read the case “USA Today: Innovation and Evolution in a Troubled Industry” in your textbook. This case study looks at the reality facing publishers today and the emergence of the e-environment coupled with the decline in reading, as found by the National Literacy Trust (Clark and Douglas, 2011). Newspapers and news journals today need to adapt to be valued and to be seen as benefitting the consumer.

As a marketer, you could well find yourself in the middle of a changing industry. As a citizen of the nation and the world, the consumers' failure to read and remain current with the many aspects of world events will impact your future.

Procedure

1. Read the case study.
2. In a Word document, respond to the following:
   1. What opportunities in the marketing environment did Gannett seize in launching USA Today? What unmet benefits are added and what value is created for the customer by USA Today?
      1. Answer the same questions for USAToday.com.
   2. How has the continuous strategy of marketing innovation proved successful for USA Today and USAToday.com, given the segmentation of their market and the perception of the customers' experiences? Do you believe that USA Today is well positioned and has properly segmented for the future? Explain.
   3. What strengths and opportunities can USA Today leverage as it looks for a competitive advantage in the distribution of news and information, given the perceptions of customer values and the benefits of world event news and global information?
   4. Based on USA Today's experiences with print and online news and the need for customer relationship management in an increasingly crowded market, evaluate the long-term potential of printed news and the newspaper publishing industry given their current customer relationships. What aspects of CRM do you think USA Today will have to be most attentive to? What recommendations do you have to improve CRM for USA Today?
3. Your responses to each question should reflect the knowledge you have acquired through your readings, module themes, and your own research.
   1. Use this information in your discussion and analysis to support your opinions.
   2. Any readings you use to support your opinions must be credible and properly cited according to APA guidelines.
   3. Readings
   4. Achim, W., Ritter, T., & Gemünden, H. G. (2001). Value creation in buyer-seller relationships: Theoretical considerations and empirical results from a supplier's perspective. Industrial Marketing Management, 30, 367-377. [Web]
   5. Ferrell, O. C., & Hartline, M. (2010). Marketing strategy. Mason, OH: Cengage. [Text]
   6. Chapters 6 and 12
   7. https://www.reader.cafescribe.com/reader/Reader.html?activationToken=PCKHSGWWCXNMT6QK&credential=MW7P8SHC
   8. user id: jash2010
   9. password: VQlBBDYa
   10.  
   11. Theme 1: Overview of the Consumer Experience
   12. Do we understand the customer experience? Look at this set of drawings that depict different perspectives. While funny to look at, are they funny to the customer?
   13. The eight diagrams in the graphic linked to above present various perceptions of a tree swing that vary according to the perspective of the individual. As you will see, the consumer's explanation (the first diagram) might not meet what the consumer really wants or needs (the last diagram). However, between these two are the perceptions of others. 
   14. While the diagram might provoke laughter, think of how often you have tried to explain something to someone, and they have not quite understood your viewpoint. Marketing is no different. No matter what is said, someone will not understand it the same way as you intended it or as you really wanted to present it.
   15. As we contemplate what the customer wants, we begin to understand that there are levels of understanding as to what the customer wants compared to what is possible and what is affordable—as well as levels of understanding from the various echelons in the company as to what the customer wants, how much each profession understands the customer, and what the company feels is billable. 
   16. What is Customer Experience? 
   17. There are many definitions, but in general, the term customer experience can be defined as a growing field of interest that looks to the totality of all the experiences the customer has with a given marketing mix throughout their relationship with the supplier. 
   18. For example, think of the last time you went to a concert:
   19. You heard about or saw an advertisement for the performance via promotion (as in an ad) or communication (if you heard about it from a friend). 
   20. You decided that the performance was at a location that was within an acceptable distance (this is the placement of the performance or the convenience for attending). 
   21. You checked the price and decided it was within your entertainment budget (the price of a ticket to attend the performance or the cost to you of attending).
   22. You experience the chore or the thrill of getting the tickets and attending the performance. 
   23. Now, as we all have experienced, sometimes the promotion is better or worse than the performance. Sometimes, it is accurate. A good marketer will be concerned with a discrepancy in these experiences and will want to know how to improve or change the promotion by asking you to complete a post-performance survey to determine if there is consistence between what you experienced and what was promoted.
   24. So customer experience goes beyond the quality of the product and/or service—it includes the customers' experiences with regard to the advertising, locating where and how to acquire the product, the physical location of the product, the interaction during its acquisition, its use or application, and the after-purchase experiences. 
   25. These experiences result in either positive or negative advocacy—word-of-mouth. Think of it: do you generally believe a friend's experience or a television advertisement? The power of word-of-mouth is enormous.
   26. It is important to understand that whether you strive to create an impression or not, the impression is made every time you interact with an individual. Companies are incapable of fully controlling the experiences of customers and stakeholders. Every experience you have involves your perceptions, emotions, actions, and interactions with others including sales staff, other customers, friends, etc. No one is able to predict these factors with 100 percent accuracy. However, you can work towards creating positive experiences by understanding the touchpoints (or points of interaction) that are controllable.
   27. Touchpoints
   28. Touchpoints are dependent upon the industry, the product, the service, and the target segment. Management of these touchpoints optimizes the interactions of the company with its stakeholders and potential stakeholders. However, to know the touchpoints for your company and/or your product, you must know your target segment or customers. Theme 3 looks at segmentation within your population.
   29. To understand your customers' and stakeholders' expectations for touchpoints, ask yourself and your customers the following questions:
   30. What are the promises you give to your customers?
   31. Do these promises derive from the needs of your customers?
   32. Are these promises supported and endorsed by the company, specifically the management?
   33. Are the promises fulfilled by the basic product and/or services or does the customer have to pay or specifically apply for them?
   34. Do you track or monitor the delivery of these promises and how the customer perceives them?
   35. What channels do you use to communicate with your customers and stakeholders about these promises?
   36. Do your customers value these promises?
   37. How do these promises differentiate you in the marketplace?
   38. Does your performance of these products meet, over perform, or underperform according to the expectations?
   39. Are the promises important to your consumers and if so, how important?
   40. Understanding the answers to these questions will help you to understand your customers' and stakeholders' expectations for your product and/or services. If their experiences do not meet their expectations, you have problems and you should listen to your customers and stakeholders with the expectation that your product and/or services will change. If their experiences do meet their expectations, you cannot stop working to improve your product. If you stop evolving, someone else will take that next step and you could well go the way of the VHS tape.
   41. Reference
   42. Manning, M. (2007, November 22). Can I get inside my customer's head please? Customer experience tools – can they help? [Web log post].
   43. Theme 2: Benefits and Value Creation
   44. The experiences of the consumer will produce benefits for the consumer, creating the perception of value in the consumer's mind. For example, if a person is cold, they will want a hot drink, deeming a cold one to be without value. However, on a hot summer's day, a cold drink will be the preferred choice, thereby giving it value. In this theme, we look at how to identify benefits for our consumers by identifying what is of value to them.
   45. The Relationship of Value to Benefits
   46. Value is created whenever an action is taken or a product is used that results in the benefits exceeding the costs—or, any time an action is not taken or a product is not used when the costs exceed the benefits. This can be applied to many areas of business including entry into a market, sale of a product and/or service, and method of marketing.
   47. It is important that value is perceived from the perspective of the customer according to the perceived difference between the price of the product and/or service and what the customer would pay (also known as consumer surplus). Thus, value is not a direct determinant in the evaluation of profit, although the selling price represents the value of the product and/or service to the firm (also known as producer surplus). 
   48. Benefits, Value Creation, and Costs
   49. From the perspective of the customer, benefits and value creation are often linked to costs. These costs include the price paid for the product and/or service. However, the costs to the customer are greater, including:
   50. Acquisition Costs (Company) — the time expended on comparisons, negotiations, and development of the product.
   51. Acquisition Costs (Individual) — the time expended on comparison, shopping, and purchase of the product.
   52. Usage Costs — the additional training necessary to use the product, and the time spent or saved using the product and/or service in comparison to a different way of achieving a similar end.
   53. Maintenance Costs — the costs of maintaining the product and/or service
   54. Ownership Costs — the costs for licensing, storage, security, etc.
   55. Disposal Costs — the costs of recycling or disposing of the product in an environmentally safe manner.
   56. These costs are incurred by all customers, although their composition can vary depending on the identity or the location of the customer. Nevertheless, the creation of value and the capturing of this value do not need to be related. While you might not capture the value of what you create, you cannot capture value if you have not created it. The amount of value captured can be more or less than the created value because value is the perception of the customer or the stakeholder. However, the incentive to create value is to capture some or all, and therefore, the two are often seen together.
   57. The intent or the focus of some companies, in particular not-for-profits, is the creation of value. The value, thus, is to the community and only indirectly to the funders. However the value is recognized by funders and the recipients of the services. 
   58. In most companies, the objective is to create or boost value to increase income and profits. Although, to increase the income and profits without creating more value means your customers will migrate to the competition. This highlights the need for innovation, creativity, and expansion to increase value for the customer. To understand how to do this, you must understand the population that buys your concepts. In short, your target market.
   59. Customer Value and Competition
   60. Competition is a key component in differentiating the product and/or service according to the benefits and perception of value to the customer. Competition influences the perception of value, which then impacts the success of the product and/or service.
   61. The information economy facilitates the understanding of the evolving customer needs and expectations within specific segments, and impacts the costs of innovation, primarily by driving the costs down while increasing quality and variety. This results in a number of value creation strategies:
   62. Product and process innovation.
   63. Increased understanding of the existing needs and/or wants of the target market as well as the emerging needs and/or wants.
   64. Facilitation of segmentation.
   65. Leveraging of existing and emerging technology to enhance existing markets and create new markets.
   66. Revision of value chains to create mutually beneficial partnerships with stakeholders.
   67. Revision of the understanding of value to a customer and/or stakeholder.
   68. With the development of value in the product and/or service, the marketing can be enhanced by appealing to the target market.
   69. Theme 3: Market Segmentation
   70. As you can well imagine, not all products or services have value or benefit for all consumers or customers. Knowing how to identify which consumers or customers will recognize the most value of any product or service is the role of market segmentation. 
   71. Segmentation is essential to marketing. As we all know, marketing can be very expensive. If you are marketing to people who cannot afford to buy or use your product, have no interest in it, or have no access to your products and/or services, the marketing expenses could be minimal compared to the perception of the costs by the population and future customers. Segmentation can include almost any quality.
   72. For example, for a weight loss clinic, the market would segment based on the body mass index or the height to weight ratio. For a jeweler, the segmentation would involve more aspects including the metal used, the cost of the end product, the type of jewelry desired, and other elements. Therefore, segmentation can be based on many factors or a few. However, there are usually more important factors than others. 
   73. For example, when purchasing an article of clothing, you will consider many elements, but the most important element is probably the fit. What the customer considers is the attractiveness of the products and/or service and what “fits” the customer's tastes. 
   74. The six categories of market segmentation are as follows:
   75. Geographic — region of the country, urban or rural, city size, population density.
   76. Demographic — age or generation cohort, sex, family size/household composition, ethnicity, identified nationality, religion.
   77. Socio-economic — income, occupation, education.
   78. Psychographic — social class, lifestyle type, personality, attitudes, opinions, values or life principles.
   79. Behavioral — degree or quantity of product usage (professional, amateur, etc.), brand loyalty (friendship or arms-length), type of usage (every day, weekly, monthly, or specific holiday), frequency of contact or purchase.
   80. Benefits Desired — low/high price/quality, degree of service, brand loyal/switcher, “snob” value.
   81. From this, we have a framework for segmentation that has been developed by professionals for a specific population, such as the VALS Framework (Strategic Business Insights, 2011). The VALS Framework divides people into eight types based on primary motivation and resources: innovators, thinkers, believers, achievers, strivers, experiencers, makers, and survivors. 
   82. Selection of Segmentation Variables
   83. The elements from these categories mix and match, making it difficult to select which variable is more important than another. So to select the segmentation variables, the individuals should:
   84. Have similar responses to the marketing mix that can be identified as different from other segments.
   85. Have easily identifiable sub-sets that are sufficient to be profitable. 
   86. Be accessible to the marketing mix.
   87. Have the power, willingness, and ability to purchase.
   88. Individuals will have different purchasing behaviors depending upon whether the product and/or service is convenience (e.g., candy or food outlet at a sports stadium), shopping (e.g., household goods or retirement planning), or specialty (e.g., a collector's car or framing art work). So the matching of the product and/or service to the individual segment is multifaceted and complex.
   89. Some products and/or services appeal and are used by both industrial and consumer markets, such as computers and electricity. However, the industrial market has some very different segmentation variables and needs. 
   90. Industrial Segmentation
   91. Segmenting for a business clientele has some of the same characteristics as the individual clientele, but there are some significant differences. Business customers often have more communication with the vendor than individuals. Their needs are far more exact and precise. Consequently, the objectives of segmentation will depend upon the product and/or service and what is available in the market. This can be examined using a 2X2 graphic:
   92.  
   93. The 2X2 looks to new and existing markets and products and/or services. The division of the categories is as follows:
   94. New Market, New Product/Service — diversify or change the product/service to enter the new market (e.g., emerging energy technologies such as solar power or wave power).
   95. New Market, Existing Product/Service — use a marketing strategy previously used (re-launch) and may have to reposition the product/service (e.g., McDonald's entering the Russian market).
   96. Existing Market, Existing Product/Service — keep, defend, and nurture the existing positioning in the market (e.g., whole wheat bread).
   97. Existing Market, New Product/Service — upgrade, add to, or innovate the product/service (e.g., the introduction of Zumba dance fitness classes).
   98. Industrial markets are segmented on the macro-level, including:
   99. The company or organization (financials, products, stage, etc.).
   100. Geographic location.
   101. SIC or NAICS code (Simon Fraser University, 2010)
   102. Purchasing stage (new, modified rebuy, rebuy).
   103. Decision making stage.
   104. Economic value to customer.
   105. Type of institution or business (government is entirely different from for-profits).
   106. Once this segmentation can be determined, it is time to look to the micro-level of segmentation, including:
   107. Criteria for buying decision.
   108. Purchasing strategy.
   109. Who is who in the decision-making unit (who has the money and the authority).
   110. Importance of the product to the purchaser.
   111. Purchaser's loyalty and/or attitude toward the supplier.
   112. Now, the Market Can Be Segmented
   113. For both the individual and the business (profit, not-for-profit, government), the target segment must be compatible with the product and/or service and the vendor's goals, image, and resources. The segment should present the opportunity to attract sufficient sales that a profit will be generated through a competitive advantage. This can be accomplished via:
   114. Market aggregation — targeting the mass market with little product differentiation.
   115. Single-segment segmentation — often used for niche markets where one segment is chosen solely.
   116. Multiple-segment segmentation — target more than one segment as the target. 
   117. This often requires grouping segments by marketing message or conveyance.
   118. Could necessitate different marketing approaches for different targeted segments.
   119. This segmentation is then used in the production of the product/service, the marketing plan and the marketing that follows from, and the estimation of usage and profits for planning.
   120. References
   121. Simon Fraser University. (2010). Standard classification systems (NAICS & SIC). Burnaby, B.C., Canada: Author.
   122. Strategic Business Insights. (2011). US framework and VALS types. Menlo Park, CA: Author.
   123.  
   124. Theme 4: Customer Relationship Marketing
   125. Customer Relationship Management (CRM) is a business philosophy that helps sellers to understand their customers, recognize their needs, and build value-driven long-term relationships. 
   126. The customer can be either an individual or a business, although more active relationships happen in the business-to-business marketplace. These relationships are built on learning from the customer and collaborating in the development of products and/or services that meet the needs of the customer. However, as with every relationship, there are requirements from both sides, including:
   127. Trust of the integrity and willingness of both parties to be responsive to each other.
   128. Value in the product and/or service for being lower cost or greater benefit.
   129. This means that both the company, by way of sales personnel, and stakeholders or customers must understand the needs and wants of each other. This process takes time and follows an ordered sequence of stages:
   130. The Pre-Relationship Stage — one or both parties are looking for a new relationship.
   131. The Early Stage — the relationship is contemplated and begins to develop through discussion. This stage is marked by decreasing levels of uncertainty.
   132. The Development Stage — transactions lead to a greater degree of commitment and trust.
   133. The Long-Term Stage — characterized by a growing mutuality between the parties.
   134. The Final Stage — characterized by an institutionalized relationship.
   135. This is not to say that relationships are ever-lasting. There can be decline, decay, and termination due to one party changing or growing in a different direction than the other or due to other situations that were not foreseen previously.
   136. Relationship of CRM to Value Creation
   137. CRM is important in the creation of value for the customer. Through CRM, marketers come to know and understand the consumer and learn to better meet their needs, wants, and expectations. This is easily exemplified by your situation in this course—the text for this course is meaningless for a person not interested in marketing or commerce. But for you, the text contains a lot of meaningful and relevant information necessary to understand marketing within the environment, not to mention earning a passing grade. 
   138. The creation of value necessitates that management understand the customer and the variance in their informational, technological, and operational needs so as to enable the differentiation of products and/or services. For example, for a custom handcrafting woodworker, the products offered will be very different from those offered to a firm that makes mass-produced discount furniture. 
   139. Additionally, the amount of information necessary to create value in a relationship with a customer will vary with the customer and with the information provided. For instance, if you are manufacturing paper, a candy maker will be very precise in the type of paper they need due to the proximity of the candy to the paper. This amount of information will not be necessary for a firm that makes envelopes, which might be more concerned with the strength of the paper. 
   140. The customer's informational, technological, and operational needs interact to produce value for the customer, which must be conveyed to the market using both communication and pricing. 
   141. While sales people are often perceived as the primary builders of relationships with customers, all individuals in the firm are responsible for promoting the relationship. All firm personnel are capable of initiating, developing, and enhancing the relationship. The following 2X2 could be useful for qualifying prospective clients.
   142.  
   143. Through the development of partners, companies build relationship networks. These networks can be based on different types of CRMs, including:
   144. Operational CRM — each customer interaction is added and logged, resulting in a historical record. 
   145. Collaborative CRM — each company and partner has different purposes and can operate through a variety of channels. 
   146. Analytical CRM — companies design and execute marketing campaigns for specific targeted populations, facilitating the analysis of the customer behaviors and responses to assist in management decisions that can alleviate churn.
   147. CRM is optimal when it encompasses the entire enterprise, when it is easy to use and facilitates adoption, when the resulting reports are shared, and when ethics are respected.