Marketing 2014 Pride 17th Edition Solutions Manual

Marketing 2014 Pride 17th Edition Solutions Manual
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CHAPTER 10
Digital Marketing and Social Networking
TEACHING RESOURCES QUICK REFERENCE GUIDE
Resource Location
Purpose and Perspective IRM, p. 203
Lecture Outline IRM, p. 204
Discussion Starters IRM, p. 213
Class Exercise IRM, p. 214
Chapter Quiz IRM, p. 215
Answers to Discussion and Review Questions IRM, p. 216
Answers to Application Questions IRM, p. 219
Answers to Internet Exercise IRM, p. 220
Answers to Developing Your Marketing Plan IRM, p. 221
Comments on the Cases IRM, p. 222
Case 10.1 IRM, p. 222
Case 10.2 IRM, p. 223
Strategic Case 4 IRM, p. 224
Instructions for Role-Play Team Case Exercise IRM, p. 225
Examination Questions: Essay Testing CD
Examination Questions: Multiple-Choice Testing CD
Examination Questions: True-False Testing CD
PowerPoint Slides Instructor’s website
Note: Additional resources may be found on the accompanying student and instructor websites at
www.cengagebrain.com.
PURPOSE AND PERSPECTIVE

The purpose of this chapter is to provide students with an overview of changes and innovations in
marketing. The digital revolution has generated new technologies that make the field of marketing
simultaneously faster, easier, different, and more complex. First, we present definitions of key terms, such
as digital media and electronic marketing. We stress their increasing importance in the strategic planning
process. Next, we provide students with an understanding of the role of digital media in marketing
strategy and how digital media can be used as an effective marketing tool. We then provide information
on how digital marketing influences consumer behavior and the marketing mix. Finally, we outline legal
and ethical concerns related to digital media and electronic marketing.
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204 Chapter 10: Digital Marketing and Social Networking
LECTURE OUTLINE
I. Growth and Benefits of Digital Marketing
A. Digital media are electronic media that function using digital codes.
B. Digital marketing uses all digital media (including the Internet and mobile and interactive
channels) to develop communications and exchanges with customers.
C. Electronic marketing, or e-marketing, refers to the strategic process of distributing,
promoting, pricing products, and discovering the desires of customers using digital media and
digital marketing.
D. The Internet allows marketers to communicate with consumers, reach new markets, and
target markets more precisely.
1. The most important benefit of e-marketing is the ability of marketers and consumers to
share information. The Internet has changed how marketers communicate with
consumers, suppliers, and employees.
2. New information technologies such as social media represent a tremendous opportunity
because they facilitate communications while significantly reducing costs.
E. For many businesses, digital marketing is essential in attaining and retaining a competitiv e
advantage.
F. Digital media is different from traditional marketing because of five key characteristics:
addressability, interactivity, accessibility, connectivity, and control (Table 10.1).
II. The Interactivity of Social Media
A. The interactivity of digital media enables the firm to engage with its stakeholders.
B. Traditional marketing involves one-way communication, which often takes a long time as
marketers and customers struggle to reach each other.
C. Interactivity focuses on digital media that make interpersonal connections possible.
1. It can help facilitate and enable ongoing conversations with customers, often in real -time,
through the use of blogs and social networking sites.
2. Interactivity helps marketers maintain high-quality relationships with existing customers
by shaping customer expectations and perceptions.
D. By providing information, ideas, and a context for interacting with other customers, interactive
marketers can enhance customers’ interest in and involvement with their products.
III. Types of Consumer Generated Marketing and Digital Media
A. Digital media are more consumer-driven than traditional media and are changing marketing.
B. Two major trends have caused consumer-generated media to gain in importance.
1. The increased tendency of consumers to publish their own thoughts, opinions, reviews,
and product discussions through blogs or digital media. As a result, the environment has
become more interactive.
2. Consumers’ tendencies to trust other consumers over corporations. Consumers often rely
on the recommendations of friends, family, and fellow consumers when making
purchasing decisions.
C. Understanding where online users are likely to express their thoughts and opinions can help
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, o r posted to a publicly accessible website, in whole or in part.
Chapter 10: Digital Marketing and Social Networking 205
marketers use these forums to interact with consumers, address problems, and promote their
firms.
D. Social Networks
1. A social network is a web-based meeting place for friends, family, coworkers, and peers
that allows users to create a profile and connect with other users for the purposes that
range from getting acquainted, to keeping in touch, to building a work related network.
2. Today’s social networks offer a multitude of consumer benefits, and marketers are using
these sites and their popularity with consumers to promote products, handle questions and
complaints, and provide information to assist customers in buying decisions
3. As social networks evolve, both marketers and the owners of social networking sites are
realizing the incredible opportunities such networks offer—an influx of advertising
dollars for social networking owners and a large reach for the advertiser.
4. Although social networks are often used to refer to consumer relationships, businesses
can also use digital media internally to assist in workplace connections and capture
knowledge
5. While billions of dollars in investments are being funneled into social media, it may be
too early to assess the exact economic contribution of social media to the entire economy.
6. Facebook
a. Internet users create Facebook profiles and then search the network for people with
whom to connect.
b. Facebook is the most popular social media site and appeals to a broad demographic.
c. Many marketers are turning to Facebook to market products, interact with consumers,
and take advantage of free publicity.
(1) Users can become a “fan” of products and companies they like.
(2) Companies are using Facebook to help consumers feel more connected to their
products. This is a form of relationship marketing, or the creation of relationships
that mutually benefit the marketing business and the customer.
7. Myspace
a. Users of Myspace create profiles and interact with other members.
b. Myspace now trails behind Facebook in popularity and is trying to reinvigorate the
site through design and content changes. However, the site retains a loyal following
who prefer its layout and interface to other online social networking sites.
c. Myspace is the largest music artist community on the Web. Emerging musicians use
Myspace to record and share their music, and users can create social playlists of
music from famous artists.
8. Twitter
a. Twitter s a hybrid social networking and micro-blogging site (users can “tweet” status
updates of up to 140 characters).
b. Some companies have become experts at using Twitter in their marketing strategies.
c. Twitter is being used to enhance customer service and create publicity about
products.
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d. Marketers can pay Twitter to highlight advertisements or company brands to a wider

range of users while they search for specific terms or topics.
E. Blogs and Wikis
1. Blogs (web-logs) are web-based journals through which authors can editorialize and
interact with other Internet users.
a. Blogs give consumers power over companies because companies cannot control what
bloggers write.
(1) Although companies have filed lawsuits against bloggers for defamation, they
usually cannot prevent the blog from going viral.
(2) A positive review of a product or service posted on a popular blog can result in
large increases in sales.
(3) Thus, blogs can represent a potent threat to corporations or an opportunity for
them.
b. Some businesses use blogs to answer consumer concerns or defend their corporate
reputations.
c. Many major corporations have created their own blogs or encourage employees to
blog about the company.
2. Wikis are a type of software that creates an interface that enables users to add or edit the
content of some types of websites.
a. Wikipedia is the most famous wiki.
(1) The site is expanded, updated, and edited by a large team of volunteer
contributors.
(2) For the most part, only information that is verifiable through another source is
considered appropriate.
(3) Because of its open format, Wikipedia has suffered from some high-profile
instances of vandalism in which incorrect information was disseminated.
b. Wikis on controversial companies like Walmart and Nike often contain negative
publicity about the companies.
c. Some companies have begun to use wikis as internal tools for teams working on a
project requiring lots of documentation.
d. Monitoring wikis provides companies with a better idea of how consumers feel about
the company.
3. Marketers who want to form better customer relationships and promote their company’s
products must not underestimate the power of these two tools as new media outlets.
F. Media-sharing Sites
1. Media-sharing sites allow marketers to share photos, videos, and podcasts.
2. Media-sharing sites are more limited in scope in how companies interact with consumers.
a. While firms can promote their products through videos or photos, they usually do not
interact with consumers through personal messages or responses.
b. At the same time, the popularity of these sites provides the potential to reach a global
audience of consumers.
3. Photo-sharing Sites
a. Photo-sharing sites allow users to upload and share their photos with the world. Well -
known photo sharing sites include Flickr, SmugMug, Picasa Web Albums, and
Photobucket.
b. Flickr is owned by Yahoo! and is the most popular photo-sharing site on the Internet.
A Flickr user can upload, edit, organize, and share images without having to e-mail
bulky image files or send photos through the mail.
c. Photo sharing represents an opportunity for companies to market themselves visually
by displaying snapshots of company events, company staff, and/or company products.
4. Video-sharing Sites
a. Video-sharing sites allow anybody to upload videos to the Internet. Some of the most
popular video-sharing sites include YouTube, Metacafe.com, and Hulu.
b. Video-sharing sites give companies the opportunity to upload ads and informational
videos about their products.
(1) A few videos become very popular, and marketers are seizing upon opportunities
to utilize this “viral” nature to promote awareness of their companies (see
Chapter 17).
(2) Businesses have begun to realize that they can use consumer-generated content,
which saves companies a lot of money because they do not have to hire
advertising firms to develop professional advertising campaigns.
c. Podcasts are audio or video files that can be downloaded from the Internet with a
subscription that automatically delivers new content to listening devices or personal
computers.
(1) Podcasts offer the benefit of convenience, giving users the ability to listen to or
view content when and where they choose.
(2) The majority of podcast users are between 18 and 29 years of age, making
podcasts a key tool for businesses marketing to this demographic.
(3) Companies can use podcasts to demonstrate how to use their products or
understand certain features.
(4) Through podcasting, many companies hope to create brand awareness, promote
their products, and encourage customer loyalty.
G. Virtual Sites
1. Virtual sites are user-created, three-dimensional worlds that have their own economies
and currencies, lands, and residents. Virtual sites include Second Life, Everquest, Sim
City, and the role-playing game World of Warcraft.
a. Internet users who participate in virtual realities like Second Life choose a fictional
persona called an avatar.
b. Residents of Second Life connect with other users, communicate with one another,
and purchase goods and experiences with virtual Linden dollars, all while spending
real money.
2. Real-world marketers and organizations have been eager to capitalize on the popularity of
virtual realities.
a. Second Life allows businesses to reach consumers in a way that is creative and fun.
b. Other businesses are looking toward virtual worlds to familiarize consumers with
their products and services.
3. Firms are also using virtual technology for recruiting purposes, such as holding virtual
job fairs. By interacting with the public virtually, businesses hope to connect with younger
generations of consumers.
H. Mobile Devices
1. Mobile devices such as smartphones, mobile computing devices, and tablet computers
allow customers to leave their desktops and access digital networks from anywhere.
2. Mobile marketing has proven effective in grabbing consumers’ attention, especially
through advertising.
3. Many brands have yet to take advantage of mobile marketing opportunities by making
mobile-compatible websites and e-mails.
4. Some of the more common mobile marketing tools include SMS ads, multimedia
messages, mobile advertisements, mobile websites, location-based networks, and mobile
applications.
I. Applications and Widgets
1. The most important feature of apps is the convenience and cost savings they offer to the
consumer.
a. Some apps allow consumers to compare a product’s price with the prices of identical
products in other stores, download in-store discounts, or accumulate rewards.
b. Some apps scan QR codes (black-and-white squares that sometimes appear in
magazines, posters, and storefront displays) and a link, video, or image shows up on
the phone’s screen. Marketers are using QR codes to promote their companies and
offer consumer discounts.
2. Mobile technology is changing the shopping experience.
a. Shoppers can use apps to tally up purchases and pay through their smart phones.
b. Mobile payments are also gaining traction. With apps like Google Wallet, the shopper
can tap the phone at the point of sale for the transaction to be registered.
3. Widgets are small bits of software on a website, desktop, or mobile device. Marketers
might use widgets to display news headlines, clocks, or games on their webpages.
a. Widgets downloaded to a user’s desktop can update the user on the latest company or
product information, enhancing relationship marketing between companies and their
fans.
b. Widgets are an innovative digital marketing tool to personalize webpages, alert users
to the latest company information, and spread awareness of the company’s products.
IV. Changing Digital Media Behaviors of Consumers
A. Consumers now expect to have access to more information and receive it faster than before.
B. Consumers can connect with each other more than ever before, as well as get the “real story”
on products and companies.
1. In many ways, some of the power of the professional marketer to control and dispense
information has been placed in the hands of the consumer. Consumers now have a greater
ability to regulate the information that they view as well as the rate and sequence of their
exposure to that information.
2. The Internet is sometimes referred to as a pull medium because users determine which
websites they are going to view; the marketer has only limited ability to control the
content to which users are exposed, and in what sequence.
C. Some companies are using the power of the consumer to their advantage.
1. While negative ratings and reviews are damaging to a company, positive customer
feedback is free publicity that often helps the company more than corporate messages do.
2. Because consumer-generated content appears more authentic than corporate messages, it
can go far in increasing a company’s credibility.
3. Marketers can also use the same sites to get information on the consumer—often more
information than could be garnered through traditional marketing venues.
4. They can examine how consumers are using the Internet to better target marketing
messages to their audience.
5. Marketers increasingly use consumer-generated content to aid in their own marketing
efforts.
6. Marketers are also using the Internet to track the success of their Internet marketing
campaigns.
D. Online Consumer Behavior
1. Marketers must constantly adapt to new technologies and changing consumption patterns.
2. Digital media channels have a high attrition rate; it is hard to stay on top of the latest
technologies and trends.
3. Marketers may find new digital media daunting, but it is essential to learn how
consumers interact with them and how digital media are changing their behaviors.
4. Forrester Research developed a classification system to help marketers understand how
different groups of consumers use social media. The Social Technographics Profile
classifies consumers into seven groups (which may overlap):
a. Creators are those consumers who create their own media outlets, such as blogs,
podcasts, consumer-generated videos, and wikis.
b. Conversationalists regularly update their Twitter feeds or status updates on social
networking sites.
c. Critics are people who comment on blogs or post ratings and reviews.
d. Collectors gather information and organize content generated by critics and creators.
e. Joiners are anyone who becomes a member of Myspace, Twitter, Facebook, or other
social networking sites.
f. Spectators are those consumers who read what other consumers produce but do not
produce any content themselves.
g. Inactives are online users who do not participate in any digital online media.
5. Marketers who want to capitalize on social and digital media marketing will need to
consider what portion of online consumers are creating, conversing, rating, collecting,
joining, or simply reading online materials.
V. E-Marketing Strategy
A. Basic Internet literacy is rising all over the world, making it a good way to reach global
consumers.
B. Most businesses now find it necessary to use digital marketing to grab and maintain market
share.
C. Digital media can help businesses streamline their organizations and offer new benefits and
convenience to consumers.
D. Product Considerations
1. Digital media provide an opportunity to add a service dimension to traditional products
and to create new products that could only be accessible on the Internet.
a. The ability to access product information for any product can have a major impact on
buyer decision making.
b. Many businesses are finding it necessary to continually upgrade their product
offerings to meet consumer needs.
2. Some companies use advertising campaigns and contests to develop better products;
some products are only available via digital media.
3. The Internet can make it easier to anticipate consumer needs—but competition makes
quality products and service offerings more important than ever.
E. Distribution Considerations
1. The Internet is a new distribution channel that helps businesses increase efficiency.
a. Processing orders electronically reduces inefficiencies, costs, and redundancies while
increasing speed.
b. Shipping times and costs are an important element in attracting customers.
c. Walmart and other retailers now offer “site to store” services that allow customers to
eliminate paying for shipping and pick up orders in the nearest store.
2. Distribution involves a push-pull dynamic, with companies pushing to get products to
consumers and channel members pulling to find each other and products.
3. These changing distribution patterns are not just limited to the Western world. Businesses
around the world are choosing to sell products over the Internet, which represents a
revolutionary shift in countries like China.
F. Promotion Considerations
1. Promotion is one of the best applications for digital media.
2. Marketers that choose to capitalize on these opportunities have the chance to boost their
firms’ brand exposure.
3. Consumer consumption patterns are changing, and marketers must adapt.
4. Most traditional promotions can be enhanced by using digital media.
G. Pricing Considerations
1. Price is the most flexible element of the marketing mix.

2. Digital media marketing facilitates both price and nonprice competition because Internet
marketing gives consumers access to more information about costs and prices.
a. As consumers become more informed about their options, the demand for low-priced
products has grown, leading to the creation of daily deal sites like Groupon and
LivingSocial.
b. Several marketers are also offering buying incentives like online coupons or free
samples to generate consumer demand for their product offerings.
3. Digital connections can help the customer find the price of the product available from
various competitors in an instant.
a. While this new access to price information benefits the consumer, it also places new
pressures on the seller to be competitive and to differentiate products so that
customers focus on attributes and benefits other than price.
b. Retailers and other organizations are developing e-commerce stores on Facebook so
that consumers will not have to leave the site to purchase items.
VI. Ethical and Legal Issues
A. How marketers use technology to gather information can raise many ethical and legal questions.
B. The rapid spread of the Internet and digital technologies means that regulation has not kept pace.
C. Privacy
1. One of the most significant privacy issues involves the personal information that
companies collect from website visitors. Privacy concerns include:
a. Companies collecting personal information from website users
b. Hackers stealing information stored by companies
c. Malware targeting mobile devices
2. Many of these breaches occur at banks, universities, and other businesses that contain
sensitive consumer information, which requires organizations to implement increased
security measures to prevent database theft.
3. Facebook, Google, and other social networking sites have also come under fire for
privacy issues, leading to mandatory privacy audits.
4. Consumers and the federal government alike are considering an online privacy “Bill of
Rights” to protect consumers from having their information tracked without permission.
5. The Federal Trade Commission is considering enacting legislation that limits the
information companies can gather online.
6. Web advertisers see regulation as a threat and are attempting self-regulation in order to
stay ahead of the game.
D. Online Fraud
1. Online fraud includes any attempt to conduct fraudulent activities online, such as by
deceiving consumers into releasing personal information.
a. Cybercriminals are increasingly using online social networking sites and other digital
media to commit fraud—either to damage a company’s reputation or to gather private
information from consumers.

b. Some fraudsters create typosquatting sites based on common misspellings of search
engines or social networks to then trick visitors into releasing their information.
c. Criminals may seek out ways to damage a company’s reputation or to extract money
from customers.
d. Criminals even use social networking sites to pose as charities in the wake of
disasters to siphon off donations.
2. Organizations and social networking sites are seeking to develop ways to combat
fraudulent online activity.
3. Consumers must always be careful what information they give when online and only give
out credit card numbers on trusted and secure sites.
E. Intellectual Property
1. Intellectual property can be ideas and creative materials, songs, movies, books,
electronics, etc. that is developed to solve problems, carry out applications, and educate
and entertain others.
2. It is generally protected by patents and copyrights, but these can be hard to enforce in a
global marketplace.
3. YouTube has often faced lawsuits on intellectual property infringement. With millions of
users uploading content to YouTube, it can be hard for Google to monitor and remove all
the videos that may contain copyrighted materials.
4. Online piracy has become such an issue that the U.S. government proposed two bills, the
Stop Online Privacy Act and Protect Intellectual Property Act, that would enable the
government to shut down sites that appeared to violate another stakeholder’s intellectual
property.
a. Although studios and record labels supported the bills, online Internet companies and
many consumers feared that the regulations would infringe on freedom of speech.
b. Protests and pressure from websites and consumers caused the government to drop
the bills.
5. The software industry is particularly hard-hit by IP violations and illegal file sharing.
6. Many consumers rationalize the illegal sharing of digital content.
7. All users of digital media must make an effort to abide by ethical practices.
DISCUSSION STARTERS
Discussion Starter 1: Online Shopping, Technology, and Privacy
Amazon.com is one of the Web’s most recognizable marketers. Visit the company’s website at
www.amazon.com and describe how the company adds value to its customers’ buying experience.
ASK: Have you ever shopped on Amazon.com?
Most students will have purchased a product from Amazon at some point in their lives.
ASK: What did you think about the experience? Did you enjoy it?
Students may have a range of answers to this question—from complete satisfaction to dissatisfaction.
ASK: Do you like how Amazon remembers you and recommends things to purchase based on your past
purchases? Other companies, like Netflix, do a similar thing. Do you think more companies should
employ similar technology? Would it convince you to buy more things?
Students may have a strong reaction to these questions. Some people may feel that it is a violation of
privacy to have a company track their purchases and recommend other things that they may want to buy.
Other students may appreciate how it makes finding interesting products easier.
Discussion Starter 2: Is Electronic Marketing for Everyone?

ASK: In general, do you think that electronic marketing is effective at reaching target markets?
Students may answer this question in a variety of ways. If strong sides emerge, you may want to set up a
miniature debate, with some students arguing that it is an effective means of marketing, and the other side
arguing that the effectiveness is overblown.
ASK: When you indicate that you ‘Like’ or are a ‘Fan’ of a product or company on Facebook, does that
make you more likely to be a customer of that company? Or are you merely passively indicating that you
think that company makes quality products?
It should be interesting to see how students answer this question. Reason would stand that they would be
more likely to purchase products of which they are a ‘Fan,’ but that may not be the case.
ASK: Can you think of any products that should not be marketed online?
Students should use their imagination on this one. Make sure to have them explain their reasoning.
CLASS EXERCISES
Class Exercise 1: Online Social Networking and Marketing
Note: This could easily be converted into a take-home assignment for either individuals or groups.
Social networking is a popular method of communication for individuals, businesses, and organizations of
all kinds. Conduct some research online and identify how companies are utilizing some of the most
popular social networking sites in their marketing strategies. Consider the target markets businesses are
trying to reach and whether you think they have been successful in reaching those markets via social
networking sites. Are some companies doing really creative things to get customers’ attention? What are
they doing, and how successful have they been?
Class Exercise 2: Blogs are Big Business (and a Powerful Tool for Marketers)
Whether businesses like it or not, bloggers have tremendous power. A positive review on a popular blog
can mean exponential increases in sales. The opposite situation could be true for a negative review.
Regardless of whether or not most bloggers are qualified to give advice about products, their readers pay
attention and so, therefore, must marketers. Many companies now send out samples, free trips, stays in
hotels, etc. to bloggers in the hopes of garnering praise on popular (and moderately popular) blogs. With
literally millions of blogs already in existence, and new ones popping up all the time, this can amount to
an overwhelming task for marketers. However, blogs can be a great way for companies to generate some
low-cost publicity. This is why so many firms have resorted to appealing to bloggers.
Have students do some research of their own on blogs. Undoubtedly, most students are aware of different
blogs that they enjoy. Have them suggest a few (school appropriate) blogs and search for ways that
marketers are utilizing the sites. They may find advertisements on the site. They may find reviews. They
also may find brand names prominently displayed in the posts. If it is a blog about cooking, the blogger
may prefer a particular kind of olive oil; or the blogger may profess a love of a certain brand of clothing
on a fashion blog, for example.
Then have students brainstorm on how they might be able to utilize blogs to market a particular product
or service. Have them think about whether any products are particularly not appropriate for marketing via
blogs.
CHAPTER QUIZ
1. A ________ is a web-based meeting place for users to create a profile and communicate with other
users.
a. podcast
b. social network
c. connectivity platform
d. linked communication tool
e. virtual link
2. Marketers are taking advantage of mobile technology to help customers do all of the following
except________.
a. Compare prices and product features
b. Download coupons and other discounts
c. Connect with other consumers buying the same product
d. Make electronic payments
e. Receive advertisements
3. ________ is free publicity that often helps the company more than corporate messages do.
a. Interactivity
b. Enterprise 2.0
c. Company websites
d. Mobile advertising
e. Positive customer feedback
4. A digital consumer who regularly posts comments on a company’s blog is mostly likely a ________.
a. Conversationalist
b. Joiner
c. Collector
d. Critic
e. Spectator
Answers to Chapter Quiz: 1. b; 2. c; 3. e; 4. d.
ANSWERS TO DISCUSSION AND REVIEW QUESTIONS

1. How does e-marketing differ from traditional marketing?
There are many ways in which e-marketing differs from traditional marketing. Characteristics that
separate e-marketing from traditional marketing include addressability, interactivity, accessibility,
connectivity, and control. The interactivity of digital media allows e-marketing to be a two-way
process, in which marketers can engage in conversations with consumers and consumers can provide
quick feedback. Marketers are using consumer ratings, reviews, blogs, and other consumer-generated
content to better understand consumer needs. Tools such as cookies allow marketers to collect real-
time information on consumers as they visit their websites, which enables marketers to tailor products
and promotions to specific target markets. Consumers also have more control than with traditional
marketing because they are able to use digital media to rate and review company products as well as
control what they view on the Internet. However, it is still important for marketers to realize that the
primary components of marketing strategy continue to apply to e-marketing. For instance, digital
marketers must still carefully consider product, distribution, promotion, and pricing when marketing
online.
2. Define interactivity and explain its significance. How can marketers exploit this characteristic
to improve relations with customers?
Interactivity allows customers to express their needs and wants directly to the firm in response to its
marketing communications. It represents a significant shift in how marketing is done because
traditional marketing media usually involved one-way forms of communication. The feedback
mechanisms used with traditional media were time-consuming and more expensive. By utilizing
appropriate digital media, companies can facilitate interactivity and enable a conversation with the
customer. Digital media like blogs and some social networks allow marketers to interact with
prospective customers in real time (or a close approximation of it). The one-sided communication
common to traditional marketing channels is being replaced with interactive conversations between
customer and marketer. Interactivity provides the advantages of a virtual sales representative, with
broader market coverage at lower costs.
3. Explain the distinction between push and pull media. What is the significance of control in
terms of using websites to market products?
Push involves a company producing a product and pushing to get it in front of consumers. Pull
involves customers specifically requesting products that they want, with the company then reacting
by providing them. Consumer control is higher in a digital age because consumers can generate
publicity, negative or positive, that is out of the control of the firm and can significantly affect sales.
Customers can generate buzz about products, therefore creating a pull effect and increasing company
sales.
4. Why are social networks becoming an increasingly important marketing tool? Find an example
on the Web in which a company has improved the effectiveness of its marketing strategy by
using social networks.
Social networks are appealing for a number of reasons. First of all, many different demographic
groups (including hard-to-reach teenagers and young adults) are active on social networks. The low
cost of advertising and participating in social networks is appealing to large and small companies
alike. It is also appealing that companies can reach new target markets and better target existing ones
via social networks. The opportunity to inexpensively gather market research data and to
communicate with customers in real-time is also an appeal of utilizing social networks. Students’
examples will vary.
5. How has new media changed consumer behavior? What are the opportunities and challenges
that face marketers with this in mind?
Consumers now have more control than ever before. They have access to greater amounts of
information and are more likely to conduct research online before purchases. Consumers can also post
bad reviews of products they did not like or provide free positive publicity for products that they do
like. Digital media has increased the amount of information available and the power conferred on
consumers. This presents opportunities for marketers to obtain free publicity from bloggers and others
who are active online, but it also makes companies more careful about the risks and downsides of
negative publicity and reviews. Companies also increasingly must provide additional online services
and features in order to retain a competitive advantage.
6. Describe the different technographic segments. How can marketers use this segmentation in
their strategies?
Creators are those consumers who create their own media outlets, such as blogs, podcasts,
consumer-generated videos, and wikis. Conversationalists regularly update their Twitter feeds or
status updates on social networking sites. Critics are people who comment on blogs or post
ratings and reviews. Collectors are perhaps the most newly recognized group of the s even.
Collectors gather information and organize content generated by Critics and Creators. Anyone
who becomes a member of Myspace, Twitter, Facebook, or other social networking sites is a
Joiner. It is not unusual for consumers to be members of several social networking sites at once.
Spectators are the largest group in most countries. It is not hard to see why. Spectators are those
consumers who read what other consumers produce, but do not produce any content themselves .
Inactives are online users who do not participate in any digital online media, but as m ore and
more people begin to use computers as a resource, this number is dwindling.
Marketers should be aware of and utilize these different segments because they all play an
important role online. However, Creators and Critics are the two most important groups when
developing a marketing strategy. Creators will help to disseminate information via blogs,
podcasts, etc. Critics need to be an important component in a company’s digital marketing
strategy, as the majority of online shoppers read ratings and reviews to aid in their purchasing
decisions.
7. How can marketers exploit the characteristics of the Internet to improve the product element of
their marketing mixes?
The Internet can help firms better address the needs of their consumers through product features
available online, improved customer service, and better marketing strategies. Digital media provide
an opportunity to add a service dimension to traditional products and to create new products that
could only be accessible on the Internet. Some companies also utilize online advertising campaigns
and contests to help develop better products.
8. How do the characteristics of e-marketing affect the promotion element of the marketing mix?
Promotion is the element of the marketing mix best suited for digital media. E-marketing allows for
more targeted publicity. In fact, apps have allowed promotions to get so specific that they are offered
to consumers as they walk by the appropriate store. The Internet and mobile marketing also allow for
greater and faster communications, resulting in better and more successful promotional campaigns.
9. How has digital media affected the pricing of products? Give examples of the opportunities and
challenges presented to marketers in light of these changes.
Digital media facilitate both price and nonprice competition, because Internet marketing gives
consumers access to more information about costs and prices. As consumers become more informed
about their options, the demand for low-priced products has grown, leading to the creation of daily
deal sites like Groupon and LivingSocial. Digital connections can help the customer find the price of
the product available from various competitors in an instant. While this new access to price
information benefits the consumer, it also places new pressures on the seller to be competitive and to
differentiate products so that customers focus on attributes and benefits other than price.
10. Name and describe the major ethical and legal issues that have developed in response to the
Internet. How should policy makers address these issues?
The major ethical and legal issues are privacy, intellectual property protection, and online fraud. All
of these problems have increased as use of digital media has increased. Students’ answers as to how
policy makers can address these problems will vary.
ANSWERS TO APPLICATION QUESTIONS

1. Amazon.com is one of the Web’s most recognizable marketers. Visit the company’s website
at www.amazon.com and describe how the company adds value to its customers’ buying
experiences.
Students should have a variety of examples of how Amazon enhances the consumer experience.
Examples may include personalized recommendations, 1-click purchasing, customer reviews,
editorial reviews, or showing what most visitors to the page ultimately purchase.
2. Social networking has become a popular method of communication not only for individuals
but for businesses as well. Visit the various social networking sites, such as Facebook and
Twitter, and identify how companies are utilizing each of these sites in their marketing
strategies.
Again, students should be able to find several companies using social media to communicate with
consumers. Interesting companies to visit include Southwest and Zappos, which interact with
several different stakeholder groups through social media.
3. Some products are better suited than others to electronic marketing activities. For example,
Art.com specializes in selling art prints via its online store. The ability to display a variety
of prints in many different categories gives customers a convenient and efficient way to
search for art. On the other hand, General Electric has a website displaying its appliances,
but customers must visit a retailer to purchase them. Visit www.art.com and
www.geappliances.com and compare how each firm uses the electronic environment of the
Internet to enhance its marketing efforts.
Students will recognize several differences between the products of Art.com and GE. Students
can discuss why digital marketing strategies vary for the two companies (i.e., ease of shipping,
existing distribution networks, and consumer needs).
4. Visit the information technology company website www.covisint.com and evaluate the
nature of the business customers attracted. Who is the target audience for this business
marketing site? Describe the types of firms currently doing business through this exchange.
What other types of organizations might be attracted? Is it appropriate to sell any banner
advertising on a site such as this? What other industries might benefit from developing
similar digital media exchange hubs?
Covisint targets several different business customers but features three groups on its homepage:
healthcare companies, manufacturing companies, and companies looking for human resources
solutions. The company also provides products and services to energy companies and any
company that requires IT services like cloud computing. Because Covisint products would be
researched and purchased by managers and executives at these companies, banner ads are not
appropriate. Other B2B industries would benefit from such a hub.
5. Based on the information provided in the text, identify and map your social habits on social
networking sites for the past week. Did you create content through blogs? Did you rate or
recommend products or companies? Did you post photos of yourself at particular events or
places on Facebook? Rate each of your online social activities according to how much
influence you think they have had upon your friends or followers. Use 0 if you believe a
particular activity had zero influence, 1 for slight influence, 2 for moderate influence, and 3
for significant influence. After you are finished ranking how much of an impact each of
your online activities has had upon your friends and followers, determine whether you are
an influencer of consumption behaviors. Do you think your friends would agree with you ?
Student answers will vary based on their social media habits.
ANSWERS TO INTERNET EXERCISE

Victors & Spoils
To learn more about the world’s first creative ad agency built on crowdsourcing principles, including
an opportunity to engage the world’s most talented creatives, look at the Victors & Spoils site at
http://victorsandspoils.com/.
1. How can Victors & Spoils be used to outsource advertising campaigns throu gh co-creation
and mass collaboration?
Victors & Spoils has over 6,000 global community members working to develop ideas for
advertising campaigns. For private projects, V&S matches certain members to client briefs and
pays them up front. For public projects, V&S shares client briefs and then accepts submissions
from members and pays them for the ideas that the client buys. These public projects provide
V&S with several ideas that can be combined and refined to better meet client needs. The
company believes that this strategy makes them more successful than a traditional ad agency,
which has a limited number of creative people.
2. Victors & Spoils and crowdsourcing is built on the foundation that good ideas should come
from anywhere. Is it possible that this new approach will eliminate traditional ad agencies
and creative departments?
Student answers will vary. Although crowdsourcing may change marketing and other industries,
students may argue that many industries are set up to prefer the services of traditional ad
agencies. However, with more jobs becoming temporary or contract, and with V&S providing
access to more ideas, crowdsourcing may challenge the traditional advertising process.
3. If you want to engage in activities related to what would be found in the creative
department of an advertising agency, how can Victors & Spoils help you launch your
career?
According to the website, Victors & Spoils provides three key membership benefits:
• Opportunity: Access to the best brands and briefs out there.
• Experience: You get to work with top creative directors in your area of expertise.
• Connection: A community of friends and peers: create your own team and work with
who you want from wherever you want.
Any aspiring advertiser would build a strong portfolio and gain valuable skills without having to
work his or her way up a corporate ladder.
ANSWERS TO DEVELOPING YOUR MARKETING PLAN

1. Review the key concepts of addressability, interactivity, accessibility, connectivity, and control
in Table 10.1, and explain how they relate to new social media. Think about how a marketing
strategy focused on new social media differs from a marketing campaign reliant on traditional
media sources.
The ability of a marketer to identify customers before they make a purchase is called addressability.
Many websites encourage visitors to register to maximize their use of the site or to gain access to
premium areas. Interactivity allows customers to express their needs and wants directly to the firm in
response to its marketing communications. It represents a significant shift because traditional
marketing media usually involved one-way forms of communication. The ability to obtain digital
information is referred to as accessibility. Because customers can access in-depth information about
competing products, prices, and reviews, they are much better informed about a firm’s products and
their relative value than ever before. Connectivity involves connecting customers with marketers as
well as with other customers. It involves the use of digital networks to provide linkages between
information providers and users. Control refers to customers’ abilities to regulate the information they
view and the rate and sequence of their exposure to that information.
Traditional media marketing campaigns were unidirectional, meaning the marketer put out a message
and hoped that it reached the correct audience and achieved the desired effect. Customer response
was slow to gauge and often inaccurate. New digital media have improved the flow of
communications in both directions, allowing marketers to design better and more targeted campaigns
while also giving consumers more power than ever before.
Digital media technology makes it possible for visitors on a website to identify themselves and
provide information about their product needs and wants before making a purchase. Armed with
knowledge about individual customers, marketers can tailor marketing mixes more precisely to target
customers with narrow interests. Addressability on social networks is achieved through their ability to
provide a meeting ground for individuals and groups with similar interests and consumption patterns.
The feedback mechanisms used with traditional media were time-consuming and more expensive. By
utilizing appropriate digital media, companies can facilitate interactivity and enable a conversation
with the customer. Digital media like blogs and some social networks allow marketers to interact with
prospective customers in real time. The one-sided communication common to traditional marketing
channels is being replaced with interactive conversations between customer and marketer.
Consumer control is higher in a digital age because consumers can generate publicity, negative or
positive, that is out of the control of the firm and can significantly affect sales. Customers can
generate buzz about products, therefore creating a pull effect and increasing company sales.
2. No matter what marketing media are used, determining the correct marketing mix for your
company is always important. Think about how social media might affect the marketing
mix.
Students’ answers will vary. They should be able to defend their reasoning no matter what stance
they take. Their discussion should involve mention of the distinguishing characteristics of digital
media, and perhaps also the technographic segments mentioned in the text.
3. Discuss different digital media and the pros and cons of using each as part of your
marketing plan.
Again, student answers will vary. Each student will have a different marketing plan , and each
must cater his or her response to this question to the unique needs of his or her plan. Make sure
students list the different digital media mentioned in the text (social networks, blogs, wikis, apps,
video and photo sharing, virtual realities, podcasting, and widgets).
COMMENTS ON THE CASES

VIDEO CASE 10.1: ROGUESHEEP’S POSTAGE APP: THE
POSTCARD OF THE FUTURE.
Summary
This case discusses how a company is using mobile apps to supplant traditional postcards with digital
ones. RogueSheep created the “Postage” iPhone app, a mobile app that allows users to choose from over
90 postcard designs, customize the design by inserting their own photos, and send the postcard to their
friends or relatives. Since its introduction, the Postage app has won several awards and has broken into
the social networking world. To create awareness of the product, Rogue Sheep uses a combination of
traditional media, apps, social networking sites like Facebook, and free trials.
Questions for Discussion
1. How do you think businesses could effectively use RogueSheep postcards in their
communications program?
Businesses can use the app to send digital postcards to remind customers about their products or
special events. This application could potentially be customized to be a less expensive, more
impactful business-to-the-consumer promotional postcard.
2. Is it possible for RogueSheep to advance its digital postcards to those who do not have access to
iPhone apps?
Since RogueSheep is continually creating new products and looking into new technologies, it seems
feasible that digital postcards can be advanced beyond iPhones. Other likely candidates for non-
iPhone digital postcards are laptops (some people bring their laptops with them on trips), smart
phones, or iPads.
3. What are the advantages of the RogueSheep digital postcard over traditional postcards?
Advantages include saving money on postcard and mailing costs, the speed with which a digital
postcard can reach the recipient (versus snail mail), the ability to customize their postcards and share
their designs with others via social networks, and the reduction of paper waste.
CASE 10.2: TWITTER EMERGES AS A DIGITAL MARKETING TOOL

Summary
This case discusses how companies have begun to use the social networking site Twitter as a new and
effective marketing tool. Businesses big and small are using Twitter as a way to generate interest in
their companies. Some of these companies have achieved immense success. Wine makers have used
Twitter to share their expertise with followers, and Twitter has even been used in presidential town
hall meetings. Other organizations, like Kogi Barbecue, are cutting out other forms of advertising and
substituting it with Twitter. With two-thirds of consumers visiting social networking sites, Twitter is
becoming a major opportunity to connect with consumers.
1. Why is Twitter appealing to companies?
Businesses are finding Twitter to be an effective communications tool for attracting consumers.
Twitter offers a way for businesses to attract followers, form relationships with consumers, and
update followers about business activities. Many companies are also using Twitter to track what
consumers are saying (a type of market research) and to replace other forms of more costly
advertising. Marketers can also advertise through Twitter and even pay Twitter to feature ads
more prominently through the site.
2. How could Twitter be used as a tool to strengthen customer relationships and to gather
consumer feedback?
Companies can utilize the site to address consumer concerns and even dialogue with consumers.
They can use Twitter to encourage customers to provide feedback since consumers can easily
write a quick message saying how they felt about a particular product or company. Companies
can then use the feedback to improve their products and/or services.
3. What are some of the drawbacks of using Twitter as a marketing tool?
Students may list several drawbacks to the third question. One might be that people could
become so inundated with mundane tweets that they may begin to ignore all messages, including
those from companies. Some consumers might also be against using a social networking tool,
where they want to connect with friends or other Internet users, as yet another avenue for
companies to try and market products. Security issues have also become a problem, and hackers
have breached the Twitter website in the past.
STRATEGIC CASE 4: MCDONALD’S CONTINUES TO BE A GLOBAL

MARKETING SUCCESS
Summary
This case discusses how McDonald’s has evolved its marketing strategies to respond to the “what,
when, where, why, and how” of its global customer base. In an extremely competitive landscape, this
case illustrates how McDonald’s has managed to stay profitable through activities focused on
reinforcing customer loyalty for all of its stakeholders.
1. In what ways is McDonald’s generating positive attitudes toward its brand and offerings?
Students should be able to find several answers in the case. McDonald’s excels at adapting its
offerings to meet the needs of consumers, including serving local favorites and healthy options,
operating during convenient hours, and selling products at a variety of prices. McDonald’s also
uses its Ronald McDonald House Charities and other socially responsible actions to create a
positive attitude toward the company. It is also using social media, videos, and blogs to connect
with consumers.
2. Why would McDonald’s select businesses as a target market for its Arch Cards?
Obviously, businesses are a potentially lucrative target market for McDonald’s. Although the top
value that can be loaded on an Arch Card is $50, selling the cards in bulk to businesses keeps costs
low. McDonald’s therefore reaps a good profit in this target market. When recipients use their Arch
Cards to eat at McDonald’s, the company may enjoy additional purchases over and above the card
value. It also has the opportunity to encourage recipients to reload their cards for future purchases,
adding to the profit potential.
3. What are the advantages and disadvantages of McDonald’s using franchising to grow more
quickly in China?
Using franchising would help McDonald’s to grow faster with less investment. The brand would
continue to grow and become more recognizable. However, franchises would mean that
McDonald’s would have less control over those locations. In addition, there are political and
economic issues unique to China that could make franchising more difficult.
4. Do you agree with how McDonald’s handled the situation with Twitter messages marked
#McDStories? Explain, in terms of addressability, accessibility, interactivity, connectivity,
and control, why you think this part of McDonald’s Twitter campaign didn’t go as planned .
Student answers will vary, but they should use the terms from the books as a guide. M ost answers
will focus on interactivity and connectivity. Consumers took control of the hashtag and used it to
express their problems for the company directly with McDonald’s and with each other.
INSTRUCTIONS FOR ROLE-PLAY TEAM CASE

ROLE-PLAY TEAM CASE EXERCISE 3: PARCEL INTERNATIONAL
EXPRESS
This role-play team case exercise is designed to simulate actual marketing decision making in the real
world. Students take on assigned roles and then participate in a team discussion of the case.
Preparation
Break the class into teams of 5. The entire team should read the Background section.
Each student will take on a role of a particular employee within the organization. Even though all of the
roles are printed in the textbook, each student should focus on only his/her assigned role and represent
that person. We realize that some students might try to read all of the roles, but when they break into
teams, they should only make comments based on their assigned roles.
The roles for Parcel International Express are:
• Casey Evans, Manager of Customer Relationship Management
• Robin Maignan, Vice President of Marketing
• Loren Chanchey, Vice President of Operations
• Sidney Dolce, Vice President of International Marketing
• Terry Nely, Customer Service Manager
Team Meeting
Students should try to accurately represent the motivations and interests of their individual roles during a
team discussion (15-45 minutes depending on class activities). Teams should discuss each of the issues in
the case and complete any activities mentioned in the Background section.
The issues for Parcel International Express include:
• PIE has fallen behind its competitors, even its business customers. Its market share in this
industry also appears to be decreasing.
• PIE is ranked as one of the worst shipping companies for customer service, and even loyal
PIE customers say that they are considering alternative shipping companies if this problem is
not addressed.
• Consumers from developing countries are often choosing low cost domestic postal carriers
rather than PIE.
• PIE is struggling to comply with the many different regulations in international markets.
• There has been news of potential misconduct among PIE’s joint venture partners.
• One of PIE’s top sales managers is suspected of bribing government officials in China,
Russia, and Mexico. If true, this could subject the company to serious penalties.
• PIE managers are carefully considering ways to add social media to their advantage.
However, the company is unsure how to implement a digital marketing strategy.
This case will require students to complete the following activities:
• Develop a plan for improving customer relationships, dealing with employee issues related to
payment of bribes, and developing ideas for a digital marketing strategy.
• The goal is to make recommendations for immediate action and a longer-term strategic
approach toward improving marketing related to these areas of concern.
This may be used solely as an in-class activity, or students can finalize reports outside of class.
Class Discussion (optional)

After the team meetings, instructors may choose to have teams discuss their findings and solutions
with the class. Students may also want to talk about some of the interpersonal dynamics in their
teams and their experiences as they worked toward a solution.
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PURPOSE AND PERSPECTIVE

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d. Marketers can pay Twitter to highlight advertisements or company brands to a wider

1. Price is the most flexible element of the marketing mix.

information from consumers.

Discussion Starter 2: Is Electronic Marketing for Everyone?

Answers to Chapter Quiz: 1. b; 2. c; 3. e; 4. d.

ANSWERS TO DISCUSSION AND REVIEW QUESTIONS

ANSWERS TO APPLICATION QUESTIONS

ANSWERS TO INTERNET EXERCISE

ANSWERS TO DEVELOPING YOUR MARKETING PLAN

COMMENTS ON THE CASES

CASE 10.2: TWITTER EMERGES AS A DIGITAL MARKETING TOOL

STRATEGIC CASE 4: MCDONALD’S CONTINUES TO BE A GLOBAL

INSTRUCTIONS FOR ROLE-PLAY TEAM CASE

226 Chapter 10: Digital Marketing and Social Networking

Class Discussion (optional)

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