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Principles of Marketing

Closing Company Case

Principles of MarketingClosing Company Case

Table of contents
  1. Preface
  2. Setting the Stage
    1. 1 Unit Introduction
    2. 1 Marketing and Customer Value
      1. In the Spotlight
      2. 1.1 Marketing and the Marketing Process
      3. 1.2 The Marketing Mix and the 4Ps of Marketing
      4. 1.3 Factors Comprising and Affecting the Marketing Environment
      5. 1.4 Evolution of the Marketing Concept
      6. 1.5 Determining Consumer Needs and Wants
      7. 1.6 Customer Relationship Management (CRM)
      8. 1.7 Ethical Marketing
      9. Chapter Summary
      10. Key Terms
      11. Applied Marketing Knowledge: Discussion Questions
      12. Critical Thinking Exercises
      13. Building Your Personal Brand
      14. What Do Marketers Do?
      15. Marketing Plan Exercise
      16. Closing Company Case
      17. References
    3. 2 Strategic Planning in Marketing
      1. In the Spotlight
      2. 2.1 Developing a Strategic Plan
      3. 2.2 The Role of Marketing in the Strategic Planning Process
      4. 2.3 Purpose and Structure of the Marketing Plan
      5. 2.4 Marketing Plan Progress Using Metrics
      6. 2.5 Ethical Issues in Developing a Marketing Strategy
      7. Chapter Summary
      8. Key Terms
      9. Applied Marketing Knowledge: Discussion Questions
      10. Critical Thinking Exercises
      11. Building Your Personal Brand
      12. What Do Marketers Do?
      13. Marketing Plan Exercise
      14. Closing Company Case
      15. References
  3. Understanding the Marketplace
    1. 2 Unit Introduction
    2. 3 Consumer Markets and Purchasing Behavior
      1. In the Spotlight
      2. 3.1 Understanding Consumer Markets and Buying Behavior
      3. 3.2 Factors That Influence Consumer Buying Behavior
      4. 3.3 The Consumer Purchasing Decision Process
      5. 3.4 Ethical Issues in Consumer Buying Behavior
      6. Chapter Summary
      7. Key Terms
      8. Applied Marketing Knowledge: Discussion Questions
      9. Critical Thinking Exercises
      10. Building Your Personal Brand
      11. What Do Marketers Do?
      12. Closing Company Case
      13. References
    3. 4 Business Markets and Purchasing Behavior
      1. In the Spotlight
      2. 4.1 The Business-to-Business (B2B) Market
      3. 4.2 Buyers and Buying Situations in a B2B Market
      4. 4.3 Major Influences on B2B Buyer Behavior
      5. 4.4 Stages in the B2B Buying Process
      6. 4.5 Ethical Issues in B2B Marketing
      7. Chapter Summary
      8. Key Terms
      9. Applied Marketing Knowledge: Discussion Questions
      10. Critical Thinking Exercises
      11. Building Your Personal Brand
      12. What Do Marketers Do?
      13. Closing Company Case
      14. References
    4. 5 Market Segmentation, Targeting, and Positioning
      1. In the Spotlight
      2. 5.1 Market Segmentation and Consumer Markets
      3. 5.2 Segmentation of B2B Markets
      4. 5.3 Segmentation of International Markets
      5. 5.4 Essential Factors in Effective Market Segmentation
      6. 5.5 Selecting Target Markets
      7. 5.6 Product Positioning
      8. 5.7 Ethical Concerns and Target Marketing
      9. Chapter Summary
      10. Key Terms
      11. Applied Marketing Knowledge: Discussion Questions
      12. Critical Thinking Exercises
      13. Building Your Personal Brand
      14. What Do Marketers Do?
      15. Marketing Plan Exercise
      16. Closing Company Case
      17. References
    5. 6 Marketing Research and Market Intelligence
      1. In the Spotlight
      2. 6.1 Marketing Research and Big Data
      3. 6.2 Sources of Marketing Information
      4. 6.3 Steps in a Successful Marketing Research Plan
      5. 6.4 Ethical Issues in Marketing Research
      6. Chapter Summary
      7. Key Terms
      8. Applied Marketing Knowledge: Discussion Questions
      9. Critical Thinking Exercises
      10. Building Your Personal Brand
      11. What Do Marketers Do?
      12. Marketing Plan Exercise
      13. Closing Company Case
      14. References
    6. 7 Marketing in a Global Environment
      1. In the Spotlight
      2. 7.1 The Global Market and Advantages of International Trade
      3. 7.2 Assessment of Global Markets for Opportunities
      4. 7.3 Entering the Global Arena
      5. 7.4 Marketing in a Global Environment
      6. 7.5 Ethical Issues in the Global Marketplace
      7. Chapter Summary
      8. Key Terms
      9. Applied Marketing Knowledge: Discussion Questions
      10. Critical Thinking Exercises
      11. Building Your Personal Brand
      12. What Do Marketers Do?
      13. Closing Company Case
      14. References
    7. 8 Marketing in a Diverse Marketplace
      1. In the Spotlight
      2. 8.1 Strategic Marketing: Standardization versus Adaptation
      3. 8.2 Diversity and Inclusion Marketing
      4. 8.3 Multicultural Marketing
      5. 8.4 Marketing to Hispanic, Black, and Asian Consumers
      6. 8.5 Marketing to Sociodemographic Groups
      7. 8.6 Ethical Issues in Diversity Marketing
      8. Chapter Summary
      9. Key Terms
      10. Applied Marketing Knowledge: Discussion Questions
      11. Critical Thinking Exercises
      12. Building Your Personal Brand
      13. What Do Marketers Do?
      14. Closing Company Case
      15. References
  4. Product, Promotion, Price, and Place
    1. 3 Unit Introduction
    2. 9 Products: Consumer Offerings
      1. In the Spotlight
      2. 9.1 Products, Services, and Experiences
      3. 9.2 Product Items, Product Lines, and Product Mixes
      4. 9.3 The Product Life Cycle
      5. 9.4 Marketing Strategies at Each Stage of the Product Life Cycle
      6. 9.5 Branding and Brand Development
      7. 9.6 Forms of Brand Development, Brand Loyalty, and Brand Metrics
      8. 9.7 Creating Value through Packaging and Labeling
      9. 9.8 Environmental Concerns Regarding Packaging
      10. 9.9 Ethical Issues in Packaging
      11. Chapter Summary
      12. Key Terms
      13. Applied Marketing Knowledge: Discussion Questions
      14. Critical Thinking Exercises
      15. Building Your Personal Brand
      16. What Do Marketers Do?
      17. Marketing Plan Exercise
      18. Closing Company Case
      19. References
    3. 10 Maintaining a Competitive Edge with New Offerings
      1. In the Spotlight
      2. 10.1 New Products from a Customer’s Perspective
      3. 10.2 Stages of the New Product Development Process
      4. 10.3 The Use of Metrics in Evaluating New Products
      5. 10.4 Factors Contributing to the Success or Failure of New Products
      6. 10.5 Stages in the Consumer Adoption Process for New Products
      7. 10.6 Ethical Considerations in New Product Development
      8. Chapter Summary
      9. Key Terms
      10. Applied Marketing Knowledge: Discussion Questions
      11. Critical Thinking Exercises
      12. Building Your Personal Brand
      13. What Do Marketers Do?
      14. Closing Company Case
      15. References
    4. 11 Services: The Intangible Product
      1. In the Spotlight
      2. 11.1 Classification of Services
      3. 11.2 The Service-Profit Chain Model and the Service Marketing Triangle
      4. 11.3 The Gap Model of Service Quality
      5. 11.4 Ethical Considerations in Providing Services
      6. Chapter Summary
      7. Key Terms
      8. Applied Marketing Knowledge: Discussion Questions
      9. Critical Thinking Exercises
      10. Building Your Personal Brand
      11. What Do Marketers Do?
      12. Closing Company Case
      13. References
    5. 12 Pricing Products and Services
      1. In the Spotlight
      2. 12.1 Pricing and Its Role in the Marketing Mix
      3. 12.2 The Five Critical Cs of Pricing
      4. 12.3 The Five-Step Procedure for Establishing Pricing Policy
      5. 12.4 Pricing Strategies for New Products
      6. 12.5 Pricing Strategies and Tactics for Existing Products
      7. 12.6 Ethical Considerations in Pricing
      8. Chapter Summary
      9. Key Terms
      10. Applied Marketing Knowledge: Discussion Questions
      11. Critical Thinking Exercises
      12. Building Your Personal Brand
      13. What Do Marketers Do?
      14. Marketing Plan Exercise
      15. Closing Company Case
      16. References
    6. 13 Integrated Marketing Communications
      1. In the Spotlight
      2. 13.1 The Promotion Mix and Its Elements
      3. 13.2 The Communication Process
      4. 13.3 Integrated Marketing Communications
      5. 13.4 Steps in the IMC Planning Process
      6. 13.5 Ethical Issues in Marketing Communication
      7. Chapter Summary
      8. Key Terms
      9. Applied Marketing Knowledge: Discussion Questions
      10. Critical Thinking Exercises
      11. Building Your Personal Brand
      12. What Do Marketers Do?
      13. Marketing Plan Exercise
      14. Closing Company Case
      15. References
    7. 14 The Promotion Mix: Advertising and Public Relations
      1. In the Spotlight
      2. 14.1 Advertising in the Promotion Mix
      3. 14.2 Major Decisions in Developing an Advertising Plan
      4. 14.3 The Use of Metrics to Measure Advertising Campaign Effectiveness
      5. 14.4 Public Relations and Its Role in the Promotion Mix
      6. 14.5 The Advantages and Disadvantages of Public Relations
      7. 14.6 Ethical Concerns in Advertising and Public Relations
      8. Chapter Summary
      9. Key Terms
      10. Applied Marketing Knowledge: Discussion Questions
      11. Critical Thinking Exercises
      12. Building Your Personal Brand
      13. What Do Marketers Do?
      14. Closing Company Case
      15. References
    8. 15 The Promotion Mix: Personal Selling and Sales Promotion
      1. In the Spotlight
      2. 15.1 Personal Selling and Its Role in the Promotion Mix
      3. 15.2 Classifications of Salespeople Involved in Personal Selling
      4. 15.3 Steps in the Personal Selling Process
      5. 15.4 Management of the Sales Force
      6. 15.5 Sales Promotion and Its Role in the Promotion Mix
      7. 15.6 Main Types of Sales Promotion
      8. 15.7 Ethical Issues in Personal Selling and Sales Promotion
      9. Chapter Summary
      10. Key Terms
      11. Applied Marketing Knowledge: Discussion Questions
      12. Critical Thinking Exercises
      13. Building Your Personal Brand
      14. What Do Marketers Do?
      15. Closing Company Case
      16. References
    9. 16 Direct, Online, Social Media, and Mobile Marketing
      1. In the Spotlight
      2. 16.1 Traditional Direct Marketing
      3. 16.2 Social Media and Mobile Marketing
      4. 16.3 Metrics Used to Evaluate the Success of Online Marketing
      5. 16.4 Ethical Issues in Digital Marketing and Social Media
      6. Chapter Summary
      7. Key Terms
      8. Applied Marketing Knowledge: Discussion Questions
      9. Critical Thinking Exercises
      10. Building Your Personal Brand
      11. What Do Marketers Do?
      12. Closing Company Case
      13. References
    10. 17 Distribution: Delivering Customer Value
      1. In the Spotlight
      2. 17.1 The Use and Value of Marketing Channels
      3. 17.2 Types of Marketing Channels
      4. 17.3 Factors Influencing Channel Choice
      5. 17.4 Managing the Distribution Channel
      6. 17.5 The Supply Chain and Its Functions
      7. 17.6 Logistics and Its Functions
      8. 17.7 Ethical Issues in Supply Chain Management
      9. Chapter Summary
      10. Key Terms
      11. Applied Marketing Knowledge: Discussion Questions
      12. Critical Thinking Exercises
      13. Building Your Personal Brand
      14. What Do Marketers Do?
      15. Marketing Plan Exercise
      16. Closing Company Case
      17. References
    11. 18 Retailing and Wholesaling
      1. In the Spotlight
      2. 18.1 Retailing and the Role of Retailers in the Distribution Channel
      3. 18.2 Major Types of Retailers
      4. 18.3 Retailing Strategy Decisions
      5. 18.4 Recent Trends in Retailing
      6. 18.5 Wholesaling
      7. 18.6 Recent Trends in Wholesaling
      8. 18.7 Ethical Issues in Retailing and Wholesaling
      9. Chapter Summary
      10. Key Terms
      11. Applied Marketing Knowledge: Discussion Questions
      12. Critical Thinking Exercises
      13. Building Your Personal Brand
      14. What Do Marketers Do?
      15. Marketing Plan Exercise
      16. Closing Company Case
      17. References
    12. 19 Sustainable Marketing: The New Paradigm
      1. In the Spotlight
      2. 19.1 Sustainable Marketing
      3. 19.2 Traditional Marketing versus Sustainable Marketing
      4. 19.3 The Benefits of Sustainable Marketing
      5. 19.4 Sustainable Marketing Principles
      6. 19.5 Purpose-Driven Marketing
      7. Chapter Summary
      8. Key Terms
      9. Applied Marketing Knowledge: Discussion Questions
      10. Critical Thinking Exercises
      11. Building Your Personal Brand
      12. References
  5. Answer Key
    1. Chapter 1
    2. Chapter 2
    3. Chapter 3
    4. Chapter 4
    5. Chapter 5
    6. Chapter 6
    7. Chapter 7
    8. Chapter 8
    9. Chapter 9
    10. Chapter 10
    11. Chapter 11
    12. Chapter 12
    13. Chapter 13
    14. Chapter 14
    15. Chapter 15
    16. Chapter 16
    17. Chapter 17
    18. Chapter 18
    19. Chapter 19
  6. Index

Peloton

If you have ever taken a class at your local gym, you know the excitement of the camaraderie and competition that takes place when you are in a class of like-minded individuals all sharing the same goal and passion for performance. Former Barnes & Noble e-commerce executive John Foley liked riding his stationary bike but wanted to bring the gym class experience to his at-home riding sessions. And in 2012, the idea for Peloton was born.34

Hailed as “Netflix for Fitness,” Peloton introduced its first bike in 2013. The company had slow and steady growth. With several rounds of funding, the start-up took off and began to take hold among consumers who enjoyed the rigorous workouts provided by trainers through the built-in bike video screens and subscription service to the various “rides.”35

For Christmas 2019, Peloton debuted what turned out to be a significant ad for the young brand. Featuring a husband buying a Peloton for his wife, the ad took viewers through the mind and thoughts of the wife while she rode her bike and seemingly got more “in shape.” Viewer outrage kicked up as some viewers believed the ad depicted a husband body-shaming his wife with the gift of exercise for the holidays. Check out the Peloton Christmas Commercial from 2019.

While the ad may have sparked some controversy, it did one thing successfully—it got people talking about Peloton. The ads allowed the viewer to glimpse the life of a Peloton user—it showed the fun method of the video courses, the use of the bike no matter what the weather outside, and the potential transformation of the Peloton user.

The other element of the ad’s storyline is that it sparked a parody ad produced by Maximum Effort, a film production and digital marketing agency.36 The agency was founded by the actor Ryan Reynolds, and the parody ad featured a voice-over by Reynolds himself. Although the ad was for Aviation Gin, a brand owned by Reynolds, the ad featured the “wife” from the Peloton Christmas ad. The parody ad did three things—kept people talking about Peloton, created a memorable story for Aviation Gin, and connected Reynolds and the Peloton brand.37

As Peloton began to take off in the United States, the country literally came to a screeching halt. In January 2020, the COVID-19 pandemic hit the country. Within months, citizens everywhere were quarantined, with gyms, restaurants, travel, businesses—everything—shut down. What started as 14 days to slow the spread turned into months. Remote work and learning became the norm, and people started to feel restless cooped up in their homes.

As the pandemic surged, so did Peloton. It picked up the fitness gauntlet, and in 2020, for the first quarter ever, the company turned a profit with a 172 percent increase in sales, stock up 220 percent, and over 1 million subscriptions. The new challenge for the organization was in the fulfillment of orders.

During the pandemic of 2019–2021, Peloton became a household name. It was the topic of discussion on the Fox News show The Five. Hosts Greg Gutfeld and Dana Perino regularly discussed the joy they got from using their Peloton bikes. Consumers everywhere were “riding out” the pandemic on a Peloton.

Even as sales surged and Peloton became a household name, it was being woven into the fabric of the American culture, such as on the ’90s hit show Sex and the City. With the aging of the show’s stars, the demographic of viewers was prime for a reboot. And so, in late 2021, the show’s stars reprised their famous roles and And Just Like That debuted.

The show premiered on HBO to a record audience.

Per HBO Max, the Sex and the City revival starring Sarah Jessica Parker, Cynthia Nixon and Kristin Davis had a strong 24-hour performance that ranks as the most viewed series premiere of a new HBO or HBO Max series on the streaming service. Overall, the AJLT opener ranks in the Top 10 of all HBO Max’s movies and series debuts, including both HBO and Max originals, trailing just some of the tentpole Warner Bros. movies that launched on the platform.38

However, the huge debut marked a significant moment for Peloton. In the first episode, one of the major stars of the show, Mr. Big, dropped dead of a heart attack after a spin on his Peloton. Throughout the episode, the love affair Mr. Big has with his bike and his appreciation for the instructor provide the major plotline to the show. This led to the question, How would the character’s death affect Peloton?

Product placement has always been a significant public relations initiative of consumer product companies. The James Bond franchise traditionally partners with well-known brands for placement in the movies and use by the popular cultural icon. The use of real products helps connect the consumer to the movie. It is usually a boon to the brand, and the movie benefits from the more realistic quality the product adds to the movie.

In the case of Peloton and Mr. Big, Peloton did not pay for the placement, but they did agree to the brand’s use in the show. According to a spokesperson for the company, the plotline was a complete surprise.39 So how does the show recover from “death by Peloton”?

Enter a new parody advertisement developed by Ryan Reynolds and Maximum Effort. When Reynolds created the ad for Aviation Gin that poked a little fun at Peloton and its “body-shaming” commercial, the actor became connected with the marketing arm of Peloton. It was time for a new parody. In this go-around, the focus would be on Peloton and Mr. Big. Actor Chris Noth, who played Mr. Big in the television show Sex and the City and the reboot And Just Like That, agreed to appear in the ad. Less than 48 hours after the show debut and the death of Mr. Big, Noth made an appearance in a Peloton ad, which shows him very much still alive. The big win all around is for Peloton and its significant increase in brand awareness.

The response from Peloton to the death of the main character Mr. Big on And Just Like That was to create an advertisement showing him very much alive—a clever approach and certainly an effort that gained Peloton brand recognition. Watch his death on the television show, and watch the commercial response here.

Case Questions

1 .
How did Peloton reach audiences with its message about the advantages of at-home exercise on its bike and corresponding trainer subscription services?
2 .
How was Peloton able to discern the effectiveness of its advertising when it debuted the 2019 commercial that was dubbed “body-shaming”?
3 .
What are some of the ways Peloton has generated brand awareness through publicity?
4 .
Peloton became the subject of the first episode of the show And Just Like That, a reboot of the hit show Sex and the City. What are the advantages and disadvantages to the product placement of Peloton in the show’s premiere episode?
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