TINGAn Introduction
/Brill;
Gary ArmstrongUniversity of North Carolina It
Philip KotlerNorthwestern University
Prentice Hall, Upper Saddle River, New Jersey 07458
Contents
Understanding Marketing and the MarketingManagement Process
1. Marketing in a Changing World: Creating Customer Value and Satisfaction 12. Strategic Planning and the Marketing Process 34
Analyzing Marketing Opportunities
3. The Global Marketing Environment 674. Marketing Research and Information Systems5. Consumer and Business Buyer Behavior 138
101
Developing Marketing Strategy and the Marketing Mix
6. Market Segmentation, Targeting, and Positioning for Competitive Advantage 1777. Product and Services Strategy 2178. New-Product Development and Product Life-Cycle Strategies 2599. Pricing Products: Pricing Considerations and Strategies 287 ,
10. Distribution Channels and Logistics Management 32611. Retailing and Wholesaling 36512. Integrated Marketing Communications: Advertising and Public Relations 40013. Integrated Marketing Communications: Personal Selling and Sales Promotion 43814. Direct and On-Line Marketing 473
Extending Marketing
15. The Global Marketplace 51116. Marketing and Society: Social Responsibility and Marketing Ethics 543
Appendices
Appendix 1 Marketing ArithmeticAppendix 2 Careers in Marketing
Glossary G1Endnotes N1Video Cases C1Credits CR1Indices 11
A1A8
VII
Ti
s ,
« : •; . . . \
Preface xix ~; "
Understanding Marketing and the Marketing / ; ; • ' ••Management Process
1. Marketing in a Changing World: Creating Customer Value and Satisfaction 1W h a t Is Marke t ing? 4 : ; "'"'•• • - : ; ' " : ' ' ' ' •> ' " l'v' ' ' • '
Marketing Defined 4, Needs, Wants, and Demands 5, Products and Services 6, Value, Satisfaction,and Quality 7, Exchange, Transactions, and Relationships 9, Markets 13, Marketing 14
Marketing Management 15
Demand Management 15, Building Profitable C u s t o m e r Relationships 15 - • | . l > > >
Marketing Management Philosophies 17 •••••* , , i . . , , . , . ,
The Production Concept 18, The Product Concept 18, The Selling Concept 18, The MarketingConcept 19, The Societal Marketing Concept 20
Marketing Challenges in the New Millennium 22Growth of Nonprofit Marketing 23, The Information Technology Boom 24, Rapid Globalization 25,The Changing World Economy 28, The Call for More Ethics and Social Responsibility 28, The NewMarketing Landscape 29
Reviewing the Concepts 30, Navigating the Key Terms 31, Travel Log 31, Traveling theNet 32, MAP—Marketing Applications 33
2. Strategic Planning and the Marketing Process 34,. • Strategic Planning 37 ; ; , ; v , ? : , - , ,4
Defining the Company Mission 38, Setting Company Objectives and Goals 40
Designing the Business Portfolio 41Analyzing the Current Business Portfolio 41, Developing Growth Strategies 43, Planning Functional
,-:, Strategies 47
Strategic Planning and Small Businesses 49 '• r'no-
, The Marketing Process 50
Targeting Consumers 50, Developing the Marketing Mix 55
Managing the Marketing Effort 56
Marketing Analysis 56, Marketing Planning 57, Marketing Implementation 57, MarketingDepartment Organization 59, Marketing Control 62, The Marketing Environment 62
Reviewing the Concepts 63, Navigating the Key Terms 64, Travel Log 64, Traveling theNet 65, MAP—Marketing Applications 66
ix
CONTENTS
Analyzing Marketing Opportunities
3. The Global Marketing Environment 67The Company's Microenvironment 70
The Company 70, Suppliers 71, Marketing Intermediaries 71, Customers 72, Competitors 73,Publics 73
The Company's Macroenvironment 74Demographic Environment 75, Economic Environment 82, Natural Environment 84, TechnologicalEnvironment 86, Political Environment 87, Cultural Environment 90
Responding to the Marketing Environment 96
Reviewing the Concepts 97, Navigating the Key Terms 98, Travel Log 98, Traveling theNet 99, MAP—Marketing Applications 100
4. Marketing Research and Information Systems 101The Marketing Information System 104
Assessing Information Needs 104, Developing Information 105, Distributing Information 109
The Marketing Research Process 110Defining the Problem and Research Objectives 111, Developing the Research Plan 111, Implementingthe Research Plan 127, Interpreting and Reporting the Findings 128
Other Marketing Research Considerations 128Marketing Research in Small Businesses and Nonprofit Organizations 128, International MarketingResearch 130, Public Policy and Ethics in Marketing Research 132
Reviewing the Concepts 133, Navigating the Key Terms 134, Travel Log 135, Traveling theNet 136, MAP—Marketing Applications 136
5. Consumer and Business Buyer Behavior 138Consumer Markets and Consumer Buyer Behavior 140
Model of Consumer Behavior 141, Characteristics Affecting Consumer Behavior 141, The BuyerDecision Process 154, The Buyer Decision Process for New Products 157, Consumer Behavior AcrossInternational Borders 160
Business Markets and Business Buyer Behavior 161> Business Markets 162, Business Buyer Behavior 163
Reviewing the Concepts 173, Navigating the Key Terms 174, Travel Log 174, Traveling theNet 175, MAP—Marketing Applications 176
Developing Marketing Strategy and the Marketing Mix
6. Market Segmentation, Targeting, and Positioning for Competitive Advantage 177Market Segmentation 180
Levels of Market Segmentation 180, Bases for Segmenting Consumer Markets 186, Segmenting BusinessMarkets 195, Segmenting International Markets 196, Requirements for Effective Segmentation 199
CONTENTS
: Market Targeting 200Evaluating Market Segments 200, Selecting Market Segments 200
Positioning for Competitive Advantage 206
Positioning Strategies 206, Choosing and Implementing a Positioning Strategy 206
Reviewing the Concepts 212, Navigating the Key Terms 214, Travel Log 214, Traveling theNet 215, MAP—Marketing Applications 216
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7. Product and Services Strategy 217What Is a Product? 219 "' " ' "" " '*"""' ' " ' "" '
The Product-Service Continuum 220, Levels of Product 220
Product Classifications 221Consumer Products 221, Industrial Products 223, Organizations, Persons, Places, andIdeas 224
I n d i v i d u a l P r o d u c t D e c i s i o n s 2 2 6 • ' • •• • • •••••••.•'-•". -«-r-
Product Attributes 226, Branding 227, Packaging 237, Labeling 240, Product SupportServices 240, Product Decisions and Social Responsibility 241 , oivrawn
Product Line Decisions 242
Product Mix Decisions 243 . . •
Services Marketing 244
Nature and Characteristics of a Service 245, Marketing Strategies for Service Firms 246
International Product and Services Marketing 252
Reviewing the Concepts 254, Navigating the Key Terms 256, Travel Log 256, Traveling theNet 257, MAP—Marketing Applications 258 " ;-
8. New-Product Development and Product Life-Cycle Strategies 259New-Product Development Strategy 261
Idea Generation 262, Idea Screening 265, Concept Development and Testing 265, MarketingStrategy Development 268, Business Analysis 269, Product Development 269, Test Marketing 271,Commercialization 271, Speeding Up New-Product Development 274
Product Life-Cycle Strategies 276Introduction Stage 278, Growth Stage 278, Maturity Stage 279, Decline Stage 282
Reviewing the Concepts 283, Navigating the Key Terms 284, Travel Log 284, Traveling the. Net 285, MAP—Marketing Applications 286
9. Pricing Products: Pricing Considerations and Strategies 287Factors to Consider When Setting Prices 290
Internal Factors Affecting Pricing Decision 290, External Factors Affecting Pricing Decisions 293
General Pricing Approaches 299
Cost-Based Pricing 299, Value-Based Pricing 301, Competition-Based Pricing 304
New-Product Pricing Strategies 304Market-Skimming Pricing 306, Market-Penetration Pricing 306
CONTENTS
Product-Mix Pricing Strategies 307Product-Line Pricing 307, Optional-Product Pricing 308, Captive-Product Pricing 308, ByproductPricing 308, Product-Bundle Pricing 310
Price-Adjustment Strategies 310Discount and Allowance Pricing 310, Segmented Pricing 311, Psychological Pricing 311,Promotional Pricing 312, Geographical Pricing 314, International Pricing 315
Price Changes 316
Initiating Price Changes 316, Responding to Price Changes 318
Public Policy and Pricing 320
Reviewing the Concepts 321, Navigating the Key Terms 323, Travel Log 323, Traveling theNet 324, MAP—Marketing Applications 325
10. Distribution Channels and Logistics Management 326The Nature of Distribution Channels 330
Why Are Marketing Intermediaries Used? 330, Distribution Channel Functions 331, Number ofChannel Levels 331
Channel Behavior and Organization 333
Channel Behavior 334, Vertical Marketing Systems 335, Horizontal Marketing Systems 339, HybridMarketing Systems 340
Channel Design Decisions 342Analyzing Consumer Service Needs 342, Setting Channel Objectives and Constraints 342, IdentifyingMajor Alternatives 343, Evaluating the Major Alternatives 345, Designing International Distribution
•'f!i Channels 345
Channel Management Decisions 347Selecting Channel Members 347, Motivating Channel Members 347, Evaluating ChannelMembers 348
Public Policy and Distribution Decisions 350
Physical Distribution and Logistics Management 350
Nature and Importance of Physical Distribution and Marketing Logistics 351, Goals of the LogisticsSystem 352, Major Logistics Functions 353, Integrated Logistics Management 355
Reviewing the Concepts 360, Navigating the Key Terms 362, Travel Log 362, Traveling theNet 363, MAP—Marketing Applications 364
11. Retailing and Wholesaling 365Retailing 368
Store Retailing 368, Nonstore Retailing 375, Retailer Marketing Decisions 379, The Future ofRetailing 384
Wholesaling 390
Types of Wholesalers 390, Wholesaler Marketing Decisions 391, Trends in Wholesaling 394
Reviewing the Concepts 396, Navigating the Key Terms 397, Travel Log 397, Traveling theNet 398, MAP—Marketing Applications 399
CONTENTS
12. Integrated Marketing Communications: Advertising and PublicRelations 400The Marketing Communications Mix 403
Integrated Marketing Communications 404 , • ., j
The Changing Communications Environment 404, The Need for Integrated Marketing ,Communications 405, A View of the Communication Process 407 . . ,
Setting the Overall Communication Mix 408The Nature of Each Promotion Tool 408, Promotion-Mix Strategies 410, Socially ResponsibleMarketing Communication 411 " "
Advertising 413 ' . _Setting Advertising Objectives 414, Setting the Advertising Budget 415, Developing AdvertisingStrategy 416, Evaluating Advertising 426, Other Advertising Considerations 427
Public Relations 429
Major Public Relations Tools 432
Reviewing the Concepts 434, Navigat ing the Key Terms 435 , Travel Log 435 , Traveling the
Net 436, M A P — M a r k e t i n g Applicat ions 437 •; : - , ( •:-• .•;.? -,»:.• ;,,
13. Integrated Marketing Communications: Personal Selling and SalesPromotion 438Personal Selling 440 '' L ; ! ( l i i ; n r i i f l h ^ ; ' i n
The Nature of Personal Selling 440, The Role of the Sales Force 442 drr.i/.
Managing the Sales Force 443 " ; •-'>•;? ••'• '.>n: n
Designing Sales Force Strategy and Structure 443, Recruiting and Selecting Salespeople 447, TrainingSalespeople 450, Compensating Salespeople 450, Supervising Salespeople 452, EvaluatingSalespeople 456
Principles of Personal Selling 456The Personal Selling Process 456, Steps in the Selling Process 457, Relationship Marketing 459
Sales Promotion 460
Rapid Growth of Sales Promotion 461, Sales Promotion Objectives 462, Major Sales PromotionTools 463, Developing the Sales Promotion Program 468
Reviewing the Concepts 469, Navigating the Key Terms 470, Travel Log 470, Traveling theNet 471, MAP—Marketing Applications 472
14. Direct and On-Line Marketing 473What Is Direct Marketing? 476
Growth and Benefits of Direct Marketing 476
The Benefits of Direct Marketing 477, The Growth of Direct Marketing 478
Customer Databases and Direct Marketing 478
Forms of Direct Marketing Communication 483Face-to-Face Selling 483, Direct-Mail Marketing 483, Catalog Marketing 485, Telemarketing 486,Direct-Response Television Marketing 486, Kiosk Marketing 487
CONTENTS
On-line Marketing and Electronic Commerce 488Rapid Growth of On-line Marketing 489, The On-line Consumer 490, The Benefits of On-lineMarketing 492, On-line Marketing Channels 493, The Promise and Challenges of On-lineMarketing 500 , ' • - ' - n < - '••<•• •••• •• • • . • > • • • > ; J A U . W I : ; n i
Integrated Direct Marketing 501 "
Public Policy and Ethical Issues in Direct Marketing 504Irritation, Unfairness, Deception, and Fraud 504, Invasion of Privacy 504
Reviewing the Concepts 505, Navigating the Key Terms 507, Travel Log 507, Traveling theNet 508, MAP—Marketing Applications 509
Extending Marketing
15. The Global Marketplace 511 ^ . - • . • . . . A
Global Marketing into the Twenty-First Century 514 - ! : v-'J
Looking at the Global Marketing Environment 518The International Trade System 518, Economic Environment 521, Political-Legal Environment 522,Cultural Environment 523 •-.-;• ••: •..-;;,.
Deciding Whether to Go International 525 ;: ; ..- ;. • •••>
Deciding Which Markets to Enter 525 ..v .' •
Deciding How to Enter the Market 529 • ' , - ...,\\iMExporting 529, Joint Venturing 530, Direct Investment 531 > : v";
Deciding on the Global Marketing Program 532 ' ' ,Product 532, Promotion 534, Price 536, Distribution Channels 536
Deciding on the Global Marketing Organization 538
Reviewing the Concepts 539, Navigating the Key Terms 539, Travel Log 540, Traveling theNet 541, MAP—Marketing Applications 541
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16. Marketing and Society: Social Responsibility and Marketing Ethics 543Social Criticisms of Marketing 546
Marketing's Impact on Individual Consumers 546, Marketing's Impact on Society as a Whole 553,Marketing's Impact on Other Businesses 555
Citizen and Public Actions to Regulate Marketing 556 '•"•" •"
Consumerism 556, Environmentalism 557, Public Actions to Regulate Marketing 563
Business Actions Toward Socially Responsible Marketing 563Enlightened Marketing 563, Marketing Ethics 566
Reviewing the Concepts 571, Navigating the Key Terms 572, Travel Log 572, Traveling theNet 573, MAP—Marketing Applications 574
CONTENTS
Appendix 1 Marketing Arithmetic A1
Appendix 2 Careers in Marketing A8
Glossary G1
Endnotes N1
Video Cases C1
Credits CR1
Indices
Company/Brand Name 11
Author 110
Subject 113