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Test Bank for MKTG 13th Edition by Charles W. Lamb
Test Bank for MKTG 13th Edition by Charles W. Lamb
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Instructor ManualMKTG, 13th Edition, Charles W. Lamb
Chapter 1-19
Chapter 1
Table of Contents
Purpose and Perspective of the Chapter ............................................................................................................... 2
Cengage Supplements .................................................................................................................................................. 2
Learning Outcomes ........................................................................................................................................................ 2
Complete List of Chapter Activities and Assessments ...................................................................................... 2
Key Terms ........................................................................................................................................................................... 4
What's New in This Chapter ........................................................................................................................................ 5
Chapter Outline ............................................................................................................................................................... 5
Discussion Questions .................................................................................................................................................. 11
Additional Activities and Assignments................................................................................................................. 11
Additional Resources .................................................................................................................................................. 16
External Videos and Playlist ..................................................................................................................... 16
Appendix ......................................................................................................................................................................... 17
Generic Rubrics ....................................................................................................................................... 17
Standard Writing Rubric .......................................................................................................................... 17
Standard Discussion Rubric ..................................................................................................................... 18
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 1
website, in whole or in part.
,Purpose and Perspective of the Chapter
The purpose of this chapter is to define marketing, which 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. The chapter introduces four types of marketing
philosophies: production-orientation, sales orientation, market-orientation, and societal
marketing orientation. It differentiates between sales- and market-oriented firms. Finally, the
chapter provides several reasons why marketing is important to study, including its role in the
allocation of goods and services, understanding businesses, creating career opportunities, and
becoming an informed consumer.
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.
Transition Guide (provides information about what‘s new from edition to edition)
Educator‘s Guide (describes assets in the platform with a detailed breakdown of activities
by chapter with seat time)
PowerPoint (provides text-based lectures and presentations)
Test Bank (contains assessment questions and problems)
Guide to Teaching Online (provides information about the key assets within the product
and how to implement/facilitate use of the assets in synchronous and asynchronous
teaching environments)
Accelerated Course Syllabus (provides guidance on the recommended delivery of course
materials given a 5-week, 8-week, 12-week, and 16-week course)
MindTap User Guide (provides information on how to navigate and use MindTap)
Learning Outcomes
The following learning outcomes are addressed in this chapter:
1-1 Define the term marketing.
1-2 Describe four marketing management philosophies.
1-3 Discuss the differences between sales and market orientations.
1-4 Describe several reasons for studying marketing.
Complete List of Chapter Activities and Assessments
For additional guidance refer to the Teaching Online Guide.
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 2
website, in whole or in part.
,Learning PPT slide Activity/Assessment Duration Certification
Outcome Standard
N/A MindTap: Why Does 5 minutes BUSPROG:
Marketing Matter to Me? Reflective
Thinking
DISC: Customer
1-1 MindTap: Learn It 1-1: 5 minutes BUSPROG:
What Is Marketing? Analytic
DISC:
Marketing Plan
1-2 MindTap: Learn It 1-2: 5-10 minutes BUSPROG:
Marketing Management Analytic
Philosophies DISC:
Marketing Plan
1-3 MindTap: Learn It 1-3: 15 minutes BUSPROG:
Differences Between Sales Analytic
and Market Orientations DISC: Customer
1-4 MindTap: Learn It 1-4: Why 5 minutes BUSPROG:
Study Marketing Analytic
DISC:
Marketing Plan
1-1 – 1-4 MindTap: Assignment 25 minutes BUSPROG:
Analytic
DISC:
Marketing Plan
1-1 – 1-4 MindTap: Case Activity 15 minutes BUSPROG:
Analytic
DISC: Strategy
1-1 3 Icebreaker in PPT 5 minutes BUSPROG:
Reflective
Thinking
DISC:
Marketing Plan
1-2 19 Discussion in PPT 10 minutes BUSPROG:
Analytic
DISC: Customer
1-2 21 Group Activity 1 in PPT 20-25 minutes BUSPROG:
Ethics
DISC: Research
1-3 42 Knowledge Check in PPT 5 minutes BUSPROG:
Analytic
DISC: Strategy
1-4 45 Group Activity 2 in PPT 20-25 minutes BUSPROG:
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 3
website, in whole or in part.
, Communication
DISC: Research
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Key Terms
Big Data: the discovery, interpretation, and communication of meaningful patterns in data.
Customer relationship management (CRM): a company-wide business strategy designed to
optimize profitability, revenue, and customer satisfaction by focusing on highly defined and
precise customer groups.
Customer satisfaction: customers‘ evaluation of a good or service in terms of whether it has
met their needs and expectations.
Customer value: the relationship between benefits and the sacrifice necessary to obtain those
benefits.
Empowerment: delegation of authority to solve customers‘ problems quickly—usually by the
first person the customer notifies regarding a problem.
Exchange: people giving up something in order to receive something else they would rather
have.
Market orientation: a philosophy that assumes that a sale does not depend on an aggressive
sales force but rather on a customer‘s decision to purchase a product; it is synonymous with the
marketing concept.
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 concept: the idea that social and economic justification for an organization‘s
existence is the satisfaction of customer wants and needs while meeting organizational
objectives.
On-demand marketing: delivering relevant experiences, integrated across both physical and
virtual environments, throughout the consumer‘s decision and buying process.
Production orientation: a philosophy that focuses on the internal capabilities of the firm rather
than the desires and needs of the marketplace.
Relationship marketing: a strategy that focuses on keeping and improving relationships with
current customers.
Sales orientation: the belief that people will buy more goods and services if aggressive sales
techniques are used and that high sales result in high profits.
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 4
website, in whole or in part.
,Societal marketing orientation: the idea that an organization exists not only to satisfy
customer wants and needs and to meet organizational objectives but also to preserve or
enhance individuals‘ and society‘s long-term best interests.
Teamwork: collaborative efforts of people to accomplish common objectives.
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What's New in This Chapter
The following elements are improvements in this chapter from the previous edition:
New example of marketing concept using Harley Davidson
New example of societal marketing concept using CVS
New example of role of training using Atlantic Health Systems
New example of American Express, Ikea, and Patagonia‘s mission statements
New discussion of Big Data with examples using Sweetgreen, Inc.
New discussion of the elements of value
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Chapter Outline
In the outline below, each element includes references (in parentheses) to related content. "LO CH-
##‖ refers to the chapter learning outcome; ―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 (―DISC‖).
Introduce the chapter and use the Ice Breaker in the PPT if desired, and if one is provided for this
chapter. Review learning outcomes for Chapter 1. (PPT Slide 2).
1. What Is Marketing? (LO 1-1, PPT Slide 4, DISC: Marketing Plan)
a. There are two important facets to marketing:
It is a philosophy, an attitude, a perspective, or a management orientation that
stresses customer satisfaction.
It is an organizational function and a set of processes used to implement this
philosophy.
b. Marketing is defined as 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.
c. The most important purpose of marketing is to facilitate an exchange—in other words,
people giving up something in order to receive something else they would rather have.
d. An exchange does not always involve money, but it does require the following five
conditions:
There must be at least two parties.
Each party has something that might be of value to the other party.
Each party is capable of communication and delivery.
Each party is free to accept or reject the exchange offer.
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 5
website, in whole or in part.
, Each party believes it is appropriate or desirable to deal with the other party.
Even when all of these conditions are met, an exchange may not necessarily take place.
2. Marketing Management Philosophies (LO 1-2, PPT Slide 8, DISC: Marketing Plan)
a. There are four competing philosophies that strongly influence an organization‘s
marketing processes: production orientation, sales orientation, market orientation, and
societal marketing orientation.
b. Production Orientation: A production orientation philosophy focuses on the internal
capabilities of the firm rather than on the desires and needs of the marketplace. In a
production orientation environment focused on creating products, management
assesses its resources and asks questions like: ―What can we do best?‖ ―What can our
engineers design?‖ ―What is easy and profitable for us to produce, given our
equipment?‖
Example: Most traditional furniture stores carry the same styles and varieties of furniture
that they have carried for many years. Regardless of what customers may be looking for,
they will find the same types of products sold in the same configurations at the same
price points. Furniture has always been a production-oriented industry, and it continues
to work because what they produce matches customer expectations.
In a production-oriented service organization, managers ask, ―What services are most
convenient for us to offer?‖ and ―Where do our talents lie?‖
c. Sales Orientation: A sales-orientation is based on the belief that people will buy more
goods and services if aggressive sales techniques are used. High sales result in high
profits, and marketing basically means selling things and collecting money. However,
without a focus on meeting customer wants and needs, sales-oriented companies may
find that even the most talented salespeople cannot convince people to buy goods or
services.
d. Market Orientation: A market orientation environment employs the marketing
concept, which states that the social and economic justification for an organization‘s
existence is the satisfaction of customer wants and needs while meeting organizational
objectives. A business is defined by the customers‘ perceived value in its products or
services.
The marketing concept includes:
o Using customer wants and needs to distinguish an organization‘s product(s) from
competitors‘ offerings
o Integrating all of the organization‘s activities, including production, to satisfy
customer wants
o Achieving long-term goals for the organization by satisfying customer wants and
needs ethically and legally
e. Success in marketing comes from developing a thorough understanding of a firm‘s
customers and competition, its distinctive capabilities that enable the company to
execute plans on the basis of this customer understanding, and knowledge of how to
deliver the desired experience using and integrating all of the resources of the firm.
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 6
website, in whole or in part.
, Example: Harley-Davidson fans told the organization they wanted bikes that were lighter
and more powerful that handled better. The company responded with the Softail line of
bikes, which meets all of these customer needs and preferences.
f. Market-oriented organizations also focus on knowing competitors‘ strengths and
weaknesses, both currently and as predicted in the future.
Example: Specialty clothing store American Apparel has experienced numerous store
closings and a bankruptcy filing because it failed to adopt methods used by its fast-
fashion competitors, particularly Zara and H&M. These organizations offer consumers
up-to-date fashions more quickly and at more affordable prices.
g. Societal Marketing Orientation: The societal marketing orientation extends the
marketing concept. This philosophy states that organizations should not only work to
satisfy customer wants and needs and to meet organizational objectives but should also
seek to preserve or enhance individuals‘ and society‘s long-term best interests. The
application of this philosophy can be seen in products and containers that are less toxic
than normal or made of recyclable materials. This concept explains why the American
Marketing Association‘s definition of marketing includes ―society at large‖ as one of the
constituencies for which marketing seeks to provide value.
Example: National drugstore chain CVS has taken several steps to help solve the nation‘s
opioid crisis. It has enhanced opioid utilization management protocols, installed
hundreds of new drug disposal collection units in its pharmacies, and is educating its
pharmacists on the dangers of opioids and other prescription drugs.
h. Who Is in Charge? When customers started using the Internet and social media to
access information, goods, and services, power began to shift from manufacturers and
retailers to consumers and business users. Customers now use their widespread
knowledge to shop smarter, and they are exercising their newfound power in myriad
ways. In response, companies must offer distinct and compelling customer value. This
can be accomplished only by using customer-driven market insights to inform and guide
companies‘ decisions.
3. Differences Between Sales and Market Orientations (LO 1-3, PPT Slide 23, DISC: Marketing
Plan)
a. It is useful to study the differences between sales and market orientations by comparing
five key characteristics: the organization‘s focus, the firm‘s business, those to whom the
product is directed, the firm‘s primary goal, and the tools used to achieve the
organization‘s goals.
b. The Organization’s Focus: Historically, sources of competitive advantage included
technology, innovation, and economies of scale, and they were derived from an internal
focus. Today, many successful firms derive their competitive advantage from an external,
market-oriented focus.
c. Customer value is the relationship between benefits and the sacrifice necessary to
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 7
website, in whole or in part.
, obtain those benefits. It is not simply a matter of high quality. Value is something that
shoppers of all markets and at all income levels look for, mainly because customers value
goods and services that are of the quality they expect and that are sold at prices they are
willing to pay.
Example: Operating under the banner of ―enlightened hospitality,‖ Shake Shack is a fast-
casual burger restaurant that targets people who care about the food‘s taste and source
and are willing to pay higher-than-average prices for burgers made from humanely
raised, antibiotic- and hormone-free meat. The company also pledges not to use
genetically modified organisms (GMOs) in its hamburger buns and is known for superior
service.
d. Customer satisfaction refers to the customers‘ evaluation of whether a good or service
has met their needs and expectations. Failure to meet needs and expectations results in
dissatisfaction with the good or service. In firms that have a reputation for delivering
high levels of customer satisfaction, everyone from top management on down
understands the link between their job and satisfied customers.
e. Companies can expand market share in three ways: attracting new customers, increasing
business with existing customers, and retaining current customers. Building relationships
with existing customers directly addresses two of the three possibilities and indirectly
addresses the other. Relationship marketing is a powerful strategy that focuses on
keeping and improving relationships with current customers.
f. Most successful relationship marketing strategies depend on:
Customer-oriented personnel: Any person, department, or division that is not
customer oriented weakens the positive image of the entire organization.
Example: Costco believes that treating employees well is a major factor in creating
customer-oriented personnel focused on good customer service. The company offers
higher-than-average pay and generous benefits. As a result, the retention rate for
employees who have been there a year is 94 percent—significantly higher than that
of its competitors.
Effective training programs: Employee training in customer service, relationship
building, and more help spark innovation and engagement within the company.
Employees with the authority to make decisions and solve problems: Empowered
employees manage themselves, are more likely to work hard, account for their own
performance and that of the company, and take prudent risks to build a stronger
business and sustain the company‘s success.
Example: In order to empower its workers, Ritz-Carlton luxury hotels developed a set
of 12 ―Service Values‖ guidelines, which include statements like ―I am empowered to
create unique, memorable and personal experiences for our guests‖ and ―I own and
immediately resolve guest problems.‖ Employees review and discuss the guidelines
daily.
Teamwork: Job performance, company performance, product value, and customer
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 8
website, in whole or in part.
, satisfaction all improve when people in the same department or work group function
as a team, assisting each other and emphasizing cooperation instead of competition.
g. The Firm’s Business: A sales-oriented firm defines its business (or mission) in terms of
goods and services, whereas a market-oriented firm defines its business in terms of the
benefits its customers seek.
Example: Microsoft‘s original mission was ―A computer on every desk and in every
home.‖ This is typical of a product-centered, sales-oriented firm. Microsoft‘s current
mission is ―To empower every person and every organization on the planet to achieve
more.‖ The focus is now on the benefit to the customer.
h. By answering the question ―What is this firm‘s business?‖ in terms of the benefits
customers seek, market-oriented firms gain three important advantages:
Ensures the firm keeps focusing on customers
Encourages innovation and creativity
Stimulates an awareness of ever-changing customer desires and preferences
i. Those to Whom the Product Is Directed: A sales-oriented organization targets its
products at ―the average customer,‖ but a market-oriented organization understands
that there is no ―average‖ customer, so it focuses on specific groups of people who are
fairly similar in terms of selected characteristics. Because these different customer groups
want different features or benefits, the firm will develop different goods, services, and
promotional appeals.
Example: The Nordstrom department store chain is trying to attract millennial shoppers,
who typically avoid department stores, with themed pop-up shops, shop-in-shops
featuring new fashion designers, and branded concept shops.
j. Customer relationship management (CRM) is a strategy designed to optimize
profitability, revenue, and customer satisfaction by focusing on highly defined and
precise customer segments. This is accomplished by organizing the actions of the entire
company around those segments, establishing and tracking customer interactions with
the company, fostering customer-satisfying behaviors, and linking all processes of the
company from its customers through its suppliers.
k. Companies using CRM systems customize their product and service offerings based on
―big data‖ generated through interactions between the customer and the company. This
strategy transcends all functional areas of the business, producing an internal system in
which all of the company‘s decisions and actions are a direct result of customer
information.
Example: Sweetgreen Inc., a California-based salad chain, uses a mobile app to gather
data on their guests‘ allergies and tastes. When guests place mobile orders, they are
asked to select from a list of dietary restrictions that includes soy, nuts, and gluten.
Selections cause menu items containing those ingredients to be flagged so the guests
know to avoid them. Insights from data are also used to shape future menus.
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 9
website, in whole or in part.
, l. As technology evolves and becomes more sophisticated, consumer expectations of their
buying-related experiences have changed. Consumers:
Want to interact anywhere, anytime
Want to do new things with varied kinds of information in ways that create value
Expect data stored about them to be targeted specifically to their needs or to
personalize their experiences
Expect all interactions with a company to be easy
In response to these expectations, companies are developing new ways to integrate and
personalize each stage of a customer‘s decision journey, which in turn should increase
relationship-related behaviors. For this type of on-demand marketing to be successful,
companies must deliver high-quality experiences across all touch points with the
customer, including sales, service, product use, and marketing.
m. The Firm’s Primary Goal: Sales-oriented organizations emphasize making sales at any
cost. By contrast, the ultimate goal of most market-oriented organizations is to make a
profit by creating customer value, providing customer satisfaction, and building long-
term relationships with customers.
n. Tools the Organization Uses to Achieve Its Goals: Sales-oriented organizations seek to
generate sales volume through intensive promotional activities, mainly personal selling
and advertising. Market-oriented organizations recognize that all four components of
the marketing mix are important: product decisions, place (or distribution) decisions,
promotion decisions, and pricing decisions. Additionally, market-oriented organizations
recognize that skills and resources throughout the organization are needed to create,
communicate, and deliver superior customer service and value.
o. A Word of Caution: This comparison of sales and market orientations is not meant to
belittle the role of promotion nor of personal selling. Promotion is the means by which
organizations communicate with present and prospective customers about the merits
and characteristics of their organization and products and continues to play an essential
role in effective marketing in all organizations.
4. Why Study Marketing? (LO 1-4, PPT Slide 43, DISC: Marketing Plan)
a. Marketing Plays an Important Role in Society: Think about how many exchanges or
transactions are needed each day to feed, clothe, and shelter the U.S. population.
Despite the enormity of the system, it works quite well, partly because the system
efficiently distributes the output of farms and factories and partly because marketing
makes products and related services readily available.
b. Marketing Is Important to Businesses: Marketing contributes directly to achieving the
fundamental objectives of most businesses: survival, profits, and growth. All
businesspeople, regardless of specialization or area of responsibility, need to be familiar
with the terminology and fundamentals of accounting, finance, management, and
especially marketing since virtually everyone in an organization contributes to marketing
in some way.
c. Marketing Offers Outstanding Career Opportunities: Somewhere between one-fourth
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website, in whole or in part.
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