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Creating Customer Relationships and Value through Marketing
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LEARNING OBJECTIVES
After reading this chapter you should be able to:
LO 1-1 Define marketing and identify the diverse factors that influence marketing actions.
LO 1-2 Explain how marketing discovers and satisfies consumer needs.
LO 1-3 Distinguish between marketing mix factors and environmental forces.
LO 1-4 Explain how organizations build strong customer relationships and customer value through marketing.
LO 1-5 Describe how today’s customer relationship era differs from prior eras.
At Chobani, Marketing Is “Nothing but Good”!
If you are like many consumers today, your food tastes have been changing. Interest in healthful, nutritious, organic products is growing dramatically, and companies like Chobani are creating new offerings to provide customer value!
It was Hamdi Ulukaya’s marketing saavy that first helped him create Chobani. As an immigrant from Turkey, he observed that American-style yogurt “was full of sugar and preservatives,” unlike the typical Greek-style yogurt he experienced growing up. The Greek yogurt was strained to remove the liquid whey and had more protein than the unstrained American yogurts marketed by Yoplait and Dannon. To meet the changing tastes of American consumers, Ulukaya bought a recently closed dairy in a small town in New York with a Small Business Administration loan and began developing a new yogurt recipe.1
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Understanding Consumers’ Food Values
“I was very picky. It took us 18 months to get the recipe right. I knew I had only one shot, and it had to be perfect,” says Ulukaya. The result was Chobani Greek Yogurt, a product that is higher in protein, lower in sugar, and thicker and creamier than typical American yogurt. The timing fit perfectly with the shift in demand for healthier and simpler products. Food purchases by young adults, particularly millennials, were increasingly influenced by concern for wellness. Chobani’s yogurt and its message “Nothing But Good” fit consumers’ new values.
Reaching Customers
Chobani had little money for traditional advertising, so the new company relied on positive word of mouth, with one happy customer telling another about the new style of yogurt. In 2010, Chobani’s “CHOmobile” started to tour the country, handing out free samples to encourage consumers to try Chobani’s Greek Yogurt for the first time. In addition, one of Chobani’s biggest breakthroughs in gaining public awareness was its sponsorship of the 2012 U.S. Olympic and Paralympic Teams.
The company also created a YouTube channel that featured “Just Add Good” recipes to show customers how to use yogurt in meals and desserts. It also interacted with consumers through other social media sites such as Twitter and Instagram, and in just five years had 800,000 Facebook fans.
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Chobani 2014 Super Bowl Ad kerin.tv/13e/v1-1
Chobani also pushed for distribution in major grocery chains rather than smaller niche stores, and encouraged placement of the product in the main dairy cases of the stores, not the specialty or health food sections. Ulukaya was convinced that Americans would really like Greek yogurt if they tried it, and that they
Chobani LLC
VIDEO 1-1
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would try it if they had heard about it and could find it easily in their grocery store. By 2013 Chobani Greek Yogurt was sold nationwide in the United States, the United Kingdom, and Australia.
Chobani Today
Chobani continues to monitor changing consumer tastes and offers new products to accommodate them. For example, the company recently introduced Chobani Kids and Chobani Tots Greek yogurt pouches, Chobani Greek Yogurt Oats—Ancient Grain Blend, and Chobani Flip Creations. The products are designed for new and existing consumers and for new eating
occasions.
One way Chobani stays in touch with consumer interests is through its yogurt café in New York’s SoHo neighborhood. New ideas are continually tested on the menu and the feedback has been so useful that Chobani plans to open similar outlets in Los Angeles, San Francisco, Chicago, and other U.S. cities. Chobani also recently announced a plan to open the Chobani Food Incubator, which is designed to invest in and cultivate ideas from emerging food entrepreneurs.
Today, Chobani boasts a 40 percent market share of the Greek Yogurt segment, which makes up almost half of the $8 billion yogurt market. The company’s success has even led to a Super Bowl ad featuring a 1,400-pound bear in search of a healthy snack!
Chobani, Marketing, and You
Will Hamdi Ulukaya and his Chobani Greek Yogurt continue this fantastic success story—especially with the recent appearance of competing Greek yogurts from
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Located in New York City, Chobani SoHo is the brand’s first-of-its-kind retail concept, serving yogurt creations with innovative toppings. © Diane Bondareff/Invision for Chobani/AP Images
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Yoplait, Dannon, and PepsiCo? For Ulukaya, one key factor will be how well Chobani understands and uses marketing—the subject of this book.
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WHAT IS MARKETING? The good news is that you are already a marketing expert! You perform many marketing activities and make marketing- related decisions every day. For example, would you sell more LG 77-inch 4K UltraHD OLED TVs at $24,999 or $2,499? You answered $2,499, right? So your experience in shopping gives you some expertise in marketing. As a consumer, you’ve been involved in thousands of marketing decisions, but mostly on the buying and not the selling side. But to test your expertise, answer the “marketing expert” questions posed in Figure 1–1. You’ll find the answers within the next several pages.
The bad news is that good marketing isn’t always easy. That’s why every year thousands of new products fail in the marketplace and then quietly slide into oblivion.
Are you a marketing expert? If so, what would you pay for this cutting-edge TV? Source: LG Electronics
Figure 1–1 The see-if-you’re-really-a-marketing-expert test.
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Marketing and Your Career
Marketing affects all individuals, all organizations, all industries, and all countries. This book seeks to teach you marketing concepts, often by having you actually “do marketing”—by putting you in the shoes of a marketing manager facing actual marketing decisions. The book also shows marketing’s many applications and how it affects our lives. This knowledge should make you a better consumer and enable you to be a more informed citizen, and it may even help you in your career planning.
Perhaps your future will involve doing sales and marketing for a large organization. Working for a well-known company—Apple, Ford, Facebook, or General Mills—can be personally satisfying and financially rewarding, and you may gain special respect from your friends.
Small businesses also offer marketing careers. Small businesses are the source of the majority of new U.S. jobs. So you might become your
own boss by being an entrepreneur and starting your own business.
In February 2004, a 19-year-old college sophomore from Harvard University started his own small web service business from his dorm room. He billed it as “an online directory that connects people through social networks at colleges.” That student, of course, was Mark Zuckerberg. The success of the Facebook launch defies comprehension. Zuckerberg’s Thefacebook.com website signed up 900 Harvard students in the four days after it appeared in early 2004. By the second week there were almost 5,000 members, and today there are more than 1.4 billion members throughout the world. Perhaps your interest in marketing will lead to the next sensational new business success!
MARKETING: DELIVERING VALUE TO CUSTOMERS
The chief executive officer of the world’s largest social media company started it as a 19-year-old college sophomore. © David Paul Morris/Bloomberg via Getty Images
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LO 1-1
Define marketing and identify the diverse factors that influence marketing actions.
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The American Marketing Association represents individuals and organizations involved in the development and practice of marketing worldwide. It defines ma rketing as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. This definition shows that marketing is far more than simply advertising
or personal selling. It stresses the need to deliver genuine value in the offerings of goods, services, and ideas marketed to customers. Also, notice that an organization’s marketing activities should also create value for its partners and for society.
To serve both buyers and sellers, marketing seeks (1) to discover the needs and wants of prospective customers and (2) to satisfy them. These prospective customers include both individuals, buying for themselves and their households, and organizations, buying for their own use (such as manufacturers) or for resale (such as wholesalers and retailers). The key to achieving these two objectives is the idea of exchange , which is the trade of things of value between a buyer and a seller so that each is better off after the trade.
The Diverse Elements Influencing Marketing Actions
Although an organization’s marketing activity focuses on assessing and satisfying consumer needs, countless other people, groups, and forces interact to shape the nature of its actions (see Figure 1– 2). Foremost is the organization itself, whose mission and objectives determine what business it is in and what goals it seeks. Within the organization, management is responsible for establishing these goals. The marketing department works closely with a network of other departments and employees to help provide the customer-satisfying products required for the organization to survive and prosper.
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Figure 1–2 also shows the key people, groups, and forces outside the organization that influence its marketing activities. The marketing department is responsible for facilitating relationships, partnerships, and alliances with the organization’s customers, its shareholders (or often representatives of nonprofit organizations), its suppliers, and other organizations. Environmental forces involving social, economic, technological, competitive, and regulatory considerations also shape an organization’s marketing
Figure 1–2 A marketing department relates to many people, organizations, and forces. Note that the marketing department both shapes and is shaped by its relationship with these internal and external groups.
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actions. Finally, an organization’s marketing decisions are affected by and, in turn, often have an important impact on society as a whole.
The organization must strike a balance among the sometimes differing interests of these groups. For example, it is not possible to simultaneously provide the lowest-priced and highest-quality products to customers and pay the highest prices to suppliers, the highest wages to employees, and the maximum dividends to shareholders.
What Is Needed for Marketing to Occur
For marketing to occur, at least four factors are required: (1) two or more parties (individuals or organizations) with unsatisfied needs, (2) a desire and ability on their part to have their needs satisfied, (3) a way for the parties to communicate, and (4) something to exchange.
Two or More Parties with Unsatisfied Needs
Suppose you’ve developed an unmet need—a desire for a late-night dinner after studying for an exam —but you don’t yet know that Domino’s Pizza has a location in your area. Also unknown to you is that Domino’s has a special offer for its tasty Handmade Pan Pizza, just waiting to be ordered, handmade, and delivered. This is an example of two parties with unmet needs: you, desiring a meal, and your local Domino’s Pizza owner, needing someone to buy a Handmade Pan Pizza.
Desire and Ability to Satisfy These Needs
Both you and the Domino’s Pizza owner want to satisfy these unmet needs. Furthermore, you have the money to buy the Domino’s Handmade Pan Pizza and the time to order it online or over the telephone. The Domino’s owner has not only the desire to sell its Handmade Pan Pizza but also the ability to do so since the pizza is easily made and delivered to (or picked up by) you.
A Way for the Parties to Communicate
Marketing doesn’t happen in a vacuum. The text describes the four factors needed to buy a product like a Domino’s Handmade Pan Pizza. Source: © Domino’s Pizza
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The marketing transaction of purchasing a Domino’s Handmade Pan Pizza will never occur unless you know the product exists and its location (street/web address and/or phone number). Similarly, the Domino’s Pizza owner won’t sell the Handmade Pan Pizza unless there’s a market of potential buyers nearby. When you receive a coupon on your phone or drive by the Domino’s store location, this communication barrier between you (the buyer) and the Domino’s Pizza owner (the seller) is overcome.
Something to Exchange
Marketing occurs when the transaction takes place and both the buyer and seller exchange something of value. In this case, you exchange your money ($8.99) for the Domino’s Handmade Pan Pizza. Both you and the Domino’s Pizza owner have gained and also given up something, but you are both better off because each of you has satisfied the other’s unmet needs. You have the opportunity to eat a Domino’s Handmade Pan Pizza to satisfy your hunger, but you gave up some money to do so; the Domino’s Pizza owner gave up the Handmade Pan Pizza but received money, which will help the owner remain in business. The ethical and legal foundations of this exchange process are central to marketing and are discussed in Chapter 4.
learning review
1-1. What is marketing? 1-2. Marketing focuses on __________ and __________ consumer needs. 1-3. What four factors are needed for marketing to occur?
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LO 1-2
Explain how marketing discovers and satisfies consumer needs.
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HOW MARKETING DISCOVERS AND SATISFIES CONSUMER NEEDS
The importance of discovering and satisfying consumer needs in order to develop and offer successful products is so critical to understanding marketing that we look at each of these two steps in detail next. Let’s start by asking you to analyze the three products below.
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A message pad with handwriting recognition software. © SSPL/Getty Images
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An e-commerce site with financial benefits for users. Courtesy of StuffDOT, Inc.
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Discovering Consumer Needs
The first objective in marketing is discovering the needs of prospective customers. Marketers often use customers surveys, concept tests, and other forms of marketing research (discussed in detail in C hapter 8) to better understand customer ideas. Many firms also use “crowdsourcing” websites to solicit and evaluate ideas from customers. At LEGO Group, for example, ideas that receive 10,000 votes from site visitors are considered for possible addition to the product line. LEGO Group products that were discovered through the website include its Ghostbuster ambulance, its Mars rover Curiosity, and a set based on the Minecraft video game! Sometimes, however, customers may not know or be able to describe what they need and want. Personal computers, smartphones, and electric cars are all examples of this, in which case an accurate long-term prediction of consumer needs is essential.
For these three products, identify (1) what benefits the product provides buyers and (2) what factors or “showstoppers” might doom the product in the marketplace. Answers are discussed in the text.
A mid-calorie cola. © Consumer Trends/Alamy
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The Challenge: Meeting Consumer Needs with New Products
While marketers are improving the ways they can generate new product ideas, experts estimate that it takes 3,000 raw ideas to generate one commercial success. Market intelligence agency Mintel estimates that 33,000 new products are introduced worldwide each month. In addition, studies of new-product launches indicates that about 40 percent of the products fail. Robert M. McMath, who has studied more than 110,000 of these new-product launches, has two key suggestions: (1) focus on what the customer benefit is, and (2) learn from past mistakes.
The solution to preventing product failures seems embarrassingly obvious. First, find out what consumers need and want. Second, produce what they need and want, and don’t produce what they don’t need and want. The three products shown above illustrate just how difficult it is to achieve new- product success, a topic covered in more detail in Chapter 10.
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Without reading further, think about the potential benefits to customers and possible “showstoppers”—factors that might doom the product—for each of the three products pictured. Some of the products may come out of your past, and others may be on your horizon. Here’s a quick analysis of the three products:
Apple Newton. In the 1990s Apple launched its Newton MessagePad, the first handheld device in a category that came to be known as personal digital assistants. Apple invested more than $1.5 billion in today’s dollars but sold just a few hundred thousand units before Steve Jobs took the product off the market. In many ways the showstopper for this product was that it was before its time. It launched before the World Wide Web, before cellphones, and before the broad use of e-mail. As a result, while the product was revolutionary, the uses for consumers were limited!10
StuffDOT Strategies kerin.tv/13e/v1-2
StuffDOT . This recent start-up is a social e-commerce site that seeks to reward consumers for their online shopping and sharing activity. This is possible because Internet retailers like Amazon and Target.com make small payments to the owners of websites that refer shoppers to their products. These payments are a big and growing business, generating a projected $4.5 billion in 2016. StuffDOT’s founders believe that consumers deserve to share in those payments, so they have developed a platform that enables users to earn a portion of the revenue that they generate by sharing links and shopping online. A potential showstopper: Will consumers understand the benefits of StuffDOT well enough to change their shopping habits to take advantage of the opportunity?
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Firms spend billions of dollars annually on marketing and technical research that significantly reduces, but doesn’t eliminate, new-product failure. So meeting the changing needs of consumers is a continuing challenge for firms around the world.
Consumer Needs and Consumer Wants
Should marketing try to satisfy consumer needs or consumer wants? Marketing tries to do both. Heated debates rage over this question, fueled by the definitions of needs and wants and the amount of freedom given to prospective customers to make their own buying decisions.
A need occurs when a person feels deprived of basic necessities such as food, clothing, and shelter. A
Pepsi True Ad kerin.tv/13e/v1-3
Pepsi True. At the 2014 Clinton Global Initiative, PepsiCo and Coca-Cola announced an agreement to reduce the calorie content of their products by 20 percent before 2025. As part of this agreement PepsiCo launched a new product—Pepsi True. The new cola is sweetened with a combination of sugar and stevia leaf extract, resulting in a soft drink with the same flavor of Pepsi-Cola but only 60 calories. Pepsi True is offered in the U.S. through Amazon.com and in grocery stores, and will be introduced in Great Britain where it will compete with Coca-Cola’s Coca-Cola Life. A potential showstopper: In the past, mid-calorie soft drinks such as Pepsi Next (2012), Pepsi Edge (2004), and Pepsi XL (1995) have not been successful as “transition” sodas from regular to diet. Will Pepsi True be next? As always, as a consumer, you will be the judge!
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want is a need that is shaped by a person’s knowledge, culture, and personality. So if you feel hungry, you have developed a basic need and desire to eat something. Let’s say you then want to eat a Cool Mint Chocolate Clif Bar because, based on your past experience, you know it will satisfy your hunger need. Effective marketing, in the form of creating an awareness of good products at fair prices and convenient locations, can clearly shape a person’s wants.
Certainly, marketing tries to influence what we buy. A question then arises: At what point do we want government and society to step in to protect consumers? Most consumers
Studying late at night for an exam and being hungry, you decide to eat a Cool Mint Chocolate Clif Bar. Is this a need or want? The text discusses the role of marketing in influencing decisions like this. © McGraw-Hill Education/Editorial Image, LLC, photographer
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would say they want government to protect us from harmful drugs and unsafe cars but not from candy bars and soft drinks. To protect college students, should government restrict their use of credit cards? Such questions have no clear-cut answers, which is why legal and ethical issues are central to marketing. Because even psychologists and economists still debate the exact meanings of need and want, we shall use the terms interchangeably throughout the book.
As shown in the left side of Figure 1–3, discovering needs involves looking carefully at prospective customers, whether they are children buying M&M’s candy, college students buying Chobani Greek Yogurt, or firms buying Xerox color copiers. A principal activity of a firm’s marketing department is to scrutinize its consumers to understand what they need and want and the forces that shape those needs and wants.
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Figure 1–3 Marketing seeks first to discover consumer needs through extensive research. It then seeks to satisfy those needs by successfully implementing a marketing program possessing the right combination of the marketing mix—the four Ps.
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LO 1-3
Distinguish between marketing mix factors and environmental forces.
What a Market Is
Potential consumers make up a market , which is people with both the desire and the ability to buy a specific offering. All markets ultimately are people. Even when we say a firm bought a Xerox copier, we mean one or several people in the firm decided to buy it. People who are aware of their unmet needs may have the desire to buy the product, but that alone isn’t sufficient. People must also have the ability to buy, such as the authority, time, and money. People may even “buy” an idea that results in an action, such as having their blood pressure checked annually or turning down their thermostat to save energy.
Satisfying Consumer Needs
Marketing doesn’t stop with the discovery of consumer needs. Because the organization obviously can’t satisfy all consumer needs, it must concentrate its efforts on certain needs of a specific group of potential consumers. This is the target market —one or more specific groups of potential consumers toward which an organization directs its marketing program.
The Four Ps: Controllable Marketing Mix Factors
Having selected its target market consumers, the firm must take steps to satisfy their needs, as shown in the right side of Figure 1–3. Someone in the organization’s marketing department, often the marketing manager, must develop a complete marketing program to
reach consumers
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by using a combination of four elements, often called “the four Ps”—a useful shorthand reference to them first published by Professor E. Jerome McCarthy:
We’ll define each of the four Ps more carefully later in the book, but for now it’s important to remember that they are the elements of the marketing mix . These four elements are the controllable factors—product, price, promotion, and place—that can be used by the marketing manager to solve a marketing problem. For example, when a company puts a product on sale, it is changing one element of the marketing mix—namely, the price. The marketing mix elements are called controllable factors because they are under the control of the marketing department in an organization.
Designing an effective marketing mix also conveys to potential buyers a clear customer value prop osition , which is a cluster of benefits that an organization promises customers to satisfy their needs. For example, Walmart’s customer value proposition can be described as “help people around the world save money and live better—anytime and anywhere.” Michelin’s customer value proposition can be summed up as “providing safety-conscious parents greater security in tires at a premium price.”
The Uncontrollable, Environmental Forces
While marketers can control their marketing mix factors, there are forces that are mostly beyond their control (see Figure 1–2). These are the environmental forces that affect a marketing decision, which consist of social, economic, technological, competitive, and regulatory forces. Examples are what consumers themselves want and need, changing technology, the state of the economy in terms of whether it is expanding or contracting, actions that competitors take, and government restrictions. Covered in detail in Chapter 3, these five forces may serve as accelerators or brakes on marketing, sometimes expanding an organization’s marketing opportunities and at other
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Product. A good, service, or idea to satisfy the consumer’s needs.
Price. What is exchanged for the product. Promotion. A means of communication between the seller and buyer.
Place. A means of getting the product to the consumer.
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LO 1-4
Explain how organizations build strong customer relationships and customer value through marketing.
times restricting them.
Traditionally, many marketing executives have treated these environmental forces as rigid, absolute constraints that are entirely outside their influence. However, recent studies and marketing successes have shown that a forward-looking, action-oriented firm can often affect some environmental forces by achieving
technological or competitive breakthroughs, such as Apple’s new Apple Watch.
THE MARKETING PROGRAM: HOW CUSTOMER RELATIONSHIPS ARE BUILT
An organization’s marketing program connects it with its customers. To clarify this link, we will first discuss the critically important concepts of customer value, customer relationships, and relationship marketing. Then we will illustrate these concepts using 3M’s marketing program for its Post-it Flag Highlighter products.
Relationship Marketing: Easy to Understand, Hard to Do
Intense competition in today’s fast-paced global markets has prompted many successful U.S. firms to focus on “customer value.” Gaining loyal customers by providing unique value is the essence of successful marketing. What is new is a more careful attempt at
Firms can affect some environmental forces with breakthrough products such as the Apple Watch. © Chesnot/Getty Images
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understanding how a firm’s customers perceive value and then actually creating and delivering that value to them. Customer value is the unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price. Firms now actually try to place a dollar value on the purchases of loyal, satisfied customers during their lifetimes. For example, loyal Kleenex customers average 6.7 boxes a year, about $994 over 60 years in today’s dollars (see question 2, Figure 1–1).
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Research suggests that firms cannot succeed by being all things to all people. Instead, firms seek to build long-term relationships with customers by providing unique value to them. Many successful firms deliver outstanding customer value with one of three value strategies: best price, best product, or best service.
With the intense competition among U.S. businesses, being seen as “best” is admittedly difficult. Still, the three firms shown in the ads on the previous page have achieved great success as reflected in the
Target, Starbucks, and Nordstrom provide customer value using three very different approaches. For their strategies, see the text. Sources: Left: Target; Center: Starbucks; Right: © Studio Works/Alamy
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mission, vision, and values statements they stress and live by:
Remaining among the “best” is a continuing challenge for today’s businesses.
A firm achieves meaningful customer relationships by creating connections with its customers through careful coordination of the product, its price, the way it’s promoted, and how it’s placed.
The hallmark of developing and maintaining effective customer relationships is today called relation ship marketing , which links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit. Relationship marketing involves a personal, ongoing relationship between the organization and its individual customers that begins before and continues after the sale.
Information technology, along with cutting-edge manufacturing and marketing processes, better enables companies to form relationships with customers today. Smart, connected products, now elements of “the Internet of everything,” help create detailed databases about product usage. Then, using data analytics, or the examination of data to discover relevant patterns, companies can gain insights into how products create value for customers. For example, BMW receives data transmitted by each new vehicle it sells and General Electric
collects information sent in by the jet engines it builds to help them understand how customers use
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Best price: Target. It uses the Target brand promise of “Expect More, Pay Less®” to “make Target the preferred shopping destination for our guests by delivering outstanding value.”
Best product: Starbucks. Starbucks seeks “to inspire and nurture the human spirit— one person, one cup and one neighborhood at a time,” stressing "The best coffee for the best YOU," in the process. Best service: Nordstrom. As a leading fashion specialty retailer, Nordstrom works to “deliver the best possible shopping experience, helping customer possess style—not just buy fashion.” Nordstrom is “committed to providing our customers with the best possible service—and improving it every day.”
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Zappos uses relationship marketing concepts—tailoring the purchase experience to each individual—to “deliver happiness” and create lifelong customers. Source: Zappos
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their products and when service may be needed.
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Online shoe retailer Zappos observes and tracks its customers’ purchases to provide personal connections and create customers for life.
The Marketing Program and Market Segments
Effective relationship marketing strategies help marketing managers discover what prospective customers need and convert these ideas into marketable products (see Figure 1–3). These concepts must then be converted into a tangible marketing program —a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers. Ideally, they can be formed into market segments , which are relatively homogeneous groups of prospective buyers that (1) have common needs and (2) will respond similarly to a marketing action. This action might be a product feature, a promotion, or a price. As shown in Figure 1–3, in an effective organization this process is continuous: Consumer needs trigger product concepts that are translated into actual products that stimulate further discovery of consumer needs.
learning review
1- 4.
An organization can’t satisfy the needs of all consumers, so it must focus on one or more subgroups, which are its __________.
1- 5.
What are the four marketing mix elements that make up the organization’s marketing program?
1- 6.
What are environmental forces?
3M’s Strategy and Marketing Program to Help Students Study
“How do college students really study?” asked David Windorski, a 3M inventor of Post-it brand products, when thinking about adding a new item to the Post-it line.
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3M Post-it® Flag Highlighters Ad kerin.tv/13e/v1-4
To answer this question, Windorski worked with a team of four college students. Their task was to observe and question dozens of students about their study behavior, such as how they used their textbooks, took notes, wrote term papers, and reviewed for exams. Often, they watched students highlight a passage and then mark the page with a Post-it Note or the smaller Post-it Flag. Windorski realized there was an opportunity to merge the functions of two products into one to help students study!
Moving from Ideas to a Marketable Highlighter Product
After working on 15 or 20 models, Windorski concluded he had to build a highlighter product that
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would dispense Post-it Flags because the Post-it Notes were simply too large to put inside the barrel of a highlighter.
Hundreds of the initial highlighter prototypes with Post-it Flags inside were produced and given to students—and also office workers—to get their reactions. This research showed users wanted a convenient, reliable cover to protect the Post-it Flags in the highlighter. So the Post-it Flag Highlighter with a rotating cover was born.
Adding the Post-it Flag Pen
Most of David Windorski’s initial design energies had gone into his Post-it Flag Highlighter research and development. But Windorski also considered other related products. Many people in offices need immediate access to Post-it Flags while writing with pens. Students are a potential market for this product, too, but probably a smaller market segment than office workers.
A Marketing Program for the Post-it Flag Highlighter and Pen
After several years of research, development, and production engineering, 3M introduced its new products. Figure 1–4 outlines the strategies for each of the four marketing mix elements in 3M’s program to market its Post-it Flag Highlighters and Post-it Flag Pens. Although similar, we can compare the marketing program for each of the two products:
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3M’s initial product line of Post-it Flag Highlighters and Post-it Flag Pens includes variations in color and line widths. © Mike Hruby
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Post-it Flag Highlighter. The target market shown in the orange column in Figur e 1–4 is mainly college students, so 3M’s initial challenge was to build student awareness of a product that they didn’t know existed. The company used a mix of print ads in college newspapers and a TV ad and then relied on word-of-mouth advertising—students telling their friends about how great the product is. Gaining distribution in college bookstores was also critical. Plus, 3M charged a price to distributors that it hoped would give a reasonable bookstore price to students and
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an acceptable profit to distributors and 3M.
Post-it Flag Pen.®
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