Contemporary Marketing Study Set 5

Business

Quiz 5 :

Consumer Markets and Buyer Behavior

Quiz 5 :

Consumer Markets and Buyer Behavior

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If you've ever lived in a city, you know that getting around can be a challenge. Traffic jams, overflowing parking lots, crammed subway cars, drivers who plow through puddles that spray water on pedestrians-all of these may be enough to make you pack your bags and head for the suburbs. A company in Boston is trying to change that, using a fleet of bicycles and the Internet. Hubway (sponsored by New Balance and operated by Alta Bicycle Share) is Boston's recently established bike-sharing system that features 60 stations, 600 bicycles, and an interactive component that allows urban consumers to borrow a bike at one location with the swipe of a credit card-and return it to another destination. On a Hubway bike, you can pedal to the gym or the grocery store; commute to work; or visit a friend across town. You can grab an available bike spur of the moment by swiping your credit card at one of the kiosk stations, giving you a 24-hour or three-day membership. Or you can sign up for an annual membership online; within a week, Hubway will mail you a station key with a printed code. The cost of membership includes unlimited rides that are less than 30 minutes, with additional fees for longer rides Hubway operates entirely in the realm of e-commerce, marketing to consumers and conducting transactions completely online. "There is no store or counter to get a key," says Hubway's Brogan Graham, who bears the title of Hype Master. "You put in your information online and we mail you a key." The touch screens at the bike stations are solar-powered, offering access 24 hours a day, 7 days a week, meaning that bike riders may rent a bike at any time without the assistance of another human being. General Manager Scott Mullen points to the efficiency of this operating system, as opposed to the "unwieldiness" of staffing each station with a Hubway representative, which he claims "would be a 1.0 solution to a 2.0 problem." Customer service does exist, however. If you cruise into a station with a flat tire or broken chain, you just hit the red "mechanic" button, which will secure the bike without letting someone else unwittingly take it out on the road. A Hubway mechanic will retrieve the bike and repair it. An app called Spot Cycle identifies the locations of different stations, including whether or not bikes are available at a specific station. Hubway relies on the communication function of the Internet to provide current information to its customers. Consumers get station updates and marketing messages through social media sites, such as Facebook and Twitter; for example, if a station's Internet connection isn't working properly, Hubway will alert consumers via social media-including an estimated time for the station to go live. On its Facebook page, some Hubway members post suggestions for improvement (like which stations need more bikes on a regular basis) while others receive kudos for bicycling achievements (such as the first member to reach 250,000 rides). "We leverage the Internet," says Scott Mullen. Hubway's typical customers tend to be those who are the most tech savvy about swiping credit cards at kiosks, using touch screens, and maximizing services via the company's website and social media accounts. But its marketers emphasize the fact that Hubway's system is easy to use. Most people need only to "use the system once to understand it because it is so intuitive," remarks Marketing Director Mary McLaughlin. Whether we're talking about e-commerce or traditional commerce, the numbers don't lie. Hubway began with a goal of attracting 3,000 members and launching 100,000 rides during its first year of business. In fact, the company hit the 100,000-ride target in less than 11 weeks and topped 250,000 trips in 6 months. On one sample day, more than 2,500 station-to-station rides were recorded. By year's end, 3,700 members had signed on. With this kind of success, Hubway has already planned expansion into more Boston neighborhoods, as well as adjacent towns like Cambridge and Brookline-with the near-term goal of doubling the number of stations and increasing the number of bikes to 1,000. Riding is "cool and fun," says Brogan Graham. "It's a great way to explore a new city." QUESTIONS FOR CRITICAL THINKING 1. What are the benefits of e-marketing for Hubway? What are the potential drawbacks? 2. Thus far, Hubway essentially engages in business-to-consumer (B2C) e-marketing. Cite two or three examples of ways in which Hubway might branch out into business-to-business (B2B) e-marketing.
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Case brief:
The bike sharing system of HW lets the citizens avoid the problems faced by the traffic with more cars on the way every day. Now, the bike sharing system H lets people share the bikes available locally and can reach their destination fast. Thus, its prime importance is to reach the individuals who need the bikes at that moment and location.
There are 60 stations and 600 bicycles. Memberships are available for 24 hours, three days, by swiping the credit cards. Bikes taken from one location can be returned to other locations, or the same location. Annual membership can be done through online.
The following are the advantages of the e-marketing of HW:
• It is easy to get the bike at any moment and location. The time can be saved.
• There will be no need to take the car for shorter distances which consumes more fuel. As the bike sharing system offers different costs for their services, the transportation cost can be reduced.
• The system is user friendly and also available for 24 hours.
• The total operations are being controlled by a centralized e-commerce system. The key to access this system is a station key, with a printed code, which is obtained on taking an annual membership online.
• Seen on a Relational Database Management Model, this station key is the primary key to access the database, and this is the only method to distribute this key, and thus it is an apparently intruder-proof model.
• There is no need to maintain physical locations and outlets for the bike stations.
The following are the Disadvantages of the e-marketing of HW:
However, there are possible drawbacks in this system, which are as follows:
• These online databases can be very easily hacked, and so it requires a strong firewall system.
• Secondly, the printed codes with the station keys can be very easily duplicated, misplaced or stolen and hence is a possible threat for the company and the user. Again, sensitive credit card information can be hacked which can lead to a major problem for the organization.
2.
The HW Company engaged in business to consumer e- marketing. It can enter and branch out into business to business e- marketing in the following manner:
• It is providing annual membership to its consumers. Along with that it can enter into contracts with the corporate business parties by leasing its bicycles to them for specific time periods.
• It can also lease the vehicles for specific time period for some small business, by which they can use for their daily business operations.

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Online shopping. Assume you're in the market for a notebook computer. Visit at least two of the websites listed below and review shopping suggestions and model ratings. Next, list your top two models and, using a shopping site like Shopping. com (www.shopping.com), search for online retailers offering the best combination of price, user ratings, shipping, and other relevant criteria. Prepare a report summarizing your experience. What did this exercise teach you about the benefits and challenges of online retailing? www.pcmag.com www.notebookcomputers.com www.pcworld.com www.cnet.com
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Online shopping:
Online shopping is shopping through website, internet, and wireless networks.
Reasons for online shopping:
Mr. X summarizes his experience of online shopping. Online shopping is booming universally, and there has been an exponential rise in consumer spending. It also provides a way out for more consumers who are looking for an easy way to shop, since their time is increasingly under pressure. Consumers save time and effort by shopping online. Retailers are recognizing the potential of the internet and are gearing up to offer products and services.
• Freedom of shopping
• No chaos of using physical coupons
• Fun of receiving product mails
• Shopping artfully at work
Benefits of online retailing:
• Convenient deliveries
• Strong customer desire
• Good shopping experience
• Expansion of market place
Challenges of online retailing:
• Risk of payment
• Attracting visitors
• Lower conversion rates
• Proximity of competition
• Abandonment of shopping cart
• Risk of receiving proper voucher

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One of the lingering obstacles to e-business revolves around privacy concerns. Virtually all websites collect user data. Internet service providers, for example, can track where users go on the Web and store that information. Search engines keep detailed data on users' Internet searches. Those arguing that additional privacy laws and regulations are needed claim that users never know exactly what information is collected, nor when it is collected. Moreover, there is no means for determining whether websites follow their own privacy policies. On the other hand, some say current laws and regulations are adequate because they make it illegal for firms to misrepresent their privacy policies or fail to disclose the type of information collected. Furthermore, there is no evidence that Internet companies are quietly passing on specific customer information to outside parties. Aside from the strictly legal issues, Web privacy raises a number of ethical issues as well. Assume your company collects and stores personal information about its online customers. The company's privacy policy allows the company to give limited amounts of that information to "selected" third parties. From strictly an economic perspective, is the company's existing policy adequate and appropriate?
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Economic perspective of privacy policy is given below:
Company's policy is sufficient from an economic perspective. But, the current laws and regulations make it illegal for companies to misrepresent their privacy policies or fail to disclose the information collected. In some cases, there is no evidence that internet companies are quietly passing on specific consumer information to the outside parties.
For example:
G. Company shares certain information of P.G area people to F.L Company for their marketing purposes. The people of P.G area are not aware about the information shared. This act of G. Company is considered as unethical.
Hence, the economic perspective of the company depends strictly on the level of information sharing and maintenance of its privacy policies.

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Describe the type and purpose of information found on a corporate website.
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One of the lingering obstacles to e-business revolves around privacy concerns. Virtually all websites collect user data. Internet service providers, for example, can track where users go on the Web and store that information. Search engines keep detailed data on users' Internet searches. Those arguing that additional privacy laws and regulations are needed claim that users never know exactly what information is collected, nor when it is collected. Moreover, there is no means for determining whether websites follow their own privacy policies. On the other hand, some say current laws and regulations are adequate because they make it illegal for firms to misrepresent their privacy policies or fail to disclose the type of information collected. Furthermore, there is no evidence that Internet companies are quietly passing on specific customer information to outside parties. Aside from the strictly legal issues, Web privacy raises a number of ethical issues as well. Assume your company collects and stores personal information about its online customers. The company's privacy policy allows the company to give limited amounts of that information to "selected" third parties. Is this policy, in your opinion, appropriate and adequate? What ethical issues does your company's policy raise?
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Zynga, the gaming company behind FarmVille, CityVille, Words with Friends, and Texas HoldEm Poker, has a complicated relationship with Facebook, where its popular games were born and became successful. Zynga earns about 90 percent of its revenue from its Facebook games, while Facebook collects 30 percent of what gamers spend on Zynga products. So Zynga's recent launch of its own platform could change the relationship between the two firms, both of which recently went public. Zynga says its 240 million active monthly users want a place to "play and post, gift and message their friends" without all the social features (and family photos) of Facebook. So it hopes users will try their favorite Facebook games on new Zynga Platform. (For now, they can switch back and forth between the two.) A live chat feature and Social Stream connect people playing the game at the same time, who can become "zFriends" and offer instant help-no more waiting for Facebook friends to log on and pitch in. Player profiles even rank zFriends on their helpfulness. Zynga's platform will also allow third parties to create new games that can reach a huge audience. Admits one developer, "By partnering with Zynga... I can gain access to hundreds of millions of users. I could never create an audience that large on my own." Zynga will host these third-party games for a fee, creating a new revenue stream for the company that could become substantial in time. Konami, Playdemic, and Rebellion are among the gaming companies partnering with Zynga Platform, which will continue to use Facebook Credits as the payment method for now. Facebook agreed to Zynga's move, even though it takes the gaming company a step closer to independence from the social network. One analyst said Zynga Platform would benefit Facebook, not only by putting welcome space between gamers and non-gamers on the social network site, but also by drawing new members to it as they meet and interact with gamers on Zynga.com. In hopes of solidifying its hold on the mobile gaming market, Zynga also purchased OMGPOP, the company behind the Draw Something game that recently skyrocketed to popularity. QUESTIONS FOR CRITICAL THINKING 1. How is Zynga protecting relationships with its users as it takes a step away from Facebook? 2. Do you agree that both companies will benefit if gamers are eventually drawn away from Facebook to ZyngaPlatform? Why or why not?
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Food, cooking, and social media seem like natural ingredients to stir together in the same stew pot. The portfolio of Scripps Networks Interactive-a leading developer of lifestyle content for media platforms-includes well-known television brands Food Network, Cooking Channel, HGTV, DIY Network, Travel Channel, and Great American Country (GAC). The food category of Food Network and Cooking Channel specifically brings consumers mouthwatering programming as well as online video, social media, and e-commerce opportunities. With 2,000 employees based in Knoxville, Tennessee, Scripps generates about $2.1 billion in revenue each year on content viewed around the world. These numbers aren't chicken feed-they reflect an understanding of the target market and careful strategic planning. "We have an audience that knows us for ideas and inspirations around food and cooking," says Susie Fogelson, senior vice president, marketing, creative services, and public relations for Food Network and the Cooking Channel. Identifying this group of people helps Scripps and Food Network-one of its major brands-design content and develop a customer-driven marketing strategy to attract loyal viewers. "At Scripps we are constantly evolving and iterating how we deliver content," says Chris Powell, executive vice president of human resources. For Food Network, this involves three variables of the marketing mix: product strategy, distribution strategy, and promotion strategy, all designed to engage viewers who want to be inspired and educated about food. By its very nature, social media lends itself to relationship building. Scripps marketers understand this and tailor the marketing strategy for Food Network and its other brands to use social media effectively. "Social media gives us a really great place to identify who our brand advocates and brand fans are and then message them" with relevant content, says Jonah Spegman, director of digital media and database marketing for Scripps. "Our brands are intrinsically social," he adds. Viewers love to talk about favorite dishes they've made themselves or enjoyed at restaurants-and they do it on Facebook, Twitter, Pinterest, YouTube, and Tumblr. When viewers are talking at these sites, Scripps and Food Network want to be there. "Wherever consumers are, we want to be," says Powell. Despite what appears to be the obvious connection between culinary entertainment and social media, Scripps hasn't taken a firstmover strategy of adopting specific social-media sites or tools. Instead, the firm prefers a second-mover strategy. "You need to wait and adopt technology at the right time," observes Rich Ma, manager of digital marketing. "See what consumers are gravitating toward." For example, Facebook and Twitter are already considered well-established social media outlets, whereas Pinterest has soared during the last year. "It's important to be a market leader in those established places," says Ma. In addition, companies must learn how to leverage the technology, instead of jumping in without a plan. Fogelson agrees with the importance of planning. "We have this enormous audience with this enormous demand to really feed the appetites of people who are looking for ideas and inspiration around cooking," she says. In order to serve this huge audience, Scripps and Food Network have begun to key in on what Fogelson refers to as the "tent poles"-the shows that have a certain focus (and target market) also have related shows and marketing wrapped around them. Such shows include Food Network Star and Great Food Truck Race. Marketers link these shows to the social sites to interact with fans, get feedback, create exchanges, and spark enthusiasm for other shows. In addition, marketers for all of Scripps' branded networks share the data they gather about social media marketing. If one network has success with Pinterest but not with Twitter, marketers will exchange the information. "All of the networks are experimenting and sharing the knowledge," says Jeffrey Kissinger, vice president of digital marketing and database marketing at Scripps. "Everyone is experimenting and trying, and we're always learning from each other." In addition, with competition for viewers an ongoing issue in the entertainment industry, Scripps and Food Network integrate this into their strategic planning. "The strategy going forward is to be as well known for entertainment in the digital and social space as we are for inspiring people to love food and cooking," says Fogelson Social media marketing brings with it a certain amount of social responsibility-and because of its global reach and interactive nature, it raises certain ethical issues, not the least of which is privacy. For example, Scripps and Food Network must ensure that any data they collect about consumers via interactive exchanges doesn't fall into unauthorized hands. But they respect the significance of their r elationship with viewers and treat it like the gift of a good meal. "There's something special there, that you can have a relationship and communicate with your audience-and always be on," says Fogelson. "But that is a tremendous responsibility as much as it is an opportunity. So we're all asking a lot of questions about how to do it right." QUESTIONS FOR CRITICAL THINKING 1. What steps could Scripps and Food Network take to avoid marketing myopia? Create a company motto for them reflecting your ideas. 2. Identify three trends in the social-cultural environment that you believe should be factors in strategic marketing planning for Scripps and Food Network. 3. How might Scripps and Food Network contribute to the highest level of the social responsibility pyramid-philanthropy? 4. What strategies might Scripps and Food Network use to become as well known for entertainment in digital and social media as they are for educating and inspiring people about food and cooking?
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In small teams, research the benefits of purchasing the following products online: a. tablet computers b. hotel rooms in Orlando c. movie tickets d. auto insurance
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List the five e-business categories.
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One of the lingering obstacles to e-business revolves around privacy concerns. Virtually all websites collect user data. Internet service providers, for example, can track where users go on the Web and store that information. Search engines keep detailed data on users' Internet searches. Those arguing that additional privacy laws and regulations are needed claim that users never know exactly what information is collected, nor when it is collected. Moreover, there is no means for determining whether websites follow their own privacy policies. On the other hand, some say current laws and regulations are adequate because they make it illegal for firms to misrepresent their privacy policies or fail to disclose the type of information collected. Furthermore, there is no evidence that Internet companies are quietly passing on specific customer information to outside parties. Aside from the strictly legal issues, Web privacy raises a number of ethical issues as well. Assume your company collects and stores personal information about its online customers. The company's privacy policy allows the company to give limited amounts of that information to "selected" third parties. How would you change the privacy policy to reflect your ethical concerns?
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Marketing uses of social networking. Choose two online retailers and two manufacturers. Go to each website. Compare and contrast how all four firms use blogs and/or podcasts to market their products. Which, in your opinion, uses these online strategies most effectively?
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Search marketing. Visit the website listed below. Prepare a brief report outlining how to optimize the use of search marketing. Be sure to include a discussion on measuring the effectiveness of search marketing. www.toprankblog.com/2009/03/charting-search -engine-optimization
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Explain how a Web presence can improve the performance of traditional brick-and-mortar operations.
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How can marketers use the concept of community to add value to their products? Give a real-world example of each type of community discussed in the chapter.
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Visa offers a service called Verified by Visa. The purpose is to reduce Internet-related fraud. (MasterCard and American Express have similar services.) Research "Verified by Visa" and prepare a report summarizing the program and how it protects both buyers and sellers.
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Assume you work for a U.S. company that markets its products throughout the world. Its current online presence outside the United States is limited. Outline some steps the company should take to expand its online presence internationally.
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Who are typical online buyers and sellers? What are some of the strategic implications of these facts to online marketers?
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Assume your team is assigned to develop the website for a large online clothing retailer that also has traditional retail stores. Research the characteristics of Web users and online shoppers. What features would you want to incorporate into your website?
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Some marketers argue that search marketing is a more effective means of using the Web to advertise than traditional popup or banner ads. Research the concept of search marketing. What are some of the benefits of using search marketing?
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Which is larger, B2B or B2C e-marketing?
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