASHES - EARTH HOUR / HMV / CANADIAN IDOL

 Synopsis and Discussion Questions ..............................................................................

1-20

 Newsflashes – Printout and Worksheet ........................................................................

1-22 IN-CLASS ACTIVITY - SMARTIES & AFTER EIGHT STRAWS

 Instructions, Handout, and Worksheet ..........................................................................

1-25

1-1 Chapter 1

STUDENT LEARNING OBJECTIVES

After reading this chapter you should be able to:

  Understand the focus of marketing and explain the marketing process. Define the marketing mix.   Understand the difference between goods, services and ideas. Describe the evolution of different business philosophies and understand how marketing has evolved.  Understand what careers exist in marketing.

KEY TERMS AND CONCEPTS

corporate social responsibility (CSR) customer value experiential marketing idea marketing marketing mix marketing process price production orientation relationship marketing service target market customer relationship management (CRM) exchange good market marketing concept marketing orientation place product promotion sales orientation societal marketing concept

MARKETING TIPS

For this particular chapter we look to Andrew Barrett, VP Marketing LG Canada for his MARKETING TIPS on what he considers is important for students to understand. You may wish to use these at the start of a class, after a break, or to summarize the material at the end of a session. Depending on the quotes, these MARKETING TIPS can also prompt interesting class discussions. The quotes for this chapter are as follows: Marketing tip #1; “At the core of every great marketing program is a creative idea. This idea becomes the catalyst that inspires every element of the marketing program…it is essential that the marketer uses this idea to inform, stimulate, and guide all of the elements of the marketing mix.” Marketing tip # 2; “The consumers decision to purchase a product or service is part of a journey of discovery that the consumer travels along. Sometimes it is as short as minutes when we buy on impulse, and other times it is months or years for major purchases. Market research is a key tool to understanding consumer buying behaviour.” Marketing tip # 3; “Great marketers are people that can find insights about consumers, and then take these insights and develop them in creative ways to make their products or services relevant. They need to develop unique, engaging programs that bring products or services to life in flawless execution. They need to be analytical, detailed and creative.” Chapter 1 1-2

LECTURE NOTES CHAPTER 1 OPENING VIGNETTE – LG TOUCH PHONES

In 2008 LG Canada launched a new line of cell phones with a marketing program to which students can relate. This is a good introductory example that can bring marketing alive to students in the classroom. It demonstrates the concepts of (1) marketing, (2) adding value, (3) goods and services, (4) the marketing mix, and (5) target markets. The vignette is summarized as follows:   In 2008 LG Canada launched the LG Vantage, Venus and Vu touch phones The purpose of the marketing program was to create awareness and hype for the new phones with two groups (1) the final consumer, and (2) the phone carriers / retailers such as Rogers, Bell, and Telus who sell the phones.  The target market was the youthful university / college crowd who were style conscious and techno-savvy. All launch elements were designed with these consumers in mind.  The marketing mix included:

Product

- research determined specific

product

needs for Canadians. The following features were included in the phone; Vibefeedback technology (the phone shudders in response to a command), touch screens, radio access, instant messaging, mobile TV access, and a high speed processor

Price –

this was competitive with other products. The phone also came without expensive data plans which consumers did not always want

Place

- distribution was secured through the standard cell phone carriers, Bell, Rogers, and Telus. Their support was needed so that the product was supported and displayed at retail

Promotion

- this was designed to create a buzz with consumers, the media, and retailers. The campaign included public relations, advertising, and point-of-sale material o Public Relations - media journalists, cell phone carriers, and key influencers were invited to attend a lunch-time launch event which unveiled the new phones o o Advertising – TV ads aired on primetime TV, washroom ads were placed in bar restaurants, a large billboard appeared across a major highway in Toronto, and online banner ads, a keyword search program, and a microsite were designed to intrigue the target audience Point-of-Sale Material – in-store signage was created in collaboration with the phone carriers Bell, Rogers, and Telus 1-3 Chapter 1

I. THE ESSENCE OF MARKETING

Chapter 1 introduces marketing as a concept that focuses on the consumer. It looks at the marketing process, explains how marketing evolved, and discusses the latest developments. Marketing programs focus on consumers, providing them with value through products that meet their needs. Marketers attempt to create distinct images for their products, setting them apart from their competition, while also appealing to consumer needs.

a. Focusing on Customer Needs

Successful marketing programs focus on consumer needs and try to develop customer value through programs that delight the consumer and encourage customer loyalty. Consumer needs are often vague and marketers turn to market research for clarification. 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.

b. Creating Customer Value

Customer value is created by providing customers with products that have added value through a combination of (1) pricing strategies, (2) product design, and (3) service elements. 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. Marketers deliver this value by managing each element of the marketing mix (product, price, place, and promotion) so that this value is evident to consumers.

c. Appealing to Target Markets

Since companies to do not have infinite funds, and cannot satisfy everyone’s needs, they design products to appeal to specific groups of customers that we call target markets. A target market is the specific group of existing and potential consumers to which a marketer targets its marketing efforts. Marketing efforts are created to appeal to a product’s specific target market. The marketing mix is designed to appeal to this specific target market.

d. Coordinating the Marketing Mix

The elements of the marketing mix consist of product, price, place, and promotion. Each element is well coordinated and managed by marketers to appeal to the target market.  Product - a good, service, or idea designed to satisfy a consumer’s needs    Price - what is exchanged for the product Promotion - a means of communication between the seller and buyer Place - a means of getting the product to the consumer

Ask Yourself

1. What is the essence of marketing? Answer: The essence of marketing is focusing on customer needs and designing programs to meet these needs so that a company can generate revenue or profits. 2. What is a target market? Answer: A target market is the group of consumers to whom you direct your marketing. 3. What is the marketing mix? Answer: The marketing mix consists of product, price, place, and promotion. Chapter 1 1-4

II. THE MARKETING PROCESS

The marketing process is a continuous process that requires marketers to pay attention to detail and apply their strategic, analytical, and creative-thinking skills.

a. The Marketing Process

The marketing process is a three step continuous process that involves (1) identifying consumer needs, (2) managing the marketing mix to meet these needs, and (3) realizing profits. Marketers constantly evaluate the success of their programs, implementing and recommending future changes to improve the programs. 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 to discover the needs and wants of prospective customers, and to satisfy these needs. The key to achieving these two objectives is the idea of exchange, which the trade of things of value between a buyer and seller so that each benefits.

b. What can be Marketed?

Goods services and ideas can all be marketed – in marketing we refer to these as products which are explained below:    Goods - products you can touch and own such as running shoes or a can of cola Services - intangible products you cannot touch such as a holiday or a haircut Ideas - concepts which typically looks for your support such as a political party or cause

c. What is a Market?

Potential consumers make up a market, which consists of people with both the desire

and

the ability to buy a specific product.

Ask Yourself

1. What steps are involved in the marketing process? Answer: The marketing process involves (1) identifying consumer needs, (2) managing the marketing mix to meet these needs, and (3) realizing profits. 2. What are the differences between goods, services, and ideas? Answer: A good is tangible while services and ideas are not. 3. Are credit cards goods, services, or ideas? Answer: A credit card is a combination of a good and a service; you actually own the credit card, (thus making it a good), while it provides the owner with deferred credit terms on purchases which is intangible, (thus making it a service). 1-5 Chapter 1

III. THE EVOUTION OF BUSINESS PHILOSOPHIES

Business approaches have changed over time, steered by improved technology, increased competition, and the evolution of different philosophical approaches. The stages overlap but in general terms they are as follows:

a. The Production Orientation Stage (until the 1930’s)

This approach focused on manufacturing goods which tended to sell regardless of their quality since they were in short supply. Consumer needs were not a priority.

b. The Sales Orientation Stage (1930’s to the 1960’s)

This approach focused on selling as many products as possible in a more competitive market where products were in abundance. Companies were hard-selling to make profits. Consumer needs were still not a major consideration.

c. The Marketing Orientation Stage (1960’s to the 1990’s)

This approach focused on consumer needs. The market was very competitive and meeting consumer needs was the path to success and profits. If a company did not meet consumer needs, another company would be able to do so.

d. The Relationship Marketing Orientation Stage (1990’s onward )

This approach considers the life-time value of its customers and developing long-term relationships with them. It emphasizes customer retention and on-going satisfaction rather than short-term sales. The philosophy behind this approach is that improved customer relationships can result in increased customer loyalty, improved customer retention levels, and greater profits for the organization. 

Relationship Marketing

- when organizations create long-term links with their customers, employees, suppliers, and other partners to increase loyalty and customer retention. An important outgrowth of this market orientation is

customer relationship management,

(CRM). 

Customer Relationship Management (CRM) –

an approach grounded in the fact that it is less expensive to service and maintain current customers rather than obtain new ones. It involves a systematic company approach to actively managing and retaining satisfied customers by efficiently and accurately identifying the elements that lead to satisfied customers and increased company profits. Chapter 1 1-6

IV. THE PROGRESSION OF MARKETING AND EVOLVING AREAS

Over the last decade societal pressures, consumer expectations, and technological changes have resulted in the following newly evolving areas for marketers:

a. Customer Relationship Management (CRM)

This focuses on identifying a firm’s most valued customers and building long-term customer relationships to build loyalty. The process involves building and maintaining profitable customer relationships through superior customer value. Examples can be simple courtesy phone calls from car dealerships or more complex loyalty programs such as AIRMILES, or OPTIMUM cards from Shoppers Drug Mart. In it most complex form, CRM involves sophisticated database management companies and software programs that allow marketers to precisely target individuals with offers and programs that meet their individual needs.

b. Experiential Marketing

This is when marketers create opportunities for consumers to directly interact with a brand to generate word-of-mouth awareness and free publicity. Event marketing and public relations often play a major role in spreading these word-of-mouth initiatives.

c. Corporate Social Responsibility (CSR)

CSR is when organizations voluntarily take responsibility for how their businesses impact consumers, customers, suppliers, employees, shareholders, communities, and society in general. Many companies have CSR initiatives which focus their organizations on annually achieving the goals they have set for themselves in these areas. Companies which have these types of initiatives include HBC, CIBC, and Tim Hortons. The Societal Marketing concept involves marketing programs that address the well being of society and the environment. The CIBC with their sponsorship of the RUN FOR THE CURE event is an example of the societal marketing concept.

d. Focus on Ethics

Companies and marketers are increasingly focusing on society, understanding that they can play a major role and have a strong impact on its well-being. Nonetheless, not all organizations or marketers are focused on CSR or the societal marketing concept. To protect society and the environment from the adverse effect of businesses, regulations are imposed (see Chapter 2) as a basic safeguard for our communities. These regulations can be imposed by governments, companies, and industry associations. Professional associations often have guidelines and codes of ethics to provide direction to their employees and members. Three of the main regulatory bodies are described below: 

The CRTC’s (Canadian Radio-television and Telecommunications Commission)

- an example of a government body that regulates many marketing practices such as broadcast standards, broadcast licenses, and Canadian content. 

The Competition Bureau - a government agency which regulates fair competition through the Competition Act.

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The Canadian Marketing Association (CMA)

- the professional marketing body that consists of more than 800 corporate members. It deals with legislation and sets guidelines for responsible business practices. The CMA has a code of ethics with which all members must comply. Its purpose is to encourage ethical and legal marketing practices. It covers topics such as accuracy, truthfulness, pricing, redemption, and privacy. Visit http://www.the-cma.org/ .

Ask Yourself

1. What are the stages involved in the evolution of business philosophies? Answer: The stages are; the product orientation stage, the sales orientation stage, the marketing orientation stage, and the relationship marketing orientation stage. 2. What is involved in a relationship marketing orientation? Answer: This is when organizations create long-term links with their customers, employees, suppliers, and other partners to increase loyalty and customer retention. 3. In your own words explain experiential marketing? Answer: Experiential marketing involves the creation of small marketing events to allow consumers to interact with products. 4. What is CSR? Answer: This is corporate social responsibility and involves companies considering the well being of society in their business practices. Chapter 1 1-8

V. MARKETING CAREERS

Many students wonder whether there are jobs in the marketing field. This is dependent on the strength of the economy, education, work experience, and contacts in the industry.

a. Getting a Job in Marketing

The key to finding a job in the industry is to obtain an education, network with industry professionals, volunteer at organizations to gain experience, and review job postings. Job postings can be found at; www.nabs.org

, www.marketingmag.ca

, www.strategymag.ca

, www.the-cma.org

, www.aimscanada.com

, and www.mediajobsearchcanada.com.

b. Marketing Jobs

Entry level positions exist in sales, marketing, and promotions. Typical jobs are for marketing coordinators, marketing analysts, marketing assistants, sales representatives, and account coordinators. Most entry level jobs usually include on the job training, the creation of analytical reports, liaison with other departments within the company, exposure to marketing program development, and the potential to move up within the company. Growth areas exist in Internet service businesses, and promotions. Foreign languages can be an asset.

c. Skills Required

Students need to be analytical, capable of working in teams, and have strong communication skills. They need to be aware of recent events, be intellectually curious, and be up-to-date on cultural events and trends. Reading newspapers/magazines, surfing the Internet, watching TV, and listening to the radio will help students stay current.

d. Recommended Reading

Publications such as Marketing magazine, Strategy magazine, Canadian Business, and Maclean’s will be helpful.

adAlyze Questions

1. Who is the target market? Answer: The target market consists of athletic female skiers who are active participants in the sport and interested in maintaining a fashionable appearance while skiing. 2. Is this advertising a good, a service, or an idea? Answer: Atomic Balanze skis are goods, tangible products that can be owned. 3. What gets your attention in this ad? Answer: The magazine-cover-type image of a beautiful woman holding skis gets attention together with the design of the skis and the unusual use of colour throughout the advertisement. 1-9 Chapter 1

QUESTIONS AND ANSWERS TO ON-LINE ACTIVITIES “APPLYING MARKETING CONCEPTS AND PERSPECTIVES”

1. What consumer benefits are met by the following products or services? (a) Gatorade sports drinks, (b) Heinz baby food, (c) iTunes music downloads.

Answer: Consumers benefits met by these products or services include: a. Gatorade sports drinks – thirst quenching, rehydration, taste, and an athletic image b. Heinz baby food – time savings, convenience, and nutrition. c. iTunes music downloads – convenience, easy access, and selection

2. For the products identified in question #1, generally describe each product’s target market.

Answer: The target markets include the following: a.Gatorade sports drinks – active children and young adults looking for thirst quenching drink that rehydrates and tastes good ( http://www.gatorade.com/ ) b. Heinz baby food – busy parents, with infants that cannot yet digest regular food. The parents need the convenience, time-savings, and nutrition of a pre-prepared baby food ( http://www.heinzbaby.com/ ) c. iTunes music downloads – tech-savvy children and young adults who own an iPod and are looking for the latest selection in downloadable music ( http://www.apple.com/itunes/ )

3. Take one of the products in question #1 and describe the elements of the marketing mix used to market the product or service.

Answer: The following items can be included in the marketing mix for these products: a. Gatorade sports drinks Product - comes in a wide assortment of flavours such as RAIN, FROST, LEMONADE, X-FACTOR, XTREMO, FIERCE, and AM. Price – varies and starts at about $2.00 Place – sold at food chains, mass merchandisers, drug stores, convenience stores, online, and in vending machines Promotion – TV ads, online ads, sponsorships of athletes / sporting teams / leagues, contests, and websites b. Heinz baby food Product - comes under four main categories – Beginner Foods, Strained Foods, Junior Foods, and Toddler Foods. Beginner Foods include carrots, green beans, peas, squash, sweet potatoes, wax beans, applesauce, Bartlett pears, bananas, and peaches. Price – varies and starts at about $1.00 Chapter 1 1-10

Place – sold at food chains, and drug stores Promotion – print ads, websites, and contests c. iTunes music downloads Product – free software downloads and a wide selection of music, movies, TV shows, audio books, and games Price – varies from free downloads, to 99 cents per song, and higher prices for other items Place – online Promotion – e-newsletters, TV ads, websites, contests

4. Think of some ideas your university or college could implement that demonstrate the societal marketing concept.

Answer: Some ideas are as follows:   Fundraiser for a children’s charity Policy on greening the campus including items such as recycling, energy conservation, and printing policies

5. What companies have used experiential marketing on campus to encourage student interest and involvement?

   Beer companies such as Molson at campus pubs Gaming companies such as Microsoft with XBOX Radio stations such as The Edge with live broadcasts 1-11 Chapter 1

QUESTIONS AND ANSWERS TO ON-LINE ACTIVITIES “DISCUSSION FORUM”

Review the launch of LG’s touch phones from the opening chapter vignette and discuss the following questions with your peers. 1. What elements led to the successful launch of the LG touch phones? 2. How might LG use the societal marketing concept in the future to market these products? 3. Brainstorm on some experiential marketing ideas that LG could use to market their touch phones. 4. If LG was to market these touch phones to mothers with children between the ages of 3-12, what changes should they make to their marketing mix?

Answer: 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 ON-LINE ACTIVITIES ANSWERS TO “INTERNET EXERCISE”

Fisher Price received accolades for its Smart Cycle™ learning arcade system launched in 2007. Go to the Fisher Price website below and navigate to information on the Smart Cycle™. Review the information on the website and determine the following to the best of your ability. http://www.fisher-price.com/us/ 1. Who is the market for the Smart Cycle™?

Answer: A market consists of the people willing and able to purchase a product. The market for the Smart Cycle is the parents of young children between the ages of 3 – 6 years.

2. Who is the target market for the Smart Cycle™?

Answer: The target market for the Smart Cycle includes the children who influence their parents. The target market for this product includes both the children and the parents.

3. By looking at information on the Fisher Price website, identify the elements of the marketing mix for the Smart Cycle™.

Answer: The marketing mix is as follows: Product - a stationary bike, learning centre and arcade game all in one. It plugs into a TV. It has multiple levels and can help kids learn numbers, letters, spelling, and motor skills. It requires cartridges to function. There are 9 different cartridges. Price- the price varies but ranges but is about $100. Each cartridge costs about $20. Place - can be purchased in toy stores, mass merchandisers and online. Promotion – TV ads and websites Chapter 1 1-12

BRING IT TO LIFE VIDEO SYNOPSIS & TEACHING SUGGESTIONS EARTH HOUR - AN HOUR FOR ENERGY AWARENESS

Synopsis

In 2007 the city of Sydney, Australia, the World Wildlife Fund (WWF), and Fairfax media created Earth Hour to focus government and worldwide attention on climate change. Through a media blitz of advertising and public relations, Earth Hour encouraged people in the city of Sydney to turn off their lights for a designated hour on March 29, 2007. The result was 2.2 million people turned off their lights, and energy usage was reduced by 10.2% - the equivalent of taking 48,000 cars off the road for the hour. The idea became more than a social movement when 2,100 corporations such as Coca-Cola, HSBC, Proctor & Gamble, and McDonalds joined hands with local residents to support the cause. Earth Hour captured the imagination of the world and in 2008 it went global. On March 29, 2008, in its second year it is estimated that Earth Hour was celebrated by more than 50 million people in over 35 countries and in 370 cities and towns. In Canada, an estimated 8 10 million people participated in Earth Hour 2008 – half of Canada’s adult population. Canada’s communities turned off their lights with cities such as Montreal, Ottawa, Toronto, and Vancouver bathed in darkness. People celebrated collectively in their homes, with street celebrations, or open air concerts. Earth Hour 2008 was considered an overwhelming success focusing individual, business, and government attention on the issue of climate change. Around the world Earth Hour 2008 was mentioned in 10,214 Google-news items and had 24,958 Earth Hour blogs created on the event. The momentum continues for 2009 with Earth Hour aiming to reach more than one billion people in 1,000 cities around the world. The Earth Hour website allows people to register for the cause and download promotional materials such as carbon-footprint calculators, tip-sheets, logos, Internet web-banners, posters, and stickers. One can even purchase T-shirts. People are encouraged to post photos on the Earth Hour Flikr group, follow the causes’ progress on Twitter, and post their videos on the Earth Hour YouTube channel.

Teaching Suggestions

This video is can be used as a lively opener to your course, making the topic of marketing real, current, interesting, and relevant to your students. Its topic, Earth Hour and global warming are familiar to your students and show how an idea can be marketed. It can generate a lively discussion with students. This topic is also briefly included in your text-book as a newsflash. If you have an Internet-capable classroom you may wish to show some additional short video clips posted on the WWF website at http://www.earthhour.org/ or under their YouTube channel at http://www.youtube.com/user/WWF . These two sites have additional Earth Hour clips from the current year. Unfortunately, Internet links are changed from time to time so be sure to check whether these links are still available. 1-13 Chapter 1

BRING IT TO LIFE VIDEO CASE- PRINTOUT EARTH HOUR - AN HOUR FOR ENERGY AWARENESS EARTH HOUR - AN HOUR FOR ENERGY AWARENESS

In 2007 a grass roots energy awareness and anti-global warming movement was born in Australia. The city of Sydney, Australia partnered with the World Wildlife Fund (WWF), and Fairfax media to focus government and worldwide attention on the issue of climate change. They created a symbolic event, Earth Hour which encouraged people in the entire city of Sydney to turn off their lights for a designated hour on March 29, 2007. The campaign mobilized the city through advertising that ran on TV, radio, and newspaper. It also saw the development of a website and blogs that encouraged people to send the information to their friends and sign up for the cause. Ads could be seen throughout the city, prominently displayed on flag-poles and transit shelters. A public relations effort encouraged the media to cover the campaign, helping to create interest and excitement with residents who came out in droves to support the Earth Hour cause. What started off as a grass-roots movement ended up as a celebration with 2.2 million people turning off their lights and a resultant 10.2% reduction in energy usage at that time. This was the equivalent of taking 48,000 cars off the road for the hour. Earth Hour gathered momentum as celebrities such as Kate Blanchett and Nicole Kidman added their voices to the cause and placed the media spotlight on the event. The idea became more than a social movement when major corporations joined hands with local residents to support the cause. In 2007 Earth Hour was supported by 2,100 corporations with well known names such as Coca-Cola, HSBC, Proctor & Gamble, and McDonalds lending their support. Earth Hour captured the imagination of the world as country after country watched Sydney Australia plunge itself into darkness as a symbolic gesture for all to follow. It demonstrated the power that can be unleashed when governments, businesses, and people work together for a common cause. In 2008 Earth Hour went global! On March 29, 2008 Earth Hour was celebrated by millions of people around the world who turned off their lights for one hour at about 8 pm local time to raise awareness of the cause. Canada’s major cities and local communities turned off their lights as 150 communities including Montreal, Ottawa, Toronto, and Vancouver saw restaurants bathed in candle light rather than use electric lights. Many people celebrated collectively in their homes, with street celebrations, or open air concerts. In Canada an estimated 8-10 million people participated in Earth Hour 2008 – half of Canada’s adult population. In its second year, it is estimated that Earth Hour united more than 50 million people in over 35 countries and in 370 cities and towns. Some highlights of the event saw national landmarks shrouded in darkness such as the Sydney Opera House in Australia, the Peace Tower in Ottawa, the CN Tower in Toronto, the Coliseum in Rome, and the Coca-Cola billboard in Times Square New York City. Even the search engine Google placed a black background on its home page with the words, "We've turned the lights out. Now it's your turn." Earth Hour 2008 was considered an overwhelming success focusing individual, business, and government attention on the issue of climate change and global warming. It demonstrated to people who felt they had no impact on this larger than life issue, that they Chapter 1 1-14

have a say, and can make a difference. Around the world, Earth Hour 2008 had 10,214 Google-news items reported, with 24,958 Earth Hour blogs created on the event. The message being sent around the world was YOU CAN MAKE A DIFFERENCE. Individuals and businesses can both take small actions such as turning off lights when they are not being used to dramatically reduce green-house gas emissions. The momentum continues for 2009 with a comprehensive website used to help garner support. This website allows people and businesses to register for the event. It displays a minute-by-minute count-down to the day, and provides supporters with information and promotional materials for the cause. Downloadable tip-sheets are available for individuals and businesses, and Earth Hour T-shirts are available for purchase. Logos, Internet web-banners, posters, stickers, and promotional videos are also all available through this website, including a downloadable corporate communication package for businesses. A carbon footprint calculator is also available for use on Facebook sites while supporters are encouraged to join Facebook and MySpace social networking sites. People are also encouraged to post photos on the Earth Hour Flikr group, follow the causes’ progress on Twitter, and post their videos on the Earth Hour YouTube channel. Earth Hour in 2009 aims to reach more than one billion people in 1,000 cities around the world. Visit the Earth Hour website to see their latest success stories at http://www.earthhour.org/ or visit their YouTube channel at http://www.youtube.com/user/WWF . Questions 1. What consumer trends and insights contributed to the success of Earth Hour? 2. How are the concepts of added-value and exchange applied to this initiative? What added value elements are being provided to participants? What is being exchanged between the marketer and the participant? 3. The marketing mix consists of product, price, place, and promotion. Describe the elements of the marketing mix for the Earth Hour product developed to put a spotlight on global warming. 4. Which of the following marketing approaches were used by the Earth Hour campaign; (1) customer relationship management, (2) experiential marketing, (3) corporate social responsibility, (4) the societal marketing concept? Sources: http://www.earthhour.org/ http://www.youtube.com/user/WWF 1-15 Chapter 1

BRING IT TO LIFE VIDEO CASE WORKSHEET EARTH HOUR - AN HOUR FOR ENERGY AWARENESS

Name: Section:

The video will review the successful Earth Hour initiative for WWF. Please answer the following questions once you have watched the video and read the case:

1. What consumer trends and insights contributed to the success of Earth Hour? 2. How are the concepts of added-value and exchange applied to this initiative? What added value elements are being provided to participants? What is being exchanged between the marketer and the participant?

Chapter 1 1-16

3. The marketing mix consists of product, price, place, and promotion. Describe the elements of the marketing mix for the Earth Hour product developed to put a spotlight on global warming.

Product

Price

Place Promotion 4. Which of the following marketing approaches were used by the Earth Hour campaign; (1) customer relationship management, (2) experiential marketing, (3) corporate social responsibility, (4) the societal marketing concept?

1-17 Chapter 1

BRING IT TO LIFE VIDEO CASE – ANSWERS TO QUESTIONS EARTH HOUR - AN HOUR FOR ENERGY AWARENESS

1. What consumer trends and insights contributed to the success of Earth Hour?

Answer: The answers are as follows: Trends  Consumers are increasingly interested in global warming and helping the environment but most people saw global warming as a world problem on which they could have no impact.  Companies have an increased emphasis on CSR and are often receptive to supporting social causes.  Global warming is receiving heightened attention in the media. Insights  The media have a heightened interest in global warming.  Governments have been slow to react to pressure by environmentalists to reduce greenhouse gas emissions.   Governments often react to pressure from wide-spread social consumer movements Corporations are increasingly interested in CSR, corporate social responsibility and are more receptive than ever to participating in such efforts.  A coordinated effort by individuals and corporations may garner strong media attention and encourage governments to take notice.  Australia has a proven story to tell which can be used with the media to encourage other countries to participate.

2. How are the concepts of added-value and exchange applied to this initiative? What added value elements are being provided to participants? What is being exchanged between the marketer and the participant?

Answer: The answers are as follows: Added value The added value provided to participants comes in the form of satisfaction from participating in the cause and realizing that you can make a difference on the global scene. The resultant media attention from this initiative also adds value by demonstrating the results of the combined consumer, corporate, and municipal government involvement in this project and how it played out around the world. Exchange The concept of exchange is interesting in this instance. The WWF provides individuals, companies, and local governments with a high profile cause to rally around and support in a very simple, yet highly visible manner. In exchange individuals, companies and local governments see the result of their support on three levels; (1) their city/town/area being shrouded in darkness, (2) the coverage on their local news broadcasts, (3) the international attention the Earth Hour campaign garners, and (3) the increased interest by governments in reducing global warming. Chapter 1 1-18

3. The marketing mix consists of product, price, place, and promotion. Describe the elements of the marketing mix for the Earth Hour product developed to put a spotlight on global warming.

Answer: The answers are as follows: Product - the product that is being marketed in this instance is an idea. The idea is to support awareness of global warming and bring attention to the cause by turning off your lights for an hour. Price - the price attached to supporting this idea is two-fold; (1) doing without lighting for an hour, (2) not supporting this general cause can have long-term dire consequences for the environment Place - the support for this initiative was secured in many countries and cities around the world. Promotion – the WWF promoted this cause by using; (1) public relations to encourage the media to cover this initiative (2) traditional newspaper advertising to raise further awareness of this cause, and (3) interactive Internet sites and blogs to create global forums and local meeting places on this subject.

4. Which of the following marketing approaches were used by the Earth Hour campaign; (1) customer relationship management, (2) experiential marketing, (3) corporate social responsibility, (4) the societal marketing concept?

Answer: The answers are as follows: All of these approaches were used by the Earth Hour campaign as follows: (1) CRM – the individualized element of this campaign, encouraging people to get directly involved in Earth Hour, creates a bond between people and the cause. This in turn helps cement the relationship between the WWF and individuals that will hopefully carry over into future years and new initiatives. (2) Experiential Marketing - individuals who participated in this initiative directly experienced the results of their actions. They experienced the darkness by turning off their lights and seeing the resultant darkness from others who participated in the event. The impact of their actions could also be followed in the media which added to the experiential element of the campaign. (3) CSR – many corporations and companies participated in Earth Hour by turning off the lights in their offices and buildings. (4) The societal marketing concept – companies demonstrated their support for society in general by turning off their lights and thereby raising awareness of the issue with society in general. 1-19 Chapter 1

BRING IT TO LIFE NEWSFLASHES SYNOPSIS AND DISCUSSION QUESTIONS

Three interesting newsflashes are included in this chapter on HMV, Earth Hour, and Canadian Idol. 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.

1. HMV REINVENTS ITSELF

The ability to download music and the increased incidence of MP3 players has resulted in a marked increased in the purchase of music from regular music stores such as HMV. In response to this change in consumer purchase patterns HMV has redesigned its stores to include expanded DVD sections, video game offerings, and BMG’s Platinum MusicPass which enables consumers to purchase digital albums which can be played on computers, and MP3 players.

Discussion Questions 1. What changes did HMV implement to appeal to its target market? 2. What added value does HMV provide to its customers? 3. Do you think this approach will be successful?

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.

2. MARKETING IDEAS: EARTH HOUR

Earth Hour is an initiative originating in Australia in 2007 when the city of Sydney, WWF, and Fairfax media partnered together to encourage residents to turn our their lights for an hour at a designated time and day in March. The purpose was to focus attention on climate change and encourage individuals, governments and businesses to mobilize themselves to help address global warming. The campaign was enormously successful, enjoying media coverage around the world. The following year, in 2008, Earth Hour went global, spreading to over 24 countries including more than 300 cities, towns and communities. In Canada, Ottawa, Toronto, Vancouver, and Montreal all participated in the event with over 100,000 people registering to support the event online.

Discussion Questions 1. Is Earth Hour a good, a service or an idea? 2. Why do you think Earth Hour was so successful? 3. What were the key elements that led to the success of Earth Hour?

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. Chapter 1 1-20

3. CTV HELPS THE IDOLS BUILD A HOUSE

Canadian Idol is a successful reality show than runs in the spring and summer on TV in Canada. It was started in 2002 and has been involved with various products which are integrated into the show such as Pantene, TD Bank, and Kraft food products. In 2007, for the first time Canadian Idol also focused attention on raising funds for charity, selecting Ronald McDonald House Charities as the partner for the initiative. This charity offers free lodging for out-of-town families whose children require local hospital treatment. Canadian Idol used an online auction, and the sales from the Idols first single, “Believe in You,” to help build a family retreat on Vancouver Island.

Discussion Questions 1. What concept is being demonstrated by Canadian Idols’ support of Ronald McDonald House Charities? 2. Why are businesses implementing CSR initiatives in Canada? 3. Do you think other parts of the world have this same focus on CSR? Why or why not?

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.

1-21 Chapter 1

BRING IT TO LIFE NEWSFLASH PRINTOUT AND WORKSHEET

Name: Section:

HMV Reinvents Itself

In recent years, HMV has been forced to change its tune. HMV Canada Inc. is the coun try’s leading music retailer, but it has found itself evolving its focus in recent years to better reflect the changing habits of the buying public. The music industry was a $1.3 billion business in Canada as recently as 1999, but by 2006 sales had plummeted to roughly half that at $679 million. Only 39.9 million physical albums were sold in 2007, a decrease of 12.1 percent since 2006. HMV has been changing to meet the needs of a new kind of consumer, one that forgoes going into a store and buying a CD for the convenience of downloading the material and playing it on an MP3 player. Recently, HMV has begun to sell the Sony BMG Platinum MusicPass, a card that enables a user to buy and download albums plus bonus material to play on any MP3 player. Downloading music, both legally and illegally, has vastly outstripped the purchasing of physical CDs by teenage consumers. HMV has responded by expanding its product base to include DVDs and video games, as well as MP3 players and other related accessories. HMV locations in the United Kingdom have also expanded in this direction, opening stores that have digital download hubs, gaming stations, and smoothie bars. HMV Canada is also evolving, moving to encompass not only music, but all forms of entertainment. Source: Matt Semansky, “Record Shift.”

Marketing

magazine, March 10, 2008: 17–20; “iPod is making beautiful music at HMV,” HMV press release, December 3, 2007, accessed at www.newswire.ca/en/releases/archive/December2007/03/c6524.html; “Record-breaking DVD sales expected this Tuesday,” HMV press release, December 6, 2007, accessed at www.cnw.ca/en/releases/archive/December2007/06/c7933.html; and HMV website, 2009, accessed at www.hmv.ca/hmvcaweb/en_CA/navigate.do?pPageID=100000035.

Discussion Questions 1. What changes did HMV implement to appeal to its target market? 2. What added value does HMV provide to its customers? 3. Do you think this approach will be successful?

Chapter 1 1-22

BRING IT TO LIFE NEWSFLASH PRINTOUT AND WORKSHEET

Name: Section:

Marketing Ideas: Earth Hour

At 8:00 p.m. on March 29, 2008, the lights went out. Not for everyone, perhaps, but for enough people to send a strong message to the government of Canada, and governments around the world. This was not a blackout, but an extremely successful marketing campaign: the World Wildlife Fund’s Earth Hour. Organized to raise awareness of climate change, Earth Hour is a largely grassroots campaign highlighting the simple measures that people can take to cut emissions by urging them to pledge to turn off their lights for just one hour—from 8:00 to 9:00 p.m. local time. When Earth Hour was first celebrated in Sydney, Australia, in 2007, the city reported a 10.2 percent decrease in energy use—the equivalent of taking 48,000 cars off the road for the hour. In 2008, Earth Hour went global, spreading from Sydney to more than 300 towns and cities in two dozen countries. Designed as a symbolic event to show concern and inspire long-term action, Earth Hour doesn’t ask participants to trade their SUVs for hybrid cars, or move into the wilderness. Rather, the Earth Hour campaign seeks just a small commitment to show the world how easy reducing emissions can be. For the 2008 event, Canadians in about 150 communities pledged to turn off their lights for the hour. Across Canada, restaurants offered candlelight dining. Toronto’s City Hall, CN Tower, and Air Canada Centre were dimmed to darkness. The clock on Parliament’s Peace Tower in Ottawa went dark as Canada marked its participation. Darkness spread worldwide, starting earlier that day in New Zealand and rolling through 14 time zones before ending on North America’s West Coast. The Sydney Opera House, Rome’s Colesseum, and Coke’s billboard in Times Square were all plunged into darkness as 8 p.m. local time moved across the world. In total, approximately 100,000 Canadians registered online for the event—roughly one third of the 300,000 registered worldwide. “Canadians go dark with world for Earth Hour,” CBC News, March 29, 2008, accessed at www.cbc.ca/world/story/2008/03/29/earth-hour.html; and Jennifer MacMillan, “Canadians embrace Earth Hour,” 327.

The Globe and Mail

, March 27, 2008, accessed at www.theglobeandmail.com/servlet/story/RTGAM.20080327.wearthhour0327/BNStory/National/?page=rss&id=RTGAM.20080327.wearthhour0

Discussion Questions 1. Is Earth Hour a good, a service, or an idea? 2. Why do you think Earth Hour was so successful? 3. What were the key elements that led to the success of Earth Hour?

1-23 Chapter 1

BRING IT TO LIFE NEWSFLASH PRINTOUT AND WORKSHEET

Name: Section:

CTV Helps the Idols Build a House

After five years on television, in 2007, Canada’s most-watched summer series,

Canadian Idol,

brought something new to viewers. For the first time, CTV’s hit series became involved with a charitable venture. Teaming up with McDonald’s Restaurants of Canada Limited,

Canadian Idol

launched the “Help the Idols Build a House” campaign. Since 1974, Ronald McDonald Houses around the world have offered free lodging to out of-town families of children undergoing treatment at local hospitals. In 2007, thanks to the donation of a two-acre plot of land on Vancouver Island’s Bear Mountain Resort, Ronald McDonald House Charities of Canada embarked on an extension of the charity’s central concept: to build the first North American Ronald McDonald Family Retreat. Here, families who have previously stayed at one of Canada’s 12 Ronald McDonald Houses would be given the opportunity to spend quality time together, free of charge, to focus on their emotional needs and get their lives back on track. Run during the show’s 2007 summer season, the “Help the Idol’s Build a House” campaign offered viewers a number of opportunities to support the charity. The viewers’ first opportunity to “Help the Idols Build a House” was an online auction run on the

Canadian Idol

website. Here viewers could bid on a number of items such as backstage passes to the meet the 2007

Canadian Idol

finalists, a romantic weekend for two in Quebec City, a ride in the CTV helicopter, and autographed sports and music memorabilia. Viewers could also download the campaign’s official anthem, “Believe in You.” Recorded to be released with the announcement of the campaign, and sung by the season’s top ten competitors, “Believe in You” became not only the campaign’s anthem but also

Canadian Idol’s

first single. Available for download from iTunes and other online music stores, net proceeds from sales of the single were donated to Ronald McDonald House Charities. Sources: “Sales from first Idol single to benefit children in need,” CTV’s Canadian Idol website, 2007, accessed at www.ctv.ca/mini/idol2007/static/bearmountain.html; “Canadian Idol to Support Ronald McDonald House Charities ® of Canada,” CTV press release, July 9, 2007, accessed at www.ctv.ca/servlet/ArticleNews/story/CTVNews/20070709/ctv_release_20070709/20070709?s_name=idol2007&no_ads=; and “Top 8 Revealed: Khalila Glanville is Next Eliminated Canadian Idol Finalist,” Channel Canada, July 25, 2007, accessed at www.channelcanada.com/Article1931.html.

Discussion Questions 1. What concept is being demonstrated by CTV’s support of Ronald McDonald House Charities? 2. Why are businesses implementing CSR initiatives in Canada? 3. Do you think other parts of the world have this same focus on CSR? Why or why not?

Chapter 1 1-24

BRING IT TO LIFE IN-CLASS ACTIVITY INSTRUCTIONS – SMARTIES & AFTER EIGHT STRAWS

Learning Objectives

1. To understand the process of marketing 2. To understand how the marketing mix needs to be coordinated with each element designed to appeal to its target market

Description of In-Class Activity

 Provide groups of students with a handout on the activity ensuring that a colour visual of Smarties and After Eight Straws is shown as either a handout, sample box, PowerPoint slide, or by linking to the Nestle website or Google Images. Your Instructor’s Survival Kit bag contains a box of Smarties, and both products are shown in chapter 1.

 Students are then given a new target market for either Smarties or After Eight Straws and asked to brainstorm on three new product ideas. They then select their best idea and develop a full marketing mix to appeal to their new target market. Finally, a spokesperson for each group informally explains the idea to the class. You may wish to add an element of fun by having students vote at the end on the product they consider to be (1) the most outrageous, and (2) the most likely to succeed!

 Groups with Smarties’ visuals are asked to develop a new Smarties product to appeal to seniors over the age of 60. The groups with the After Eight images are asked to create a product to appeal to teenagers between the ages of 13-16 years.

 This activity should only be conducted in groups.

The estimated class time is 60- 90 minutes.

Preparation before Class

 To prepare for this activity you will need to first determine whether you will be showing the visuals through an overhead, linking to Google Images, or showing an actual box in class. Showing the product on a screen and then the actual contents of the box in class provides the necessary detail for successful completion of the activity.  Bring large tear sheets or flip charts and markers for the students to use during the brainstorming sessions.

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: o Discuss the term target market - the specific group of existing and potential consumers to whom a marketer targets its marketing efforts. o Define the marketing mix—product, price, place, and promotion: Product - all the attributes that make up a good, a service, or an idea, including product design, features, colour, packaging, warrantee, and service levels Price – the expected retail shelf price and sale price of the product Place - the distribution channels and retailers required to sell the product. 1-25 Chapter 1

   o o Promotion the communication tools needed to inform consumers about the product, including advertising, sales promotion, public relations, direct marketing, and personal selling. Explain that successful marketing programs carefully manage the marketing mix so that each element is well coordinated and appeals to the target market Provide an example of a well coordinated marketing mix such as the LG Touch Phones described in the opening vignette for chapter 1.

In-Class Instructions

- Show a visual of the Smarties and After Eight Straws products on the screen and describe the products to the class, showing an actual box and its contents if appropriate. Briefly and informally explain the activity and then ask the students to get into groups of four. Distribute the handout to each group and then formally review the activity with the students. Break the activity up in to three segments; (1) give the students 30 minutes to brainstorm on three new product ideas, (2) give the students 30 minutes to develop a marketing mix for their best idea, and (3) allocate 20 minutes in total for all the groups to briefly explain their product idea and marketing mix to the rest of the class. Collect the handouts for evaluation purposes.

Handout –

Distribute the handout and worksheet for students to complete.

Evaluation

– Collect the worksheets from this activity for evaluation purposes. They can be evaluated for completion, or graded for quality of the work completed. Chapter 1 1-26

BRING IT TO LIFE IN-CLASS ACTIVITY – SMARTIES MARKETING MIX HANDOUT

 You have been tasked to create a new Smarites product for Nestle to appeal to seniors over the age of sixty. Spend 30 minutes brainstorming on three new product ideas you think would appeal to this target market. The ideas should include the actual product itself (taste, appearance, colour, size, shape, special ingredients, etc.) and its packaging.  Select your best idea and now develop the elements of the marketing mix, product, price, place, and promotion that are needed to market this idea to your target group, (30 minutes).  Select a spokesperson for your group who will briefly and informally explain your selected concept and its marketing mix to the class.

Background

Smarties targets families and specifically tweens. The product consists of small, brightly coloured, candy-coated chocolates that come in a bright blue package with colourful, fun graphics. The bite-sized pieces are easy to share. The product appeals to its target market through a fun promotional program at www.smarties.ca where images of Smarties are used in an online computer game. The product is also sold at a relatively inexpensive price, approximately $1.09 for 50 grams, making it affordable. Finally, the product is merchandised at retail, close to cash registers to prompt impulse purchases. 1-27 Chapter 1

BRING IT TO LIFE IN-CLASS ACTIVITY- SMARTIES MARKETING MIX WORKSHEET

Name: Section: A. List and describe the 3 product ideas that you created for your product in terms of taste, appearance, colour, size, shape, special ingredients, and packaging. 1. 2. 3. B. Product name - select the best idea that you have and give your product a name.

Chapter 1 1-28

  

C. Craft the elements of the marketing mix for your new product to appeal to your target market:

Product - finalize the product you previously selected ensuring it meets the needs of your target market Price – determine the retail shelf price and sale price that meets your target market needs. (For the purposes of this exercise costs and profit requirements are not taken into consideration). Place – determine all the places where you think this product should be sold. (For this exercise distribution channels will not be included in this area). Promotion – describe the promotional ideas that you will use to communicate to your target group such as advertising, sales promotion, public relations, direct marketing, and personal selling. Create a promotional program that will appeal to this target market.

1-29 Chapter 1

BRING IT TO LIFE IN-CLASS ACTIVITY – AFTER EIGHT STRAWS MARKETING MIX HANDOUT

 You have been tasked to create a new After Eight Straws product for Nestle to appeal to teenagers between the ages of 13-16. Spend 30 minutes brainstorming on three new product ideas you think would appeal to this target market. The ideas should include the actual product itself (taste, appearance, colour, size, shape, special ingredients, etc.) and its packaging.  Select your best idea and now develop the elements of the marketing mix that are needed to market this idea to your target group, (30 minutes).  Select a spokesperson for your group who will briefly and informally explain your selected concept and its marketing mix to the class.

Background

After Eight Straws targets adults. The product consists of long thin sticks of dark chocolate with a delicate mint-cream filling. The product comes in a sleek, upscale silver cylinder with muted grey tones and subdued graphics. The package contains 20 thin After Eight Straws. The product is sold at a premium price of $3.99 for a 90-gram package, reflecting its high-quality image and adult target market. This product is not merchandised at the cash register. Instead, it is typically found on the shelves of many grocery stores and drug retailers, but enjoys wider seasonal distribution during the winter holidays when the product is popular for enter taining. In 2007, the product was promoted at Toronto Symphony Orchestra events to reflect its image as a product for adult entertaining. Chapter 1 1-30

BRING IT TO LIFE IN-CLASS ACTIVITY- AFTER EIGHT STRAWS MARKETING MIX WORKSHEET

Name: Section: A. List and describe the 3 product ideas that you created for your product in terms of taste, appearance, colour, size, shape, special ingredients, and packaging. 1. 2. 3. B. Product name - select the best idea that you have and give your product a name.

1-31 Chapter 1

  

C. Craft the elements of the marketing mix for your new product to appeal to your target market:

Product - finalize the product you previously selected ensuring it meets the needs of your target market Price – determine the retail shelf price and sale price that meets your target market needs. (For the purposes of this exercise costs and profit requirements are not taken into consideration) Place – determine all the places where you think this product should be sold. (For this exercise distribution channels will not be included in this area.). Promotion – describe the promotional ideas that you will use to communicate to your target group such as advertising, sales promotion, public relations, direct marketing, and personal selling. Create a promotional program that will appeal to this target market.

Chapter 1 1-32

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