MARKETING

Thirteenth Edition

Roger A. Kerin Southern Methodist University

Steven W Hartley University of Denver

Mc Graw Hill Education DETAILED CONTENTS

Initiating the Marketing Process 1 CREATING CUSTOMER RELATIONSHIPS AND VALUE THROUGH MARKETING 2 At Chobani, Marketing Is "Nothing But Good"! 2 Understanding Consumers' Food Values 2 Reaching Customers 2 Chobani Today 3 Chobani, Marketing, and You 3 What Is Marketing? 4 Marketing and Your Career 4 Marketing: Delivering Value to Customers 5 The Diverse Elements Influencing Marketing Actions 5 What Is Needed for Marketing to Occur 6 How Marketing Discovers and Satisfies Consumer Needs 7 Discovering Consumer Needs 7 The Challenge: Meeting Consumer Needs with New Products 7 Satisfying Consumer Needs 9 The Marketing Program: How Customer Relationships Are Built 10 Relationship Marketing: Easy to Understand, Hard to Do 10 The Marketing Program and Market Segments 12 3M's Strategy and Marketing Program to Help Students Study 12 How Marketing Became So Important 14 Evolution of the Market Orientation 14 Focusing on Customer Relationship Management 15 Ethics and Social Responsibility in Marketing: Balancing the Interests of Different Groups 16 The Breadth and Depth of Marketing 17 Learning Objeetives Review 19 Learning Review Answers 19 Focusing on Key Terms 20 Applying Marketing Knowledge 20 Building Your Marketing Plan 20 Video Case 1: Chobani1'1: Making Greek Yogurt a Household Name 21 Chapter Notes 24

2 DEVELOPING SUCCESSFUL ORGANIZATIONAL AND MARKETING STRATEGIES 26 Making the World a Better Place, One Scoop at a Time! 26

xxiv Today's Organizations 28 Kinds of Organizations 28 What Is Strategy? 28 The Structure of Today's Organizations 28 Making Responsible Decisions: Social Entrepreneurs Are Creating New Types of Organizations to Pursue Social Goals 29 Strategy in Visionary Organizations 30 Organizational Foundation: Why Does It Exist? 30 Organizational Direction: What Will It Do? 32 Organizational Strategies: How Will It Do It? 33 Tracking Strategie Performance with Marketing Analytics 33 Applying Marketing Metrics: How Well Is Ben & Jerry's Döing? 35 Setting Strategie Directions 35 A Look Around: Where Are We Now? 35 Growth Strategies: Where Do We Want to Go? 36 Marketing Matters: Filling the Shoes of Apple CEO Tim Cook: Where Will Apple's Projected Future Growth for Its Major SBUs Come From? 37 The Strategie Marketing Process 40 The Flanning Phase of the Strategie Marketing Process 40 The Implementation Phase of the Strategie Marketing Process 43 The Evaluation Phase of the Strategie Marketing Process 45 Learning Objectives Review 47 Learning Review Answers 48 Focusing on Key Terms 49 Applying Marketing Knowledge 49 Building Your Marketing Plan 49 Video Case 2: IBM: Using Strategy to Build a "Smarter Planet" 49 Chapter Notes 57 Appendix A Building an Effective Marketing Plan 54

3 SCANNING THE MARKETING ENVIRONMENT 70 Is "Connecting the World" an Ambitious Vision? Not If You Are Facebook! 70 Facebook in the Future 70 Environmental Scanning 72 Tracking Environmental Trends 72 An Environmental Scan of Today's Marketplace 73 Social Forces 74 Demographics 74

XXV Making Responsible Decisions: Millennials Are a Force for Good 77 Culture 80 Economic Forces 82 Macroeconomic Conditions 82 Consumer Income 83 Marketing Insights About Me: American FactFinder: Your Source for Economic Information 83 Technological Forces 84 Technology of Tomorrow 84 Technology's Impact on Customer Value 85 Technology Enables Data Analytics 86 Competitive Forces 86 Alternative Forms of Competition 87 Components of Competition 87 Small Businesses as Competitors 88 Regulatory Forces 88 Protecting Competition 88 Product-Related Legislation 89 Pricing-Related Legislation 90 Distribution-Related Legislation 91 Advertising- and Promotion-Related Legislation 91 Marketing Matters: Online Tracking: Is Big Brother Watching? 92 Control through Self-Regulation 92 Learning Objectives Review 93 Learning Review Answers 93 Focusing on Key Terms 94 Applying Marketing Knowledge 94 Building Your Marketing Plan 94 Video Case 3: Geek Squad: A New Business for a New Environment 95 Chapter Notes 97

ETHICAL AND SOCIAL RESPONSIB1LITY FOR SUSTAINABLE MARKETING 100 Anheuser-Busch: Becoming the Best Beer Company in a Better World 100 Alcohol Responsibility 100 Environmental Preservation 101 Nature and Significance of Marketing Ethics 102 An Ethical/Legal Framework for Marketing 102 Critical Perceptions of Ethical Behavior 103 Four Factors Affect Ethical Marketing Behavior 103 Societal Culture and Norms 103 Business Culture and Industry Practices 104 Making Responsable Decisions: Corporate Conscience in the Cola War 106 Corporate Culture and Expectations 106 Marketing Insights About Me: Is Commercial Bribery More or Less Common in My Country ? 107 Your Personal Moral Philosophy and Ethical Behavior 107 Understanding Social Responsibility for Sustainable Marketing 110 Three Concepts of Social Responsibility 110 Marketing Matters: Will Consumers Switch Brands for a Cause? Yes, If... 112 The Social Audit and Sustainable Development: Döing Well by Döing Good 113 Turning the Table: Consumer Ethics and Social Responsibility 114 Learning Objeetives Review 115 Learning Review Answers 116 Focusing on Key Terms 116 Applying Marketing Knowledge 116 Building Your Marketing Plan 117 Video Case 4: Toyota. Building Cleaner, Greener Cars 117 Chapter Notes 120

5 UMXRSTAMXNG CONSUMER BEHAVIOR 122 Enlightened Carmakers Know What Custom(h)ers and Influenc(h)ers Value 122 Consumer Purchase Decision Process and Experience 124 Problem Recognition: Perceiving a Need 124 Information Search: Seeking Value 124 Alternative Evaluation: Assessing Value 124 Purchase Decision: Buying Value 125 Postpurchase Behavior: Realizing Value 126 Marketing Matters: How Much Is a Satisfied Customer Worth? 127 Consumer Involvement Affects Problem Solving 129 Situational Influences That Affect Purchase Decisions 129 Psychological Influences on Consumer Behavior 130 Consumer Motivation and Personality 130 Consumer Perception 131 Making Responsable Decisions: The Ethics of Subliminal Messages 132 Consumer Learning 133 Consumer Values, Beliefs, and Attitudes 134 Consumer Lifestyle 135 Marketikglnsights About Me: What Motivates You? Identifying Your VALS Profile 136 Sociocultural Influences on Consumer Behavior 137 Personal Influenae 137 Reference Group Influenae 138 Marketing Matters: BzzAgent—The Buzz Experience 139 Family Influenae 140 Social Class Influenae 142 Culture and Subculture Influences 142 Learning Objectives Review 144 Learning Review Answers 145 Focusing on Key Terms 146 Applying Marketing Knowledge 146 Building Your Marketing Plan 146 Video Case 5: Groupon: Helping Consumers with Purchase Decisions 146 Chapter Notes 149

6 UNDERSTANDING ORGANIZATIONS AS CUSTOMERS 152 Buying Is Marketing Tool Purchasing Publication Paper for JCPenney 152 Business-to-Business Marketing and Organizational Buyers 154 Organizational Buyers 154 Organizational Markets 154 Measuring Organizational Markets 155 Characteristics of Organizational Buying 156 Demand Characteristics 156 Size of the Order or Purchase 157 Number of Potential Buyers 157 Organizational Buying Objectives 157 Organizational Buying Criteria 158 Marketing Insights About Me: Do I Buy frorn Organizations That Promote Diversity among Their Suppliers and in Their Workplaces? 158 Buyer-Seller Relationships and Supply Partnerships 159 Marketing Matters: At Milsco Manufacturing, "Our Marketing , Philosophy Is Designed to Develop Partnerships" and Deliver a Great Ride for Customers' Seats 160 Making Responsible Decisions: Sustainable Procurement for Sustainable Growth at Starbucks 161 The Organizational Buying Function and Process and the Buying Center 161 The Buying Function in Organization« 161 Stages in the Organizational Buying Process 161 The Buying Center: A Cross-Functional Group 162 Online Buying in Business-to-Business Marketing 164 Prominence of Online Buying in Organizational Markets 164 E-Marketplaces: Virtual Organizational Markets 165 Marketing Matters: eBay Means Business for Entrepreneurs 165 Online Auctions in Organizational Markets 166 Learning Objeetives Review 167 Learning Review Answers 168 Focusing on Key Terms 168 Applying Marketing Knowledge 168 Building Your Marketing Plan 169 Video Case 6: Trek: Building Better Bikes through Organizational Buying 169 Chapter Notes 172

7 UNDERSTANDING AND REACHING GLOBAL CONSUMERS AND MARKETS 174 Building a Two Billion Dollar Business in India the Dell Inc. Way 174 Dynamics of World Trade 176 Global Perspective on World Trade 176 U.S. Perspective on World Trade 177 Marketing in a Borderless Economic World 177 Decline of Economic Protectionism 178 Making Responsible Decisions: Global Ethics and Global Economics—The Case of Protectionism 178 Rise of Economic Integration 179 A New Reality: Global Competition among Global Companies for Global Consumers 181 Marketing Matters: The Global Teenager—Ä Market öf 2 Billion Voracious Consumers 183 Emergence of a Networked Global Marketspace 184 Growing Prevalence of Economic Espionage 185 A Global Environmental Scan 185 Cultural Diversity 185 Economic Considerations 188

xxix Marketing Insights About Me: Checking My Country's Political Risk Rating—Are You Surprised? 191 Political-Regulatory Climate 191 Comparing Global Market-Entry Strategies 192 Exporting 192 Marketing Matters: Creative Cosmetics and Creative Export Marketing in Japan 193 Licensing 193 Joint Venture 194 Direct Investment 194 Crafting a Worldwide Marketing Program 195 Product and Promotion Strategies 195 Distribution Strategy 196 Pricing Strategy 197 Learning Objeetives Review 198 Learning Review Answers 198 Focusing on Key Terms 199 Applying Marketing Knowledge 199 Building Your Marketing Plan 199 Video Case 7: Mary Kay, Inc.: Building a Brand in India Chapter Notes 202

Targeting Marketing Opportunities

8 MARKETING RESEARCH: FROM CUSTOMER INSIGHTS TO ACTIONS 204 Marketing Research Goes to the Movies 204 A Film Industry Secret 204 The Role of Marketing Research 206 What Is Marketing Research? 206 The Challenges in Döing Good Marketing Research 206 Five-Step Marketing Research Approach 207 Step 1: Define the Problem 207 Set the Research Objeetives 207 Identify Possible Marketing Actions 208 Step 2: Develop the Research Plan 208 Specify Constraints 208 Identify Data Needed for Marketing Actions 209 Determine How to Collect Data 209 Step 3: Collect Relevant Information 210 Secondary Data: Internal 210 Secondary Data: Externa! 211 Advantages and Disadvantages of Secondary Data 211 Marketing Matters: Online Databases and Internet Resources Useful to Marketers 212

xxx Primary Data: Watching People 212 Primary Data: Asking People 214 Primary Data: Other Sources 218 Applying Marketing Metrics: Are the Carmex Social Media Programs Working Well? 220 Advantages and Disadvantages of Primary Data 222 Analyzing Primary Data Using Gross Tabulations 222 Making Responsible Decisions: No More Personal Secrets: The Downside of Data Mining 223 Step 4: Develop Findings 224 Analyze the Data 225 Present the Findings 225 Step 5: Take Marketing Actions 226 Make Action Recommendations 226 Implement the Action Recommendations 227 Evaluate the Results 227 Sales Forecasting Techniques 227 Judgments of the Decision Maker 228 Surveys of Knowledgeable Croups 228 Statistical Methods 228 Learning Objectives Review 229 Learning Review Answers 230 Focusing on Key Terms 231 Applying Marketing Knowledge 231 Building Your Marketing Plan 232 Video Case 8: Carmex® (A): Leveraging Facebook for Marketing Research 232 Chapter Notes 235

9 MARKET SEGMENTATION, TARGETING, AND POSITIONING 236 Zappos.com Is Powered by Service—and Segmentation! 236 Segmentation Is a Key to Success 236 Delivering WOW Customer Service 236 Why Segment Markets? 238 What Market Segmentation Means 238 When and How to Segment Markets 239 Steps in Segmenting and Targeting Markets 242 Step 1: Group Potential Buyers into Segments 242 Marketing Insights About Me: To Which "Flock" Do You Belong? 245 Step 2: Group Products to Be Sold into Categories 248 Step 3: Develop a Market-Product Grid and Estimate the Size of Markets 250

xxxi Step 4: Select Target Markets 251 Step 5: Take Marketing Actions to Reach Target Markets 252 Market-Product Synergies: A Balancing Act 254 Marketing Matters: Apple's Segmentation Strategy—Camp Runamok No Longer 255 Positioning the Product 256 Two Approaches to Product Positioning 256 Writing a Positioning Statement 256 Product Positioning Using Perceptual Maps 256 A Perceptual Map to Reposition Chocolate Milk for Adults 257 Learning Objeetives Review 258 Learning Review Answers 258 Focusing on Key Terms 259 Applying Marketing Knowledge 259 Building Your Marketing Plan 259 Video Case 9: Prince Sports, Inc.: Tennis Racquets for Every Segment 260 Chapter Notes 262

Satisfying Marketing Opportunities 10 DEVELOPING NEW PRODUCTS AND SERVICES 264 Apple: The World-Class New-Product Machine 264 Apple's New-Product Development Successes... 264 ... And New-Product Development Stumbles 264 The Next Chapter in Apple's Story: Apple Watch 265 What Are Products and Services? 266 A Look at Goods, Services, and Ideas 266 Classifying Products 266 Classifying Services 267 Product Classes, Forms, Items, Lines, and Mixes 268 New Products and Why They Succeed or Fail 268 What Is a New Product? 268 Marketing Matters: Feature Bloat: Geek Squad to the Rescue! 269 Why Products and Services Succeed or Fail 271 How Applying Marketing Metrics Can Improve New-Product Performance 273 Applying Marketing Metrics: Whieh States Are Underperforming? 273 The New-Product Development Process 274 Stage 1: New-Product Strategy Development 274 Stage 2: Idea Generation 275

xxxii Stage 3: Screening and Evaluation 277 Marketing Matters: Was the Google Glass Half Füll or Half Empty? 278 Stage 4: Business Analysis 279 Stage 5: Development 279 Stage 6: Market Testing 280 Stage 7: Commercialization 281 Learning Objectives Review 282 Learning Review Answers 283 Focusing on Key Terms 284 Applying Marketing Knowledge 284 Building Your Marketing Plan 285 Video Case 10: X-1: Breaking the Barriers of Sound with New-Product Development 285 Chapter Notes 288

11 MANAGING SUCCESSFUL PRODUCTS, SERVICES, AND BRANDS 290 & Gatorade: Bringing Science to Sweat for 50 Years 290 Creating the Gatorade Brand 290 4' * Building the Gatorade Brand 290 f' Charting the Product Life Cycle 292 Introduction Stage 292 Growth Stage 294 Maturity Stage 295 Decline Stage 295

Three Aspects of the Product Life Cycle 296 Managing the Product Life Cycle 300 Role of a Product Manager 300 Modifying the Product 300 Modifying the Market 300 Applying Marketing Metries: Knowing Your CDI and BDI 301 Repositioning the Product 303 Making Responsible Decisions: Consumer Economic« of Downsizing—Get Less, Pay More 303 Branding and Brand Management 303 Marketing Insights About Me: Do You Want to Start a Business Using Your Own Name-? Better Check First! 304 Brand Personality and Brand Equity 305 Picking a Good Brand Name 306 Branding Strategies 307

xxxiii Packaging and Labeling Products 310 Creating Customer Value and Competitive Advantage through Packaging and Labeling 311 Marketing Matters: Creating Customer Value through Packaging—Pez Heads Dispense More Than Candy 311 Packaging and Labeling Challenges and Responses 312 Product Warranty 312 Learning Objeetives Review 313 Learning Review Answers 314 Focusing on Key Terms 314 Applying Marketing Knowledge 314 Building Your Marketing Plan 315 Video Case 11: P&G's Secret Deodorant: Finding Inspiration in Perspiration 315 Chapter Notes 318

12 SERVICES MARKETING 320 Airbnb Redefines Services—and the Economy! 320 The Uniqueness of Services 322 The Four I's of Services 323 The Service Continuum 325 Classifying Services 326 Marketing Matters: Social Mariceting Is a Must for Nönprofits 328 How Consumers Purchase Services 329 The Purchase Process 329 Assessing Service Quality 329 Customer Contact and Relationship Marketing 330 Marketing Matters: Managing Service Failures: The Importance of Monitoring and Guarantees 331 Managing the Marketing of Services 333 Product (Service) 333 Price 333 Place (Distribution) 334 Promotion 335 People 335 Physical Environment 336 Process 336 Applying Marketing Metrics: Are JetBlue's Flights Profitably Loaded? 337 Services in the Future 338 Learning Objeetives Review 339 Learning Review Answers 339 Focusing on Key Terms 340 Applying Marketing Knowledge 340 Building Your Marketing Plan 340 Video Case 12: LA Galaxy: Where Sports Marketing Is a Kick! 341 Chapter Notes 344 13 BUILDING THE PRICE FOUNDATION 348 VIZIO, Inc.—Delivering Beautifully Simple Products at a Great Value 348 Nature and Importance of Price 350 What Is a Price? 350 Price as an Indicator of Value 351 Marketing Matters: Does Spirit Airlines Engage in Value Pricing? For Some Yes, for Others No 352 Price in the Marketing Mix 352 Step 1: Identify Pricing Objectives and Constraints 353 Identifying Pricing Objectives 353 Identifying Pricing Constraints 355 Step 2: Estimate Demand and Revenue 358 Estimating Demand 358 Price Elasticity of Demand 360 Marketing Matters: Using Big Data to Curb Smoking Uncovering the Price Elasticity of Demand foi Cigarettes 361 Fundamentals of Estimating Revenue 361 Step 3: Determine Cost, Volume, and Profit Relationships 362 The Importance of Controlling Costs 362 Break-Even Analyst s 362 Learning Objectives Review 364 Learning Review Answers 365 Focusing on Key Terms 365 Applying Marketing Knowledge 366 Building Your Marketing Plan 366 Video Case 13: Washburn Guitars: Using Break-Even Points to Make Pricing Decisions 367 Chapter Notes 368

14 ARRIVING AT THE FINAL PRICE 370 E-books and E-conomics: A Twisted Tale of Pricing for Profit 370 Setting the Stage with E-readers: Amazon's Kindle 370 Printed Book Pricing Practices 370 Enter E-books 370 Pricing E-books . .. Profitably 371

XXXV Step 4: Select an Approximate Price Level 372 Demand-Oriented Pricing Approaches 372 Marketing Matters: Energizer's Lesson in Price Perception— Value Lies in the Eye of the Beholder 374 Cost-Oriented Pricing Approaches 375 Profit-Oriented Pricing Approaches 377 Competition-Oriented Pricing Approaches 379 Applying Marketing Metrics: Are Red Bull Prices Above, At, or Below the Market? 380 Step 5: Set the List or Quoted Price 381 Choose a Price Policy 381 Consider Company, Customer, and Competitive Effects on Pricing 382 Making Responsible Decisions: The Ethics and Economics of Surge Pricing 383 Balance Incremental Costs and Revenues 384 Step 6: Make Special Adjustments to the List or Quoted Price 385 Discounts 385 Allowances 387 Geographica! Adjustments 388 Marketing Matters: Everyday Low Prices at the Supermarket = Everyday Low Profits—Creating Customer Value at a Cost 388 Legal and Regulatory Aspects of Pricing 389 Learning Objeetives Review 391 Learning Review Answers 392 Focusing on Key Terms 393 Applying Marketing Knowledge 393 Building Your Marketing Plan 393 Video Case 14: Carmex (B): Setting the Price of the Number One Lip Balm 394 Chapter Notes 396 Appendix B Financial Aspects of Marketing 397

15 MANAGING MARKETING CHANNELS AND SUPPLY CHAINS 406 Callaway Golf: Designing and Delivering the Goods for Great Golf 406 Nature and Importance of Marketing Channels 408 What Is a Marketing Channel of Distribution? 408 How Customer Value Is Created by Intermediaries 408 Marketing Channel Structure and Organization 410 Marketing Channels for Consumer Products and Services 410

xxxvi Marketing Channels for Business Products and Services 411 Internet Marketing Channels 412 Direct and Multichannel Marketing 413 Dual Distribution and Strategie Channel Alliances 413 Marketing Matters: Nestle and General Mills—Cereal Partners Worldwide 414 Vertical Marketing Systems 414 Marketing Channel Choice and Management 416 Factors Affecting Channel Choice and Management 416 Applying Marketing Metrics: Channel Sales and Profit at Charlesburg Furniture 418 Managing Channel Relationships: Conflict and Cooperation 418 Logistics and Supply Chain Management 421 Supply Chains versus Marketing Channels 421 Sourcing, Assembling, and Delivering a New Car: The Automotive Supply Chain 422 Supply Chain Management and Marketing Strategy 423 Marketing Mätters: IBM s Integrated Supply Chain— Delivering a Total Solution for Its Customers 424 Two Concepts of Logistics Management in a Supply Chain 425 Total Logistics Cost Concept 425 Customer Service Concept 425 Closing the Loop: Reverse Logistics 426 Making Responsible Decisions: Reverse Logistics and Green Marketing Go Together at Hewlett-Packard: Recycling e-Waste 427

Learning Objectives Review 428 Learning Review Answers 428 Focusing on Key Terms 429 Applying Marketing Knowledge 429 Building Your Marketing Plan 430 Video Case 15: Amazon: Delivering the Earth's Biggest Selection! 430 Chapter Notes 432

16 RETAILING AND WHOLESALING 434 Shoppers Are Wearing the Future of Retailing! 434 The Value of Retailing 436 Consumer Utilities Offered by Retailing 436 The Global Economic Impact of Retailing 437 Classifying Retail Outlets 438 Form of Ownership 438

xxxvii Making Responsible Decisions: How Green Is Your Retailer? The Rankings Are Out! 439 Level of Service 440 Type of Merchandise Line 441 Nonstore Retailing 443 Automatic Vending 443 Direct Mail and Catalogs 444 Television Home Shopping 445 Online Retailing 445 Telemarketing 446 Direct Selüng 447 Retailing Strategy 447 Positioning a Retail Store 447 Retailing Mix 449 Applying Marketing Metrics: Why Apple Stores May Be the Best in the United States! 452 The Changing Nature of Retailing 453 The Wheel of Retailing 453 The Retail Life Cycle 454 Future Changes in Retailing 455 Multichannel Retailing 455 Marketing Matters: The Multichannel Marketing Multiplier 456 Data Analytics 456 Wholesaling 457 Merchant Wholesalers 457 Agents and Brokers 458 Manufacturer's Branches and Offices 458 Learning Objeetives Review 459 Learning Review Answers 459 Focusing on Key Terms 460 Applying Marketing Knowledge 460 Building Your Marketing Plan 461 Video Case 16: Mall of America®: America's Biggest Mall Knows the Secret to Successful Retailing! 461 Chapter Notes 463

17 INTEGRATED MARKETING COMMUNICATIONS AND DIRECT MARKETING 468 Taco Bell Loves Twitter! 468 The Communication Process 470 Encoding and Decoding 471 Feedback 471 Noise 472

xxxviii The Promotional Elements 472 Advertising 472 Personal Selling 473 Public Relations 474 Sales Promotion 475 Direct Marketing 475 Integrated Marketing Communications—Developing the Promotional Mix 476 The Target Audience 476 Marketing Matters; Tips for Targeting College Students 477 The Product Life Cycle 477 Product Characteristics 478 Stages of the Buying Deelsion 479 Channel Strategies 480 Developing an Integrated Marketing Communications Program 482 Identifying the Target Audience 482 Specifying Promotion Objectives 482 Setting the Promotion Budget 483 Applying Marketing Metrics: How Much Should You Spend on IMC? 484 Selecting the Right Promotional Tools 485 Designing the Promotion 485 Scheduling the Promotion 485 Executing and Assessing the Promotion Program 486 Direct Marketing 487 The Growth of Direct Marketing 488 The Value of Direct Marketing 488 Technological, Global, and Ethical Issues in Direct Marketing 489 Making Responsable Decisions: What Is the Future of YourPrivacy? 490

Learning Objectives Review 491 Learning Review Answers 491 Focusing on Key Terms 492 Applying Marketing Knowledge 492 Building Your Marketing Plan 493 Video Case 17: Taco Bell: Using IMC to Help Customers Live Mäs! 493 Chapter Notes 495

18 ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS 498 Virtual Reality Is the New Reality for Advertising! 498 Types of Advertisements 500 Product Advertisements 500 Institutional Advertisements 501

xxxix Developing the Advertising Program 502 Identifying the Target Audience 502 Specifying Advertising Objeetives 502 Setting the Advertising Budget 503 Marketing lasights About Me: Are You an Expert at Picking the Best Super Bowl Ads? 504 Designing the Advertisement 504 Selecting the Right Media 507 Applying Marketing Metrics: What Is the Best Way to Reach l OOD CnÄkmcm) 5% Different Media Alternatives 509 Making Responsible Decisions: Who Is Responsible for Preventing Click Fraud? 514 Scheduling the Advertising 515 Executing the Advertising Program 516 Pretesting the Advertising 516 Carrying Out the Advertising Program 517 Assessing the Advertising Program 518 Posttesting the Advertising 518 Making Needed Changes 518 Sales Promotion 519 Consumer-Oriented Sales Promotions 519 Trade-Oriented Sales Promotions 524 Public Relations 526 Publicity Tools 526 Increasing the Value of Promotion 526 Building Long-Term Relationships 526 Self-Regulation 527 Learning Objeetives Review 528 Learning Review Answers 528 Focusing on Key Terms 529 Applying Marketing Knowledge 529 Building Your Marketing Plan 530 Video Case 18: Google, Inc.: The Right Ads at the Right Time 530 Chapter Notes 533

19 USING SOCIAL MEDIA AND MOBILE MARKETING TO CONNECT WITH CONSUMERS 538 The Ultimate Marketing Machine .. . Is in Your Pocket! 538 Understanding Social Media 540 What Are Social Media? 540 Comparing Social and Traditional Media 542 A Look at Four Important Social Media 543 Comparing Four Social Media 543 Facebook 543 Twitter 546 Linkedln 547 YouTube 548 Marketing Matters: Mobile Marketing Discovers Video Bloggers! 549 Integrating Social Media into Today's Marketing Strategies 550 Social Media and the Strategie Marketing Process 550 Selecting Social Media 551 How Social Media Produce Sales 551 Measuring the Results of Social Media Programs 552 Carmex Goes Viral with Luck and a LeBron James Bear Hug 554 The Future: Social Media 4- Smartphones + Exotic Apps 556 The Convergence of Real and Digital Worlds 556 Mobile Marketing: Tightening Links to Marketing Actions 557 Learning Objectives Review 559 Learning Review Answers 560 Focusing on Key Terms 561 Applying Marketing Knowledge 561 Building Your Marketing Plan 561 Video Case 19: StuffDOT™, Inc.: Rewarding Users for Actively Shopping and Sharing! 561 Chapter Notes 564

20 PERSONAL SELLING AND SALES MANAGEMENT 566 Meet Today's Sales Professional 566 Scope and Significance of Personal Selling and Sales Management 568 Nature of Personal Selling and Sales Management 568 Selling Happens Almost Everywhere 568 Personal Selling in Marketing and Entrepreneurship 569 Creating Customer Solutions and Value through Salespeople: Relationship and Partnership Selling 569 Marketing Matters: Science and Selling: Is Customer Value Creation in Your Genes? 571 The Many Forms of Personal Selling 571 Order-Taking Salespeople 571 Order-Getting Salespeople 572 Customer Sales Support Personnel 572 v Marketing Matters: Creating and Sustaining Customer Value through Cross-Functional Team Selling 574

xli The Personal Selling Process: Building Relationships 574 Prospecting: Identifying and Qualifying Prospective Customers 575 Preapproach: Preparing for the Sales Call 576 Approach: Making the First Impression 577 Presentation: Tailoring a Solution for a Customer's Needs 577 Marketing Matters: Imagine This ,.. Patting the Customer into Customer Solutions! 579 Close: Asking for the Customer's Order or Business 580 Follow-up: Solidifying the Relationship 580 The Sales Management Process 580 Making Responsible Decisions: The Ethics of Asking Customers about Competitors 581 Sales Plan Formulation: Setting Direction 581 Sales Plan Implementation: Putting the Plan into Action 585 Marketing Insights About Me: What Is Your Emotional Intelligence? You Might Be Surprised 586 Salesforce Evaluation: Measuring Results 587 Applying Marföting Metrics: liacklng Salesperson Performance at Moore Chemical& Sanitation Supply, Inc. 588 Salesforce Automation and Customer Relationship Management 589 Learning Objeetives Review 590 Learning Review Answers 591 Focusing on Key Terms 591 Applying Marketing Knowledge 592 Building Your Marketing Plan 592 Video Case 20: Xerox: Building Customer Relationships through Personal Selling 593 Chapter Notes 594

Managing the Marketing Process

nvr A\n \imnciiAWi:,. MARKLTIXi; Y.'f) Seven Cycles Delivers Just One Bike. Yours. 596 Creating Customer Value, Relationships, and Experiences in Marketspace 598 Marketing in Two Environments 598 Creating Customer Value in Marketspace 598 Interactivity, Individuality, and Customer Relationships in Marketspace 599 Creating an Online Customer Experience 601

xlii Applying Marketing Metrics: Sizing Up Site Stickiness at Sewell Automotive Companies 604 Online Consumer Behavior and Marketing Practice in Marketspace 604 Who Is the Online Consumer? 604 Marketing Insights About Me: Am I Addicted to the Internet? Answer 20 Questions to Find Out 605 What Online Consumers Buy 605 Why Consumers Shop and Buy Online 605 When and Where Online Consumers Shop and Buy 610 Making Responsible Decisions: Who Is Responsible for Internet Privacy and Security? 610 Cross-Channel Consumers and Multichannel Marketing 611 Who Is the Cross-Channel Consumer? 611 Implementing Multichannel Marketing 612 Learning Objectives Review 613 Learning Review Answers 614 Focusing on Key Terms 614 Applying Marketing Knowledge 615 Building Your Marketing Plan 615 Video Case 21: Pizza Hut and imc2: Becoming a Multichannel Marketer 615 Chapter Notes 619 22 PULLING IT ALL TOGLTHFk: THL STRATEGIC MARKETING PROCESS 6:0 Strategie Marketing Helps General Mills Adapt to New Tastes! 620 Flanning for Even More Change 620 Creative Initiatives at General Mills 621 Marketing Basics: Döing What Works and Allocating Resources 622 Rinding and Using What Really Works 622 Allocating Marketing Resources Using Sales Response Functions 623 The Flanning Phase of the Strategie Marketing Process 626 The Use of Marketing Metrics in Marketing Flanning 626 The Variety of Marketing Plans 627 Marketing Flanning Frameworks: The Search for Growth 627 Marketing Matters: A Test of Your Skills: Where Are the Synergies? 629 Some Marketing Flanning and Strategy Lessons 639 Marketing Matters: Ask Disruptive Questions to Achieve Disruptive Innovations 633

xliii The Implementation Phase of the Strategie Marketing Process 634 Is Flanning or Implementation the Problem? 634 Increasing Emphasis on Marketing Implementation 634 Improving Implementation of Marketing Programs 634 Marketing Matters: Learning from Mistakes and Avoiding Traps on the Way to Blue Oceans 636 Organizing for Marketing 638 The Evaluation Phase of the Strategie Marketing Process 640 The Marketing Evaluation Process 640 Marketing ROI, Metrics, and Dashboards 642 Evaluation Using Marketing Metrics and Marketing Dashboards at General Mills 642 Learning Objectives Review 644 Learning Review Answers 645 Focusing on Key Terms 646 Applying Marketing Knowledge 647 Building Your Marketing Plan 647 Video Case 22. General Mills Warm Delights: Indulgent, Delicious, and Gooey! 647 Chapter Notes 649 Appendix C Flanning a Career in Marketing 652

Appendix D Alternate Cases, available in SmartBook or Connect Instructor Resources Part 1 D-l 3M's Post-it Flag Highlighter: Extending the Concept! D-2 Daktronics, Inc.: Global Displays in 68 Billion Colors D-3 Jamba Juice: Scanning the Marketing Environment D-4 BP's Deepwater Horizon: Ethics and Environmental Effects Part 2 D-5 Decoding a Purchase Decision D-6 Motetronix Technology: Marketing Smart Dust D-7 Callaway Golf: The Global Challenge Part 3 D-8 HOM Furniture: Where Keen Observation Pays D-9 Lawn Mowers: Segmentation Challenges Part 4 D-10 Medtronic in China: Where "Simpler" Serves Patients Better D-II Pampered Pooches Travel in Style D-I2 Philadelphia Phillies, Inc.: Sports Marketing 101 D-13 Wellness Getaways, Inc.: The Challenge of Setting a Price D-14 Glitzz: Devising a Pricing Strategy D-15 Shiseido: Channeling Cosmetics in China D-16 Trader Joe's: Upscale Value D-17 Banyan Tree Holdings: Creating a Brand with 1MC D-18 Target Corporation: Award-Winning Advertising D I 9 A01 Marketing: Using Facebook to Laurich Bitter Girls D-20 Morgantown Furniture: Making Promotion Trade Offs Part 5 D-21 Crate and Barrel: Multichannel Marketing D-22 Nakecf Juice: Strategy for Growth

Glossary 673 Name Index 683 Company/Product Index 691 Subject Index 698

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