An IntroductioEleventnh Edition r Global Edition - ?· Market Segmentation 193 Segmenting Consumer Markets…

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  • An Introduction Eleventh Edition

    Global Editionr

    errGARY ARMSTRONGUniversity of NorthXarolina

    PHILIP KOTLERNorthwestern University

    Boston Columbus Indianapolis New York San FranciscoUpper Saddle River Amsterdam Cape Town Dubai LondonMadrid Milan Munich Paris Montreal Toronto Delhi Mexico CitySao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo

  • ContentsPreface 21 %

    Acknowledgments 26

    IT1 DEFINING MARKETING AND THE MARKETING PROCESS 30

    Marketing: Creating and Capturing Customer Value 30

    CHAPTER ROAD MAP 30

    Objective Outline 30 Previewing the Concepts 30 First Stop: FlyDubai 31

    What Is Marketing? 33

    Marketing Defined 33 The Marketing Process 33

    Understanding the Marketplace and Customer Needs 34

    Customer Needs, Wants, and Demands 34 Market OfferingsProducts, Services, andExperiences 34 Customer Value and Satisfaction 35 Exchanges and Relationships 35 Markets 36

    Designing a Customer-Driven Marketing Strategy 37

    Selecting Customers to Serve 37 Choosing a Value Proposition 37 Marketing Management^ Orientations 37 ,,

    Preparing an Integrated Marketing Plan and Program 40

    Building Customer Relationships 41

    Customer Relationship Management 41

    Marketing at Work 1.1: Customer Relationship Management at AWT, Abu Dhabi,United Arab Emirates (UAE) 43

    The Changing Nature of Customer Relationships 45 Partner Relationship Management 48

    Capturing Value from Customers 48

    Creating Customer Loyalty and Retention 48 Growing Share of Customer 49 Building CustomerEquity 50

    The Changing Marketing Landscape 51

    The Changing Economic Environment 52

    Marketing at Work 1.2: An Era of AusterityThe Thrifty Route in Fashion 53

    The Digital Age 54 The Growth of Not-for-Profit Marketing 55 RapidGlobalization 56 Sustainable MarketingThe Call for More Social Responsibility 56

    So, What Is Marketing? Pulling It All Together 57

    REST STOP: REVIEWING THE CONCEPTS 59

    CHAPTER REVIEW AND KEY TERMS Objectives Review 59 Key Terms 60 DISCUSSIONAND CRITICAL THINKING Discussion Questions 61 Critical ThinkingExercises 61 MINICASES AND APPLICATIONS Marketing Technology 61 MarketingEthics 62 Marketing by the Numbers 62 Video Case 62 Company Cases 63

    11

  • 12 Contents

    / Company and Marketing Strategy: Partnering to Build CustomerRelationships 64

    CHAPTER ROAD MAP 64 "

    Objective Outline 64 Previewing the Concepts 64 First Stop: McDonald's 65 \ ^

    Company-Wide Strategic Planning: Defining Marketing's Role 66

    Defining a Market-Oriented Mission 67 Setting Company Objectives and Goals 68

    Designing the Business Portfolio 69

    Analyzing the Current Business Portfolio 69

    Marketing at Work 2.1: Singapore Airlines: Going the Extra Mile in Strategic Planning 70

    Developing Strategies for Growth and Downsizing 73

    Planning Marketing: Partnering to Build Customer Relationships 74

    Partnering with Other Company Departments 75 Partnering with Others in the Marketing System 76

    Marketing Strategy and the Marketing Mix 76

    Customer-Driven Marketing Strategy 77

    Marketing at Work 2.2: Nicher Allegiant Air: "Going Where They Ain't" 79 /

    Developing an Integrated Marketing Mix 80

    Managing the Marketing Effort 82

    Marketing Analysis 82 Marketing Planning 83 Marketing Implementation 83 MarketingDepartment Organization 84 Marketing Control 85

    Measuring and Managing Return on Marketing Investment 86

    * REST STOP: REVIEWING THE CONCEPTS 88

    CHAPTER REVIEW AND KEY TERMS Objectives Review 88 Key Terms 89 DISCUSSIONAND CRITICAL THINKING Discussion Questions 89 Critical ThinkingExercises 89 MINICASES AND APPLICATIONS Marketing Technology 90 MarketingEthics 90 Marketing by the Numbers 90 Video Case 91 Company Cases 91

    PMTT 2 > UNDERSTANDING THE MARKETPLACE AND CONSUMERS 92

    3) Analyzing the Marketing Environment 92

    CHAPTER ROAD MAP 92

    Objective Outline 92 Previewing the Concepts 92 First Stop: YouTube 93

    The Microenvironment 95

    The Company 95 Suppliers 95 MarketingIntermediaries 96 Competitors 96 Publics 97 Customers 97

    The Macroenvironment 98

    The Demographic Environment 98 The Economic Environment 104 The Natural"Environment 105 The Technological Environment 107 The Political and Social Environment 108The Cultural Environment 111

    Marketing at Work 3.1: Spearheading Environmental Responsibility: "Masdar" 112

    Responding to the Marketing Environment 116

    Marketing at Work 3.2: When the Dialog Gets Nasty: Turning Negatives into Positives 117

  • Contents 13

    REST STOP: REVIEWING THE CONCEPTS 118

    CHAPTER REVIEW AND KEY TERMS Objectives Review 118 Key Terms 119 DISCUSSIONAND CRITICAL THINKING Discussion Questions 120 Critical ThinkingExercises 120 MINICASES AND APPLICATIONS Marketing Technology 120 MarketingEthics 121 Marketing by the Numbers 121 Video Case 12P* Company Cases 121

    A Managing Marketing Information to Gain \Customer Insights 122

    CHAPTER ROAD MAP 122

    Objective Outline 122 Previewing the Concepts 122 First Stop: Protrac 123

    Marketing Information and Customer Insights 124

    Assessing Marketing Information Needs 125

    Developing Marketing Information 126Internal Data 126 Competitive Marketing Intelligence 127

    Marketing Research 128

    Defining the Problem and Research Objectives 129 Developing the Research Plan 129 GatheringSecondary Data 130 Primary Data Collection 131

    Marketing at Work 4.1: Ethnographic Research: Watching What Consumers Really Do 132

    Marketing at Work 4.2: Listening Online: The Web Knows What You Want 139

    Implementing the Research Plan 142 Interpreting and Reporting the Findings 142

    Analyzing and Using Marketing Information 143

    Customer Relationship Management 143 Distributing and Using Marketing Information 144: Other Marketing Information Considerations 145

    Marketing Research in Small Businesses and Nonprofit Organizations 145 International MarketingResearch 146 Public Policy and Ethics in Marketing Research 148

    REST STOP: REVIEWING THE CONCEPTS 150

    CHAPTER REVIEW AND KEY TERMS Objectives Review 150 Key Terms 151 DISCUSSIONAND CRITICAL THINKING Discussion Questions 151 Critical ThinkingExercises 151 MINICASES AND APPLICATIONS Marketing Technology 152 MarketingEthics 152 Marketing by the Numbers 153 Video Case 153 Company Cases 153

    R Understanding Consumer and Business Buyer Behavior 154

    CHAPTER ROAD MAP 154

    Objective Outline 154 Previewing the Concepts 154 First Stop: Apple 155

    Consumer Markets and Consumer Buyer Behavior 156

    Model of Consumer Behavior 156 Characteristics Affecting Consumer Behavior 157

    Marketing at Work 5.1: CSL 1010: Moving Forward with New Consumers 162

    The Buyer Decision Process 170

    Need Recognition 170 Information Search 170 Evaluation of Alternatives 171 PurchaseDecision 172 Postpurchase Behavior 172

    The Buyer Decision Process for New Products 173

    Stages in the Adoption Process 173 Individual Differences in Innovativeness 174 Influence ofProduct Characteristics on Rate of Adoption 174

  • 14 Contents

    Business Markets and Business Buyer Behavior 175

    Business Markets 176 Business Buyer Behavior 177 \

    Marketing at Work 5.2: Dow Performance Plastics: "If You Win, We Win" 178

    REST STOP: REVIEWING THE CONCEPTS 185

    CHAPTER REVIEW AND KEY TERMS Objectives Review 185 Key Terms 187, DISCUSSIONAND CRITICAL THINKING Discussion Questions 187 Critical Thinking \Exercises 187 MINICASES AND APPLICATIONS Marketing Technology 188 MarketingEthics 188 Marketing by the Numbers 188 Video Case 189 Company Cases 189*

    DESIGNING A CUSTOMER-DRIVEN STRATEGYAND MIX 190

    J\ Customer-Driven Marketing Strategy: Creating Valuefor Target Customers 190

    CHAPTER ROAD MAP 190

    Objective Outline 190 Previewing the Concepts 190 First Stop: Air Arabia 191

    Market Segmentation 193

    Segmenting Consumer Markets 193

    Marketing at Work 6.1: Mobinil: Targeting the Mobile Telecommunications Market 196

    Segmenting Business Markets 200 Segmenting International Markets 201 Requirements forEffective Segmentation 202

    Market Targeting 202

    Evaluating Market Segments 202 Selecting Target Market Segments 203

    Marketing at Work 6.2: Location-Based Micromarketing Equals Macro Opportunities 206

    Differentiation and Positioning 210

    Positioning Maps 211 Choosing a Differentiation and Positioning Strategy 211 Communicating andDelivering the Chosen Position 216

    REST STOP: REVIEWING THE CONCEPTS 217

    CHAPTER REVIEW AND KEY TERMS Objectives Review 217 Key Terms 218 DISCUSSIONAND CRITICAL THINKING Discussion Questions 219 Critical ThinkingExercises 219 MINICASES AND APPLICATIONS Marketing Technology 219 MarketingEthics 220 Marketing by the Numbers 220 Video Case 220 Company Cases 221

    I# Products, Services, and Brands: Building Customer Value 222

    CHAPTER ROAD MAP 222

    Objective Outline 222 Previewing the Concepts 222 First Stop: Emirates Airlines 223

    What Is a Product? 224

    Products, Services, and Experiences 225 Levels of Product and Services 225 Product and ServiceClassifications 226 :

    Product and Service Decisions 229

    Individual Product and Service Decisions 229 Product Line Decisions 234 Product MixDecisions 235

  • Contents 15

    Services Marketing 236

    The Nature and Characteristics of a Service 236 Marketing Strategies for Service Firms 238

    Marketing at Work 7.1: Zappos.com: Taking Care of Those Who Take Care of Customers 239

    Branding Strategy: Building Strong Brands ^243

    Brand Equity 243 Building Strong Brands 244 ~

    Marketing at Work 7.2: Thrifty Times Are Good Times for Store Brands. But What's National Brandto Do? 247

    Managing Brands 251

    REST STOP: REVIEWING THE CONCEPTS 252

    CHAPTER REVIEW AND KEY TERMS Objectives Review 252 Key Terms 253 DISCUSSIONAND CRITICAL THINKING Discussion Questions 253 Critical ThinkingExercises 253 MINICASES AND APPLICATIONS Marketing Technology 254 MarketingEthics 254 Marketing by the Numbers 254 Video Case 255 Company Cases 255

    M Developing New Products and Managingthe Product Life Cycle 256

    CHAPTER ROAD MAP 256

    Objective Outline 256 Previewing the Concepts 256 First Stop: Google 257

    New-Product Development Strategy 258

    The New-Product Development Process 259Idea Generation 259 Idea Screening 262 Concept Development and Testing 262 MarketingStrategy Development 263 Business Analysis 264 Product Development 264 TestMarketing 265 Commercialization 266

    Managing New-Product Development 266

    Customer-Centered New-Product Development 266 Team-Based New-ProductDevelopment 267 Systematic New-Product Development 267

    Marketing at Work 8.1: LEGO Group: Building Customer Relationships, Brick by Brick 268

    New-Product Development in Turbulent Times 269

    Product Life-Cycle Strategies 270

    Introduction Stage 272 Growth Stage 272 Maturity Stage 273

    Marketing at Work 8.2: Swatch: New Times for Swiss Watchmaking 274

    Decline Stage 275

    Additional Product and Service Considerations 276

    Product Decisions and Social Responsibility 276 International Product and Services Marketing 277

    REST STOP: REVIEWING THE CONCEPTS 278

    CHAPTER REVIEW AND KEY TERMS Objectives Review 278 Key Terms 279 DISCUSSIONAND CRITICAL THINKING Discussion Questions 280 Critical ThinkingExercises 280 MINICASES AND APPLICATIONS Marketing Technology 280 MarketingEthics 280 Marketing by the Numbers 281 Video Case 281 Company Cases 281

    Pricing: Understanding and Capturing Customer Value 282

    CHAPTER ROAD MAP 282

    Objective Outline 282 Previewing the Concepts 282 First Stop: STC vs. Mobily vs. Zain 283

  • 16 Contents

    What Is a Price? 285

    Major Pricing Strategies 285

    Customer Value-Based Pricing 286 Cost-Based Pricing 288

    Marketing at Work 9.1: Panera Bread Company: It's Not about LoW'Prices 289

    Competition-Based Pricing 291 ~* X

    Other Internal and External Considerations Affecting Price Decisions 292 V

    Overall Marketing Strategy, Objectives, and Mix 292 Organizational Considerations 293 The Marketand Demand 294 The Economy 295 Other External Factors 296

    Marketing at Work 9.2: Whole Foods Market: Price and Value in a Tighter Economy 297

    New-Product Pricing Strategies 298

    Market-Skimming Pricing 298 Market-Penetration Pricing 299

    Product Mix Pricing Strategies 299

    Product Line Pricing 300 Optional Product Pricing 300 Captive Product Pricing 301 By-ProductPricing 301 Product Bundle Pricing 302

    Price Adjustment Strategies 302

    Discount and Allowance Pricing 302 Segmented Pricing 303 Psychological Pricing 303 PromotionalPricing 304 Geographical Pricing 305 Dynamic Pricing 306 International Pricing 307

    Price Changes 308

    Initiating Price Changes 308 Responding to Price Changes 309

    Public Policy and Pricing 311

    Pricing within Channel Levels 312 Pricing across Channel Levels 312

    REST STOP: REVIEWING THE CONCEPTS 313

    v CHAPTER REVIEW AND KEY TERMS Objectives Review 313 Key Terms 315 DISCUSSIONAND CRITICAL THINKING Discussion Questions 315 Critical ThinkingExercises 315 MINICASES AND APPLICATIONS Marketing Technology 316 MarketingEthics 316 Marketing by the Numbers 316 Video Case 317 Company Cases 317

    Marketing Channels: Delivering Customer Value 318

    CHAPTER ROAD MAP 318

    Objective Outline 318 Previewing the Concepts 318 First Stop: Enterprise 319

    Supply Chains and the Value Delivery Network 320

    The Nature and Importance of Marketing Channels 321 How Channel Members Add Value 322 Number of Channel Levels 323

    Channel Behavior and Organization 324

    Channel Behavior 324 Vertical Marketing Systems 325 Horizontal MarketingSystems 327 Multichannel Distribution Systems 328 Changing Channel Organization 329

    Marketing at Work 10.1: Netflix: Disintermediate or Be Disintermediated 330

    Channel Design Decisions 331

    Analyzing Consumer Needs 332 Setting Channel Objectives 332 Identifying MajorAlternatives 333 Evaluating the Major Alternatives 334 Designing International DistributionChannels 334

    Channel Management Decisions 335

    Selecting Channel Members 335 Managing and Motivating Channel Members 336 EvaluatingChannel Members 337

  • Contents 17

    Public Policy and Distribution Decisions 337

    Marketing Logistics and Supply Chain Management 338

    Nature and Importance of Marketing Logistics 338 Goals of the Logistics System 339 MajorLogistics Functions 339 Integrated Logistics Management 342

    Marketing at Work 10.2: UPS: "We Love Logistics"Put UPS to Work for You and You'll LoveLogistics Too 344 \

    REST STOP: REVIEWING THE CONCEPTS 346

    CHAPTER REVIEW AND KEY TERMS Objectives Review 346 Key Terms 347 DISCUSSIONAND CRITICAL THINKING Discussion Questions 347 Critical ThinkingExercises 348 MINICASES AND APPLICATIONS Marketing Technology 348 MarketingEthics 348 Marketing by the Numbers 348 Video Case 349 Company Cases 349

    Retailing and Wholesaling 350

    CHAPTER ROAD MAP 350

    Objective Outline 350 Previewing the Concepts 350 First Stop: Ramez Super Discount Store 351

    Retailing 352

    Types of Retailers 353

    Marketing at Work 11.1: Grocery Price Wars: Malaysian Style 357

    Retailer Marketing Decisions 361

    Marketing at Work 11.2: Trader Joe's Unique Positioning Twist: Cheap Gourmet 363

    Retailing Trends and Developments 367

    Wholesaling 372

    Types of Wholesalers ,373 Wholesaler Marketing Decisions 375 Segmentation, Targetin...

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