An Introduction. Global Edition. "University of North Carolina. Northwestern University
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1 An Introduction Global Edition "University of North Carolina Northwestern University Boston Columbus Indianapolis NewYork San Francisco Upper Saddle River Amsterdam CapeTown Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
2 Preface 21 Acknowledgments 25 Part 1 Defining Marketing and the Marketing Process 30 Marketing: Creating and Capturing Customer Value so What Is Marketing? 32 Marketing Defined 33 The Marketing Process 33 Understanding the Marketplace and Customer Needs 34 Customer Needs, Wants, and Demands 34 Market Offerings Products, Services, and Experiences 34 Customer Value and Satisfaction 35 Exchanges and Relationships 35 Markets 36 Designing a Customer-Driven Marketing Strategy 37 Selecting Customers to Serve 37 Choosing a Value Proposition 37 Marketing Management Orientations 37 Preparing an Integrated Marketing Plan and Program 40 Building Customer Relationships 41 Customer Relationship Management Marketing at Work irobot's Roomba: The Power of Customer Delight 43 The Changing Nature of Customer Relationships 45 Partner Relationship Management 47 Capturing Value from Customers 48 Creating Customer Loyalty and Retention 48 Growing Share of Customer 49 Building Customer Equity 50 The Changing Marketing Landscape 52 The Uncertain Economic Environment SVlairketSng at Work An Era of Austerity TheThrifty Route in Fashion 53 The Digital Age 55 Rapid Globalization 56 Sustainable Marketing The Call for More Social Responsibility 56 The Growth of Not-for-Profit Marketing 57 So, What Is Marketing? Pulling It All Together 58 REST STOP: Reviewing the Concepts 59, Navigating the Key Terms 61, Travel Log 61, Under the Hood: MarketingTechnology 62, Staying on the Road: Marketing Ethics 62, Rough Road Ahead: Marketing and the Economy 62, Travel Budget: Marketing by the Numbers 63, Drive In: Video Case 63 Company and Marketing Strategy: Partnering to Build Customer Relationships 64 Companywide Strategic Planning: Defining Marketing's Role 67 Defining a Market-Oriented Mission 67 Setting Company Objectives and Goals Marketing at Work McDonald's: On a Customer-Focused Mission 69 Designing the Business Portfolio 71
3 12 Contents Planning Marketing: Partnering to Build Customer Relationships 74 Partnering with Other Company Departments 75 Partnering with Others in the Marketing System 76 Marketing Strategy and the Marketing Mix 77 Customer-Driven Marketing Strategy SWarketomg at Work Nicher Logitech: The Little MouseThat Roars 79 Developing an Integrated Marketing Mix 81 Managing the Marketing Effort 82 Marketing Analysis 82 Marketing Planning 83 Marketing Implementation 85 Marketing Department Organization 85 Marketing Control 86 Measuring and Managing Return on Marketing Investment 86 REST STOP: Reviewing the Concepts 88, Navigating the Key Terms 89, Travel Log 89, Under the Hood: MarketingTechnology 90, Staying on the Road: Marketing Ethics 90, Rough Road Ahead: Marketing and the Economy 91, Travel Budget: Marketing by the Numbers 91, Drive In: Video Case 91 Part 2 Understanding the Marketplace and Consumers Analyzing the Marketing Environment 92 The Company's Microenvironment 95 The Company 95 Suppliers 96 Marketing Intermediaries 96 Competitors 97 Publics 97 Customers 98 The Company's Macroenvironment 98 Demographic Environment 99 Economic Environment 106 Natural Environment 108 Technological Environment 109 Political and Social Environment Marketing at Work Spearheading Environmental Responsibility: "Masdar" 114 Cultural Environment 116 Responding to the Marketing Environment MairketSmg at Work YourCompanySucks.com 121 REST STOP: Reviewing the Concepts 122, Navigating the Key Terms 123, Travel Log 123, Under the Hood: MarketingTechnology 124, Staying on the Road: Marketing Ethics 124, Rough Road Ahead: Marketing and the Economy 125, Travel Budget: Marketing by the Numbers 125, Drive In: Video Case 125 Managing Marketing Information to Gain Customer Insights 126 Marketing Information and Customer Insights 129 Assessing Marketing Information Needs 130 Developing Marketing Information 131 Internal Data 131 Competitive Marketing Intelligence 132 Marketing Research 134 Defining the Problem and Research Objectives 134 Developing the Research Plan 135 Gathering Secondary Data 136 Primary Data Collection IWarketiinig at Work Research at Zay-Dee, Abu Dhabi, United Arab Emirates (UAE) 145 Implementing the Research Plan 148 Interpreting and Reporting the Findings 148
4 Contents 13 Analyzing and Using Marketing Information 148 Customer Relationship Management (CRM) 149 Distributing and Using Marketing Information 150 Other Marketing Information Considerations 151 Marketing Research in Small Businesses and Nonprofit Organizations 151 International Marketing Research 152 Public Policy and Ethics in Marketing Research Marketing at Work Tracking Consumers on the Web: Smart Targeting or a Little Creepy? 155 REST STOP: Reviewing the Concepts 157, Navigating the Key Terms 159, Travel Log 159, Under the Hood: MarketingTechnology 159, Staying on the Road: Marketing Ethics 160, Rough Road Ahead: Marketing and the Economy 160, Travel Budget: Marketing by the Numbers 161, Drive In: Video Case 161 Understanding Consumer and Business Buyer Behavior 162 Consumer Markets and Consumer Buyer Behavior 164 Model of Consumer Behavior 165 Characteristics Affecting Consumer Behavior Marketing! at Work Google Is Britain's Top Brand 171 The Buyer Decision Process 179 The Buyer Decision Process for New Products 182 Business Markets and Business Buyer Behavior 184 Business Markets Marketing at Work Tejari.com: Building B-to-B Customer Partnerships 186 Business Buyer Behavior 188 REST STOP: Reviewing the Concepts 195, Navigating the Key Terms 196, Travel Log 196, Under the-hood: MarketingTechnology 197, Staying on the Road: Marketing Ethics 197, Rough Road Ahead: Marketing and the Economy 198, Travel Budget: Marketing by the Numbers 198, Drive In: Video Case 199 Part 3 Designing a Customer-Driven Strategy and Mix 200 Customer-Driven Marketing Strategy: Creating Value for Target Customers 200 Market Segmentation 203 Segmenting Consumer Markets Marketing at Work MobinihTargeting the MobileTelecommunications Market 208 Segmenting Business Markets 211 Segmenting International Markets 212 Requirements for Effective Segmentation 213 Market Targeting 214 Evaluating Market Segments 214 Selecting Target Market Segments 214 Socially Responsible Target Marketing 219 Differentiation and Positioning 221 Positioning Maps 221 Choosing a Differentiation and Positioning Strategy Marketing at Work Raffles Hotel in Singapore:The Grand Old Dame of the East 226 Communicating and Delivering the Chosen Position 229
5 14 Contents REST STOP: Reviewing the Concepts 230, Navigating the Key Terms 231, Travel Log 231, Under the Hood: MarketingTechnology 232, Staying on the Road: Marketing Ethics 232, Rough Road Ahead: Marketing and the Economy 232, Travel Budget: Marketing by the Numbers 233, Drive In: Video Case 233 (?) Products, Services, and Brands: Building Customer Value 234 What Is a Product? 236 Products, Services, and Experiences 237 Levels of Product and Services 237 Product and Service Classifications 238 Product and Service Decisions 242 Individual Product and Service Decisions 242 Product Line Decisions 247 Product Mix Decisions 248 Services Marketing 249 Nature and Characteristics of a Service 249 Marketing Strategies for Service Firms Marketing at Work Jumeirah Group: Stay Different 252 Branding Strategy: Building Strong Brands 256 Brand Equity 256 Building Strong Brands Marketing at Work BadTimes Are GoodTimes for Store Brands. But What's a National Brand to Do? 260 Managing Brands 264 BEST STOP: Reviewing the Concepts 265, Navigating the Key Terms 266, Travel Log 266, Under the Hood: MarketingTechnology 267, Staying on the Road: Marketing Ethics 267, Rough Road Ahead: Marketing and the Economy 268, Travel Budget: Marketing by the Numbers 268, Drive In: Video Case 269 Developing New Products and Managing the Product Life-Cycle 270 New-Product Development Strategy 272 The New-Product Development Process 273 Idea Generation 273 Idea Screening 276 Concept Development and Testing 276 Marketing Strategy Development 277 Business Analysis 278 Product Development 278 Test Marketing 279 Commercialization 280 Managing New-Product Development 281 Customer-Centered New-Product Development 281 Team-Based New-Product Development 282 Systematic New-Product Development Marketing at Work BreadTalk's Revolutionary Approach to Selling Bread Meets Customers' Needs 283 Product Life-Cycle Strategies 285 Introduction Stage 287 Growth Stage Marketing at Work Kraft: Lots of Good Old Products;Too Few Good New Ones? 288 Maturity Stage 289 Decline Stage 291 Additional Product and Service Considerations 292 Product Decisions and Social Responsibility 293 International Product and Services Marketing 293 REST STOP: Reviewing the Concepts 295, Navigating the Key Terms 296, Travel Log 297, Under the Hood: MarketingTechnology 297, Staying on the Road: Marketing Ethics 298, Rough Road Ahead: Marketing and the Economy 298, Travel Budget: Marketing by the Numbers 298, Drive In: Video Case 299
6 Contents 15 Pricing: Understanding and Capturing Customer Value 300 What Is a Price? 303 Major Pricing Strategies 303 Customer Value-Based Pricing 303 Cost-Based Pricing 306 Competition-Based Pricing 308 Other Internal and External Considerations Affecting Price Decisions 308 Overall Marketing Strategy, Objectives, and Mix 309 Organizational Considerations 310 The Market and Demand 310 The Economy 312 Other External Factors 312 New-Product Pricing 313 Market-Skimming Pricing 313 Market-Penetration Pricing 313 Product Mix Pricing 314 Product Line Pricing 314 Optional-Product Pricing 315 Captive-Product Pricing 315 By-Product Pricing Marketing at Work Kodak: A Whole New Concept in Printer Pricing and Economics 316 Product Bundle Pricing 317 Price Adjustments 318 Discount and Allowance Pricing 318 Segmented Pricing 318 Psychological Pricing Marketing at Work Airline Pricing: Balancing the Price-Value Equation 320 Promotional Pricing 321 Geographical Pricing 322 Dynamic Pricing 323 International Pricing 325 Price Changes 325 Initiating Price Changes 326 Responding to Price Changes 327 Public Policy and Pricing 329 Pricing within Channel Levels 329 Pricing across Channel Levels 330 REST STOP: Reviewing the Concepts 331, Navigating the Key Terms 332, Travel Log 332, Under the Hood: MarketingTechnology 333, Staying on the Road: Marketing Ethics 333, Rough Road Ahead: Marketing and the Economy 334, Travel Budget: Marketing by the Numbers 334, Drive In: Video Case 335 Marketing Channels: Delivering Customer Value 336 Supply Chains and the Value Delivery Network 338 The Nature and Importance of Marketing Channels 339 How Channel Members Add Value 340 Number of Channel Levels 341 Channel Behavior and Organization 342 Channel Behavior 342 Vertical Marketing Systems Marketing at Work Zara: Fast Fashions Really Fast 345 Horizontal Marketing Systems 346 Multichannel Distribution Systems 347 Changing Channel Organization 348 Channel Design Decisions 349 Analyzing Consumer Needs 350 Setting Channel Objectives 350 Identifying Major Alternatives 351 Number of Marketing Intermediaries 351 Evaluating the Major Alternatives 352 Designing International Distribution Channels 352 Channel Management Decisions 353 Selecting Channel Members 353 Managing and Motivating Channel Members 354 Evaluating Channel Members 355
7 16 Contents Public Policy and Distribution Decisions 355 Marketing Logistics and Supply Chain Management 356 Nature and Importance of Marketing Logistics 356 Goals of the Logistics System ,2 Marketing at Work Greening the Supply Chain: It's the Right Thing to Do and It's ProfitableToo 358 Major Logistics Functions 358 Integrated Logistics Management 362 REST STOP: Reviewing the Concepts 365, Navigating the Key Terms 366, Travel Log 366, Under the Hood: MarketingTechnology 367, Staying on the Road: Marketing Ethics 367, Rough Road Ahead: Marketing and the Economy 368, Travel Budget: Marketing by the Numbers 368, Drive In: Video Case 369 Retailing and Wholesaling 370 Retailing 372 Types of Retailers Marketing at Work Carrefour Egypt: Buy in Bulk and Save Money 377 Retailer Marketing Decision !.2 Marketing at Work The Dubai Mall: Creating a Sense of "My Space" A Lifestyle Statement 383 Retailing Trends and Developments 387 Wholesaling 392 Types of Wholesalers 393 Wholesaler Marketing Decisions 394 Trends in Wholesaling 397 R!EST STOP: Reviewing the Concepts 398, Navigating the Key Terms 399, Travel Log 399, Under the Hood: MarketingTechnology 400, Staying on the Road: Marketing Ethics 400, Rough Road Ahead: Marketing and the Economy 401, Travel Budget: Marketing by the Numbers 401, Drive In: Video Case 401 Communicating Customer Value: Advertising and Public Relations 402 The Promotion Mix 403 Integrated Marketing Communications 403 The New Marketing Communications Landscape 405 The Shifting Marketing Communications Model 406 The Need for Integrated Marketing Communications Marketing at Work Staying Relevant in a Shifting Advertising Universe: The Old Versus the New 408 Shaping the Overall Promotion Mix 410 The Nature of Each Promotion Tool 410 Promotion Mix Strategies 412 Advertising 413 Setting Advertising Objectives 414 Setting the Advertising Budget 415 Developing Advertising Strategy 417 Evaluating Advertising Effectiveness and Return on Advertising Investment Marketing at Work n7w: Helping in ManagingTourism 427 Other Advertising Considerations 428 Public Relations 430 The Role and Impact of Public Relations 431 Major Public Relations Tools 432
8 Contents 17 REST STOP: Reviewing the Concepts 433, Navigating the Key Terms 434, Travel Log 434, Under the Hood: MarketingTechnology 435, Staying on the Road: Marketing Ethics 435, Rough Road Ahead: Marketing and the Economy 436, Travel Budget: Marketing by the Numbers 436, Drive In: Video Case 437 Personal Selling and Sales Promotion 438 Personal Selling 440 The Nature of Personal Selling 441 The Role of the Sales Force Marketing at Work The Role of the Sales Force and the Entire Company: Putting Customers First 443 Managing the Sales Force 444 Designing Sales Force Strategy and Structure 444 Recruiting and Selecting Salespeople 448 Training Salespeople 449 Compensating Salespeople 450 Supervising and Motivating Salespeople 451 Evaluating Salespeople and Sales Force Performance 453 The Personal Selling Process 454 Steps in the Selling Process 454 Personal Selling and Managing Customer Relationships Marketing at Work Hyflux: Value Selling A Corporate Culture of Providing Integrated Solutions 458 Sales Promotion 459 Rapid Growth of Sales Promotion 459 Sales Promotion Objectives 460 Major Sales Promotion Tools 460 Developing the Sales Promotion Program 464 REST STOP: Reviewing the Concepts 465, Navigating the Key Terms 466, Travel Log 466, Under the Hood: MarketingTechnology 467, Staying on the Road: Marketing Ethics 467, Rough Road Ahead: Marketing and the Economy 467, Travel Budget: Marketing by the Numbers 468^ Drive In: Video Case 468 Direct and Online Marketing: Building Direct Customer Relationships 470 The New Direct Marketing Model 473 Growth and Benefits of Direct Marketing 473 Benefits to Buyers 474 Benefits to Sellers 474 Customer Databases and Direct Marketing 476 Forms of Direct Marketing 477 Direct-Mail Marketing 477 Catalog Marketing 478 Telephone Marketing 479 Direct- Response Television Marketing 480 Kiosk Marketing 482 New Digital Direct Marketing Technologies Marketing at Work Mobile Marketing: Do Call Me, Please or I'll CallYou! 484 Online Marketing 486 Marketing and the Internet 486 Online Marketing Domains 487 Setting Up an Online Marketing Presence Marketing at Work Online Social Networks: Targeting Niches of Like-Minded People 497 The Promise and Challenges of Online Marketing 499 Public Policy Issues in Direct Marketing 499 Irritation, Unfairness, Deception, and Fraud 499 Invasion of Privacy 500 A Need for Action 501
9 18 Contents REST STOP: Reviewing the Concepts 502, Navigating the Key Terms 503, Travel Log 503, Under the Hood: MarketingTechnology 504, Staying on the Road: Marketing Ethics 504, Rough Road Ahead: Marketing and the Economy 505, Travel Budget: Marketing by the Numbers 505, Drive In: Video Case 505 Part 4 Extending Marketing 506 The Global Marketplace Global Marketing Today Looking at the Global Marketing Environment 510 The International Trade System 510 Economic Environment 512 Political-Legal Environment 514 Cultural Environment 514 Deciding Whether to Go Global 517 Deciding Which Markets to Enter 518 Deciding How to Enter the Market 519 Exporting 520 Joint Venturing 520 Direct Investment 522 Deciding on the Global Marketing Program 523 Product Marketing at Work Oreos and Milk, Chinese Style 524 Promotion 526 Price Marketing at Work Watch Your Language! 528 Distribution Channels 529 Deciding on the Global Marketing Organization 530 i REST STOP: Reviewing the Concepts 531, Navigating the Key Terms 532, Travel Log 532, Under the Hood: MarketingTechnology 533, Staying on the Road: Marketing Ethics 533, Rough Road Ahead: Marketing and the Economy 533, Travel Budget: Marketing by the Numbers 534, Drive In: Video Case 534 Sustainable Marketing: Social Responsibility and Ethics 536 Sustainable Marketing 539 Social Criticisms of Marketing 540 Marketing's Impact on Individual Consumers 540 Marketing's Impact on Society as a Whole 546 Marketing's Impact on Other Businesses 548 Consumer Actions to Promote Sustainable Marketing 549 Consumerism 550 Environmentalism 551 Public Actions to Regulate Marketing Marketing at Work Fat-Free Promotion 557 Business Actions Toward Sustainable Marketing 558 Sustainable Marketing Principles Marketing at Work HSBC Holdings pic: Serving Both Profits and Values 561 Marketing Ethics 563 The Sustainable Company 565
10 Contents 19 REST STOP: Reviewing the Concepts 567, Navigating the Key Terms 568, Travel Log 568, Under the Hood: MarketingTechnology 569, Staying on the Road: Marketing Ethics 569, Rough Road Ahead: Marketing and the Economy 569, Travel Budget: Marketing by the Numbers 570, Drive In: Video Case 570 Appendix 1 Marketing Plan 571 Appendix 2 Marketing by the Numbers 580 References 597 Glossary 617 Credits 627 Index 630
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