CHAPTER TEN Motivating Employees & Building Self- Managed Teams.

CHAPTER TEN Motivating Employees & Building Self- Managed Teams

Why Good Workers Leave Source: USA Today-Snapshot, 10/16/00
TA 10-6 Why Good Workers Leave 1. This acetate illustrates the most likely causes for good employees to quit, according to human resources executives. You may want to refer to OT 11-2 ‘What Makes Employees Stay’ when reviewing this acetate to provide for some balance. 2. By a large margin the limited potential for advancement is the greatest reason why employees leave jobs. Ask students if they have resigned from a job for this reason. Why are workers prone to leave jobs if they see a lack of opportunity? Given today’s highly mobile work force with less organizational loyalty and more career loyalty leaving a job creates no stigma as it might have in the past. What can employers do to minimize this? Do employers want to minimize this? Good discussion questions. Source: USA Today-Snapshot, 10/16/00

Intrinsic vs. Extrinsic Rewards
Extrinsic = Outside Intrinsic = Inside Praise Recognition Feeling of Job Well Done Pride Promotions Salary Increase TA 10-1 Intrinsic Vs. Extrinsic Rewards 1. This acetate illustrates visually to students that intrinsic rewards come from within an individual, whereas extrinsic rewards come from outside a person. Ask students which type of reward is most valuable to them and why? 2. Students might like to discuss situations in which they were intrinsically motivated. You can also question what types of extrinsic rewards they find most powerful? Also, see if students can explain why this information is so important to managers. 3. Discussion of intrinsic and extrinsic rewards is an excellent segue into the key material that’s covered throughout the chapter. Students need to know that motivating workers is perhaps the most difficult job the manager faces. Sense of Achievement Status Gifts

Most Common U.S. Motivators
TA 10-4 Most Common Motivators Used by Businesses in the U.S. 1. See if students can guess the leading motivators used by business in the U.S. It’s likely they will get the most popular motivator, cash awards, correct. Ask them what particularly motivates them when performing a job? The discussion of Herzberg’s Theory presented in the chapter may question business motives in using cash awards as the most popular method of motivation. See if students believe that cash awards are only temporary in motivation. See if they can identify long-term motivators. 2. Ask students what managers should use as the basis for motivators. Remind them that often we tend to focus on things that are important to us as being important to others. That is very often a major error of managers trying to motivate workers. Can students cite instances where they experienced managers doing exactly that? 3. In the next chapter we will discuss issues such as family leave and other benefits. See how much importance students put to benefit issues such as family leave or child care. Are these motivators to them? Source: Incentive Federation

Personal Qualities Related to Job Motivation
1. Ability 2. Personal Needs 3. Frustration Tolerance 4. Self-Esteem 5. Outside Supports TA Personal Qualities Related to Job Motivation 1. If we look at each of these qualities separately, several interesting facts can be communicated to students. Intelligence, creativity, energy, and maturity can all be considered factors related to ability. If a person’s abilities are congruent with the needs of the job this can serve as a motivating force. However, if an employee’s abilities are significantly higher than the challenges of the job, this can prove to be a contra-motivational factor. This will answer student questions concerning being ‘over qualified’ for a job. 2. If an employee’s needs (the need to be secure, liked, appreciated, effective, trusted, autonomous, etc.) are reasonably met on the job, internal motivation will incubate and likely grow. The relationship to Maslow’s Hierarchy can easily be interjected here. 3. Employees that have strong frustration tolerance are capable of being patient in the face of job obstacles or temporary failures or frustrations. Low frustration tolerance can cause severe problems in job situations where at least average frustration tolerance is needed. For example, people that cannot tolerate children not following directions could be easily frustrated and, therefore, not motivated as elementary teachers. See if the students can think of other examples. 4. An inherent sense of self-esteem generally moves workers to perform a job well whether they are closely supervised or not. They appreciate acknowledgement of a job well done, but don’t need it to continue to perform effectively. Self-esteem clearly helps self-motivation. 5. Family, friends, hobbies, interests, and a sense of purpose in life help employees bring energy to the workplace. If work is placed in a healthy perspective, a bad workday can be tolerated by a good night with family or friends. Employees whose entire life is work-driven tend to overreact to work setbacks and frustrations.

Evolution of Human Relations Concepts
Behavioral Management Hawthorne (Mayo) Maslow McGregor Ouchi Herzberg Scientific Management Frederick Taylor Gantt Charts Gilbreths

Maslow’s Hierarchy of Needs
Unsatisfied Self- Actualization Esteem Needs Social Needs Satisfied Safety Needs Physiological Needs

McGregor’s Theories Theory X- Autocratic Dislike Work
Avoid Responsibility Little Ambition Forced/Controlled/ Directed/Threatened Motivated by Fear & Money Theory Y- Democratic Like Work Naturally Works Toward Goals Seeks Responsibility Imaginative, Creative, Clever Motivated by Empowerment

Ouchi’s Theory Z Long-Term Employment Collective Decision-making
Individual Responsibility Slow Evaluation/ Promotion Specialized Career Path Holistic Concern for Employees

Herzberg’s Two-Factor Concept
Job-Related Achievement Recognition Work Itself Growth/Advancement Responsibility Peer Relationships Job Environment Working Conditions Salary Policy/Admin. Supervision

Comparison of Maslow & Herzberg
(Figure 10.5) Figure 10.5 Comparison of Maslow and Herzberg TA 10-5 Comparison of Herzberg and Maslow 1. This acetate is effective in covering the hypotheses of Herzberg and how they compare to Maslow’s Hierarchy. Since Herzberg is perhaps a bit more illogical to students than the other theorists, using the reinforcement of Maslow in explaining his theory of factors should help. 2. Students generally have the most problem with Herzberg downplaying the fact of money being a motivator. Part of this relates to the fact that most of them (especially day students) have very little money and it’s quite important to them. They should understand the distinction Herzberg is making. Money is very important in the motivational process in that the lack of what’s perceived to be fair compensation can cause dissatisfaction. You might want to note to students that this is why companies often perform salary surveys to find what are equitable wages to pay employees. 3. See if students agree with the match up of the two theories. Ask them if Herzberg’s motivational factors would/do motivate them to higher performance on the job. Students should know that motivating employees to perform at their highest level of ability is perhaps the most challenging job of the manager. Lots of possibilities with this acetate.

Job-Oriented Motivational Techniques
Job Enrichment/Redesign Skill Variety Task Identity/Significance Autonomy Feedback Job Simplification Job Enlargement Job Rotation

Goal-Setting Theory (MBO)
Management By Objectives (1960s) Employees Motivate Themselves Help Coach

Employee-Oriented Motivational Techniques
Expectancy Theory Equity Theory

How to Use Expectancy Theory
Determine rewards valued by employees. Evaluate performance level you seek. Make performance level attainable. Make reward valuable to employee. TA 10-7 How to Use Expectancy Theory 1. Expectancy theory, though explained in the chapter, often provides some interpretation difficulty for students. This acetate should help in forming in students’ minds the basis of how organizations can use expectancy theory in attempting to motivate workers to perform at their highest level of capability. 2. One key question in using expectancy theory is setting the right level of expected attainment in relation to the performance you desire. Attainable performance can be a tricky measure to set. If the level of attainment is set too low, workers will scoff at the ease of the expected task. If set too high, they may not even attempt to try to accomplish the task. This can make the application of expectancy theory rather difficult. You might question students as to what should be the basis that managers work with in setting attainable goals? 3. The other major problem deals with offering a reward the employee considers valuable. This can sometimes be a problem since managers often set rewards in relation to what is important to them. For example, tickets to a St. Louis Rams football game might be very motivating to us, but may not motivate a co-worker not interested in football. Ask students how managers can find out what will motivate workers toward a higher level of performance. This is one of the key steps in making expectancy theory work.

Employee Questions About Expectancy Theory
What is the probability that I can perform at the required level if I try? What is the likelihood my performance will lead to the desired outcomes? What value do I place on the outcome? TA 10-8 Employee Questions About Expectancy Theory 1. The information in this acetate is outlined in the text discussion but probably bears some attention here as well. Again, expectancy theory can be somewhat confusing to students. 2. These are the three key questions workers evaluate in a company’s attempt to use expectancy theory. Probability of success is very important to workers. Think of the following scenario for a moment; if the following grade scale is set for a course, what would be expected student attitudes? A 96-98 B 95-92 C 91-89 D BELOW 89 F Students may feel it’s virtually impossible to get a good grade. Likelihood of performance leading to the reward. If I announced to my classes that no one has ever attained a grade of A in my introduction to business class for the past 20 years, what would students feel about their chances? How much value is placed on the outcome? Think of the football tickets mentioned earlier or consider a student that feels grades mean nothing to future success. Do you think this person would strive to attain an “A” for the course? Businesses of course are faced with the same challenges and questions as described above. Ask students how managers can solve some of these problems and still be able to motivate workers.

Steps to Improve Performance
Determine Rewards Valued Determine Standards Ensure Standards Attainable Tie Rewards To Performance Are Rewards Considered Adequate?

Teamwork & Open Communication
Self-Managed Teams = Open Communication Identify Procedures Apply Procedures Change Not Easy Employee Empowerment

Keys to Building Employee Trust
Start from a position of trust Be consistent Listen with an open mind & respect others’ opinions Admit your mistakes Give credit where credit is due TA 10-9 Keys to Building Employee Trust 1. A recent study concluded that trust has declined at three out of four work places over the last two years. This acetate illustrates what can be done to reverse that trend. 2. The following are potential techniques for reversing the trend: Start from a position of trust- trust can be approached in 2 ways: Trust people on the front end and withdraw it if they prove untrustworthy. Withhold trust until you’re sure it’s warranted. Be consistent- eliminate discrepancies between what you say and what you do. Listen with an open mind and respect others’ opinions- make a strong attempt to understand and be open to what you hear. Admit your mistakes- when you have erred, others probably know it. A respected manager admits his/her mistakes. Give credit where credit is due- if the team as a whole did something great, say so Source: Communication Solutions

Work Trends for the 21st Century
Tinkering With Time Role Blur Two Places at Once A Super-Class Involved Working Dads Grieving at Work TA Work Trends for the 21st Century 1. This acetate illustrates trends that are affecting work as we enter the 21st Century. 2. It may be helpful to students to go over each of the trends to get student feedback and ensure understanding. Some useful starting points are: Tinkering with time- the value workers place on time vs. money will continue to shift in favor or time. Role blur- it will be harder to tell, just by looking, exactly what work and/or family roles people are playing. The sleeping-looking dad who stands at the corner bus stop with your kids every morning may be telecommuting for a Japanese software firm. Two places at once- to ease pressure on employees feeling they need to be in two places at once, such perks as dry cleaning at the workplace will continue to grow, encouraging integration of work and home. A super-class- ambitious, self-sacrificing workers will shoulder a larger share of business travel, relocation and long hours. Involved working dads- young fathers will slay the stereotypes of the past: the 1950s’ Organization Man, emotionally absent from his family, and the 1980s’ baby-boom executive, not only emotionally but often physically absent for long periods, too. Grieving at work- workplace taboos against talking about death and grieving will crumble as a larger share of the aging work force experiences the deaths of loved ones Source: Wall Street Journal, 12/29/99

Warning Signs of Employee Stress
Drops in productivity Chronic lateness Absenteeism Careless with details Unable to work with others Negative attitudes about work Withdrawal from co-workers Easily upset/angered TA Warning Signs of Employee Stress 1. Employers can often spot impending stress or on-the-job stress or burnout by looking for the signs listed in the acetate. 2. See which of these signs students see as being the most obvious sign of stress in the worker. Ask why they made this choice and what they would do to counter such a problem if they faced it. See if anyone in class has ever undergone stress on the job or at school. 3. As a matter of fact, this acetate is helpful for instructors to look at carefully. It might assist in identifying potential problems with students before they get out of hand. The information on this acetate would be a good topic for a workshop or for a faculty chat session.

Key Terms Equity theory 313 Extrinsic reward 296 Expectancy theory 312
Goal-setting theory 310 Hawthorne effect 300 Intrinsic reward 296 Job enlargement 310 Job enrichment 309 Job rotation 310 Job simplification 309 Management by objectives 311 Maslow hierarchy of needs 300 Motivators 307 Scientific management 297 Time-motion studies 297

HUMAN RESOURCE MANAGEMENT: FINDING AND KEEPING THE BEST EMPLOYEES
CHAPTER ELEVEN HUMAN RESOURCE MANAGEMENT: FINDING AND KEEPING THE BEST EMPLOYEES

Number of Hours Americans Work Per Week
TA 11-1 Number of Hours Americans Work Per Week 1. This acetate illustrates the number of hours on the job the typical employee puts in during an average work week. 2. As can be seen here, despite all of the technological breakthroughs to increase productivity, 62% of all workers still work 40 to 50 hours per week. Another way of looking at this information is that 80% of all employees work more than 40 hours per week. 3. Ask students if they believe a 40-hour workweek is a fair amount of time to be on the job. Source: USA Today

HR Challenge Shortages Declining Industries Undereducated New Workers
Shift in Workforce Composition Laws & Regulations Single-Parent & Two-Income Families Attitudes Toward Work

Employer Perception of % High School Seniors Ready for Work
TA 11-2 Employer Perception of % High School Seniors Ready for Work 1. Students should be very interested in the information on this acetate. As they can see, employers do not have a very high opinion of student’s abilities coming out of high school. 2. See if students concur with the evaluation of employers about students’ preparation. It’s particularly important to emphasize the low marks employers attach to student abilities in written communication and basic math skills. Ask students if the information is accurate, and who is at fault for the poor student work readiness? 3. This is a good time to pitch for student electives such as composition courses and basic oral communications. Most programs require such courses but some have them as electives. Students should be aware of the importance employers attach to such skills in the communication age.

Determining HR Needs Forecast Needs Prepare HR Inventory
Prepare Job Analysis Analysis Description Specifications Assess Demand Assess Supply Establish Strategic Plan

Hiring Process Recruit Select Train/Develop Orientation OJT
Application Form Interview Test Investigate Examine Probation Train/Develop Orientation OJT Apprenticeship Off-The-Job Train Online Training Vestibule Training Simulation

What Attracts Employees to Specific Employers?
TA 11-3 What Attracts Workers to Specific Employers . Why are workers anxious to work for certain companies and somewhat adverse to others? This information is very important for companies seeking to attract qualified employees. That question is addressed in this acetate. . Job security is, evidently, still important to workers. With threats of outsourcing and downsizing still looming in the workplace, it is not surprising workers look for stability. Training and education are not far behind. Workers today realize that staying up on technology and improving skills are critical to continued success in a changing work environment. . Ask what is most important to students. See if their answers mirror the responses given on the acetate. % Employees That Agree

Why Companies Use Temporary Workers
Provide flexibility to meet demand fluctuations Acquire specific expertise Fill-in for absentee workers Screen candidates for future employment Control increasing benefit cost Offset effects of downsizing TA Why Companies Use Temporary Workers 1. This acetate highlights the growth of temporary workers in U.S. companies. It provides the rationale why companies now use such growing numbers of temporary workers. 2. See which of the reasons listed sounds most accurate to students. Ask how many students would like to be full-time workers as opposed to part-time. The issue of temporary or contingent workers is a major issue in today’s workplace. You might inform them that the 1997 UPS strike that is covered in Chapter 12 dealt primarily with the issue of hiring temporary and part-time workers. 3. This acetate notes that temporary workers can be used to combat the growing concerns of organizations faced with problems such as absenteeism and fear of hiring the wrong person. This issue is discussed more in depth in Chapter 11. 4. In case they are not aware, students should understand the importance of reviewing fringe benefit packages that firms offer in their employment search. Students tend to focus on salary or per-hour wage as the primary evaluative criteria. The information in the earlier acetate should provide a good background as to why workers want to join certain organizations.

What Not to Ask in Job Interviews
What is your date of birth? Have you ever filed a worker’s comp. claim? Sometimes we will need the person we hire to work late hours. Will this cause problems with your childcare? What is your native language? What is your place of birth? Do you own a home? I see you use a walker. If we were to hire your, what accommodations would you require? TA What Not to Ask in Job Interviews . Employers need to be careful that they don’t even inadvertently violate regulations and laws. This acetate deals with some areas to stay away from in conducting the interview process. Chapter 11 deals quite specifically with principles involved in equal employment law. The last acetates in this section advise specific things to ask and not ask of prospective employees in the recruiting and interviewing process. 2. See if students can explain why the questions listed in this acetate are not permitted in the job interview process. Some are a bit tricky but, with a bit of thought, students should be able to discern the proper answer. Ask students if they have been asked these questions in any job interviews that they have encountered.

Management Development
On-The-Job Coaching Understudy Job Rotation Off-The-Job Courses & Training Network- Mentor

Performance Appraisal
Establish Standards Communicate Standards Evaluate Performance Discuss Results Take Corrective Action Use Results to Make Decisions

Major Uses of Performance Appraisals
Identify training needs Use as a promotion tool Recognize workers’ achievements Evaluate hiring process Judge effectiveness of orientation process Use as a basis for terminating workers TA 11-6 Major Uses of Performance Appraisals 1. Appraising employee performance is one of the least preferred tasks of managers. The class may have a difficult time associating with this since it’s doubtful many students have encountered such responsibility in their previous or current employment. You might want to refer to your own difficulty in appraising performance of students. They don’t realize it’s often very difficult for professors to accurately measure what students know. This acetate carefully lists the major uses of performance appraisals from a managerial perspective. Students unfamiliar with performance appraisals often feel they are primarily used for discipline. 2. If you take this discussion a bit deeper, you might want to get into some of the problems associated with managers’ performance appraisals. Some of the more reoccurring problems include: a. Halo Effects- this happens if the evaluator assigns a basic rating to an employee on the basis of their overall impression of the person being rated. They lose objectivity in terms of what they should exactly be appraising. b. Leniency or Harshness- evaluators are often too lenient or too harsh in their evaluation of employees. This can lead to employee confusion and rather strange employee performance histories. c. Central Tendency- in this situation, evaluators avoid high/low ratings. Instead they rate everyone as being about average. This can lead highly motivated performers to cut back on their efforts. d. Recency- often evaluators lose focus on the period being evaluated. For example, in a semi-annual evaluation, they may only consider the employee’s performance over the past two weeks. This time span would not be a fair or accurate measurement of performance. 3. If you follow the techniques listed on the acetate, students should have no difficulty understanding how both the manager and employee can benefit from the performance appraisal process.

Employee Retention Compensation Fringe Benefits Job-Sharing Flextime
Individual Team Fringe Benefits Job-Sharing Flextime Core Time Compressed Workweek Home-Based & Mobile Work

What Makes Employees Stay
TA 11-7 What Makes Employees Stay 1. This acetate illustrates what keeps employees working with the same employer. You may want to refer back to TA 10-6 ‘Why Good Workers Leave’ when discussing this information. Also, you may want to refer to TA Work Trends of the 21st Century as part of the discussion. 2. While Raises and Benefits account for two-thirds of the retention percentages, you may want to remind students that Flexible Schedules and Stock Options are relatively new ideas that are just starting to win acceptance. If you refer to TA you may want to point out how those trends might impact on this chart in the future. Source: BridgeGate, Irvine, CA & Market Facts Inc., Arlington Heights, IL

Unusual Benefits Offered to Workers
Steelcase- 1,200 acre camping and recreational area SYNOVUS- $50 bonus to take physical exam, $200 reward if vital signs are OK Los Angeles Dodgers- free ice cream for staff if team is in first place XEROX- Life Cycle Account or $1,000 to help employees with major thresholds (buying home, college) TA 11-8 Unusual Benefits Offered to Workers 1. Students should like this acetate mainly for its uniqueness, however, it does enforce an important point nonetheless. Company benefits vary considerably company by company, and expectations are diversity of benefits will continue throughout the 21st century. These are some rather interesting examples. 2. In case you want to relate a few more unique benefit offerings: Fannie Mae offers workers ten paid hours a month for volunteer work J. P. Morgan gives a free lunch every day for all employees at 60 Wall Street Moog Industries offers 35 extra vacation days on the tenth year of service and every five years thereafter Deloitte & Touche gives bonuses of $1,500 to $10,000 to employees that recommend new hires Xerox has a life cycle account of $10,000 to help employees cross major thresholds such as buying a first house or financing college tuition. 3. Benefits are a key part of the compensation package and companies seem to be getting more and more creative. Ask the class if they know of any type of benefit plan available through a particular employer. Ask how important benefits are to them.

Reasons for Establishing Flex-Time
TA 11-9 Reasons for Establishing Flex-time 1. This acetate lists the primary reasons why companies establish flexible work systems. 2. It’s interesting to get student perspectives about such plans as flextime and compressed workweeks. Some students may have experience working in such systems, especially if they have worked for the government or a company like UPS. Once again, it might be helpful for them to relate what they consider to be the pro’s and con’s of such systems. 3. Flexible work plans have taken on a new direction with the growth of home-based businesses and flex-place options. Flex-place options allow workers to come into the office or stay at home to accomplish specific job requirements. If your campus is involved in distance learning programs, this will fit in nicely with the information in the acetate. Check and see if students think flexible work situations will grow or diminish in the future work environment. Odds are they will grow.

Employee Movement Promotion/Reassignment Termination Retirement
Resignation

HR & Legal Issues Civil Rights Act (1964)
Equal Employment Opportunity Act (1972) Affirmative Action Reverse Discrimination Civil Rights Act (1991) Americans with Disabilities Act (1990)

Employment Opportunity Laws- Which statements are T/F?
It’s OK to ask any applicant whether he or she has an automobile. It appropriate to ask applicants to attach photographs. During interviews, it’s appropriate to ask an applicant his/her age. It’s appropriate to ask if an applicant is a naturalized citizen. It’s not appropriate to ask an applicant about post work experience. TA Employment Opportunity Laws - Which Statements are T/F? 1. The importance of understanding Equal Employment Law is emphasized in this acetate. 2. Students often have a variety of opinions related to these questions. It leads to spirited discussion as to the benefits/shortcomings of equal employment law. 3. The short quiz highlights some of the particulars involved in Equal Employment Law most people never consider. The answers to the questions are as follows: . FALSE- this is irrelevant unless the job requires working in one’s car . FALSE- this is considered inappropriate to protect applicants from possible recruiter bias. . TRUE- this would be a violation of the Age Discrimination in Employment Act of 1967. . FALSE- This is considered non-essential in measuring potential job performance and could lead to possible recruiter bias . FALSE- you can and should ask about an applicant’s past work experience

Employment Opportunity Laws- Which statements are T/F?
You may ask an applicant to indicate what foreign languages he/she can read, write or speak fluently. It’s appropriate to ask an applicant if he/she has an arrest record. It’s OK to ask whether the applicant is physically able to lift heavy weights. It’s appropriate to ask women questions about childcare arrangements. You have the right to ask an applicant for names of work-related and personal references. TA Employment Opportunity Laws (cont’d) . TRUE- you can ask this question if language fluency is required in the job only. . TRUE- you should not inquire about arrests since they do not imply convictions or guilt. . TRUE- this should be asked only if the job requires such lifting . TRUE- this question can only be asked if it is asked of all applicants. 0. TRUE- you can ask for the information but cannot ask any questions from the references that could be construed as discriminatory.

Key Terms Affirmative action 352 Apprentice 339
Cafeteria-style fringe benefits 347 Compressed workweek 348 employee orientation 338 Flextime plan 348 Fringe benefits 346 Human resources 328 Job analysis 332 Job description 332 Job sharing 349 Job specifications 332 Networking 341 Off-the-job training 339 On-the-job training 338 Performance appraisal 342 Recruitment 333 Reverse discrimination352 Selection 335 Training and development 338 Vestibule training 340

Dealing with Employee- Management Issues and Relationships
Chapter Twelve Dealing with Employee- Management Issues and Relationships

Employed Workers In Unions
Source: U. S. News & World Report, 3/5/01

Union Membership by Industry (2000)
Source: Bureau of Labor Statistics

Poor management/ employee relations Negative organizational climate
Why Employees Join Unions Why Employees Don’t Join Unions Pro-union attitudes Poor management/ employee relations Negative organizational climate Poor work conditions Union’s reputation Job security Anti-union attitude Good management/ labor relations Positive organizational climate Good work conditions Union’s reputation Peer pressure TA 12-1 Why Employees Join/Don’t Join Unions 1. This acetate compares reasons why employees either choose to join or not join a union. See what students think about each of these factors and the decision to join or not join a union. 2. Several key decision factors center on work conditions, employee/management relations, and overall organizational climate. This may be a good time to discuss different types of labor agreements. For example, many students will be surprised that in union shop agreements a worker must join the union or face discharge from a job. You can also bring in information concerning labor law and open shop agreements. It’s possible to compare/contrast between open and union shop agreements in discussing this acetate. 3. You might want to use this acetate to discuss such issues as should public employees be permitted to join unions? If yes, should they be permitted to strike? Ask students if they would be inclined to join a union? Why or why not?

History of Labor Unions
CIO Organized AFL/CIO National Labor Relations Act (Wagner Act) Local Craft Unions Organized Knights of Labor AFL Organized

Objectives of Organized Labor
1970s- Pay/Benefits 1980s- Job Security & Union Recognition 1990s- Job Security/ Global Competition

International Union Membership
Sweden % Italy % United Kingdom 21% Germany 33% Canada % Japan % U.S % France %

Organized Labor Issues
Right-To-Work Laws & Open Shop Union Security Clauses Closed Shop Union Shop Agency Shop TA 12-4 States With Right-to-Work Laws 1. This acetate reviews for students the twenty states that have adopted right-to-work laws. In case students are interested, the last state to pass a right-to-work law was the state of Idaho. 2. In viewing this acetate, it would be a very good time to go over some of the significant labor laws, such as the Wagner Act and the Taft-Hartley Act. You might want to note to students that of all labor legislation passed, labor unions are perhaps most vehemently opposed to provision 14B of the Taft-Hartley Act, permitting states to enact right-to-work laws. Students need to understand that unions may very well be present in right-to-work states but employees are under no obligation to join. If the union negotiates higher wages or other benefits, the non-members of the union, however, also share in the largesse. 3. See if students favor right-to-work laws and what their general opinions are of labor unions. If the class is somewhat divided, have them debate the pro’s and con’s of union membership. We have had some spirited discussions in our classes. Also, see what they see as the future of labor unions in the United States. Right-To-Work States = 21

Grievance Resolution Process
TA 12-5 Grievance Resolution Process 1. Some students, depending on their background, may be familiar with the grievance process, others will know very little about it. This acetate should help to reinforce the entire class’ understanding. 2. It’s important for students to know that most labor disputes in the workplace are settled at the first step of the grievance process. Shop stewards and first-line managers play a key role here and generally resolve most grievance issues. Students should know, however, that the grievance process could actually ascend up to the highest level of the union and top corporate officers. 3. This would be an opportune time to discuss the mediation and arbitration process. Students need to understand that binding arbitration calls for a decision that both sides must abide by. Grievance Resolution Process Figure 12.6

Mediation/Arbitration
Bargaining Zone Mediation/Mediator- suggestions Arbitration- binding decision

Factors That Affect the Collective Bargaining Process
Public Sentiment Labor Law State of Economy Union Rep. Mgmt.Rep. Bargaining Topic Goals of Bargaining Parties Issues Being Discussed TA 12-3 Factors that Affect the Collective Bargaining Process 1. This acetate highlights several key issues involved in the collective bargaining process. Students should be reminded that collective bargaining is the life’s blood of the union movement. Historically, labor unions have been limited to collectively bargain only on issues related to job or work conditions. Students can refer to the example in the text of different issues involved in the collective bargaining process. Samuel Gompers, a pioneer of the labor movement, once defined collective bargaining as the process of “equalizing un-equals at a bargaining table.” He felt this was the key objective and achievement of labor unions. This right was earned under the National Labor Relations Act of 1935. 2. Issues such as various labor laws could be addressed at this time. Certainly the National Labor Relations Act (Wagner Act) and the Labor/Management Relations Act (Taft-Hartley Act) are the two most important pieces of legislation in this section. 3. It’s important to inform students that issues in collective bargaining often change. The bargaining topic often relates specifically to outside factors listed on the acetate such as the state of the economy, goals of both parties, and particularly public sentiment. Donald Fehr, the profile in the Getting to Know section is the head of the Player’s Association in Major League Baseball. Some feel there may be another baseball strike in How would public sentiment affect this issue? You can also note how public sympathy for the Teamsters’ Union helped to end the UPS strike in 1997. 4. Students may question you concerning mediation and arbitration in discussing this acetate. Both topics could be discussed at this juncture or perhaps in the discussion of the next acetate. Precedents in Bargaining

Union Tactics Strike Sickouts Boycott Primary Secondary On Strike

Management Tactics Yellow-Dog Contracts- outlawed Lockouts Injunction
Strikebreakers

Employee-Management Issues of Future
Executive Compensation Comparable Worth Sexual Harrassment Child Care Elder Care Aids/Drug Testing, Violence in Workplace Employee Stock Ownership Plans(ESOPs)

CEO Pay as Multiple of Average Worker Pay
Source: Executive Excess 2000, Institute for Policy Studies & United for a Fair Economy

Women’s Earnings as % of Men’s by Age
Source: Business and Professional Women/USA

Types of Sexual Harassment
Gender Harassment Seductive Behavior Sexual Bribery Sexual Coercion Sexual Imposition TA 12-6 Types of Sexual Harassment 1. This acetate lists the different types of sexual harassment that can occur in the workplace. With this issue dominating the news over the past few years, it’s worthwhile to explain the types to students. 2. Here’s how the five types work: Gender harassment includes generalized sexist statements and behavior that convey insulting or degrading attitudes about a person’s sex. Seductive behavior is unwanted, inappropriate and offensive sexual advances. Sexual bribery is the solicitation of sexual activity or other sex-linked behavior by promise of reward. Sexual coercion is similar to sexual bribery only with the threat of punishment such as negative job evaluations, loss of promotions, or threat of termination. Sexual imposition is gross sexual imposition such as forceful touching, feeling, grabbing, or sexual assault

Percentage of Workers Responsible for An Aging Relative
TA 12-7 Percentage of Workers Responsible for Aging Relative 1. This acetate highlights a growing problem facing the U.S. workplace. It’s estimated that the number of workers responsible for an elderly relative will double in the next five years was the most recent year for data collected. The UB6E web site will be updating such information as it becomes available. 2. You might use this acetate to tackle the issue of proactive behavior versus reactive behavior in the workplace. According to Hewitt Associates, companies they have surveyed are still lacking in offering significant elder care benefits to employees compared to the level of assistance offered in child-care benefits. A similar survey conducted by the Society for Human Resource Management reported that two-thirds of the companies it evaluated were involved in a very limited degree with elder care services. 3. It important for students to review this rather brief but important section in the chapter. Elder caregivers are absent on average 1 1/2 times more often than other employees are. Productivity losses for elder care costs as much as $2,500 per year per care-giving employee. Since elder care providers tend to be older, more experienced workers, the cost to the company is generally higher than the time lost due to child-care. The sad fact is the situation will only get worse in the future.

Major Types of Workplace Violence
TA 12-8 Major Types of Workplace Violence 1. Workplace violence is addressed in Chapter 12 and has been a current feature on news broadcasts and in newspapers. We don’t need to remind students about such horrific events as the Columbine massacre. See if students think the workplace is getting more violent. If they answer yes, ask them why it is. 2. As the acetate points out, the major cause of violence occurs with one employee attacking another or an employee attacking a supervisor. The NBA case involving Latrell Sprewell (the player that choked his coach) would be a good example to use here. See what the students think about what he did and was his punishment justifiable. Also, ask students if some jobs don’t lend themselves to workplace violence? See if they can name a few such jobs.

Key Terms Agency shop agreement 368 American federation of labor 346
Arbitration 369 Certification 365 Closed-shop agreement 368 Collective bargaining 365 Comparable worth 377 Congress of industrial organization 364 Cooling-off-period 372 Craft union 363 Decertification 365 Employee stock ownership plan 383 Give back 373 Grievance 369 Industrial union 364 Injunction 373 Knights of labor 364 Lockout 373 Mediation 369 Negotiated labor-management agreement 366 Open-shop agreement 368 Primary boycott 373 Right-to-work laws 368 Sexual harassment 378 Shop steward 369 Union 362 Yellow dog contract 373

Customer and Stakeholder Relationship Management
Chapter Thirteen Marketing: Customer and Stakeholder Relationship Management

The Marketing Concept Customer Orientation Service Orientation
Profit Orientation Update of Concept

What is Marketing? Target Market Market Needs Satisfy Needs

Marketing Strategies in Non-Profit Organizations
Find a productive board of trustees (Directors) Make marketing the focus; not short-term sales Know your mission and review mission strategy regularly Practice strategic planning Carefully segment target market Train & develop volunteers for long-term Be frugal- know how to manage finances TA 13-1 Marketing Strategies in Non-Profit Organizations 1. This acetate highlights to students the need for effective marketing in nonprofit organizations. It is important students realize that non-profits must apply the same aspects of marketing as their counterparts in profit-seeking organizations. For instance, marketing applications such as customer orientation, targeting, and an integrated marketing plan are very relevant to nonprofit organizations. 2. A few questions will help the discussion of this information. Students can be quizzed concerning the future of non-profits. Do students believe that non-profits will become more or less dependent on marketing? You can also ask what is exchanged in nonprofit transactions? Some organizations look for donations, others for time commitments, still others for votes. 3. You might want to point out to students that non-profits offer real potential for the marketer looking for challenge and experience. It’s also helpful to communicate to students the wide scope of non-profit businesses in the U.S. economy.

Elements in the Marketing Mix
Place Product Computer 'R Us Marketing Program TA 13-2 Elements in the Marketing Mix 1. The critical elements in each of the four Ps of the marketing mix are identified here. This acetate is very helpful in illustrating the depth and breadth of the marketing mix. 2. It might be interesting to question students about the importance of each element in the four categories. An example might be, “Will college students ever insist that a warranty be part of their degree programs?” “Do you think we will see 10-year car loans in the near future?” “How is the Internet going to change retailing and distribution in the future?” 3. The responsibility of the marketing manager in building the four Ps into a cohesive marketing program is also highlighted. Students can see how all four elements must fit together to be effective. 4. This acetate also provides you with the opportunity to discuss the importance of environmental scanning in searching out marketing opportunities and threats. You may want to highlight that a firm’s survival often depends on its ability to spot trends in its environment and turn them into advantages. One of the key trends today is delighting customers. Buy at Computers ‘R Us Promotion Price

Marketing Process Need Design Research Name/Package/ Price Test
Promote Build Distribution?

Market Research Process
Define Collect Analyze Choose

Uses of Market Research
Analyze Customer Needs/Satisfaction Analyze Markets & Opportunities Analyze Effectiveness of Strategy/Tactics Analyze Goal Achievement TA 13-3 Uses of Marketing Research 1. Note to students the key word is analyze. Marketing research is often predictive and certainly helps formulate a foundation for marketing decisions. It might be interesting to students that research is conducted in both pre-testing and post-testing situations. Often before product development, marketers test to see if there is potential for the good, service, or idea. After the product is in the market, users are queried for their opinions or suggestions on how to make the product better. 2. You might want to discuss the issues of primary and secondary data to students at this point. Explaining these components of the research process often provides students with a clearer understanding of what’s happening in the research effort. Give students an example of a real or hypothetical product and see if they can discern for themselves what types of information they would like to have before marketing the product.

Sources for Marketing Research Information
Secondary Data Company Records Gov’t Agencies Trade Associations Research Companies Primary Data- Specific to Project Surveys Observations

Guidelines for Market Research
Clarify research objectives/stay on target. Decide whether you will do the research or use a professional researcher. Make certain questions are directed to objectives. Ask for relevant information. TA 13-4 Guidelines for Market Research 1. Marketing research is the subject of the next two acetates. The purpose of such coverage is to communicate to students that new product development and other key variables in marketing decisions don’t just happen. They are carefully analyzed and plotted according to what is determined from marketing research. This acetate helps start the process. 2. If students stayed focused on these guidelines, they can see how the process evolves. It’s important for students to understand that the purpose of research is to either solve problems or locate opportunities. Therefore, the services of a professional researcher are often called into action. See if students can name at least one major marketing research firm. It’s likely someone will identify A.C. Nielsen because of the television ratings system or Louis Harris because of the extensive polling they do on American life. 3. The next acetate helps to define the process of market research more fully.

The Marketing Environment
Economic Technology Competitive Customer Social Global

Figure 13.5 Marketing Environment
TA 13-5 The Marketing Environment 1. This acetate helps to explain the environment under which the marketing manager must operate. Students need to know that marketing is a complex, challenging field that offers many opportunities. 2. See if students can relate to and offer examples of how companies must deal with the major environmental factors. It’s probably helpful to work through each factor one-by-one seeking student input as you progress. You might want note to students this is called an environmental scan. Here are some examples you can use: a. Social – see if students can identify how population shifts will alter the marketing process as we know it today and create opportunities for the future. The aging of America could play a significant role here. b. Economic – ask students what industries are hit particularly hard by economic downturns such as a recession. What items do consumers postpone purchasing? c. Technological – How has technology revolutionized customer expectations? What research benefits do companies receive from advances such as bar codes? d. Global – Hopefully students will remember information from chapter three. For example, 95% of the world’s population lives outside the United States. 3. It’s important to note to the class that the environment of marketing is changing faster than at any time in history. Companies that don’t keep up, go under.

Different Markets Consumer Niche One-to-One Business-to-Business (B2B)

Market Segmentation Target Marketing Mass Marketing Geographic
Relationship Marketing Target Marketing Geographic Demographic Psychographic Benefit Volume

Buying Process Step 1: Recognize Problem Step 2: Information Search
Step 3: Evaluate Alternatives Step 4: Make Purchase Decision Step 5: Postpurchase Evaluation

Consumer Decision Making
(Figure 13.7) Sociocultural Reference groups Family Social class Culture Subculture Marketing mix Product Price Place Promotion Decision-Making Process Problem Recognition Information Search Alternative evaluation Purchase decision Postpurchase evaluation (cognitive dissonance) Situational Type of Purchase Social surroundings Physical surroundings Previous experience Psychological Perception Attitudes Learning Motivation TA 13-8 Consumer Decision-Making Process 1. This material is covered in the text, but it’s your decision how far you want to take it. Students, however, should have some perception of how consumers decide to purchase particular products. As they work through the different influences in the consumer decision-making process, the applications should unfold more clearly for them. 2. Sociocultural influences present the most interesting area for discussion. See if students can relate to how their reference groups influence purchases especially in terms of products such as music, clothes, athletic shoes, and movies. 3. Situational influences may cause students the most difficulty. It might be necessary to work through these different influences and provide examples for each one.

Influences on Consumer Behavior
Reference Group Culture Learning Customer Cognitive Dissonance Subculture

Business-to-Business (B2B)
Number Size Geographic Concentration Rational Direct Sales Personal Selling

Updated Marketing Concept
Customer > Delight Stakeholders Organizational Service > Uniting Organizations Maintain Profit Orientation Establish Relationships Customer Stakeholder

Urban Adult Spending Habits
TA 13-6 Urban Adult Spending Habits 1. This acetate illustrates the spending habits of the urban adults population versus adults not living in major cities. 2. It is always quite revealing for students to see how urban adults gravitate to the more fashion conscious (read more expensive) items than do All Adults. Ask students what this does to their perception of the amount of money urban adults spend on apparel and entertainment? What implications does this have for someone wishing to market to urban areas? Source: Simmons Market Research

Successful Marketing in Small Organizations
Identify your best customers. Build lasting relationships. Share your customers with other businesses by developing strategic alliances. Practice integrated marketing. Know what makes your customers happy. Personally thank your customers for support. Stand out above the competition. TA 13-9 Successful Marketing in Small Organizations 1. Students often question how small companies can become effective marketers with the very limited resources most small businesses have available. This acetate, hopefully, will help with this question. 2. A good resource for students interested in a more in-depth analysis of small business marketing is Kenneth Cook’s book, The American Marketing Association’s complete Guide to Small Business Marketing, published by NTC Business Books, Lincolnwood, Illinois. 3. In reviewing this acetate a few points can be emphasized: Approximately 20% of a small company’s customers account for 80% of its sales. Know what your customers are looking for and be ready to satisfy their needs. Professor Micheal Etzel of the University of Notre Dame emphasizes that efforts of the organization should not focus on short-term returns. Scoring once is not the key to success, building enduring relationships is the key to long-term profitability. Crossover marketing is becoming very popular. What this involves is two businesses sharing customers in some way. For example, a theatre may enter into an agreement with a restaurant whereby they offer joint discounts to customers. Implementing strategic alliances with other businesses also makes good long-term sense. Integrated marketing (discussed in Chapter 16) helps to build a positive customer image. It involves using varied approaches to reach a wide range of potential customers. With fewer financial resources available, small businesses need to rely on a good deal of creativity. Writing personal letters to customers may sound corny or sappy, but often they send a special message to the customer that he/she is important.

ABCs of Marketing Always be customer-driven.
Benchmark against the best in the world. Continuously improve product/performance. Develop the best value package. Empower your employees. Focus on relationships. Generate profit/meet other org. objectives. TA 13-7 The ABCs of Marketing 1. This acetate is appropriate to begin the analysis of the marketing section of the course. It includes many of the ideas, concepts, and applications discussed in the text that are currently used in business today. 2. This is perhaps a good time to discuss with students the need for marketing in all types of organizations. Students often think of marketing as a key component in profit-seeking businesses but rarely think of the marketing efforts of government and non-profit businesses. Ask them if the college they attend is involved in marketing? How about their church or place of worship? How about the federal government? This gets students thinking about the scope of marketing in contemporary society. See what other information they can offer. Source: Nickels & Wood, Marketing, Worth Publishing, 1997

Key Terms Brand name 400 Consumer market focus group 409 Market 396
Market segmentation 410 Marketing 396 Marketing management 397 Marketing mix 398

Developing and Pricing
Chapter Fourteen Developing and Pricing Products and Services

Consumer Choices of Best Product Innovation of ALL Time
TA 14-1 Consumer Choices of Best Product Innovation of ALL Time 1. This acetate should be fun, yet informative, for students to explore. See what they identify as the leading product innovations in marketing history then compare the answers with those on the acetate. See if students are surprised the computer is not among the leading innovations. 2. Ask students what types of product innovations they envision in the future. It might also be interesting to engage in a discussion of the importance of developing new products from the standpoint of business and economic reasons. Interjecting global market realities could be appropriate here. Remind students that twenty years ago many of our leading companies were non-existent on in emerging stages (i.e., Microsoft, Oracle, Cisco Systems, etc.). Source: American Demographics

Product Development & Value Package
Value- Total Product Offer Product Line Product Mix Product Differentiation

Classic Product Failures
Company Loss Edsel Corfam VideoDisc PCjr New Coke Premier Ford Motor Co. DuPont RCA IBM Coca-Cola R. J. Reynolds $250 M $100 M $500 M $ 40 M No $ Number TA 14-2 Classic Product Failures 1. Students can easily see that the failures described here involve very reputable, and well-established companies. Virtually every large company in the United States has experienced the misfortune of a failed product. 2. An out-of-class assignment we often use is to give each student a company in a major industry in the United States. Have them research and see if the company has experienced a significant product failure. Students are often surprised to find that most have. Some examples: Anheuser-Busch- L.A. (Light Alcohol) Beer Heinz- Great American Soups Campbell’s- Red Kettle Soups Chevrolet- Corvair Gillette- Calculators This list goes on! 3. It is useful to inform students that most new products introduced in the market in a given year fail. Good question: if that is the case why do companies continue to roll out new products year-after-year?

First Products Produced by Five Major Companies
Hershey Caramels Amway No-rinse car wash Heinz Horseradish Avon Little Dot perfume set 3M Sandpaper Horseradish TA 14-3 First Products Produced by Five Major Companies 1. Students should find this both a fun acetate and an informative one. The first products produced by five well-known companies are listed in the acetate. See if students can guess any of the original products of these five companies without uncovering the information on the acetate. If they can, perhaps we should be learning from them. 2. See if students can recall the first products introduced by specific companies in their market area. A phone call, trip to the library, or a tour of the Internet often helps facilitate this assignment. 3. Reviewing utility concepts and niche marketing can be helpful here. Finding a need and filling it is still the heartbeat of marketing. Source: World Features Syndicate

Mickey Mouse’s Product Mix
Theme parks & resorts ABC Television Network TV & radio stations Film studios & production Video programs & licensing Consumer products Publishing TA 14-4 Mickey Mouse’s Product Mix 1. This acetate illustrates the concept of a product mix. Chapter 14 discusses both product line and product mix and how they relate to the marketing efforts of the firm. The product mix of the Disney Company is illustrated in this acetate. 2. You may want to advise students to go over the key elements used in classifying products. Remind students that consumers will perceive the classification of products in different ways. For example, to a business, banking services may very well be a shopping service; a brand insistent consumer will look on a pack of Marlboro’s as a specialty good. 3. You can ask students why a company like Disney has such a wide product mix? Obviously students should be able to identify the potential for profits as one reason. See if students can identify Disney’s product line in its film studios and production. Students are probably aware that Disney is the owner of Miramax films, as well as Touchstone Pictures. Each studio produces its own type of movies for different consumer targets.

Marketing Classes of Goods & Services
Consumer Convenience Shopping Specialty Unsought Industrial

Packaging Protect Attract Describe Explain Warranties
Price, Value, Uses

Mary’s Fresh Fruit Jams Straight from the Garden
Branding Brand & Trademark Categories Manufacturers’ Knockoff Dealer/Private Generic Equity Loyalty Awareness Association Mary’s Fresh Fruit Jams Fresh Daily Straight from the Garden

Market Value of A Brand Name
Billions of Dollars TA 14-5 Market Value of Brand Name 1. This acetate offers the estimated market value of various brand names according to the Interbrand Group. This company does an annual evaluation of brand names and the value they provide to their companies. You can research more about its process and surveys at its Web site: 2. Keeping up with changes in brand rankings from year to year can offer clues about how aggressively various companies are growing. Nokia, for example, is a relative newcomer, but it has clearly established itself firmly in the minds of people everywhere. Intel earned its position with its ‘Intel Inside’ campaign- before that, few people knew who made computer components. 3. Ask students if they have candidates they feel should be added to this list. Others that might be added include: AT & T $26 Billion Marlboro (Philip Morris Company) 22 Billion Mercedes/Benz Billion Source: Interbrand Group

A Good Brand Name... Brand Name
Speaks directly to product’s target customers Attracts/motivates consumers to try it Is memorable/sticks in customers’ minds Is distinctive enough to protect it legally Brand Name TA 14-6 A Good Brand Name… 1. This is a good introduction to the concept of branding. While it’s never certain that a brand name will be successful, there are some simple rules that assist in branding products. This acetate provides direction in deciding what makes a good brand name for a product. 2. See what brand names stick most in the minds of your students. Ask them what makes the brand memorable. This is also a good point to inform them that in Chapter 16 we discuss integrated marketing communication. Through promotional variables such as advertising, brand names are often indelibly burned into the minds of consumers. You may want to explain that concepts such as branding are covered in more depth in the principles of marketing class.

New-Product Development
Idea Generation Screening Analysis Development Testing Commercialize

Figure 14.7 Sales and Profits During the PLC
TA 14-7 Sales and Profits During the Product Life Cycle 1. This is certainly one of the most important concepts in this chapter. Students need to understand the importance of the product life cycle, and how decisions are made according to various stages in this cycle. 2. Make sure students can see the clear difference between sales and profitability. Many will have problems with the assumption that profits reach their peak in the late growth-early maturity stage; sales, however, peak in the mid-maturity stage. See if students can figure out why this happens. 3. Ask students how the product life cycle impacts on marketing decisions such as promotion? How would the different stages affect the promotional mix? 4. If students want to know if products can ever come back from the decline stage to the growth stage, the answer is yes. Arm and Hammer Baking Soda is of course the classic. See if they can think of anything else.

What They Cost When First Introduced
1927 Transatlantic Call $ 75/3 min. 1947 Microwave Oven $ 3,000 1964 FAX unit rental $ 850/month 1970 Pocket Calculator $ 150 1974 VCR Tape $ TA What They Cost When First Introduced 1. Once again we deal with an acetate that’s both fun and informative for students. It’s very interesting to see how far we have come price wise in dealing with the products listed here. Product acceptance and economies of scale can often be credited with the significant price decreases we enjoy today. Product life cycle factors also come into play here which makes it a good time to introduce the concept. In addition, technological advances help bring down cost and lead to mass production that reduces cost. 2. Can students think of any other price examples similar to the ones listed? Cellular phones, pagers, and personal computers come to mind. 3. Ask students if they can think of products where the reverse is true. In other words, products that do not tend to decrease in price as demand builds. Professional sports, college tuition, etc., tend to work here. Source: World Features Syndicate

Pricing Objectives Cost-Based ROI Traffic Market Share Sales Image
Value- Service Break-Even Fixed Cost Variable Cost Strategies Skim Penetration EDLP High-Low Leadership Objectives ROI Traffic Market Share Sales Image Social Cost-Based

Total Revenue or Total Cost
Breakeven Chart (Figure 14.9) Figure 14.9 Breakeven Chart Total Revenue or Total Cost TA 14-9 Breakeven Chart 1. If you decide to cover breakeven analysis in class, this acetate will help with the explanation. As we stated previously with this and other topics, many professors pass over this discussion until a later course. The option is up to you. 2. Students need to understand that the breakeven point is the point at which revenues will just cover costs. You might note to them that businesses that breakeven can stay operating indefinitely. To challenge them a bit, ask students why the fixed cost curve is a straight line. They should be able to understand that it remains constant because fixed costs do not change. Also, make sure they see that after fixed costs and variable costs are met, profits begin to rise. 3. Any interesting example you may want to expound on if you discuss breakeven analysis here is, ask students if they have ever had a class cancelled at the campus. See if they understand that the principle of breakeven analysis is often at work here in deciding if classes make. Number of Units

Pricing Using Breakeven Analysis
Problem Should we charge $2 or $3 per box? Costs Total Fixed Costs $400,000 Variable Cost $ per box Market Research Forecast Company can sell: 290,000 boxes at 210,000 boxes at Breakeven point = total fixed cost price - variable cost (per unit) (per unit) $2 price = $400, ,000 units to breakeven $2 - $1 $3 price = $400, ,000 units to breakeven $3 - $1 TA Pricing Using Breakeven Analysis 1. This acetate takes students step-by-step through the breakeven process. This is discussed in the chapter but not covered heavily. It’s up to you what you choose to do with this pricing model. To be honest, we find many of our users cover this material and many decline to use it in the introduction to business course. 2. It’s important to point out that breakeven analysis is just another tool the marketing manager can use in setting price. The forecast from market research in step three is an example of this. You can note to students that it’s forecasted that 290,000 boxes can be sold at $2.00 and 210,000 boxes sold at $3.00. Breakeven Analysis

Market Share-Cable Source: Wall Street Journal 1/12/2000
TA Market Share- Cable 1. This acetate illustrates the percentage of total cable homes each of the major players in the cable market control. This acetate should be reviewed with TA and TA 2. Using all of the suggested TAs, it can be seen how AOL is building a media behemoth through its alliance with Time-Warner, Inc. 3. AT & T/Media One currently dominates the market but this field is changing quite rapidly. Paul Allen, one of the Microsoft founders, is now a key player in this industry. The industry is also experiencing a good deal of merger/acquisition activity. It is probably safe to say that because of that M & A activity these percentages may have already changed since this TA was prepared. Source: Wall Street Journal 1/12/2000

Movies- Domestic Box Office Market Share
TA Movies-Domestic Box Office Market Share 1. This acetate provides students with information concerning the division of the motion picture market among the various major companies. Since students are keenly interested in movies, it helps to show them that no major company dominates in this market. 2. Ask students how the marketing of motion pictures has changed. They may not know, but a significant portion of a film’s budget is for now for promotional costs. 3. See if students believe that the delivery of movies will change in the 21st century. Streaming video is creating all sorts of possibilities. Source: Wall Street Journal, 1/12/2000

Market Share of Video Sales
TA Market Share of Video Sales 1. This acetate illustrates the percentage of video sales to dealers for each of the major companies in the industry. 2. As contrasted with TA 14-12, the bunching of the different companies is not as pronounced. 3. Ask students why Disney leads the pack in video sales. Hint, they have an extensive film library and their marketing tactics for classic videos have seemed to work well. Source: Wall Street Journal, 1/12/2000

Chapter Fifteen Distributing Products Efficiently and Competitively:
Supply Chain Management

Channel of Distribution
Marketing Intermediaries Wholesaler Retailer Brokers Role of Intermediaries Create Efficiency Value vs. Cost

The Supply Chain (Figure 15.6) TA 15-9 The Supply Chain
Supply chain management is a key to effective distribution in the 21st century-company. This acetate illustrates to students how supply chains are structured and implemented in the market. 2. Make note to students that cooperation at every level of the supply chain is essential for the system to work. Companies like Wal-Mart have come close to perfecting the implementation of this system, even though suppliers often feel a real sense of pressure. 3. Ask if any students in class have experience working with a company that has an operational supply chain. We have found that several students (especially our evening students) offer rather effective synopses of how they work within a supply chain.

Form Utility Possession Time Service Place OPEN 24 HRS Information

Wholesale Intermediaries
Merchant Wholesalers Rack Jobbers Cash-and-Carry Drop Shippers Business to Business (B2B) XYZ Warehouse

Percent of B2B Commerce from Internet
*Excludes Service Industries TA 15-1 Percent of B2B Commerce from Internet 1. This acetate forecasts the amount of B2B commerce that’s expected to be conducted on the Internet in the future. 2. The purpose of this acetate is to illustrate to students the tremendous growth of B2B commerce in the early years of the 21st century. You might point out to them that in 1997 B2B was a mere 0.2% of business transactions. It is forecasted to be 9.4% by This equates to an average annual growth rate of nearly 90%. The message, B2B is here to stay 3. See if students can explain what implications B2B will have on traditional methods of distribution. Source: Forrester Research Inc.

Retail Competition Price Service Location Selection Entertainment

Is it Becoming a Wal-Mart World?
*There are 2,985 stores in the U.S. TA 15-3 Is It Becoming a Wal-Mart World? 1. The retailer of the 1990s and the 21st century in the U.S. was clearly Wal-Mart. Wal-Mart has tried to work its magic globally and has expanded into different markets detailed in the acetate. As students will notice, Wal-Mart has even moved into the People’s Republic of China. 2. Ask students what problems Wal-Mart can expect to face in its global ventures. You could assign students to go on the Internet or to the library and find what significant problems Wal-Mart has experienced in such diverse markets as Brazil and Mexico. What opportunities have they enjoyed diversifying into global markets? 3. See if students can answer why companies like Wal-Mart, with close to 3,000 stores in the U.S., would take the risk of expanding into global markets. You might see if they recall form Chapter 3 the different forms of entry into global markets companies can consider (I.e., export, franchising, licensing, joint ventures, contract manufacturing, direct investment, etc.) and the degree of risk associated with each strategy. Source: Wal-Mart Annual Report 2000

Retail Store Distribution
Intensive Selective Exclusive

Identify a Retailer in Your Area
Specialty Store Factory Outlet Superstores Catalog Showroom Supermarket Convenience Store Discount Store Department Store Category Killer TA 15-4 Identify a Retailer in Your Area 1. This is a good in-class exercise for students. The class should have little trouble identifying supermarkets, convenience stores, discount stores, or department stores that are dominant in their market area. Category killers, specialty stores, factory outlets, superstores, and catalog showrooms might prove a bit more difficult for them to identify. 2. It might be interesting to ask students again what effect the Internet and other forms of technology will have on retailing in the future. See if they have ideas of how some of the large retailers will take advantage of the Internet in expanding operations. 3. Also see if students have any ideas concerning different forms of retailing that may be prevalent and dominant in the future. It’s important that they understand that retailing is constantly evolving and opportunities consistently abound in this market.

The Wheel of Retailing 2. Retail Outlet 3. Retail Outlet Passage of
Adds Service Raises Prices Better Location Higher Prices Higher Status Passage of Time 4. New Outlet Enters 1. Retail Outlet Starts TA 15-5 The Wheel of Retailing 1. This acetate illustrates the concept of the wheel of retailing. This application is discussed in the chapter and is rather interesting for students to peruse. 2. It helps to go through the information stage-by-stage of the life cycle implied in the wheel of retailing and point out to students how retailing, like products, goes through a specific life. Some analysts note that changes in technology and the focus on customer orientation have led to an acceleration of the wheel turning. See if students have any examples of where this phenomenon has occurred. 3. Ask students if they can think of any retailers in their market that have gone around the wheel. It is interesting to discuss some of the changes retailers such as K-Mart and J. C. Penney have tried to implement. They are good examples of the wheel at work. Low Price Limited Service Low Price Limited Service Out-of-way Location

Non-Store Distribution
E-tailing Telemarketing Vending Machines, Kiosks, Carts Internet Direct Selling Multilevel Marketing Direct Marketing

E-Business Expectations
Share of company revenues CEOs say come from e-business Now vs. In 5 years TA 15-2 E-Business Expectations 1. This acetate illustrates how CEOs feel the Internet is expected to impact on company revenues today vs. in 5 years. 2. The way to read this is that Now approximately 35% of the CEOs say they receive “None” of their revenues from the Internet and 6% receive more than 20% of their revenues from the Internet. On the other hand, in five years only 8% will receive “None” of their revenues from the Internet and 20% will receive more than 20% of their revenues from the Internet. This is a significant shift in sources of revenue within a very short period of time. 3. It can be seen that while the CEOs recognize the majority of their income comes from traditional sources increased revenue will grow as e-business transactions through the Internet rise. Source: USA Today

Has The Internet Changed Your Shopping Habits?
Survey of Americans who have high* Internet use vs. those with low use TA 15-6 Has The Internet Changed Your Shopping Habits. 1. This acetate provides additional information that suggests that the Web is cutting hours at the mall. 2. The survey was conducted with Americans who have Internet access who say they go to the store/mall less often because they shop online. As the acetate’s information highlights, we are rapidly approaching the point where one-half of all people who use the Internet more than 15 hours per week agree they spend less time in the mall. A logical questions students might ask is “are people staying at home to shop on the Internet or are they spending so much time online that they don’t have time to go to the mall? See how students respond to these facts and see how many of them agree that they spend more time online as opposed to frequenting the shopping malls. 3. It might be interesting to ask the class, “What are the future implications for marketing if consumers are spending more time online?” Is the store salesperson of the future going to be a robot with an Internet connection? * high use = 15+ hours per week Source: USA Today

What Online Shoppers Bought* Per Month in 2000
*In thousands of dollars TA 15-7 What Online Shoppers Bought Per Month in 2000 1. This acetate illustrates what buyers are purchasing in their virtual shopping experiences. 2. Ask students if they are surprised by this breakdown? Students will probably agree that it’s natural that online shoppers would buy more technology-oriented products such as computer hardware and software or toys and video games? Why do you suppose they are buying travel? See if students have a good answer for this and see how many of them have purchased travel online. They should be able to recognize both convenience and price options available here by purchasing online. Source: Forrester Research

What does it take to persuade consumers to buy online?
*Survey of 1,944 Web users that had not made an online purchase TA 15-8 What does it take to persuade consumers to buy online? 1. This acetate illustrates what assurances people who do not buy online would need to be persuaded to purchase products online. 2. It’s obvious that privacy/security of personal information (e.g., credit card number) and price are the drivers of success for a seller online. Therefore, in marketing their Internet sites, it’s imperative that this information be communicated to prospective customers. If consumer’s seem content about security and sense value, the seller will reap the rewards. 3. Do students feel it’s important to be able to return unwanted products to a brick-and-mortar store? What if there was no cost of shipping to the buyer? Would that make a difference? Source: CIO Web Business, 10/1/1999

Channel Cooperation Corporate Distribution Contractual Distribution
Administered Distribution Supply Chain Management

Contractual Distribution
Franchise Systems Wholesaler-Sponsored Chains Retail Cooperatives

Distribution/Storage Mode
Railroad Motor Vehicles Water Pipeline Air Intermodal Storage Materials Handling

Chapter Sixteen Promoting Products Using Interactive and Integrated
Marketing Communications

Change & Promotion Mix Definition- Promotion Promotion Mix
Integrated Marketing Communication (IMC) Change Technology Build Relationships Interactivity

Factors That Affect The Promotion Mix
Type of Product Stage in the Product Life Cycle Target Market Characteristics Actions of Competitors Available Funds TA Factors That Affect The Promotion Mix 1. This acetate gets students involved in the concept of the promotional mix. Make certain they do not confuse this with the marketing mix. 2. It’s helpful to work through the acetate step-by-step since the information supports many of the concepts discussed in the marketing section. See if students can offer examples of promotion tactics as it relates to the five factors listed. For example, ask students which of the following products is most conducive to television advertising, dishwashing liquid or automobile carburetors? See if they can see how the type of product relates to the promotional strategy used. It’s also a good time to reinforce product concepts such as convenience, shopping, and specialty goods and services. These applications force students to use critical thinking skills and see how factors such as the product, product life cycle, target markets, competition, and available funds affect the promotion process. 3. This is also a good time to note the expense involved in promotion. A good question for students to ponder is, “Can promotional expenses be a barrier to entry in certain industries or product categories?” See if they can offer some examples where this is the case.

Components of Integrated Marketing
Advertising Corporate Communication Crisis Communication E-Commerce Event Marketing Internal Communication Issues Management Marketing Multimedia Public Relations Sales Promotion Strategic Planning Web Design TA Components of Integrated Marketing 1. This acetate illustrates the multi-disciplinary aspects of product/service promotion today as exemplified by integrated marketing. 2. Whenever a company is creating a marketing/promotion campaign, it should take into consideration all of the identified items listed and how they work synergistically. Too often, promotion is considered a short-term, quick payback effort. In reality, it permeates the entire organization and needs to present a solid, integrated view of the entire organization. While advertising, marketing, public relations, and sales promotion all come to mind when we think of marketing, we should consider the many other areas that make a statement about Who we are to customers and others in the marketplace. Integrated marketing requires the company to be consistent in its message and in the image it sends through any communication.

Objectives of Integrated Marketing
Build Brand Equity Provide Information Manage Demand & Build Sales Differentiate Products Influence Perceptions, Attitudes, & Buyer Behavior TA Objectives of Integrated Marketing 1. This acetate looks at factors that are involved in integrated marketing communication. Integrated marketing communications is discussed at length in this chapter and is one of the key marketing applications of the new millennium. Make sure students carefully read the section and fully comprehend exactly what the basis and purpose of integrated marketing communications is all about. 2. See if students can point to any other organization that currently integrates its advertising, public relations, and other promotions into one system. A visit to Sprint’s web page will offer them a good example of integrated marketing. See if students can identify more such efforts or maybe assign them the task of finding several examples.

Total Direct Advertising Expenditures
In billions TA 16-4 Total Direct Advertising Expenditures 1. This acetate illustrates how much money has been spent on direct advertising in the U.S. and what is expected to be spent in 2002. 2. It becomes quite obvious that direct advertising is big business. See if students can ascertain why so much spending is put into advertising. It will be interesting to see if any of them recognize the tax implications of advertising. Though a bit advanced for an introductory course, it’s important for students to know that advertising is a deductible expense of doing business. If they don’t spend some of the available funds, that money is taxed. Source: The Direct Marketing Association *Projected

Figure 16.3 Advertising Expenditure by Media
TA 16-3 Advertising Expenditure by Media 1. This acetate is generally very interesting to students. Our classes are clearly interested in such advertising information, and quite frankly are somewhat surprised by the statistics. You might want to work with them category-by-category. 2. Students will probably guess (if they have not yet read the chapter), that television earns the highest expenditures of all advertising media. This ranking is because of the expansion of cable opportunities in television advertising. Students, however, are generally surprised that newspapers are number two in percent of advertising expenditures. See if they can figure out why? For example, in the St. Louis area we have one major daily newspaper. This fact causes students to ask, “how can one newspaper generate such advertising numbers?” A couple of retorts can be helpful here. One it’s important to get rates from your major dailies for things such as a full-page ad. Students are shocked at the price of a full-page newspaper ad. A second point, we agree with them that St. Louis has one major daily newspaper; but the St. Louis region literally has hundreds (including our school paper) of other newspapers that sell advertising space. Remind students about local, neighborhood papers that might be distributed in their neighborhoods and the advertising contained in such publications. 3. It could be helpful here to go over the information in the text concerning the advantages and disadvantages of the different types of advertising media covered in the next figure in the chapter.

Advertising Today Persuasive Communication Infomercials Internet
Global Advertising

Century’s Top Ad Jingles
“You deserve a break today” “Be all you can be” “Pepsi-Cola hits the spot” “Mm Mm good!” “See the USA in your Chevrolet” “I wish I were an Oscar Mayer wiener” “Double your pleasure, double your fun” “Winston tastes good like a cigarette should” “It’s the real thing” “A little dab’ll do ya” TA Century’s Top Ad Jingles 1. This is a fun acetate to use in class. It will be interesting to see if students can recall the products these jingles represented. Some of these jingles were introduced before many of the students were even born. 2. Ask students if they know what products these jingles represent? Some of them are obvious but others may not be: McDonald’s Oscar Meyer Weiners The U.S. Army Wrigley’s Doublemint gum Pepsi-Cola Winston Cigarettes Campbell Soup Coca-Cola GM Brylcreem (this might stump your students) Source: Advertising Age

Favorite Budweiser Advertising Slogans
When you know your beer… it’s bound to be Bud Food’s Favorite Companion Proud to be your Bud America’s Social Companion When you say Budweiser, you’ve said it all It lives with good taste everywhere King of Bottled Beers TA 16-2 Favorite Budweiser Advertising Slogans 1. Students should enjoy this acetate. Budweiser is one of the most familiar brand names in the U.S. It has undergone many slogan changes over the history of the product. See if students can recall any others and see if they know the current slogan. You might also question if students can name certain trade characters that are closely associated with the brand (the Budweiser frogs, Louie the Lizard, etc.). 2. See if students can identify five additional slogans that are specifically identified with particular products. Ask which slogan they think has been the most effective in enhancing the product it represents. They may need to do this assignment out of class. 3. If you would like a list of Budweiser slogans from 1899 through 2000 contact us through the UB6E web site. It makes an interesting handout for students and highlights the importance of changing a promotional theme. 1899 1937 1943 1947 1953 1971 1993

Do Blatantly Sexy Ads Turn You Off?
TA 16-7 Blatantly Sexy Ads Turn Off Consumers 1. This acetate ventures into the question of “Do sexy advertisements turn you off as a customer?” In other words, does sex really sell? 2. It can be argued that most ads using a sexy message appear to be targeted at men. See if students agree with this assessment. The data provided on the acetate however seems to indicate that men are somewhat evenly divided on the use of sex as an advertising come on. If this data is correct, see what students think this means to marketers efforts in the future. Source: USA Today

Internet Advertising =
Amount Spent On... Internet Advertising = $1.92 Billion Outdoor Advertising = $1.58 Billion TA 16-8 Amount Spent On… 1. This acetate illustrates how Internet advertising, in its relatively short life, has surpassed Outdoor advertising in the amount of money it controls. 2. Some additional information to add to this acetate is the percent of Internet advertising that is: Banner Ads 56% Sponsorships 30% Interstitials (Ads between Web pages) 5% 1% Source: CIO Web Business, 1/1/1999

Internet Advertising- 2004
Will reach $22 billion in the U.S. The rest of world will spend $10.8 billion. $27 billion (10% of all U.S. ad spending) will be siphoned from traditional media Hardest hit: newspapers and direct mail TA 16-9 Internet Advertising- 2004 1. This acetate illustrates the rapid growth the Internet is making in gobbling up advertising dollars. 2. Students should know that between 1999 and 2004, the U.S. is expected to increase its Internet advertising bill by nearly 8 fold. 3. Internet advertising in the rest of the world (outside the U.S.) will rise nearly 21 times what it was in 1999. 4. The Internet is expected to account for 10% of ad dollars in With this occurring, newspapers and direct mail are expected to be the hardest hit. Ask students why these, instead of radio, TV and billboards will be impacted the hardest? Students should know that Internet ads allow the advertiser to more carefully target the market- something that has been the specialty of newspapers (geographically) and direct mail (psychographically). Source: CIO Web Business, 10/1/1999

Steps in Personal Selling
Presentation Prospect/Qualify Objections Preapproach Close Approach Follow-up

Public Relations Steps Listen Change/Develop Inform Publicity Free
More Effective Than Ad Believable No Control No Repetition

Sales Promotion Internal & External Sampling Word-Of-Mouth
Viral Marketing/Swag Technology Testimonials

Tips on Issuing Coupons
Coupons can be used as a “Thank you for buying” or a “Stop and try us.” The value must be enough to attract customers. Use coupon promotions sparingly. Get professional help to get maximum exposure. Color-code your coupons for different groups that use them. TA Tips on Issuing Coupons 1. It’s hard to fathom the numbers of coupons offered by companies in the U.S. market. Estimates range as high as 1 trillion (that’s right- trillion). What students and consumers are not aware of if that coupons are also a significant expense to companies as the stakes and costs of issuing coupons get higher. 2. This acetate offers tips to companies considering offering coupons as a form of sales promotions. Students should be able to relate to the information provided here and offer suggestions of their own. You might want them to comment on each of the five statements individually. 3. Have students bring in some examples of unique types of coupons they find in local newspapers or from other sources. See if the class has ideas to improve or expand the effectiveness of coupons not currently used in the market. Do they see the use of coupons growing or decreasing in the future?

Top Celebrity Endorsers
Candice Bergen Bill Cosby Kathi Lee Gifford Cindy Crawford Jerry Seinfield Cybil Shepherd Product(s) Sprint Jell-O Carnival Cruise Lines Revlon, Pepsi American Express L’Oreal TA 16-5 Top Celebrity Endorsers 1. The names and products on this acetate should be familiar to students. Ask if students can add additional celebrities and products to the list. The list of celebrity endorsers is always growing. 2. Ask students what are the pluses and minuses of using celebrities to endorse products. See if they can identify situations where an advertiser was embarrassed by having a celebrity associated with their product (O. J. Simpson, Madonna, and Michael Jackson come to mind here.) How about the trendy nature of celebrities? Who are the safest types of celebrities to use for promotion? 3. Students may be interested that celebrities such as those listed on the acetate are compensated very highly (often in millions of dollars) to attach their endorsement to products. Big, big business! 4. Ask students if they can identify any trade characters or actors that have successfully played roles to endorse products. You may remind them of trade characters contained in the branding section. Mr. Whipple, Earnest P. Worrel, Tony the Tiger, Mrs. Olsen, and the lonely Maytag Repairman are just a few of the characters imbedded in advertising history.

Top Sports Endorsers Athlete Endorsements Micheal Jordan Tiger Woods
Arnold Palmer Andre Agassi Endorsements $ 47.0 Million $ 24.0 Million $ 16.0 Million $ 14.0 Million TA 16-6 Top Sports Endorsers 1. This acetate can be real fun for students to guess at and work with. See if they can name the top athlete endorsers from the year Annual updates can be found in Fortune magazine or can be obtained by looking at the UB6E web site. You can also contact us by and as soon as we get it, we can get it to you. 2. Discuss the benefits and shortcomings of using athlete endorsers for products. What are the strengths and weaknesses of this practice? What do sponsors expect to gain from celebrity endorsements? Female athletes such as the William’s sisters are now starting to make it big time in sports endorsements. Do students think this trend will continue? Why or why not? Lots of potential discussion with this acetate. Source: Fortune Magazine

Promotional Strategies
Push Strategy Promotion Customer Distribution Promotion Retail Store Pull Strategy

Building IMC IMC Gather Data & Maintain Database
Respond Quickly To Adjust Policies & Procedures IMC Provide Accessible Information