Contents

Preface 17 The Selling Concept 43

The Marketing Concept 43
PART 1 Understanding Marketing The Holistic Marketing Concept 43
Management 24 Updating the Four Ps 47
MARKETING IN ll.iHT Understanding the
Chapter 1 Defining Marketing for the New 4 As of Marketing 48
Realities 25 Marketing Management Tasks 49
Developing Marketing Strategies and
The Value of Marketing 25
Plans 49
Marketing Decision Making 25
Capturing Marketing Insights 50
Winning Marketing 26
Connecting with Customers 50
The Scope of Marketing 27 Building Strong Brands 50
Wnat Is fvlarketing? 27
What Is Marketed? 27 MARKETING MEMO Marketers' Frequently
WITT5'"Marl<e sr29 Asked Questions 50
Core Marketing Concepts 31 Creating Value 51
Needs, Wants, and Demands 31 Delivering Value 51
Target Markets, Positioning, and Communicating Value 51
Segmentation 31 onducting Marketing Responsibly for
Offerings and Brands 32 Long-Term Success 51
Marketing Channels 32 Summary 51
Paid, Owned, and Earned Media 32 Applications 52
Impressions and Engagement 32
Value and Satisfaction 33 MARKETING EXCELLENCE Nike 52
Supply Chain 33 MARKETING EXCELLENCE Google 54
Competition 34
Marketing Environment 34
T he New Marketing Realities 35 Chapter 2 Developing Marketing Strategies
Technology 35 and Plans 57
Globalization 36
Marketing and Customer Value 57
Social Responsibility 36
The Value Delivery Process 57
MARKETING INSIGHT Getting to The Value Chain 58
Marketing 3.0 37 Core Competencies 58
T he Central Role of Strategic Planning 59
A Dramatically Changed Marketplace 38
New Consumer Capabilities 38 Corporate and Division Strategic Planning 60
New Company Capabilities 39 MARKETING MEMO What Does It Take
Changing Channels 41 to Be a Successful CMO? 61
Heightened Competition 41
Defining the Corporate Mission 61
Marketing in Practice 41 rstabfishing Strategic Business Units 64
Marketing Balance 41 Assigning Resources to Each SBU 64
MARKETING MEMO Reinventing Marketing Assessing Growth Opportunities 64
at Coca-Cola 42 Organization and Organizational Culture 68
Marketing Innovation 69
Marketing Accountability 42
Marketing in the Organization 42 MARKETING IN IQHT Creating Innovative
Company Orientation toward the Marketing 69
Marketplace 42 Business Unit Strategic Planning 70
The Production Concept 42 T he Business Mission 71
-,,,e Product Concept 43 SWOT Analysis 71
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 MARKETING MEMO Checklist for Evaluating MARKETING MEMO Finding Gold at the
Strengths/Weaknesses Analysis 73 Bottom of the Pyramid 97
Goal Formulation 74 The Economic Environment 99
Strategic Formulation 74 The Sociocultural Environment 100
Program Formulation and The Natural Environment 101
Implementation 75
MARKETING INSIGHT The Green Marketing
MARKETING INSIGHT Businesses Charting Revolution 103
a New Direction 76 The Technological Environment 104
Feedback and Control 77 The Political-Legal Environment 105
The Nature and Contents of a Marketing MARKETING INSIGHT Watching Out for Big
Plan 77 Brother 107
MARKETING MEMO Marketing Plan Forecasting and Demand Measurement 107
Criteria 77 The Measures of Market Demand 108
The Role of Research 78 A Vocabulary for Demand Measurement 109
The Role of Relationships 78 Estimating Current Demand 111
From Marketing Plan to Marketing Estimating Future Demand 113
Action 79 Summary 115
Summary 79 Appllcatlons 116
Applications 80 MARKETING EXCELLENCE Microsoft 116
MARKETING EXCELLENCE Electrolux 80 MARKETING EXCELLENCE Ferrero 117
MARKETING EXCELLENCE Emirates 81
Sample Marketing Plan: Pegasus Sports
International 83 Chapter 4 Conducting Marketing
Research 121

PART 2 Capturing Marketing The Scope of Marketing Research 121

Insights 88 Importance of Marketing Insights 121
Who Does Marketing Research? 122
Overcoming Barriers to the Use of Marketing
Chapter 3 Collecting Information and Research 123
Forecasting Demand 89 The Marketing Research Process 124
Components of a Modern Marketing Step 1: Define the Problem, the Decision
Information System 89 Alternatives, and the Research
Objectives 124
Internal Records 91 Step 2: Develop the Research Plan 125
The Order-to-Payment Cycle 91
Sales Information Systems 91 MARKETING MEMO Conducting Informative
Databases, Data Warehousing, and Data Focus Groups 127
Mining 91
MARKETING MEMO Marketing
MARKETING INSIG T Digging Into Big Questionnaire Dos And Don'ts 130
Data 92
MARKETING INSIGHT Getting into the
Marketing Intelligence 92
Heads of Consumers 131
The Marketing Intelligence System 92
Collecting Marketing Intelligence on the MARKETING INIIGH Understanding Brain
Internet 94 Science 133
Communicating and Acting on Marketing
Intelligence 94 Step 3: Collect the Information 135
Analyzing the Macroenvironment 94 Step 4: Analyze the Information 135
Needs and Trends 95 Step 5: Present the Findings 135
Identifying the Major Forces 95 MARKETING IN IGH Bringing Marketing
The Demographic Environment 96 Research to Life with Personas 136
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 Step 6: Make the Decision 136 Chapter 6 Analyzing Consumer Markets 179
Measuring Marketing Productivity 137
Marketing Metrics 137 What Influences Consumer Behavior? 179
Cultural Factors 179
MARKETING MEMO Measuring Social Social Factors 181
Media ROI 139 Personal Factors 183
Marketing-Mix Modeling 140 MARKETING MEMO The Average U.S.
Marketing Dashboards 140 Consumer Quiz 184
MARKETING MEMO Designing Effective Key Psychological Processes 187
Marketing Dashboards 141 Motivation 187
Summary 143 Perception 189
Applications 143 MARKETING MEMO T he Power of Sensory
Marketing 189
MARKETING EXCELLENCE IDEO 144
MARKETING EXCELLENCE Intuit 146 Learning 191
Emotions 192
Memory 193
PART 3 Connecting with The Buying Decision Process: The Five-Stage
Customers 148 Model 194
Problem Recognition 195
Information Search 196
Chapter 5 Creating Long-Term Loyalty Evaluatfon of Alternatives 197
Relationships 149 Purchase Decision 198
Postpurchase Behavior 200
Building Customer Value, Satisfaction, and
Moderating Effects on Consumer Decision
Loyalty 149 Making 202
Customer-Perceived Value 150
Behavioral Decision Theory and Behavioral
Total Customer Satisfaction 153
Monitoring Satisfaction 155 Economics 202
Product and Service Quality 156 Decision Heuristics 203
Framing 204
MARKETING I �HT Net Promoter and Summary 205
Customer Satisfaction 157
App lications 205
Maximizing Customer Lifetime Value 158 MARKETING EXCELLENCE Disney 206
Customer Profitability 159
Measuring Customer Lifetime MARKETING EXCELLENCE IKEA 207
Value 160
Attracting and Retaining Customers 160
Chapter 7 Analyzing Business Markets 211
MARKETING MEMO Calculating Customer
Lifetime Value 161 What is Organizational Buying? 211
T he Business Market versus the Consumer
Building Loyalty 164
Market 211
Brand Communities 165
Buying Situations 214
Win-Backs 168
Participants in the Business Buying
Cultivating Customer Relationships 168
Customer Relationship Management 168 Process 215
T he Buying Center 216
MARKETING N tGHf The Behavioral Buying Center Influences 216
Targeting Controversy 169 Targeting Firms and Buying Centers 217
Summary 174 MARKETING lN nHT Big Sales to Small
Applications 174 Businesses 218
MARKETING EXCELLENCE Audi 175 The Purchasing/Procurement Process 219
MARKETING EXCELLENCE Stages in the Buying Process 220
Harley-Davidson 176 Problem Recognition 220
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 General Need Description and Product Global Communication Strategies 257
Specification 221 Global Pricing Strategies 257
Supplier Search 221 Global Distribution Strategies 259
Proposal Solicitation 223 Country-of-Origin Effects 260
Supplier Selection 223 Building Country Images 260
MARKETING MEMO Developing Compelling Consumer Perceptions of Country of
Customer Value Propositions 224 Origin 261
Summary 262
Order-Routine Specification 226
Performance Review 226
Applications 263
Developing Effective Business-to-Business MARKETING EXCELLENCE Twitter 263
Marketing Programs 226 MARKETING EXCELLENCE L'Oreal 264
Communication and Branding Activities 226
Systems Buying and Selling 228
MARKETING MEMO Spreading the Word
PART4 Building Strong
with Customer Reference Programs 229 Brands 266
Role of Services 229
Managing Business-to-Business Customer Chapter 9 Identifying Market Segments and
Relationships 230 Targets 267
The Benefits of Vertical Coordination 230
Bases for Segmenting Consumer
MARKETING I I Establishing
Markets 268
Corporate Trust, Credibility, and
Reputation 231 Geographic Segmentation 268
Demographic Segmentation 271
Risks and Opportunism in Business Psychographic Segmentation 280
Relationships 231 Behavioral Segmentation 281
Institutional and Government Markets 233 How Should Business Markets Be
Summary 234 Segmented? 283
Applications 235 Market Targeting 284
MARKETING EXCELLENCE Accenture 235 Effective Segmentation Criteria 285
Evaluating and Selecting the Market
MARKETING EXCELLENCE GE 236
Segments 286
MARKETING INSI T Chasing the Long
Tail 289
Chapter 8 Tapping into Global Markets 239
MARKETING MEMO Protecting Kids
Competing on a Global Basis 239
Online 291
Deciding Whether to Go Abroad 241
Deciding Which Markets to Enter 242 Summary 291
How Many Markets to Enter 242 Applications 292
Evaluating Potential Markets 243 MARKETING EXCELLENCE HSBC 292
Succeeding in Developing
Markets 243 MARKETING EXCELLENCE BMW 294
Deciding How to Enter the Market 248
Indirect and Direct Export 249 Chapter 10 Crafting the Brand Positioning 297
Licensing 249
Joint Ventures 250 Developing a Brand Positioning 297
Direct Investment 250 Understanding Positioning and Value
Acquisition 250 Propositions 297
Deciding on the Marketing Program 251 Choosing a Competitive Frame of
Global Similarities and Differences 252 Reference 298
Marketing Adaptation 253 Identifying Potential Points-of-Difference
Global Product Strategies 254 and Points-of-Parity 300
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 Choosing Specific POPs and PODs 304 Summary 352
Brand Mantras 307 Applications 352
Establishing a Brand Positioning 309 MARKETING EXCELLENCE McDonald's 353
MARKETING MEMO Constructing a Brand MARKETING EXCELLENCE
Positioning Bull's-eye 309
Procter & Gamble 354
Alternative Approaches to Positioning 313
Brand Narratives and Storytelling 313
Cultural Branding 314 Chapter 12 Addressing Competition and
Driving Growth 357
Positioning and Branding for A Small
Business 314 Growth 357
Summary 317 Growth Strategies 357
Applications 317 Growing the Core 358
Competitive Strategies for Market
MARKETING EXCELLENCE
Nespresso 318 Leaders 359
Expanding Total Market Demand 360
MARKETING EXCELLENCE Protecting Market Share 361
Philips 319 Increasing Market Share 363
Other Competitive Strategies 364
Market-Challenger Strategies 364
Chapter 11 Creating Brand Equity 321 Market-Follower Strategies 366
How Does Branding Work? 321 MARKETING INSIGI' T The Costs and
The Role of Brands 322 Benefits of Fast Fashion 367
The Scope of Branding 323 Market-Nicher Strategies 368
Defining Brand Equity 324 MARKETING MEMO Niche Specialist
Brand Equity Models 326 Roles 370
MARKETING INSI..KT Brand Bubble
Product Life-Cycle Marketing Strategies 370
Trouble 328
Product Life Cycles 370
Building Brand Equity 331 Style, Fashion, and Fad Life Cycles 371
Marketing Strategies: Introduction Stage and
MARKETING MEMO The Marketing Magic of
1he Pioneer Advantage 373
Characters 332
MARKETING SIG T Understanding
Designing Holistic Marketing Activities 332
Double Jeopardy 374
Leveraging Secondary Associations 334
Internal Branding 336 Marketing Strategies: Growth Stage 375
Measuring Brand Equity 337 Marketing Strategies: Maturity Stage 376
Marketing Strategies: Decline Stage 377
MARKETING I rGHT The Brand Value
Chain 337 MARKETING MEMO Managing a Marketing
Crisis 378
MARKETING 8'-G tT What Is a Brand Evidence for the Product Life-Cycle
Worth? 339 Concept 380
Managing Brand Equity 340 Critique of the Product Life-Cycle
Brand Reinforcement 340 Concept 381
Market Evolution 381
Brand Revitalization 341
Devising a Branding Strategy 343 Marketing in a Slow-Growth Economy 381
Branding Decisions 344 Explore the Upside of Increasing
Brand Portfolios 345 Investment 381
Brand Extensions 347 Get Closer to Customers 382
Review Budget Allocations 382
Customer Equity 350 Put Forth the Most Compelling Value
MARKETING MEMO Twenty-First-Century Proposition 382
Branding 351 Fine-Tune Brand and Product Offerings 383
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 Summary 384 MARKETING EXCELLENCE
Applications 384 Nivea 416
MARKETING EXCELLENCE MARKETING EXCELLENCE
Samsung 385 Toyota 418
MARKETING EXCELLENCE SABIC 386
Chapter 14 Designing and Managing
PART 5 Creating Value 388 Services 421

The Nature of Services 421

Chapter 13 Setting Product Strategy 389 Service Industries Are Everywhere 421
Categories of Service Mix 422
Product Characteristics and Distinctive Characteristics of Services 424
Classifications 389 The New Services Realities 428
Product Levels: The Customer-Value A Shifting Customer Relationship 428
Hierarchy 389 MARKETING MEMO Lights! Cameras!
Product Classifications 391 Customer Service Disasters! 430
Differentiation 392
Product Differentiation 393 Achieving Excellence In Services
Services Differentiation 394 Marketing 431
Design 396 Marketing Excellence 431
Design Leaders 396 Technology and Service
Power of Design 397 Delivery 432
Approaches to Design 397 Best Practices of Top Service
Luxury Products 398 Companies 433
Characterizing Luxury Brands 398 Differentiating Services 435
Growing Luxury Brands 398 MARKETING INll Improving Company
Marketing Luxury Brands 399 Call Centers 436
Environmental Issues 400
Managing Service Quality 439
MARKETING MEMO A Sip or A Gulp: Managing Customer Expectations 440
Environmental Concerns in the Water
MARKETING MEMO Recommendations for
Industry 401
Improving Service Quality 441
Product and Brand Relationships 401 Incorporating Self-Service Technologies
The Product Hierarchy 402
(SST S) 443
Product Systems and Mixes 402
Product Line Analysis 403 Managing Product-Support Services 444
Product Line Length 404 Identifying and Satisfying Customer
Needs 444
MARKETING I t' When Less Is Postsale Service Strategy 445
More 405 Summary 445
Product Mix Pricing 408 Applications 446
Co-Branding and Ingredient
MARKETING EXCELLENCE
Branding 409
Club Med 446
MARKETING MEMO Product-Bundle Pricing
MARKETING EXCELLENCE
Considerations 410
Parkway Group Hotels 448
Packaging, Labeling, Warranties, and
Guarantees 412
Packaging 412 Chapter 15 Introducing New Market
Labeling 414 Offerings 451
Warranties and Guarantees 415
New-Product Options 451
Summary 415 Make or Buy 451
Applications 416 Types of New Products 452
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 Challenges in New-Product Setting the Price 489
Development 453 Step 1: Selecting the Pricing Objective 489
The Innovation Imperative 454 MARKETING INSIQHT Trading Up, Down,
New-Product Success 454 and Over 490
New-Product Failure 455
Ste 2: Determining Demand 492
Organizational Arrangements 456
Step 3: Estimating Costs 494
Budgeting for !New-Product Development 456
Organizing New-Product Development 457 MARKETING MEMO How to Cut Costs 496
Managing the Development Process: Ideas 460 Step 4: Analyzing Competitors' Costs, Prices,
Generating Ideas 460 and Offers 496
MARKETING MEMO Ten Ways to Find Great Step 5: Selecting a Pricing Method 497
New-Product Ideas 460 Step 6: Selecting the Final Price 502
MARKETING IN IQHT Stealth Price
MARKETING I SIGHT P&G'S Connect+ Increases 503
Develop Approach to Innovation 461
Adapting the Price 504
MARKETING MEMO Seven Ways to Draw Geographical Pricing (Cash, Countertrade,
New Ideas from Your Customers 462 Barter) 504
Price Discounts and Allowances 504
MARKETING MEMO How to Run a Promotional Pricing 505
Successful Brainstorming Session 464 Differentiated Pricing 506
Using Idea Screening 465 Initiating and Responding to Price
Managing the Development Process: Concept Changes 507
to Strategy 467 Initiating Price Cuts 507
Concept Development and Testing 467 Initiating Price Increases 508
Marketing Strategy Development 470 Anticipating Competitive Responses 508
Business Analysis 470 Responding to Competitors' Price
Changes 509
Managing the Development Process:
Development to Commercialization 472 Summary 510
Product Development 472 Applications 51 O
Market Testing 473 MARKETING EXCELLENCE eBay 511
Commercialization 475
MARKETING EXCELLENCE
The Consumer-Adoption Process 476
Air Arabia 512
Stages in the Adoption Process 476
Factors Influencing the Adoption
Process 476
Summary 478
PART 6 Delivering Value 514
Applications 479
MARKETING EXCELLENCE Apple 479 Chapter 17 Designing and Managing Integrated
MARKETING EXCELLENCE Marketing Channels 515
Salesforce.com 481 Marketing Channels and Value
Networks 516
The Importance of Channels 516
Chapter 16 Developing Pricing Strategies Multichannel Marketing 516
and Programs 483 Integrating Multichannel Marketing
Understanding Pricing 483 Systems 517
Pricing in a Digital World 484 Value Networks 519
A Changing Pricing Environment 484 The Digital Channels Revolution 520
The Role of Marketing Channels 521
MARKETING IN G,HT Giving It All Away 485 Channel Functions and Flows 522
How Companies Price 486 Channel Levels 523
Consumer Psychology and Pricing 487 Service Sector Channels 524
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 Establish the Total Marketing MARKETING MEMO Measuring
Communications Budget 594 High-Performance Sponsorship
Selecting the Marketing Communications Programs 628
Mix 595 Creating Experiences 628
Characteristics of the Marketing Public Relations 629
Communications Mix 596 Marketing Public Relations 629
Factors in Setting the Marketing Major Decisions in Marketing PR 630
Communications Mix 597 Summary 631
Measuring Communication Results 599
Applications 632
Managing the Integrated Marketing
Communications Process 599 MARKETING EXCELLENCE
Coordinating Media 601 Evian 632
Implementing IMC 601 MARKETING EXCELLENCE Gillette 634
MARKETING MEMO How Integrated Is Your
IMC Program? 601
Chapter 21 Managing Digital Communications:
Summary 602
Online, Social Me�dia�a�'-----­
�
Applications 603
M obile 637 Its Digital
MARKETING EXCELLENCE Red Bull 603 marketing in
Online Marketing 637
MARKETING EXCELLENCE L'Oreal 604 Advantages and Disadvantages
Marketing Communications 638
Online Marketing Communication
Chapter 20 Managing Mass Communications: Options 639
Advertising, Sales Promotions, MARKETING MEMO How to Maximize the
Events and Experiences, and Public Marketing Value of E-mails 642
Relations 607 Social Media 642
Developing and Managing an Advertising Social Media Platforms 643
Using Social Media 644
Program 608
Setting the Advertising Objectives 609 Word of Mouth 645
Deciding on the Advertising Budget 609 Forms of Word of Mouth 646
Developing the Advertising Creating Word-of-Mouth Buzz 646
Campaign 610 MARKETING MEMO How to Start a Buzz
MARKETING MEMO Print Ad Evaluation Fire 648
Criteria 612
MARKETING INSIGHT Tracking Online
MARKETING SIG'ff Off-Air Ad Battles 614 Buzz 649

Choosing Media 615 Measuring the Effects of Word of

Mouth 650
MARKETING IN5ilQHT Playing Games with
Mobile Marketing 650
Brands 618 The Scope of Mobile Marketing 650
MARKETING MEMO Winning The Super
Developing Effective Mobile Marketing
Bowl of Advertising 619 Programs 651
Mobile Marketing across Markets 651
Evaluating Advertising Effectiveness 621 Summary 652
Sales Promotion 622 Applications 653
Advertising Versus Promotion 622
Major Decisions 623 MARKETING EXCELLENCE
Facebook 653
Events and Experiences 626
Events Objectives 626 MARKETING EXCELLENCE Unilever
Major Sponsorship Decisions 627 (Axe and Dove) 654

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Chapter 22 Managing Personal Communications: MARKETING MEMO Characteristics of
Direct and Database Marketing and Company Departments That Are Truly
Personal Selling 657 Customer Driven 681
Organizing the Marketing Department 682
Direct Marketing 657
Relationships with Other Departments 684
The Benefits of Direct Marketing 658
Building a Creative Marketing
Direct Mail 659
Organization 684
Catalog Marketing 660
Telemarketing 660 MARKETING INSIGHT The Marketing CEO 685
Other Media for Direct-Response
Socially Responsible Marketing 685
Marketing 661
Corporate Social Responsibility 686
Public and Ethical Issues in Direct
Marketing 661 MARKETING INSIGHT The Rise of
Customer Databases and Database Organic 689
Marketing 662 Socially Responsible Business
Customer Databases 662 Models 690
Data Warehouses and Data Mining 662 Cause-Related Marketing 690
The Downside of Database Marketing 664
MARKETING MEMO Making a Difference:
Designing the Sales Force 664 Top 10 T ips for Cause Branding 693
Sales Force Objectives and Strategy 666
Sales Force Structure 667 Social Marketing 694
Marketing Implementation and Control 697
MARKETING INSIQH Major Account
Marketing Implementation 697
Management 668
Marketing Control 697
Sales Force Size 668 The Future of Marketing 702
Sales Force Compensation 668
MARKETING MEMO Major Marketing
Managing the Sales Force 669
Weaknesses 703
Recruiting and Selecting
Representatives 669 Summary 705
Training and Supervising Sales Applications 705
Representatives 669
Sales Rep Productivity 670 MARKETING EXCELLENCE
Motivating Sales Representatives 670 Starbucks 706
Evaluating Sales Representatives 671 MARKETING EXCELLENCE Virgin
Principles of Personal Selling 673 Group 707
The Six Steps 673
Appendix Tools for Marketing Control 709
Relationship Marketing 674
Summary 675 Appendix: Sonic Marketing Plan
Applications 675 and Exercises A1
MARKETING EXCELLENCE Progressive 676 Endnote s E1
Glossary G1
MARKETING EXCELLENCE Victoria's
Secret 677 Name Index 11
Company, Brand, and
Organization Index 15
PARTS Conducting Marketing Subject Index 118
Responsibly for Long-term
Success 678
Chapter 23 Managing a Holistic Marketing
Organization for the Long Run 679

Trends in Marketing Practices 679

Internal Marketing 680
16