The World of Marketing 1
The World of Marketing 1
Chapter1 An Overview of Marketing 3
Chapter 1 An Overview of Marketing 3
Marketing Management Philosophies 4
What Is Marketing? 4
The Concept of Exchange 4
Sales Orientation 5
Production Orientation 5
Marketing Orientation 6
Societal Marketing Orientation 7
The Differences Between Sales and Marketing Orientations 7
The Organization s Focus 7
Ethics in Marketing:“Alcopops :An Ethical Dilemma for U.S.Brewers 8
The Firm s Business 11
Those to Whom the Product Is Directed 12
The Firm s Primary Goal 13
Implementation of the Marketing Concept 13
Tools the Organization Uses to Achieve Its Goals 13
A Word of Caution 13
Front - Line Experiences for Management 14
Changes in Authority and Responsibility 14
The Marketing Process 15
Global Perspectives: China: A $300 Billion Consumer Market 15
Marketing Offers Outstanding Career Opportunities 16
Marketing Plays an Important Role in Society 16
Marketing Is Important to Businesses 16
Why Study Marketing? 16
Marketing and Small Business: Choosing a Francbisor 17
Looking Ahead 18
Marketing Affects Your Life Everyday 18
Key Terms 19
Summary 19
Looking Back 19
Discussion and Writing Questions 20
Application for Small Business 21
Video Case: Lanier Worldwide 21
Chapter 2 Strategic Planning Developing and Implementing a Marketing Plan 23
Chapter2 Strategic Planning: Developing and Implementing a Marketing Plan 23
The Nature of Strategic Planning 24
What Is a Marketing Plan? 24
Why Write a Marketing Plan? 24
Marketing Plan Elements 25
Define the Business Mission 26
Set Marketing Plan Objectives 28
Conduct a Situation Analysis 29
Global Perspectives: A Traffic fam of Auto Makers 29
Strategic Windows 31
Strategic Alternatives 32
Marketing and Small Business: Pickle Queen fumps Through a Strategic Window 32
Selecting a Strategic Alternative 33
Differential Advantage 37
Target Market Strategy 38
Describe the Marketing Strategy 38
The Marketing Mix 39
Implementation, Evaluation, and Control of the Marketing Plan 41
Writing the Marketing Plan 42
Effective Strategic Planning 42
Looking Back 45
Summary 46
Key Terms 46
Discussion and Writing Questions 47
Video Case: New England Culinary Institute 48
Application for Small Business 48
Chapter3 The Marketing Environment 51
Chapter 3 The Marketing Environment 51
The External Marketing Environment 52
Understanding the External Environment 52
Environmental Management 54
Social Factors 54
Marketing-Oriented Values of the 1990s 55
The Growth of Component Lifestyles 55
The Changing Role of Families and Working Women 55
Ethics in Marketing: Why Do Women Pay More? 57
Is It a New Social Trend or a Fad? 58
Demographic Factors 58
Today s Preteens: Born to Shop 58
Teenagers: Lots of Money and Strong Opinions 60
Generation X: Savvy and Cynical 60
Marketing and Small Business: Mrs. fones“Runs It Up the Flagpole 62
Baby Boomers: America s Mass Market 62
Older Consumers: Not Just Grandparents 63
Americans on the Move 66
Growing Ethnic Markets 66
Ethnic and Cultural Diversity 67
Rising Incomes 69
Economic Factors 69
Inflation 70
Recession 70
Technological and Resource Factors 71
Political and Legal Factors 72
Federal Legislation 73
State Laws 73
Regulatory Agencies 74
Competitive Factors 75
The Economics of Competition 76
Competition for Market Share 77
Global Competition 78
Global Perspectives: Pepsi Retools for More Intensive Global Competition 79
Looking Back 79
Key Terms 80
Summary 80
Discussion and Writing Questions 81
Application for Small Business 81
Video Case: Life Fitness Company 82
Chapter4 Developing a Global Vision 85
Chapter 4 Developing a Global Vision 85
The Rewards of Global Marketing 86
The Importance of Global Marketing to the United States 87
Multinational Firms 88
The Multinational Advantage 89
Ethics in Marketing: Governments Don t Always“Play Fair in Global Trade 90
Global Marketing Standardization 90
The External Environment Facing Global Marketers 91
Culture 92
Economic and Technological Development 94
Marketing and Small Business: The Video Van Distribution Channel Works In India 96
Political Structure 97
Demographic Makeup 104
Natural Resources 104
Global Marketing by the Individual Firm 105
Export 106
Licensing 108
Contract Manufacturing 108
Joint Venture 109
Direct Investment 109
The Global Marketing Mix 110
Product and Promotion 110
Pricing 114
Meeting ISO 9000 Standards 114
Distribution 116
Looking Back 117
Summary 117
Key Terms 117
Discussion and Writing Questions 118
Application for Small Business 119
Video Case: Starbucks Coffee Goes to ?apan 119
Chapter5 Ethics and Social Responsibility 121
Chapter 5 Ethics and Social Responsibility 121
Ethical Behavior in Business 122
Morality and Business Ethics 124
Ethics and Marketing Management 125
Ethical Decision Making 126
Ethical Guidelines 127
Current Ethical Dilemmas 129
Tobacco and Alcohol Promotion 129
Consumer Privacy 131
Green Marketing 133
Marketing and Small Business: Will Being a Green Marketer Help Your Business Succeed? 134
Cultural Differences in Ethics 134
Global Perspectives: U. S. Ethical Practices: How They Compare Globally 135
Exploitation of Developing Countries 136
Corporate Social Responsibility 137
Responding to Ethics Problems 138
Looking Back 139
Key Terms 140
Summary 140
Discussion and Writing Questions 141
Application for Small Business 141
Video Case: Alcohol and Tobacco Advertising How Should It Be Treated? 142
Part One Critical Thinking Case: Ben ? ?erry s Ice Cream Tackles the Russian Market 143
Part One Critical Thinking Case: Hooters, Inc. 145
Part One Marketing Planning Activities: The World of Marketing 147
Analyzing Marketing Opportunities 149
Analyzing Marketing Opportunities 149
Chapter 6 Consumer Decision Making 151
Chapter6 Consumer Decision Making 151
The Importance of Understanding Consumer Behavior 152
The Consumer Decision-Making Process 152
Problem Recognition 153
Information Search 154
Evaluation of Alternatives and Purchase 155
Postpurchase Behavior 156
Types of Consumer Buying Decisions and Consumer Involvement 157
Factors Determining the Level of Consumer Involvement 158
Marketing Implications of Involvement 159
Individual Factors Influencing Consumer Buying Decisions 159
Perception 160
Motivation 162
Learning 163
Ethics in Marketing: Fear as a Marketing Tool: Does It Sell? 164
Values, Beliefs, and Attitudes 166
Personality, Self - Concept, and Lifestyle 168
Social Factors Influencing Consumer Buying Decisions 170
Culture 170
Global Perspectives: Marketing Across Cultures 171
Subculture 172
Reference Groups 172
Opinion Leaders 174
Family 175
Family Life Cycle 176
Social Class 176
Marketing and Small Business: Selling to Multicultural Markets 179
Looking Back 180
Summary 180
Key Terms 180
Discussion and Writing Questions 181
Application for Small Business 181
Video Case: Community Coffee Pursues the Gourmet Coffee Market 182
Chapter7 Business-to-Business Marketing 185
Chapter 7 Business-to-Business Marketing 185
What Is Business-to-Business Marketing? 186
Relationship Marketing and Strategic Alliances 186
Global Perspectives: Whirlpool Ventures into a New Frontier 188
Major Categories of Business-to-Business Customers 189
Producers 189
Resellers 189
Governments 190
Marketing and Small Business: Bidding for Government Contracts 190
Institutions 191
The Standard Industrial Classification (SIC) System 192
Demand 194
Business-to-Business Versus Consumer Markets 194
Number of Customers 195
Purchase Volume 195
Location of Buyers 196
Nature of Buying Influence 196
Use of Reciprocity 196
Distribution Structure 196
Nature of Buying 196
Type of Negotiations 196
Types of Business-to-Business Products 197
Major Equipment 197
Use of Leasing 197
Primary Promotional Method 197
Accessory Equipment 197
Raw Materials 198
Component Parts 198
Supplies 199
Buying Centers 199
Processed Materials 199
Business Services 199
Business-to-Business Buying Behavior 199
Evaluative Criteria 201
Buying Situations 202
The Purchase Process 203
Etbics in Marketing: The NAPM Code of Et?ics 206
Looking Back 207
Summary 207
Key Terms 207
Application for Small Business 208
Discussion and Writing Questions 208
Video Case: Amtecb Corporation 209
Chapter8 Segmenting and Targeting Markets 211
Chapter 8 Segmenting and Targeting Markers 211
Market Segmentation 212
Criteria for Successful Segmentation 213
The Importance of Market Segmentation 213
Bases for Segmenting Consumer Markets 214
Demographic Segmentation 215
Geographic Segmentation 215
Global Perspectives: Poland Starting to See the Emergence of Puppies 216
Marketing and Small Business: Lifestyle Matrix Marketing 217
Psychographic Segmentation 221
Benefit Segmentation 223
Usage-Rate Segmentation 223
Macrosegmentation 225
Bases for Segmenting Business Markets 225
Microsegmentation 226
Steps in Segmenting a Market 227
Strategies for Selecting Target Markets 228
Undifferentiated Targeting 228
Concentrated Targeting 230
Multisegment Targeting 231
Positioning 232
Ethics in Marketing: Less Privacy Seen as Trade-Off for Better Target Marketing 232
Product Differentiation 233
Perceptual Mapping 234
Positioning Bases 235
Global Issues in Market Segmentation and Targeting 235
Looking Back 236
Summary 237
Key Terms 237
Discussion and Writing Questions 238
Application for Small Business 238
Video Case: Russell s Service Center 239
Chapter 9 Decision Support Systems and Marketing Research 241
Chapter9 Decision Support Systems and Marketing Research 241
Marketing Decision Support Systems 242
Database Marketing and Micromarketing 243
Ethics in Marketing: Databases Can Probe into Your Life 245
The Role of Marketing Research 245
Differences Between Marketing Research and DSS 246
Management Uses of Marketing Research 246
Steps in a Marketing Research Project 249
Defining the Marketing Problem 249
Planning the Research Design and Gathering Primary Data 254
Global Perspectives: The Challenges of Global Marketing Resarch 259
Specifying the Sampling Procedures 264
Collecting the Data 266
Analyzing the Data 266
Preparing and Presenting the Report 267
Following Up 267
Marketing and Small Business: Marketing Research for Small Companies 268
Scanner-Based Research 268
When Should Marketing Research Be Conducted? 269
Looking Back 269
Key Terms 270
Summary 270
Application for Small Business 271
Discussion and Writing Questions 271
Signature Series Video Case: Category Management Using Information Resources, Inc. Scanner-Based Information 272
Video Case: Bon-Ton Department Stores 273
Part Two Critical Thinking Case: Long ?ohn Silver s Reaches Out to Drive - Through Customers 274
Part Two Marketing Planning Activities: Analyzing Marketing Opportunities 276
Product Decisions 277
Product Decisions 277
Chapter 10 Product Concepts 279
Chapter 10 Product Concepts 279
What Is a Product? 280
Types of Consumer Products 280
Convenience Products 281
Shopping Products 281
Specialty Products 282
Unsought Product 282
Product Ltems, lines, and Mixes 282
Repositioning 284
Adjustments to Product Items, Lines, and Mixes 284
Branding 285
Benefits of Branding 286
Branding Strategies 287
Ethics in Marketing: Exploitative Marketing to Children on the Internet 288
Trademarks 291
Packaging 292
Packaging Functions 292
Global Perspectives: China Fails to Protect Foreign Companies Trademarks and Other Property Rights 293
Labeling 294
Branding 295
Universal Products Codes 295
Global Issues in Branding and Packaging 295
Packaging 296
Product Warranties 297
Summary 297
Key Terms 297
Looking Back 297
Discussion and Writing Questions 298
Video Case: Head Golf 299
Application for Small Business 299
Chapter 11 Developing and Managing Products 301
Chapter 11 Developing and Managing Products 301
Categories of New Products 302
Idea Generation 303
New-Product Strategy 303
The New-Product Development Process 303
Ethics in Marketing: Marketing Smokeless Cigarettes 304
Idea Screening 306
Business Analysis 306
Development 307
Marketing and Small Business: Checklist for Evaluating New-Product Concepts 308
Test Marketing 309
Commercialization 311
Why Some New Products Succeed and Others Fail 312
Global Perspectives: American Cars for Asian Markets 313
Global Issues in New-Product Development 313
Organization for New-Product Development 313
New-Product Committees and Departments 314
Venture Teams and Intrepreneurs 314
Simultaneous Product Development 315
Product Life Cycles 315
Introductory Stage 316
Maturity Stage 317
Growth Stage 317
Decline Stage 318
Implications for Marketing Management 318
Diffusion of Innovation 319
The Spread of New Products 319
Product Characteristics and the Rate of Adoption 321
Marketing Implications of the Adoption Process 321
Summary 322
Key Terms 322
Looking Back 322
Discussion and Writing Questions 323
Video Case: 3M 324
Application for Small Business 324
Chapter 12 Services and Nonprofit Organization Marketing 327
Chapter 12 Services and Nonprofit Organization Marketing 327
The Importance of Services 328
How Services Differ from Goods 328
Intangibility 329
Heterogeneity 330
Inseparability 330
Perishability 330
Marketing Mixes for Services 331
Product (Service) Strategy 331
Services Marketing in Manufacturing 331
Distribution Strategy 333
Promotion Strategy 334
Price Strategy 335
Relationship Marketing in Services 336
Internal Marketing in Service Firms 337
Nonprofit Organization Marketing 338
Global Issues in Services Marketing 338
Global Perspectives: One World、One UPS 339
What Is Nonprofit Organization Marketing? 339
Unique Aspects of Nonprofit Organization Marketing Strategies 340
Ethics in Marketing: How a Tiny Charity Transformed Itself into a Used-Car Giant 341
Summary 346
Looking Back 346
Key Terms 346
Discussion and Writing Questions 347
Video Case: 1-800-FLOWERS 348
Application for Small Business 348
Chapter 13 Customer Value, Quality, and Satisfaction 351
Chapter 13 Customer Value, Quality, and Satisfaction 351
What Is Customer Value? 352
A Customer Value Framework 353
Goods Quality 354
Global Perspectives: American Firms Find Niche in ?apanese Market 355
Essential Quality Techniques 356
Participants in the Quality Effort 357
Service Quality 359
Categories of Service 360
Service Quality Components 361
The Gap Model of Service Quality 362
Marketing and Small Business: AT?T and MCI Take Aim at Internet Access Market 362
Transaction Costs 364
Value-Based Pricing 364
Life Cycle Costs 365
Customer Satisfaction 366
Measurement of Customer Satisfaction 366
Risk 366
Nonmonetary Sacrifice 366
Customer Satisfaction or Customer Dissatisfaction? 367
Ethics in Marketing: American Cancer Society Exchanges Endorsements for Donations 368
Customer Loyalty 369
Key Terms 371
Looking Back 371
Summary 371
Discussion and Writing Questions 373
Application for Small Business 374
Video Case: Stew Leonard s 374
Part Three Critical Thinking Case: Shaving Systems by Gillette 376
Part Three Marketing Planning Activities: Product Decisions 378
Distribution Decisions 379
Distribution Decisions 379
Chapter 14 Channels ad Physical Distribution 381
Chapter 14 Channels and Physical Distribution 381
Providing Specialization and Division of Labor 382
Overcoming Discrepancies 382
Marketing Channels and Physical Distribution 382
Providing Contact Efficiency 383
Channel Functions 384
Channel Structures 386
Channels for Consumer Products 386
Channels for Industrial Products 387
Marketing and Small Business: Crawfish to Your Doorstep Using the Internet 387
Alternative Channel Arrangements 388
Factors Affecting Channel Choice 390
Channel Strategy Decisions 390
Levels of Distribution Intensity 391
Ethics in Marketing: Should Retailers Control Which Products We Buy? 393
Physical Distribution Service 394
Global Marketing Channels 394
The Importance of Physical Distribution 394
The Balance Between Service and Cost 395
Warehousing 397
Physical Distribution Subsystems 397
Materials Handling 398
Inventory Control 400
Transportation 402
Order Processing 402
Physical Distribution for Services 403
Automation 404
Trends in Physical Distribution 404
Environmental Issues 405
Electronic Distribution 405
Global Distribution 406
Quality in Transportation 406
Contract Logistics and Partnerships 406
Global Perspectives: Physical Distribution in China 407
Summary 408
Key Terms 408
Looking Back 408
Discussion and Writing Questions 410
Application for Small Business 410
Video Case: United Parcel Service 411
Chapter 15 Retailing and Wholesaling 413
Chapter 15 Retailing and Wholesaling 413
Classification of Retail Operations 414
The Role of Retailing 414
Ownership 415
Product Assortment 416
Price 416
Level of Service 416
Major Types of Retail Operations 417
Department Stores 417
Speciality Stores 418
Global Perspectives: ?apan Wakes Up and Smells Starbucks 419
Supermarkets 420
Convenience Stores 420
Discount Stores 421
Nonstore Retailing 425
Direct Retailing 425
Automatic Vending 425
Direct Marketing 426
Franchising 429
Retail Marketing Strategy 431
Defining a Target Market 431
Choosing the Retailing Mix 432
Ethics in Marketing: What Supermarkets Know About You 438
Marketing and Small Business: Expertise: A Critical Success Factor for Small Retailers 441
Global Retailing 442
Trends in Retailing 442
Convenience and Efficiency 443
Entertainment 443
Current Problems Affecting Retailing 444
Wholesaling Intermediaries 445
Merchant Wholesalers 446
Agents and Brokers 447
Trends in Wholesaling 447
Summary 448
Key Terms 448
Looking Back 448
Discussion and Writing Questions 449
Application for Small Business 450
Signature Series Video Case: Tandy Corporation 450
Part Four Critical Thinking Case: Walgreen Company 453
Part Four Marketing Planning Activities: Distribution Decisions 455
Integrated Marketing Communications 457
Jntegrated Marketing Communications 457
Chapter 16 Promotion Strategy and Marketing Communication 459
Chapter 16 Promotion Strategy and Marketing Communication 459
The Role of Promotion in the Marketing Mix 460
The Promotional Mix 461
Advertising 461
Public Relations 462
Personal Selling 463
Sales Promotion 463
Marketing Communication 464
The Communication Process 464
Dreamful Attraction: Shaquille O Neal s Thoughts on Marketing and Advertising 466
Global Perspectives: Global Challenges in Marketing Communication 469
The Communication Process and the Promotional Mix 470
Integrated Marketing Communications 471
Informing 472
The Goals and Tasks of Promotion 472
Reminding 473
Persuading 473
AIDA and the Hierarchy of Effects 474
The Hierarchy of Effects and the Promotional Mix 476
Factors Affecting the Promotional Mix 477
Nature of the Product 477
Stage in the Product Life Cycle 478
Type of Buying Decision 479
Target Market Characteristics 479
Available Funds 480
Push and Pull Strategies 480
Marketing and Small Business: Guerrilla Promotions for Cash-Strapped Small Business Owners 481
Analyze the Marketplace 482
Steps in Developing the Promotion Plan 482
Set Promotional Objectives 483
Identify the Target Market 483
Ethics in Marketing: Targeting School Kids 484
Develop a Promotion Budget 485
Choose the Promotional Mix 487
Self-Regulation of Promotion 487
Legal and Ethical Aspects of Promotion 487
Federal Regulation of Promotion 488
Looking Back 488
Key Terms 489
Summary 489
Discussion and Writing Questions 491
Application for Small Business 491
Signature Series Video Case: Attracting Customers to Piccadilly Cafeterias 492
Chapter 17 Advertising and Public Relations 495
Chapter 17 Advertising and Public Relations 495
Effects of Advertising 496
Advertising and Market Share 497
Advertising and the Consumer 497
Advertising and Brand Loyalty 498
Ethics in Marketing: Are Kids Influenced by ?oe Camel? 499
Major Types of Advertising 500
Advertising and Product Attributes 500
Product Advertising 501
Institutional Advertising 501
Steps in Creating an Advertising Campaign 502
Make Creative Decisions 503
Determine Campaign Objectives 503
Global Perspectives: Iranian Censors Decide Many Topics Are Unmentionable in Ads 506
Make Media Decisions 508
Media Types 508
Marketing and Small Business: Radio: An Effective Advertising Medium for Small Marketers 511
Media Selection Considerations 514
Media Scheduling 515
Evaluate the Ad Campaign 517
Public Relations 518
Major Public Relations Tools 518
Managing Unfavorable Publicity 521
Looking Back 522
Key Terms 522
Summary 522
Discussion and Writing Questions 523
Signature Series Video Case: Woman s Hospital Responds to Changing Market Opportunities 524
Applications for Small Business 524
Chapter 18 Sales Promotion and Personal Selling 527
Chapter 18 Sales Promotion and Personal Selling 527
Sales Promotion 528
The Objectives of Sales Promotion 528
Tools for Consumer Sales Promotion 529
Marketing and Small Business: Customer-Specific Marketing for Small Retailers 532
Tools for Trade Sales Promotion 535
Personal Selling 537
Relationship Selling 538
Selling Tasks 539
Ethics in Marketing: Why the Bad Rap? 540
Steps in the Selling Process 542
Generating Leads 543
Qualifying Sales Leads 544
Doing a Needs Assessment 545
Developing and Proposing Solutions 545
Handling Obiections 547
Closing the Sale 547
Following Up 548
Sales Management 548
Global Perspectives: Global Dos and Don ts in Selling 549
Defining Sales Objectives and the Sales Process 550
Designing the Sales Organization 551
Developing the Sales Force 553
Directing the Sales Force 556
Evaluating the Sales Force 558
Looking Back 558
Summary 558
Key Terms 558
Discussion and Writing Questions 560
Application for Small Business 560
Video Case: Ferrara Fire Apparatus (FFA) Pursues Relationship Selling 561
Endnotes 563
Chapter 19 Internet Marketing 565
Chapter 19 Internet Marketing 565
Part Five Critical Thinking Case: Coca-Cola Company 567
Part Five Marketing Planning Activities: Integrated Marketing Communications 568
Pricing Decisions 571
Pricing Decisions 571
Chapter 20 Pricing Concepts 573
Chapter 20 Pricing Concepts 573
What Is Price? 574
The Importance of Price to Marketing Managers 574
The Importance of Price 574
Profit-Oriented Pricing Objectives 575
Pricing Objectives 575
Sales-Oriented Pricing Objectives 577
Status Quo Pricing Objectives 578
The Demand Determinant of Price 579
The Nature of Demand 579
Elasticity of Demand 581
Ethics in Marketing: Getting Ripped Off at the ATM 583
The Cost Determinant of Price 585
Markup Pricing 587
Profit Maximization Pricing 587
Break- Even Pricing 588
Other Determinants of Price 590
Stage in the Product Life Cycle 590
The Competition 591
Distribution Strategy 591
Global Perspectives: Chaotic Pricing Calls for Pricing Corridors 592
Promotion Strategy 593
The Relationship of Price to Quality 593
Summary 594
Key Terms 594
Looking Back 594
Discussion and Writing Questions 596
Application for Small Business 596
Signature Series Video Case: Fabulous Technology Offers Many New Features for Tomorrow s Automobiles-But Will the Consumer Buy It? 597
Chapter 21 Setting the Right Price 601
Chapter 21 Setting the Right Price 601
How to Set a Price on a Product 602
Establish Pricing Goals 602
Choose a Price Strategy 603
Estimate Demand, Costs, and Profits 603
The Legality and Ethics of Price Strategy 606
Unfair Trade Practices 606
Global Perspectives: Budget Hotels Arenit Always a Bargain Abroad 607
Price Fixing 607
Price Discrimination 608
Tactics for Fine Tuning the Base Price 609
Discounts, Allowances, and Rebates 609
Predatory Pricing 609
Geographic Pricing 611
Special Pricing Tactics 613
Ethics in Marketing: Are Drug Prices Based on All the Traffic Will Bear ? 616
Product Line Pricing 618
Relationships Among Products 618
Pricing During Difficult Economic Times 619
Inflation 619
Joint Costs 619
Recession 621
Pricing: A Look at the Future 622
Looking Back 623
Summary 623
Key Terms 623
Discussion and Writing Questions 625
Application for Small Business 626
Video Case: Southwest Airlines 626
Part Six Critical Thinking Case: GM s Move to No-Haggle Pricing 628
Part Six Critical Thinking Case: Levi Strauss and Company 630
Part Six Marketing Planning Activities: Pricing Decisions 632
Appendix: Careers in Marketing 633
Appendix: Careers in Marketing 633
Glossary 640
Glossary 640
Endnotes 653
Company and Organization Index 671
Subject Index 677
Internet Index 691