Digital Marketing and Social Media PDF

Because learning changes everything. ® Chapter 13 Digital Marketing and Social Media © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.  Learning Objectives 13-1 Recognize the increasing value of digital...

Because learning changes everything. ® Chapter 13 Digital Marketing and Social Media © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.  Learning Objectives 13-1 Recognize the increasing value of digital media and digital marketing in strategic planning. 13-2 Demonstrate the role of digital marketing in today’s business environment. 13-3 Show how digital media affect the marketing mix. 13-4 Illustrate how businesses can use different types of social networking media. 13-5 Explain online monitoring and analytics for social media. 13-6 Identify legal and ethical considerations in digital media. 13-7 Propose recommendations to a marketer’s dilemma. © McGraw Hill, LLC 3  Growth and Benefits of Digital Communication E-business. Carrying out the goals of business through utilization of the internet. Digital media. Electronic media that function using digital codes via computers, smartphones, and other digital devices. Digital marketing. Uses all digital media, including the internet and mobile and interactive channels, to develop communication and exchanges with customers. © McGraw Hill, LLC 4  Table 13.1 Characteristics of Digital Marketing Characteristic Definition Example Addressability The ability of the marketer to Amazon installs cookies on a user’s computer identify customers before they that allows it to identify the owner when they make a purchase return to the website Interactivity The ability of customers to Texas Instruments interacts with its customers express their needs and wants on its Facebook page by answering concerns directly to the firm in response to and posting updates its marketing communications Accessibility The ability for marketers to obtain Google can use web searches done through digital information its search engine to learn about customer interests. Connectivity The ability for consumers to be Volition Beauty’s website encourages connected with marketers along customers to submit their makeup and skin with other consumers care product ideas, which can then be voted on by other users for the chance to be created. Control The customer’s ability to regulate Consumers use Kayak to discover the best the information they view as well travel deals. as the rate and exposure to that information © McGraw Hill, LLC 5  POLLING QUESTION 1 There are several important characteristics of digital marketing. Using cookies to track consumers and their purchasing habits is an example of which of the following characteristics? A. Connectivity. B. Accessibility. C. Crumb mining. D. Addressability. © McGraw Hill, LLC 6  Using Digital Media in Business Fast and inexpensive communication. New businesses and industries are evolving that would not exist without digital media. Focus on creating products that customers need or want. Can improve communication within and between businesses. Can quickly change opportunities, create challenges. © McGraw Hill, LLC 7  Digital Media and the Marketing Mix 1 Digital media differs from conventional marketing techniques in that: Communications are richer, faster, more interactive. Companies can reach target markets more easily, affordably, quickly. They help marketers utilize new resources in seeking out and communicating with customers. Important to achieve the right marketing mix. © McGraw Hill, LLC 8  Figure 13.1 Social Media Use by Platform Note: U.S. adults. Pre-2018 telephone poll data are not available for YouTube or Snapchat. Pre-2020 data are not available for TikTok. Data not published in 2017. Source: Pew Research Center survey conducted August 31–September 7, 2020. Trend data from previous Pew Research Center surveys. Access the text alternative for these images. © McGraw Hill, LLC 9  Digital Media and the Marketing Mix 2 Product Considerations. Digital media connectivity creates opportunities to add services and benefits to products. Some products are only available digitally. Businesses can offer more online than in a retail store. Ability to access product information digitally impacts buyer decision making. Internet can make it easier to learn about and anticipate consumer needs. © McGraw Hill, LLC 10  Digital Media and the Marketing Mix 3 Distribution Considerations. The internet is a new distribution channel for making products available at the right time, at the right place, and in the right quantities. Processing orders electronically can reduce inefficiencies, cost, and redundancies. Can increase speed throughout the marketing channel. Omni-channel retailing. Integrates the different methods of shopping available to consumers. © McGraw Hill, LLC 11  Digital Media and the Marketing Mix 4 Promotion Considerations. One of the best ways businesses can utilize digital media is for promotion purposes. Increasing brand awareness. Connecting with consumers. Taking advantage of social networks to form relationships and generate positive publicity. Online promotion allows consumers to make informed purchase decisions. Consumer consumption patterns are changing. Marketers must adapt promotional efforts to meet them. Influencer marketing. © McGraw Hill, LLC 12  Digital Media and the Marketing Mix 5 Pricing Considerations. Most flexible element of the marketing mix. Digital marketing can enhance a product’s value by providing service, information, convenience. Discounts and sales can be quickly communicated. Deal sites allow consumers to compare prices. To compete on price, digital marketing provides unlimited opportunities. © McGraw Hill, LLC 13  POLLING QUESTION 2 Nordstrom offers consumers the opportunity to purchase goods in-store or online. They streamline the shopping experience by allowing customers to make returns either online or in-store. This is an example of A. Omni-channel retailing. B. Retail marketing. C. Integrated marketing communications. D. Quixotic approach. © McGraw Hill, LLC 14  Social Media Marketing Social Media Marketing. Obtaining communications with consumers through social media sites. Firms promote a message through multiple platforms. Paid media. Owned media. Earned media. User-generated content. Consumers who create, converse, rate, collect, join, read online materials. Marketers need to determine the best social media approach to support marketing objectives. © McGraw Hill, LLC 15  Facebook Facebook is the number one social media platform with more than 2.8 billion monthly active users. © McGraw Hill, LLC easy camera/Shutterstock 16  Consumer-Generated Marketing and Digital Media 1 Two factors sparked the rise of consumer-generated information. 1. The increased tendency of consumers to post their own thoughts, opinions, reviews, and product discussions through blogs or digital media. 2. Consumers’ tendencies to trust other consumers over corporations. Consumers often rely on the recommendations of friends, family, and fellow consumers when making purchasing decisions. © McGraw Hill, LLC 17  Consumer-Generated Marketing and Digital Media 2 Social Networks. Facebook. Marketers use Facebook to market products, interact with consumers and gain free publicity. Brand pages, sell and promote products, advertising, etc.. Useful in relationship marketing. Twitter. Hybrid of a social networking site and a micro-blogging site that asks: “What’s happening?” Companies use site to build or rebuild customer relationships. © McGraw Hill, LLC 18  Consumer-Generated Marketing and Digital Media 3 Social Networks. Snapchat. Allows users to send messages and disappearing photos and videos to friends. Marketers can reach young, highly engaged audience. YouTube. Video sharing site. Consumers far outnumber brands. Diversifying its offering with YouTube Premium and YouTube TV. © McGraw Hill, LLC 19  Consumer-Generated Marketing and Digital Media 4 Social Networks. TikTok. Short-form mobile video-sharing platform. Collaborative. Known for meme culture, dancing videos, challenges, comedic sketches. LinkedIn. Top networking site for businesses and business professionals. Digital résumé. Lead generator. © McGraw Hill, LLC 20  Consumer-Generated Marketing and Digital Media 5 Blogs and Wikis. Blogs—web-based journals in which writers can editorialize and interact with other internet users. Give consumers power over companies. Companies use blogs to answer consumer concerns or defend their reputations. Wikis—websites where users can add to or edit the content of posted articles. Monitoring relevant wikis gives companies a better idea of how consumers feel about their company or brand. © McGraw Hill, LLC 21  Consumer-Generated Marketing and Digital Media 6 Media Sharing. Video-sharing sites (for example, Vimeo, Dailymotion). Allow both businesses and individuals to post videos. Viral marketing. Photo-sharing sites (for example, Instagram, Flickr, Google Photos). Allow users to upload their photos and short videos. Usage has increased with mobile apps. Podcasts. Podcast—Audio or video file that can be downloaded from the internet via a subscription. Can affect consumer buying habits. © McGraw Hill, LLC 22  POLLING QUESTION 3 You’ve been asked to increase your company’s social media presence. In your opinion, which social media platform should you focus on first? A. Facebook. B. TikTok. C. LinkedIn. D. Twitter. © McGraw Hill, LLC 23  Consumer-Generated Marketing and Digital Media 7 Mobile Marketing. Consumers increasingly do business and shopping from mobile devices and smartphones. Brands must recognize importance of mobile marketing. E-commerce sales on smartphones rapidly growing. © McGraw Hill, LLC 24  Consumer-Generated Marketing and Digital Media 8 Mobile Marketing. SMS messages. Multimedia messages. Mobile advertisements. Mobile websites. Location-based networks. Mobile applications. © McGraw Hill, LLC 25  Figure 13.2 Mobile App Activities Conducted by Smartphone Users Note: ages 18–64; in the past 30 days. Source: “U.S. Time Spent Mobile by App Category 2019,” Statista, October 2019, https://www.statista.com/statistics/248343/distribution-of-time-spent-ios-and-android-apps-by-category (accessed March 30, 2021). Access the text alternative for these images. © McGraw Hill, LLC 26  Consumer-Generated Marketing and Digital Media 9 Applications. Apps add a new layer to the marketing environment. Convenience and cost savings to the consumer. Companies use mobile marketing to offer additional incentives, promotions to customers. QR scanning app. Mobile payments. © McGraw Hill, LLC 27  Online Monitoring and Analytics Without digital media monitoring and evaluation, it will not be possible to maximize resources and minimize costs in social media marketing. Metrics develop from listening and tracking. Key performance indicators (KPIs) should be embedded at the outset of a social media strategy. Comprehensive performance evaluation can be done by analytics platform monitoring. Google Analytics. Analyzing traffic data allows marketers to better understand customers. © McGraw Hill, LLC 28  Table 13.2 Google Analytics Reports Description Real time Data updates are live so you can see pageviews, top social traffic, top referrals, top keywords, top active pages, and top locations in real time. Audience Audience reports provide insight into demographics, interests, geography, behavior, mobile use, and more. Acquisition In-bound traffic is monitored through acquisition reports, allowing you to compare traffic from search, referrals, e-mail, and social media. Behavior Track behavior flow, site speed, site search, events, and more. © McGraw Hill, LLC 29  Using Digital Media to Learn about Consumers Digital media and social networking sites. Help gather useful information about consumers and their preferences. Crowdsourcing. Describes how marketers use digital media to find out the opinions or needs of the crowd (or potential markets). Consumer feedback. Digital media forums allow businesses to closely monitor what customers are saying. © McGraw Hill, LLC 30  Crowdsourcing M&M’S has used crowdsourcing to let consumers vote on new limited-edition flavors. © McGraw Hill, LLC Roman Samokhin/123RF 31  Ethical and Legal Issues in Digital Marketing 1 Growth of information technology, the internet, and social networks has generated many legal and social issues for consumers and businesses. Privacy concerns. Risk of identity theft. Risk of online fraud. Need to protect intellectual property. To avoid deception, all online communication must tell the truth and cannot mislead consumers. © McGraw Hill, LLC 32  Ethical and Legal Issues in Digital Marketing 2 Privacy. Marketers can amass vast quantities of personal information, often without consumers’ knowledge. Cookies—an identifying string of text on users’ computers. Data protection laws. U.S. does not have comprehensive data protection law. EU. has the General Data Protection Regulation (GDPR). Transparency. FTC requires influencers to clearly disclose any connection they have with brands they promote. © McGraw Hill, LLC 33  Ethical and Legal Issues in Digital Marketing 3 Identity Theft and Online Fraud. Identity theft—when criminals obtain personal information that allows them to impersonate someone else in order to use their credit to access financial accounts and make purchases. Security breaches are a serious threat. Phishing is using a counterfeit of a familiar website to deceive people into divulging private information. To deter identity theft, the National Fraud Center wants financial institutions to implement new technologies such as digital certificates, digital signatures, and biometrics. © McGraw Hill, LLC 34  Figure 13.3 Main Sources of Identity Theft *Other includes email or social media, evading the law, insurance, medical services, online shopping or payment account, and securities accounts. Source: Consumer Sentinel Network Data Book 2020, Federal Trade Commission. Access the text alternative for these images. © McGraw Hill, LLC 35  Ethical and Legal Issues in Digital Marketing 4 Identity Theft and Online Fraud. Online fraud—includes any attempt to purposely deceive online. Use a different password for each website and making them complex. Credit card fraud is a major type of fraud that occurs online. Avoid fraud by not giving out personal information unless the site is legitimate. © McGraw Hill, LLC 36  Ethical and Legal Issues in Digital Marketing 5 Intellectual Property Theft and Other Illegal Activities. Intellectual property can include songs, movies, books, and software. Generally protected by patents and copyrights, but piracy and illegal sharing costs global industries billions annually. Illicit online marketing becoming serious issue for law enforcement. Illegal drugs. Counterfeit goods. © McGraw Hill, LLC 37  Digital Media’s Impact on Marketing Digital media can make your company more efficient and productive. Transition to digital media can be challenging. New media may require employees with new skills or additional training for current employees. Correct blend of traditional and digital media in marketing mix takes time and consideration. Future marketing opportunities will require a knowledge of digital media and how to use them. © McGraw Hill, LLC 38  POLLING QUESTION 4 You are opening an online boutique. In your opinion, which ethical or legal issue should you be most concerned with? A. Privacy concerns. B. Risk of identity theft. C. Risk of fraud. D. Transparency. © McGraw Hill, LLC 39  Because learning changes everything. ® Chapter 12 Dimensions of Marketing Strategy © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.  Learning Objectives 12-1 Describe the role of product in the marketing mix, including how products are developed, classified, and identified. 12-2 Explain the importance of price in the marketing mix, including various pricing strategies a firm might employ. 12-3 Identify factors affecting distribution decisions, such as marketing channels and intensity of market coverage. 12-4 Specify the activities involved in promotion, as well as promotional strategies and promotional positioning. 12-5 Evaluate an organization’s marketing strategy plans. © McGraw Hill, LLC 3  The Marketing Mix The Marketing Mix. Part of the marketing strategy. Involves decisions regarding controllable variables. Management of the marketing mix helps give firms an advantage over competitors. Successful companies offer at least one dimension of the marketing mix that surpasses all competitors. Companies must maintain acceptable, and if possible, distinguishable differences in other marketing mix variables. © McGraw Hill, LLC 4  The Marketing Mix 1. PRODUCT © McGraw Hill, LLC 5  Product Strategy 1 Developing New Products. Idea development. New idea screening. Business analysis. Product development. Test marketing. Commercialization. Access the text alternative for these images. © McGraw Hill, LLC 6  Product Strategy 3 Classifying Products. Business products—used directly or indirectly in the operation or manufacturing processes of businesses. Raw materials. Major equipment. Accessory equipment. Component parts. Processed materials. Supplies. Business services. © McGraw Hill, LLC 9  Product Strategy 4 Product Line and Product Mix. Product line. A group of closely related products that are treated as a unit because of a similar marketing strategy. Product mix. All the products offered by an organization. © McGraw Hill, LLC 10  Figure 12.3 A Sampling of Colgate-Palmolive’s Product Mix and Product Lines in North America Source: Colgate-Palmolive, “Colgate-Palmolive Brands,” https://www.colgatepalmolive.com/en-us/brands (accessed June 10, 2020). Access the text alternative for these images. © McGraw Hill, LLC 11  Product Strategy 5 Product Life Cycle. Introductory stage. Consumer awareness and acceptable are limited. Sales are zero, profits are negative. Growth stage. Sales increase rapidly, profits peak. Maturity stage. Sales peak but start to decline. Decline stage. Sales fall rapidly. © McGraw Hill, LLC 12  Figure 12.4 The Life Cycle of a Product Access the text alternative for these images. © McGraw Hill, LLC 13  Table 12.1 Products at Different Stages of the Product Life Cycle Introduction Growth Maturity Decline Ultra HD 4K 3D printers Laptop computer Desktop television computers Smart home Airbnb lodging Disney theme Landline phones gyms sharing parks Hydrogen fuel Keto products Soft drinks Print newspaper automobiles © McGraw Hill, LLC 14  POLLING QUESTION 1 In the product life cycle, in which stage do new companies enter the market and drive the price of a new product down? A. Introductory stage. B. Growth stage. C. Maturity stage. D. Decline stage. © McGraw Hill, LLC 15  Product Strategy 6 Identifying Products. Branding—the process of naming and identifying products. Brand. Brand name. Brand mark. Trademark is a brand that is legally protected from use by another firm. © McGraw Hill, LLC 16  Product Strategy 8 Identifying Products. Packaging. External container that holds and describes the product. Influences consumers’ attitudes. Labeling. The presentation of important information on the package. Closely associated with packaging. Quality. Reflects the degree to which a good, service, or idea meets the demands and requirements of customers. Quality of service is difficult to gauge. © McGraw Hill, LLC 18  POLLING QUESTION 2 You have been assigned the responsibility of leading the product packaging team for a new cologne. In your opinion, which aspect of the packaging should you be most concerned with? A. Colors. B. Brand. C. Shape. D. Symbols. © McGraw Hill, LLC 20  The Marketing Mix 1 2. PRICING © McGraw Hill, LLC 21  Pricing Strategy 1 Price is a key element in the marketing mix as it relates directly to revenue and profits. Probably the most flexible marketing mix variable; can be set or changed in a few minutes. Pricing Objectives. Specify the role of price in an organization’s marketing mix and strategy. Four common strategies: maximizing profits, boosting market share, maintaining the status quo, and survival. © McGraw Hill, LLC 22  Pricing Strategy 2 Specific Pricing Strategies. Pricing New Products. Price skimming. Charging the highest possible price buyers who want the product will pay. Luxury items. Generate much-needed revenue. Penetration pricing. A low price designed to help a product enter the market and gain market share rapidly. Entering a new market. Less flexible than price skimming. © McGraw Hill, LLC 23  Pricing Strategy 3 Specific Pricing Strategies. Pricing New Products. Psychological Pricing. Encourages purchases based on emotional rather than rational responses to the price. Even/odd pricing. Symbolic/prestige pricing. Reference Pricing. Price Discounting. Discounts—temporary price reductions, often employed to boost sales. Quantity, seasonal, promotional. © McGraw Hill, LLC 24  The Marketing Mix 3. DISTRIBUTION (PLACE) © McGraw Hill, LLC 25  Distribution Strategy 1 Marketing Channels. Marketing channel—a group of organizations that moves products from their producer to customers. Middlemen (intermediaries). © McGraw Hill, LLC 26  Distribution Strategy 2 Marketing Channels. Retailers. Intermediaries who buy products from manufacturers (or other intermediaries) and sell them to consumers for home and household use rather than for resale or for use in producing other products. Place utility. Time utility. Ownership utility. © McGraw Hill, LLC 27  Table 12.4a General Merchandise Retailers Type of Retailer Description Examples Department store Large, full-service stores Nordstrom, organized by departments Macy’s, Neiman Marcus Internet retailer A direct marketer providing most Amazon, products over the internet Alibaba Discount store Offers less services than Big Lots, department stores; store Bargain Hunt, atmosphere reflects value pricing Gabe’s Convenience store Small, self-service stores Circle K, 7- carrying many items for Eleven, Allsup’s immediate consumption Supermarket Large stores carrying most food Trader Joe’s, items as well as nonfood items Albertsons, for daily family use Wegman’s © McGraw Hill, LLC 28  Table 12.4b General Merchandise Retailers Type of Retailer Description Examples Superstore Very large stores that carry most Target, Walmart, food and nonfood products that Meijer are routinely purchased Hypermarket The largest retail stores that take Carrefour, Tesco the foundation of the discount Extra store and provide even more food and nonfood products Warehouse club Large membership establishments Costco, BJ’s with food and nonfood products Wholesale Club, and deep discounts Sam’s Club Warehouse Large facilities with products IKEA, Cost Plus showroom displayed that are often retrieved from a less expensive adjacent warehouse © McGraw Hill, LLC 29  Distribution Strategy 3 Marketing Channels. Direct marketing. Use of nonpersonal media to communicate products, information, and the opportunity to purchase via media such as mail, telephone, or the internet. Direct selling. Marketing products to ultimate consumers through face-to- face sales presentations at home or in the workplace. © McGraw Hill, LLC 30  Distribution Strategy 4 Marketing Channels. Wholesalers. Intermediaries who buy from producers or from other wholesalers and sell to retailers. Usually do not sell in significant quantities to ultimate consumers. Extremely important because of the marketing activities they perform. Merchant wholesalers. Agents. © McGraw Hill, LLC 31  Figure 12.6 Marketing Channels for Consumer Products Access the text alternative for these images. © McGraw Hill, LLC 32  Distribution Strategy 6 Logistics Management. Involves planning, implementing, and controlling the flow and storage of products and information from the point of origin to consumption. Transportation. Warehousing. Materials Handling. © McGraw Hill, LLC 34  Distribution Strategy 7 Intensity of Market Coverage. Intensive distribution. Makes a product available in as many outlets as possible. Try to make the product available at every location where a consumer might desire to purchase it. Selective distribution. Uses only a small number of all available outlets to expose products. Exclusive distribution. Reflects the degree to which a good, service, or idea meets the demands and requirements of customers. Quality of service is difficult to gauge. © McGraw Hill, LLC 35  Distribution Strategy 8 Importance of Distribution in a Marketing Strategy. Distribution decisions are among the least flexible marketing mix decisions. Distribution decisions often commit resources and establish contractual relationships that are slow to change. Competitors. © McGraw Hill, LLC 36  The Marketing Mix 4. PROMOTION © McGraw Hill, LLC 37  Promotion Strategy 2 The Promotion Mix. Advertising. A paid form of nonpersonal communication transmitted through a mass medium, such as television commercials, magazine advertisements, or online ads. Commercials use celebrities, customers, or unique creations to grab viewers’ attention and pique interest in a product. © McGraw Hill, LLC 38  Promotion Strategy 3 The Promotion Mix. Advertising campaign. Designing a series of advertisements and placing them in various media to reach a particular target audience. A product’s features, uses, and benefits affect the content of the campaign message and individual ads. Objectives and platform also affect the content and form of its messages. The use of online advertising is increasing. Infomercials. © McGraw Hill, LLC 39  Promotion Strategy 4 The Promotion Mix. Personal selling. Direct, two-way communication with buyers and potential buyers. Most flexible promotional method but is expensive. Three categories of salespersons. Order takers. Creative salespersons. Support salespersons. © McGraw Hill, LLC 40  Promotion Strategy 5 The Promotion Mix. Personal selling. Personal selling process. 1. Prospecting. 2. Approaching. 3. Presenting. 4. Handling objections. 5. Closing. 6. Following up. © McGraw Hill, LLC 41  Promotion Strategy 6 The Promotion Mix. Publicity. Nonpersonal communication transmitted through the mass media but not paid for directly by the firm. Message is presented as a news story and the company is not seen as the originator of the message. Public relations. Influencer marketing. Viral marketing. © McGraw Hill, LLC 42  Promotion Strategy 7 The Promotion Mix. Sales Promotion. Involves direct inducements offering added value or some other incentive for buyers to enter into an exchange. Generally easier to measure, less expensive than advertising. Stimulates customer purchasing and increases dealer effectiveness in selling products. © McGraw Hill, LLC 43  POLLING QUESTION 3 Which of the following is an example of a sales promotion strategy? A. Social media profiles. B. Door-to-door sales. C. Coupons. D. Personal selling. © McGraw Hill, LLC 44  Promotion Strategy 8 Promotion Strategies: To Push or to Pull. Push strategy. Attempts to motivate intermediaries to push the product down to their customers. Company attempts to motivate wholesalers and retailers to make product available to their customers. Pull strategy. Uses promotion to create consumer demand for a product; consumers then exert pressure on marketing channel members to make it available. © McGraw Hill, LLC 45  Importance of Marketing Strategy Marketing creates value through the marketing mix. The marketing mix must be carefully integrated into an effective marketing strategy. Firms that develop an effective marketing mix to meet customer needs will gain competitive advantages over those that do not. Often occurs when the firm excels at one or more elements of the marketing mix. Firms must constantly monitor the market environment. © McGraw Hill, LLC 48  Solve the Dilemma Better Health with Snacks 1 © McGraw Hill, LLC 50  Solve the Dilemma Better Health with Snacks 1 Deluxe Chips’ Deluxos tortilla chips are the number-one selling brand in North America and its Ridgerunner potato chips is also a market share leader. Wants to stay on top of the market by changing marketing strategies to match changing consumer needs and preferences. As middle-aged consumers modify their snacking habits, Deluxe Chips is considering a new product line of light snack food. Less fat and cholesterol. Targeted at 35- to 50-year-old consumers who want to be more health conscious. © McGraw Hill, LLC 51  Solve the Dilemma Better Health with Snacks 2 New healthy chips. Will succeed if taste good and consumers may be willing to pay more. More advertising to overcome competition. Possible to analyze customer profiles and retail store characteristics. Match right product with right neighbourhood. Store-specific micromarketing would allow Deluxe Chips to spend promotional dollars more efficiently. © McGraw Hill, LLC 52  Solve the Dilemma Better Health with Snacks 3 Critical Thinking Questions. 1. Design a marketing strategy for the new product line. 2. Critique your marketing strategy in terms of its strengths and weaknesses. 3. What are your suggestions for implementation of the marketing strategy? © McGraw Hill, LLC 53  Because learning changes everything. ® www.mheducation.com © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.  Because learning changes everything. ® Chapter 11 Customer-Driven Marketing © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.  Learning Objectives 11-1 Define marketing. 11-2 Describe the exchange process. 11-3 Specify the functions of marketing. 11-4 Explain the marketing concept and its implications for developing marketing strategies. 11-5 Examine the development of a marketing strategy, including market segmentation and marketing mix. 11-6 Describe how marketers conduct marketing research and study buying behavior. 11-7 Summarize the environmental forces that influence marketing decisions. 11-8 Propose a solution for resolving a problem with a company’s marketing plans. © McGraw Hill, LLC 3  Nature of Marketing 1 Marketing—A group of activities designed to expedite transactions by creating, distributing, pricing, and promoting goods, services, and ideas. Marketing activities create value. Important part of a firm’s overall strategy. Marketing is not… Manipulating consumers to get them to buy products they don’t want. Just advertising and selling. © McGraw Hill, LLC 4  Creating Value Companies find that communicating with customers through social media sites can enhance customer relationships and create value for their brands. © McGraw Hill, LLC Chinnapong/Shutterstock 5  Nature of Marketing 2 The Exchange Relationship. Exchange—the act of giving up one thing (money, credit, labor, goods) in return for something else (goods, services, or ideas). Each participant must be willing to give up “something of value” to receive the “something” held by the other. Product itself may not be as important as the image of the benefits associated with the product. Capability gained from using a product. Image evoked by it. Brand name. © McGraw Hill, LLC 6  Figure 11.1 The Exchange Process: Giving Up One Thing in Return for Another Access the text alternative for these images. © McGraw Hill, LLC 7  Nature of Marketing 3 Functions of Marketing. Buying. Selling. Transporting. Storing. Time utility. Usually impossible to store services. © McGraw Hill, LLC 8  Nature of Marketing 4 Functions of Marketing. Grading. Financing. Marketing research and data analytics. Trends. Changes in consumer tastes. Risk taking. © McGraw Hill, LLC 9  POLLING QUESTION 1 Which of the following is NOT one of the functions of marketing? A. Buying. B. Transporting. C. Risk taking. D. Human resources. © McGraw Hill, LLC 10  Nature of Marketing 5 Creating Value with Marketing. Value—a customer’s subjective assessment of benefits relative to costs in determining the worth of a product. Customer value = customer benefits − customer costs. Benefits are anything a buyer receives in exchange. Costs are anything a buyer gives up to obtain a product’s benefits. © McGraw Hill, LLC 11  Nature of Marketing 6 The Marketing Concept. Marketing concept—Idea that an organization should try to satisfy customers’ needs through coordinated activities that also allow it to achieve its own goals. Businesses must: Find out what consumers desire. Develop the good, service, or idea to satisfy that want. Get the product to the customer. Continually alter, adapt, and add products to keep pace with changing customer demands. © McGraw Hill, LLC 12  Nature of Marketing 7 The Marketing Concept. Determining customer needs is difficult. While customer satisfaction is the goal, businesses must achieve their own objectives. To implement the marketing concept, a business must: Have good information about what consumers want. Adopt a customer orientation. Coordinate its efforts throughout the entire organization. Make the customer’s perception of value the focus. A breakdown at any point in an organization can result in lost sales, lost revenue, and dissatisfied customers. © McGraw Hill, LLC 14  Nature of Marketing 8 Evolution of the Marketing Concept. The production orientation. Second half of 19th century. Industrial Revolution well underway. New technologies and increasing manufacturing efficiency. The sales orientation. Early 20th century. Supply exceeded demand. Advances in technology. Sales viewed as primary means of increasing profits. © McGraw Hill, LLC 15  Nature of Marketing 9 Evolution of the Marketing Concept. The market orientation. By the 1950s. Market orientation requires organizations to: Gather information about customers’ needs. Share the information throughout the firm. Use the information to build long-term relationships with customers. Customer acquisition cost. Customer relationship management (CRM). Communication. © McGraw Hill, LLC 16  Developing a Marketing Strategy 1 Marketing strategy—a plan of action for developing, pricing, distributing, and promoting products that meet the needs of specific customers. Selecting a Target Market. Market. Target market. Business-to-business (B2B) marketing. Business-to-consumer (B2C) marketing. © McGraw Hill, LLC 17  Developing a Marketing Strategy 2 Total-market approach. Firm try to appeal to everyone and assumes all buyers have similar needs and wants. Also referred to as mass marketing. Market segmentation. Dividing the total market into groups that have relatively similar product needs. Market segment. A collection of individuals, groups, or organizations who share one or more characteristics and thus have relatively similar product needs and desires. © McGraw Hill, LLC 18  Developing a Marketing Strategy 3 Market Segmentation Approaches. Concentration approach. Company develops one marketing strategy for a single market segment. Allows a firm to specialize. Multisegment approach. Marketing efforts are aimed at two or more segments with a marketing strategy for each. Niche marketing. One small, well-defined group. Narrow market segment with unique needs. © McGraw Hill, LLC 19  Figure 11.2 Target Market Strategies Access the text alternative for these images. © McGraw Hill, LLC 20  Developing a Marketing Strategy 4 Requirements for a successful concentration or multisegment marketing approach include: 1. Consumers’ needs for the product must be heterogeneous. 2. The segments must be identifiable and divisible. 3. The total market must be divided in a way that allows estimated sales potential, cost, and profits of the segments to be compared. 4. At least one segment must have enough profit potential to justify developing and maintaining a special marketing strategy. 5. The firm must be able to reach the chosen market segment with a particular market strategy. © McGraw Hill, LLC 21  Developing a Marketing Strategy 5 Bases for Segmenting Markets. Demographic. age, gender, race, ethnicity, income, education, occupation, family size, religion, social class. Geographic. climate, terrain, natural resources, population density, subcultural values. Psychographic. personality characteristics, motives, lifestyles. Behavioristic. some characteristic of the consumer’s behavior toward the product. © McGraw Hill, LLC 22  POLLING QUESTION 2 You are the head of Einstein University’s marketing department. You must determine the best way to segment the market to encourage the brightest young minds of America to apply for acceptance. In your opinion, which segment should you focus on? A. Demographic. B. Geographic. C. Psychographic. D. Behavioristic. © McGraw Hill, LLC 23  Developing a Marketing Strategy 6 Developing a Marketing Mix. Marketing mix—the four marketing activities. Product. Price. Distribution. Promotion. Firm tries to control these activities to achieve specific goals. © McGraw Hill, LLC 24  Figure 11.3 The Marketing Mix: Product, Price, Promotion, and Distribution Access the text alternative for these images. © McGraw Hill, LLC 25  Developing a Marketing Strategy 7 Product. A complex mix of tangible and intangible attributes that provide satisfaction and benefits. Good. A physical entity you can touch (a car, computer, or adopted kitten). Service. The application of human and mechanical efforts to people or objects to provide intangible benefits to customers (air travel, dry cleaning, or haircuts). Idea. Can be a concept, philosophy, image, or issue (attorney advice or political parties). © McGraw Hill, LLC 26  Developing a Marketing Strategy 8 Price. Price—a value placed on an object exchanged between a buyer and a seller. The buyer exchanges purchasing power—income, credit, wealth—for the satisfaction of utility associated with a product. Key element of the marketing mix because it relates directly to the generation of revenue and profits. Can be changed quickly to… Stimulate demand. Respond to competitors’ actions. © McGraw Hill, LLC 27  Developing a Marketing Strategy 9 Distribution. Distribution—making products available to customers in the quantities desired. Sometimes referred to as “place”. Intermediaries—usually wholesalers and retailers—perform many of the activities required to move products efficiently from producers to consumers or industrial buyers. Transporting, warehousing, materials handling, inventory control, packaging, and communication. Supply chain management (SCM). © McGraw Hill, LLC 28  Developing a Marketing Strategy 10 Promotion. Promotion—persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals, groups, and organizations to accept goods, services, and ideas. Advertising, personal selling, publicity, sales promotion. Communicate directly or indirectly with individuals, groups, organizations to facilitate exchanges. © McGraw Hill, LLC 29  Some Of The Most Iconic Advertising Campaigns Of All Time 10 De Beers – A Diamond is Forever (1947) On the topic of campaigns that are underpinned by incredible taglines, De Beers’ 1947 effort followed a concerted decline in the sale of diamonds in the wake of the Great Depression. The iconic text ‘A Diamond is Forever’ was penned by copywriter Frances Gerety at the NW Ayer agency in Philadelphia, while it quickly became the foundation for an extensive print media campaign on behalf of De Beers © McGraw Hill, LLC 30  Some Of The Most Iconic Advertising Campaigns Of All Time US Military – I Want You (1916) Next up is a similar iconic, but highly controversial, military campaign and one that sought to recruit citizens for the US forces during World War I. In a striking print ad, ‘Uncle Sam’ points an imposing and accusing finger at viewers, reinforcing the idea that eligible citizens had a moral responsibility to join the forces and commit to the international war effort. Similar to the UK campaign that featured a striking image of Lord Kitchener and the text ‘Wants You’, such ads highlight the global conscription drive and were highly inspiring and influential in encouraging citizens across a broad range of demographics to join in the war effort. © McGraw Hill, LLC 31  Some Of The Most Iconic Advertising Campaigns Of All Time Nike – Just Do It (1988) Back in 1987, sports brand Nike hired the marketing agency Wieden + Kennedy to develop its first major television campaign, which featured a broad selection of commercials for running, walking, cross-training, basketball and women’s fitness. However, each spot was conceived and developed by a different creative team, creating disparate and disjointed campaigns that did the brand little justice. So, the night before the ads were first run, agency founder Dan Wieden decided that a unifying tagline was required to create a more holistic campaign that could drive brand recognition. So, ‘Just Do It’ was born, with this simplistic but impactful and active slogan introducing an emotional hook to help engage potential customers. Incredibly, the slogan has also evolved to become one of the most iconic in history, while Nike continues to use it extensively to this day. © McGraw Hill, LLC 32  Some Of The Most Iconic Advertising Campaigns Of All Time Apple – Get a Mac (2006) The Apple brand has always been synonymous with classic simplicity, from its clean and sleek products to the now iconic brand. Such values also underpinned Apple’s renowned ‘Get a Mac’ campaign in 2006, which successfully marketed the brand’s flagship laptop as being a preferable and more contemporary alternative to the classic Windows PC. Set against a white backdrop, the ad features two men, one of whom is casually dressed and introduces himself as ‘Mac’. The other character is more formally dressed and relatively buttoned-down, while he describes himself as being a PC. The ads feature various scenarios that highlight the superiority and enhanced functionality of the Mac, while cleverly associating PC and Windows users with the unpopular ‘nerd’ cliche. By simultaneously presenting the Apple Mac as an improved and cooler option, the ads achieved huge success and superbly clarified the brand’s preferred, premium position in the marketplace. © McGraw Hill, LLC 33  POLLING QUESTION 3 Which element of the marketing mix relates to moving products efficiently from producers to consumers? A. Product. B. Price. C. Distribution. D. Promotion. © McGraw Hill, LLC 34  Marketing Research and Information Systems 1 Marketing research—A systematic, objective process of getting information about potential customers to guide marketing decisions. Inside the organization. Continuous flow of information on prices, sales, and expenses. Outside the organization. Data available through public and private reports, census statistics, digital media sources, etc. © McGraw Hill, LLC 35  Marketing Research and Information Systems 2 Primary data. Observed, recorded, or collected directly from respondents. “Mystery shoppers,” surveys, and focus groups. Ethnographic or observational research. Secondary data. Compiled inside or outside an organization for some purpose other than changing the current situation. Government agencies, databases created by marketing research firms, sales and other internal reports. © McGraw Hill, LLC 36  Marketing Research and Information Systems 3 Online Marketing Research. Virtual testing. Combined sight, sound, animation. Digital and social networking sites. Customers willing to share their experiences. Reach new voices, gain varied perspectives. Online surveys. Marketing analytics. Artificial intelligence. Dashboards. Big data. © McGraw Hill, LLC 37  Buying Behavior 1 Buying behavior—the decision processes and actions of people who purchase and use products. Consumer buying behaviour. Business buying behaviour. Psychological variables. Social variables. © McGraw Hill, LLC 38  Buying Behavior 3 Psychological Variables of Buying Behavior. Perception. Motivation. Learning. Attitude. Personality. © McGraw Hill, LLC 40  Buying Behavior 4 Social Variables of Buying Behavior. Social roles. Reference groups. Social classes. Culture. Understanding Buying Behavior. Difficult to explain why a buyer purchases a particular product. Trying to understand is the best way to satisfy customers. © McGraw Hill, LLC 41  The Marketing Environment External forces that directly or indirectly influence the development of marketing strategies. Political, legal, and regulatory forces. Social forces. Competitive and economic forces. Technological forces. Environmental forces… Can change quickly and dramatically. Are interconnected. Are sometimes uncontrollable, but not totally so. © McGraw Hill, LLC 42  Figure 11.4 The Marketing Mix and the Marketing Environment Access the text alternative for these images. © McGraw Hill, LLC 43  POLLING QUESTION 4 In your opinion, what is the most important factor of the external marketing environment when considering the introduction of a new product? A. Political/legal/regulatory forces. B. Social forces. C. Competitive and economic forces. D. Technology forces. © McGraw Hill, LLC 44  Solve the Dilemma © McGraw Hill, LLC 46  Solve the Dilemma Will It Go? 1 Ventura Motors makes midsized and luxury automobiles in the U.S. Success of two-seat sports cars, like the Mazda R X-8, made the company evaluate the market for two-seat sports cars priced midway between moderate and luxury markets. Research found significant demand. Ventura needed to act fast to take advantage of market opportunity. Designed, engineered, and produced in just over two years. Higher-than-anticipated costs. Price set at $32,000 for two-seat car Olympus. © McGraw Hill, LLC 47  Solve the Dilemma Will It Go? 2 However… Initial sales have been slow, and company executives are surprised and concerned. Olympus was introduced quickly, made available at all Venture dealers, priced midway between luxury and moderate models, and advertised heavily. © McGraw Hill, LLC 48  Solve the Dilemma Will It Go? 3 Critical Thinking Questions. 1. What do you think were the main concerns with the Olympus two-door sports coupe? Is there a market for a two-seat, $32,000 sports car when the RX-8 sells for significantly less? 2. What is the role of the marketing mix in the Olympus introduction? 3. What are some of the marketing strategies auto manufacturers use to stimulate sales of certain makes of automobiles? © McGraw Hill, LLC 49  Lucid Motors © McGraw Hill, LLC 52  Because learning changes everything. ® Chapter 10 Managing Human Resources © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.  Learning Objectives 10-1 Explain the significance of human resource management. 10-2 Summarize the processes of recruiting and selecting human resources for a company. 10-3 Discuss how workers are trained and their performance appraised. 10-4 Identify the types of turnover companies may experience. 10-5 Explain why turnover is an important issue. 10-6 Specify the various ways a worker may be compensated. 10-7 Evaluate some of the issues associated with unionized employees, including collective bargaining and dispute resolution. 10-8 Describe the importance of diversity, equity, and inclusion in the workforce. 10-9 Assess an organization’s efforts to reduce its workforce size and manage the resulting effects. © McGraw Hill, LLC 3  Introduction Today’s organizations are more diverse, with employees of different genders, races, ethnicities, abilities, and ages represented in the workforce. © McGraw Hill, LLC ©Rawpixel.com/Shutterstock 4  Nature of Human Resource Management Human resource management (HRM). All the activities involved in determining an organization’s human resource needs. Acquiring, training, and compensating people to fill those needs Maximizing the satisfaction of employees. Motivating employees to meet organizational objectives productively. © McGraw Hill, LLC 5  Planning for Human Resource Needs Determine the number of employees/skills needed to satisfy organization’s plans. Forecast the number of qualified employees that will need to be hired, or determine if layoffs are required. Analyze the organization’s jobs. Job analysis. Job description. Job specification. © McGraw Hill, LLC 6  Recruiting and Selecting New Employees 1 Recruiting. Forming a pool of qualified applicants from which management can select employees. Internal sources. External sources. Job listing websites. College and university campuses. Headhunters. © McGraw Hill, LLC 7  Recruiting and Selecting New Employees 2 Selection. Process of collecting information about applicants and using that information to make hiring decisions. Includes: The application. The interview. Testing. Reference checking. © McGraw Hill, LLC 8  Table 10.1 Most Common Questions Asked during the Interview 1. What are your strengths? 2. What are your weaknesses? 3. Why are you interested in working for this company? 4. Where do you see yourself in five years? Ten years? 5. Why do you want to leave your current company? 6. Why was there a gap in your employment between [insert date] and [insert date]? 7. What can you offer us that someone else cannot? 8. What are three things your former manager would like you to improve on? 9. Are you willing to relocate? 10.Are you willing to travel? Source: “50 Most Common Interview Questions,” Glassdoor, October 21, 2019, https://www.glassdoor.com/blog/common-interviewquestions/ (accessed June 9, 2020). © McGraw Hill, LLC 9  Personality Tests Personality tests such as Myers-Briggs are used to assess an applicant’s potential for a certain kind of job. For instance, extroversion and a love of people would be good qualities for a retail job. © McGraw Hill, LLC ©stockphoto mania/Shutterstock 10  Table 10.2 Top Ten Most Common Résumé Lies 1. Education. 2. Employment dates. 3. Technical skills. 4. Previous employment history. 5. Fluency in another language. 6. GPA. 7. Previous job descriptions. 8. Graduation year. 9. Promotions. 10.Salary. Source: “20 Most Common Lies on Resumes and Why Applicants Get Caught,” Skillsroads.com, https://skillroads.com/blog/mostcommon-lies-on-resumes (accessed June 9, 2020). © McGraw Hill, LLC 11  POLLING QUESTION 1 You are the chair of a hiring committee searching for new talent. In your opinion, which source of information should you place the greatest value in during the interview process? A. Application. B. Interview. C. Employment Test. D. References. © McGraw Hill, LLC 12  Legal Issues in Recruiting and Selecting 2 Americans with Disabilities Act (ADA). Prevents discrimination against people with disabilities. Age Discrimination in Employment Act. Outlaws discrimination based on age; focus is on people 40 years and older. Equal Pay Act. Mandates that men and women who do equal work receive the same wage. Wage differences are acceptable if based on seniority, performance, or qualifications. © McGraw Hill, LLC 14  Developing the Workforce 1 Orientation—Familiarizes newly hired employees with fellow workers, company procedures, and the physical properties of the company. Tour of the building. Introductions to supervisors and co-workers. Distribution of manuals and policies. Socializing the new employee into the ethics and culture of the company. © McGraw Hill, LLC 16  Developing the Workforce 2 Training and Development. Training. On-the-job training. Classroom training. Mentoring. Development. © McGraw Hill, LLC 17  Classroom Training McDonald’s Hamburger University, with locations in Chicago, Tokyo, London, Sydney, Munich, Shanghai, and São Paulo, provides learning and training for its employees and partners to build long-lasting careers. © McGraw Hill, LLC Qilai Shen/Bloomberg/Getty Images 18  Developing the Workforce 3 Assessing Performance. One of the most difficult tasks for managers. Crucial activity because it: Gives employees feedback. Provides a basis for determining compensation. Generates information about the quality of the firm’s selection, training, and development activities. Objective or subjective. 360-degree feedback system. Decreasing negative employee feedback. © McGraw Hill, LLC 19  Developing the Workforce 4 Turnover. Occurs when employees quit or are fired and must be replaced by new employees. Losses in productivity. Promotion. Advancement to a higher-level job with increased authority, responsibility, and pay. Transfer. Move to another job within the company at the same level and wage. © McGraw Hill, LLC 20  Downsizing Many companies in recent years are choosing to downsize by eliminating jobs. Reasons for downsizing might be due to financial constraints or the need to become more productive and competitive. © McGraw Hill, LLC ©belterz/iStockphoto 21  Developing the Workforce 5 Separations. Occur when employees resign, retire, are terminated, or laid off. Traditionally, employees could be fired at-will. Legislation now requires that companies fire employees fairly, for just cause only. Want to minimize losses due to separations. Recruiting and training is expensive. Exit interviews. © McGraw Hill, LLC 22  Table 10.3 Actions You Should and Shouldn’t Take When You Are Terminated 1. Do not criticize your boss who terminated you. 2. Do not take files or property that is not yours. 3. Do try to get a reference letter. 4. Do not criticize your former employer during job interviews. 5. Do look to the future and be positive about new job opportunities. © McGraw Hill, LLC 23  Compensating the Workforce 1 Wage/salary survey. Pay and benefits represent a substantial expense for a firm. Compensation for a specific job is typically determined through a wage/salary survey. Tells a company how much compensation comparable firms are paying for specific jobs that the firms have in common. © McGraw Hill, LLC 24  Compensating the Workforce 2 Financial Compensation. Wages. Hourly wages provide no incentive to increase productivity. Commission. Can motivate employees. Salary. May be required to work beyond usual hours without additional compensation. Bonuses. Profit sharing. ESOPs. © McGraw Hill, LLC 25  Compensating the Workforce 3 Benefits. Nonfinancial forms of compensation provided to employees. Pension plans. Health insurance. Paid vacation. Holidays. Employee assistance program (EAP). © McGraw Hill, LLC 26  Compensating the Workforce 4 Benefits. Fringe benefits. Sick leave, vacation pay, pension plans, health plans. Soft benefits. Perks that help balance life and work. Cafeteria benefit plans. Provide financial amount employees can use to select specific benefits that fit their needs. © McGraw Hill, LLC 27  POLLING QUESTION 3 Employees at Acme Corp. can launder/dry clean clothing at work. This benefit is known as a _____ benefit. A. Soft. B. Fringe. C. Paid. D. Cafeteria. © McGraw Hill, LLC 28  Managing Unionized Employees 1 Labor Unions—employee organizations formed to achieve better pay, hours, and working conditions. On average, union workers make about $200 more than nonunion workers. Union growth has slowed in recent years. Significant aspects of HRM, particularly compensation, are dictated by union contracts. © McGraw Hill, LLC 29  Managing Unionized Employees 2 Collective bargaining—Negotiation process by management and unions to reach an agreement about compensation, working hours, and working conditions for the bargaining unit. Labor contract—Formal written document delineating the relationship between union and management for a specified period of time, usually two or three years. Cost-of-living escalator (COLA) clause. Givebacks. © McGraw Hill, LLC 30  Figure 10.1 The Collective Bargaining Process Access the text alternative for these images. © McGraw Hill, LLC 31  Managing Unionized Employees 3 Resolving Disputes. Labor tactics. Picketing. Strikes. Boycotts. Management tactics. Lockout. Strikebreakers. © McGraw Hill, LLC 32  Managing Unionized Employees 4 Outside Resolution. Conciliation. Mediation. Arbitration. Compulsory arbitration. © McGraw Hill, LLC 33  The Importance of Workforce Diversity, Equity, and Inclusion 1 Diversity. Presence of differences within an organization based on factors such as race, gender, religion, sexual orientation, ethnicity, nationality, socioeconomic status, language, abilities, age, or political beliefs. Equity. Providing equal opportunities and fair treatment for all employees. Inclusion. Degree to which diverse individuals are valued and welcomed by the organization. © McGraw Hill, LLC 35  The Importance of Workforce Diversity, Equity, and Inclusion 2 The Characteristics of Diversity. Primary characteristics. Secondary characteristics. Each person is defined by the interrelation of all characteristics. Managers must consider the complete person. © McGraw Hill, LLC 36  Figure 10.2 Characteristics of Diversity Source: Marilyn Loden and Judy B. Rosener, Workforce America! Managing Employee Diversity as a Vital Resource (New York: McGraw- Hill, 1991), p. 20. Access the text alternative for these images. © McGraw Hill, LLC 37  The Importance of Workforce Diversity, Equity, and Inclusion 3 Why Are Diversity, Equity, and Inclusion Important? U.S. workforce is increasingly diverse. More than half of the population under age 16 identifies as a racial or ethnic minority. Companies are trying to improve HRM programs to recruit, develop, retain more diverse employees. © McGraw Hill, LLC 38  The Importance of Workforce Diversity, Equity, and Inclusion 4 The Benefits of Diversity, Equity, and Inclusion. More productive use of human resources. Reduced conflict among employees. More productive working relationships. Increased commitment to organizational goals. Increased innovation and creativity. Increased ability to serve the needs of an increasingly diverse customer base. Contributions, presence, and perspectives of different groups are integrated into the work environment. © McGraw Hill, LLC 39  The Importance of Workforce Diversity, Equity, and Inclusion 5 Affirmative Action. Legally mandated plans. Try to increase job opportunities for underrepresented groups. Analyze the current pool of workers, identifying areas where certain groups are underrepresented. Establish specific hiring and promotion goals, with target dates, for addressing the discrepancy. © McGraw Hill, LLC 40  Solve the Dilemma Morale among the Survivors 1 © McGraw Hill, LLC 43  Solve the Dilemma Morale among the Survivors 1 Medallion Corporation manufactures quality carpeting and linoleum for homes throughout the United States. Recession and subsequent downturn in home sales has sharply cut the company’s sales. Have to lay off hundreds of employees in the home office (manufacturing facilities) and salespeople. One additional month of work. One month of severance pay. Opportunity to sign up for classes to help with transition. Several months after the cutback, morale was at an all-time low for the company although productivity had improved. © McGraw Hill, LLC 44  Solve the Dilemma Morale among the Survivors 2 Consultant suggested: Leaner, flatter organizational structure would be suitable for more team activities. Set up task forces and teams to deal with employee concerns. But diversity of the workforce led to conflict and misunderstandings among team members. © McGraw Hill, LLC 45  Solve the Dilemma Morale among the Survivors 3 Critical Thinking Questions. 1. What did Medallion’s HRM department do right in dealing with the employees who were laid off? 2. What are some of the potential problems that must be dealt with after an organization experiences a major trauma such as massive layoffs? 3. What can Medallion do to make the team approach work more smoothly? What role do you think diversity training should play? © McGraw Hill, LLC 46  Women lean in to leadership © McGraw Hill, LLC 47 © McGraw Hill, LLC 48  Because learning changes everything. ® Chapter 9 Motivating the Workforce © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.  Learning Objectives 9-1 Explain why the study of human relations is important. 9-2 Summarize early studies that laid the groundwork for understanding employee motivation. 9-3 Compare and contrast the human relations theories of Abraham Maslow and Frederick Herzberg. 9-4 Investigate various theories of motivation, including Theories X, Y, and Z; equity theory; expectancy theory; and goal-setting theory. 9-5 Describe some of the strategies that managers use to motivate employees. 9-6 Critique a business’s program for motivating its salesforce. © McGraw Hill, LLC 3  Nature of Human Relations 1 Human relations—The study of the behavior of individuals and groups in organizational settings. Involves motivating employees to achieve organizational objectives efficiently and effectively. Motivation—Inner drive that directs a person’s behavior toward a goal. A goal is the satisfaction of some need. A need is the difference between an actual state and a desired state. © McGraw Hill, LLC 4  Motivation Motivation is important both in business and outside of it. For instance, coaches motivate athletes before major games to increase their chances they will play their best. © McGraw Hill, LLC Chris Brown/CSM/Shutterstock 5  Motivation: Al Pacino best speech - Any Given Sunday © McGraw Hill, LLC Chris Brown/CSM/Shutterstock 6  Figure 9.1 The Motivation Process © McGraw Hill, LLC 7  POLLING QUESTION 1 One objective of _____ involves motivating employees to achieve organizational goals efficiently and effectively. A. Need satisfaction. B. Human relations. C. Employee morale. D. Motivational theory. © McGraw Hill, LLC 8  Nature of Human Relations 2 Morale—An employee’s attitude toward their job, employer, and colleagues. High morale leads to: High levels of productivity. High returns to stakeholders. Employee loyalty. Low morale leads to: High rates of absenteeism. High rates of employee turnover. © McGraw Hill, LLC 9  Nature of Human Relations 3 Both intrinsic and extrinsic rewards contribute to motivation. Intrinsic rewards. Personal satisfaction and enjoyment you feel from attaining a goal. Extrinsic rewards. Benefits and/or recognition you receive from someone else. © McGraw Hill, LLC 10  Table 9.1 How to Retain Good Employees 1. Offer ongoing training opportunities. 2. Create a positive organizational culture. 3. Support free-flowing communication. 4. Blend compensation, benefits, and recognition. 5. Encourage referrals and don’t overlook internal recruiting. 6. Coach employees, provide feedback, and offer mentoring programs. 7. Provide growth opportunities. 8. Support work/life balance and minimize stress. 9. Foster trust, respect, and confidence in high-level management. © McGraw Hill, LLC 11  POLLING QUESTION 2 You have been asked to help increase employee retention at Smiles Dentistry. Where do you think you should focus all your efforts? A. Training and mentorship. B. Compensation, benefits, and recognition. C. Work/life balance. D. Interactions with senior leadership. © McGraw Hill, LLC 12  Historical Perspectives on Employee Motivation 1 Classical Theory of Motivation. Theory suggesting that money is the sole motivator for workers. Time and motion studies. Frederick W. Taylor, Frank and Lillian Gilbreth. Analyzed how workers performed tasks to improve productivity. Led to the application of scientific principles to management. Taylor’s ideas still in practice today. Financial incentives for productivity. © McGraw Hill, LLC 13  Historical Perspectives on Employee Motivation 2 The Hawthorne Studies. Early 20th century at the Hawthorne Works Plant. Elton Mayo. Postulated that physical conditions in the workplace stimulate productivity. Productivity increased regardless of physical conditions (the Hawthorne effect). Findings showed that social and psychological factors could affect productivity and morale. Marked the beginning of concern for human relations in the workplace. © McGraw Hill, LLC 14  Theories of Employee Motivation 1 Maslow’s hierarchy. Psychologist Abraham Maslow. A theory that arranges the five basic needs of people— physiological, security, social, esteem, and self- actualization—into the order in which people strive to satisfy them. Source: Adapted from Abraham H. Maslow, “A Theory of Human Motivation,” Psychology Review 50 (1943), pp. 370–396. American Psychology Association. © McGraw Hill, LLC 15  Theories of Employee Motivation 2 Herzberg’s Two-Factor Theory. Hygiene factors. Relate to the work setting and not to the content of the work. Do not necessarily motivate people to excel, but their absence may dissatisfy workers. Motivational factors. Relate to the content of the work itself. Absence may not result in dissatisfaction, but presence is likely to motivate. © McGraw Hill, LLC 16  Table 9.2 Herzberg’s Hygiene and Motivational Factors Hygiene Factors Motivational Factors Company policies Achievement Supervision Recognition Working conditions Work itself Relationships with peers, supervisors, Responsibility and subordinates Salary Advancement Security Personal growth © McGraw Hill, LLC 17  Motivation Factors at Google Google’s employee-friendly offices feature elements like basketball courts, pinball machines, and photo booths to foster creativity and make work more enjoyable. © McGraw Hill, LLC ©Daniel Brenner/Bloomberg/Getty Images 18  Theories of Employee Motivation 3 McGregor’s Theory X and Y. Theory X is a traditional view of management. 1. The average person naturally dislikes work and will avoid it when possible. 2. Most workers must be coerced, controlled, directed, or threatened with punishment to get them to work toward achieving organizational objectives. 3. The average worker prefers to be directed, avoids responsibility, has little ambition, and wants security. © McGraw Hill, LLC 19  Theories of Employee Motivation 4 McGregor’s Theory X and Y. Theory Y. 1. The expenditure of physical and mental effort in work is as natural as play or rest. 2. People will exercise self-direction and self-control to achieve objectives to which they are committed. 3. People will commit to objectives when they realize that the achievement of those goals will bring them personal reward. 4. The average person will accept and seek responsibility. 5. Imagination, ingenuity, and creativity can help solve organizational problems, but most organizations do not make adequate use of these characteristics in their employees. 6. Organizations today do not make full use of workers’ intellectual potential. © McGraw Hill, LLC 20  Theories of Employee Motivation 5 Theory Z. Management philosophy that stresses employee participation in all aspects of company decision making. First described by William Ouchi. Incorporates elements of the Japanese approach to management; trust and intimacy. Managers and workers share responsibilities. Participative management style. Long-term, often lifelong employment. © McGraw Hill, LLC 21  Table 9.3 Comparisons of Theories X, Y, and Z Factor Theory X Theory Y Theory Z Countries that China United States Japan use this style Philosophy Tight control Assume workers will seek Employee over workers out responsibility and participation in all satisfy social needs aspects of company decision making Job Considerable Less control and Trust and intimacy description specialization supervision; address with workers sharing higher levels of Maslow’s responsibilities hierarchy Control Tight control Commitment to objectives Relaxed but required with self-direction expectations Worker Limited Democratic Commitment to welfare concern worker’s total lives Responsibility Managerial Collaborative Participative © McGraw Hill, LLC 22  Theories of Employee Motivation 6 Equity Theory. How much people are willing to contribute to an organization depends on their assessment of the fairness, or equity, of the rewards they will receive in exchange. Equity is a subjective notion. May explain why many consumers are upset about CEO compensation. Feelings of inequity may lead to unethical behaviour. © McGraw Hill, LLC 23  Theories of Employee Motivation 7 Expectancy Theory. Motivation depends not only on how much a person wants something, but also on the person’s perception of how likely they are to get it. Goal-Setting Theory. Refers to the impact that setting goals has on performance. Management by objectives (MBO). © McGraw Hill, LLC 24  POLLING QUESTION 3 Meta offers employees work areas where they can gather, share ideas, relax, play games, and unwind. According to McGregor, this style of management is most likely following the _____ theory of motivation. A. W. B. X. C. Y. D. Z. © McGraw Hill, LLC 25  Strategies for Motivating Employees 1 Behavior Modification. Involves changing behavior and encouraging appropriate actions by relating the consequences of behavior to the behavior itself. Reinforcement theory. Behavior that is rewarded will tend to be repeated. Behavior that is punished will tend to be eliminated. Two strategies may not be equally effective. Generally, rewarding appropriate behavior is more effective. © McGraw Hill, LLC 26  Strategies for Motivating Employees 2 Job Design. Managers can use job design strategies to improve employee motivation. Job rotation. Job enlargement. Job enrichment. © McGraw Hill, LLC 27  Table 9.4 Benefits of Job Rotation 1. Being exposed to different business areas. 2. Nurturing employees. 3. Supporting ongoing learning and improvement. 4. Preparing for more senior roles. 5. Accelerating professional development. 6. Building new hard and soft skills. 7. Boosting overall productivity. 8. Enhancing recruiting and retention efforts. © McGraw Hill, LLC 28  Strategies for Motivating Employees 3 Job Design. Flexible scheduling strategies. Flextime. Compressed workweek. Job sharing. Allowing full-time workers to work part-time for a certain time period. Allowing workers to work at home either full- or part-time. © McGraw Hill, LLC 29  Figure 9.3 Flextime, Showing Core and Flexible Hours Access the text alternative for these images. © McGraw Hill, LLC 30  Working Remotely Working remotely is becoming increasingly common. Telecommuting, job sharing, and flextime can be beneficial for employees who cannot work normal work hours. © McGraw Hill, LLC ©nd3000/Shutterstock 31  POLLING QUESTION 4 Isa, a recent college graduate, is hired by Lean Street Consulting and given several options for a work schedule. Each one requires her to work a minimum of 40 hours per week. In your opinion, which should she choose? A. Flexible hours. B. Work remotely. C. Compressed workweek. D. Traditional 9:00 to 5:00. © McGraw Hill, LLC 32  Strategies for Motivating Employees 4 Importance of Motivational Strategies. Fosters employee loyalty. Boosts productivity. Influences pay, promotion, job design, training opportunities, and reporting relationships. Employees are motivated by the nature of: The relationship they have with supervisors. Their jobs. The characteristics of the organization. © McGraw Hill, LLC 33  Motivational Strategies Businesses have come up with different ways to motivate employees, including rewards such as trophies and plaques to show the company’s appreciation. © McGraw Hill, LLC ©Caiaimage/Paul Bradbury/OJO+/Getty Images 34  Table 9.5 Companies with Excellent Motivational Strategies 1 Company Motivational Strategies 3M Gives employees 15 percent of their time to pursue own projects Google Perks include a massage every other week, free gourmet lunches, tuition reimbursement, a volleyball court, and time to work on own projects Whole Foods Employees receive 20–30 percent discounts on company products, the opportunity to gain stock options, and the ability to make major decisions in small teams Patagonia Provides areas for yoga and aerobics, in-house child care services, organic food in its café, and opportunities to go surfing during the day The Container Store Provides more than 260 hours of employee training and hosts “We Love Our Employees” Day © McGraw Hill, LLC 35  Table 9.5 Companies with Excellent Motivational Strategies 2 Company Motivational Strategies Southwest Gives employees permission to interact with passengers as Airlines they see fit, provides free or discounted flights, and hosts the “Adopt-a-Pilot” program to connect pilots with students across the nation Nike Offers tuition assistance, product discounts, onsite fitness centers, and the ability for employees to give insights on how to improve the firm Apple Creates a fast-paced, innovative work environment where employees are encouraged to debate ideas Hilton Offers friends and family travel discounts, promotes Hotels & lifelong learning with its leadership development framework, Resorts and celebrates achievements through an employee recognition program Zappos Creates a fun, zany work environment for employees and empowers them to take as much time as needed to answer customer concerns © McGraw Hill, LLC 36  Solve the Dilemma 37 © McGraw Hill, LLC  Solve the Dilemma Motivating to Win 1 Eagle Pharmaceutical has long been recognized for its innovative techniques for motivating its salesforce. Features the salesperson who has been most successful during the previous quarter in the company newsletter “Touchdown.” Receive football jersey. Plaque. $1,000 worth of Eagle’s stock. “Superbowl Club” for employees who reach or exceed their sales goals. “Heisman Award” trip to Caribbean for top 20 salespeople. © McGraw Hill, LLC 38  Solve the Dilemma Motivating to Win 2 Videoconference hookup. Between honored salesperson and four regional sales managers to share some tactics and strategies winning salesperson uses to succeed. Managers summarize these ideas and pass them along to their salespeople. Sales managers feel strongly that by sharing strategies and tactics, they can be successful. © McGraw Hill, LLC 39  Solve the Dilemma Motivating to Win 3 Critical Thinking Questions. 1. Which motivational theories are in use at Eagle? 2. What is the value of getting employees to compete against a goal instead of against one another? 3. Put yourself in the shoes of one of the four regional sales managers and argue against potential cutbacks to the motivational program. © McGraw Hill, LLC 40  Motivation: Hilton’s strategy 41 © McGraw Hill, LLC  Motivation: Patagonia’s strategy 42 © McGraw Hill, LLC  High performance culture: Google 43 © McGraw Hill, LLC  Google’s office in Cambridge 44 © McGraw Hill, LLC  Google’s office in Tel Aviv 45 © McGraw Hill, LLC  Digital workspace Technology has transformed how people work and has created the digital workspace. «a way of describing the broad set of connected technologies that employees use on a daily basis to do their jobs» (marsh 2018): this means that we no longer need to visit a physical office as we can connect to all our resources from work files to customer data, throught cloud computing using our laptop in a coffee shop or in a collaborative workspace 46 © McGraw Hill, LLC  Smartphone Sixty seconds – find collaboration tools Take out your mobile phone and search for «collaboration tools» How many do you find? Have you ever used any of these collaboration tools? Why do you think this is a growing business? What are the best abnd worst factors about collaboration tools?