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 Offerings—Products, 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 Austerity—The Thrifty Route in Fashion 53
The Digital Age 54 • The Growth of Not-for-Profit Marketing 55 • RapidGlobalization 56 • Sustainable Marketing—The 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, Targeting,Differentiation, and Positioning Decisions 375 • Trends in Wholesaling 377
REST STOP: REVIEWING THE CONCEPTS 378
CHAPTER REVIEW AND KEY TERMS • Objectives Review 378 • Key Terms 379 • DISCUSSIONAND CRITICAL THINKING • Discussion Questions 379 • Critical ThinkingExercises 380 • MINICASES AND APPLICATIONS • Marketing Technology 380 • MarketingEthics 380 • Marketing by the Numbers 381 • Video Case 381 • Company Cases 381
Communicating Customer Value: Advertising and PublicRelations 382
CHAPTER ROAD MAP 382
Objective Outline 382 • Previewing the Concepts 382 • First Stop: Microsoft vs. Apple 383
The Promotion Mix 385
Integrated Marketing Communications 385
The New Marketing Communications Model 385 • The Need for Integrated Marketing Communications 387
Marketing at Work 12.1: The Edinburgh Inspiring Capital Brand 388
Shaping the Overall Promotion Mix 390
The Nature of Each Promotion Tool 390 • Promotion Mix Strategies 392
Advertising 393
Setting Advertising Objectives 394 • Setting the Advertising Budget 395 • DevelopingAdvertising Strategy 397
18 Contents
Marketing at Work 12.2: Consumer-Generated Advertising: When Done Well, It Can BeReally Good 402
Evaluating Advertising Effectiveness and the Return on Advertising Investment 407 • OtherAdvertising Considerations 408
Public Relations 410 *
The Role and Impact of PR 411 • Major Public Relations Tools 412 \
REST STOP: REVIEWING THE CONCEPTS 413Vv
CHAPTER REVIEW AND KEY TERMS • Objectives Review 413 • Key Terms 414 • DISCUSSIONAND CRITICAL THINKING • Discussion Questions 415 • Critical ThinkingExercises 415 • MINICASES AND APPLICATIONS • Marketing Technology 415 • MarketingEthics 416 • Marketing by the Numbers 416 • Video Case 416 • Company Cases 417
^J Personal Selling and Sales Promotion 418
CHAPTER ROAD MAP 418
Objective Outline 418 • Previewing the Concepts 418 • First Stop: Nokia 419
Personal Selling 420
The Nature of Personal Selling 421 • The Role of the Sales Force 421
Managing the Sales Force 423
Designing the Sales Force Strategy and Structure 423 • Recruiting and SelectingSalespeople 426 • Training Salespeople 427 • Compensating Salespeople 428 • Supervising and
Motivating Salespeople 428
Marketing at Work 13.1: B-to-B Salespeople: Who Needs Them Anymore? 430
^ Evaluating Salespeople and Sales Force Performance 433
The Personal Selling Process 433
Steps in the Selling Process 433 • Personal Selling and Managing Customer Relationships 436
Sales Promotion 437
The Rapid Growth of Sales Promotion 437 • Sales Promotion Objectives 438 • Major Sales PromotionTools 439
Marketing at Work 13.2: Mobile Coupons: Reaching Customers Where They Are—Now 440
Developing the Sales Promotion Program 443
REST STOP: REVIEWING THE CONCEPTS 444
CHAPTER REVIEW AND KEY TERMS • Objectives Review 444 • Key Terms 445 • DISCUSSIONAND CRITICAL THINKING • Discussion Questions 445 • Critical ThinkingExercises 445 • MINICASES AND APPLICATIONS • Marketing Technology 446 • MarketingEthics 446 • Marketing by the Numbers 446 • Video Case 447 • Company Cases 447
A Direct and Online Marketing: Building DirectCustomer Relationships 448
CHAPTER ROAD MAP 448
Objective Outline 448 • Previewing the Concepts 448 • First Stop: Facebook 449
The New Direct Marketing Model 451
Contents 19
Growth and Benefits of Direct Marketing 451
Benefits to Buyers 451
Marketing at Work 14.1: Amazon.com: The Model for Direct Marketing in the Digital Age 452
Benefits to Sellers 453
Customer Databases and Direct Marketing 454* ^
Forms of Direct Marketing 455 vDirect-Mail Marketing 456 • Catalog Marketing 457 • Telemarketing 458 • Direct-ResponseTelevision Marketing 458 • Kiosk Marketing 460 '*
Online Marketing 460
Marketing and the Internet 461 • Online Marketing Domains 461 • Setting Up an Online MarketingPresence 464
Marketing at Work 14.2: Mobile Marketing: Customers Come Calling 470
Public Policy Issues in Direct Marketing 471
Irritation, Unfairness, Deception, and Fraud 472 • Consumer Privacy 472 • A Need forAction 473
REST STOP: REVIEWING THE CONCEPTS 474
CHAPTER REVIEW AND KEY TERMS • Objectives Review 474 • Key Terms 475 • DISCUSSIONAND CRITICAL THINKING • Discussion Questions 476 • Critical ThinkingExercises 476 • MINICASES AND APPLICATIONS • Marketing Technology 476 • MarketingEthics 477 • Marketing by the Numbers 477 • Video Case 477 • Company Cases 477
EXTENDING MARKETING 478
The Global Marketplace 478
CHAPTER ROAD MAP 478
Objective Outline 478 • Previewing the Concepts 478 • First Stop: Google in China 479
Global Marketing Today 480
Looking at the Global Marketing Environment 482The International Trade System 482 • Economic Environment 484 • Political-LegalEnvironment 485 • Cultural Environment 486
Deciding Whether to Go Global 489
Deciding Which Markets to Enter 489
Marketing at Work 15.1: Coca-Cola in Africa: "Everything Is Right There to Have It Happen" 490
Deciding How to Enter the Market 491
Exporting 492 • Joint Venturing 493 • Direct Investment 494
Deciding on the Global Marketing Program 495
Product 496 • Promotion 497
Marketing at Work 15.2: Global Marketing: Watch Your Language! 498
Price 499 • Distribution Channels 499
Deciding on the Global Marketing Organization 500
20 Contents
REST STOP: REVIEWING THE CONCEPTS 502
CHAPTER REVIEW AND KEY TERMS 502 • Objectives Review 502 • Key Terms 503 • DISCUSSIONAND CRITICAL THINKING • Discussion Questions 503 • Critical ThinkingExercises 503 • MINICASES AND APPLICATIONS • Marketing Technology 503 • MarketingEthics 504 • Marketing by the Numbers 50,4 • Video Case 504 • Company Cases 505
(n) Sustainable Marketing: Social Responsibility and Ethics 506
CHAPTER ROAD MAP 506
Objective Outline 506 • Previewing the Concepts 506 • First Stop: Siemens in the Middle East 507
Sustainable Marketing 508
Social Criticisms of Marketing 510
Marketing's Impact on Individual Consumers 510 • Marketing's Impact on Society as aWhole 514 • Marketing's Impact on Other Businesses 516
Consumer Actions to Promote Sustainable Marketing 517
Consumerism 517 • Environmentalism 518
Marketing at Work 16.1: Walmart: The World's Super Eco-Nanny 522
Public Actions to Regulate Marketing 523
Business Actions toward Sustainable Marketing 523
Sustainable Marketing Principles 523
Marketing at Work 16.2: Socially Responsible Marketing: Making the World a Better Place 526
Marketing Ethics 528 • The Sustainable Company 531
REST STOP: REVIEWING THE CONCEPTS 531
* CHAPTER REVIEW AND KEY TERMS • Objectives Review 531 • Key Terms 532 • DISCUSSIONAND CRITICAL THINKING • Discussion Questions 532 • Critical ThinkingExercises 533 • MINICASES AND APPLICATIONS • Marketing Technology 533 • MarketingEthics 533 • Marketing by the Numbers 534 • Video Case 534 • Company Cases 534
APPENDIX 1 Company Cases A1
APPENDIX 2 Marketing Plan A33
APPENDIX 3 Marketing by the Numbers A45
Glossary G1
References R1
Index 11