(
CONTENTS
Preface
xxix
PART 1
Understanding Marketing Management
Chapter 1
Defining Marketing for the 21st Century
The I m p o r t a n c e of M a r k e t i n g
The Scope of M a r k e t i n g
What Is Marketing?
2
3
4
5
5
MARKETING M E M O Marketers' Frequently Asked Questions 6
Exchange and Transactions
What Is Marketed?
Who Markets?
6
8
10
MARKETING INSIGHT
N e w Consumer Capabilities
How Business and Marketing Are Changing
11
13
M A R K E T I N G M E M O The Ten Rules of Radical M a r k e t i n g
C o m p a n y O r i e n t a t i o n s Toward t h e M a r k e t p l a c e
The Production Concept
The Product Concept
The Selling Concept
15
15
15
15
The Marketing Concept
16
The Holistic Marketing Concept
MARKETING INSIGHT
16
The Internet A d v a n t a g e
17
F u n d a m e n t a l M a r k e t i n g C o n c e p t s , Trends, and Tasks
Core Concepts
Marketing Management Tasks
Chapter 2
27
29
31
Applications
Notes
24
24
Shifts in Marketing Management
Summary
13
31
32
Developing Marketing Strategies and Plans
M a r k e t i n g and C u s t o m e r Value
The Value Delivery Process
The Value Chain
35
36
36
38
Core Competencies
39
A Holistic Marketing Orientation and Customer Value
The Central Role of Strategic Planning
MARKETING INSIGHT
41
Views on M a r k e t i n g f r o m Chief
Executive Officers
MARKETING INSIGHT
40
42
Keys t o Long-Term Market
Leadership
43
xi
f CONTENTS
1
C o r p o r a t e and Division S t r a t e g i c Planning
Defining the Corporate Mission
Defining the Business
45
Assessing Growth Opportunities
47
Organization and Organizational Culture
Business Unit S t r a t e g i c Planning
The Business Mission
SWOT Analysis
44
44
50
51
51
52
Goal Formulation
54
M A R K E T I N G M E M O Checklist for Performing
Strengths/Weaknesses Analysis 55
Strategic Formulation
56
Program Formulation and Implementation
MARKETING INSIGHT
58
Marketing's C o n t r i b u t i o n t o
Shareholder Value 58
Feedback and Control
59
P r o d u c t Planning: The N a t u r e and C o n t e n t s of a M a r k e t i n g
Plan
60
Contents of the Marketing Plan
60
T I N G M E M O M a r k e t i n g Plan Criteria
Summary
67
Applications
Notes
61
67
68
PART 2
C a p t u r i n g M a r k e t i n g Insights
70
Chapter 3
Gathering Information and Scanning the Environment
71
C o m p o n e n t s of a M o d e r n M a r k e t i n g I n f o r m a t i o n System
I n t e r n a l Records and M a r k e t i n g Intelligence
The Order-to-Payment Cycle
Sales Information Systems
73
73
Databases, Data Warehousing, and Data Mining
The Marketing Intelligence System
MARKETING INSIGHT
74
74
Putting Data t o Work w i t h Business
Integration Software 75
Analyzing the Macroenvironment
77
M A R K E T I N G M E M O Clicking on the C o m p e t i t i o n
Needs and Trends
77
77
MARKETING INSIGHT
72
73
Ten Megatrends Shaping the
Consumer Landscape 78
Identifying the Major Forces
78
The D e m o g r a p h i c E n v i r o n m e n t
79
W o r l d w i d e Population Growth
79
Population A g e Mix
80
Ethnic and Other Markets
Educational Groups
83
Household Patterns
83
81
Geographical Shifts in Population
84
O t h e r Major M a c r o e n v i r o n m e n t s
Economic Environment
85
Social-Cultural Environment
Natural Environment
Green M a r k e t i n g
Technological Environment
92
Political-Legal Environment
93
Notes
91
95
Applications
Chapter 4
87
89
MARKETING INSIGHT
Summary
85
96
97
Conducting Marketing Research and Forecasting Demand
The M a r k e t i n g Research System
102
The M a r k e t i n g Research Process
103
101
Step 1: Define the Problem, the Decision Alternatives, and the
Research Objectives
104
Step 2: Develop the Research Plan
MARKETING INSIGHT
104
C o n d u c t i n g Informative Focus
Groups
106
M A R K E T I N G M E M O Questionnaire Dos and Don'ts
MARKETING INSIGHT
107
G e t t i n g into Consumers' Heads with
Qualitative Research 109
Step 3: Collect the Information
112
M A R K E T I N G M E M O Pros and Cons of Online Research 113
MARKETING INSIGHT
Global Online Market Research
Challenges
Step 4: Analyze the Information
Step 5: Present the Findings
Step 6: Make the Decision
114
114
114
115
Overcoming Barriers t o the Use of Marketing Research
Measuring Marketing Productivity
Marketing Metrics
116
116
117
MARKETING INSIGHT
Seeing the Big Picture and Getting
t o the Bottom Line in Marketing 117
Measuring Marketing Plan Performance
Profitability Analysis
Marketinq-Mix M o d e l i n g
3
119
122
3
125
XIII
[CONTENTS
Forecasting and D e m a n d M e a s u r e m e n t
The Measures of Market Demand
125
126
A Vocabulary for Demand Measurement
Estimating Current Demand
Estimating Future Demand
Summary
132
134
Applications
Notes
127
130
135
136
PART 3
Connecting with Customers
138
Chapter 5
Creating Customer Value, Satisfaction, and Loyalty
B u i l d i n g C u s t o m e r Value, Satisfaction, and Loyalty
Customer Perceived Value
144
145
Product and Service Quality
Total Quality Management
146
147
M a x i m i z i n g Customer L i f e t i m e Value
Customer Profitability
148
149
Measuring Customer Lifetime Value
Customer Equity
140
141
Total Customer Satisfaction
Measuring Satisfaction
139
150
151
C u l t i v a t i n g Customer Relationships
152
Customer Relationship Management (CRM)
MARKETING INSIGHT
152
Progress and Priorities in Customer
Equity Management
153
A t t r a c t i n g , Retaining, and Growing Customers
154
M A R K E T I N G M E M O How t o Handle Customer Complaints 156
Building Loyalty 157
Reducing Customer Defection
158
Forming Strong Customer Bonds
159
M E M O Asking Questions when Customers
Leave 159
M A R K E T I N G M E M O Forming Strong Customer Bonds 160
C u s t o m e r Databases and Database M a r k e t i n g
Customer Databases
162
162
Data Warehouses and Datamining
163
The Downside of Database Marketing and CRM
MARKETING INSIGHT
Summary
167
Applications
Notes
169
168
Succeeding at CRM
165
167
CONTENTS
Chapter 6
Analyzing Consumer Markets
173
W h a t Influences Consumer Behavior?
Cultural Factors
174
MARKETING INSIGHT
Social Factors
174
Consumer Trends for the Future 176
176
MARKETING INSIGHT
M a r k e t i n g t o Cultural Market
Segments
Personal Factors
178
180
M A R K E T I N G M E M O The A v e r a g e American Consumer
Quiz 181
Key Psychological Processes
184
Motivation: Freud, Maslow, Herzberg
Perception
184
185
Learning
187
Memory
187
The Buying Decision Process: The Five-Stage M o d e l
Problem Recognition
Information Search
191
191
191
Evaluation of Alternatives
193
M A R K E T I N G M E M O A p p l y i n g Customer Value Analysis
Purchase Decisions
196
196
Postpurchase Behavior
198
O t h e r Theories of Consumer Decision M a k i n g
Level of Consumer Involvement
Decision Heuristics and Biases
199
200
201
M A R K E T I N G M E M O Decision Traps 202
Mental Accounting
202
Profiling the Customer Buying Decision Process
Summary
Applications
Notes
Chapter 7
203
203
203
205
A n a l y z i n g Business M a r k e t s
209
W h a t Is O r g a n i z a t i o n a l Buying?
210
The Business Market Versus the Consumer Market
MARKETING INSIGHT
Buying Situations
210
Big Sales t o Small Business 210
212
M A R K E T I N G M E M O Guidelines for Selling t o Small
Business 212
Systems Buying and Selling
213
XV
Participants in t h e Business Buying Process
The Buying Center
214
214
Buying Center Influences
215
Buying Center Targeting
215
The P u r c h a s i n g / P r o c u r e m e n t Process
Purchasing Orientations
217
218
Types of Purchasing Processes
218
Purchasing Organization and Administration
Stages in t h e Buying Process
Problem Recognition
219
219
220
General Need Description and Product Specification
Supplier Search
E-Procurement
221
222
222
MARKETING INSIGHT
The Business-to-Business (B2B)
Cyberbuying Bazaar 223
Proposal Solicitation
Supplier Selection
225
225
M A R K E T I N G M E M O Methods of Assessing Customer Value 226
Order-Routine Specification
Performance Review
227
227
MARKETING INSIGHT
Establishing C o r p o r a t e Trust
and Credibility
228
M a n a g i n g Business-to-Business C u s t o m e r Relationships
The Benefits of Vertical Coordination
228
Business Relationships: Risks and Opportunism
I n s t i t u t i o n a l and G o v e r n m e n t M a r k e t s
230
230
M A R K E T I N G M E M O Selling Tech t o the Government
Summary
234
Applications
Notes
Chapter 8
234
235
Identifying M a r k e t S e g m e n t s and Targets
Levels of M a r k e t S e g m e n t a t i o n
Segment Marketing
Niche Marketing
Local Marketing
Customerization
239
240
240
242
244
MARKETING INSIGHT
Experiential Marketing
246
S e g m e n t i n g Consumer M a r k e t s
Geographic Segmentation
247
247
Demographic Segmentation
Psychographic Segmentation
249
252
228
245
233
MARKETING INSIGHT
M a r k e t i n g t o Generation Y 253
M A R K E T I N G M E M O Cheat Sheet for 21-Year-Olds
Behavioral Segmentation
254
Bases f o r S e g m e n t i n g Business M a r k e t s
Marketing to Small Businesses
Sequential Segmentation
Market Targeting
258
258
260
261
Effective Segmentation Criteria
262
Evaluating and Selecting the Market Segments
Additional Considerations
Summary
262
264
268
Applications
Notes
253
268
269
PART 4
Building Strong Brands
Chapter 9
Creating Brand Equity
273
W h a t Is Brand Equity?
The Role of Brands
272
274
274
M A R K E T I N G M E M O The Brand Report Card 275
The Scope of Branding
275
Defining Brand Equity
276
Brand Equity as a Bridge
Brand Equity Models
278
278
Building Brand Equity
281
Choosing Brand Elements
281
Designing Holistic Marketing Activities
MARKETING INSIGHT
A p p l y i n g Permission
Marketing
Leveraging Secondary Associations
Measuring Brand Equity
285
287
288
MARKETING INSIGHT
Brand Audits
284
The Brand Value Chain 288
289
Brand Tracking
290
Brand Valuation
290
M a n a g i n g Brand Equity
Brand Reinforcement
291
291
MARKETING INSIGHT
What Is a Brand W o r t h ?
292
M A R K E T I N G M E M O Twenty-First-Century
Branding
Brand Revitalization
Brand Crisis
294
294
295
xvii
Devising a B r a n d i n g S t r a t e g y
296
Branding Decision: To Brand or N o t t o Brand?
Brand Extensions
Brand Portfolios
297
297
301
M A R K E T I N G M E M O Research Insights on Brand
Extensions
Summary
303
Applications
Notes
301
303
304
Chapter 10 Crafting t h e Brand Positioning
309
D e v e l o p i n g and C o m m u n i c a t i n g a Positioning S t r a t e g y
C o m p e t i t i v e Frame of Reference
MARKETING INSIGHT
311
Value Disciplines Positioning
Points-of-Parity and Points-of-Difference
Establishing Category Membership
Choosing POPs and PODs
311
312
314
315
Creating POPs and PODs
316
i M E M O W r i t i n g a Positioning Statement
Differentiation Strategies
310
316
318
MARI E T I N G M E M O How t o Derive Fresh Consumer Insights t o
Differentiate Products and Services 318
Product Differentiation
319
Personnel Differentiation
Channel Differentiation
Image Differentiation
319
320
320
P r o d u c t Life-Cycle M a r k e t i n g Strategies
321
M A R K E T I N G M E M O Exceeding Customer Expectations
Product Life Cycles
322
322
Style, Fashion, and Fad Life Cycles
323
Marketing Strategies: Introduction Stage and the Pioneer
Advantage
324
Marketing Strategies: Growth Stage
Marketing Strategies: Maturity Stage
Marketing Strategies: Decline Stage
325
326
329
The Product Life-Cycle Concept: Critique
Market Evolution
331
MARKETING INSIGHT
Summary
335
Applications
Notes
xviii
337
335
331
Dynamics of Attribute Competition 334
Chapter 11 Dealing with Competition
C o m p e t i t i v e Forces
341
342
Identifying Competitors
343
Industry Concept of C o m p e t i t i o n
344
Market Concept of C o m p e t i t i o n
Analyzing Competitors
Strategies
346
347
347
Objectives
347
Strengths and Weaknesses
Selecting Competitors
347
348
C o m p e t i t i v e S t r a t e g i e s f o r M a r k e t Leaders
349
M A R K E T I N G M E M O Benchmarking t o Improve C o m p e t i t i v e
Performance
Expanding the Total Market
MARKETING INSIGHT
349
350
When Your C o m p e t i t o r Delivers
More for Less 351
Defending Market Share
352
Expanding Market Share
355
Other Competitive Strategies
355
Market-Challenger Strategies
Market-Follower Strategies
355
359
M A R K E T I N G M E M O Making Smaller Better
Market-Nicher Strategies
360
362
M A R K E T I N G M E M O Niche Specialist Roles
364
M A R K E T I N G M E M O Strategies for Entering Markets Held
by Incumbent Firms
364
Balancing C u s t o m e r and C o m p e t i t o r O r i e n t a t i o n s
Competitor-Centered Companies
Customer-Centered Companies
Summary
PART 5
365
365
366
Applications
Notes
365
366
367
Shaping t h e Market Offerings
Chapter 12 Setting Product Strategy
370
371
Product Characteristics and Classifications
372
Product Levels: The Customer Value Hierarchy
Product Classifications
Differentiation
372
373
376
Product Differentiation
376
Design: The Integrative Force
377
xix
Services Differentiation
378
MARKETING INSIGHT
Design as a Powerful Marketing
Tool 379
P r o d u c t and Brand Relationships
The Product Hierarchy
380
Product Systems and Mixes
Product-Line Analysis
Product-Line Length
380
381
382
384
MARKETING INSIGHT
Rationalizing Brand Portfolios
for G r o w t h
Product-Mix Pricing
387
387
Co-Branding and Ingredient Branding
390
P a c k a g i n g , L a b e l i n g , W a r r a n t i e s , and Guarantees
392
M A R K E T I N G M E M O Making Ingredient Branding Work
Packaging
Labeling
393
394
Warranties and Guarantees
Summary
395
396
Applications
Notes
392
397
398
Chapter 13 Designing and Managing Services
The N a t u r e of Services
401
402
Service Industries Are Everywhere
Categories of Service Mix
402
403
Distinctive Characteristics of Services
M a r k e t i n g S t r a t e g i e s f o r Service Firms
A Shifting Customer Relationship
405
408
408
M A R K E T I N G M E M O A Service Marketing Checklist
Holistic Marketing for Services
MARKETING INSIGHT
M a n a g i n g Service Q u a l i t y
Customer Expectations
409
410
Voice Mail Hell 410
412
412
Best Practices of Service-Quality Management
MARKETING INSIGHT
414
The Role of Expectations in ServiceQuality Perceptions 415
M A R K E T I N G M E M O Assessing E-Service Quality
416
M A R K E T I N G M E M O Recommendations for Improving
Service Quality 417
M A R K E T I N G M E M O G e t t i n g Self-Service Kiosks Off the
Ground 418