CHAPTER 1
MARKETING: CREATING AND CAPTURING CUSTOMER VALUE
General Teaching Tips for this Chapter
This chapter introduces the subject of marketing, starting with the question: What is
marketing? There are many definitions. The American Marketing Association defines
marketing 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. The Oxford English Dictionary defines marketing as the action or business of
promoting and selling products or services, including market research and advertising.
Wikipedia defines it as is the process of communicating the value of a product or service to
customers, for selling that product or service. This textbook defines marketing simply as
managing profitable customer relationships. Another simple definition of marketing is,
everything that is done in support of sales.
For most students, this will be their first introduction to marketing and all its
ramifications. To most of them, marketing is nothing more than selling and/or advertising,
and this gets reinforced daily when they see “marketing” job ads that are really sales
positions. It helps
to get students talking about what marketing is, and to give examples of what they think is
really good marketing. Try to bring in contemporary examples that the students can relate
to.
The first chapter of this textbook sets the stage for the rest of the content. It outlines the
major topics and principles that will be discussed in each of the following chapters, and
gives the student a good grounding in what to expect in their journey into the world of
marketing.
First classes are always difficult, both for the instructor and for the student. Therefore,
using examples that students can relate to easily is always a good idea when starting out.
In reviewing the material in class, a good way to break it down follows. This assumes a
typical one-hour structure; if the class is longer, spend a little more time on each topic. If
shorter, you can either break the chapter over two sessions, or shorten each topic’s
allotted discussion time:
10 MIN discussing what marketing really is. Many students will come into class
thinking they are going to be learning all about advertising, or all about selling. Ask
students to talk about what they think marketing is, and to use examples of what
they’ve encountered in their own lives.
10 MIN on the second major topic of the chapter, understanding the marketplace
and consumer needs. Discussing the differences of needs, wants, and demands, and
, how
they relate to marketing, can greatly enhance the students’ understanding of the
basis of marketing. Also included in this section are the notions of marketing offers,
satisfaction, and relationships. You can discuss the various ways companies develop
relationships with their customers. Using Amazon.com as an example can really help
the students understand that a company with millions of customers can still easily
develop relationships with each and every one of them.
10 MIN on designing customer-driven marketing strategies. Many students will still
not understand how needs, wants, and demands can drive companies’ product
development, but this section of the chapter will help them see it a little more
clearly.
5 MIN on preparing a marketing plan and program. This section shows how
everything they learn in marketing will be pulled together, but it is too soon in the
semester to be spending a lot of time on the topic.
15 MIN on customer relationships, because this topic is the heart of the chapter and
the entire text. Use examples that the students will appreciate. Discussing the
difference in the relationships they have with their hairdresser or barber and that of
Amazon.com or other online seller (Ticketmaster?) can drive home the importance
of holding on to good customers. Students will also be well aware of frequency
marketing programs, and examples of those will also be beneficial.
10 MIN discussing the future of marketing and the development of customer
relationships. Remember your students have known an era without the Internet.
Asking them how they would have developed relationships with their customers
without the assistance of technology is a good way to get a discussion started on
how marketing programs are developed. Then you can talk about how the advent of
email and the Internet has opened the entire world for even a small retailer.
If time permits, revisit the question of “what is marketing?” The students should now
have a greater appreciation of the science behind marketing, as well as the creativity
necessary to develop successful marketing programs.
Students need to truly understand and internalize what it means to work in marketing, and
to be
a marketer, before they can proceed with the topics in this book. They need to do more than
just memorize and repeat back a definition; they need to demonstrate understanding. So, a
good way to start off the first class is to ask students how they would define marketing. Or,
less formally, “How would you explain what marketing is to a friend who has never taken a
marketing course?” (Variations: how would you explain it to your grandparents; how would
you explain it to the Martians if they just landed on Earth and no nothing about us.)
At this stage, students are very apprehensive about the course. When they walked into
class, they thought they might learn about selling and advertising, and now they’ve
discovered that there is much more to marketing than just those two subjects. Talking
about how much fun it is to be the centre of the company, and knowing more about
,customers than any other functional area in the company, can sometimes ease their minds
and make them look forward to learning more. Emphasizing that marketing combines both
the analytical and the creative can also ease some tension. The accounting and finance
majors will find that there is something in it to suit their more analytical frame of reference,
and the artists and designers who hope to become fashion mavens can also rest assured
that although they will need to understand the more logical areas
of the subject, their intuition can still reign supreme.
Finally, you might want to show the students the website of the Canadian Marketing
Association, just to introduce them to the organization, and show them what it is. More
teaching tips follow below, in conjunction with each content section of this chapter.
Ideas for Activities and Assignments based on Opening Story (Joe
Fresh)
The opening story is about grocery giant Loblaw’s clothing line, Joe Fresh, which has
become one of Canada’s most successful apparel brands—a success attributed to the
company’s approach to marketing. The Joe Fresh brand creates value for customers, and in
return it captures value from those customers, through the money they spend in the store,
and the fact that they keep coming back.
The main retail segment, which operates under several grocery banners and the Joe Fresh
clothing chain, had $7.41 billion in sales, up 1.8 per cent or $130 million from $7.29 billion
(Feb 20, 2014, CBC News, Canadian Press). The brand expanded its product line to include
beauty and cosmetics in 2009 (which it rolled out in Shoppers’ Drug Mart store in January
2016), and launched an ecommerce site in 2013. Joe Fresh is now set to expand to 140 more
stores in 23 new countries to respond to customer demand and requests for more current
service strategies.
You’ll see this theme of creating customer value, to capture value in return repeated
throughout the first chapter and throughout the text.
Group discussion: What some of the strategic marketing decisions (under the 4 P’s of
marketing) that Joe Fresh made that has led to their success?
Some answers to look for:
o Distribution or P=place decision: Locating the stores inside or beside Loblaw’s
grocery stores and creating e-commerce options
o P=price decision: Very low prices/affordable, so consumers can pick up a few
things at the same time as groceries, without having to make a major shopping
investment
o P=product decision: Constantly rotating stock so that people can visit every week
and always see something new and adding in new diversified products such as
shoes and cosmetics
, o P=promotion: Brand name has a Canadian sound to it (“Joe”) and the word fresh
communicates what the brand stands for
In-class group participation activity: Joe Fresh was launched in 2006 and in less than 8
years has grown to become the largest apparel brand in Canada in terms of both units sold
and dollars. Research (search online) the other top apparel brands in Canada. Collect data
such as annual sales if possible.
Ideas for Activities and Assignments based on M@W 1.1 (Canada
Goose)
Canada Goose was the comprehensive case in the 4th Canadian edition of this textbook, so if
you still have a copy, might want to use it for more ideas and material. Canada Goose is a
brand that many Canadian students are familiar with, especially ones who come from, or
live in, very cold parts of the country. But the brand has taken off rapidly in the last decade
by marketing its made-in-Canada ethos and trendy goose down parkas with red, white, and
blue circular patches to Europeans, who have flocked to the outerwear. Celebrities such as
Toronto-born rapper Drake, Prime Minister Justin Trudeau, and model Kate Upton (on the
cover of the 2013 Sports Illustrated swimsuit edition, sporting nothing else) have been
spotted donning the puffy coats. Even after its sale to U.S. equity firm Bain, the President
and CEO Dani Reiss still uses Canadian-made as the moniker for its brand dominance.
“Made in Canada is extremely important, and extremely important to Canada Goose, and
we’ve chosen partners to whom it is also extremely important to,” Mr. Reiss said in an
interview. “And I have no expectation that that’s going to change. If I thought that it was
going to change, I would not have done this deal.” (Retail and Marketing, Dec. 2013)
Group/class discussion: Though the subject of branding isn’t covered in detail until
chapter 9, it is mentioned in this story so this is a good time to introduce it. The story says,
“Canada Goose is a company that has always chosen its own path and stayed true to its
brand.” Ask students what they think that means, especially the part about staying true to a
brand.
Some points to look for: A very good student might pick up on this point, quoted from the
story: “Customers know what to expect when they buy a Canada Goose product.” That,
essentially, is what it means to be a brand—it is an identification that “signals” meaning to
consumers, so they know what to expect. It’s why people go into McDonald’s when they’re
in interesting foreign countries. Brands mean something; they stand for something in the
consumer’s mind. Ask students what Canada Goose means to them. Ask them what Canada
Goose stands for. Another quote they should pick up on is “Canada Goose… realized early on
that having its clothes made in Canada was integral to the authenticity of its brand.” Ask
students what is meant by “authenticity” when it comes to a brand. Ask them what brands
they feel are authentic, and which are not. (They will likely have strong opinions about this.)
Other points they might mention about the Canada Goose brand are the fact that it still
manufactures in Canada; the designs are all by Canadian designers; and the fact that CG uses
MARKETING: CREATING AND CAPTURING CUSTOMER VALUE
General Teaching Tips for this Chapter
This chapter introduces the subject of marketing, starting with the question: What is
marketing? There are many definitions. The American Marketing Association defines
marketing 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. The Oxford English Dictionary defines marketing as the action or business of
promoting and selling products or services, including market research and advertising.
Wikipedia defines it as is the process of communicating the value of a product or service to
customers, for selling that product or service. This textbook defines marketing simply as
managing profitable customer relationships. Another simple definition of marketing is,
everything that is done in support of sales.
For most students, this will be their first introduction to marketing and all its
ramifications. To most of them, marketing is nothing more than selling and/or advertising,
and this gets reinforced daily when they see “marketing” job ads that are really sales
positions. It helps
to get students talking about what marketing is, and to give examples of what they think is
really good marketing. Try to bring in contemporary examples that the students can relate
to.
The first chapter of this textbook sets the stage for the rest of the content. It outlines the
major topics and principles that will be discussed in each of the following chapters, and
gives the student a good grounding in what to expect in their journey into the world of
marketing.
First classes are always difficult, both for the instructor and for the student. Therefore,
using examples that students can relate to easily is always a good idea when starting out.
In reviewing the material in class, a good way to break it down follows. This assumes a
typical one-hour structure; if the class is longer, spend a little more time on each topic. If
shorter, you can either break the chapter over two sessions, or shorten each topic’s
allotted discussion time:
10 MIN discussing what marketing really is. Many students will come into class
thinking they are going to be learning all about advertising, or all about selling. Ask
students to talk about what they think marketing is, and to use examples of what
they’ve encountered in their own lives.
10 MIN on the second major topic of the chapter, understanding the marketplace
and consumer needs. Discussing the differences of needs, wants, and demands, and
, how
they relate to marketing, can greatly enhance the students’ understanding of the
basis of marketing. Also included in this section are the notions of marketing offers,
satisfaction, and relationships. You can discuss the various ways companies develop
relationships with their customers. Using Amazon.com as an example can really help
the students understand that a company with millions of customers can still easily
develop relationships with each and every one of them.
10 MIN on designing customer-driven marketing strategies. Many students will still
not understand how needs, wants, and demands can drive companies’ product
development, but this section of the chapter will help them see it a little more
clearly.
5 MIN on preparing a marketing plan and program. This section shows how
everything they learn in marketing will be pulled together, but it is too soon in the
semester to be spending a lot of time on the topic.
15 MIN on customer relationships, because this topic is the heart of the chapter and
the entire text. Use examples that the students will appreciate. Discussing the
difference in the relationships they have with their hairdresser or barber and that of
Amazon.com or other online seller (Ticketmaster?) can drive home the importance
of holding on to good customers. Students will also be well aware of frequency
marketing programs, and examples of those will also be beneficial.
10 MIN discussing the future of marketing and the development of customer
relationships. Remember your students have known an era without the Internet.
Asking them how they would have developed relationships with their customers
without the assistance of technology is a good way to get a discussion started on
how marketing programs are developed. Then you can talk about how the advent of
email and the Internet has opened the entire world for even a small retailer.
If time permits, revisit the question of “what is marketing?” The students should now
have a greater appreciation of the science behind marketing, as well as the creativity
necessary to develop successful marketing programs.
Students need to truly understand and internalize what it means to work in marketing, and
to be
a marketer, before they can proceed with the topics in this book. They need to do more than
just memorize and repeat back a definition; they need to demonstrate understanding. So, a
good way to start off the first class is to ask students how they would define marketing. Or,
less formally, “How would you explain what marketing is to a friend who has never taken a
marketing course?” (Variations: how would you explain it to your grandparents; how would
you explain it to the Martians if they just landed on Earth and no nothing about us.)
At this stage, students are very apprehensive about the course. When they walked into
class, they thought they might learn about selling and advertising, and now they’ve
discovered that there is much more to marketing than just those two subjects. Talking
about how much fun it is to be the centre of the company, and knowing more about
,customers than any other functional area in the company, can sometimes ease their minds
and make them look forward to learning more. Emphasizing that marketing combines both
the analytical and the creative can also ease some tension. The accounting and finance
majors will find that there is something in it to suit their more analytical frame of reference,
and the artists and designers who hope to become fashion mavens can also rest assured
that although they will need to understand the more logical areas
of the subject, their intuition can still reign supreme.
Finally, you might want to show the students the website of the Canadian Marketing
Association, just to introduce them to the organization, and show them what it is. More
teaching tips follow below, in conjunction with each content section of this chapter.
Ideas for Activities and Assignments based on Opening Story (Joe
Fresh)
The opening story is about grocery giant Loblaw’s clothing line, Joe Fresh, which has
become one of Canada’s most successful apparel brands—a success attributed to the
company’s approach to marketing. The Joe Fresh brand creates value for customers, and in
return it captures value from those customers, through the money they spend in the store,
and the fact that they keep coming back.
The main retail segment, which operates under several grocery banners and the Joe Fresh
clothing chain, had $7.41 billion in sales, up 1.8 per cent or $130 million from $7.29 billion
(Feb 20, 2014, CBC News, Canadian Press). The brand expanded its product line to include
beauty and cosmetics in 2009 (which it rolled out in Shoppers’ Drug Mart store in January
2016), and launched an ecommerce site in 2013. Joe Fresh is now set to expand to 140 more
stores in 23 new countries to respond to customer demand and requests for more current
service strategies.
You’ll see this theme of creating customer value, to capture value in return repeated
throughout the first chapter and throughout the text.
Group discussion: What some of the strategic marketing decisions (under the 4 P’s of
marketing) that Joe Fresh made that has led to their success?
Some answers to look for:
o Distribution or P=place decision: Locating the stores inside or beside Loblaw’s
grocery stores and creating e-commerce options
o P=price decision: Very low prices/affordable, so consumers can pick up a few
things at the same time as groceries, without having to make a major shopping
investment
o P=product decision: Constantly rotating stock so that people can visit every week
and always see something new and adding in new diversified products such as
shoes and cosmetics
, o P=promotion: Brand name has a Canadian sound to it (“Joe”) and the word fresh
communicates what the brand stands for
In-class group participation activity: Joe Fresh was launched in 2006 and in less than 8
years has grown to become the largest apparel brand in Canada in terms of both units sold
and dollars. Research (search online) the other top apparel brands in Canada. Collect data
such as annual sales if possible.
Ideas for Activities and Assignments based on M@W 1.1 (Canada
Goose)
Canada Goose was the comprehensive case in the 4th Canadian edition of this textbook, so if
you still have a copy, might want to use it for more ideas and material. Canada Goose is a
brand that many Canadian students are familiar with, especially ones who come from, or
live in, very cold parts of the country. But the brand has taken off rapidly in the last decade
by marketing its made-in-Canada ethos and trendy goose down parkas with red, white, and
blue circular patches to Europeans, who have flocked to the outerwear. Celebrities such as
Toronto-born rapper Drake, Prime Minister Justin Trudeau, and model Kate Upton (on the
cover of the 2013 Sports Illustrated swimsuit edition, sporting nothing else) have been
spotted donning the puffy coats. Even after its sale to U.S. equity firm Bain, the President
and CEO Dani Reiss still uses Canadian-made as the moniker for its brand dominance.
“Made in Canada is extremely important, and extremely important to Canada Goose, and
we’ve chosen partners to whom it is also extremely important to,” Mr. Reiss said in an
interview. “And I have no expectation that that’s going to change. If I thought that it was
going to change, I would not have done this deal.” (Retail and Marketing, Dec. 2013)
Group/class discussion: Though the subject of branding isn’t covered in detail until
chapter 9, it is mentioned in this story so this is a good time to introduce it. The story says,
“Canada Goose is a company that has always chosen its own path and stayed true to its
brand.” Ask students what they think that means, especially the part about staying true to a
brand.
Some points to look for: A very good student might pick up on this point, quoted from the
story: “Customers know what to expect when they buy a Canada Goose product.” That,
essentially, is what it means to be a brand—it is an identification that “signals” meaning to
consumers, so they know what to expect. It’s why people go into McDonald’s when they’re
in interesting foreign countries. Brands mean something; they stand for something in the
consumer’s mind. Ask students what Canada Goose means to them. Ask them what Canada
Goose stands for. Another quote they should pick up on is “Canada Goose… realized early on
that having its clothes made in Canada was integral to the authenticity of its brand.” Ask
students what is meant by “authenticity” when it comes to a brand. Ask them what brands
they feel are authentic, and which are not. (They will likely have strong opinions about this.)
Other points they might mention about the Canada Goose brand are the fact that it still
manufactures in Canada; the designs are all by Canadian designers; and the fact that CG uses
