Marketin. Global Edition 14

Marketin Global Edition 14 PHILIP Kotler Northwestern University GARY Armstrong University of North Carolina Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo

Contents Part 1: Defining Marketing and the Marketing Process (Chapters 1-2) Part 2: Understanding the Marketplace and Consumers (Chapters 3-6) Part 3: Designing a Customer-Driven Strategy and Mix (Chapters 7-17) Part 4: Extending Marketing (Chapters 18-20) Preface 16 Part 1: Defining Marketing and the Marketing Process 26 What Is Marketing? 28 Marketing: Creating and Capturing Customer Value 26 Marketing Defined 29 I The Marketing Process 29 Understanding the Marketplace and Customer Needs 30 Customer Needs, Wants, and Demands 30 I Market Offerings Products, Services, and Experiences 30 I Customer Value and Satisfaction 31 I Exchanges and Relationships 31 I Markets 31 Designing a Customer-Driven Marketing Strategy 32 Selecting Customers to Serve 32 I Choosing a Value Proposition 33 I Marketing Management Orientations 33 Preparing an Integrated Marketing Plan and Program 36 Building Customer Relationships 36 Customer Relationship Management 36 I The Changing Nature of Customer Relationships 40 I Partner Relationship Management 43 Capturing Value from Customers 44 Creating Customer Loyalty and Retention 44 I Growing Share of Customer 45 I Building Customer Equity 45 The Changing Marketing Landscape 46 The Uncertain Economic Environment 47 I The Digital Age 50 I Rapid Globalization 51 I Sustainable Marketing The Call for More Social Responsibility 51 I The Growth of Not-for-Profit Marketing 52 So, What Is Marketing? Pulling It All Together 53 Reviewing Objectives and Key Terms 54 I Key Terms 55 I Discussing & Applying the Concepts 56 I Focus on Technology 56 I Focus on Ethics 57 I Marketing & the Economy 57 I Marketing by the Numbers 57 Video Case: Stew Leonard's 58 Company Case: Pegasus Airline: Delighting a New Type of Traveling Customer 58 Company and Marketing Strategy: Partnering to Build Customer Relationships 60 Company-Wide Strategic Planning: Defining Marketing's Role 62 Defining a Market-Oriented Mission 63 I Setting Company Objectives and Goals 64 I Designing the Business Portfolio 64 Planning Marketing: Partnering to Build Customer Relationships 69 Partnering with Other Company Departments 70 I Partnering with Others in the Marketing System 71 Marketing Strategy and the Marketing Mix 72 Customer-Driven Marketing Strategy 72 I Developing an Integrated Marketing Mix 75 Managing the Marketing Effort 77 Marketing Analysis 77 I Marketing Planning 78 I Marketing Implementation 78 I Marketing Department Organization 79 I Marketing Control 80 Measuring and Managing Return on Marketing Investment 81 Reviewing Objectives and Key Terms 83 I Key Terms 84 I Discussing & Applying the Concepts 84 I Focus on Technology 84 I Focus on Ethics 85 I Marketing & the Economy 85 I Marketing by the Numbers 85 Video Case: Live Nation 86 Company Case: Bahrain Bay: Building Customer Relations for the Future 86 Part 2: Understanding the Marketplace and Consumers 88 The Microenvironment 90 Analyzing the Marketing Environment 88 The Company 91 I Suppliers 91 I Marketing Intermediaries 92 I Competitors 92 I Publics 93 I Customers 93 The Macroenvironment 94 The Demographic Environment 94 I The Economic Environment 101 I The Natural Environment 102 I The Technological Environment 104 I The Political and Social Environment 105 I The Cultural Environment 110 Responding to the Marketing Environment 113 Reviewing Objectives and Key Terms 115 I Key Terms 116 I Discussing & Applying the Concepts 116 I Focus on Technology 117 I Focus on Ethics 117 I Marketing & the Economy 117 I Marketing by the Numbers 117 Video Case: TOMS Shoes 118 Company Case: AirAsia: The Sky's the Limit 118 Managing Marketing Information to Gain Customer Insights 120 Marketing Information and Customer Insights 122 Assessing Marketing Information Needs 124 11

12 Contents Developing Marketing Information 124 Internal Data 124 I Competitive Marketing Intelligence 125 Marketing Research 127 Defining the Problem and Research Objectives 127 I Developing the Research Plan 128 I Gathering Secondary Data 128 I Primary Data Collection 130 I Implementing the Research Plan 142 I Interpreting and Reporting the Findings 142 Analyzing and Using Marketing Information 143 Customer Relationship Management 143 I Distributing and Using Marketing Information 144 Other Marketing Information Considerations 145 Marketing Research in Small Businesses and Nonprofit Organizations 145 I International Marketing Research 147 I Public Policy and Ethics in Marketing Research 148 Reviewing Objectives and Key Terms 150 I Key Terms 151 I Discussing & Applying the Concepts 151 I Focus on Technology 152 I Focus on Ethics 152 I Marketing & the Economy 152 I Marketing by the Numbers 153 Video Case: Radian6 153 Company Case: Harrah's Entertainment: Hitting the CRM Jackpot 153 Consumer Markets and Consumer Buyer Behavior 156 Model of Consumer Behavior 158 Characteristics Affecting Consumer Behavior 159 Cultural Factors 159 I Social Factors 163 I Personal Factors 168 I Psychological Factors 171 Types of Buying Decision Behavior 174 Complex Buying Behavior 174 I Dissonance-Reducing Buying Behavior 175 I Habitual Buying Behavior 175 I Variety-Seeking Buying Behavior 176 The Buyer Decision Process 176 Need Recognition 176 I Information Search 176 I Evaluation of Alternatives 177 I Purchase Decision 178 I Postpurchase Behavior 178 The Buyer Decision Process for New Products 180 Stages in the Adoption Process 180 I Individual Differences in Innovativeness 181 I Influence of Product Characteristics on Rate of Adoption 181 Reviewing Objectives and Key Terms 182 I Key Terms 183 I Discussing & Applying the Concepts 183 I Focus on Technology 184 I Focus on Ethics 184 I Marketing & the Economy 185 I Marketing by the Numbers 185 Video Case: Radian6 185 Company Case: Porsche: Guarding the Old While Bringing in the New 186 Business Markets 190 Business Markets and Business Buyer Behavior 188 Market Structure and Demand 191 I Nature of the Buying Unit 192 I Types of Decisions and the Decision Process 192 Business Buyer Behavior 194 Major Type of Buying Situations 195 I Participants in the Business Buying Process 196 I Major Influences on Business Buyers 197 I The Business Buying Process 200 I E-Procurement: Buying on the Internet 202 Institutional and Government Markets 204 Institutional Markets 204 I Government Markets 205 Reviewing Objectives and Key Terms 207 I Key Terms 207 I Discussing & Applying the Concepts 208 I Focus on Technology 208 I Focus on Ethics 209 I Marketing & the Economy 209 I Marketing by the Numbers 209 Video Case: Eaton 209 Company Case: Cisco Systems: Solving Business Problems Through Collaboration 210 Part 3: Designing a Customer-Driven Strategy and Mix 212 Market Segmentation 214 Customer-Driven Marketing Strategy: Creating Value for Target Customers 212 Segmenting Consumer Markets 215 I Segmenting Business Markets 222 I Segmenting International Markets 223 I Requirements for Effective Segmentation 224 Market Targeting 224 Evaluating Market Segments 225 I Selecting Target Market Segments 225 Differentiation and Positioning 231 Positioning Maps 232 I Choosing a Differentiation'and Positioning Strategy 232 I Communicating and Delivering the Chosen Position 239 Reviewing Objectives and Key Terms 240 I Key Terms 241 I Discussing & Applying the Concepts 241 I Focus on Technology 242 I Focus on Ethics 242 I Marketing &the Economy 242 I Marketing by the Numbers 242 Video Case: Meredith 243 Company Case: Beanos Cafe: An Egyptian Flavor 243 What Is a Product? 248 Products, Services, and Brands: Building Customer Value 246 Products, Services, and Experiences 248 I Levels of Product and Services 249 I Product and Service Classifications 250 Product and Service Decisions 253 Individual Product and Service Decisions 253 I Product Line Decisions 258 I Product Mix Decisions 259 Services Marketing 260 The Nature and Characteristics of a Service 260 I Marketing Strategies for Service Firms 262

Contents 13 Branding Strategy: Building Strong Brands 267 Brand Equity 267 I Building Strong Brands 268 I Managing Brands 275 Reviewing Objectives and Key Terms 276 I Key Terms 277 I Discussing & Applying the Concepts 277 I Focus on Technology 278 I Focus on Ethics 278 I Marketing & the Economy 278 I Marketing by the Numbers 279 Video Case: General Mills GoGurt 279 Company Case: Mobinil: The First Egyptian Mobile Service Provider 279 New Product Development and Product Life-Cycle Strategies 282 New-Product Development Strategy 284 The New-Product Development Process 285 Idea Generation 285 I Idea Screening 288 I Concept Development and Testing 288 I Marketing Strategy Development 289 I Business Analysis 290 I Product Development 290 I Test Marketing 291 I Commercialization 292 Managing New-Product Development 293 Customer-Centered New-Product Development 293 I Team- Based New-Product Development 294 I Systematic New-Product Development 294 I New-Product Development in Turbulent Times 296 Product Life-Cycle Strategies 297 Introduction Stage 299 I Growth Stage 299-1 Maturity Stage 301 I Decline Stage 302 Additional Product and Service Considerations 304 Product Decisions and Social Responsibility 304 I International Product and Services Marketing 304 Reviewing Objectives and Key Terms 306 I Key Terms 307 I Discussing & Applying the Concepts 307 I Focus on Technology 308 I Focus on Ethics 308 I Marketing & the Economy 308 I Marketing by the Numbers 309 Video Case: General Mills FiberOne 309 Company Case: Samsung: From Gallop to Run 309 What Is a Price? 314 Major Pricing Strategies 315 Pricing: Understanding and Capturing Customer Value 312 Customer Value-Based Pricing 315 I Cost-Based Pricing 319 I Competition-Based Pricing 323. Other Internal and External Considerations Affecting Price Decisions 324 Overall Marketing Strategy, Objectives, and Mix 324 I Organizational Considerations 325 I The Market and Demand 325 I The Economy 327 I Other External Factors 328 Reviewing Objectives and Key Terms 330 I Key Terms 331 I Discussing & Applying the Concepts 332 I Focus on Technology 332 I Focus on Ethics 332 I Marketing & the Economy 333 I Marketing by the Numbers 333 Video Case: IKEA 333 Company Case: Cebu Pacific Air: Now, Everybody Can Fly 334 Pricing Strategies 336 New-Product Pricing Strategies 338 Market-Skimming Pricing 338 I Market-Penetration Pricing 338 Product Mix Pricing Strategies 339 Product Line Pricing 339 I Optional Product Pricing 340 I Captive Product Pricing 340 I By-Product Pricing 340 I Product Bundle Pricing 342 Price Adjustment Strategies 343 Discount and Allowance Pricing 343 I Segmented Pricing 343 I Psychological Pricing 344 I Promotional Pricing 345 I Geographical Pricing 346 I Dynamic Pricing 347 I International Pricing 348 Price Changes 349 Initiating Price Changes 349 I Responding to Price Changes 351 Public Policy and Marketing 352 Pricing within Channel Levels 352 I Pricing Across Channel Levels 355 Reviewing Objectives and Key Terms 356 I Key Terms 357 I Discussing & Applying the Concepts 357 I Focus on Technology 358 I Focus on Ethics 358 I Marketing & the Economy 358 I Marketing by the Numbers 358 Video Case: Smashburger 359 Company Case: Unilab's Vidastat: The Price Buster 359 Marketing Channels: Delivering Customer Value 362 Supply Chains and the Value Delivery Netwof k 364 The Nature and Importance of Marketing Channels 365 How Channel Members Add Value 366 I Number of Channel Levels 367 Channel Behavior and Organization 368 Channel Behavior 368 I Vertical Marketing Systems 369 I Horizontal Marketing Systems 372 I Multichannel Distribution Systems 373 I Changing Channel Organization 374 Channel Design Decisions 375 Analyzing Consumer Needs 375 I Setting Channel Objectives 376 I Identifying Major Alternatives 376 I Evaluating the Major Alternatives 377 I Designing International Distribution Channels 378 Channel Management Decisions 378 Selecting Channel Members 379 I Managing and Motivating Channel Members 379 I Evaluating Channel Members 380 Public Policy and Distribution Decisions 380 Marketing Logistics and Supply Chain Management 381 Nature and Importance of Marketing Logistics 381 I Goals of the Logistics System 382 I Major Logistics Functions 384 I Integrated Logistics Management 387

14 Contents Reviewing Objectives and Key Terms 390 I Key Terms 391 I Discussing & Applying the Concepts 392 I Focus on Technology 392 I Focus on Ethics 392 I Marketing & the Economy 393 I Marketing by the Numbers 393 Video Case: Progressive 393 Company Case: Netflix: Disintermediator or Disintermediated? 393 Retailing 398 Retailing and Wholesaling 396 Types of Retailers 399 I Retailer Marketing Decisions 406 I Retailing Trends and Developments 413 Wholesaling 418 Types of Wholesalers 420 I Wholesaler Marketing Decisions 420 I Trends in Wholesaling 423 Reviewing Objectives and Key Terms 424 I Key Terms 425 I Discussing & Applying the Concepts 425 I Focus on Technology 426 I Focus on Ethics 426 I Marketing & the Economy 426 I Marketing by the Numbers 427 Video Case: Zappos.com 427 Company Case: Jones the Grocer: Gourmet Food for Everyday Living 427 Communicating Customer Value: Integrated Marketing Communications Strategy 430 The Promotion Mix 432 Integrated Marketing Communications 433 The New Marketing Communications Model 433 I The Need for Integrated Marketing Communications 434 A View of the Communication Process 438 Steps in Developing Effective Marketing Communication 439 Identifying the Target Audience 439 I Determining the Communication Objectives 440 I Designing a Message 441 I Choosing Media 442 I Selecting the Message Source 444 I Collecting Feedback 444 Setting the Total Promotion Budget and Mix 446 Setting the Total Promotion Budget 446 I Shaping the Overall Promotion Mix 448 I Integrating the Promotion Mix 450 Socially Responsible Marketing Communication 451 Advertising and Sales Promotion 451 I Personal Selling 452 Reviewing Objectives and Key Terms 452 I Key Terms 453 I Discussing & Applying the Concepts 453 I Focus on Technology 454 I Focus on Ethics 454 I Marketing & the Economy 455 I Marketing by the Numbers 455 Video Case: CP+B 455 Company Case: Pepsi: Can a Soda Really Make the World a Better Place? 456 Advertising 460 Advertising and Public Relations 458 Setting Advertising Objectives 461 I Setting the Advertising Budget 462 I Developing Advertising Strategy 463 I Evaluating Advertising Effectiveness and the Return on Advertising Investment 473 I Other Advertising Considerations 474 Public Relations 478 The Role and Impact of Public Relations 479 I Major Public Relations Tools 480 Reviewing Objectives and Key Terms 481 I Key Terms 482 I Discussing & Applying the Concepts 482 I Focus on Technology 483 I Focus on Ethics 483 I Marketing & the Economy 483 I Marketing by the Numbers 484 Video Case: E*TRADE 484 Company Case: OgilvyOne: It's Not Creative Unless It Sells 484 Personal Selling 488 Personal Selling and Sales Promotion 486 The Nature of Personal Selling 488 I The Role of the Sales Force 489 Managing the Sales Force 492 Designing the Sales Force Strategy and Structure 492 I Recruiting and Selecting Salespeople 496 I Training Salespeople 497 I Compensating Salespeople 498 I Supervising. and Motivating Salespeople 498 I Evaluating Salespeople and Sales Force Performance 501 The Personal Selling Process 502 Steps in the Selling Process 502 I Personal Selling and Managing Customer Relationships 504 Sales Promotion 505 The Rapid Growth of Sales Promotion 506 I Sales Promotion Objectives 506 I Major Sales Promotion Tools 507 J Developing the Sales Promotion Program 511 Reviewing Objectives and Key Terms 512 I Key Terms 513 I Discussing & Applying the Concepts 513 I Focus on Technology 514 I Focus on Ethics 514 I Marketing & the Economy 514 I Marketing by the Numbers 514 Video Case: Nestle Waters 515 Company Case: HP: Overhauling a Vast Corporate Sales.Force 515 Direct and Online Marketing: Building Direct Customer Relationships 518 The New Direct Marketing Model 520 Growth and Benefits of Direct Marketing 521 Benefits to Buyers 521 I Benefits to Sellers 522 Customer Databases and Direct Marketing 523 Forms of Direct Marketing 524 Direct-Mail Marketing 525 I Catalog Marketing 526 I Telephone Marketing 526 I Direct-Response Television Marketing 527 I Kiosk Marketing 528 I New Digital Direct Marketing Technologies 529 Online Marketing 532 Marketing and the Internet 532 I Online Marketing Domains 533 I Setting Up an Online Marketing Presence 537

Contents 15 Public Policy Issues in Direct Marketing 542 Irritation, Unfairness, Deception, and Fraud 542 I Invasion of Privacy 543 I A Need for Action 544 Reviewing Objectives and Key Terms 545 I Key Terms 546 I Discussing & Applying the Concepts 546 I Focus on Technology 546 I Focus on Ethics 547 I Marketing & the Economy 547 I Marketing by the Numbers 547 Video Case: Zappos.com 548 Company Case: EBay: Fixing an Online Marketing Pioneer 548 Deciding on the Global Marketing Program 589 Product 590 I Promotion 593 I Price 595 I Distribution Channels 596 Deciding on the Global Marketing Organization 597 Reviewing Objectives and Key Terms 598 I Key Terms 599 I Discussing & Applying the Concepts 599 I Focus on Technology 600 I Focus on Ethics 600 I Marketing & the Economy 600 I Marketing by the Numbers 601 Video Case: Monster 601 Company Case: Nokia: Envisioning a Connected World 601 Part 4: Extending Marketing 550 Competitor Analysis 552 Creating Competitive Advantage 550 Identifying Competitors 552 I Assessing Competitors 553 I Selecting Competitors to Attack and Avoid 555 I Designing a Competitive Intelligence System 557 Competitive Strategies 559 Approaches to Marketing Strategy 559 I Basic Competitive Strategies 560 I Competitive Positions 562 I Market Leader Strategies 562 I Market Challenger Strategies 565 I Market Follower Strategies 566 I Market Nicher Strategies 567 Balancing Customer and Competitor Orientations 568 Reviewing Objectives and Key Terms 569 I Key Terms 570 I Discussing & Applying the Concepts 570 I Focus on Technology 570 I Focus on Ethics 570 I Marketing & the Economy 571 I Marketing by the Numbers 571 Video Case: Umpqua Bank 571 Company Case: Ford: Resurrecting an Iconic Company 572 Sustainable Marketing: Social Responsibility and Ethics 604 Sustainable Marketing 606 Social Criticisms of Marketing 608 Marketing's Impact on Individual Consumers 608 I Marketing's Impact on Society as a Whole 613 I Marketing's Impact on Other Businesses 615 Consumer Actions to Promote Sustainable Marketing 616 Consumerism 616 I Environmentalism 617 I Public Actions to Regulate Marketing 623 Business Actions Toward Sustainable Marketing 623 Sustainable Marketing Principles 623 I Marketing Ethics 628 I The Sustainable Company 632 Reviewing Objectives and Key Terms 632 I Key Terms 633 I Discussing & Applying the Concepts 633 I Focus on Technology 634 I Focus on Ethics 634 I Marketing & the Economy 634 I Marketing by the Numbers 635 Video Case: Land Rover 635 Company Case: International Paper: Combining Industry and Social Responsibility 635 The Global Marketplace 574 Global Marketing Today 576 Looking at the Global Marketing Environment 578 The International Trade System 578 I Economic Environment 580 I Political-Legal Environment 581 I Cultural Environment 581 Deciding Whether to Go Global 584 Deciding Which Markets to Enter 585 Deciding How to Enter the Market 586 Exporting 586 I Joint Venturing 587 I Direct Investment 589 Appendix 1: Marketing Plan Al Appendix 2: Marketing by the Numbers All References Rl Glossary Gl Credits Cl Index II