Introducing Marketing “This document is attributed to John Burnett” Chapter 1 OPEN ASSEMBLY EDITION OPEN ASSEMBLY editions of Open Textbooks have been disaggregated into chapters in order to facilitate their full and seamless integration with courseware. Experienced on the Open Assembly platform, this edition permits instructors and students to introduce supplemental materials of any media type directly at the chapter-level--in addition to the module and topic level. OPEN ASSEMBLY instructors and students are offered the opportunity to engage an immersive and unified user experience of courseware and content, within a single interface. www.openassembly.com This OPEN ASSEMBLY edition is adapted with no changes to the original content. Textbook Equity URL: http://www.texbookequity.org Introducing Marketing Introducing Marketing John Burnett Copyright © 2010 John Burnett Editor-In-Chief: John Burnett Associate Editor: Marisa Drexel Editorial assistants: Aashka Chaudhari, Rachel Pugliese, Jackie Sharman, LaKwanzaa Walton Proofreaders: Tessa Greenleaf, Desiree White Volunteers: Catherine Land, Bryan Wethington For any questions about this text, please email: [email protected] The Global Text Project is funded by the Jacobs Foundation, Zurich, Switzerland This book is licensed under a Creative Commons Attribution 3.0 License Table of Contents About the author............................................................................................................................................... 5 Preface............................................................................................................................................................... 6 1. Introducing marketing ............................................................................................................8 Elvis—alive and well ........................................................................................................................................ 8 Marketing: definition and justification .......................................................................................................... 11 Keys to marketing success ............................................................................................................................. 34 2. Understanding and approaching the market....................................................................... 42 Defining the market........................................................................................................................................ 44 Types of markets............................................................................................................................................. 46 Approaching the market................................................................................................................................. 47 3. Marketing research: an aid to decision making................................................................... 68 The nature and importance of marketing research....................................................................................... 69 What needs researching in marketing?.......................................................................................................... 70 Procedures and techniques in marketing research........................................................................................ 72 Conducting the research................................................................................................................................. 82 Processing the data......................................................................................................................................... 82 The value of marketing research.................................................................................................................... 82 4. Understanding buyer behavior............................................................................................. 89 Till death do us part........................................................................................................................................ 89 Buyer behavior and exchange........................................................................................................................ 90 Buyer behavior as problem solving ................................................................................................................ 91 Organizational buyer behavior .................................................................................................................... 107 5. External considerations in marketing .................................................................................117 External factors that affect planning ............................................................................................................ 119 6. Marketing in global markets................................................................................................143 Defining international marketing................................................................................................................. 144 Standardization and customization.............................................................................................................. 145 Reasons for entering international markets................................................................................................. 146 Reasons to avoid international markets....................................................................................................... 147 The stages of going international.................................................................................................................. 147 The international marketing plan................................................................................................................. 150 The international marketing environment................................................................................................... 155 7. Introducing and managing the product.............................................................................. 168 Defining the product..................................................................................................................................... 169 Classification of products.............................................................................................................................. 171 Product planning and strategy formulation ................................................................................................ 176 8. Communicating to mass markets....................................................................................... 204 The role of IMC............................................................................................................................................. 206 The objectives of marketing communication................................................................................................ 211 How we communicate................................................................................................................................... 212 Designing an IMC strategy............................................................................................................................ 215 Understanding advertising........................................................................................................................... 220 Sales promotion and public relations........................................................................................................... 225 9. Pricing the product...............................................................................................................251 Price defined: three different perspectives.................................................................................................. 253 Pricing objectives.......................................................................................................................................... 256 Developing a pricing strategy....................................................................................................................... 257 New product pricing..................................................................................................................................... 262 Price lines...................................................................................................................................................... 264 Price flexibility.............................................................................................................................................. 265 Price bundling.............................................................................................................................................. 268 Psychological aspects of pricing................................................................................................................... 268 Alternative approaches to determining price.............................................................................................. 270 The future of pricing..................................................................................................................................... 274 This book is licensed under a Creative Commons Attribution 3.0 License 10. Channel concepts: distributing the product..................................................................... 279 The dual functions of channels...................................................................................................................