Briefly explain and discuss the five types of utility. Which type(s) of utility (are) the most important and why?
The five types of utility are the following:
1. Form Utility—Have attributes or features that set them apart from the competition.
2. Time Utility—Are available when customers want them.
3. Place Utility—Are available where customers want them, which is typically wherever the customer happens to be at that moment, or where the product needs to be at that moment.
4. Possession Utility—Deals with the transfer of ownership or title from marketer to customer. Products higher in possession utility are more satisfying because marketers make them easier to acquire.
5. Psychological Utility—Deliver positive experiential or psychological attributes that customers find satisfying. Conversely, a product might offer exceptional psychological utility because it lacks negative experiential or psychological attributes.
Each utility type has its own need: all five are complementary and overlap one another. For example, it could be argued that form utility is the most important, because customers tend to choose products that offer certain features. However, for products that are routinely purchased, such as gasoline or bread, time and place utility are more important. For uncommon or particular products (vacations or luxury goods), psychological utility might be more important.
Discuss the challenges and opportunities associated with planning and developing marketing strategy in today’s economy. Why is marketing strategy both exciting and challenging?
One of the main frustrations in marketing is change: customers, competitors, and even the marketing organization changes. What works today may not work tomorrow. What a customer buys today, he/she may not need tomorrow. Although frustrating, challenges like these also make marketing interesting and rewarding. Additionally, marketing strategy is inherently people-driven. It’s about the people inside an organization figuring out the best ideas for how to deliver value by fulfilling the needs and wants of customers, shareholders, business partners, and/or society as a whole.
Continual change and the people-driven nature of marketing makes developing and implementing marketing strategy a challenging task. Even if the strategy is completed to perfection, it can still fail. The reason for this is that there are no rules for what will work or won’t work. There are trends that society goes through, and it is the job of a marketing team to determine what is currently “hot”. In other words, it is impossible to say that given “this customer need” and these “competitors” and this “level of government regulation” that Product A, Price B, Promotion C, and Distribution D should be used. Marketing simply does not work that way. The lack of rules and the ever-changing economic, sociocultural, competitive, technological, and political/legal landscapes make marketing strategy a fascinating, challenging, yet rewarding subject.
Why have ethics and social responsibility become so important in recent years? Why is it important that marketing ethics be incorporated into the firm’s strategic plan?
With stricter laws and more socially-conscious consumers, marketing ethics are more important today than ever before. Many organizations have died out as a result of poor marketing, with bad image and poor reputation being the downfall. If a customer does not thing an organization is ethical or socially responsible, there will be no trust, which can lead to the destruction of an organization. Additionally, ethics and social responsibility are also necessary because of stakeholder demands and changes in federal law. Ethical Marketing does occur by simply hiring ethical people; it requires the implementation of an effective ethics and compliance program.
More and more firms have incorporated ethics and social responsibility into the strategic marketing planning process. Any organization’s reputation can be damaged by poor performance or ethical misconduct. Even those indirectly connected to negative events can shift their reputation by making social responsibility and ethical behavior a part of the marketing strategy. Usually, those indirectly connected to negativity may be more influenced by the media or general public than those who are directly connected to an organization. Some scandals lead to boycotts and aggressive campaigns as a way to decrease earnings.
Draw, label, and explain the pyramid of social responsibility. What are the requirements for a firm if it truly wants to be ethical and socially responsible?
The pyramid of social responsibility is comprised of four dimensions or responsibilities: economic, legal, ethical, and philanthropic. From an economic perspective, all firms must be responsible to their shareholders, who have a keen interest in stakeholder relationships that influence reputation of the firm and earning a return on their investment. The economic responsibility of making a profit also serves employees and the community due to impact on employment and income levels in the area that the firm’s location.
Marketers are also expected to obey laws and regulations. This is a challenge because laws change so frequently. Without economic and legal concerns, the firm will likely not survive long enough to engage in ethical or philanthropic activities.
At the next level of the pyramid, marketing ethics refers to principles and standards that define acceptable marketing conduct as determined by the public, government regulators, private-interest groups, competitors, and the firm itself. Remember, though, that marketing ethics goes beyond legal issues. Ethical marketing decisions create trust, helping to build long-term marketing relationships.
Regarding philanthropy, firms that choose to take these extra steps concern themselves with increasing their overall positive impact on society, their local communities, and the environment, with the bottom line of increased goodwill toward the firm, as well as increased profits. Firms have a responsibility align their philanthropy with marketing and brand image. It can be a challenge, but it’s important to succeed at this stage. During major crises, like Hurricane Katrina or the more recent financial meltdown, firms are given an opportunity to make their philanthropic programs more responsive and visible to the public. Socially responsible behavior is not only good for customers, employees, and the community, but it also makes good business sense. For this reason, philanthropic activities make very good marketing tools. Thinking of corporate philanthropy as a marketing tool may seem cynical, but it points out the reality that philanthropy can be very good for a firm.
Describe the role that a code of conduct plays in ensuring ethical compliance within a firm. How should a code of conduct be developed, what should it contain, and what are the keys to ensuring that the code is successfully implemented?
Most firms begin the process of establishing organizational ethics programs by developing codes of conduct/ethics), which are statements that describe what an organization expects of its employees. According to a KPMG Integrity Survey, 82 percent of employees reported that their firm has a formal code of conduct. These codes may address a variety of situations from internal operations to sales presentations and financial disclosure practices.
A code of ethical conduct has to reflect the board of directors’ and senior management’s desire for organizational compliance with the values, rules, and policies that support an ethical climate. Development of a code of conduct should involve the board of directors, president, and senior managers who will be implementing the code. Legal staff should be called upon to ensure that the code has correctly assessed key areas of risk and that standards contained in the code protect against potential legal problems. A code of conduct that does not address specific high-risk activities within the scope of daily operations is inadequate for maintaining standards that can prevent misconduct.
Corporate codes of ethics often have five to seven core values or principles in addition to more detailed descriptions and examples of appropriate conduct. Six core values are considered to be highly desirable in any code of ethical conduct: (1) trustworthiness, (2) respect, (3) responsibility, (4) fairness, (5) caring, and (6) citizenship. Ultimately, employees need specific and relatable examples of how these values can be implemented.
Codes of conduct will not resolve every ethical issue encountered, but they help employees and managers deal with ethical dilemmas by limiting specific activities and giving everyone guidelines to follow. People need to know the code exists, and how to access it. A code placed online or in a manual is useless if the company doesn’t reinforce it. By communicating both the expectations of proper behavior to employees, as well as punishments they face if they violate the rules, codes of conduct prevent opportunities for unethical behavior and thereby improve ethical decision making. Codes of conduct do not have to be so detailed that they take into account every situation, but they should provide guidelines and principles capable of helping employees achieve organizational ethical objectives and address risks in an accepted manner.
What is the relationship among marketing ethics, strategic planning, and organizational performance? How is being market oriented different than having a stakeholder orientation?
The strongest argument for using ethics and social responsibility in the strategic planning process is the link between social responsibility, stakeholders, and marketing performance. Employees working in an ethical climate will make an extra effort to better understand the demands and concerns of customers. Ethical climate is associated with employee commitment to quality and trust. Employee commitment to the firm, customer loyalty, and profitability have also been linked to increased social responsibility.
An ethical climate is also conducive to a strong market orientation. Market orientation refers to the development of an organizational culture that effectively and efficiently promotes the necessary behaviors for the creation of superior value for buyers and continuous superior performance. Market orientation places the customer’s interests first, but it does not negate the interests of other stakeholders. Being market oriented means fostering a sense of cooperation and information exchange that gives the firm a clearer view of the customer’s wants and needs.
The degree to which a firm understands and addresses stakeholder demands can be referred to as a stakeholder orientation. This orientation contains three sets of activities: (1) the organization-wide generation of data about stakeholder groups and assessment of the firm’s effects on these groups, (2) the distribution of this information throughout the firm, and (3) the organization’s responsiveness.
A stakeholder orientation can be viewed as a continuum in that firms are likely to adopt the concept to varying degrees. To gauge a given firm’s stakeholder orientation, the extent to which the firm adopts behaviors regarding dissemination of stakeholder intelligence and responsiveness must be evaluated. An organization may generate and disseminate more intelligence about certain stakeholder communities than about others and may respond to that intelligence differently.
“Analysis alone is not a solution” is an important piece of advice to keep in mind during a situation analysis. What does this phrase mean? If analysis alone is not a solution, what other considerations are relevant during a situation analysis?
Thorough situational analysis leads to more extensive planning and decisions, but there needs to be more. Judgement and intuition are required in order to lead to make the results useful for planning. It should not take the place of management and his/her role in making decisions. The true purpose is to put the manager in a better position with all the information he/she needs to make the best decisions for everyone involved.
Situation analysis’s motivating factor should be to empower the manager to understand the information provided by the analysis, and therefore make better decisions. Situation analysis is used to go back to the basics, to try and determine why people, products, and/or organizations make the choices they make. Finally, the manager will then be able to incorporate and integrate the information in order to better understand the impending decisions that need to be made.
Identify and explain each element of the 5W model for customer analysis. What role does this analysis play in an overall situation analysis?
When looking at the customer’s environment, it’s important to note who the current and potential customers are, as well as the needs of the current and future customers. Do things need to change, are ideas changing, and how can we reach them in an ethical and socially responsible way?
First, consider who the current and potential customers are. The “who” questions is about looking at what exactly who makes up our target market. Things to consider include the following: gender, age, income, where they live, opinions, and interests.
Next, why do customers use, need, and buy the product? The “what” question should be used to answer how the product(s) are used and gotten rid of. Identifying the usage rate of the products, as well as what makes someone a regular user of the product compared to someone who finds a use for it infrequently.
The “where” question specifically about distribution and the customer’s convenience. Where do people buy the product(s)? Today is very different from generations passed. Today, customers have a plethora of ways to find product: Internet and search engines, companies have its products online, and infomercials, to name a few.
The “when” questions answers the following: when do people purchase the product? This question refers to reasons that cause purchasing activity to change. For example, like changing seasons or the variability in purchasing activity caused by promotional events or financial constraints.
The “why” question involves determining the benefits of the product. Competing products should be analyzed in order to determine if our products are top-notch, or how we could improve upon them. The “how” answers the question of, “How do customers pay for our products?”
Fifth, we have to ask ourselves why some customers make the decision not to buy our products. Breaking down the “why” can often be answered by three short answers: price, location, or need for the product.
All of the Ws are important, as the results will ideally identify marketing holes, and how we can strengthen our strategy, while gaining clients.
Identify and discuss at least five reasons why potential customers do not purchase a firm’s goods or services. For each reason, discuss ways that the firm can overcome the resistance of noncustomers.
There are various decisions a customer makes that may lead him/her not to purchase a product. Some of these reasons are the following:
There is a need that cannot be met by a firm’s product.
When money enters the picture, many people will go for the lower-priced product, even if it’s not made to the same standard as a firm’s product.
Maybe the firm has a bad reputation from its past, and people are hesitant to try a new product.
If the product is hidden away in very niche stores that most people don’t frequent, they may not know the product even exists.
Identify and discuss the challenges involved in collecting environmental data and information. How can a marketing manager or analyst overcome these problems?
Regardless of intentions, problems often occur in the data collection process. First, there needs to be clear guidelines regarding what the collection of data should address. If people are not sure what they are looking for, how will they be able to accurately find it? Another key thing to note is that you don’t want to overwhelm the recipient of the data collection. This can result in far too much information being presented. Keep the results succinct, and be knowledgeable about the results so that your manager can easily understand the usefulness of the data collection.
Additionally, expense can be an issue when collecting data. There will be expected costs with collection of data, the process does not need to be overly expensive. Finding different ways to collect data is imperative. For example, professors often use marketing projects as a tool for students to learn and meet course requirements, so it could be a smart and inexpensive way to do your data collection. You could also create your own survey online as a way to collect data. Set up your survey and send the link to it out to the masses.
Finally, we have to look at very real time constraints. While this is true with primary data collection, secondary data collection can be quick and easy. Online data sources are accessible, and even if the manager has no idea where to begin the search, search engines like Google or Bing make the process much simpler. The Internet has incredibly intelligent at the retrieval of data, so now the problem is sorting through all the information in order to find the relevant pieces.
How do you decide how to organize your data? This decision can be made easier by defining early on what the marketing problem is. Next, take your data and put it in place for optimal strategy development. While there is an assortment of ways that can be used to evaluate and correlate environmental data, one of the most effective is SWOT analysis.
