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Situation: What would you do? You work for an online travel agency. You meet with the salesperson
from a company that offers a pricing analytics software program. The program allows you to charge
different prices to customers who visit your website—so you can show higher prices to customers willing
to pay more and lower prices to customers who will not buy at a high price. For example, the salesperson
for this software told you, “We have found Mac users are less price sensitive than Windows computer
users, so you can steer Mac users to more expensive hotels (and earn your company bigger
commissions).” Another feature allows the software to detect frequent travelers. Because frequent
travelers are usually traveling on business (and their company pays the bill), they are usually less price
sensitive; these customers can be charged higher prices. When you ask if it is fair that different customers
see different prices, the software salesperson answers, “This is just how target marketing works today.
One target market is price sensitive, so we offer it a lower price. The other target market doesn’t care
about price, so we keep prices higher. We optimize how much your travel agency earns from each
transaction. Most of our customers see a 25 percent jump in profits after installing our software.” Would
you recommend purchasing this software? How would customers paying the higher price feel if they
found out other customers paid lower prices? Explain your decision.
Behavioral targeting is a controversial practice. Many privacy advocates are concerned about the
implications of behavioral targeting. The question also introduces the students to price discrimination.
Usually we find student less concerned about invasions of their privacy and more concerned about
“unfair” pricing. If a discussion trends in these directions, you might ask students whether they think
“ladies night pricing at a bar” or “student discounts” are “fair”? You might also ask how they would feel if
they walked into a bookstore and the salesperson came up and suggested books by authors they had
read before. Does the online context make it more acceptable to them?
An instructor may want to create a simple spreadsheet like the one shown below to demonstrate how to
calculate these answers:
1. $458 – these numbers were designed to demonstrate to students the power of customer retention
on customer lifetime value.
2. $325 – in discussion, an instructor might ask if raising prices might impact any other numbers in
the equation. It makes sense that retention rate might fall as more price sensitive customers
chose to drink coffee at home or patronize another coffee shop – perhaps plugging lower
numbers into retention rate might demonstrate such a tradeoff. Local Joe’s might also find that
some of the “regular” customers would visit less often – maybe offsetting his desired higher
margin per customer.
3. This question is designed to get students thinking. At this stage in the class, students may not
know how far to take this or be comfortable making assumptions. Yet these are important skills
for marketing managers. Instructors are encouraged to discuss this question in class. So for
example, ask students what might happen if Local Joe’s was more aggressive in advertising and
had higher acquisition costs? One potential downside is that new customers are less of a fit for
Local Joe’s and have a lower retention rate. Lower prices could encourage a higher retention rate
and maybe higher profits per customer per year.
The goal with this exercise is to get students thinking about the options and how they might be entered
into a spreadsheet. Instructors should remind students that this type of data analytics – based on
assumptions – is not precise, but will often provide some directional insight.
2-2. The case opener suggests that Cirque du Soleil has already pursued some new opportunities.
What follows are some potential examples:
Market penetration – offer more shows when it travels to each town, multiple
shows in Las Vegas
Market development – traveling shows in Europe, Asia, Australia, etc. offer
opportunities in new markets
Product development – opening Cirque du Soleil hotels or a clothing line that
targets current customers,
IV-2-2
Diversification – they might move into pharmaceutical drugs or attempt to build
cars – very much a diversification move.
2- 3. A marketing strategy includes the selection of a target market and the development of a
marketing mix. Therefore, a marketing mix is only part of a marketing strategy.
2- 4. Target marketing involves consciously picking some target (which might be the "mass
market"), while mass marketing is not focused on some specific customers. The managers just
naively assume that "everyone" or at least enough "someones" will buy to make the business
successful. A meaningful example for students might be contrasting the operation of some
fast-food franchises that have developed good strategies with a locally owned restaurant that is
just serving "food," apparently to "everyone," and not doing very well. Local examples with
which the student has had some experience are usually better than discussing the strategies of
large companies that are managed from remote cities.
2- 5. The target customer is placed in the center of the four Ps because the customer should be the
focal point of all marketing efforts and really, all business efforts. Without potential customers –
and eventually satisfied customers – there is not much point in any company effort. Almost any
product (for example ball point pens or sports shirts) might be used to illustrate the way that
products can and should be designed with the customer in mind, made conveniently available,
promoted to these potential customers, and priced attractively or competitively – again with the
customer in mind. The interrelatedness of the decisions (as shaped by the needs and attitudes
of the various potential customers) should be noted.
2- 6. It is important for a firm to have a clearly defined target market even if a company sells its
products only from a website. This question is designed to prompt students to think about the
idea of the website in the context of the marketing mix. The fact that the firm is distributing to
customers “direct” via its website (rather than through wholesalers or retailers) is certainly an
important decision in the marketing mix context, but the fact that the website it available to
customers from all over the world doesn’t mean that the firm’s offering will be attractive to
customers regardless of geographic location. The marketer still needs to think about the
benefits its product offers relative to the needs of some set of customers, what competitors
offer those customers, when and how the product is going to get to the customer’s place, what
communications (promotion, customer service, etc.) the customers will need, what price is
appropriate, and the like. There is intense competition for attention and business on the
Internet, and just “building a better mousetrap” (if the firm has in fact done that…whether it is
the product offering OR the website itself!) is not any sort of assurance that it will attract,
satisfy, and retain customers. A firm that has a specific target market will be able to fine tune
its message and the rest of the marketing mix to the needs of the target customers; that
increases the odds that it can offer them superior customer value.
2- 7. This question basically serves as a review of the text discussion in the section, “Developing
Marketing Mixes for Target Markets.”
2- 8. This question is designed to get the students thinking more seriously about what should be
included in a marketing strategy – that is, to get them beyond a superficial definition of
marketing strategy. Ideally, a strategy should include policy statements with respect to how
each of the four Ps should be handled. If these are spelled out completely, then there are
comprehensive guidelines for implementing strategy. Usually not all the details of
implementation will be set by the strategy, but a detailed marketing plan would provide
sufficient detail so there was no doubt that the implementation decisions were primarily
concerned with operational (not strategy) matters. The discussion here should not leave the
student thinking that there is "nothing" to implementation efforts. This is certainly not true. The
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“Only that I might see how many years older she is than I,” replied
Phemie.
“A great many, I imagine,” laughed Mrs. Stondon.
“She is half my lifetime older,” said the girl, earnestly.
“I dare say she is; but what then?”
“Why, only that one may do ever so much in half a lifetime.”
“I know some one who might do anything she chose,” answered
Mrs. Montague Stondon, and Phemie coloured to the very roots of
her hair at having her own thoughts put into such exceedingly plain
English.
“Eight years!—what might she not do in eight years? That was
what she began pondering and considering. She could learn—she
could gain knowledge—she could work hard—she could acquire such
information as might make the man who had married her, proud of
her instead of ashamed.
For Phemie felt confident he must be ashamed of her. It might
have been all very well at Tordale, but in London, and amongst all
these grand people (as the girl in her innocence considered them), he
must be ashamed of the wife he had chosen.
She felt her heart beat faster and the blood rush up into her face as
she recalled a glance that she had seen exchanged between a pair of
ladies when she broke down in her song so hopelessly. A raising of
the eyebrows, a mere curl of the lips, the slightest shrug of the
shoulders, told Phemie their thoughts as clearly as though they had
spoken them outright.
And it was so hard—so hard because she knew she had a better
voice than Miss Derno—and singing was her sole accomplishment,
and Captain Stondon had been proud of it! He would never ask her
to sing again; he would be afraid. He would——
“So you really are going to leave London in two days,” said Miss
Derno at this juncture, breaking in suddenly on her reverie. “How I
envy you! How I wish I was going through Switzerland, and to Rome,
and to Naples, instead of down to a lonely country house on the
borders of civilization, where we get letters about once a week, and
see a stranger only when a vessel is wrecked on the coast!”
“I lived in a place as quiet as that,” answered Phemie, “and liked
it.”
“Possibly; but you will like it no more. You could never go back and
like it again. Solitude may be very charming, but society is more
charming still. The world may be very hollow, but it is made up of
our fellow-creatures for all that; and we cannot live without our
fellow-creatures, bad as they are, for the simple reason that we are
gregarious animals, and that angelic company is not obtainable on
earth. Added to which,” finished Miss Derno, “I think angels would
be a little dull.”
“I wish,” said Phemie, “you were going abroad too. I should like it
so much.”
“So should I,” answered Miss Derno, “but duty calls me to the ends
of the earth, and I obey the summons. When you are in Paris,
Vienna, or in any one of the hundred towns Captain Stondon says he
intends taking you to see, think of me killing time—or, rather, being
killed by time—in a place fifteen miles from everything—from letters
—from papers—from books—from a doctor—from a station. There is
no necessary of life near us excepting the churchyard, and we have
no society, unless a curate who wears thick boots and spectacles, and
his lame wife and about twenty-seven children, can be called
desirable neighbours.”
“What do you do all day?” asked her auditor.
“We sleep a great deal, and we eat every hour or so, and we watch
the vessels passing, through a telescope; and we wonder where they
are going. Then we drive; and I ride, and walk; and some one or
other of the curate’s children is always getting maimed; and when
the doctor has happily to be sent for, he calls at the great house, and
brings us news of the outer world—of the latest suicide, of the most
interesting murder. But there is my aunt preparing for departure. I
must say good-bye. Au revoir.”
“I am afraid it will not be au revoir,” said Phemie. “We are to be
away for so long a time that it is not likely we shall see each other
again ever.”
Miss Derno laughed. “There is no ‘for ever’ in society. Everybody
meets every one sooner or later; and, recollect, when we do meet you
are to sing ‘You’ll remember’ without a mistake. If we were to be
parted for twenty years the first thing I should say to you would be,
‘That song, Mrs. Stondon.’ So do not forget.”
And she pressed Phemie’s hand in hers, and was gone before the
girl could answer.
CHAPTER XV.
FIVE YEARS LATER.
END OF VOL. I.
[Ready.
[Shortly.
[Ready.
CONTENTS:
1. False Steps.
2. The Uses of Dignity.
3. Quarrels.
4. Social Salamanders.
5. Vague Aims.
6. Falling Off.
7. Minor Tribulations.
8. Thrift.
9. Domestic Autocracy.
10. Culpability and Degradation.
11. Husbands.
12. The Companions of our Pleasures.
13. Clever Men’s Wives.
14. New Ideas.
15. Cynical Fallacies.
16. Friendly Infatuation.
17. Pithiness.
18. The Theory of Life from Below Stairs.
19. Needy Men.
20. Philosophers and Politicians.
21. Authors and Books.
22. Literary Industry.
23. Nineteenth Century Sadness.
24. Weakness of Public Opinion.
25. Pagan Patriotism.
26. Occasional Cynicism.
27. Praise and Blame.
28. The Artisan and his Friends.
29. The Terrors of Intellect.
LIFE OF GEORGE THE THIRD: from Published and Unpublished
Sources. By J. HENEAGE JESSE, Esq. In 3 vols. 8vo.
[Shortly.
[Shortly.
MESSRS. TINSLEY BROTHERS’ NEW
WORKS.
[Ready.
[Ready.
[Ready.
[Ready.
[Ready.
[Ready.
[Ready.
[Ready.
[Ready.
[Ready.
[Ready.
TINSLEY BROTHERS, 18, CATHERINE STREET, STRAND.