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Instructor Manual:

Instructor Manual For Marketing Strategy, 8th Edition O. C. Ferrell (Author), Michael Hartline (Author), Bryan W. Hochstein (Author) Chapter 1-10 Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 1: Marketing in Today’s Economy

Contents Purpose and Perspective of the Chapter ............................................................................................................... 2 Cengage Supplements .................................................................................................................................................. 2 Chapter Objectives ......................................................................................................................................................... 2 Key Terms ........................................................................................................................................................................... 2 What's New in This Chapter ........................................................................................................................................ 4 Chapter Outline ............................................................................................................................................................... 4 Discussion Questions ..................................................................................................................................................... 9

Instructor Manual: Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 1: Marketing in Today’s Economy

Purpose and Perspective of the Chapter In this first chapter, we review some of the major challenges and opportunities that exist in planning marketing strategy in today’s economy. We also review the nature and scope of major marketing activities and decisions that occur throughout the planning process. Finally, we look at some of the major challenges involved in developing a marketing strategy.

Cengage Supplements The following product-level supplements provide additional information that may help you in preparing your course. They are available in the Instructor Resource Center. • • • •

Test Bank (contains assessment questions and problems) PowerPoint (provides text-based lectures and presentations) Case Notes (provides a case summary and teaching questions) Marketing Plan Worksheets (assists in writing a formal marketing plan)

Chapter Objectives • • • • •

Describe the challenges and opportunities of marketing in today’s economy Define marketing Explain basic marketing concepts Discuss major marketing activities and decisions Describe some of the challenges involved in developing a marketing strategy

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Key Terms Competitive advantage: A firm’s capabilities that allow it to serve customers’ needs better than the competition Competitive intelligence: Analysis of the competitive environment that involves analyzing the capabilities, vulnerabilities, and intentions of competing businesses Environmental scanning: Analysis of the external environment that involves the analysis of economic, political, legal, technological, and cultural events and trends that may affect the future of the organization and its marketing efforts Exchange: The process of obtaining something of value from someone by offering something in return Integrated marketing communication (IMC): The coordination of all promotional activities (e.g., media advertising, social media, direct mail, personal selling, sales promotion, public relations, packaging, store displays, website design, personnel) to produce a unified, customerfocused message

Instructor Manual: Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 1: Marketing in Today’s Economy

Internal analysis: The objective review of internal information pertaining to the firm’s current strategy and performance, as well as the current and future availability of resources Market: A collection of buyers and sellers that have similar needs that can be met by a particular product Market segmentation: Dividing the total market into smaller, relatively homogeneous groups or segments that share similar needs, wants, or characteristics Marketing: The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large Marketing ethics: Principles and standards that define acceptable marketing conduct as determined by the public, government regulators, private-interest groups, competitors, and the firm itself Marketing implementation: The process of executing the marketing strategy Marketing plan: A written document that provides the blueprint or outline of the organization’s marketing activities, including the implementation, evaluation, and control of those activities Marketplace: The location where buyers and sellers meet to conduct transactions Marketspace: Electronic marketplaces unbound by time or space Product: Something that can be acquired via exchange to satisfy a need or a want Product positioning: Establishing a mental image, or position, of the product offering relative to competing offerings in the minds of target buyers Situation analysis: The overall process of collecting and interpreting internal, competitive, and environmental information Social responsibility: An organization’s obligation to maximize its positive impact on society, while minimizing its negative impact Strategy: Outlines the organization’s game plan for success Supply chain: The connection and integration of all members of the marketing channel Tactical planning: Addresses specific markets or market segments and the development of marketing programs that will fulfill the needs of customers in those markets Target markets: One or more segments of individuals, businesses, or institutions toward which the firm’s marketing efforts will be directed Utility: The ability of a product to satisfy a customer’s desires [return to top]

Instructor Manual: Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 1: Marketing in Today’s Economy

What's New in This Chapter The following elements are improvements in this chapter from the previous edition: • • • • • • • • • • • • • • •

Updated introduction to address current challenges of marketing in today’s economy New boxed feature discussing the future of marketing and recent disruptive technologies New Exhibit 1.1 Fundamental Changes to Marketing New content on the power shift to customers New content on products that have been eliminated Expanded content on audience and media fragmentation New Exhibit 1.2 Time Spent With Media New content on shifting demand patterns Eliminated content on metamarkets and metamediaries New boxed feature discussing Amazon’s marketing strategy New content on situation analysis related to data analytics New content on supply chains New Exhibit 1.4 Fortune’s 10 Best Companies to Work For New boxed feature exploring the marketing strategy at Zappos Updated Exhibit 1.6 American Satisfaction Index

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Chapter Outline In the outline below, each element includes references (in parentheses) to related content. "CH.##” refers to the chapter objective; “PPT Slide #” refers to the slide number in the PowerPoint deck for this chapter (provided in the PowerPoints section of the Instructor Resource Center); and, as applicable for each discipline, accreditation or certification standards (“BL 1.3.3”). Introduce the chapter and use the Ice Breaker in the PPT if desired, and if one is provided for this chapter. Review learning objectives for Chapter 4. (PPT Slides 1-3). I.

Introduction (PPT Slide 4) a. Changes in marketing are dynamic and fast-paced i. Require companies to think outside the box to anticipate disruptions and new technology-enabled competition b. Organizations require effective planning and sound marketing strategy c. Technology disruptions include: i. Blockchain ii. Omnichannel technologies iii. Consumer-centric technology iv. Streaming entertainment II. The Challenges and Opportunities of Marketing in Today’s Economy (PPT Slide 11) a. Power shift to customers i. Comparison shopping and broader purchase options ii. Creates price match pressure on retailers iii. Companies are striving to:

Instructor Manual: Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 1: Marketing in Today’s Economy

1. Regain power 2. Focus on unique customer experiences 3. Understand how macro factors (e.g., weather) affect buyers 4. Greater anticipation and forecasting of customer needs b. Changes in products and selection i. Free shipping ii. Competition has exploded iii. Vast information on products iv. Displaced product lines v. Transaction efficiency vi. Disrupted industries c. Audience and media fragmentation i. Broadcast TV and streaming have created mass channels and uncertain targeting ii. Radio has been declining iii. We’re fragmented 1. We multi-task 2. We use multiple media iv. Niche marketing and targeting is enhanced v. Mass market reach is much more difficult d. Changing value proposition i. Commoditization of certain products…leads to price vulnerability ii. Pandemic and climate change challenge ―value‖ iii. Major retail ―shake-ups‖ and lifestyle changes iv. In-home entertainment challenges e. Shifting demand patterns i. Technology has shifted customer demand for certain product categories 1. Most news is not consumed through traditional newspaper 2. Most music is now consumed digitally 3. Business model is changing in many areas (e.g., malls, banks, pharmacies, grocery stores, specialty stores, conferencing/travel) f. Privacy, security, and ethical concerns i. Customer data collection is more scrutinized 1. What is the purpose of collecting the data? 2. Who are you sharing the data with? ii. Social media sites and internet connected devices create anxiety over privacy 1. Mobile devices and vehicles can track us g. Unclear legal jurisdiction i. Legal systems differ from country to country 1. This difference is especially important for firms doing business in the United States and China ii. Collection of sales tax for online transactions is a major issue III. Basic Marketing Concepts (PPT Slide 20)

Instructor Manual: Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 1: Marketing in Today’s Economy

a. Marketing i. Marketing places the customer at the core of all decisions 1. Changing wants/needs 2. Drive satisfaction ii. Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society-at-large 1. Greater focus on long-term relationships b. What is a market? i. A market is a collection of buyers and sellers ii. A marketplace is a physical location where buyers and sellers meet to conduct transactions (e.g., grocery stores, malls, flea markets) iii. A marketspace describes electronic marketplaces unbound by time or space (i.e., online markets or e-commerce) c. What is exchange? i. Exchange is the process of obtaining something of value from someone by offering something in return 1. Usually entails obtaining products for money ii. Five conditions must be met: 1. There must be at least two parties to the exchange 2. Each party has something of value to the other party 3. Each party must be capable of communication and delivery 4. Each party must be free to accept or reject the exchange 5. Each party believes it is desirable to exchange with the other party d. What is a product? i. A product is something that can be acquired via exchange to satisfy a need or a want 1. Goods 2. Services 3. Ideas 4. Information 5. Digital product 6. People 7. Places 8. Experiences and events 9. Real/financial property 10. Organizations ii. Economists use the term utility to describe the ability of a product to satisfy a customer’s desires 1. Form utility: distinctive features and quality 2. Time utility: available when the customer wants (24-hour access) 3. Place utility: available where the customer wants (Uber Eats) 4. Possession utility: credit cards and financing

Instructor Manual: Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 1: Marketing in Today’s Economy

5. Psychological utility: positive experiential activities that bring satisfaction (live events) IV. Major Marketing Activities and Decisions (PPT Slide 29) a. Strategic planning i. Strategy is blueprint for building marketing plan 1. Top-level concerns: Corporate mission, SBU coordination, resource acquisition 2. Mid-level concerns: Focus on a particular product or market 3. Lower-level concerns: Tactical and operational in nature a. Tactical planning addresses specific markets or market segments and the development of marketing programs that will fulfill the needs of customers in those markets ii. The marketing plan provides the outline for how the organization will combine product, pricing, distribution, and promotion decisions to create an offering that customers will find attractive b. Research and analysis i. Internal analysis 1. Objective review of resources, strategy, and performance ii. Competitive intelligence 1. Assessment of competitors’ capabilities, vulnerabilities, and planning iii. Environmental scanning 1. Macro considerations: economic, political, legal, tech, and cultural iv. Situation analysis 1. Collecting and interpreting internal, competitive, and environmental information c. Developing competitive advantage i. Competitive advantage is an excellence that exceeds competitors 1. Product quality 2. Strategic pricing-travel and tourism 3. Customer service 4. Market positioning 5. Distribution networks 6. Innovation and access to new technologies d. Marketing strategy decisions i. An organization’s marketing strategy describes how the firm will fulfill the needs and wants of its customers 1. Can include activities associated with maintaining relationships with other stakeholders (e.g., employees, shareholders, supply chain partners) 2. Composed of one or more marketing programs ii. Marketing programs consist of two elements 1. A target market or markets 2. A marketing mix (product, price, place, promotion)

Instructor Manual: Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 1: Marketing in Today’s Economy

e. Market segmentation and target marketing i. Market segmentation 1. Dividing a marketplace into smaller, homogeneous segments 2. Similar needs, wants, and characteristics ii. Target marketing 1. Distinct segments that a company will market their product to 2. May have many markets: primary, secondary, etc. f. Marketing program decisions i. Products fulfill the basic needs and wants of the customer 1. Product decisions are most important ii. Price leads to revenue and profit 1. Has direct connection with customer demand 2. Easiest element to change 3. Major quality cue for customers iii. Distribution is critical 1. Supply chain decisions involve many activities (e.g., sourcing of raw materials, production of finished products, ultimate delivery to final customers) iv. Promotion is also called integrated marketing communication (IMC) 1. The coordination of all promotional activities to produce a unified, customer-focused message g. Branding and positioning i. Product positioning involves establishing a mental image, or position, of the product offering relative to competing offerings in the minds of target buyers ii. Goal is to differentiate the firm’s product offering from those of competitors by making the offering stand out h. Social responsibility and ethics i. Social responsibility 1. Refers to an organization’s obligations to maximize its positive and minimize its negative impact on society ii. Marketing ethics 1. Principles or standards that define acceptable behavior in marketing activities i. Implementation and control i. Marketing implementation is the process of executing the marketing strategy ii. The ―how‖ of marketing planning iii. The organization must always consider how the strategy will be executed iv. ―People‖ sometimes referred to as ―fifth P‖ of the marketing mix 1. Employees who execute the marketing strategy j. Developing and maintaining customer relationships i. Move from transactional to relationship marketing

Instructor Manual: Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 1: Marketing in Today’s Economy

ii. Develop and maintain longer term, mutually satisfying relationships through value creation iii. Promotes customer trust and confidence iv. Important in B2B employees and supply chain partners V. Taking on the Challenges of Marketing Strategy (PPT Slide 47) a. Biggest challenge: change i. Customers, technology, the marketing organization itself b. Marketing strategy is inherently people-driven i. People inside organization fulfilling needs and wants of other people 1. Customers, shareholders, business partners, society at large c. Customer expectations are high, less brand loyal, more price sensitive d. Marketers must adapt to shifts in markets and competition [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS; as whole-class discussions in person; or as a partner or group activity in class. 1. Think about all of the exchanges that you participate in on a weekly or monthly basis. How many of these exchanges have their basis in long-term relationships? How many are simple transaction-based exchanges? Which do you find most satisfying? Why? a. Answer: Answers to this question will vary greatly. Many students will not consider their exchanges to be relational until you ask them how long they have been using the same company/provider. Many exchanges are relational by default (we use the same dry cleaner or gas station continuously without thinking about it). Whether students find transactional or relational exchanges more satisfying will depend on their likes and dislikes. 2. What do you think is the most important P of the marketing mix? a. Answer: Since the product and its attributes fulfill the basic needs and wants of the customer, it is no surprise that the product and the decisions that surround it are among the most important parts of the marketing program. This importance hinges on the connection between the product and the customers’ needs. 3. Why is developing a competitive advantage important? Think of a successful company and identify its competitive advantage. a. Answer: To be successful, a firm must possess one or more competitive advantages that it can leverage in the market in order to meet its objectives. A competitive advantage is something that the firm does better than its competitors that gives it an edge in serving customers’ needs and/or maintaining mutually satisfying relationships with important stakeholders. Competitive advantages are critical because they set the tone, or strategic focus, of the entire marketing program. When these advantages are tied to market opportunities, the firm can offer customers a compelling reason to buy their products. Without a competitive advantage, the firm and its products are likely to be just one more offering among a sea of commoditized products.

Instructor Manual: Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 1: Marketing in Today’s Economy

b. Examples of successful companies could include: i. Product quality (Apple) ii. Customer service (Microsoft) iii. Market positioning (Salesforce) iv. Distribution networks (Amazon) v. Innovation and access to new technologies (Tesla) [return to top]

Instructor Manual: Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 2: Strategic Marketing Planning

Instructor Manual Ferrell, Hartline, Hochstein, Marketing Strategy; Chapter 2: Strategic Marketing Planning

Contents Purpose and Perspective of the Chapter ............................................................................................................ 12 Cengage Supplements ............................................................................................................................................... 12 Chapter Objectives ...................................................................................................................................................... 12 Key Terms ........................................................................................................................................................................ 12 What's New in This Chapter ..................................................................................................................................... 13 Chapter Outline ............................................................................................................................................................ 14 Discussion Questions .................................................................................................................................................. 19