M a n a g i n g Service Brands
421
Differentiating Services
422
Developing Brand Strategies for Services
M a n a g i n g P r o d u c t S u p p o r t Services
423
424
Identifying and Satisfying Customer Needs
Postsale Service Strategy
Summary
425
426
Applications
Notes
425
426
427
Chapter 14 Developing Pricing Strategies and Programs
U n d e r s t a n d i n g Pricing
431
432
MARKETING INSIGHT
The Internet and Pricing Effects
on Sellers and Buyers 433
How Companies Price
433
Consumer Psychology and Pricing
S e t t i n g t h e Price
434
436
Step 1: Selecting the Pricing Objective
437
M A R K E T I N G M E M O When t o Use Price Cues 437
Step 2: Determining Demand
Step 3: Estimating Costs
439
441
M A R K E T I N G M E M O Three Myths about Pricing Strategy 441
Step 4: Analyzing C o m p e t i t o r s ' Costs, Prices, and Offers
Step 5: Selecting a Pricing M e t h o d
Step 6: Selecting the Final Price
MARKETING INSIGHT
A d a p t i n g t h e Price
444
448
Stealth Price Increases
449
450
Geographical Pricing (Cash, Countertrade, Barter)
Price Discounts and Allowances
Promotional Pricing
Differentiated Pricing
450
451
452
453
I n i t i a t i n g and R e s p o n d i n g t o Price Changes
Initiating Price Cuts
443
455
455
Initiating Price Increases
455
MARKETING INSIGHT
Smart Pricing Takes Off
456
M A R K E T I N G M E M O M a r k e t i n g Strategies t o A v o i d Raising
Prices 458
Reactions to Price Changes
458
Responding to Competitors' Price Changes
Summary
461
Applications
Notes
463
461
460
PART 6
D e l i v e r i n g Value
466
C h a p t e r 15 D e s i g n i n g and M a n a g i n g Value N e t w o r k s and Channels
M a r k e t i n g Channels and Value N e t w o r k s
The Importance of Channels
Channel Development
467
468
468
469
M A R K E T I N G M E M O Multichannel Shopping Checklist 470
Value Networks
470
The Role o f M a r k e t i n g Channels
Channel Functions and Flows
Channel Levels
472
472
474
MARKETING INSIGHT
M-Commerce Opens Up New
O p p o r t u n i t i e s for Marketers
Service Sector Channels
476
Channel-Design Decisions
476
Analyzing Customers' Desired Service O u t p u t Levels
Establishing Objectives and Constraints
Identifying Major Channel Alternatives
M A R K E T I N G INSIGHT
475
476
477
477
How Carmax is Transforming
the A u t o Business 479
Evaluating the Major Alternatives
C h a n n e l - M a n a g e m e n t Decisions
Selecting Channel Members
Training Channel Members
481
483
483
483
Motivating Channel Members
483
Evaluating Channel Members
485
Modifying Channel Arrangements
Channel I n t e g r a t i o n and Systems
Vertical Marketing Systems
485
486
486
M A R K E T I N G M E M O Designing a Customer-Driven
Distribution System 487
Horizontal Marketing Systems
488
Multichannel Marketing Systems
489
C o n f l i c t , C o o p e r a t i o n , and C o m p e t i t i o n
Types of Conflict and Competition
Causes of Channel Conflict
491
Managing Channel Conflict
492
491
491
Legal and Ethical Issues in Channel Relations
E-Commerce M a r k e t i n g Practices
Pure-Click Companies
MARKETING INSIGHT
494
Burst of the Dot-Com Bubble 495
Brick-and-Click Companies
xxii
493
493
495
Summary
497
Applications
Notes
498
499
Chapter 16 Managing Retailing, Wholesaling, and Logistics
Retailing
503
504
Types of Retailers
504
New Models for Success
506
MARKETING INSIGHT
Franchise Fever
508
M A R K E T I N G M E M O Helping Stores t o Sell 509
Marketing Decisions
509
MARKETING INSIGHT
Making Labels Smarter
513
M A R K E T I N G M E M O W h a t W o m e n Want f r o m Customer
Service
Trends in Retailing
Private Labels
517
518
House Brands
518
The Private Label Threat
Wholesaling
514
519
520
The Growth and Types of Wholesaling
Wholesaler Marketing Decisions
Trends in Wholesaling
M a r k e t Logistics
521
521
522
523
M A R K E T I N G M E M O Strategies for High-Performance
Wholesaler-Distributors
Integrated Logistics Systems
Market-Logistics Objectives
Market-Logistics Decisions
Organizational Lessons
Summary
PART 7
524
525
526
529
530
Applications
Notes
524
530
532
C o m m u n i c a t i n g Value
534
Chapter 17 Designing and Managing Integrated Marketing
Communications
535
The Role of M a r k e t i n g C o m m u n i c a t i o n s
536
Marketing Communications and Brand Equity
The Communications Process Models
539
D e v e l o p i n g Effective C o m m u n i c a t i o n s
541
Identify the Target Audience
541
Determine the Communications Objectives
Design the Communications
536
544
542
MARKETING INSIGHT
Celebrity Endorsements as a
Strategy
547
Select the Communications Channels
MARKETING INSIGHT
548
Buzz Marketing
549
Establish t h e Total Marketing Communications Budget
MARKETING INSIGHT
552
H i t t i n g the Bull's Eye in a PostMass-Market World
553
D e c i d i n g on t h e M a r k e t i n g C o m m u n i c a t i o n s Mix
554
Characteristics of the Marketing Communications Mix
555
Factors in Setting the Marketing Communications Mix
556
Measuring Communication Results
557
Managing the Integrated Marketing Communications
Process
558
Coordinating Media
Implementing IMC
558
560
MARKETING INSIGHT
Coordinating Media t o Build Brand
Equity 560
M A R K E T I N G M E M O How Integrated Is Your IMC Program? 562
Summary
562
Applications
Notes
563
564
Chapter 18 Managing Mass Communications: Advertising, Sales
Promotions, Events, and Public Relations
567
D e v e l o p i n g and M a n a g i n g an A d v e r t i s i n g P r o g r a m
Setting the Objectives
568
568
Deciding on the Advertising Budget
Developing the Advertising Campaign
569
570
M A R K E T I N G M E M O Print AD Evaluation Criteria
D e c i d i n g on M e d i a and M e a s u r i n g Effectiveness
Deciding on Reach, Frequency, and Impact
Choosing A m o n g Major Media Types
Alternative Advertising Options
Selecting Specific Vehicles
MARKETING INSIGHT
573
574
574
575
576
579
Playing Games w i t h Brands 581
Deciding on Media Timing and Allocation
Evaluating Advertising Effectiveness
581
583
How t o Sell in Hard Times 584
MARKETING INSIGHT
Understanding the Effects of
Advertising and Promotion
xxiv
585
Sales P r o m o t i o n
Objectives
585
585
Advertising versus Promotion
Major Decisions
586
587
Events and Experiences
Events Objectives
Major Decisions
591
591
592
Public Relations
593
Marketing Public Relations
594
Major Decisions in Marketing PR
Summary
Applications
Notes
595
596
597
598
Chapter 19 Managing Personal Communications: Direct M a r k e t i n g
and Personal Selling
Direct M a r k e t i n g
603
604
The Benefits of Direct Marketing
Direct Mail
604
606
M A R K E T I N G M E M O The Public and Ethical Issues in Direct
Marketing
606
M A R K E T I N G M E M O When Your Customer Is a Committee 608
Catalog Marketing
Telemarketing
609
611
Other Media for Direct-Response Marketing
Interactive Marketing
612
The Benefits of Interactive Marketing
Designing an Attractive W e b Site
613
613
M A R K E T I N G M E M O Just Your Type
Placing Ads and Promotion Online
E-Marketing Guidelines
614
616
Sales Force Objectives and Strategy
Sales Force Size
614
615
D e s i g n i n g t h e Sales Force
Sales Force Structure
611
617
618
618
MARKETING INSIGHT
Major A c c o u n t M a n a g e m e n t
Sales Force Compensation
M a n a g i n g t h e Sales Force
619
620
Recruiting and Selecting Representatives
620
Training and Supervising Sales Representatives
Sales Rep Productivity
621
Motivating Sales Representatives
623
Evaluating Sales Representatives
624
620
619
Principles of Personal Selling
The Six Steps
625
626
MARKETING INSIGHT
Principles of Customer-Oriented
Selling 627
Negotiation
627
Relationship Marketing
Summary
628
Applications
Notes
PART 8
628
629
630
C r e a t i n g Successful Long-Term G r o w t h
Chapter 20 Introducing N e w M a r k e t Offerings
632
633
Challenges in N e w - P r o d u c t D e v e l o p m e n t
MARKETING INSIGHT
634
Iridium Disconnects with Global
Customers
Organizational Arrangements
637
637
M A R K E T I N G M E M O Lessons for New-Product Success 638
Budgeting for New-Product Development
Organizing New-Product Development
639
M a n a g i n g t h e D e v e l o p m e n t Process: Ideas
Idea Generation
638
640
640
M A R K E T I N G M E M O Ten Ways t o Great New-Product
Ideas 642
Idea Screening
643
MARKETING INSIGHT
Developing Successful High-Tech
Products
644
M a n a g i n g t h e D e v e l o p m e n t Process: Concept t o Strategy
Concept Development and Testing
Marketing Strategy
Business Analysis
645
648
649
M a n a g i n g t h e D e v e l o p m e n t Process: D e v e l o p m e n t
t o Commercialization
651
Product Development
Market Testing
651
653
Commercialization
655
The C o n s u m e r - A d o p t i o n Process
658
Stages in the A d o p t i o n Process
659
Factors Influencing the A d o p t i o n Process
Summary
661
Applications
Notes
vi
663
661
659
645
Chapter 21 Tapping into Global Markets
667
C o m p e t i n g on a G l o b a l Basis
668
D e c i d i n g W h e t h e r t o Go A b r o a d
669
D e c i d i n g Which M a r k e t s t o Enter
How Many Markets t o Enter
670
670
Developed versus Developing Markets
Regional Free Trade Zones
673
Evaluating Potential Markets
673
D e c i d i n g H o w t o Enter t h e M a r k e t
Indirect and Direct Export
674
674
Using a Global W e b Strategy
Licensing
671
675
676
Joint Ventures
676
Direct Investment
677
D e c i d i n g on t h e M a r k e t i n g P r o g r a m
Product
677
678
MARKETING INSIGHT
Global Standardization or
Adaptation?
679
M A R K E T I N G M E M O The Ten C o m m a n d m e n t s of Global
Branding
MARKETING INSIGHT
Communications
Price
680
Establishing Global Service Brands 681
682
684
Distribution Channels
685
C o u n t r y - o f - O r i g i n Effects
686
Building Country Images
686
Consumer Perceptions of Country of Origin
MARKETING INSIGHT
The Ups and Downs of Brand
America
688
D e c i d i n g on t h e M a r k e t i n g O r g a n i z a t i o n
Export Department
International Division
689
689
690
Applications
Notes
688
689
Global Organization
Summary
686
690
691
Chapter 22 Managing a Holistic Marketing Organization
Trends in M a r k e t i n g Practices
Internal M a r k e t i n g
695
696
697
Organizing the Marketing Department
697
xxvii
M A R K E T I N G M E M O Characteristics of Company
Departments That Are Truly
Customer-Driven
Relations with Other Departments
698
703
Building a Creative Marketing Organization
MARKETING INSIGHT
The Marketing CEO 705
Socially Responsible M a r k e t i n g
MARKETING INSIGHT
706
Fueling Strategic Innovation
Corporate Social Responsibility
Cause-Related Marketing
706
707
Socially Responsible Business Models
Social Marketing
704
709
709
712
M A R K E T I N G M E M O Making a Difference
Marketing Implementation
Evaluation and C o n t r o l
Efficiency Control
717
Strategic Control
719
713
715
716
M A R K E T I N G M E M O Marketing Effectiveness Review
Instrument
The F u t u r e o f M a r k e t i n g
720
721
M A R K E T I N G M E M O Major M a r k e t i n g Weaknesses
Summary
726
Applications
Notes
Appendix
Glossary
726
727
A1
G1
Image Credits
Name Index
C1
11
Company, Brand, and Organization index
Subject Index
112
14
725
M
arketing Management is the leading marketing text because its content and organization consistently reflect changes in marketing theory and practice. The very first
edition of Marketing Management, published in 1967, introduced the concept that
companies must be customer-and-market driven. But there was little mention of what have
now become fundamental topics such as segmentation, targeting, and positioning.
Concepts such as brand equity, customer value analysis, database marketing, e-commerce,
value networks, hybrid channels, supply chain management, and integrated marketing
communications were not even part of the marketing vocabulary then. Firms now sell
goods and services through a variety of direct and indirect channels. Mass advertising is not
nearly as effective as it was. Companies are exploring new forms of communication, such
as experiential, entertainment, and viral marketing. Customers are increasingly telling
companies what types of product or services they want and when, where, and how they
want to buy them.
In response, companies have shifted gears from managing product portfolios to managing customer portfolios, compiling databases on individual customers so they can understand them better, and construct individualized offerings and messages. They are doing less
product and service standardization and more niching and customization. They are replacing monologues with customer dialogues. They are improving their methods of measuring
customer profitability and customer lifetime value. They are intent on measuring the return
on their marketing investment and its impact on shareholder value. They are also concerned
with the ethical and social implications of their marketing decisions.
As companies change, so does their marketing organization. Marketing is no longer a
company department charged with a limited number of tasks—it is a company-wide undertaking. It drives the company's vision, mission, and strategic planning. Marketing includes
decisions like who the company wants as its customers; which needs to satisfy; what products and services to offer; what prices to set; what communications to send and receive;
what channels of distribution to use; and what partnerships to develop. Marketing succeeds
only when all departments work together to achieve goals: when engineering designs the
right products, finance furnishes the required funds, purchasing buys quality materials, production makes quality products on time, and accounting measures the profitability of different customers, products, and areas.
And as marketing techniques and organization have changed, so has this text. The biggest
change is the addition of a co-author. Kevin Lane Keller is one of the top marketing academics of his generation. He has conducted ground-breaking research and written a highly
successful text, Strategic Brand Management. He has also worked with marketing executives
from companies around the globe to help them become better marketers. He brings fresh
thinking and new perspectives to Marketing Management.
The twelfth edition reflects a collaborative effort between the two authors with a goal of
creating the best edition of Marketing Management ever. Extensive focus groups were conducted to fully understand the course and classroom needs of the instructor. Based on this
input, the twelfth edition is designed to preserve the strengths of previous editions while
introducing new material and organization to further enhance learning. It is dedicated to
helping companies, groups, and individuals adapt their marketing strategies and management to the marketplace realities of the twenty-first century.
Ill Revision Strategy for the Twelfth Edition
Marketing is of interest to everyone, whether they are marketing goods, services, properties,
persons, places, events, information, ideas, or organizations. As the "ultimate authority" for
students and educators, Marketing Management must be kept up-to-date and contemporary. Students (and instructors) should feel that the book is talking directly to them in terms
of both content and delivery.
XXIX
The success of Marketing Management can be attributed to its ability to maximize three
dimensions that characterize the best marketing texts—depth, breadth, and relevance—as
reflected by the following questions.
n Depth. Does the book have solid academic grounding? Does it contain important theoretical concepts, models, and frameworks? Does it provide conceptual guidance to solve
practical problems?
! Breadth. Does the book cover all the right topics? Does it provide the proper amount of
emphasis on those topics?
i" Relevance. Does the book engage the reader? Is the book interesting to read? Does it have
lots of compelling examples?
The twelfth edition builds on the fundamental strengths of past editions:
n Managerial Orientation. The book focuses on the major decisions that marketing managers and top management face in their efforts to harmonize the organization's objectives, capabilities, and resources with marketplace needs and opportunities.
I Analytical Approach. This book presents conceptual tools and frameworks for analyzing
recurrent problems in marketing management. Cases and examples illustrate effective
marketing principles, strategies, and practices.
n Multidisciplinary Perspective. This book draws on the rich findings of various scientific
disciplines—economics, behavioral science, management theory, and mathematics—for
fundamental concepts and tools.
n Universal Applications. This book applies strategic thinking to the complete spectrum of
marketing: products and services, consumer and business markets, profit and nonprofit
organizations, domestic and foreign companies, small and large firms, manufacturing
and intermediary businesses, and low- and high-tech industries.
I Comprehensive and Balanced Coverage. This book covers all the topics an informed
marketing manager needs to understand to execute strategic, tactical, and administrative
marketing.
N e w Themes: Holistic Marketing
One major new theme in this edition is holistic marketing. Holistic marketing can be seen
as the development, design, and implementation of marketing programs, processes, and
activities that recognize the breadth and interdependencies involved today's marketing
environment. Holistic marketing recognizes that "everything matters" with marketing and
that a broad, integrated perspective is often necessary. Holistic marketing has four key
dimensions:
1. Internal marketing-ensuring everyone in the organization embraces appropriate marketing principles, especially senior management.
2. Integrated marketing-ensuring that multiple means of creating, delivering and communicating value are employed and combined in the optimal manner.
3. Relationship marketing-having rich, multi-faceted relationships with customers, channel members and other marketing partners.
4. Socially responsible marketing-understanding the ethical, environmental, legal, and
social effects of marketing.
These four dimensions are woven throughout the book and at times spelled out explicitly.
Two additional themes of this text are marketing personalization and marketing accountability. The former reflects all the attempts to make marketing more individually relevant; the latter reflects the need to understand and justify the return on marketing investments within
organizations.