2. How concerned are you about privacy and security in today’s economy? Why do so many people, particularly younger people, seem to be unconcerned about privacy? Will these issues still be important in 10 years? Explain.
Most students will state that they are very concerned about privacy and security. However, younger people, unlike their parents, understand that the line between privacy and convenience is a fine one. If consumers want the conveniences of advanced technology, allowing access to personal information is unavoidable. In the future, most consumers won’t think too deeply about privacy and security as technology further penetrates our lives. There is also the potential for significant government regulation in this area.
3. The text argues that marketing possesses very few rules for choosing the appropriate marketing activities. Can you describe any universal rules of marketing that might be applied to most products, markets, customers, and situations?
This is a very challenging question, as most students will have not considered this issue. Even generally accepted statements like “sales increase when you lower the price” are not necessarily true (see Chapter 6). An example that comes close to being a universal rule is “everyone loves a new product.” New products and sales are good ways to draw attention, but are not necessarily situations that increase revenue for the firm.
Exercises
1. The pace of change in our economy was frenetic from 1999 to 2001 (the so called dot-com boom) because of rapidly expanding technology and the growth of the Internet. Shortly thereafter, the bubble burst and many dot-com pioneers disappeared. Conduct some research to determine the reasons for the collapse. Most experts contend that a similar type of shakeout is unlikely today. What is different about today’s technology and the Internet that points to this conclusion? How can firms prevent another collapse?
This exercise makes an excellent midterm exam or a term project. In their research students will uncover many factors that led to the dotcom collapse. They will likely be drawn to the financial and management reasons for the problems that occurred. If they focus solely on marketing-related reasons for the collapse, five issues stand out: (1) lack of marketing planning, (2) lack of any real differentiating competitive advantage, (3) lack of backend distribution infrastructure to support operations, (4) lack of an offline brand image, and (5) misguided assumptions about consumer behavior. Most students will argue that a similar shakeout is unlikely because the Internet has evolved (increased interactivity, social networking, wireless, etc.) and that firms today see the Internet as one of several key channels (rather than THE channel). However, astute students will see that some firms are still likely to disappear, mainly because they do not offer a compelling reason for their existence (Yahoo! and AOL are good examples). Firms that are most likely to succeed are those that take a combined offline/online approach.
2. Log on to a metamediary in the automobile metamarket (e.g., www.edmunds.com, www.kbb.com, or www.carsdirect.com). What aspects of the car buying experience does the metamediary offer? Which aspects of the experience are missing? How does the metamediary overcome these missing aspects?
These metamediaries offer everything needed to purchase a car. However, they do not provide a car buying experience. Many consumers actually enjoy taking test drives and haggling over price. These metamediaries overcome this by catering to the car buying public that prefers the sterile exercise of buying a car to the experience of buying a car. They also provide everything in one place, unlike the traditional experience.
3. Think about all of the exchanges that you participate in on a weekly or monthly basis. How many of these exchanges have their basis in long-term relationships? How many are simple transaction-based exchanges? Which do you find most satisfying? Why?
Answers to this question will vary greatly. Many students will not consider their exchanges to be relational until you ask them how long they have been using the same company/provider. Many exchanges are relational by default (we use the same dry cleaner or gas station continuously without thinking about it). Whether students find transactional or relational exchanges more satisfying will depend on their likes and dislikes.