marketing - gbv · · 2009-03-02nature and significance of marketing ethics 80 ethical/legal...
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MarketingTh
e Roger A. KerinSouthern Methodist University
University of Denver
University of Minnesota
McGraw-HillIrwin
Boston Burr Ridge, IL Dubuque, IA Madison, Wl New York San Francisco St. LouisBangkok Bogota Caracas Kuala Lumpur Lisbon London Madrid Mexico CityMilan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto
DETAILED CONTENTS
Parti Initiating the Marketing Process
1 CREATING CUSTOMER RELATIONSHIPS AND VALUETHROUGH MARKETING 2
How Do College Students Study? 3M's Response to aNew-Product Challenge! 3What Is Marketing? 4
Marketing and Your Career 4
Marketing Matters: Payoff for the Joys (!) andSleepless Nights (?) of Starting Your Own SmallBusiness: YouTubeW! 5
Marketing: Delivering Benefits to the Organization, ItsStakeholders, and Society 6The Diverse Factors Influencing Marketing Activities 6
How Marketing Discovers and Satisfies Consumer Needs 7Discovering Consumer Needs 7Satisfying Consumer Needs 10
The Marketing Program: How Customer RelationshipsAre Built 11
Customer Value and Customer Relationships 11Relationship Marketing and the Marketing Program 113M's Strategy and Marketing Program to Help StudentsStudy 12
How Marketing Became So Important 14Evolution of the Market Orientation 14Ethics and Social Responsibility: Balancing Interests 14The Breadth and Depth of Marketing 15
Learning Objectives Review 16Focusing on Key Terms 17Applying Marketing Knowledge 17Building Your Marketing Plan 18
Video Case 1: 3M's Post-it® Flag Highlighter: Extending the• Concept! 18
2 DEVELOPING SUCCESSFUL MARKETING ANDCORPORATE STRATEGIES 20
Can an "A" in an Ice Cream Making Course ReallyBecome a Business? 21Today's Organizations 22
Strategy and Visionary Organizations 22Organizational Foundation 22Organizational Direction 24Tracking Strategic Directions with Marketing Dashboards 25Organizational Structures and Strategies 27
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XXVIII DETAILED CONTENTS
Setting Strategic Directions 28A Look Around: Where Are We Now? 28Growth Strategies: Where Do We Want to Go? 29
The Strategic Marketing Process 32The Planning Phase of the Strategic Marketing Process 32The Implementation Phase of the Strategic MarketingProcess 36The Evaluation Phase of the Strategic Marketing Process 37
Learning Objectives Review 39Focusing on Key Terms 40Applying Marketing Knowledge 40Building Your Marketing Plan 40
Video -Case 2: BP: Transforming Its Strategy "BeyondPetroleum" 41
Appendix A Building an Effective Marketing Plan 44
3 SCANNING THE MARKETING ENVIRONMENT 58
60
Web 2.0 Is All About You! 59 j
Environmental Scanning 60
An Environmental Scan of Today's MarketplaceSocial Forces 60
Demographics 60
Marketing Matters: Generation Y Is Becominga Generation of Entrepreneurs! 63
Culture 65Economic Forces 65
Macroeconomic Conditions 65Consumer Income 66
Technological Forces 67Technology of Tomorrow 67Technology's Impact on Customer Value 68Electronic Business Technologies 68
Competitive Forces 69Alternative Forms of Competition 69Small Businesses as Competitors 69
Regulatory Forces 70Protecting Competition 70Product-Related Legislation 70
Making Responsible Decisions: Are Doppelgangers a FirstAmendment Right? 72
Pricing-Related Legislation 72Distribution-Related Legislation 73Advertising- and Promotion-Related LegislationControl through Self-Regulation 73
Learning Objectives Review 74
Focusing on Key Terms 75
73
DETAILED CONTENTS XXIX
Applying Marketing Knowledge 75Building Your Marketing Plan 75
Video Case 3: Geek Squad: A New Business for a NewEnvironment 75
ETHICAL AND SOCIAL RESPONSIBILITY INMARKETING 78
There Is More to Anheuser-Busch Than Meets the Palate 79Nature and Significance of Marketing Ethics 80
Ethical/Legal Framework in Marketing 80Current Perceptions of Ethical Behavior 80
Understanding Ethical Marketing Behavior 81Societal Culture and Norms 81Business Culture and Industry Practices 82
Making Responsible Decisions: Corporate Conscience inthe Cola War 84
Corporate Culture and Expectations 84Your Personal Moral Philosophy and Ethical Behavior 85
Understanding Social Responsibility in Marketing 86Three Concepts of Social Responsibility 86The Social Audit: Doing Well by Doing Good 88
Marketing Matters: Will Consumers Switch Brands fora Cause? Yes, If... 90
Turning the Table: Consumer Ethics and SocialResponsibility 90
Learning Objectives Review 91Focusing on Key Terms 92Applying Marketing Knowledge 92Building Your Marketing Plan 92
Video Case 4: Starbucks Corporation: Serving More ThanCoffee 93
Part 2 Understanding Buyers and Markets5 UNDERSTANDING CONSUMER BEHAVIOR 96
Who's Really Buying That New Car? Just Ask Her! 97Consumer Purchase Decision Process and Experience 98
Problem Recognition: Perceiving a Need 98Information Search: Seeking Value 98Alternative Evaluation: Assessing Value 99Purchase Decision: Buying Value 100Postpurchase Behavior: Value in Consumption or Use 100Consumer Involvement Affects the Purchase Process 100Situational Influences 102
Psychological Influences on Consumer Behavior 103Motivation and Personality 103Perception 104
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Making Responsible Decisions: The Ethics of SubliminalMessages 105
Learning 106Values, Beliefs, and Attitudes 107Consumer Lifestyle 108
Sociocultural Influences on Consumer BehaviorPersonal Influence 109Reference Groups 110
Marketing Matters: BzzAgent—The BuzzExperience 111
109
Family Influence 111Culture and Subculture 114
Learning Objectives Review 116Focusing on Key Terms 117Applying Marketing Knowledge 117Building Your Marketing Plan 117
Video Case 5: Best Buy: Using Customer Centricity to Connectwith Customers 118
UNDERSTANDING ORGANIZATIONS ASCUSTOMERS 120
Buying Paper Is a Global Business Decision at JCPenney 121The Nature and Size of Organizational Markets 122
Industrial Markets 122Reseller Markets 122Government Markets 122
Measuring Domestic and Global Industrial, Reseller, andGovernment Markets 123Characteristics of Organizational Buying 124
Demand Characteristics 124Size of the Order or Purchase 125Number of Potential Buyers 125Organizational Buying Objectives 126Organizational Buying Criteria 126
Marketing Matters: Harley-Davidson's SupplierCollaboration Creates Customer Value . .. and a GreatRide 127
Buyer-Seller Relationships and Supply Partnerships 127
Making Responsible Decisions: Scratching Each Other'sBack—The Ethics of Reciprocity in OrganizationalBuying 128
The Organizational Buying Process and the \Buying Center 128
Stages in the Organizational Buying Process 129The Buying Center: A Cross-Functional Group 129
DETAILED CONTENTS XXXI
Online Buying in Organizational Markets 131Prominence of Online Buying in Organizational Markets 132E-Marketplaces: Virtual Organizational Markets 132
Marketing Matters: eBay Means Business forEntrepreneurs 133
Online Auctions in Organizational Markets 133
Learning Objectives Review 134Focusing on Key Terms 135Applying Marketing Knowledge 135Building Your Marketing Plan 135
Video Case 6: Lands' End: Where Buyers Rule 136
7 UNDERSTANDING AND REACHING GLOBALCONSUMERS AND MARKETS 138
Procter & Gamble Is Changing the Face of China 139Dynamics of World Trade 140
Decline of Economic Protectionism 140Rise of Economic Integration 140A New Reality: Global Competition among Global Companiesfor Global Consumers 142 r
Marketing Matters: The Global Teenager—A Market of500 Million Voracious Consumers with $100 Billion toSpend 144
Emergence of a Networked Global Marketspace 145A Global Environmental Scan 146
Cultural Diversity 146Economic Considerations 148Political-Regulatory Climate 150
Comparing Global Market-Entry Strategies 151Exporting 151
Marketing Matters: Creative Cosmetics and CreativeExport Marketing in Japan 152
Licensing 152Joint Venture 153Direct Investment 153
Crafting a Worldwide Marketing Program 154Product and Promotion Strategies 154Distribution Strategy 156Pricing Strategy 157
Learning Objectives Review 158Focusing on Key Terms 158Applying Marketing Knowledge 158 ,Building Your Marketing Plan 159
Video Case 7: CNS Breathe Right Strips:Going Global 159
XXXII DETAILED CONTENTS
Part 3 Targeting Marketing Opportunities
MARKETING RESEARCH: FROM CUSTOMERINSIGHTS TO ACTIONS 162
Test Screenings: How Listening to Consumers ReducesMovie Risks 163
The Role of Marketing Research 164What Is Marketing Research? 164Why Good Marketing Research Is Difficult 164Five-Step Marketing Research Approach 165
Step 1: Define the Problem 166Set the Research Objectives 166Identify Possible Marketing Actions 166
Step 2: Develop the Research Plan 167Specify Constraints 167Identify Data Needed for Marketing Actions 167Determine How to Collect Data 167
Step 3: Collect Relevant Information 168Secondary Data: Internal 168Secondary Data: External 168Advantages and Disadvantages of Secondary Data 169
Marketing Matters: Online Databases and InternetResources Useful to Marketers 170
Primary Data: Observing Behavior 170Primary Data: Questioning Consumers 173
Marketing Matters: When Less Is More—Deleting Featuresto Open Up Huge Markets 175
Primary Data: Panels and Experiments 176Advantages and Disadvantages of Primary Data 177Syndicated Panel Data and Information Technology 178Using Information Technology to Trigger Marketing Actions 178
Step 4: Develop Findings 180Analyze the Data 180Present the Findings 180
Step 5: Take Marketing Actions 182Make Action Recommendations 182Implement the Action Recommendations 182
Sales Forecasting Techniques 182Judgments of the Decision Maker 183Surveys of Knowledgeable Groups 183Statistical Methods 183
Learning Objectives Review 184Focusing on Key Terms 185Applying Marketing Knowledge 185Building Your Marketing Plan 186
Video Case 8: Ford Consulting Group Inc.: From Data toActions 186 ^
DETAILED CONTENTS xxxiii
SEGMENTING MARKETS AND POSITIONINGOFFERINGS 188
Zappos.com: Powered by Service™ 189Why Segment Markets? 190
What Market Segmentation Means 190When and How to Segment Markets 191
Steps in Segmenting and Targeting Markets 194Step 1: Group Potential Buyers into Segments 194Step 2: Group Products Sold into Categories 197Step 3: Develop a Market-Product Grid and Estimate the Size ofMarkets 198Step 4: Select Target Markets 199Step 5: Take Marketing Actions to Reach Target Markets 200
Marketing Matters: Apple's Segmentation Strategy—CampRunamok No Longer 202
Market-Product Synergies: A Balancing Act 202Positioning the Product 203
Two Approaches to Product Positioning 203Writing a Positioning Statement 203
Learning Objectives Review 205Focusing on Key Terms 206Applying Marketing Knowledge 206Building Your Marketing Plan 206
Video Case 9: Rollerblade: Skates to Go Where YouWant to Go 206
Part 4 Satisfying Marketing Opportunities
10 DEVELOPING NEW PRODUCTS AND SERVICES 210
Apple's New-Product Revolutions 211What Are Products and Services? 212
A Look at Goods, Services, and Ideas 212Classifying Products 213
Product Items, Product Lines, and Product Mixes 214Classifying Services 214The Uniqueness of Services 215The Goods-Services Continuum 216
New Products and Why They Succeed or Fail 217What Is a New Product? 217
Marketing Matters: You Bought a Combination Computer,Lawn Mower, and Dishwasher? Better Call the GeekSquad! 219
Why Products Succeed or Fail 220
Using Marketing Dashboards: Which States AreUnderperforming? 223
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How Marketing Dashboards Can ReduceNew-Product Failures 223
The New-Product Process 224Stage 1: New-Product Strategy Development 224Stage 2: Idea Generation 224Stage 3: Screening and Evaluation 226Stage 4: Business Analysis 227Stage 5: Development 227Stage 6: Market Testing 228Stage 7: Commercialization 229
Learning Objectives Review 230Focusing on Key Terms 231Applying Marketing Knowledge 231Building Your Marketing Plan 231
Video Case 10: General Mills Warm Delights™: Indulgent,Delicious, and Gooey! 232
11 MANAGING PRODUCTS, SERVICES, ANDBRANDS 234
Gatorade: Satisfying the Unquenchable Thirst 235The Product Life Cycle 236
Introduction Stage 236Growth Stage 238Maturity Stage 239 ;
Marketing Matters: Will E-mail Spell Extinction for FaxMachines? 240
Decline Stage 240Some Dimensions of the Product Life Cycle 241
Managing the Product Life Cycle 243Role of a Product Manager 243Modifying the Product 243
Using Marketing Dashboards: Knowing Your CD! andBDI 244
Modifying the Market 244Repositioning the Product 245
Making Responsible Decisions: Consumer Economics ofDownsizing—Get Less, Pay More 246
Branding and Brand Management 247Brand Personality and Brand Equity 247Picking a Good Brand Name 249Branding Strategies 250
Marketing Matters: Creating Customer Value throughPackaging—Pez Heads Dispense More Than Candy 253
DETAILED CONTENTS XXXV
Packaging and Labeling Products 253Creating Customer Value and Competitive Advantage throughPackaging and Labeling 253Contemporary Packaging and Labeling Challenges 255
Managing the Marketing of Services 256Product (Service) 256Price 256Place (Distribution) 257Promotion 257
Learning Objectives Review 258Focusing on Key Terms 258Applying Marketing Knowledge 258Building Your Marketing Plan 259
Video Case 11: Philadelphia Phillies Inc.: SportsMarketing 101 259
12 PRICING PRODUCTS AND SERVICES 262
Standing Tall in Starbury Signature Sneakers 263Nature and Importance of Price 264
What Is a Price? 264Price as an Indicator of Value 265Price in the Marketing Mix 266
General Pricing Approaches 266Demand-Oriented Pricing Approaches 266
Marketing Matters: Energizer's Lesson in PricePerception—Value Lies in the Eye of the Beholder 268
Cost-Oriented Pricing Approaches 268Profit-Oriented Pricing Approaches 269Competition-Oriented Pricing Approaches 270
Using Marketing Dashboards: Are Cracker Jack PricesAbove, At, or Below the Market? 271
Estimating Demand and Revenue 272Fundamentals of Estimating Demand 272Fundamentals of Estimating Revenue 274
Determining Cost, Volume, and Profit Relationships 274The Importance of Controlling Costs 275Break-Even Analysis 275
Pricing Objectives and Constraints 277Identifying Pricing Objectives 277Identifying Pricing Constraints 278
Setting a Final Price 280Step 1: Select an Approximate Price Level 280Step 2: Set the List or Quoted Price 281Step 3: Make Special Adjustments to the List or QuotedPrice 281
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Making Responsible Decisions: Flexible Pricing—Is ThereRace and Gender Discrimination in Bargaining for a NewCar? 282
Learning Objectives Review 284Focusing on Key Terms 284Applying Marketing Knowledge 284Building Your Marketing Plan 285
Video Case 12: The Starbury Collection: Setting a Price.Making a Difference. 285
13 MANAGING MARKETING CHANNELS AND SUPPLYCHAINS 288
Apple Stores: Creating a High-Touch Customer Experience in aHigh-Tech Marketing Channel 289Nature and Importance of Marketing Channels 290
What Is a Marketing Channel of Distribution? 290Value Is Created by Intermediaries 290
Marketing Channel Structure and Organization 292Marketing Channels for Consumer Goods and Services 292Marketing Channels for Business Goods and Services 293Electronic Marketing Channels 294Direct and Multichannel Marketing 295Dual Distribution and Strategic Channel Alliances 295Vertical Marketing Systems and Channel Partnerships 295
Marketing Matters: Nestle and General Mills—CerealPartners Worldwide 296
Marketing Channel Choice and Management 298Factors Affecting Channel Choice and Management 298Managing Channel Relationships: Conflict and Cooperation 300
Using Marketing Dashboards: Channel Sales and Profit atCharlesburg Furniture 301
Logistics and Supply Chain Management 302Supply Chains versus Marketing Channels 303Sourcing, Assembling, and Delivering a New Car: TheAutomotive Supply Chain 303Supply Chain Management and Marketing Strategy 304
Marketing Matters: IBM's Integrated Supply Chain—Delivering a Total Solution for Its Customers 305
Two Concepts of Logistics Management in a SupplyChain 306
Total Logistics Cost Concept 306Customer Service Concept 307
Learning Objectives Review 308Focusing on Key Terms 309Applying Marketing Knowledge 309
DETAILED CONTENTS XXXVII
Building Your Marketing Plan 309
Video Case 13: Golden Valley Microwave Foods: TheSurprising Channel 309
14 RETAILING AND WHOLESALING 312
Retailers Are Reinventing Their Stores to Match the Way YouWant to Shop! 313The Value of Retailing 314
Consumer Utilities Offered by Retailing 314The Global Economic Impact of Retailing 315
Classifying Retail Outlets 315Form of Ownership 316
Marketing Matters: Are You a Future RetailingEntrepreneur? 317
Level of Service 317Type of Merchandise Line 318
Nonstore Retailing 319Automatic Vending 319Direct Mail and Catalogs 320Television Home Shopping 321Online Retailing 321Telemarketing 322Direct Selling 322
Retailing Strategy 323Retail Pricing 323Store Location 324Retail CommunicationMerchandise 325
325
Using Marketing Dashboards: Why Apple Stores May Bethe Best in the United States! 326
The Changing Nature of Retailing 327The Wheel of Retailing 327The Retail Life Cycle 328
Wholesaling 329Merchant Wholesalers 329Agents and Brokers 330Manufacturer's Branches and Offices 330
Learning Objectives Review 331Focusing on Key Terms 331Applying Marketing Knowledge 331Building Your Marketing Plan 332
Video Case 14: Mall of America: Shopping and a Whole LotMore 332
XXXVIII DETAILED CONTENTS
15 INTEGRATED MARKETING COMMUNICATIONS ANDDIRECT MARKETING 334
How Do Marketers Fight the Game Console Wars? WithIntegrated Marketing Communications! 335The Communication Process 336
Encoding and Decoding 336Feedback 338Noise 338
The Promotional Elements 338Advertising 338Personal Selling 339Public Relations 340Sales Promotion 341Direct Marketing 341
Integrated Marketing Communications—Developing thePromotional Mix 342
The Target Audience 342The Product Life Cycle 342
Marketing Matters: Mobile Marketing ReachesGeneration Y, 32/7! 343
Channel Strategies 344Developing an IMC Program 345
Identifying the Target Audience 345Specifying Promotion Objectives 346Setting the Promotion Budget 346
Using Marketing Dashboards: How Much Should YouSpend on IMC? 347
Selecting the Right Promotional Tools 347Designing the Promotion 348Scheduling the-Promotion 348
Executing and Evaluating the Promotion Program 348Direct Marketing 350
The Growth of Direct Marketing 350The Value of Direct Marketing 350Technological, Global, and Ethical Issues in DirectMarketing 351
Making Responsible Decisions: Is Spam Out ofControl? 352
Learning Objectives Review 352Focusing on Key Terms 353Applying Marketing Knowledge 353Building Your Marketing Plan 354
Video Case 15: Las Vegas: Creating a Brand with IMC 354
DETAILED CONTENTS xxxix
16 ADVERTISING, SALES PROMOTION, AND PUBLICRELATIONS 358
Advertisers Have Another Life on Second Life! 359Types of Advertisements 360
Product Advertisements 360Institutional Advertisements 361
Developing the Advertising Program 361Identifying the Target Audience 361Specifying Advertising Objectives 362Setting the Advertising Budget 362Designing the Advertisement 362Selecting the Right Media 364
Using Marketing Dashboards: What Is the Best Way toReach 1,000 Customers? 365
Different Media Alternatives 366
Making Responsible Decisions: Who Is Responsible forClick Fraud? 369
Scheduling the Advertising 370Executing the Advertising Program 371
Pretesting the Advertising 371Carrying Out the Advertising Program 371
Assessing the Advertising Program 372Posttesting the Advertising 372
Sales Promotion 373Consumer-Oriented Sales Promotions 373Trade-Oriented Sales Promotions 376
Public Relations 377
Learning Objectives Review 377Focusing on Key Terms 378Applying Marketing Knowledge 378Building Your Marketing Plan 379
Video Case 16: Fallon Worldwide: In the CreativityBusiness 379
17 PERSONAL SELLING AND SALESMANAGEMENT 382
Xerox Delivers an Exceptional Customer Experience by Sellingthe Way Customers Want to Buy 383Scope and Significance of Personal Selling and SalesManagement 384
Nature of Personal Selling and Sales Management 384Selling Happens Almost Everywhere 384Personal Selling in Marketing 385Creating Customer Solutions and Value through Salespeople:Relationship Selling 385
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The Many Forms of Personal Selling 385Order Taking 386
Order Getting 386The Personal Selling Process: Building Relationships 388
Prospecting 388
Preapproach 389
Approach 390
Presentation 390
Marketing Matters: Imagine This . . . ? Putting theCustomer into Customer Solutions! 392
Close 393Follow-Up 393
The Sales Management Process 393 -
Sales Plan Formulation: Setting Direction 393
Marketing Matters: Creating and Sustaining CustomerValue through Cross-Functional Team Selling 395
Sales Plan Implementation: Putting the Plan into Action 396
Salesforce Evaluation: Measuring Results 398
Salesforce Automation and Customer Relationship
Management 398
Using Marketing Dashboards: Tracking SalespersonPerformance at Moore Chemical & Sanitation SupplyInc. 399
Learning Objectives Review 400Focusing on Key Terms 401Applying Marketing Knowledge 401Building Your Marketing Plan 401
Video Case 17: Xerox: Building Customer Relationshipsthrough Personal Selling 402
18 IMPLEMENTING INTERACTIVE AND MULTICHANNELMARKETING 404
Seven Cycles. One Bike. Yours 405Creating Customer Value, Relationships, and Experiences inMarketspace 406
Customer Value Creation in Marketspace 406
Interactivity, Individuality, and Customer Relationships in
Marketspace 407
Creating an Online Customer Experience 409
Using Marketing Dashboards: Sizing Up Site Stickiness atSewell Automotive Companies 411
DETAILED CONTENTS xli
Online Consumer Behavior and Marketing Practice inMarketspace 412
Who Is the Online Consumer? 412
Marketing Matters: Meet Today's Internet Mom—All 31Million! 413
What Online Consumers Buy 413
Why Consumers Shop and Buy Online 414
When and Where Online Consumers Shop and Buy 417
Making Responsible Decisions: Let the E-BuyerBeware 418
Cross-Channel Shoppers and Multichannel Marketing 418
Who Is the Cross-Channel Shopper? 418
Implementing Multichannel Marketing 419
Learning Objectives Review 420Focusing on Key Terms 421Applying Marketing Knowledge 421Building Your Marketing Plan 421
Video Case 18: McFarlane Toys: The Best of InteractiveMarketing 422
Appendix B Planning a Career in Marketing 424
Glossary 434Learning Review Answers 440Chapter Notes 447
Credits 468Name Index 470Company/Product Index 475
Subject Index 480