brief contents
SECTION ONE Assessing the Marketplace 2
1
2
3
4
Overview of Marketing 2
Developing Marketing Strategies 28
Ethics and Socially Responsible Marketing 56
Analyzing the Marketing Environment 82
Section Two Understanding the Marketplace 114
5
6
7
Marketing Research and Information Systems 114
Consumer Behaviour 146
Business-to-Business Marketing 176
Section Three Targeting the Marketplace 202
8
Segmentation, Targeting, and Positioning 202
Section Four Value Creation 236
9 Product, Branding, and Packaging Decisions 236
10 Developing New Products 264
11 Services: The Intangible Product 294
Section Five Transacting Value 320
12
Pricing Concepts and Strategies: Establishing Value 320
Section Six Value Delivery: Designing the Marketing Channel
and Supply Chain 359
13 Marketing Channels: Distribution Strategy 359
14 Retailing 388
Section Seven Value Communication 416
15 Integrated Marketing Communications 416
16 Advertising, Sales Promotions, and Personal Selling 448
SECTION EIGHT Marketing in the Global Environment 482
17
Global Marketing 482
Marketing Plan Appendix 518
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table of contents
Section ONE Assessing the Marketplace 2
1
Overview of Marketing 2
What Is Marketing? 5
Marketing is about Satisfying Customer Needs and Wants 6
Marketing Entails Value Exchange 7
Marketing Requires Product, Price, Place, and Promotion Decisions 8
Marketing is Shaped by Forces and Players External to the Firm 11
Marketing Can Be Performed by Both Individuals and Organizations 12
Marketing Occurs in Many Settings 12
Marketing Helps Create Value 13
Adding Value 1.1: Bottled Water: Commodity or Super Premium? 15
What Is Value-Based Marketing? 16
How Firms Compete on the Basis of Value 16
How Do Firms Become Value Driven? 16
Why Is Marketing Important? 18
Entrepreneurial Marketing 1.1: ImaSight—Get Clear 19
Marketing Expands Firms’ Global Presence 19
Marketing is Pervasive across the Organization 20
Marketing is Pervasive across the Supply Chain 21
Marketing Makes Life Easier and Provides Career Opportunities 22
Marketing Enriches Society 22
Marketing Can Be Entrepreneurial 22
Learning Objectives Review 24
Key Terms 25
Concept Review 25
Marketing Applications 25
Net Savvy 26
Chapter Case Study: eBay: Creating Value in the Marketplace 26
2 Developing Marketing Strategies 28
Levels of Strategic Planning in Corporations 31
The Strategic Marketing Planning Process 32
Step 1: Define the Business Mission 33
Step 2: Conduct a Situation Analysis Using SWOT 35
Step 3: Identify and Evaluate Opportunities Using STP (Segmentation, Targeting,
and Positioning) 36
Develop Marketing Mix 37
Internet Marketing 2.1: Lee Valley Tools Ltd.—Delivering Value through
Integrated Channels 40
Step 4: Implement the Marketing Mix: Allocating Resources 41
Ethical Dilemma 2.1: LuLulemon: Bare It All, Even If You Don’t Want To! 41
Boston Consulting Group’s Portfolio Analysis 42
Step 5: Evaluate Performance and Make Adjustments 44
Strategic Planning is Not Sequential 44
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Growth Strategies
44
Market Penetration
Market Development
45
45
Product Development
Diversification
Macro Strategies
46
46
46
Customer Excellence
46
Entrepreneurial Marketing 2.1: kicking horse Coffee—kicking ass!
Customer Service
49
Operational Excellence
49
adding value 2.1: Customer Service at virgin atlantic
Product Excellence
50
Learning Objectives Review
Key Terms
53
Concept Review
53
Marketing Applications
Toolkit
54
Net Savvy
47
50
52
53
54
Chapter Case Study: Toronto Football Club: Rebirth to Excitement
54
3 EthicsandSociallyResponsibleMarketing 56
The Scope of Marketing Ethics
60
Ethical Issues Associated with Marketing Decisions
Creating an Ethical Climate in the Workplace
The Influence of Personal Ethics
63
60
61
The Link between Ethics and Corporate Social Responsibility
64
adding value 3.1: aldO Fights aIdS Globally—hear No Evil,
See No Evil, and Speak No Evil 66
A Framework for Ethical Decision Making
Step 1: Identify Issues
67
67
Step 2: Gather Information and Identify Stakeholders
Step 3: Brainstorm Alternatives
68
Step 4: Choose a Course of Action 68
Integrating Ethics into Marketing Strategy
Planning Phase
69
Implementation Phase
67
69
70
Ethical dilemma 3.1: Traffic light labelling—Bucking the Obesity Trend
Entrepreneurial Marketing 3.1: Fetzer vineyards’ Mission Is win–win
Control Phase
73
Understanding Ethics Using Scenarios
72
71
73
Internet Marketing 3.1: Turnitin.com—Plagiarism Prevention or Copyright
Infringement? 74
Scenario 1: Who is on the Line?
74
Scenario 2: Giving Credit Where Credit isn’t Due
75
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Scenario 3: The Jeweller’s Tarnished Image
Scenario 4: No Wonder It’s So Good
76
Scenario 5: Bright Baby’s Bright Idea
76
Consumerism, Ethics, and Social Responsibility
Ethical and Social Criticisms of Marketing
Learning Objectives Review
Key Terms
76
77
78
79
Concept Review
79
Marketing Applications
Net Savvy
75
79
80
Chapter Case Study: How Big Is Your Footprint?
80
4 AnalyzingtheMarketingEnvironment 82
A Marketing Environment Analysis Framework
84
Successfully Leveraging Company Capabilities
Building Relationships with Corporate Partners
85
86
adding value 4.1: Toyota and a little help from Its
Friends 86
Macroenvironmental Factors
86
Entrepreneurial Marketing 4.1: dussault Custom Ink—
Meshing rock and hip hop! 87
Competitors
88
Demographics
89
Social and Cultural Trends
Technological Advances
Economic Situation
95
99
100
Internet Marketing 4.1: voice over Internet Protocol—
a world of Possibilities? 101
Political/Regulatory Environment
Scenario Planning
102
103
Ethical dilemma 4.1: Payday loans—valuable Service or
Predatory lenders? 104
Step 1: Assess Strengths and Weaknesses
104
Step 2: Assess Opportunities and Threats
106
Step 3: Identify Different Scenarios
106
Step 4: Apply the Marketing Mix to the Different Scenarios
Step 5: Assess the Profitability of Each Scenario
Learning Objectives Review
Key Terms
108
109
Concept Review
109
Marketing Applications
Net Savvy
107
107
109
110
Chapter Case Study: Simply Audiobooks: Changing the Way We Read Books
110
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SECTION TwO
Understanding the Marketplace
114
5 MarketingResearchandInformationSystems 114
Using Marketing Information Systems to Create Better Value 118
The Ethics of Using Customer Information 119
The Marketing Research Process 120
Step 1: Define the Problem and Objectives 121
Step 2: Design the Research Project 122
adding value 5.1: leger Marketing: Speeding Strategic decision
Making 125
Internet Marketing 5.1: rFId—My underwear Is reporting
My whereabouts? 127
Step 3: Data Collection Process 128
Exploratory Research Methods 129
Ethical dilemma 5.1: Getting up Close and Personal with Shoppers
Conclusive Research Methods 132
Step 4: Analyze Data 136
Step 5: Present Results 137
Entrepreneurial Marketing 5.1: Marketing research
on a Shoestring Budget 138
Learning Objectives Review 140
Key Terms 141
Concept Review 141
Marketing Applications 142
Net Savvy 143
Chapter Case Study: Research Boosts Iams Sales 143
131
6 ConsumerBehaviour 146
The Consumer Decision Process
Step 1: Need Recognition
149
150
Step 2: Search for Information
151
adding value 6.1: h.O.G. heaven
Step 3: Evaluation of Alternatives
Step 4: Purchase and Consumption
Step 5: Postpurchase
151
153
155
156
Internet Marketing 6.1: Evaluating Travel alternatives
with Expedia 157
Ethical dilemma 6.1: dissatisfied Customers use
Ihate[company].com 158
Types of Consumer Buying Decisions
Complex Buying Behaviour
159
Habitual Buying Behaviour
161
159
Dissonance-Reducing Buying Behaviour
Variety-Seeking Buying Behaviour
161
160
Factors Influencing Consumer Buying Decisions
Psychological Factors
Social Factors
165
161
161
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Culture
167
Situational Factors
167
Entrepreneurial Marketing 6.1: Zipcar—The urban rent-a-Car
Learning Objectives Review
Key Terms
171
Concept Review
171
Marketing Applications
Toolkit
172
Net Savvy
170
169
172
172
Chapter Case Study: The Smart Car Prepares to Enter the U.S. Market
173
7 Business-to-BusinessMarketing 176
B2B Markets
178
Manufacturers or Producers
Resellers
179
180
Institutions
Government
180
180
B2B Classification System and Segmentation
Differences between B2B and B2C Markets
The Business-to-Business Buying Process
184
181
182
Entrepreneurial Marketing 7.1: Shepherd Thermoforming and
Packaging Inc.—Forming the Future through Innovation 184
Stage 1: Need Recognition
185
Stage 2: Product Specifications
Stage 3: RFP Process
186
186
Stage 4: Proposal Analysis, Vendor Negotiation, and Supplier Selection
Stage 5: Order Specifications
Stage 6: Vendor Analysis 187
187
Factors Affecting the Buying Process
The Buying Centre
188
Organizational Culture
188
189
Ethical dilemma 7.1: how does the doctor know Best?
Buying Situations
187
190
adding value 7.1: Putting a volkswagen Together
Role of the Internet in Business-to-Business Marketing
190
192
193
Internet Marketing 7.1: Covisint—where People, Information,
and applications Come Together 195
Learning Objectives Review
Key Terms
197
Concept Review
197
Marketing Applications
Toolkit
198
Net Savvy
198
196
197
Chapter Case Study: The Telfer School Moves Into the Desmarais Building
199
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SECTION ThrEE
Targeting the Marketplace
202
8 Segmentation,Targeting,andPositioning 202
Step 1: Establish Overall Strategy or Objectives 205
Step 2: Profile Segments 206
Step 3: Evaluate Segment Attractiveness 213
adding value 8.1: Segmenting the Financial Services Market
using demographics and lifestyles 214
Internet Marketing 8.1: Easy does It with Internet-Based
Segmentation 215
Step 4: Select Target Market 218
Entrepreneurial Marketing 8.1: BalMShEll—lip-Gloss with a
difference 221
Step 5: Identify and Develop Positioning Strategy 223
Ethical dilemma 8.1: The Junk Food wars Targeting kids 223
Positioning Stages 227
Repositioning 228
Learning Objectives Review 231
Key Terms 232
Concept Review 232
Marketing Applications 233
Toolkit 233
Net Savvy 234
Chapter Case Study: M&M Meat Shops—Using Demographics to Drive Decisions
SECTION FOur
Value Creation
234
236
9 Product,Branding,andPackagingDecisions 236
Product Assortment and Product Line Decisions 239
Change Product Mix Breadth 240
Change Product Mix Depth 241
Change Number of SKUs 242
Product Line Decisions for Services 242
Branding 242
Value of Branding for the Customer and the Marketer 242
Brand Equity 244
Branding Strategies 248
Brand Ownership 248
Internet Marketing 9.1: Branding on the Net 249
adding value 9.1: ambush Marketing Threatens 2010 winter Games
Naming Brands and Product Lines 251
Brand Extension 253
Cobranding 254
Entrepreneurial Marketing 9.1: Exploring virgin Territories 255
Brand Licensing 255
Packaging 257
Product Labelling 258
Ethical dilemma 9.1: what’s Behind a Seal of approval? 259
250
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Learning Objectives Review 260
Key Terms 260
Concept Review 261
Marketing Applications 261
Net Savvy 262
Chapter Case Study: Band-Aid® Brand Products: Building on the Value of the
Brand 262
10 DevelopingNewProducts 264
Innovation and Value 266
Adoption of Innovation 270
Innovators 270
Early Adopters 271
Early Majority 271
Late Majority 271
Laggards 271
Using the Adoption Cycle 271
How Firms Develop New Products 273
Idea Generation 273
Internet Marketing 10.1: Making Consumers Co-creators of
New Products 275
Concept Testing 276
Product Development 277
Ethical dilemma 10.1: Should Cosmetics Firms Test Products
on animals? 278
Market Testing 278
adding value 10.1: rIM’s BlackBerry Pearl 8100 smartphone 279
Product Launch 280
Evaluation of Results 282
The Product Life Cycle 282
Introduction Stage 283
Growth Stage 284
Maturity Stage 285
Decline Stage 286
Entrepreneurial Marketing 10.1: Gourmantra—Spice Business heats up
The Shape of the Product Life Cycle Curve 287
Strategies Based on Product Life Cycle: Some Caveats 288
Learning Objectives Review 289
Key Terms 290
Concept Review 290
Marketing Applications 290
Net Savvy 291
Chapter Case Study: Marketing Apple’s iPod: Music to Your Ears 291
287
11 Services:TheIntangibleProduct 294
Services Marketing Differs from Product Marketing 298
Intangible 298
Inseparable Production and Consumption 299
Ethical dilemma 11.1: Smile, You’re On Camera? 300
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Variable (Inconsistent) 300
adding value 11.1: adding Convenience through Self-Checkout
Machines 302
Perishable (Inventory) 303
Providing Great Service: The Gaps Model 304
The Knowledge Gap: Knowing What Customers Want 305
Entrepreneurial Marketing 11.1: Expanding the definition of
Beauty 308
The Standards Gap: Setting Service Standards 308
The Delivery Gap: Delivering Service Quality 310
Internet Marketing 11.1: Fairmont: Turning Moments Into
Memories 312
The Communications Gap: Communicating the Service Promise 313
Service Recovery 313
Listening to the Customer 314
Finding a Fair Solution 314
Resolving Problems Quickly 315
Learning Objectives Review 316
Key Terms 316
Concept Review 317
Marketing Applications 317
Toolkit 318
Net Savvy 318
Chapter Case Study: Canadian Tire—More Than Just Tires 318
SECTION FIvE
Transacting Value
320
12 PricingConceptsandStrategies:EstablishingValue 320
The Five Cs of Pricing 324
Company Objectives 325
Customers 327
adding value 12.1: Musicians look for Cymbals of Success 328
Costs 331
Break-Even Analysis and Decision Making 332
Competition 334
Channel Members 335
Ethical dilemma 12.1: white-label aBM Fees red-Flagged 335
Other Influences on Pricing 336
The Internet 336
Internet Marketing 12.1: Canadian Internet Pharmacies Serve u.S.
Customers 337
Economic Factors 337
Pricing Strategies 338
1. Cost-Based Methods 339
2. Competitor-Based Methods 339
3. Value-Based Methods 339
New Product Pricing 341
Price Skimming 341
Market Penetration Pricing 342
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Psychological Factors Affecting Value-Based Pricing Strategies
Consumers’ Use of Reference Prices
342
343
Entrepreneurial Marketing 12.1: Giant Tiger Stakes Its Territory
Everyday Low Pricing (EDLP) versus High/Low Pricing
Odd Prices
345
The Price–Quality Relationship
Pricing Tactics
345
Pricing Tactics Aimed at Consumers
Legal Aspects and Ethics of Pricing
349
350
Deceptive or Illegal Price Advertising
Predatory Pricing
351
Price Discrimination
Price Fixing
352
354
Concept Review
355
Marketing Applications
Toolkit
356
Net Savvy
347
346
351
352
Learning Objectives Review
Key Terms
343
345
Business-to-Business Pricing Tactics and Discounts
Consumer Price Reductions
344
353
355
356
Chapter Case Study: Finding the Best Price: Bizrate versus eBay
356
Value Delivery: Designing the Marketing Channel
and Supply Chain 359
SECTION SIx
13 MarketingChannels:DistributionStrategy 359
The Importance of Distribution 361
Distribution Channels, Supply Chain, and Logistics are Related 362
Designing Distribution Channels 364
Distribution Channel Structure 365
Ethical dilemma 13.1: listing Fees: Needless or Necessary? 367
Internet Marketing 13.1: Integrated Multichannel retailing:
The Future of distribution 368
Distribution Intensity 369
adding value 13.1: arctic Glacier: heating up the Ice
Industry 370
Managing the Distribution Channels 371
Managing Channels through Vertical Marketing Systems 372
Entrepreneurial Marketing 13.1: Fire up the Grill 374
Supply Chains Add Value 375
Supply Chain Management Streamlines Distribution 376
Supply Chain Management Affects Marketing 376
Making Information Flow 377
Electronic Data Interchange 378
Managing Supply Chains through Strategic Relationships 379
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Logistics Management: Making Merchandise Flow 380
Inbound Transportation 380
Receiving and Checking 381
Storing and Cross-Docking 381
Getting Merchandise Floor-Ready 382
Shipping Merchandise to Stores 382
Inventory Management through Just-In-Time Systems 382
Learning Objectives Review 383
Key Terms 384
Concept Review 384
Marketing Applications 384
Net Savvy 385
Chapter Case Study: Wal-Mart: Pioneer in Supply Chain Management
385
14 Retailing 388
The Changing Retail Landscape 392
How Do Retailers Create Value? 394
Using the Four Ps to Create Value in Retailing 395
Product 396
Price 396
Promotion 396
Ethical dilemma 14.1: a Swipe at Sweatshops 397
Entrepreneurial Marketing 14.1: 2010 winter Games Please Please
Mum 399
Place 399
Types of Retailers 399
Food Retailers 399
General Merchandise Retailers 400
adding value 14.1: Pete’s Frootique—a Food adventure 401
Non-Store Retailing 402
Internet and Electronic Retailing 407
Internet Marketing 14.1: Muchmusic.com—Much More in Store 408
Developing a Retailing Strategy and Positioning 410
Learning Objectives Review 412
Key Terms 412
Concept Review 413
Marketing Applications 413
Net Savvy 414
Chapter Case Study: Staples, Inc. 414
SECTION SEvEN
Value Communication
416
15 IntegratedMarketingCommunications 416
Communicating with Consumers 419
The Communication Process 419
Ethical dilemma 15.1: Is It deceptive to disguise the Message
Sender? 421
How Consumers Perceive Communication 422
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Integrated Marketing Communication Tools 423
Advertising 423
Personal Selling 424
Sales Promotions 424
Direct Response Marketing 424
Entrepreneurial Marketing 15.1: Ideas that Build Success 425
Public Relations (PR) 426
adding value 15.1: One-to-One Marketing 427
Electronic Media 428
Internet Marketing 15.1: a viral Evolution 429
Steps in Planning an IMC Campaign 431
1. Identify Target Audience 431
2. Set Objectives 431
3. Determine the Budget 433
4. Convey the Message 434
5. Evaluate and Select Media 437
6. Create Communication 439
7. Assess Impact 440
Results: Measuring IMC Success 441
Learning Objectives Review 443
Key Terms 444
Concept Review 444
Marketing Applications 445
Net Savvy 445
Chapter Case Study: Dove Widens Definition of Beauty in Integrated Campaign
446
16 Advertising,SalesPromotions,andPersonalSelling 448
Advertising 451
The AIDA Model 451
Advertising Objectives 453
Informative Advertising 454
Persuasive Advertising 454
Internet Marketing 16.1: viral dare 455
Reminder Advertising 455
Focus of Advertisements 456
Legal and Ethical Issues in Advertising 458
Stealth Marketing 459
Ethical dilemma 16.1: Seeing (rEd) 460
Sales Promotion 461
Consumer Sales Promotions 462
adding value 16.1: Pop-up Beauty 464
Entrepreneurial Marketing 16.1: Capital Ideas
Trade Channel Sales Promotions 466
Using Sales Promotion Tools 466
Personal Selling and Sales Management 467
The Scope and Nature of Personal Selling 467
Personal Selling and Marketing Strategy 468
The Value Added by Personal Selling 469
The Personal Selling Process 470
465
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Managing the Sales Force 475
Sales Force Structure 475
Recruiting and Selecting Salespeople 476
Sales Training 476
Motivating and Compensating Salespeople 476
Evaluating Salespeople 477
Learning Objectives Review 478
Key Terms 479
Concept Review 479
Marketing Applications 479
Toolkit 480
Net Savvy 480
Chapter Case Study: West49.com—The Cutting Edge of Cool
SECTION EIGhT
480
Marketing in the Global Environment
482
17 GlobalMarketing 482
Growth of the Global Economy: Globalization of Marketing and Production
Ethical dilemma 17.1: Globalization and Its discontents 489
Assessing Global Markets 489
Analyzing the Political and Legal Environment 489
Analyzing the Economic Environment 495
Analyzing Sociocultural Factors 499
Internet Marketing 17.1: In the Eyes of the Beholder:
Global or local web design? 501
Analyzing Infrastructure and Technological Capabilities 502
Choosing a Global Entry Strategy 503
Choosing a Global Marketing Strategy 507
Target Market: Segmentation, Targeting, and Positioning 507
The Global Marketing Mix 508
adding value 17.1: MTv Conquers the world 509
Ethical Issues in Global Marketing 511
Entrepreneurial Marketing 17.1: david versus Goliath
in the Beer wars 512
Environmental Concerns 512
Global Labour Issues 512
Impact on Host Country Culture 513
Learning Objectives Review 514
Key Terms 515
Concept Review 515
Marketing Applications 516
Net Savvy 516
Chapter Case Study: IKEA Takes on the World, One Country at a Time 516
487
MarkETING PlaN aPPENdIx 518
Glossary GL-1
Endnotes EN-1
Credits CR-1
Index IN-1
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