Contents
Planning Marketing: Partnering to Build Customer
Relationships 45
Partnering with Other Company Departments 46 | Partnering
with Others in the Marketing System 47
Marketing Strategy and the Marketing Mix 48
Customer-Driven Marketing Strategy 48 | Developing an
Integrated Marketing Mix 51
Managing the Marketing Effort 53
Marketing Analysis 53 | Marketing Planning 54 | Marketing
Implementation 54 | Marketing Department Organization 55 |
Marketing Control 56
Measuring and Managing Return on Marketing Investment 57
Reviewing Objectives and Key Terms 59 | Key Terms 60 |
Discussing & Applying the Concepts 60 | Focus on
Technology 60 | Focus on Ethics 61 | Marketing & the
Economy 61 | Marketing by the Numbers 61
Video Case: Live Nation 62
Company Case: Trap-Ease America: The Big Cheese
of Mousetraps 62
Part 2: Understanding the Marketplace and Consumers 64
Analyzing the Marketing
Environment 64
The Microenvironment 66
The Company 67 | Suppliers 67 | Marketing Intermediaries 68
| Competitors 68 | Publics 69 | Customers 69
The Macroenvironment 70
The Demographic Environment 70 | The Economic
Environment 77 | The Natural Environment 78 | The
Technological Environment 80 | The Political and Social
Environment 81 | The Cultural Environment 86
Responding to the Marketing Environment 89
Reviewing Objectives and Key Terms 91 | Key Terms 92 |
Discussing & Applying the Concepts 92 | Focus on
Technology 93 | Focus on Ethics 93 | Marketing & the
Economy 93 | Marketing by the Numbers 93
Video Case: TOMS Shoes 94
Company Case: Target: From “Expect More” to “Pay Less” 94
Managing Marketing Information
to Gain Customer Insights 96
Marketing Information and Customer Insights 98
Assessing Marketing Information Needs 100
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)
1
2
3
4
xii Contents
Developing Marketing Information 100
Internal Data 100 | Competitive Marketing Intelligence 101
Marketing Research 103
Defining the Problem and Research Objectives 103 | Developing
the Research Plan 104 | Gathering Secondary Data 104 |
Primary Data Collection 106 | Implementing the Research
Plan 118 | Interpreting and Reporting the Findings 118
Analyzing and Using Marketing Information 119
Customer Relationship Management 119 | Distributing and
Using Marketing Information 120
Other Marketing Information Considerations 121
Marketing Research in Small Businesses and Nonprofit
Organizations 121 | International Marketing Research 123 |
Public Policy and Ethics in Marketing Research 124
Reviewing Objectives and Key Terms 126 | Key Terms 127 |
Discussing & Applying the Concepts 127 | Focus on
Technology 128 | Focus on Ethics 128 | Marketing & the
Economy 128 | Marketing by the Numbers 129
Video Case: Radian6 129
Company Case: Harrah’s Entertainment: Hitting the CRM
Jackpot 129
Consumer Markets and Consumer
Buyer Behavior 132
Model of Consumer Behavior 134
Characteristics Affecting Consumer Behavior 135
Cultural Factors 135 | Social Factors 139 | Personal
Factors 144 | Psychological Factors 147
Types of Buying Decision Behavior 150
Complex Buying Behavior 150 | Dissonance-Reducing Buying
Behavior 151 | Habitual Buying Behavior 151 | Variety-Seeking
Buying Behavior 152
The Buyer Decision Process 152
Need Recognition 152 | Information Search 152 | Evaluation
of Alternatives 153 | Purchase Decision 154 | Postpurchase
Behavior 154
The Buyer Decision Process for New Products 156
Stages in the Adoption Process 156 | Individual Differences
in Innovativeness 157 | Influence of Product Characteristics
on Rate of Adoption 157
Reviewing Objectives and Key Terms 158 | Key Terms 159 |
Discussing & Applying the Concepts 159 | Focus on
Technology 160 | Focus on Ethics 160 | Marketing & the
Economy 161 | Marketing by the Numbers 161
Video Case: Radian6 161
Company Case: Porsche: Guarding the Old While Bringing
in the New 162
Business Markets and Business
Buyer Behavior 164
Business Markets 166
Market Structure and Demand 167 | Nature of the Buying
Unit 168 | Types of Decisions and the Decision Process 168
Business Buyer Behavior 170
Major Type of Buying Situations 171 | Participants in the
Business Buying Process 172 | Major Influences on Business
Buyers 173 | The Business Buying Process 176 | E-Procurement:
Buying on the Internet 178
Institutional and Government Markets 180
Institutional Markets 180 | Government Markets 181
Reviewing Objectives and Key Terms 183 | Key Terms 183 |
Discussing & Applying the Concepts 184 | Focus on
Technology 184 | Focus on Ethics 185 | Marketing & the
Economy 185 | Marketing by the Numbers 185
Video Case: Eaton 185
Company Case: Cisco Systems: Solving Business Problems
Through Collaboration 186
Part 3: Designing a Customer-Driven Strategy and Mix 188
Customer-Driven Marketing
Strategy: Creating Value for Target
Customers 188
Market Segmentation 190
Segmenting Consumer Markets 191 | Segmenting Business
Markets 198 | Segmenting International Markets 199 |
Requirements for Effective Segmentation 200
Market Targeting 200
Evaluating Market Segments 201 | Selecting Target Market
Segments 201
Differentiation and Positioning 207
Positioning Maps 208 | Choosing a Differentiation and
Positioning Strategy 208 | Communicating and Delivering the
Chosen Position 215
Reviewing Objectives and Key Terms 216 | Key Terms 217 |
Discussing & Applying the Concepts 217 | Focus on
Technology 218 | Focus on Ethics 218 | Marketing & the
Economy 218 | Marketing by the Numbers 218
Video Case: Meredith 219
Company Case: Starbucks: Just Who Is the Starbucks
Customer? 219
Products, Services, and Brands:
Building Customer Value 222
What Is a Product? 224
Products, Services, and Experiences 224 | Levels of Product and
Services 225 | Product and Service Classifications 226
Product and Service Decisions 229
Individual Product and Service Decisions 229 | Product Line
Decisions 234 | Product Mix Decisions 235
Services Marketing 236
The Nature and Characteristics of a Service 236 | Marketing
Strategies for Service Firms 238
5
6
7
8
Contents xiii
Branding Strategy: Building Strong Brands 243
Brand Equity 243 | Building Strong Brands 244 | Managing
Brands 251
Reviewing Objectives and Key Terms 252 | Key Terms 253 |
Discussing & Applying the Concepts 253 | Focus on
Technology 254 | Focus on Ethics 254 | Marketing & the
Economy 254 | Marketing by the Numbers 255
Video Case: General Mills—GoGurt 255
Company Case: Las Vegas: What’s Not Happening
in Vegas 255
New Product Development and
Product Life-Cycle Strategies 258
New-Product Development Strategy 260
The New-Product Development Process 261
Idea Generation 261 | Idea Screening 264 | Concept
Development and Testing 264 | Marketing Strategy
Development 265 | Business Analysis 266 | Product
Development 266 | Test Marketing 267 |
Commercialization 268
Managing New-Product Development 269
Customer-Centered New-Product Development 269 | Team-
Based New-Product Development 270 | Systematic New-Product
Development 270 | New-Product Development in Turbulent
Times 272
Product Life-Cycle Strategies 273
Introduction Stage 275 | Growth Stage 275 | Maturity
Stage 277 | Decline Stage 278
Additional Product and Service Considerations 280
Product Decisions and Social Responsibility 280 | International
Product and Services Marketing 280
Reviewing Objectives and Key Terms 282 | Key Terms 283 |
Discussing & Applying the Concepts 283 | Focus on
Technology 284 | Focus on Ethics 284 | Marketing & the
Economy 284 | Marketing by the Numbers 285
Video Case: General Mills—FiberOne 285
Company Case: Samsung: From Gallop to Run 285
Pricing: Understanding and
Capturing Customer Value 288
What Is a Price? 290
Major Pricing Strategies 291
Customer Value-Based Pricing 291 | Cost-Based Pricing 295 |
Competition-Based Pricing 299
Other Internal and External Considerations Affecting Price
Decisions 300
Overall Marketing Strategy, Objectives, and Mix 300 |
Organizational Considerations 301 | The Market and
Demand 301 | The Economy 303 | Other External Factors 304
Reviewing Objectives and Key Terms 306 | Key Terms 307 |
Discussing & Applying the Concepts 308 | Focus on
Technology 308 | Focus on Ethics 308 | Marketing & the
Economy 309 | Marketing by the Numbers 309
Video Case: IKEA 309
Company Case: Southwest Airlines: Balancing the Price-Value
Equation 310
Pricing Strategies 312
New-Product Pricing Strategies 314
Market-Skimming Pricing 314 | Market-Penetration Pricing 314
Product Mix Pricing Strategies 315
Product Line Pricing 315 | Optional Product Pricing 316 |
Captive Product Pricing 316 | By-Product Pricing 316 | Product
Bundle Pricing 318
Price Adjustment Strategies 319
Discount and Allowance Pricing 319 | Segmented Pricing 319 |
Psychological Pricing 320 | Promotional Pricing 321 |
Geographical Pricing 322 | Dynamic Pricing 323 | International
Fricing 324
Price Changes 325
Initiating Price Changes 325 | Responding to Price Changes 327
Public Policy and Marketing 328
Pricing within Channel Levels 328 | Pricing Across Channel
Levels 331
Reviewing Objectives and Key Terms 332 | Key Terms 333 |
Discussing & Applying the Concepts 333 | Focus on
Technology 334 | Focus on Ethics 334 | Marketing & the
Economy 334 | Marketing by the Numbers 334
Video Case: Smashburger 335
Company Case: Payless ShoeSource: Paying Less for
Fashion 335
Marketing Channels: Delivering
Customer Value 338
Supply Chains and the Value Delivery Network 340
The Nature and Importance of Marketing Channels 341
How Channel Members Add Value 342 | Number of Channel
Levels 343
Channel Behavior and Organization 344
Channel Behavior 344 | Vertical Marketing Systems 345 |
Horizontal Marketing Systems 348 | Multichannel Distribution
Systems 349 | Changing Channel Organization 350
Channel Design Decisions 351
Analyzing Consumer Needs 351 | Setting Channel
Objectives 352 | Identifying Major Alternatives 352 | Evaluating
the Major Alternatives 353 | Designing International Distribution
Channels 354
Channel Management Decisions 354
Selecting Channel Members 355 | Managing and Motivating
Channel Members 355 | Evaluating Channel Members 356
Public Policy and Distribution Decisions 356
Marketing Logistics and Supply Chain Management 357
Nature and Importance of Marketing Logistics 357 | Goals of the
Logistics System 358 | Major Logistics Functions 360 |
Integrated Logistics Management 363
9
10
12
11
xiv Contents
Reviewing Objectives and Key Terms 366 | Key Terms 367 |
Discussing & Applying the Concepts 368 | Focus on
Technology 368 | Focus on Ethics 368 | Marketing & the
Economy 369 | Marketing by the Numbers 369
Video Case: Progressive 369
Company Case: Netflix: Disintermediator or
Disintermediated? 369
Retailing and Wholesaling 372
Retailing 374
Types of Retailers 375 | Retailer Marketing Decisions 382 |
Retailing Trends and Developments 389
Wholesaling 394
Types of Wholesalers 396 | Wholesaler Marketing Decisions 396
| Trends in Wholesaling 399
Reviewing Objectives and Key Terms 400 | Key Terms 401 |
Discussing & Applying the Concepts 401 | Focus on
Technology 402 | Focus on Ethics 402 | Marketing & the
Economy 402 | Marketing by the Numbers 403
Video Case: Zappos.com 403
Company Case: Tesco Fresh & Easy: Another British
Invasion 403
Communicating Customer Value:
Integrated Marketing
Communications Strategy 406
The Promotion Mix 408
Integrated Marketing Communications 409
The New Marketing Communications Model 409 | The Need for
Integrated Marketing Communications 410
A View of the Communication Process 414
Steps in Developing Effective Marketing Communication 415
Identifying the Target Audience 415 | Determining the
Communication Objectives 416 | Designing a Message 417 |
Choosing Media 418 | Selecting the Message Source 420 |
Collecting Feedback 420
Setting the Total Promotion Budget and Mix 422
Setting the Total Promotion Budget 422 | Shaping the Overall
Promotion Mix 424 | Integrating the Promotion Mix 426
Socially Responsible Marketing Communication 427
Advertising and Sales Promotion 427 | Personal Selling 428
Reviewing Objectives and Key Terms 428 | Key Terms 429 |
Discussing & Applying the Concepts 429 | Focus on
Technology 430 | Focus on Ethics 430 | Marketing & the
Economy 431 | Marketing by the Numbers 431
Video Case: CPB 431
Company Case: Pepsi: Can a Soda Really Make the World
a Better Place? 432
Advertising and Public Relations 434
Advertising 436
Setting Advertising Objectives 437 | Setting the Advertising
Budget 438 | Developing Advertising Strategy 439 | Evaluating
Advertising Effectiveness and the Return on Advertising
Investment 449 | Other Advertising Considerations 450
Public Relations 454
The Role and Impact of PR 455 | Major Public Relations
Tools 456
Reviewing Objectives and Key Terms 457 | Key Terms 458 |
Discussing & Applying the Concepts 458 | Focus on
Technology 459 | Focus on Ethics 459 | Marketing & the
Economy 459 | Marketing by the Numbers 460
Video Case: E*TRADE 460
Company Case: OgilvyOne: It’s Not Creative Unless It
Sells 460
Personal Selling and Sales
Promotion 462
Personal Selling 464
The Nature of Personal Selling 464 | The Role of the Sales
Force 465
Managing the Sales Force 468
Designing the Sales Force Strategy and Structure 468 |
Recruiting and Selecting Salespeople 472 | Training
Salespeople 473 | Compensating Salespeople 474 | Supervising
and Motivating Salespeople 474 | Evaluating Salespeople and
Sales Force Performance 477
The Personal Selling Process 478
Steps in the Selling Process 478 | Personal Selling and Managing
Customer Relationships 480
Sales Promotion 481
The Rapid Growth of Sales Promotion 482 | Sales Promotion
Objectives 482 | Major Sales Promotion Tools 483 | Developing
the Sales Promotion Program 487
Reviewing Objectives and Key Terms 488 | Key Terms 489 |
Discussing & Applying the Concepts 489 | Focus on
Technology 490 | Focus on Ethics 490 | Marketing & the
Economy 490 | Marketing by the Numbers 490
Video Case: Nestlé Waters 491
Company Case: HP: Overhauling a Vast Corporate Sales
Force 491
Direct and Online Marketing:
Building Direct Customer
Relationships 494
The New Direct Marketing Model 496
Growth and Benefits of Direct Marketing 497
Benefits to Buyers 497 | Benefits to Sellers 498
Customer Databases and Direct Marketing 499
Forms of Direct Marketing 500
Direct-Mail Marketing 501 | Catalog Marketing 502 |
Telephone Marketing 502 | Direct-Response Television
Marketing 503 | Kiosk Marketing 504 | New Digital Direct
Marketing Technologies 505
Online Marketing 508
Marketing and the Internet 508 | Online Marketing
Domains 509 | Setting Up an Online Marketing Presence 513
14
15
16
17
13
Contents xv
Public Policy Issues in Direct Marketing 518
Irritation, Unfairness, Deception, and Fraud 518 | Invasion of
Privacy 519 | A Need for Action 520
Reviewing Objectives and Key Terms 521 | Key Terms 522 |
Discussing & Applying the Concepts 522 | Focus on
Technology 522 | Focus on Ethics 523 | Marketing & the
Economy 523 | Marketing by the Numbers 523
Video Case: Zappos.com 524
Company Case: EBay: Fixing an Online Marketing Pioneer 524
Part 4: Extending Marketing 526
Creating Competitive
Advantage 526
Competitor Analysis 528
Identifying Competitors 528 | Assessing Competitors 529 |
Selecting Competitors to Attack and Avoid 531 | Designing a
Competitive Intelligence System 533
Competitive Strategies 535
Approaches to Marketing Strategy 535 | Basic Competitive
Strategies 536 | Competitive Positions 538 | Market Leader
Strategies 538 | Market Challenger Strategies 541 | Market
Follower Strategies 542 | Market Nicher Strategies 543
Balancing Customer and Competitor Orientations 544
Reviewing Objectives and Key Terms 545 | Key Terms 546 |
Discussing & Applying the Concepts 546 | Focus on
Technology 546 | Focus on Ethics 546 | Marketing & the
Economy 547 | Marketing by the Numbers 547
Video Case: Umpqua Bank 547
Company Case: Ford: Resurrecting an Iconic Company 548
The Global Marketplace 550
Global Marketing Today 552
Looking at the Global Marketing Environment 554
The International Trade System 554 | Economic
Environment 556 | Political-Legal Environment 557 | Cultural
Environment 557
Deciding Whether to Go Global 560
Deciding Which Markets to Enter 561
Deciding How to Enter the Market 562
Exporting 563 | Joint Venturing 563 | Direct Investment 565
Deciding on the Global Marketing Program 565
Product 566 | Promotion 569 | Price 571 | Distribution
Channels 572
Deciding on the Global Marketing Organization 573
Reviewing Objectives and Key Terms 574 | Key Terms 575 |
Discussing & Applying the Concepts 575 | Focus on
Technology 576 | Focus on Ethics 576 | Marketing & the
Economy 576 | Marketing by the Numbers 577
Video Case: Monster 577
Company Case: Nokia: Envisioning a Connected World 577
Sustainable Marketing: Social
Responsibility and Ethics 580
Sustainable Marketing 582
Social Criticisms of Marketing 584
Marketing’s Impact on Individual Consumers 584 | Marketing’s
Impact on Society as a Whole 589 | Marketing’s Impact on Other
Businesses 591
Consumer Actions to Promote Sustainable Marketing 592
Consumerism 592 | Environmentalism 593 | Public Actions to
Regulate Marketing 599
Business Actions Toward Sustainable Marketing 599
Sustainable Marketing Principles 599 | Marketing Ethics 604 |
The Sustainable Company 608
Reviewing Objectives and Key Terms 608 | Key Terms 609 |
Discussing & Applying the Concepts 609 | Focus on
Technology 610 | Focus on Ethics 610 | Marketing & the
Economy 610 | Marketing by the Numbers 611
Video Case: Land Rover 611
Company Case: International Paper: Combining Industry and
Social Responsibility 611
Appendix 1: Marketing Plan A1
Appendix 2: Marketing by the Numbers A11
References R1
Glossary G1
Credits C1
Index I1
18
19
20
xvi
The Fourteenth Edition of Principles of Marketing!
Still Creating More Value for You!
The goal of every marketer is to create more value for customers. So it makes sense that our
goal for the fourteenth edition is to continue creating more value for you—our customer.
Our goal is to introduce new marketing students to the fascinating world of modern mar-
keting in an innovative and comprehensive yet practical and enjoyable way. We’ve poured
over every page, table, figure, fact, and example in an effort to make this the best text from
which to learn about and teach marketing. Enhanced by mymarketinglab, our online home-
work and personalized study tool, the fourteenth edition creates exceptional value for both
students and professors.
Marketing: Creating Customer
Planning Marketing: Partnering to Build Customer
Relationships 45
Partnering with Other Company Departments 46 | Partnering
with Others in the Marketing System 47
Marketing Strategy and the Marketing Mix 48
Customer-Driven Marketing Strategy 48 | Developing an
Integrated Marketing Mix 51
Managing the Marketing Effort 53
Marketing Analysis 53 | Marketing Planning 54 | Marketing
Implementation 54 | Marketing Department Organization 55 |
Marketing Control 56
Measuring and Managing Return on Marketing Investment 57
Reviewing Objectives and Key Terms 59 | Key Terms 60 |
Discussing & Applying the Concepts 60 | Focus on
Technology 60 | Focus on Ethics 61 | Marketing & the
Economy 61 | Marketing by the Numbers 61
Video Case: Live Nation 62
Company Case: Trap-Ease America: The Big Cheese
of Mousetraps 62
Part 2: Understanding the Marketplace and Consumers 64
Analyzing the Marketing
Environment 64
The Microenvironment 66
The Company 67 | Suppliers 67 | Marketing Intermediaries 68
| Competitors 68 | Publics 69 | Customers 69
The Macroenvironment 70
The Demographic Environment 70 | The Economic
Environment 77 | The Natural Environment 78 | The
Technological Environment 80 | The Political and Social
Environment 81 | The Cultural Environment 86
Responding to the Marketing Environment 89
Reviewing Objectives and Key Terms 91 | Key Terms 92 |
Discussing & Applying the Concepts 92 | Focus on
Technology 93 | Focus on Ethics 93 | Marketing & the
Economy 93 | Marketing by the Numbers 93
Video Case: TOMS Shoes 94
Company Case: Target: From “Expect More” to “Pay Less” 94
Managing Marketing Information
to Gain Customer Insights 96
Marketing Information and Customer Insights 98
Assessing Marketing Information Needs 100
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)
1
2
3
4
xii Contents
Developing Marketing Information 100
Internal Data 100 | Competitive Marketing Intelligence 101
Marketing Research 103
Defining the Problem and Research Objectives 103 | Developing
the Research Plan 104 | Gathering Secondary Data 104 |
Primary Data Collection 106 | Implementing the Research
Plan 118 | Interpreting and Reporting the Findings 118
Analyzing and Using Marketing Information 119
Customer Relationship Management 119 | Distributing and
Using Marketing Information 120
Other Marketing Information Considerations 121
Marketing Research in Small Businesses and Nonprofit
Organizations 121 | International Marketing Research 123 |
Public Policy and Ethics in Marketing Research 124
Reviewing Objectives and Key Terms 126 | Key Terms 127 |
Discussing & Applying the Concepts 127 | Focus on
Technology 128 | Focus on Ethics 128 | Marketing & the
Economy 128 | Marketing by the Numbers 129
Video Case: Radian6 129
Company Case: Harrah’s Entertainment: Hitting the CRM
Jackpot 129
Consumer Markets and Consumer
Buyer Behavior 132
Model of Consumer Behavior 134
Characteristics Affecting Consumer Behavior 135
Cultural Factors 135 | Social Factors 139 | Personal
Factors 144 | Psychological Factors 147
Types of Buying Decision Behavior 150
Complex Buying Behavior 150 | Dissonance-Reducing Buying
Behavior 151 | Habitual Buying Behavior 151 | Variety-Seeking
Buying Behavior 152
The Buyer Decision Process 152
Need Recognition 152 | Information Search 152 | Evaluation
of Alternatives 153 | Purchase Decision 154 | Postpurchase
Behavior 154
The Buyer Decision Process for New Products 156
Stages in the Adoption Process 156 | Individual Differences
in Innovativeness 157 | Influence of Product Characteristics
on Rate of Adoption 157
Reviewing Objectives and Key Terms 158 | Key Terms 159 |
Discussing & Applying the Concepts 159 | Focus on
Technology 160 | Focus on Ethics 160 | Marketing & the
Economy 161 | Marketing by the Numbers 161
Video Case: Radian6 161
Company Case: Porsche: Guarding the Old While Bringing
in the New 162
Business Markets and Business
Buyer Behavior 164
Business Markets 166
Market Structure and Demand 167 | Nature of the Buying
Unit 168 | Types of Decisions and the Decision Process 168
Business Buyer Behavior 170
Major Type of Buying Situations 171 | Participants in the
Business Buying Process 172 | Major Influences on Business
Buyers 173 | The Business Buying Process 176 | E-Procurement:
Buying on the Internet 178
Institutional and Government Markets 180
Institutional Markets 180 | Government Markets 181
Reviewing Objectives and Key Terms 183 | Key Terms 183 |
Discussing & Applying the Concepts 184 | Focus on
Technology 184 | Focus on Ethics 185 | Marketing & the
Economy 185 | Marketing by the Numbers 185
Video Case: Eaton 185
Company Case: Cisco Systems: Solving Business Problems
Through Collaboration 186
Part 3: Designing a Customer-Driven Strategy and Mix 188
Customer-Driven Marketing
Strategy: Creating Value for Target
Customers 188
Market Segmentation 190
Segmenting Consumer Markets 191 | Segmenting Business
Markets 198 | Segmenting International Markets 199 |
Requirements for Effective Segmentation 200
Market Targeting 200
Evaluating Market Segments 201 | Selecting Target Market
Segments 201
Differentiation and Positioning 207
Positioning Maps 208 | Choosing a Differentiation and
Positioning Strategy 208 | Communicating and Delivering the
Chosen Position 215
Reviewing Objectives and Key Terms 216 | Key Terms 217 |
Discussing & Applying the Concepts 217 | Focus on
Technology 218 | Focus on Ethics 218 | Marketing & the
Economy 218 | Marketing by the Numbers 218
Video Case: Meredith 219
Company Case: Starbucks: Just Who Is the Starbucks
Customer? 219
Products, Services, and Brands:
Building Customer Value 222
What Is a Product? 224
Products, Services, and Experiences 224 | Levels of Product and
Services 225 | Product and Service Classifications 226
Product and Service Decisions 229
Individual Product and Service Decisions 229 | Product Line
Decisions 234 | Product Mix Decisions 235
Services Marketing 236
The Nature and Characteristics of a Service 236 | Marketing
Strategies for Service Firms 238
5
6
7
8
Contents xiii
Branding Strategy: Building Strong Brands 243
Brand Equity 243 | Building Strong Brands 244 | Managing
Brands 251
Reviewing Objectives and Key Terms 252 | Key Terms 253 |
Discussing & Applying the Concepts 253 | Focus on
Technology 254 | Focus on Ethics 254 | Marketing & the
Economy 254 | Marketing by the Numbers 255
Video Case: General Mills—GoGurt 255
Company Case: Las Vegas: What’s Not Happening
in Vegas 255
New Product Development and
Product Life-Cycle Strategies 258
New-Product Development Strategy 260
The New-Product Development Process 261
Idea Generation 261 | Idea Screening 264 | Concept
Development and Testing 264 | Marketing Strategy
Development 265 | Business Analysis 266 | Product
Development 266 | Test Marketing 267 |
Commercialization 268
Managing New-Product Development 269
Customer-Centered New-Product Development 269 | Team-
Based New-Product Development 270 | Systematic New-Product
Development 270 | New-Product Development in Turbulent
Times 272
Product Life-Cycle Strategies 273
Introduction Stage 275 | Growth Stage 275 | Maturity
Stage 277 | Decline Stage 278
Additional Product and Service Considerations 280
Product Decisions and Social Responsibility 280 | International
Product and Services Marketing 280
Reviewing Objectives and Key Terms 282 | Key Terms 283 |
Discussing & Applying the Concepts 283 | Focus on
Technology 284 | Focus on Ethics 284 | Marketing & the
Economy 284 | Marketing by the Numbers 285
Video Case: General Mills—FiberOne 285
Company Case: Samsung: From Gallop to Run 285
Pricing: Understanding and
Capturing Customer Value 288
What Is a Price? 290
Major Pricing Strategies 291
Customer Value-Based Pricing 291 | Cost-Based Pricing 295 |
Competition-Based Pricing 299
Other Internal and External Considerations Affecting Price
Decisions 300
Overall Marketing Strategy, Objectives, and Mix 300 |
Organizational Considerations 301 | The Market and
Demand 301 | The Economy 303 | Other External Factors 304
Reviewing Objectives and Key Terms 306 | Key Terms 307 |
Discussing & Applying the Concepts 308 | Focus on
Technology 308 | Focus on Ethics 308 | Marketing & the
Economy 309 | Marketing by the Numbers 309
Video Case: IKEA 309
Company Case: Southwest Airlines: Balancing the Price-Value
Equation 310
Pricing Strategies 312
New-Product Pricing Strategies 314
Market-Skimming Pricing 314 | Market-Penetration Pricing 314
Product Mix Pricing Strategies 315
Product Line Pricing 315 | Optional Product Pricing 316 |
Captive Product Pricing 316 | By-Product Pricing 316 | Product
Bundle Pricing 318
Price Adjustment Strategies 319
Discount and Allowance Pricing 319 | Segmented Pricing 319 |
Psychological Pricing 320 | Promotional Pricing 321 |
Geographical Pricing 322 | Dynamic Pricing 323 | International
Fricing 324
Price Changes 325
Initiating Price Changes 325 | Responding to Price Changes 327
Public Policy and Marketing 328
Pricing within Channel Levels 328 | Pricing Across Channel
Levels 331
Reviewing Objectives and Key Terms 332 | Key Terms 333 |
Discussing & Applying the Concepts 333 | Focus on
Technology 334 | Focus on Ethics 334 | Marketing & the
Economy 334 | Marketing by the Numbers 334
Video Case: Smashburger 335
Company Case: Payless ShoeSource: Paying Less for
Fashion 335
Marketing Channels: Delivering
Customer Value 338
Supply Chains and the Value Delivery Network 340
The Nature and Importance of Marketing Channels 341
How Channel Members Add Value 342 | Number of Channel
Levels 343
Channel Behavior and Organization 344
Channel Behavior 344 | Vertical Marketing Systems 345 |
Horizontal Marketing Systems 348 | Multichannel Distribution
Systems 349 | Changing Channel Organization 350
Channel Design Decisions 351
Analyzing Consumer Needs 351 | Setting Channel
Objectives 352 | Identifying Major Alternatives 352 | Evaluating
the Major Alternatives 353 | Designing International Distribution
Channels 354
Channel Management Decisions 354
Selecting Channel Members 355 | Managing and Motivating
Channel Members 355 | Evaluating Channel Members 356
Public Policy and Distribution Decisions 356
Marketing Logistics and Supply Chain Management 357
Nature and Importance of Marketing Logistics 357 | Goals of the
Logistics System 358 | Major Logistics Functions 360 |
Integrated Logistics Management 363
9
10
12
11
xiv Contents
Reviewing Objectives and Key Terms 366 | Key Terms 367 |
Discussing & Applying the Concepts 368 | Focus on
Technology 368 | Focus on Ethics 368 | Marketing & the
Economy 369 | Marketing by the Numbers 369
Video Case: Progressive 369
Company Case: Netflix: Disintermediator or
Disintermediated? 369
Retailing and Wholesaling 372
Retailing 374
Types of Retailers 375 | Retailer Marketing Decisions 382 |
Retailing Trends and Developments 389
Wholesaling 394
Types of Wholesalers 396 | Wholesaler Marketing Decisions 396
| Trends in Wholesaling 399
Reviewing Objectives and Key Terms 400 | Key Terms 401 |
Discussing & Applying the Concepts 401 | Focus on
Technology 402 | Focus on Ethics 402 | Marketing & the
Economy 402 | Marketing by the Numbers 403
Video Case: Zappos.com 403
Company Case: Tesco Fresh & Easy: Another British
Invasion 403
Communicating Customer Value:
Integrated Marketing
Communications Strategy 406
The Promotion Mix 408
Integrated Marketing Communications 409
The New Marketing Communications Model 409 | The Need for
Integrated Marketing Communications 410
A View of the Communication Process 414
Steps in Developing Effective Marketing Communication 415
Identifying the Target Audience 415 | Determining the
Communication Objectives 416 | Designing a Message 417 |
Choosing Media 418 | Selecting the Message Source 420 |
Collecting Feedback 420
Setting the Total Promotion Budget and Mix 422
Setting the Total Promotion Budget 422 | Shaping the Overall
Promotion Mix 424 | Integrating the Promotion Mix 426
Socially Responsible Marketing Communication 427
Advertising and Sales Promotion 427 | Personal Selling 428
Reviewing Objectives and Key Terms 428 | Key Terms 429 |
Discussing & Applying the Concepts 429 | Focus on
Technology 430 | Focus on Ethics 430 | Marketing & the
Economy 431 | Marketing by the Numbers 431
Video Case: CPB 431
Company Case: Pepsi: Can a Soda Really Make the World
a Better Place? 432
Advertising and Public Relations 434
Advertising 436
Setting Advertising Objectives 437 | Setting the Advertising
Budget 438 | Developing Advertising Strategy 439 | Evaluating
Advertising Effectiveness and the Return on Advertising
Investment 449 | Other Advertising Considerations 450
Public Relations 454
The Role and Impact of PR 455 | Major Public Relations
Tools 456
Reviewing Objectives and Key Terms 457 | Key Terms 458 |
Discussing & Applying the Concepts 458 | Focus on
Technology 459 | Focus on Ethics 459 | Marketing & the
Economy 459 | Marketing by the Numbers 460
Video Case: E*TRADE 460
Company Case: OgilvyOne: It’s Not Creative Unless It
Sells 460
Personal Selling and Sales
Promotion 462
Personal Selling 464
The Nature of Personal Selling 464 | The Role of the Sales
Force 465
Managing the Sales Force 468
Designing the Sales Force Strategy and Structure 468 |
Recruiting and Selecting Salespeople 472 | Training
Salespeople 473 | Compensating Salespeople 474 | Supervising
and Motivating Salespeople 474 | Evaluating Salespeople and
Sales Force Performance 477
The Personal Selling Process 478
Steps in the Selling Process 478 | Personal Selling and Managing
Customer Relationships 480
Sales Promotion 481
The Rapid Growth of Sales Promotion 482 | Sales Promotion
Objectives 482 | Major Sales Promotion Tools 483 | Developing
the Sales Promotion Program 487
Reviewing Objectives and Key Terms 488 | Key Terms 489 |
Discussing & Applying the Concepts 489 | Focus on
Technology 490 | Focus on Ethics 490 | Marketing & the
Economy 490 | Marketing by the Numbers 490
Video Case: Nestlé Waters 491
Company Case: HP: Overhauling a Vast Corporate Sales
Force 491
Direct and Online Marketing:
Building Direct Customer
Relationships 494
The New Direct Marketing Model 496
Growth and Benefits of Direct Marketing 497
Benefits to Buyers 497 | Benefits to Sellers 498
Customer Databases and Direct Marketing 499
Forms of Direct Marketing 500
Direct-Mail Marketing 501 | Catalog Marketing 502 |
Telephone Marketing 502 | Direct-Response Television
Marketing 503 | Kiosk Marketing 504 | New Digital Direct
Marketing Technologies 505
Online Marketing 508
Marketing and the Internet 508 | Online Marketing
Domains 509 | Setting Up an Online Marketing Presence 513
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15
16
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Contents xv
Public Policy Issues in Direct Marketing 518
Irritation, Unfairness, Deception, and Fraud 518 | Invasion of
Privacy 519 | A Need for Action 520
Reviewing Objectives and Key Terms 521 | Key Terms 522 |
Discussing & Applying the Concepts 522 | Focus on
Technology 522 | Focus on Ethics 523 | Marketing & the
Economy 523 | Marketing by the Numbers 523
Video Case: Zappos.com 524
Company Case: EBay: Fixing an Online Marketing Pioneer 524
Part 4: Extending Marketing 526
Creating Competitive
Advantage 526
Competitor Analysis 528
Identifying Competitors 528 | Assessing Competitors 529 |
Selecting Competitors to Attack and Avoid 531 | Designing a
Competitive Intelligence System 533
Competitive Strategies 535
Approaches to Marketing Strategy 535 | Basic Competitive
Strategies 536 | Competitive Positions 538 | Market Leader
Strategies 538 | Market Challenger Strategies 541 | Market
Follower Strategies 542 | Market Nicher Strategies 543
Balancing Customer and Competitor Orientations 544
Reviewing Objectives and Key Terms 545 | Key Terms 546 |
Discussing & Applying the Concepts 546 | Focus on
Technology 546 | Focus on Ethics 546 | Marketing & the
Economy 547 | Marketing by the Numbers 547
Video Case: Umpqua Bank 547
Company Case: Ford: Resurrecting an Iconic Company 548
The Global Marketplace 550
Global Marketing Today 552
Looking at the Global Marketing Environment 554
The International Trade System 554 | Economic
Environment 556 | Political-Legal Environment 557 | Cultural
Environment 557
Deciding Whether to Go Global 560
Deciding Which Markets to Enter 561
Deciding How to Enter the Market 562
Exporting 563 | Joint Venturing 563 | Direct Investment 565
Deciding on the Global Marketing Program 565
Product 566 | Promotion 569 | Price 571 | Distribution
Channels 572
Deciding on the Global Marketing Organization 573
Reviewing Objectives and Key Terms 574 | Key Terms 575 |
Discussing & Applying the Concepts 575 | Focus on
Technology 576 | Focus on Ethics 576 | Marketing & the
Economy 576 | Marketing by the Numbers 577
Video Case: Monster 577
Company Case: Nokia: Envisioning a Connected World 577
Sustainable Marketing: Social
Responsibility and Ethics 580
Sustainable Marketing 582
Social Criticisms of Marketing 584
Marketing’s Impact on Individual Consumers 584 | Marketing’s
Impact on Society as a Whole 589 | Marketing’s Impact on Other
Businesses 591
Consumer Actions to Promote Sustainable Marketing 592
Consumerism 592 | Environmentalism 593 | Public Actions to
Regulate Marketing 599
Business Actions Toward Sustainable Marketing 599
Sustainable Marketing Principles 599 | Marketing Ethics 604 |
The Sustainable Company 608
Reviewing Objectives and Key Terms 608 | Key Terms 609 |
Discussing & Applying the Concepts 609 | Focus on
Technology 610 | Focus on Ethics 610 | Marketing & the
Economy 610 | Marketing by the Numbers 611
Video Case: Land Rover 611
Company Case: International Paper: Combining Industry and
Social Responsibility 611
Appendix 1: Marketing Plan A1
Appendix 2: Marketing by the Numbers A11
References R1
Glossary G1
Credits C1
Index I1
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xvi
The Fourteenth Edition of Principles of Marketing!
Still Creating More Value for You!
The goal of every marketer is to create more value for customers. So it makes sense that our
goal for the fourteenth edition is to continue creating more value for you—our customer.
Our goal is to introduce new marketing students to the fascinating world of modern mar-
keting in an innovative and comprehensive yet practical and enjoyable way. We’ve poured
over every page, table, figure, fact, and example in an effort to make this the best text from
which to learn about and teach marketing. Enhanced by mymarketinglab, our online home-
work and personalized study tool, the fourteenth edition creates exceptional value for both
students and professors.
Marketing: Creating Customer
