Video Case 10.3: Kimpton Hotels Puts Green Initiatives to Work

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the housekeeping staff, the front desk clerk. “How we do

what we do defines us,” observes Niki Leondakis, COO of

Kimpton Hotels & Restaurants, which runs 50 boutiquestyle luxury hotels and restaurants across the U.S.

Although Kimpton began its green practices long

ago, in 2005 the company launched a company-wide

program called EarthCare in order to standardize these

practices across all of its hotels and restaurants. Frank

Kawecki, director of operations for Kimpton Restaurants

in the Northeast, recalls that Kimpton’s green efforts

started first in the restaurants with the chefs, then spread.

When the EarthCare program began, the company asked

for volunteers from each property who were devoted to

the green effort because they were already committed to

the idea and could communicate best between management and staff. Volunteers ranged from bartenders to general managers who were willing to meet once a month.

One of the first initiatives—which came from restaurant

servers—was to eliminate imported bottled water, shifting

instead to locally bottled water and the use of recycled

water bottles.

As EarthCare has expanded throughout the company,

standard guidelines have been set for nearly every facet of

the firm’s operation. Home office materials and procedures

include shifting to online publication of many documents;

using post-consumer recycled paper and eco-friendly

inks for those documents that are printed; making hotel

key-cards from recycled plastic; offering continuous education in green initiatives for staff, and more. At the hotels

themselves, all in-room materials and bills are printed on

recycled paper; phone books are offered by request only;

all plumbing is water-efficient; lighting is LED or CFL, and

subject to motion sensors; rooms are stocked with greencertified linens and towels; guest room soaps are made of

natural ingredients, and carpet cleaning is done with nontoxic products. If the list seems endless, it nearly is—and

the complexity of the operations management required to

implement standards such as these is daunting.

Waste management is a category unto itself, with

hotel and restaurant-wide recycling and reuse of everything from cardboard and paper to batteries and computers. Restaurants in particular present a huge challenge.

“There’s an enormous amount of waste from a lot of restaurants,” observes Kawecki. “A lot of it can be composted, recycled, or reused. There can be a 40-percent savings

in waste removal. Waste removal was traditionally a fixed

expense that we have manipulated,” through EarthCare.

In addition to reducing waste and energy use, Kimpton

restaurants purchase and serve as many certified organic

products as possible, ranging from local produce and seafood to coffee, tea, and wine.



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Saving the planet can be expensive. Running a business incurs costs as well. One of the challenges of implementing the EarthCare program is monitoring costs. “Green

efforts can’t compromise the experience for our guests and

it can’t cost our shareholders more money. If we go out of

business, saving the planet as hoteliers goes away,” notes

Leondakis. “So that premise was very good in helping us

decide what we would tackle first—water savings, energy

savings.” Whatever is good for the planet has to be good

for the bottom line. One way that Kimpton Hotels meets

this goal is by looking at ways for certain costs to offset

each other. If purchasing recycled paper costs more, there

might be a way to find savings in another area. “We put

measurements on all of our efforts to see what impact they

have on the bottom line,” says Leondakis. “We’ve still been

able to say that it saves us money.”

Recently Kimpton Hotels announced its plan to seek

third-party Green Seal certification on all 50 of its properties; 10 properties have already been certified. Green Seal

certification involves an application process and evaluation

similar to LEED certification, which the company is also

seeking for its new or renovated properties. “It will be an

ongoing work in progress forever,” predicts Leondakis. But

Kimpton Hotels has a head start.



Questions for Critical Thinking

1. Location is certainly a production factor for

Kimpton Hotels & Restaurants, which are

located in cities such as New York, Los Angeles,

Boston, Chicago, and Seattle. What location factors might Kimpton managers consider when

thinking about whether to acquire or build a

new Kimpton hotel and restaurant?

2. According to the EarthCare program, what factors might a Kimpton restaurant chef or manager consider when selecting suppliers?

3. A daily staff meeting at a Kimpton hotel can be

considered part of production control, contributing to the smooth running of the hotel. Who

might attend such a meeting? What kinds of

topics might they discuss?

4. Quality is top priority at Kimpton Hotels &

Restaurants. What steps can a Kimpton hotel

manager take to balance quality and the initiatives of the EarthCare program?

Sources: Kimpton Hotels Web site, http://www.kimptonhotels.

com, accessed February 24, 2012; Matt Courtland, “Environmental

Mission Statements: A List of Hotel Sustainability Policies,” Environmental

Leader, http://www.environmentalleader.com, accessed February 24,

2012; “Kimpton Hotels Aim for 100 Percent Green Seal Certification,”

GreenerBuildings, http://www.greenbiz.com, accessed February 24, 2012.



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Kansas City

Salina



Smoky Hill River



Greensburg

den City



135



335



35



Wichita



PART 3



KANSAS

Saline River

70



No Time to Micromanage

“This is a stepping stone for me,” thought Greensburg’s

town administrator, Steve Hewitt. Hewitt, who had grown up

in Greensburg, had moved back home and taken a position

in the tiny rural town of 1,500. Standing in what was left of

his kitchen on the night of Friday, May 4, 2007, he realized

he had gotten more than he bargained for.

Across town, Mayor Lonnie McCollum and his wife had

survived by clinging to a mattress as the storm ravaged their

home. A write-in candidate in the past election, McCollum

had accepted the job and set out to revive the dying town.

Among his many ideas, the most innovative had been green

building. McCollum was no tree-hugger; he was simply looking for a way to save money on fuel and utilities, to conserve

the town’s resources.

Like many people in town, Hewitt and McCollum had

no idea of the extent of the damage. They would later learn

that the two-mile-wide F5 tornado drove right through the

two-mile-wide town. By the end of the weekend, though,

they knew that Greensburg was gone. At a press conference,

McCollum announced that the town would rebuild, and

would do it using green technology.

By May 2008, the town was on its third mayor since the

disaster, but Hewitt was still the town administrator. He had

expanded his staff from 20 to 35 people, establishing a fulltime fire department, a planning department, and a community development department. Each week Hewitt spent hours



giving interviews to reporters from all over the world. “He’s

very open as far as information,” said Recovery Coordinator

and Assistant Town Administrator Kim Alderfer. “He’s very

good about delegating authority. He gives you the authority

to do your job. He doesn’t have time to micromanage.”

Meanwhile, residents Janice and John Haney had rebuilt

their family farm on the outskirts of town. Although their

new home, an earth berm structure, was full of energyefficient features, Janice wasn’t convinced that the plan to

rebuild Greensburg using green technology was the right

one. “I do worry that it will be a T-shirt slogan,” said Haney.

“I personally don’t think the persons that are living in

Greensburg right now are really committed to it. We didn’t

have a choice. You MUST go green. That’s really not everybody’s option.” She added that many people feared higher

taxes would force some families out of town.

Questions

After viewing the video, answer the following questions:



1. What kind of leader is Steve Hewitt?

2. How would you describe Greensburg’s culture?

3. Do you believe that as town administrator, Hewitt had



the right to impose green building codes on residents and

businesses?



4. Perform a SWOT analysis of Greensburg’s green initiative.



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LAUNCHING YOUR



Management Career

Part 3, “Management:

Empowering People to Achieve

Business Objectives,” covers Chapters

7 through 10, which discuss management, leadership, and the internal

organization; human resource management, motivation, and labor–

management relations; improving

performance through empowerment,

teamwork, and communication; and

production and operations management. In those chapters, you read

about top executives and company

founders who not only direct their

companies’ strategy but lead others in their day-to-day tasks to keep

them on track, middle managers who

devise plans to turn the strategies into

realities, and supervisors who work

directly with employees to create

strong teams that satisfy customers.

An incredible variety of jobs is available to those choosing management

careers. And the demand for managers will continue to grow. The U.S.

Department of Labor estimates that

managerial jobs will grow by about 7

percent over the next decade.1

So what kinds of jobs might you

be able to choose from if you launch

a management career? As you learned

in Chapter 7, three types of management jobs exist: supervisory managers,

middle managers, and top managers.

Supervisory management, or first-line

management, includes positions such

as supervisor, office manager, department manager, section chief, and

team leader. Managers at this level

work directly with the employees who

produce and sell a firm’s goods and

services.



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Middle management includes

positions such as general managers,

plant managers, division managers, and regional or branch managers. They are responsible for setting

objectives consistent with top management’s goals and planning and

implementing strategies for achieving

those objectives.

Top managers include such positions as chief executive officer (CEO),

chief operating officer (COO), chief

financial officer (CFO), chief information officer (CIO), and executive vice

president. Top managers devote most

of their time to developing long-range

plans, setting a direction for their

organization, and inspiring a company’s executives and employees to

achieve their vision for the company’s

future. Top managers travel frequently

between local, national, and global

offices as they meet and work with

customers, vendors, and company

managers and employees.

Most managers start their careers

in areas such as sales, production, or

finance, so you likely will start in a

similar entry-level job. If you do that

job and other jobs well, you may be

considered for a supervisory position.

Then, if you are interested and have

the technical, human, and conceptual

skills to succeed, you’ll begin your

management career path. But what

kinds of supervisory management jobs

are typically available? Let’s review

the exciting possibilities.

Administrative services managers manage basic services—such as

clerical work, payroll, travel, printing and copying, data records,



3

telecommunications, security, parking,

and supplies—without which no organization could operate. On average,

administrative service managers earn

$84,000 a year.2

Construction managers plan, schedule, and coordinate the building of

homes, commercial buildings such as

offices and stores, and industrial facilities such as manufacturing plants and

distribution centers. Unlike administrative service managers, who work

in offices, construction managers

typically work on building sites with

architects, engineers, construction

workers, and suppliers. On average,

construction managers earn $94,000

a year.3

Food service managers run restaurants and services that prepare

and offer meals to customers. They

coordinate workers and suppliers in

kitchens, dining areas, and banquet

operations; are responsible for those

who order and purchase food inventories; maintain kitchen equipment;

and recruit, hire, and train new workers. Food service managers can work

for chains such as Ruby Tuesday or

Olive Garden, for local restaurants,

and for corporate food service departments in organizations. On average,

food service managers earn more than

$52,000 a year.4

Human resource managers help

organizations follow federal and local

labor laws; effectively recruit, hire,

train, and retain talented workers;

administer corporate pay and benefits

plans; develop and administer organizational human resource policies;

and, when necessary, participate in



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contract negotiations or handle disputes. Human resource management

jobs vary widely, depending on how

specialized the requirements are. On

average, human resource managers

earn $108,000 a year.5

Lodging managers work in hotels

and motels but also help run camps,

ranches, and recreational resorts.

They may oversee guest services,

front desk, kitchen, restaurant, banquet, house cleaning, and maintenance

workers. Because they are expected

to help satisfy customers around the

clock, they often work long hours and

may be on call when not at work. On

average, lodging managers earn about

$54,000 a year.6

Medical and health services managers work in hospitals, nursing homes,

doctors’ offices, and corporate and

university settings. They run departments that offer clinical services;

ensure that state and federal laws are

followed; and handle decisions related

to the management of patient care,

nursing, surgery, therapy, medical

records, and financial payments. On

average, medical and health service

managers earn $93,000 a year.7

Purchasing managers lead and control organizational supply chains that

ensure that companies have needed

materials to produce the goods and

services they sell, purchase materials



at reasonable prices, and oversee

deliveries when and where they are

needed. Purchasing managers work

with wholesale and retail buyers,

buying goods that are then resold to

others; purchasing agents, who buy

supplies and raw materials for their

organizations; and contract specialists,

who negotiate and supervise purchasing contracts with key suppliers and

vendors. On average, purchasing managers earn nearly $100,000 a year.8

Production managers direct and

coordinate operations that manufacture goods. They work with employees who produce parts and assemble

products, help determine which new

machines should be purchased and

when existing machines need maintenance, and are responsible for achieving production goals that specify the

quality, cost, schedule, and quantity

of units to be produced. On average,

production managers earn almost

$95,000 a year.9

Career Assessment Exercises

in Management

1. The American Management

Association is a global, not-forprofit professional organization that provides a range of

management development and

educational services to individu-



als, companies, and government

agencies. Access the AMA’s Web

site at http://www.amanet.org.

Explore the “Free Resources”

link there (you will have to register). Pick an article or research

area that interests you. Provide a

one-page summary of the management issues discussed in the

feature.

2. Go online to a business news

service, such as Yahoo! News or

Google News, or look at the business section of your local newspaper. Find a story relating to a firstline supervisor, middle manager,

or top executive. Summarize that

person’s duties. What decisions

does that person make and how do

those decisions impact his or her

organization?

3. Pick a supervisory management

position from the descriptions

provided here that interests you.

Research the career field. What

skills do you possess that would

make you a good candidate for

a management position in that

field? What work and other experience do you need to help you

get started? Create a list of both

your strengths and weaknesses and

formulate a plan to add to your

strengths.



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Part 4



Marketing Management



Learning Objectives

1 Define marketing.

2 Discuss the evolution of the marketing concept.

3 Describe not-for-profit marketing and nontraditional marketing.



Chapter



11



4 Outline the basic steps in developing a marketing strategy.

5 Describe marketing research.

6 Discuss market segmentation.

7 Summarize consumer behavior.

8 Discuss relationship marketing.



Fuse/Getty Images, Inc.



Customer-Driven

Marketing



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Walmart Introduces “Great

for You”



E



ven in an economic downturn, research shows, customers want more from retailers than just low prices. So Walmart,

already the undisputed leader in low-price retail, is identifying healthier, low-cost food choices for consumers by adding

a bright green-and-white “Great for You” label to foods that

meet the store’s new set of nutritional quality standards.

Fresh fruits and vegetables make the cut; sugary cereals don’t.

“There are no candy bars,” said the company’s senior vice

president of sustainability. Lean cuts of meat, brown rice, and

skim milk also qualify, and, after a long debate about their

protein value versus their cholesterol content, so do eggs. About

20 percent of packaged food products sold in Walmart’s nearly

3,600 stores—both its own brands and those of its suppliers—

will eventually carry the “Great for You” label. The U.S. Food

and Drug Administration (FDA) has yet to unveil an official food

quality designation of its own. When it does, says Walmart’s

sustainability officer, “we’ll be happy to make a switch. At this

point we feel like our customers need help right now.”



Walmart is also lowering the prices of about 350 healthier

foods, such as low-fat peanut butter and fat-free salad

dressings, making them as affordable as regular products to

encourage customers to purchase them. The company has

worked with suppliers to reduce the sugar, trans fats, and

sodium in many of the prepared products it carries. And it

reduced prices on fresh fruits and vegetables enough to save

consumers more than $1 billion a year over the prices charged

at competing stores.

Many observers give the company credit for establishing pretty

strict criteria for its “Great for You” label, though some question whether it is just a green “buy me” scheme. But the

CEO of Partnership for a Healthier America, which focuses on

addressing childhood obesity, says the organization is pleased

that Walmart continues to be a critical leader among a growing

number of private sector companies looking to help end the

obesity crisis.

Ever cost-conscious, Walmart will use up all its label-free packaging before it prints new boxes marked “Great for You.”1



Overview

Business success in the 21st century is

directly tied to a company’s ability to identify

and serve its target markets. In fact, all

organizations—profit-oriented and not-forprofit, manufacturing and retailing—must

serve customer needs to succeed, just as

Walmart does by offering multiple choices to

its shoppers. Marketing is the link between

the organization and the people who buy and

use its goods and services. It is the way organizations determine buyer needs and inform

potential customers that their firms can meet

those needs by supplying a quality product

at a reasonable price. And it is the path to

developing loyal, long-term customers.

Consumers who purchase goods for

their own use and business purchasers seeking products to use in their firm’s operation

may seem to fall in the same category, but

marketers see distinct wants and needs for



c11.indd 321



each group. To understand buyers—from

manufacturers to Web surfers to shoppers in

the grocery aisles—companies gather mountains of data on every aspect of consumer

lifestyles and buying behaviors. Marketers

use the data to understand the needs and

wants of both final customers and business

buyers. Satisfying customers goes a long way

toward building relationships with them. It’s

not always easy.

This chapter begins with an examination

of the marketing concept and the way businesspeople develop a marketing strategy. We

then turn to marketing research techniques

and how businesses apply data to market

segmentation and understanding customer

behavior. The chapter closes with a detailed

look at the important role customer relationships play in today’s highly competitive business world.



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1



What Is Marketing?

Every organization—from profit-seeking firms such as Jimmy John’s and Zappos.com

to such not-for-profits as the Make-a-Wish Foundation and the American Cancer Society—

must serve customer needs to succeed. Perhaps the retail pioneer J. C. Penney best expressed

this priority when he told his store managers, “Either you or your replacement will greet the

customer within the first 60 seconds.”



marketing organizational

function and set of

processes for creating,

communicating, and delivering value to customers

and for managing customer

relationships in ways that

benefit the organization

and its stakeholders.



exchange process 

activity in which two or

more parties give something of value to each other

to satisfy perceived needs.



According to the American Marketing Association Board of Directors, marketing is

an organizational function and set of processes for creating, communicating, and delivering value to customers, and for managing customer relationships in ways that benefit the

organization and its stakeholders.2 In addition to selling goods and services, marketing techniques help people advocate ideas or viewpoints and educate others. The American Heart

Association mails out questionnaires that ask, “Are you at risk for a heart attack?” The documents help educate the general public about this widespread condition by listing its risk factors and common symptoms and describing the work of the association.

Department store founder Marshall Field explained marketing quite clearly when he

advised one employee to “give the lady what she wants.” The phrase became the company

motto, and it remains a business truism today. The best marketers not only give consumers

what they want but even anticipate consumers’ needs before those needs surface. Ideally, they

can get a jump on the competition by creating a link in consumers’ minds between the new

need and the fulfillment of that need by the marketers’ products. Principal Financial Group,

with headquarters in Iowa, markets employee retirement plans to other firms that then custom

tailor those plans to retain key employees. NetJets offers fractional jet ownership to executives

who want the luxury and flexibility of private ownership without the cost of owning their own

plane. Samsung offers its next generation of high-definition TV with its SMART TVs. Owners

can connect their televisions to their home Internet connection, then add widgets to track the

weather, use Skype, stream video content, and check for Twitter updates—all in real time. In

addition, they can get video-on-demand service and other apps through the company’s Web

site. “Get the best of the Web right on your TV,” one of Samsung’s promotions says.



ThomasPeter/Reuters/NewsCom



As these examples illustrate, marketing is more

than just selling. It is a process that begins with discovering unmet customer needs and continues with

researching the potential market; producing a good or

service capable of satisfying the targeted customers;

and promoting, pricing, and distributing that good or

service. Throughout the entire marketing process, a

successful organization focuses on building customer

relationships.



The best marketers give consumers what they want and anticipate their needs.

Samsung’s SMART TVs allow consumers to interact, connect, and multi-task

without leaving their homes.



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When two or more parties benefit from trading

things of value, they have entered into an exchange

process. When you purchase a cup of coffee, the

other party may be a convenience store clerk, a vending machine, or a Seattle’s Best server. The exchange

seems simple—some money changes hands, and you

receive your cup of coffee. But the exchange process is more complex than that. It could not occur if

you didn’t feel the need for a cup of coffee or if the



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Hit



& Miss

Ethnic Cuisine Goes Mobile



In restaurant-rich cities like New York and Los Angeles and smaller

communities with fewer dining choices, food trucks are a thriving trend

bringing novel and often exotic cuisines to the streets. About 3 million

trucks and 5 million carts are going where diners are, bringing tantalizing flavors and aromas.

With chefs serving their native cuisines, quality can be high, and

variety ranges from Korean and Thai to Salvadoran and Jamaican. “Food

trucks have changed the conversation,” says one restaurant trend–

watching agency.

Customers tend to be Millennials who enjoy experimentation.

Nearly half of those between 18 and 30 say they visit food trucks weekly

for unique meals that fast-food chains can’t match. An even higher

percentage of Facebook and Twitter users patronize mobile eateries.

“If you take a look at what [food truck operators] have been able to do

with Twitter and Facebook from a marketing standpoint,” said one food

industry expert, “having people follow them around . . . it’s brilliant.”



Questions for Critical Thinking

1. One big growth area for food trucks is converting people

reluctant to buy food from a truck. How can operators

overcome this reluctance?

2. Some truck operators are only test-marketing before

expanding to brick-and-mortar eateries or supermarket

distribution. List some pros and cons of this strategy.

Sources: Maureen Morrison, “Food Trucks Spread ‘New’ Cuisine, Shake up

Restaurant Model,” Ad Age, http://adage.com, accessed March 21, 2012; Entrepreneur

Press and Rich Mintzer, “Beyond the Food Truck: Six Ideas for Mobile Food Businesses,”

Entrepreneur, http://www.entrepreneur.com, accessed March 21, 2012; Marc Brandau,

“Technomic: Open Road for Food Trucks,” Nation's Restaurant News, http://nrn.com,

accessed March 21, 2012.



convenience store or vending machine were not available. You wouldn’t choose Seattle’s Best

Coffee unless you were aware of the brand. Because of marketing, your desire for a flavored

blend, plain black coffee, or decaf is identified, and the coffee manufacturer’s business is

successful.



How Marketing Creates Utility

Marketing affects many aspects of an organization and its dealings with customers. The

ability of a good or service to satisfy the wants and needs of customers is called utility. A

company’s production function creates form utility by converting raw materials, component

parts, and other inputs into finished goods and services. But the marketing function

creates time, place, and ownership utility. Time utility is created by making a good or service

available when customers want to purchase it. Place utility is created by making a product available in a location convenient for customers. Ownership utility refers to an orderly

transfer of goods and services from the seller to the buyer. Firms may be able to create all

three forms of utility. Target is the first nationwide retailer to offer bar-coded, scannable

mobile coupons direct to cell phones. Guests can sign on to the program either on their

personal computers or on their cell phones. Each month, they receive a text message with

a link to a mobile Web site page where they will find offers for various products. They can

use the mobile coupons at any Target store nationwide because Target is the first retailer to

have point-of-sale scanning technology for the coupons in all of its stores. Steve Eastman,

the president of Target.com, says, “At Target, we know that mobile phones are an integral

part of our guests’ lives, and mobile coupons are just another way we’re providing convenient, on-the-go shopping solutions.”3 Even food is going mobile, creating place utility as

described in the “Hit & Miss” feature.



Chapter 11 Customer-Driven Marketing



c11.indd 323



utility power of a good or

service to satisfy a want

or need.



Assessment

Check

1. What is utility?

2. Identify ways in which

marketing creates utility.



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2



Evolution of the Marketing Concept

Marketing has always been a part of business, from the earliest village traders to large

21st-century organizations producing and selling complex goods and services. Over time,

however, marketing activities evolved through the five eras shown in Figure 11.1: the production, sales, marketing, and relationship eras, and now the social era. Note that these eras

parallel some of the time periods discussed in Chapter 1.

For centuries, organizations of the production era stressed efficiency in producing quality

products. Their philosophy could be summed up by the remark, “A good product will sell

itself.” Although this production orientation continued into the 20th century, it gradually

gave way to the sales era, in which businesses assumed that consumers would buy as a result

of energetic sales efforts. Organizations didn’t fully recognize the importance of their customers until the marketing era of the 1950s, when they began to adopt a consumer orientation. This focus intensified, leading to the emergence of the relationship era in the 1990s. In

the relationship era, companies emphasized customer satisfaction and building long-term

business relationships. As the second decade of the new century gets underway, the social era

of marketing is in full swing, thanks to the Internet and the creation of social media sites

such as Twitter and Facebook. Companies now routinely use the Web and social media sites

to connect to consumers as a way of marketing their goods and services.



Emergence of the Marketing Concept

marketing concept 

companywide consumer

orientation to promote

long-run success.



The term marketing concept refers to a companywide customer orientation with

the objective of achieving long-run success. The basic idea of the marketing concept is that

marketplace success begins with the customer. A firm should analyze each customer’s needs

FIGURE



11.1



Five Eras in the History of Marketing



DEGREE OF EMPHASIS

High



Low

SOCIAL

“Connecting to consumers via

Internet and social media sites is

an effective tool.”



RELATIONSHIP

“Long-term relationships

lead to success.”



MARKETING

“The consumer is king! Find a need

and fill it.”

SALES

“Creative advertising and selling will overcome consumers’

resistance and convince them to buy.”

PRODUCTION

“A good product will sell itself.”



1900



324



c11.indd 324



1950



2015



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and then work backward to offer products that fulfill them. The emergence of the marketing

concept can be explained best by the shift from a seller’s market, one with a shortage of goods

and services, to a buyer’s market, one with an abundance of goods and services. During the

1950s, the United States became a strong buyer’s market, forcing companies to satisfy customers rather than just producing and selling goods and services.

Today, much competition among firms centers on the effort to satisfy customers.

Amazon and Barnes & Noble have been battling for consumer preference for their e-readers,

the Kindle and Nook. The two firms are continually adding features, making price adjustments, and offering new models of their products in order to satisfy consumers. Kindle’s

price has dropped dramatically, and Amazon recently released Kindle software for Android

users and introduced a tablet version called the Kindle Fire. Barnes & Noble followed its

original Nook with Nook Color, touting its superiority at displaying magazines and children’s books. Now both are facing competition from the Sony Reader and Apple’s iPad.4



3



Assessment

Check

1. What is the marketing

concept?

2. How is the marketing

concept tied to the relationship and social eras

of marketing?



Not-for-Profit and Nontraditional

Marketing

The marketing concept has traditionally been associated with products of profit-seeking

organizations. Today, however, it is also being applied to not-for-profit sectors and other

nontraditional areas ranging from religious organizations to political campaigns.



Not-for-Profit Marketing

Residents of every continent benefit in various ways from the approximately 20 million notfor-profit organizations currently operating around the globe. Nearly 1.9 million of them are

located in the United States, where they employ 13.5 million workers and benefit from volunteers representing the equivalent of 9 million full-time employees.5 Women tend to volunteer at a

higher rate than men, and 35- to 44-year-olds and 45- to 54-year-olds are also the most likely to

volunteer.6 The largest not-for-profit organization in the world is the Red Cross/Red Crescent.

Other not-for-profits range from Habitat for Humanity to the Boys & Girls Clubs of America to

the Juvenile Diabetes Research Foundation. These organizations all benefit by applying many of

the strategies and business concepts used by profit-seeking firms. They apply marketing tools to

reach audiences, secure funding, and accomplish their overall missions. Marketing strategies are

important for not-for-profit organizations because they are all competing for dollars—from individuals, foundations, and corporations—just as commercial businesses are.

Not-for-profit organizations operate in both public and private sectors. Public groups

include federal, state, and local government units as well as agencies that receive tax funding. A state’s department of natural resources, for instance, regulates land conservation and

environmental programs; the local animal control officer enforces ordinances protecting

people and animals; a city’s public health board ensures safe drinking water for its citizens.

The private not-for-profit sector comprises many different types of organizations, including

the Philadelphia Zoo, the United States Olympic Committee, and the American Academy of

Orthopaedic Surgeons. Although some private not-for-profits generate surplus revenue, their

primary goals are not earning profits. If they earn funds beyond their expenses, they invest

the excess in their organizational missions.

In some cases, not-for-profit organizations form a partnership with a profit-seeking

company to promote the firm’s message or distribute its goods and services. This partnership

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usually benefits both organizations. The National Football League and

the United Way joined to form one of the longest-running public-service partnerships in the United States. NFL athletes and other personalities appear in public-service advertisements and in person to promote

community service and fundraising. Since 1999, the “Hometown

Huddle” has been an NFL-wide day of service when team members,

their families, coaches, and staff members participate in local community

service activities.7



Some not-for-profit organizations enlist the help of celebrities

to spread the word about their charitable causes. To mark its

125th anniversary, Avon presented grants to women’s domestic

shelters and other agencies in the United States as well as in

countries around the world. Here actress Reese Witherspoon

and Avon’s Executive Chairman Andrea Jung present a grant to

Partnership Against Domestic Violence in Atlanta, Georgia.



Celebrities are particularly visible campaigning for not-forprofit organizations—their own as well as others. The actress Reese

Witherspoon is the Avon Global Ambassador and Honorary Chairperson

of the Avon Foundation for Women. Witherspoon recently helped

announce and present ten $60,000 grants to women’s domestic-violence

shelters and other agencies in countries around the world. The grants are

from the $2 million Avon Global Believe Fund, which Avon Products,

Inc. established in 2011 to mark its 125th anniversary and to maintain the

commitment to ending violence against women everywhere.8



Nontraditional Marketing

Not-for-profit organizations often engage in one or more of five major categories of nontraditional marketing: person marketing, place marketing, event marketing, cause marketing,

and organization marketing. Figure 11.2 provides examples of these types of marketing. As

described in the “Going Green” feature, through each of these types of marketing, an organization seeks to connect with the audience that is most likely to offer time, money, or other

resources. In some cases, the effort may reach the market the organization intends to serve.

FIGURE



11.2



Categories of Nontraditional Marketing

Marketing

Cause



Mar

ke



Major League

Baseball

World Series



326



c11.indd 326



in



rs



g



Pe



on



ing



Alison

Krauss and

Union Station



arket



Organization



M

ce

Pla



tin

g



American Cancer Society —

“No one deserves to get

cancer but everyone

deserves the

Bowling Green

right to fight

State University —

it.”

Chicago —

“Changing the

“Come play all day,

world by

stay all night.”

degrees.”



Ma



r ke



tin g



Eve



n



a

tM



rk



et



Part 4 Marketing Management



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