Ancillaries
Internet Exercises: Answers
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Chapter
1: Overview of Strategic Marketing
Pharmaceutical Manufacturers Association of Canada
This exercise requires students to explore the Web site of the Pharmaceutical
Manufacturers Association of Canada (PMAC), an industry association
that represents many Canadian pharmaceutical manufacturers.
The first question asks what information is available through the PMAC
Web site. There is a lot of information at this site, including position
statements of the PMAC on various issues important to industry stakeholders.
There is also information on patents and patent protection, the Health
Research Foundation, news releases and the PMAC newsletter, the annual
review and special reports, and industry facts which are available by
province. The information here is targeted to member organizations;
physicians, pharmacists, and other members of the health industry; policy
and regulatory decision makers; and even to students (the industrial
pharmacy studentship program).
The second question asks how the PMAC Web site facilitates relationship
marketing. Visitors to the site can get a listing of E-mail address
for many people within the association to whom they can communicate
directly. There are links to many important industry-related sites,
and this encourages people to visit the PMAC site to see these. There
is also a comprehensive code of marketing ethics (you may want to have
students visit this again when you discuss Chapter 3) which helps communicate
the association’s position on many ethical issues. Members of the association
that practise this code of ethics will develop better relationships
with their various stakeholders as well. Finally, there is a section
on stakeholder relationships in the annual review that is worth viewing.
The third question asks what variable/s of the marketing mix the PMAC’s
Internet marketing efforts best exemplifies. One comment on its Web
site says, "Marketing in the pharmaceutical industry is a process
of education and communication." This Web site is designed largely
to educate stakeholders and to communicate with them. Therefore, the
promotion variable is the one which is best exemplified with the PMAC’s
Internet marketing efforts. The site also provides information on the
conduct of salespeople (in the code of marketing practices), and discusses
price, product, and distribution issues there and in various other locations
within the site.
Chapter
3: Marketing Ethics and Social Responsibility
KPMG Canada
This exercise exposes students to a wealth of ethics-related information
available through KPMG’s Ethics & Integrity Services.
The first question asks students to identify an article from the Globe
and Mail that deals with a marketing ethics issue. This site currently
has information on three articles by KPMG’s Michael Deck that have appeared
in the Globe and Mail between September and December 1997, and there
will likely be more in the future. This question requires students to
think about marketing ethics issues discussed in the text and gives
them practice at recognizing such issues in the real world. Students’
responses will vary depending on the articles available at the time
of access and the specific article they choose.
The second question asks students to identify how the ethics issue
from the above article relates to concepts covered in Chapter 3 of the
text. Responses will vary depending on the articles available at the
time of access and the specific article they choose. Responses should
generally deal with product, distribution, promotion, or price issues.
The final question requires students to choose an item from the Web
site that deals with a marketing ethics issue someone might encounter
early in his or her career. Responses will vary depending on the items
available at the time of access and the specific item chosen, but should
demonstrate an understanding of the basic concepts in Chapter 3.
Along with the many informative items available at the Web site, there
is a hotlink to an interactive quiz on ethical dilemmas and to KPMG’s
newsletter, Integrity.
Chapter
7: Organizational Markets and Buyer Behaviour
Bombardier
This exercise allows students to explore the Web page of a firm that
sells mostly to organizational markets (although its recreational products
are targeted mainly at consumer markets). This Web site provides much
information, including company profile and structure, financial information,
a media centre (with press releases, biographies of top executives,
and a photo gallery that can be downloaded), company history, and information
on career opportunities with Bombardier. (Case 20.1, p. 491, is also
on Bombardier.)
The first question asks toward what organizational markets Bombardier
Aerospace targets its products. Bombardier manufactures business, regional,
and amphibious aircraft. Business aircraft would be targeted mainly
at producer markets (various types of business organizations). However,
some of these smaller aircraft are probably sold to government markets
as well. Regional aircraft would be mainly targeted at airlines. These
would be producer markets in Canada and the United States, but may be
government markets in some parts of the world. Amphibious aircraft would
be targeted at government markets as they are mostly used for fire fighting,
survey and surveillance work, and emergency service in locations where
access may only be available by water.
The second question asks students to discuss how Bombardier’s Web site
addresses some of the concerns of organizational buyers. The Web site
provides great detail about the firm’s products, including specifications,
a status report that lists customers for each model of aircraft and
how many each owns, and a section on maintenance and support that explains
how Bombardier is able to help customers with start-up support, training,
spare parts, and technical publications and support. This allows prospective
customers to access a list of current customers if they wish to approach
them for referrals or recommendations.
The final question asks what environmental factors are likely to affect
demand for Bombardier’s Aerospace products. Many factors will affect
buyers’ decisions with regard to Bombardier’s Aerospace products, though
these are not necessarily named on Bombardier’s Web site. Based on the
Aerospace products profiled on Bombardier’s Web site, students will
have a variety of answers, including economic factors (fewer customers
will buy aircraft in slow economic periods), regulatory factors (airlines
must meet strict governmental regulations for safety, and these regulations
may vary from one country to another), global factors (increasing globalization
of business means more international flights are necessary, so more
airlines are buying more airplanes to service this demand), technological
and sociocultural factors (society seems to want airlines to replace
aging aircraft because of safety concerns), competitive factors (more
airlines are using smaller aircraft for commuter or feeder lines so
they can improve their efficiency, and this is a great opportunity for
the regional aircraft that Bombardier manufactures), and more.
Pacific Fasteners
This exercise introduces students to an industrial distributor, a special
type of merchant wholesaler that sells to organizational customers.
The first question asks toward what organizational markets Pacific
Fasteners targets its products. Fasteners are produced by industrial
manufacturers that then sell them to Pacific Fasteners. That means that
Pacific Fasteners is part of a reseller market. It may sell to other
resellers that may buy in smaller quantities, but this would not be
its main market. The largest percentage of its products are probably
sold to producer markets. Fasteners of many types are used as component
parts in many consumer and organizational products. Fasteners are also
used in producer markets as consumable supplies; that is, as maintenance,
repair, or operating supplies (MRO supplies; see Chapter 9 for a discussion
of product classifications: component parts and consumable supplies).
Government markets and institutional markets will also buy fasteners
as consumable supplies, although they will not buy as many as producer
markets.
The second question asks what methods of organizational buying Pacific
Fasteners’ customers are likely to use. For most customers, it would
not matter whether they are making a straight rebuy, a modified rebuy,
or a new task buy, they would likely buy fasteners by description as
they are very standardized products. In a very few instances, customers
may buy by inspection or sampling, but this would likely happen only
when the fasteners are used in very critical applications, such as those
that may be found in aerospace, defence, or nuclear applications.
The final question inquires whether any of Pacific Fasteners’ products
are sold based on derived demand. When these products are sold as consumable
supplies, the answer is no. However, when they are sold in producer
markets as a component part in manufactured goods, sales are based on
derived demand. For example, the number of wheel nuts that GM Canada
purchases is directly related to the number of cars that it manufactures.
Chapter
14: Wholesaling
Tenaquip
The first question asks students to compare Tenaquip to Pacific Fasteners.
With respect to similarities, they are both merchant wholesalers. They
both take title to goods and assume risks associated with ownership.
They both may sell to all types of organizational accounts. They differ
in that Tenaquip is a general-merchandise wholesaler, and Pacific Fasteners
is a specialty-line wholesaler. Tenaquip carries a wide product mix:
shelving, maintenance equipment, packaging, safety supplies, hand and
power tools, pneumatic tools, abrasives, and much more. Pacific Fasteners
specializes in non-corrosive fasteners—a very narrow product mix—but
it has depth within that narrow product mix.
The second question asks students what Tenaquip means by "Integrated
Supply Program." Tenaquip says "...we want to be your partner
in materials management." Partnering is a term which became popular
in the late 1980s and was referred to as "the most significant
change in industrial marketing in five decades." It refers to very
close buyer-seller relationships, ones that are so close they often
result in sole- or single-source supply arrangements. These require
much greater communication and coordination of operations between buyers
and sellers and when implemented successfully, result in considerable
cost savings for customers and increased sales for sellers. As Tenaquip
notes, an integrated supply program offers customers reduced costs for
buying and holding materials, reduced paperwork, customized service
and delivery requirements, and technical support. The whole focus is
to improve materials flow and reduce overall materials management costs
for customers.
The third question asks how Tenaquip can benefit from having a home
page on the Internet. The Web page gives Tenaquip greater exposure than
it might otherwise have. It gives Tenaquip the opportunity to promote
its corporate image, and to explain its commitment to "complete
customer satisfaction." It also lets Tenaquip suggest to customers
the benefits of considering a partnering or single-source supply arrangement,
and customers who wish can place orders via the Internet.
Chapter
15: Retailing
Sears Canada
This exercise takes students to the Web site of Sears Canada, a well-known
Canadian retailer.
The first question asks students whether there are advantages for Sears
Canada being the first retailer to provide department store selection
online. There may be some small advantage in the short term from exposure
to early browsers. Sears Canada can also develop and improve its Web
site as it gains experience with promotion on the Internet, and from
feedback from customers and other browsers. There may be some longer
term advantage by simply being able to promote this as a Canadian first
which might help maintain a positive image as a retailer that is responsive
to changing trends in retailing.
The second question asks students to compare the "atmospherics"
of Sears Canada’s Web page to the atmospherics of a traditional Sears
Canada store. The atmospherics of Sears Canada’s Web page is generally
consistent with a traditional Sears Canada store, down to the frequent
use of the familiar Sears Canada logo with the maple leaf. Sears Canada
stores carry many more items than are available on the Web site, so
browsers may not get the same impression of breadth and depth of product
assortments, but many items are available in several important product
categories. The Web pages also use quite a bit of "white space"
for ease in use. This may be necessary given the nature of Web pages,
and may heighten the awareness of limited product assortment. As to
the issue of whether the atmospherics of a Web page should be consistent
with those of the traditional retailer, the answer is subjective and
answers will vary. A good argument can be made that a certain level
of consistency is beneficial to reinforce the store’s image in consumers’
minds and their expectations of what they will find.
The third question asks students whether they get the impression that
Sears Canada is distinctly service-oriented from browsing its Web site.
According to the Web site, Sears Canada offers more specialty services
than any other retailer in Canada. Included are such things as a travel
agency, hair care centres, portrait studios, income tax by Sears, lawn
care, and carpet, upholstery, and air duct cleaning services. Sears
operates a parts and service network which employs 1,200 service technicians
and handles almost 1.5 million calls each year. Sears offers delivery
service, has 24-hour bilingual service at its call centres, extends
credit to customers (Sears Card), operates a Sears Club that rewards
loyal customers, maintains a gift registry, and guarantees satisfaction
on its products and services. Sears Canada, although a lot of its sales
are made through catalogue sales offices and increasingly over the Internet,
is a good example demonstrating that department stores are distinctly
service-oriented.
Chapter
16: Physical Distribution
Federal Express Canada
From US site ....
Midland Transport
This exercise introduces students to the Web page of a transportation
company that started less than three decades ago with only six trucks
and now operates in six Canadian provinces, has 1,500 employees, and
over 1,700 pieces of equipment. It offers an impressive assortment of
services to meet customers’ transportation and physical distribution
needs.
The first question asks what are the advantages and disadvantages of
using Midland Transport services less-than-truckload (LTL) and truckload
services. One advantage of using truck transportation (LTL and truckload)
is that it is more flexible in terms of scheduling and routing than
other modes of transportation. Trucks can go almost anywhere over land
and can deliver to the most locations, even more remote locations that
are sometimes inaccessible by other transportation modes. Truck transportation
is generally faster than train, but more expensive and somewhat more
vulnerable to bad weather. Trucks have also been criticized for high
levels of loss and damage. Midland Transport, and some other truck carriers,
are addressing these issues as they monitor and track shipments with
new tracking technology, and analyze their service performance and customers’
transportation costs.
The second question asks what advantage does Midland Prime Time service
offer over regular Midland Transport service. This is a service that
is designed to balance cost and speed. It offers customers faster delivery
times than regular truck transportation services for a higher price,
but still lower in cost than other types of premium transportation services
such as courier or air freight.
The third question asks why Midland Transport offers so many different
types of services. The company started as a small truck transportation
company with six trucks and probably added specialized services as it
found more market niches that it wanted to serve. For example, the Midland
Show Time service is targeted specifically at companies that participate
in trade shows. Midland delivers booths and product to trade shows and
returns them to the owners after the show is over. Midland also coordinates
its services with trade show organizers to ensure that customer needs
related to trade show participation are met. Other specialized services
are designed to meet the needs of other specific market niches.
Chapter
19: Personal Selling and Sales Promotion
Canadian Professional Sales Association
The purpose of this exercise is to introduce students to the CPSA.
It has a very interesting site that will interest all serious marketing
students, not just those who are thinking about professional sales careers.
The first question asks how salespeople might benefit from belonging
to the CPSA. Benefits include travel discounts at hotels and car rental
companies, as well as discounts related to insurance programs, long-distance
services, and financial services. Members can also take part in professional
development workshops, seminars, and programs; can access library resources
including print, audio, and video material; subscribe to a weekly newsletter
for sales professionals; and browse tips and techniques that will help
them improve their selling effectiveness.
The second question asks students to select one or two items under
"sales tips & techniques" that they think are among the most
important. This, of course, will vary depending on what is available
at the time the student accesses the site. Currently there are over
a dozen items that relate to sales tips for sales professionals and
for entrepreneurs. Students should be able to come up with many good
ideas here.
The third question asks students to visit the CPSA Member Mall and
decide what purpose the mall serves. One of the reasons for this question
is to get students to visit the "Cool Sites for Sales Professionals"
link as there is some very interesting material here related to marketing
associations, banks and financial institutions, government, and the
media. For example, there are links to Canadian newspapers, marketing
magazines, and Canada NewsWire. The Member Mall lists CPSA members and
the products and services they provide, and helps members network with
other members. There are many members registered at the Member Mall,
and listings are provided both alphabetically and by category of product
or service. It is a valuable resource for members, but can also be accessed
by non-members.
Chapter
20: Pricing Concepts
General Motors Canada
This exercise gives students a chance to car shop online, with a special
emphasis on the prices of General Motors vehicles.
The first part of the exercise asks students to find the lowest priced
Saturn available today, to view it on the GM Web site, and to find the
closest dealership. Answers will vary depending on the models, prices,
and special promotions available at the time of access. A recent access
found the Saturn SL model to be the cheapest with an MSRP of $14,188
plus options. Dealership location depends on students’ location.
The second question asks students what are the advantages and disadvantages
of leasing a vehicle versus buying one. The advantages listed include
little or no down payment with lower monthly payments, no worries about
resale or trade-in hassles, the ability to arrange the lease at the
dealership, and being able to gain a new vehicle more often. The site
shows calculations that compare SmartLease with traditional financing.
Some disadvantages include the fact that you do not own the car and
must return it to the dealer at the end of the lease period unless you
decide to exercise the purchase option. You may also, at that time,
have extra charges if there are repairs required to the vehicle for
excess wear or use. For example, there is a charge of $0.05 per kilometre
if the car is driven more than 24,000 kilometres times the number of
years of the lease.
The final part of the exercise asks students to explore leasing options
for the Saturn and to determine the monthly lease cost. Again, responses
will vary depending on the numbers they plug into the GM SmartLease
calculator, which asks users to fill in length of lease period and other
information in order to determine a monthly payment.
Chapter
21: Setting Prices
The following two exercises give students an opportunity to observe
the Web pages of two companies that compete in the public transportation
industry, and to compare their pricing strategies.
Air Canada’s Websaver Fares
The first question asks students to list some of the factors that affect
the pricing of seats on Air Canada flights. The primary factors that
appear to affect price of Air Canada flights are demand (e.g., the fact
that Air Canada offers the Websaver program to sell unsold seats at
very low rates) and competitors’ fares (when one major airline offers
special deals, others generally follow). Other factors might include
airport fees (which may be higher at some airports than others). Presumably,
Air Canada also sets most fares at a level to ensure the firm reaches
the break-even point for that route and hopefully makes some profit
as well.
The second question asks students to evaluate the company’s perception
of price elasticity of demand, based on Air Canada’s Websaver fares.
Based on the existence of Websaver fares, as well as the fare wars that
flare up periodically among the airlines, Air Canada’s perception of
its price elasticity of demand is that it is elastic (a decrease in
price will cause an increase in revenue because demand will rise). Consequently,
Air Canada tries to offer the lowest fares possible on certain routes
to stimulate demand and therefore sales and revenue. Because unsold
seats do not generate revenue for airlines, anything to increase demand
in a competitive market is desirable.
The third question asks how Air Canada is using price differentiation
to segment markets based on type of customer, type of marketing channel,
or time of purchase. Air Canada uses price differentiation to segment
markets on the basis of type of customer, marketing channel, and time
of purchase. For example, weekday routes often have the highest fares
because these are used by businesspeople who often must travel regardless
of cost. Less desirable times (such as the "red eye") may
have lower fares to encourage more sales during off hours. Air Canada
can further afford to lower fares booked through Websaver fares because
it does not have to pay ticket or reservations agents to handle the
bookings.
VIA Rail: A Price for Everyone
The first question asks students how VIA Rail’s pricing strategy differs
from Air Canada’s pricing strategy with respect to targeting different
segments of travellers. The first thing students will probably notice
is that students get discounts of 40 percent or more. There are special
packages where students can get a discount of 50 percent by buying a
VIA 6 Pak; that is, three return trips between two destinations. This
package is attractive to students who may wish to make frequent trips
between home and where they study. VIA Rail also targets additional
segments, such as hikers and campers who might wish to try the VIA Adventures
promotion. These travellers can get on and off the train as often as
they wish (if they are travelling economy class), and can arrange to
have special drop-off and pick-up points anywhere along the train route.
The CANRAILPASS is another program designed to attract travellers who
might wish to extend their travelling over a longer period to visit
more places. Travellers can travel for 12 days in a 30-day period, and
can add additional days for additional fare if desired.
Question 2 asks students what sales promotions VIA Rail uses to attract
customers. Some have been mentioned in the previous paragraph; however,
there are others. Seniors get special deals. They generally get a 10
percent discount, but this also applies beyond any other special promotions
that VIA offers. Students can visit the Web site and sign up to receive
monthly information on special promotions, new services, and other items
of interest. For frequent travellers, there is VIA Preference, a loyalty
program where travellers get bonus points for each dollar spent travelling
via VIA (similar to airlines’ air miles loyalty programs, but points
are awarded on the basis of dollars spent rather than miles travelled).
Members can also receive bonus points on their VIA Preference cards
by using Hertz for car rentals, or Best Western, Novotel, or Radisson
Canada hotels.
The third question simply asks students whether it is ethical to differentiate
among market segments when pricing services, and whether it might make
a difference depending on the segments involved. Students’ opinions
will vary. Regardless of the positions taken, you may wish to query
students as to whether VIA Rail might change its strategy as the attractiveness
of the seniors segment increases with changing demographics.
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