Principles of Marketing Openstax
TABLE OF CONTENTS
Chapter 1. Marketing and Customer Value
Chapter 2. Strategic Planning in Marketing
Chapter 3. Consumer Markets and Purchasing Behavior
Chapter 4. Business Markets and Purchasing Behavior
Chapter 5. Market Segmentation, Targeting, and Positioning
Chapter 6. Marketing Research and Market Intelligence
Chapter 7. Marketing in a Global Environment
,Chapter 8. Marketing in a Diverse Marketplace
Chapter 9. Products: Consumer Offerings
Chapter 10. Maintaining a Competitive Edge with New Offerings
Chapter 11. Services: The Intangible Product
Chapter 12. Pricing Products and Services
Chapter 13. Integrated Marketing Communications
Chapter 14. The Promotion Mix: Advertising and Public Relations
Chapter 15. The Promotion Mix: Personal Selling and Sales Promotion
Chapter 16. Direct, Online, Social Media, and Mobile Marketing
Chapter 17. Distribution: Delivering Customer Value
Chapter 18. Retailing and Wholesaling
Chapter 19. Sustainable Marketing: The New Paradigm
CHAPTER 1. MARKETING AND CUSTOMER VALUE
END-OF-CHAPTER QUESTIONS AND SOLUTIONS
Applied Marketing Knowledge
1. Why is capturing customer lifetime value so important? Choose a retailer, and apply this concept
as a way to explain, in part, its profitability and long-term viability in the marketplace. [Section 1.1
LO2; Section 1.6, LO 1-2]
[Sample answer: Consumers make purchases throughout their lifetimes, from regular grocery
shopping to buying a car. If a customer has good experiences and develops loyalty to that grocery
retailer or car dealership, the customer will bring business repeatedly to that retailer.
For regional employee-owned grocery chain Hy-Vee, headquartered in West Des Moines, Iowa,
customer satisfaction is the base of every new service offered. Customers can pick up prescriptions,
gas, flowers, deli items, meals, liquor, and nutritionist-recommended fresh produce. A fuel-saver
program awards loyal customers with discounts on gas, helps customers make repeat purchases
quickly, and also supplies Hy-Vee with specific knowledge of customer purchases to help with stocking
needs.
During the pandemic, Hy-Vee quickly shifted to a service called Aisles Online. Customers could order
groceries online or through an app, and Hy-Vee employees would shop for the items in the order and
either deliver the groceries without charge or bring them to the car for pickup orders. This service has
proven so popular that Hy-Vee continues to offer it to loyal customers who feel Hy-Vee understands
their needs and wants.]
,2. The marketing mix has been compared to a tool belt. In other words, successful marketers can
devise an appropriate marketing mix by combining the right blend of tools: product, price, place, and
promotion. Describe a recent product that you purchased on Amazon.com or some other online
retailer (place), how you located it (promotion), and whether the price was competitive when
compared to similar products. [Section 1.2 LO1]
[Sample Answer: Unless consumers have specific brands in mind, they may begin with an online
search for the product they want to buy. Online retailers vie for the search terms consumers enter
into the search box, paying a fee so their product will appear first in search results. If consumers found
a pair of sunglasses on Amazon, they could quickly compare the price and availability using
pricegrabber.com for products from Sunglass Hut, Ray-Ban, Warby Parker, or Maui Jim.
Because products are much easier to compare these days, sunglass manufacturers must know where
to sell their products; how to price them competitively according to the product positioning
statement; how to promote the product through pictures, celebrities, and opinion leaders; and which
words or phrases will help buyers find their products.]
3. Why do some marketers prefer to follow the 4Ps (product, price, place, and promotion) of
marketing and others might prefer to follow the new pattern of the 5Ms (minds, minutes, machinery,
materials, and money)? [Section 1.2 LO2; Section 1.3 LO2]
[Sample Answer: Generally speaking, the 4Ps relate to the product or service a business is selling.
Successfully marketing that product depends upon the quality of the product, pricing strategies,
where it is available for purchase, and how messages are crafted and placed in the marketplace to
describe the product’s benefits.
The 5Ms describe a business’s assets. These assets include the internal resources such as staffing,
finances, equipment, time, and materials necessary for production.
Both approaches are helpful to businesses as they first examine whether they have the capability or
capacity to introduce a new product or extend a product line. If so, businesses can then research
externally to determine demand and, if demand is there, develop the product and its appropriate
marketing mix.]
4. A person can be a product. Please give an example of this. [Section 1.2 LO2; Section 1.4 LO2]
[Sample answer: Actors, singers, lawyers, athletes, celebrities, and even opinion leaders have
websites, publicists, booking agents, trainers, and sponsors to help promote them. They are
“products” in the sense that fans wish to buy their music, watch their competitions, attend their
movies, and more. Even the president of the United States is a product, competing for votes.]
5. According to the US Centers for Disease Control and Prevention, the birth rate is falling in
communities around the world. In the United States, the birthrate fell by 4 percent in 2020 to an all-
time low. Describe why dwindling population is a demographic concern in the macroenvironment all
businesses must contend with. [Section 1.3 LO1; Section 1.7 LO1]
, [Sample answer: Businesses depend upon consumers to purchase goods and services. Colleges,
universities, trade schools, and junior colleges, for instance, rely upon lists of high school graduates
as marketing prospects. A smaller demographic alters these colleges’ macroenvironments, as do
availability of low-cost loans (economic), movement toward online learning (technological),
distribution of state monies to specific learning institutions (political), flux of international students
to US colleges (sociocultural), and overall campus efforts toward sustainability (ecological).
Because the birth rate has fallen sharply in just the past two decades, public and private colleges have
compensated by adding additional programming, such as master’s courses and certification programs,
to attract more students. Dozens of colleges have closed their doors. Retailers selling things such as
cell phones and fast food are also losing business due to demographic changes.]
Critical Thinking Exercises
1. Your roommate in the dorm talks on his cell phone incessantly while you’re trying to study. Since
you’re a broke college student and it’s too cold to walk to the library, you decide to explore the
marketplace for used noise-canceling headphones. How will you locate the best, most affordable
market offering to meet your needs? Describe how marketing messages may guide your steps in this
process. [Section 1.1 LO2; Section 1.5 LO1, LO2]
[Sample answer: Students will likely begin by checking with their family members and friends, either
personally or via social platforms. They might also have heightened awareness to seeing who else in
the dorm owns these headphones and which brands are most popular. Many consumers these days
follow up with online shopping, gathering information about customer satisfaction, availability, and
pricing of specific brands.
If student shoppers visit specific sites, the business will likely serve them advertisements about that
particular product. Students may also visit resale sites to look for used products that are still in good
shape.]
2. All consumers have needs and wants. You likely felt a state of deprivation this morning—hunger—
and decided what you wanted to eat for breakfast. Do a bit of research to discover how your breakfast
preference (want) compares to what a college student living in Osaka, Japan, might want to satisfy
their need for sustenance. [Section 1.5 LO1, LO2]
[Sample Answer: While US students might prefer pancakes and bacon or even a bowl of steamy
oatmeal for breakfast, Japanese counterparts are likely eating a bowl of rice with natto (fermented
soybeans) on top. Other options include pickled vegetables, miso soup, and grilled fish.]
3. Because relationships are so important in marketing, multiple tools have been developed to help
manage customer relationships. Many technological advances assist marketers in their efforts.
Promotional strategies include utilizing social media posts, websites, advertising, public relations,
and sponsorships to communicate with the target audience. One of the most effective tools in
planning/calendaring these promotional contacts or touch points is a Gantt chart. Do a bit of
research on Gantt charts so you better understand this scheduling tool that also visually illustrates
linkages between promotional activities and progress toward a marketing goal. List and discuss five
TABLE OF CONTENTS
Chapter 1. Marketing and Customer Value
Chapter 2. Strategic Planning in Marketing
Chapter 3. Consumer Markets and Purchasing Behavior
Chapter 4. Business Markets and Purchasing Behavior
Chapter 5. Market Segmentation, Targeting, and Positioning
Chapter 6. Marketing Research and Market Intelligence
Chapter 7. Marketing in a Global Environment
,Chapter 8. Marketing in a Diverse Marketplace
Chapter 9. Products: Consumer Offerings
Chapter 10. Maintaining a Competitive Edge with New Offerings
Chapter 11. Services: The Intangible Product
Chapter 12. Pricing Products and Services
Chapter 13. Integrated Marketing Communications
Chapter 14. The Promotion Mix: Advertising and Public Relations
Chapter 15. The Promotion Mix: Personal Selling and Sales Promotion
Chapter 16. Direct, Online, Social Media, and Mobile Marketing
Chapter 17. Distribution: Delivering Customer Value
Chapter 18. Retailing and Wholesaling
Chapter 19. Sustainable Marketing: The New Paradigm
CHAPTER 1. MARKETING AND CUSTOMER VALUE
END-OF-CHAPTER QUESTIONS AND SOLUTIONS
Applied Marketing Knowledge
1. Why is capturing customer lifetime value so important? Choose a retailer, and apply this concept
as a way to explain, in part, its profitability and long-term viability in the marketplace. [Section 1.1
LO2; Section 1.6, LO 1-2]
[Sample answer: Consumers make purchases throughout their lifetimes, from regular grocery
shopping to buying a car. If a customer has good experiences and develops loyalty to that grocery
retailer or car dealership, the customer will bring business repeatedly to that retailer.
For regional employee-owned grocery chain Hy-Vee, headquartered in West Des Moines, Iowa,
customer satisfaction is the base of every new service offered. Customers can pick up prescriptions,
gas, flowers, deli items, meals, liquor, and nutritionist-recommended fresh produce. A fuel-saver
program awards loyal customers with discounts on gas, helps customers make repeat purchases
quickly, and also supplies Hy-Vee with specific knowledge of customer purchases to help with stocking
needs.
During the pandemic, Hy-Vee quickly shifted to a service called Aisles Online. Customers could order
groceries online or through an app, and Hy-Vee employees would shop for the items in the order and
either deliver the groceries without charge or bring them to the car for pickup orders. This service has
proven so popular that Hy-Vee continues to offer it to loyal customers who feel Hy-Vee understands
their needs and wants.]
,2. The marketing mix has been compared to a tool belt. In other words, successful marketers can
devise an appropriate marketing mix by combining the right blend of tools: product, price, place, and
promotion. Describe a recent product that you purchased on Amazon.com or some other online
retailer (place), how you located it (promotion), and whether the price was competitive when
compared to similar products. [Section 1.2 LO1]
[Sample Answer: Unless consumers have specific brands in mind, they may begin with an online
search for the product they want to buy. Online retailers vie for the search terms consumers enter
into the search box, paying a fee so their product will appear first in search results. If consumers found
a pair of sunglasses on Amazon, they could quickly compare the price and availability using
pricegrabber.com for products from Sunglass Hut, Ray-Ban, Warby Parker, or Maui Jim.
Because products are much easier to compare these days, sunglass manufacturers must know where
to sell their products; how to price them competitively according to the product positioning
statement; how to promote the product through pictures, celebrities, and opinion leaders; and which
words or phrases will help buyers find their products.]
3. Why do some marketers prefer to follow the 4Ps (product, price, place, and promotion) of
marketing and others might prefer to follow the new pattern of the 5Ms (minds, minutes, machinery,
materials, and money)? [Section 1.2 LO2; Section 1.3 LO2]
[Sample Answer: Generally speaking, the 4Ps relate to the product or service a business is selling.
Successfully marketing that product depends upon the quality of the product, pricing strategies,
where it is available for purchase, and how messages are crafted and placed in the marketplace to
describe the product’s benefits.
The 5Ms describe a business’s assets. These assets include the internal resources such as staffing,
finances, equipment, time, and materials necessary for production.
Both approaches are helpful to businesses as they first examine whether they have the capability or
capacity to introduce a new product or extend a product line. If so, businesses can then research
externally to determine demand and, if demand is there, develop the product and its appropriate
marketing mix.]
4. A person can be a product. Please give an example of this. [Section 1.2 LO2; Section 1.4 LO2]
[Sample answer: Actors, singers, lawyers, athletes, celebrities, and even opinion leaders have
websites, publicists, booking agents, trainers, and sponsors to help promote them. They are
“products” in the sense that fans wish to buy their music, watch their competitions, attend their
movies, and more. Even the president of the United States is a product, competing for votes.]
5. According to the US Centers for Disease Control and Prevention, the birth rate is falling in
communities around the world. In the United States, the birthrate fell by 4 percent in 2020 to an all-
time low. Describe why dwindling population is a demographic concern in the macroenvironment all
businesses must contend with. [Section 1.3 LO1; Section 1.7 LO1]
, [Sample answer: Businesses depend upon consumers to purchase goods and services. Colleges,
universities, trade schools, and junior colleges, for instance, rely upon lists of high school graduates
as marketing prospects. A smaller demographic alters these colleges’ macroenvironments, as do
availability of low-cost loans (economic), movement toward online learning (technological),
distribution of state monies to specific learning institutions (political), flux of international students
to US colleges (sociocultural), and overall campus efforts toward sustainability (ecological).
Because the birth rate has fallen sharply in just the past two decades, public and private colleges have
compensated by adding additional programming, such as master’s courses and certification programs,
to attract more students. Dozens of colleges have closed their doors. Retailers selling things such as
cell phones and fast food are also losing business due to demographic changes.]
Critical Thinking Exercises
1. Your roommate in the dorm talks on his cell phone incessantly while you’re trying to study. Since
you’re a broke college student and it’s too cold to walk to the library, you decide to explore the
marketplace for used noise-canceling headphones. How will you locate the best, most affordable
market offering to meet your needs? Describe how marketing messages may guide your steps in this
process. [Section 1.1 LO2; Section 1.5 LO1, LO2]
[Sample answer: Students will likely begin by checking with their family members and friends, either
personally or via social platforms. They might also have heightened awareness to seeing who else in
the dorm owns these headphones and which brands are most popular. Many consumers these days
follow up with online shopping, gathering information about customer satisfaction, availability, and
pricing of specific brands.
If student shoppers visit specific sites, the business will likely serve them advertisements about that
particular product. Students may also visit resale sites to look for used products that are still in good
shape.]
2. All consumers have needs and wants. You likely felt a state of deprivation this morning—hunger—
and decided what you wanted to eat for breakfast. Do a bit of research to discover how your breakfast
preference (want) compares to what a college student living in Osaka, Japan, might want to satisfy
their need for sustenance. [Section 1.5 LO1, LO2]
[Sample Answer: While US students might prefer pancakes and bacon or even a bowl of steamy
oatmeal for breakfast, Japanese counterparts are likely eating a bowl of rice with natto (fermented
soybeans) on top. Other options include pickled vegetables, miso soup, and grilled fish.]
3. Because relationships are so important in marketing, multiple tools have been developed to help
manage customer relationships. Many technological advances assist marketers in their efforts.
Promotional strategies include utilizing social media posts, websites, advertising, public relations,
and sponsorships to communicate with the target audience. One of the most effective tools in
planning/calendaring these promotional contacts or touch points is a Gantt chart. Do a bit of
research on Gantt charts so you better understand this scheduling tool that also visually illustrates
linkages between promotional activities and progress toward a marketing goal. List and discuss five
