Marketing Sixth Edition PDF

sixth edition grewal levy  mar. ket. ing Marketing is the activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, part...

sixth edition grewal levy  mar. ket. ing Marketing is the activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. The definition of marketing, established by the American Marketing Association, October 2007. Word in italics was added by authors. mhhe.com/grewal6e Marketing Sixth Edition Dhruv Grewal, PhD Babson College Michael Levy, PhD Babson College MARKETING, SIXTH EDITION Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2018 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous edition © 2016, 2014, 2012, 2010, and 2008. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for ­distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 LWI/LWI 21 20 19 18 17 ISBN 978-1-259-70907-4 MHID 1-259-70907-8 Chief Product Officer, SVP Products & Markets: G. Scott Virkler Vice President, General Manager, Products & Markets: Michael Ryan Vice President, Content Design & Delivery: Betsy Whalen Managing Director: Susan Gouijnstook Brand Manager: Meredith Fossel Director, Product Development: Meghan Campbell Lead Product Developer: Kelly L. Delso Product Developer: Lai T. Moy Director, Marketing: Robin Lucas Marketing Manager: Elizabeth Schonagen Market Development Manager: Andrea Shieve Digital Product Analyst: Kerry Shanahan Director, Content Design & Delivery: Terri Schiesl Program Manager: Mary Conzachi Content Project Managers: Christine A. Vaughan; Danielle Clement Buyer: Susan G. Culbertson Design: Matt Diamond Content Licensing Specialists: DeAnna Dausener; Ann Marie Jannette Cover Images: Tomislav Forgo/Getty Images; Jack Anderson/Getty Images; habovka/Getty Images; Devan Muir/Getty Images Compositor: Aptara®, Inc. Typeface: 10/12 STIX Mathjax Main Printer: LSC Communications Section/chapter opener strawberry image: © Himbeertoni/Getty Images RF All credits appearing on page or at the end of the book are considered to be an extension of the copyright page. Library of Congress Cataloging-in-Publication Data Names: Grewal, Dhruv, author. | Levy, Michael, 1950- author. Title: Marketing / Dhruv Grewal, PhD, Babson College, Michael Levy, PhD,   Babson College. Description: Sixth edition. | New York, NY : McGraw-Hill Education, Identifiers: LCCN 2016046062 | ISBN 9781259709074 (alk. paper) | ISBN 1259709078 (alk. paper) Subjects: LCSH: Marketing. Classification: LCC HF5415.G6753 2018 | DDC 658.8—dc23 LC record available at https://lccn.loc.gov/2016046062 The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites. mheducation.com/highered  To my family for their never-ending support; my wife Diana; and my children, Lauren and Alex. —Dhruv Grewal To Mark Levy, my best friend and brother. —Michael Levy  about the authors Dhruv Grewal He has won a number of awards for his teaching: 2005 Sherwin-Williams Distinguished Teaching Award, Society for Dhruv Grewal, PhD (Virginia Tech), Marketing Advances; 2003 American Marketing Association is the Toyota Chair in Commerce and Award for Innovative Excellence in Marketing Education; 1999 Electronic Business and a professor Academy of Marketing Science Great Teachers in Marketing of marketing at Babson College. He is Award; Executive MBA Teaching Excellence Award (1998); School listed in The World’s Most Influential of Business Teaching Excellence Awards (1993, 1999); and Scientific Minds, Thompson Reuters Virginia Tech Certificate of Recognition for Outstanding Teaching 2014 (only eight from the marketing (1989). He has won numerous awards for his research: 2016 Courtesy of Dhruv Grewal field and 95 from economics and Journal of Marketing Sheth Award; William R. Davidson Journal business are listed). He was of Retailing Best Paper Awards 2010, 2012, and 2016; Luis W. awarded the 2013 university-wide Distinguished Graduate Stern Awards 2011 and 2015 (AMA IO Sig); William R. Davidson Alumnus from his alma mater, Virginia Tech, the 2012 Lifetime Journal of Retailing Honorable Mention Awards 2010 and 2011; Achievement Award in Pricing (AMA Retailing & Pricing SIG), the Babson College Faculty Scholarship Award (2010 and 2015); 2010 Lifetime Achievement Award in Retailing (AMA Retailing University of Miami School of Business Research Excellence SIG), the 2010 AMS Cutco/Vector Distinguished Educator Award, Award for the years 1991, 1995, 1996, and 1998; Best Services the 2010 Lifetime Achievement Award in Retailing (AMA Retailing Paper Award (AMA Services SIG 2002); Stanley C. Hollander SIG), and in 2005 the Lifetime Achievement in Behavioral Pricing Best Retailing Paper (AMS 2002 and 2008); and M. Wayne Award (Fordham University, November 2005). He is a DeLozier Best Conference Paper (AMS 2002 and 2008). He Distinguished Fellow of the Academy of Marketing Science. He also received Best Reviewer Awards (Journal of Retailing 2008, was ranked first in the marketing field in terms of publications in Journal of Marketing 2014), best area editor (Journal of the the top-six marketing journals during the 1991–1998 period and Academy of Marketing Science 2016), and a Distinguished again for the 2000–2007 period. He ranked eighth in terms of Service Award (Journal of Retailing 2009). publications in JM and JMR during the 2009–2013 period and Professor Grewal has taught executive seminars and ranked seventh in terms of publications in the Journal of Public courses and/or worked on research projects with numerous Policy & Marketing for the period 1992–2001. He was also firms, such as Dell, ExxonMobil, IRI, Radio Shack, Telcordia, ranked first in terms of publications and third in ­citations for Khimetriks, Profit-Logic, McKinsey, Ericsson, Motorola, Nextel, pricing research for the time period 1980–2010 in 20 marketing FP&L, Lucent, Sabre, Goodyear Tire & Rubber Company, and business publications. He has served as VP, research and Sherwin-Williams and Asahi. He has delivered seminars in the conferences, American Marketing Association Academic Council United States, Europe, Latin America, and Asia. He has also (1999–2001), and as VP, development for the Academy of served as an expert witness and worked as a consultant on Marketing Science (2000–2002). He was co-editor of Journal numerous legal cases. of Retailing from 2001 to 2007. He co-chaired the 1993 Academy of Marketing Science Conference, the 1998 Winter Michael Levy American Marketing Association Conference, the 2001 AMA doctoral consortium, the American Marketing Associa­ Michael Levy, PhD (Ohio State tion 2006 Summer Educators Conference, the 2011 DMEF re- University), is the Charles Clarke search summit, and the 2012 and 2015 AMA/ACRA Retailing Reynolds Professor of Marketing Conference. Emeritus at Babson College and CEO Professor Grewal has published over 140 articles in jour- of RetailProf LLC. He received his PhD nals such as the Journal of Retailing, Journal of Marketing, in business administration from The Journal of Consumer Research, Journal of Marketing Ohio State University and his under- Research, Journal of Consumer Psychology, Journal of Applier Courtesy of Michael Levy graduate and MS degrees in business Psychology, and Journal of the Academy of Marketing Science, administration from the University of as well as other journals. He currently serves on numerous edi- Colorado at Boulder. He taught at Southern Methodist University torial and advisory review boards, such as the Journal of before joining the faculty as professor and chair of the market- Retailing, Journal of Marketing (area editor), Journal of Marketing ing department at the University of Miami. Research, Journal of Consumer Psychology, Journal of the Professor Levy received the inaugural ACRA Academic Academy of Marketing Science (area editor), Academy of Lifetime Achievement Award presented at the 2015 AMA/ACRA Marketing Science Review, Journal of Interactive Marketing, (American Marketing Association/American Collegiate Retailing Journal of Business Research, and Journal of Public Policy & Association) Triennial Conference; was recognized for 25 years Marketing. He has over 35,000 citations based on Google scholar. of dedicated service to the editorial review board of the Journal vii viii about the authors of Retailing in 2011. He won the McGraw-Hill Corporate Academy of Marketing Science, International Journal of Achievement Award for Grewal–Levy Marketing 2e with Physical Distribution and Materials Management, International Connect in the category of excellence in content and analytics Journal of Business Logistics, ECR Journal, European Business (2010); Revision of the Year for Marketing 2e (Grewal–Levy) Review, and has been on the editorial advisory boards of from McGraw-Hill/Irwin (2010); the 2009 Lifetime Achievement European Retail Research and the European Business Review. Award, American Marketing Association, Retailing Special He is co-author of Retailing Management, 9e (2014), the Interest Group (SIG); the Babson Faculty Scholarship Award best-selling college-level retailing text in the world. Professor (2009); and the Distinguished Service Award, Journal of Levy was co-editor of the Journal of Retailing from 2001 to Retailing (2009) (at winter AMA). 2007. He co-chaired the 1993 Academy of Marketing Science He was rated as one of the best researchers in marketing conference and the 2006 summer AMA conference. in a survey published in Marketing Educator (Summer 1997). He Professor Levy has worked in retailing and related disci- has developed a strong stream of research in retailing, business plines throughout his professional life. Prior to his academic ca- logistics, financial retailing strategy, pricing, and sales manage- reer, he worked for several retailers and a housewares ment. He has published over 50 articles in leading marketing distributor in Colorado. He has performed research projects and logistics journals, including the Journal of Retailing, Journal with many retailers and retail technology firms, including of Marketing, Journal of the Academy of Marketing Science, Accenture, Federated Department Stores, Khimetrics (SAP), and Journal of Marketing Research. He has served on the edi- Mervyn’s, Neiman Marcus, ProfitLogic (Oracle), Zale Corporation, torial review boards of the Journal of Retailing, Journal of the and numerous law firms.  New to the Sixth Edition Some exciting new additions to the Sixth Edition! Chapter 1, “Overview of Marketing,” starts with a discussion of one of the world’s most successful chocolate brands, Godiva, which is in keeping with this edition’s cover theme— how chocolate has gone from a commodity to a high-value branded product through mar- keting. The Superior Service, Adding Value, Social & Mobile Marketing, and Ethical & Societal Dilemma boxes now cover such new topics as in-flight WiFi, Whole Foods ­purpose-based marketing, the growth of mobile advertising, and free fruit offered by super- markets to individuals shopping with children. A new section on marketing analytics is also accompanied in other chapters by new Marketing Analytics boxes. In this chapter the Marketing Analytics box discusses how Starbucks uses analytics to determine new store locations. Finally the chapter closes with a new case study on the global chocolate market, again in keeping with this edition’s cover theme on how marketing has added value to the chocolate industry. Chapter 2, “Developing Marketing Strategies and a M ­ arketing Plan,” opens with a dis- cussion on PepsiCo, weaving in a comparison between PepsiCo and Coca-Cola throughout the chapter. We introduce a new Superior Service box highlighting Amazon’s new home-­ service option, as well as a new Ethical & Social Dilemma box examining Volkswagen’s Dieselgate scandal. The new Marketing Analytics box covers Google’s predictive analytics. In addition, the chapter ends with a new case study on the coffee wars between Starbucks, Dunkin' Donuts, and McDonald’s. Chapter 3, “Social and Mobile Marketing,” begins with a new opener on how Under Armour has successfully used social media in its marketing campaigns. The chapter also features a new section that details the wheel of social media engagement. The wheel of engagement highlights the information, connected, network, dynamic, and timeless effects of social media. The chapter also includes a new Adding Value box describing how ­Mercedes-Benz uses LinkedIn, an Ethical & Societal Dilemma box on how Disney ­appeals to moms, and two new Marketing Analytics boxes: one that covers eHarmony’s analytics and the other on how Twitter and Billboard are teaming up to create real-time top music lists. Chapter 4, “Conscious Marketing, Corporate Social Responsibility, and Ethics,” is re-titled to reflect a new section on conscious marketing, which argues that firms have a sense of purpose that encompasses four key principles: (1) recognizing marketing’s greater purpose, (2) considering stakeholders and their interdependence, (3) conscious leader- ship and its role in creating a corporate culture, and (4) understanding that decisions are ethically based. Chapter 4 also includes a new opener on the TOMS shoes company, a new Marketing Analytics box on how Kellogg’s uses analytics to address GMO concerns, and a new Social & Mobile Marketing box on how cell phones are being used to help custom- ers at the bottom of the pyramid. Chapter 5, “Analyzing the Marketing Environment,” starts with a discussion of Panera Bread’s new clean menu. The chapter includes a new Superior Service box on CVS’s mo- bile MinuteClinic app and a new Marketing Analytics box that highlights Netflix’s predic- tive analytics. It also includes a new Adding Value box on Google’s self-driving car. ix  Chapter 6, “Consumer Behavior,” begins with a discussion of Nike’s partnership with the Weather Channel and how it is using the Weather Channel app to advertise. A new Marketing Analytics box highlights how H&R Block uses analytics to create new tax ser- vices. A new Ethical & Societal Dilemma box discusses the allegations of unethical prac- tices by pharmaceutical firms. Chapter 7, “Business-to-Business Marketing,” starts with an interesting application of a B2B market—how Amazon Business serves its partners. The chapter also includes two new boxes: Marketing Analytics on cloud computing and Adding Value on Xerox's fashion show to sell its latest printer. The chapter also includes a new case study on Staples’ B2B business. Chapter 8, “Global Marketing,” examines how companies that either market the same products globally or have to change their products for the global market have ­different challenges from those that operate only in domestic markets. The new opener highlights the challenges faced by Netflix as it expands to the global economy. New examples include Chanel and how they are addressing the exchange rate in China, as well as Porsche’s and Marks & Spencer’s marketing fumbles when advertising to the Chinese market. Chapter 9, “Segmentation, Targeting, and Positioning,” opens with a discussion of how ABC Family’s segmentation strategy has influenced its recent rebranding effort. A new Marketing Analytics box features Starbucks’ wildly popular mobile app, and a new Superior Service box highlights how hotels leverage their proximity to universities. The chapter also includes a new case study on Mercedes-Benz’s marketing strategy. Chapter 10, “Marketing Research,” begins with a discussion about how research has influenced the lingerie company Adore Me to use plus-sized models. A new Superior Ser- vice box explains how universities analyze usage data to identify when students use on-campus gyms to improve their college experience. Finally, the chapter concludes with a case study on how the YMCA is redefining itself. Chapter 11, “Product, Branding, and Packaging Decisions” includes the following new boxes: Adding Value about the latest entry-level luxury cars, Marketing Analytics that discusses how Macy’s uses analytics to determine its assortment, and Ethical & Societal Dilemma that highlights how Mars, Inc. is moving toward sugar labeling on its candy prod- ucts. This chapter concludes with a new case study describing how Birkenstock has be- come a fashion brand. Chapter 12, “Developing New Products,” begins with a discussion of Xiaomi’s afford- able smartphones in Asia; a new Adding Value box explores how Disney licenses its mov- ies and characters to toy companies; a new Ethical & Societal Dilemma box discusses concerns about the rise in the popularity of drones; a new Marketing Analytics box f­ ocuses on GM’s use of big data to develop new cars and features; and a new Adding Value box features SkinnyPop snacks. Chapter 13, “Services: The Intangible Product,” opens with a new vignette about lu- lulemon’s new flagship store in New York City, which is designed to provide consumers with exceptional customer service. New boxes include ­Adding Value about Pepsi’s new Kola House restaurant and Marketing Analytics about Kroger's use of analytics to ­determine how to reduce wait times during checkout. A new case study highlights the differences among Uber, Lyft, and traditional taxis. Chapter 14, “Pricing Concepts for Establishing V ­ alue,” describes pricing concepts us- ing new examples from Coca-Cola in an Ethical & Societal Dilemma box, Amazon in a new Adding Value box, and airline ticket pricing in a Marketing Analytics box. x Chapter 15, “Strategic Pricing Methods,” begins with a discussion of Disney’s new surge pricing at its theme parks. Updated examples include two new Ethical & Societal Dilemma boxes: one about how Apple is conspiring with publishers to raise the price of e-books, and another about the gray market for luxury goods. F ­ inally, the chapter ends with a new case study on the pizza industry, focusing specifically on Papa John’s, Little Caesars, Domino’s, Pizza Hut, and local pizzerias. Chapter 16, “Supply Chain and Channel Management,” opens with a vignette on IKEA’s innovations in its supply chain. New boxes in this chapter include: Marketing ­Analytics on Amazon’s anticipatory shipping, Ethical & Societal Dilemma on how con- sumer demands for organic products is affecting the supply chain, and Adding Value on e-tailing in the United States versus India. Chapter 17, “Retailing and Omnichannel Marketing,” begins with a discussion of a retail innovator–Amazon. It includes a new Superior Service box on how Burberry is seeking to access its customers directly, a new Marketing Analytics box discussing Fresh- Direct, a new Social & Mobile Marketing box detailing IKEA’s online and in-store retail- ing strategies, and a new case study about how Macy’s is taking initiatives to maintain its competitive advantage. Chapter 18, “Integrated Marketing Communications,” starts with Pepsi’s emoji cam- paign to illustrate how integrated marketing communications is at the forefront of market- ing. New boxes: Social & Mobile Marketing describing how ­Domino’s uses Snapchat for a marketing campaign, Adding Value about Pepsi’s endorsement on the television show Em- pire, Ethical & Societal Dilemma highlighting how companies take risks when developing their IMC programs, Adding Value on the partnership between the NBA and Kia, and Marketing Analytics describing how Puma uses Google’s analytics. The chapter concludes with a new case study on Pepsi’s Pepsi Max campaign. Chapter 19, “Advertising, Public Relations, and Sales Promotions,” starts with ­McDonald’s “Our Food. Your Questions” campaign. There is a new Social & Mobile ­Marketing box on how mobile advertising is pushing out digital advertising, a new Adding Value box on the use of popular music in advertisements, and a new Marketing Analytics box on how CVS uses the data it collects from its loyalty program to target coupons to consumers. Chapter 20, “Personal Selling and Sales Management,” begins with a discussion of IBM’s Watson. The chapter also includes a new Social & Mobile Marketing box highlight- ing how companies can use mobile CRM systems, and an Adding Value box on how selling Tupperware can empower women in Indonesia. xi  a letter from the authors We are pleased to welcome you to the sixth edition of Marketing ! Since the first edition, we have committed to emphasizing a basic, yet essential, theme: Marketing adds value. This theme comes through not only in our instructional features but also in our covers. With each edition’s cover, we have featured a product that, because of marketing, has become more valuable in the eyes of consumers than it might have otherwise become. Last edition we featured coffee; in previous editions, we featured yogurt, water, and jeans. For this sixth edition, we feature chocolate. These are all familiar products that started out as commodities but became high-value branded products because of marketing. How We Show That Marketing Adds Value As with previous editions of Marketing, we continue to emphasize how marketing has evolved into its present-day, integral business function of creating value. We also focus on how firms maintain value and rely on value for establishing lasting relationships with their customers. To keep students engaged with this theme, we offer the following features: Adding Value—illustrate how companies add value not only in providing products and services but also in making contributions to society. Ethical & Societal Dilemmas—emphasize the role of marketing in society. Marketing Analytics—feature companies that rely on sophisticated data analyt- ics to define and refine their approaches to their customers and their markets. Marketing Digitally—illustrates how marketers successfully use digital media in their marketing campaigns and efforts. Social & Mobile Marketing—discuss how social media are used in marketing products. Superior Service—highlight the emerging role of the service industry. How We Teach the Basics of Marketing We understand that for students to appreciate discussions of how marketing adds value, they must first develop a basic understanding of key marketing principles and core concepts. In this effort, we believe students learn best when they see how a subject relates to them. Through- out this edition and all those prior, we provide numerous examples of how students engage in ­marketing activities every day of their lives—either as consumers or sellers of a product or service. In addition to providing the traditional study and reinforcement tools of most princi- ples of marketing products, we also offer ways to help students think critically about and apply core concepts: xii Chapter-Opening Vignettes focus on some of the marketplace challenges faced by such well-known companies as Under Amour, PepsiCo, TOMS, Netflix, Amazon, and others. Marketing Applications encourage students to apply what they have learned to marketing scenarios that are relevant to their lives. End-of-Chapter Cases help students develop analytical, critical-thinking, and tech- nology skills. Progress Checks throughout each chapter give students the opportunity to stop and consider whether their understanding of key concepts is progressing as it should. Auto-graded Application Exercises in Connect (such as video cases, case analyses, and click-drags) challenge students to apply marketing concepts to real-life marketing scenarios, which fosters their critical-thinking skills in lecture and beyond. Why We Believe in the Value of Marketing Beyond teaching a principles of marketing course and developing a product to be taught, we also want to impress upon our students why marketing in and of itself is valuable. Marketing creates enduring and mutually valuable relationships between companies and their consumers. Marketing identifies what customers value at the local level in order to make it possible for firms to expand at the global level. Without marketing, it would be difficult for any of us to learn about new products and services. In fact, an understanding of marketing can help students find jobs after they finish school. If we can inspire this understanding of the value of marketing in our students, then we will have succeeded in demonstrating how marketing adds value... to their education, their careers, and to their lives. Dhruv Grewal, Babson College Michael Levy, Babson College xiii  ® Required=Results ©Getty Images/iStockphoto McGraw-Hill Connect® Learn Without Limits Connect is a teaching and learning platform that is proven to deliver better results for students and instructors. Connect empowers students by continually adapting to deliver precisely what they need, when they need it, and how they need it, so your class time is more engaging and effective. 73% of instructors who use Connect require it; instructor Using Connect improves retention satisfaction increases by 28% rates by 19.8%, passing rates by when Connect is required. 12.7%, and exam scores by 9.1%. Analytics Connect Insight® Connect Insight is Connect’s new one-of-a- kind visual analytics dashboard—now available for both instructors and students—that provides at-a-glance information regarding student performance, which is immediately actionable. By presenting assignment, assessment, and topical performance results together with a time metric that is easily visible for aggregate or individual results, Connect Insight gives the user the ability to take a just-in-time approach Students can view to teaching and learning, which was never before available. their results for any Connect Insight presents data that empowers students and helps instructors improve class performance in a way that is Connect course. efficient and effective. Mobile Connect’s new, intuitive mobile interface gives students and instructors flexible and convenient, anytime–anywhere access to all components of the Connect platform. Adaptive THE ADAPTIVE READING EXPERIENCE DESIGNED TO TRANSFORM THE WAY STUDENTS READ More students earn A’s and B’s when they use McGraw-Hill Education Adaptive products. SmartBook® Proven to help students improve grades and study more efficiently, SmartBook contains the same content within the print book, but actively tailors that content to the needs of the individual. SmartBook’s adaptive technology provides precise, personalized instruction on what the student should do next, guiding the student to master and remember key concepts, targeting gaps in knowledge and offering customized feedback, and driving the student toward comprehension and retention of the subject matter. Available on tablets, SmartBook puts learning at the student’s fingertips—anywhere, anytime. Over 8 billion questions have been answered, making McGraw-Hill Education products more intelligent, reliable, and precise. Practice Marketing Practice Marketing is a 3D, online, single- or multiplayer game that helps students apply the four Ps by taking on the role of Marketing Manager for a backpack company. By playing the game individually and/or in teams, students come to understand how their decisions and elements of the marketing mix affect one another. Practice Marketing is easy to use, fully mobile, and provides an interactive alternative to marketing plan projects. Log in to mhpractice.com with your Connect credentials to access a demo, or contact your local McGraw-Hill representative for more details. www.mheducation.com acknowledgments We would like to acknowledge the considerable contributions of Elisabeth Nevins and Jenny Esdale for their help throughout the development of this edition of Marketing. We wish to express our sincere appreciation to Leroy Robinson of the University of Houston–Clear Lake for his work on the instructor's manual and the PowerPoint slides; Melissa Martin of George Mason University for her contributions to the Connect instructor’s manual, video guide, and Connect application exercises; and to Susan Simpfenderfer of ID8 for her contributions to the test bank. We are grateful to Kelly Luchtman at Lightfellow for her continuing hard work on video production. Our McGraw-Hill editorial and production staff also deserve recognition for their ­patient and professional support: executive brand manager, Meredith Fossel; market- ing manager, Elizabeth Schonagen; senior product developer, Lai Moy; lead content project manager, Christine Vaughan; senior content project manager, Danielle Clement; senior designer, Matt Diamond; content l­icensing specialists, DeAnna Dausener and Ann Marie Jannette; and photo researchers, Danny Meldung and Julie De Adder. Our colleagues in industry have been invaluable in providing us with case, video, ­advertising, and photo materials. Over the years, we have had the opportunity to work with many talented and ­insightful colleagues. We have benefited from our research and discussions with them. Some of these colleagues are: Anne L. Roggeveen, Victoria Crittenden, Anjali Bal, Lauren S. Beitelspacher, Krista Hill, Rajendra Sisodia, Bala Iyer (Babson College); Ruth Bolton, Steve Brown, and Terry Bristol (Arizona State University); Ramon Avila (Ball State University); Joan Lindsey-Mullikin and Norm Borin (Cal Poly, San Luis Obispo); Ko de Ruyter (Cass Business School); Larry D. Compeau (Clarkson University); Don Lehmann and Keith L. Wilcox (Columbia); Praveen Kopalle, Scott Neslin, and Kusum Ailawadi (Dartmouth); Rajneesh Suri (Drexel); Rajesh Chandrashekaran (Fairleigh Dickinson University); Gopal Iyer and Tamara Mangleburg (Florida Atlantic University); Anthony Miyazaki and Walfried Lassar (Florida International University); Hooman Estelami (Fordham University); Ronnie Goodstein (Georgetown); V. Kumar (Georgia State University); Scott Motyka (KGI); K. Sivakumar (Lehigh University); Martin Wetzels and Dominik Mahr (Maastricht University); Yu Ma (McGill University); Maria Elena Vazquez Lira (Monterrey Tec); Douglas M. Lambert and Walter Zinn (Ohio State University); Wagner Kamakura (Rice); Thomas Rudolph (St. Gallen University); Jens Nordfält (Stockholm School of Economics); Zhen Zhu (Suffolk University); Venkatesh Shankar, Mark Houston, and Manjit Yadav (Texas A&M); Julie Baker and William Cron (Texas Christian University); Rodney C. Runyan (Texas State University); Kristy Reynolds (University of Alabama); Merrie Brucks and Ajith Kumar (University of Arizona); Dinesh Gauri (University of Arkansas); Nancy M. Puccinelli (University of Bath); Cheryl Nikata (University of Illinois, Chicago); David Hardesty (University of Kentucky); Arun Sharma, A. Parasuraman, R. Krishnan, Howard Marmorstein, Anuj Mehrotra, Claudia Townsend, and Michael Tsiros (University of Miami); Francisco Villarroel Ordenes (University of Massachusetts Amherst); A. C. Samli (University of North Florida); Monika Kukar Kinney and Kent Monroe (University of Richmond); Abhijit Guha (University of South Carolina); Valerie Folkes (University of Southern California); Stephanie Noble (University of Tennessee); Robert Peterson (University of Texas at Austin); Carolyn Costley (University of Waikato); Rob Palmatier (University of Washington); Abhijit Biswas and Sujay Dutta (Wayne State University); and M. Joseph Sirgy (Virginia Tech).  acknowledgments xvii We would like to thank the following instructors for providing feedback to shape the fifth and sixth editions. A special thank you to: Wendi L. Achey Reba Heberlein Susan Myrden Northampton Community College Madison Area Technical College University of Maine Ebru Ulusoy Akgun Tarique Hossain Steve Noll University of Maine California State Polytechnic University Madison Area Technical College Audrey Ashton-Savage Elizabeth Jane Matthew O’Hern Peter T. Paul College of Business and Wilson Suffolk University University of Oregon Economics, University of New Hampshire Mayuresh M. Kelkar David Terry Paul Nisreen Bahnan Salem State University The Ohio State University Salem State University Todd Korol Frank Allen Philpot Linda Jane Coleman Monroe Community College George Mason University Salem State University Kathleen A. Krentler Lori A. Radulovich Kevin Joseph Cumiskey San Diego State University Baldwin Wallace University Eastern Kentucky University Jamie Lambert Jean Marc Rejaud Laura Dix Ohio University Fashion Institute of Technology Ferris State University Marilyn Lavin Harper Andrew Roehm, Jr. Kim Donahue University of Wisconsin-Whitewater University of North Carolina–Greensboro Indiana University, Kelley School of Business Patricia Marco Donald Shemwell Indianapolis Madison College East Tennessee State University Jerome Gafford Mary Christene Martin John Striebich University of North Alabama Fort Hays State University Monroe Community College James Gorman Carolyn A. Massiah Robert Scott Taylor Houson University of Alabama University of Central Florida Moberly Area Community College Daniel E. Hallock Maria McConnell Steven A. Taylor University of North Alabama Lorain County Community College Illinois State University Dana L. E. Harrison Joyce L. Meyer Deborah Utter East Tennessee State University The University of Alabama Boston University For their contributions to previous editions of Marketing, we gratefully acknowledge: Wendi Achey Sandy Becker Claire Bolfing Northampton Community College Rutgers Business School James Madison University Praveen Aggarwal Hannah Bell-Lombardo Karen Bowman University of Minnesota, Duluth Bryant University University of California Maria Aria Ellen Benowitz Tom Boyd Camden County College Mercer County Community California State University–Fullerton Dennis Arnett College Nancy Boykin Texas Tech University Gary Benton Tarleton State University Gerard Athaide Western Kentucky University Cathy Brenan Loyola College of Maryland Joseph Ben-Ur Northland Community and Technical Timothy W. Aurand University of Houston at Victoria College Northern Illinois University Patricia Bernson Martin Bressler Laurie Babin County College of Morris Houston Baptist University University of Louisiana Harriette Bettis-Outland Claudia Bridges at Monroe University of West Florida California State University Ainsworth Bailey Parimal Bhagat Glen H. Brodowsky University of Toledo Indiana University of Pennsylvania California State University, San Marcos Aysen Bakir Amit Bhatnagar Greg Broekemier Illinois State University University of Wisconsin, Milwaukee University of Nebraska Kearney Joyce Banjac Jan Bingen Gary Brunswick Myers University Little Priest Tribal College Northern Michigan University Harvey Bauman John Bishop Alan J. Bush Lees McRae College University of South Alabama–Mobile University of Memphis Oleta Beard Nancy Bloom John Buzza University of Washington Nassau Community College Monmouth University xviii acknowledgments Linda Calderone Tilokie Depoo Jana Goodrich SUNY, Farmingdale Monroe College Penn State Behrend Nathaniel Calloway Monique Doll Robin Grambling University of Maryland, University College Macomb Community College University of Texas at El Paso Rae Caloura Kimberly Donahue Kimberly D. Grantham Johnson & Wales University Indiana University–Purdue University University of Georgia Michaelle Cameron at Indianapolis James I. Gray St. Edwards University Jim D’Orazio Florida Atlantic University Catherine Campbell Cleveland State University Kelly Gredone University of Maryland Michael Dore Bucks County Community College Carlos Castillo University of Oregon Tom Greene University of Minnesota, Duluth James Downing Eastern Washington University Eve Caudill University of Illinois–Chicago Michael Greenwood Winona State University Michael Drafke Mount Wachusett Community College Carmina Cavazos College of DuPage Barbara Gross University of Saint Thomas Leon Dube California State University–Northridge Lindell Chew Texas A&M University David Grossman Linn University of Missouri Colleen Dunn Florida Southern College Dorene Ciletti Bucks County Community College Hugh Guffey Duquesne University John Eaton Auburn University Melissa Clark Arizona State University–Tempe Reetika Gupta University of North Alabama Kellie Emrich Lehigh University Terry Clark Cuyahoga Community College John Hafer Southern Illinois University–Carbondale Nancy Evans University of Nebraska at Omaha Joyce Claterbos New River Community College Allan Hall University of Kansas Keith Fabes Western Kentucky University Gloria Cockerell Berkeley College Joan Hall Collin County College Tina Facca Macomb Community College Paul Cohen John Carroll University Clark Hallpike Florida Atlantic University Joyce Fairchild Elgin Community College Mark E. Collins Northern Virginia Community College James E. Hansen University of Tennessee David J. Faulds University of Akron Clare Comm University of Louisville Don Hanson University of Massachusetts, Lowell Larry Feick Bryant University Sherry Cook University of Pittsburgh Jeffrey Harper Southwest Missouri State University Karen Flaherty Texas Tech University Stan Cort Oklahoma State University–Stillwater Dorothy Harpool Case Western Reserve University Leisa Flynn Wichita State University Keith Cox Florida State University Lynn Harris University of Houston William Foxx Shippensburg University Ian Cross Auburn University Linda Hefferin Bentley College Alan Friedenthal Elgin Community College Geoffrey Crosslin Kingsborough Community College Charlane Held Kalamazoo Valley Community Douglas Friedman Onondaga Community College College Penn State University Lewis Hershey Brent Cunningham Stanley Garfunkel Fayetteville State University Jacksonville State University Queensborough Community College Jonathan Hibbard Clayton L. Daughtrey S. J. Garner Boston University Metropolitan State College of Denver Eastern Kentucky University Tom Hickman Charlene Davis David Gerth Loyola University Trinity University Nashville State Community College Robbie Hillsman Joseph DeFilippe Peggy Gilbert University of Tennessee–Martin Suffolk County Community College Missouri State University Nathan Himelstein George Deitz Kelly Gillerlain Essex County College University of Memphis Tidewater Community College Adrienne Hinds Kathleen DeNisco George Goerner Northern Virginia Community College Erie Community College Mohawk Valley Community College at Annandale  acknowledgments xix John Hobbs Sandie Lakin Maria McConnnell University of Oklahoma Hesser College Lorain County Community College Don Hoffer Timothy Landry Dennis Menezes Miami University University of Oklahoma University of Louisville, Louisville Craig Hollingshead Don Larson Mohan Menon Texas A&M University, Kingsville Ohio State University University of South Alabama Donna Hope Felicia Lassk Michelle Meyer Nassau Community College Northeastern University Joliet Junior College Ronald Hoverstad J. Ford Laumer Ivor Mitchell University of the Pacific Auburn University University of Nevada Reno Kris Hovespian Marilyn Lavin Mark Mitchell Ashland University University of Wisconsin, Whitewater University of South Carolina James Hunt Kenneth Lawrence Steven Moff University of North Carolina Wilmington New Jersey IT Pennsylvania College of Technology Shane Hunt Freddy Lee Rex Moody Arkansas State University California State University, Los Angeles University of Colorado Julie Huntley Rebecca Legleiter Rex Moody Oral Roberts University Tulsa CC Southeast Campus Central Washington University at Ellensburg Sean Jasso Hillary Leonard Melissa Moore University of California–Riverside University of Rhode Island Mississippi State University Carol Johanek Natasha Lindsey Linda Morable Washington University, St. Louis University of North Alabama Richland College Doug Johansen Guy Lochiatto Farrokh Moshiri University of North Florida Massachusetts Bay Community College University of California–Riverside Candy Johnson Paul Londrigan Dorothy Mulcahy Holyoke Community College Mott Community College Bridgewater State College Maria Johnson Terry Lowe James Munch Macomb Commity College, Heartland Community College Wright State University–Dayton Clinton Township Dolly Loyd Brian Murray University of Southern Mississippi Keith Jones Jefferson Community College North Carolina A&T University Harold Lucius Suzanne Murray Rowan University Janice Karlen Piedmont Technical College CUNY–Laguardia Community College Alicia Lupinacci James E. Murrow Tarrant Community College Eric J. Karson Drury University Villanova University Stanley Madden Noreen Nackenson Baylor University Rajiv Kashyap Nassau Community College William Paterson University Lynda Maddox Sandra Blake Neis George Washington University Josette Katz Borough of Manhattan Community Atlantic Cape Community College Moutusi Maity College University of Wisconsin, Whitewater Garland Keesling John Newbold Towson University Cesar Maloles Sam Houston State University California State University, East Bay Imran Khan Keith Niedermeier University of South Alabama–Mobile Karl Mann University of Pennsylvania Tennessee Tech University Todd Korol Martin Nunlee Cathy Martin Monroe Community College Syracuse University University of Akron Dennis Lee Kovach Hudson Nwakanma Melissa Martin Community College of Allegheny County Florida A & M University George Mason University Dmitri Kuksov Carolyn Massiah Lois Olson Washington University–St Louis University of Central Florida San Diego State University Jeff Kulick Tamara Masters Beng Ong George Mason University Brigham Young University California State University, Fresno Michelle Kunz Erika Matulich Daniel Onyeagba Morehead State University University of Tampa Argosy University, Atlanta Ann T. Kuzma Bob Mayer Karen Overton Minnesota State University, Mankato Mesa State College Houston Community College John Kuzma Nancy McClure Deborah L. Owens Minnesota State University at Mankato University of Central Oklahoma University of Akron xx acknowledgments Esther Page-Wood Juanita Roxas Steve Taylor Western Michigan University California State Polytechnic University Illinois State University Richard Pascarelli Donald Roy Sue Taylor Adelphi University Middle Tennessee State University Southwestern Illinois College Terry Paul Linda Salisbury Sharon Thach Ohio State University, Columbus Boston College Tennessee State University Michael Pearson Nick Sarantakes Mary Tharp Loyola University Austin Community College University of Texas at San Antonio Jerry Peerbolte Shikhar Sarin Frank Tobolski University of Arkansas–Fort Smith Boise State University Lake in the Hills Glenn Perser Carl Saxby Louis A. Tucci Houston Community College University of Southern Indiana College of New Jersey Diane Persky Diana Scales Sue Umashankar Yeshiva University Tennessee State University University of Arizona Susan Peters Dwight Scherban Deborah Utter California State Polytechnic University at Pomona Central Connecticut State University Boston University Renee Pfeifer-Luckett James Schindler Ven Venkatesan University of Wisconsin at Whitewater Columbia Southern University University of Rhode Island at Kingston Frank Alan Philpot Jeffrey Schmidt Bronis Verhage George Mason University University of Oklahoma–Norman Georgia State University Gary Pieske Laura Shallow Deirdre Verne Minnesota State Community and St. Xavier University Westchester Community College Technical College Dan Sherrell Steve Vitucci Jeff Podoshen University of Memphis Tarleton University Central Texas Temple University Philip Shum Keith Wade Carmen Powers William Paterson University Webber International University Monroe Community College Lisa Simon Suzanne Walchli Mike Preis California Polytechnic State University, University of the Pacific University of Illinois–Champaign San Luis Obispo Wakiuru Wamwara-Mbugua Susan Price Rob Simon Wright State University–Dayton California Polytechnic State University University of Nebraska–Lincoln Bryan Watkins Lori Radulovich Erin Sims Dominican University, Priory Campus Baldwin-Wallace College Devry University at Pomona Ron Weir Bruce Ramsey Lauren Ruth Skinner East Tennessee State University Franklin University University of Alabama at Birmingham Ludmilla Wells Rosemary Ramsey Karen Smith Florida Gulf Coast University Wright State University Columbia Southern University Thomas Whipple Srikumar Rao Lois J. Smith Cleveland State University Long Island University University of Wisconsin Tom Whitman Kristen Regine Julie Z. Sneath Mary Washington College Johnston & Wales University University of South Alabama Kathleen Williamson Joseph Reihing Brent Sorenson University of Houston–Clear Lake Nassau Community College University of Minnesota–Crookston Phillip Wilson William Rice James Spiers Midwestern State University California State University–Fresno Arizona State University–Tempe Doug Witt Patricia Richards Geoffrey Stewart Brigham Young University Westchester Community College University of Louisiana Kim Wong Eric Rios John Striebich Albuquerque Tech Institute Eastern University Monroe Community College Letty Workman Ann Renee Root Randy Stuart Utah Valley University Florida Atlantic University Kennesaw State University Courtney Worsham Janet Robinson James Swanson University of South Carolina Mount St. Mary’s College Kishwaukee College Brent Wren Tom Rossi James Swartz University of Alabama–Huntsville Broome Community College California State Polytechnic University Alex Wu Heidi Rottier Robert R. Tangsrud, Jr. California State University– Bradley University University of North Dakota Long Beach  acknowledgments xxi Joseph Yasaian Poh-Lin Yeoh Paschalina Ziamou McIntosh College Bentley College Bernard M. Baruch College We would like to thank all the professors who were instrumental in guiding our revision of not only the text, but also Connect and other ancillary materials Ivan Abel Beth Deinert Chiquan Guo St. John’s University Southeast Community College The University of Texas–Pan American Wendi Achey David DiRusso Jamey Halleck Northampton Community College Millersville University Marshall University Praveen Aggarwal Michael Dotson Richard Hanna University of Minnesota, Duluth Appalachian State University Northeastern University Keanon Alderson Colleen Dunn David Eric Hansen California Baptist University Bucks County Community College Texas Southern University Rosalyn Amaro Diane Edmondson Jeffrey Harper Florida State College at Middle Tennessee State University Texas Tech University Jacksonville Burcak Ertimur Perry Hidalgo Maria Aria Fairleigh Dickinson University Gwinnett Technical College Camden County College David J. Faulds Diane Holtzman Jill S. Attaway University of Louisville Richard Stockton College of Illinois State University Amy Feest New Jersey Michelle Barnhart Tunxis Community College Monica Hodis Oregon State University Kathleen Ferris-Costa St. John Fisher College Robert Belenger Bridgewater State University Donna Hope Bristol Community College Troy A. Festervand Nassau Community College Tom Bilyeu Middle Tennessee State University Gorman Houston Southwestern Illinois College Paul Fombelle University of Alabama Mark Blake Northeastern University Erika Hovland York College of Pennsylvania John Fraedrich Temple University Maurice Bode Southern Illinois University–Carbondale Vince Howe Delgado Community College Theresa E. Frame University of North Carolina, Wilmington Brad Cox Horry Georgetown Technical College Miriam Huddleston Midlands Technical College Sheila Fry Harford Community College Jean M. Brown Champlain College James B. Hunt University of Alabama in Huntsville Jerome Gafford University of North Carolina, Wilmington Gary Brunswick Univeristy of North Alabama Eva Hyatt Northern Michigan University Tao (Tony) Gao Appalachian State University Desislava Budeva Northeastern University Roxanne Jackson Ramapo College of New Jersey Lance Gentry Vance-Granville Community College Melissa Burnett Colorado State University–Pueblo Grace Jebakumari Johnson Missouri State University Nabarun Ghose University of Wisconsin–Milwaukee Susan Carder The University of Findlay Victoria Jones Northern Arizona University Connie Golden University of North Carolina, Wilmington Ella Carter Lakeland Community College Sungwoo Jung Bowie State University Lisa Goolsby Columbus State University Debi Cartwright Southern Adventist University Vishal Kashyap Truman State University Deborah M. Gray Xavier University Haozhe Chen Central Michigan University Mark Kay East Carolina University Susan Greer Montclair State University Angeline Close Horry-Georgetown Technical Sylvia Keyes The University of Texas at Ausin College Bridgewater State University Kevin Coulson Cynthia Grether Tina Kiesler Emporia State University Delta College California State University, Northridge Brent Cunningham Mike Griffith Brian Kinard Jacksonville State University Lone Star College–Kingwood University of North Carolina, Wilmington Datha Damron-Martinez Barbara Gross John Kinnett Truman State University California State University, Northridge Columbus State University xxii acknowledgments Peter Knight Dorothy J. Mulcahy Christine Seel University of Wisconsin, Parkside Bridgewater State University Delaware Valley College Michael W. Kroff Jay Mulki Daaim Shabazz Montana State University Northestern University–Boston Florida A&M University Ann T. Kuzma Benjamin Muller Abhay Shah Minnesota State University, Mankato Portland Community College Colorado State University–Pueblo Theodore Labay Gergana Nenkov Rick Shannon Bishop State Community College Boston College Western Kentucky University Donald W. Larson John Newbold Kenneth Shaw The Ohio State University Sam Houston State University State University of New York, Oswego James R. Lashley Hudson Nwakanma Robert Simon Bowie State University Florida A&M University University of Nebraska–Lincoln E. Scott Lathrop Matt O’Hern Peter D. Simonson Whitman School of Management, University of Oregon North Dakota State University Syracuse University Richard B. Osborn David Smith Debra Laverie York College of Pennsylvania Bemidji State University Texas Tech University Rodney Oudan Dennis Spector Cary LeBlanc Worcester State University Naugatuck Valley Community College Assumption College Lauren Paisley Vernon R. Stauble David M. Lee Genesee Community College San Bernardino Valley College Sam Houston State University Mahatapa Palit Susan Steiz Andrea Licari Borough of Manhattan Community Norwalk Community College St. John’s University College Geoffrey Stewart Junsang Lim Janet Parish University of Louisiana Virginia State University Texas A&M University Karen L. Stewart Bryan D. Little Raymond A. Parkins, Jr. Richard Stockton College of New Jersey Marshall University Florida State College at Jacksonville Susan Stone Ruth Lumb Ed Petkus Shippensburg University of Pennsylvania Minnesota State University, Moorhead Ramapo College of New Jersey Ray Stroup, Jr. Guy Lochiatto Julie M. Pharr University of Louisiana at Lafayette MassBay Community College Tennessee Tech University James Swenson Anne Weidemanis Magi Rajani Ganesh Pillai Minnesota State University, Moorhead University of South Florida North Dakota State University Steven Taylor David Matthews Sampath Ranganathan Illinois State University SUNY Adirondack (Adirondack University of Wisconsin–Green Bay Ramendra Thakur Community College) Mohammed Rawwas University of Louisiana–Lafayette Fredric Mayerson University of Northern Iowa Norman Thiel Kingsborough Community College Virginia Reilly Walla Walla University Myke McMullen Ocean County College Dennis Tootelian Long Beach Community College John E. Robbins California State University, Sacramento Rajiv Mehta Winthrop University Philip Trocchia New Jersey Institute of Technology Ann R. Root University of South Florida, St. Petersburg Sanjay S. Mehta Florida Atlantic University Sven Tuzovic Sam Houston State University Robert Rouwenhorst Pacific Lutheran University Jeffrey Meier University of Iowa Leo Vasquez Fox Valley Technical College Donald P. Roy San Bernardino Valley College, San Bernardino Michael Mejza Middle Tennessee State University Franck Vigneron University of Nevada, Alberto Rubio-Sanchez California State University Northridge Las Vegas University of the Incarnate Word Doug Wilson Robert Meyer Catherine Ruggieri University of Oregon–Lundquist Parkland College St. John’s University, New York College of Business Elizabeth Miller Doreen Sams Roger Wilson Boston College Georgia College & State University Fairmont State University Iris Mohr Robin Schallie Doug Witt St. John’s University Fox Valley Technical College Brigham Young University Josefer Montes Douglas Scott Mike Wittmann Walla Walla University State College of Florida The University of Southern Mississippi  acknowledgments xxiii Van R. Wood Ashley Wright Ge Xiao Virginia Commonwealth University Spartanburg Community College Wilkes University Jefrey R. Woodall Elle Wu Jim Zemanek York College of Pennsylvania Louisiana State University East Carolina University Kim Wong Charles Wyckoff Lin Zhang Central New Mexico Community College Riverside Community College Truman State University We express our thanks to all faculty who have contributed to the development of digital learning content: Lauren Spinner Beitelspacher Donna Haeger Leroy Robinson Babson University Monroe Community College University of Houston, Clear Lake Barbara Black Todd Korol John Striebech University of Miami Monroe Community College Monroe Community College Thomas Byrnes Melissa Martin Lois Olson North Carolina State University George Mason University San Diego State University A special thank you to Steven A. Taylor of Illinois State University, Elizabeth Jane Wilson of Suffolk University, Kevin Bertotti of iTVk, and Becky and Patrick of We Write Good for their efforts in authoring and producing the iSee it! videos in Connect. We’d also like to thank the team at Hurix—Sumesh Yoganath, Namrata Gunjal, and Ashwin Srivastav—for their contributions, as well as Sue Sullivan of Editors, Inc.  brief contents SECTION 1 : ASSESSING THE MARKETPLACE 1 1 OVERVIEW OF MARKETING 2 2 DEVELOPING MARKETING STRATEGIES AND A MARKETING PLAN 28 APPENDIX 2A WRITING A MARKETING PLAN 61 3 SOCIAL AND MOBILE MARKETING 80 4 C ONSCIOUS MARKETING, CORPORATE SOCIAL RESPONSIBILITY, AND ETHICS 116 APPENDIX 4A UNDERSTANDING ETHICS USING SCENARIOS 143 5 ANALYZING THE MARKETING ENVIRONMENT 148 SECTION 2 : UNDERSTANDING THE MARKETPLACE 173 6 CONSUMER BEHAVIOR 174 7 BUSINESS-TO-BUSINESS MARKETING 208 8 GLOBAL MARKETING 234 SECTION 3 : TARGETING THE MARKETPLACE 265 9 SEGMENTATION, TARGETING, AND POSITIONING 266 10 MARKETING RESEARCH 300 SECTION 4 : VALUE CREATION 337 11 PRODUCT, BRANDING, AND PACKAGING DECISIONS 338 12 DEVELOPING NEW PRODUCTS 368 13 SERVICES: THE INTANGIBLE PRODUCT 404 SECTION 5 : VALUE CAPTURE 431 14 PRICING CONCEPTS FOR ESTABLISHING VALUE 432 15 STRATEGIC PRICING METHODS AND TACTICS 458 SECTION 6 : VALUE DELIVERY: DESIGNING THE CHANNEL AND SUPPLY CHAIN 485 16 SUPPLY CHAIN AND CHANNEL MANAGEMENT 486 17 RETAILING AND OMNICHANNEL MARKETING 518 SECTION 7 : VALUE COMMUNICATION 547 18 INTEGRATED MARKETING COMMUNICATIONS 548 19 ADVERTISING, PUBLIC RELATIONS, AND SALES PROMOTIONS 576 20 PERSONAL SELLING AND SALES MANAGEMENT 608 Glossary 635 Quiz Yourself Answer Key 650 Name Index 652 Company Index 659 Subject Index 664 xxiv  table of contents SECTION 1 ASSESSING THE MARKETPLACE 1 1 OVERVIEW OF MARKETING 2 WHAT IS MARKETING? 4 Marketing Is about Satisfying Customer Needs and Wants 5 Marketing Entails an Exchange 5 Marketing Requires Product, Price, Place, and Promotion Decisions 6 Superior Service 1.1: A Service for Fliers, a Moneymaker for JetBlue Airlines: Wi-Fi-Enabled Shopping in the Air 8 © Charley Gallay/Getty Images Marketing Analytics 1.1: Location, Location, Analytics: Starbucks’ Use of Data to Place New Stores 9 Marketing Can Be Performed by Individuals and Organizations 10 Marketing Affects Various Stakeholders 11 Marketing Helps Create Value 12 Adding Value 1.1: The Meaning of Best Value: Whole Foods’ Purpose-Based Marketing 14 How Do Marketing Firms Become More Value Driven? 14 Social & Mobile Marketing 1.1: What Comes Around: Marketing Today 16 WHY IS MARKETING IMPORTANT? 17 Marketing Expands Firms’ Global Presence 18 Marketing Is Pervasive across Marketing Channel Members 19 Marketing Enriches Society 19 Ethical & Societal Dilemma 1.1: Free Fruit for Children: What Could Go Wrong? 20 Marketing Can Be Entrepreneurial 21 Reviewing Learning Objectives 22 Key Terms 23 Marketing Digitally 23 Marketing Applications 23 Quiz Yourself 24 Chapter Case Study: From Beans to Pralines: The Global Chocolate Market 24 2 DEVELOPING MARKETING STRATEGIES AND A MARKETING PLAN 28 WHAT IS A MARKETING STRATEGY? 30 Customer Excellence 32 Superior Service 2.1: Amazon Is about Products, Delivery, Prices, and Now Home Services 33 Operational Excellence 34 Product Excellence 34 Locational Excellence 34 Multiple Sources of Advantage 35 © Craig Barritt/Getty Images xxv xxvi table of contents THE MARKETING PLAN 35 Step 1: Define the Business Mission 36 Step 2: Conduct a Situation Analysis 37 Adding Value 2.1: Small Coke Cans: Are Consumers Paying More for Less, or Are They Just Paying to Get What They Want? 39 Step 3: Identify and Evaluate Opportunities Using STP (Segmentation, Targeting, and Positioning) 40 Step 4: Implement Marketing Mix and Allocate Resources 41 Step 5: Evaluate Performance Using Marketing Metrics 43 Social & Mobile Marketing 2.1: Making Snapchat More Strategic: How CoverGirl Uses Geotargeting to Leverage the Marketing Potential of a Fun App 44 Ethical & Societal Dilemma 2.1: Volkswagen’s “Dieselgate” Scandal 45 Marketing Analytics 2.1: The First Name in Predictive Analytics: Google 47 Strategic Planning Is Not Sequential 50 GROWTH STRATEGIES 51 Market Penetration 51 Market Development 51 Product Development 51 Diversification 52 Reviewing Learning Objectives 52 Key Terms 54 Marketing Digitally 54 Marketing Applications 54 Quiz Yourself 55 Toolkit SWOT Analysis 55 Chapter Case Study: The Coffee Wars 55 Appendix 2A: Writing a Marketing Plan 61 3 SOCIAL AND MOBILE MARKETING 80 THE 4E FRAMEWORK FOR SOCIAL MEDIA 82 Excite the Customer 83 Social & Mobile Marketing 3.1: Late-Night Laughs to Order 84 Educate the Customer 84 Experience the Product or Service 85 Adding Value 3.1: Educating Customers Using HubSpot 86 Engage the Customer 86 THE WHEEL OF SOCIAL MEDIA ENGAGEMENT 88 The Information Effect 88 © VCG/Getty Images The Connected Effect 89 The Network Effect 90 The Dynamic Effect 90 The Timeliness Effect 91 CATEGORIES OF SOCIAL MEDIA 92  table of contents xxvii Social Network Sites 92 Adding Value 3.2: Mercedes-Benz Is LinkedIn 94 Media‐Sharing Sites 95 Thought‐Sharing Sites 96 Ethical & Societal Dilemma 3.1: The Most Powerful and Appealing Target Market Might Be … Your Mom? 98 GOING MOBILE AND SOCIAL 99 App Pricing Models 100 HOW DO FIRMS ENGAGE THEIR CUSTOMERS USING SOCIAL MEDIA? 101 Listen 102 Analyze 103 Marketing Analytics 3.1: Finding a Perfect Match: How eHarmony Leverages Users’ Data to Identify Dates—and Their Consumption Patterns 104 Do 105 Marketing Analytics 3.2: Measuring the Coolest Tunes: A Billboard Chart for the Popularity of Music-Related Tweets 108 Reviewing Learning Objectives 109 Key Terms 109 Marketing Digitally 109 Marketing Applications 110 Quiz Yourself 110 Chapter Case Study: Images, Sales, Brands: How Red Bull Uses Various Social Media Techniques to Achieve All Its Objectives 110 4 CONSCIOUS MARKETING, CORPORATE SOCIAL RESPONSIBILITY, AND ETHICS 116 CONSCIOUS MARKETING 119 MARKETING’S GREATER PURPOSE: CORPORATE SOCIAL RESPONSIBILITY AS AN ELEMENT OF CONSCIOUS MARKETING 121 THE STAKEHOLDERS OF CONSCIOUS MARKETING 122 Employees 123 © jackie ellis/Alamy Marketing Analytics 4.1: How Kellogg’s Uses Analytics to Address GMO Concerns 124 Customers 124 Marketplace 125 Adding Value 4.1: Walmart Wants to Be the Corporate “Good Guy” 126 Society 126 Environment 127 INTEGRATING CONSCIOUS MARKETING THROUGHOUT THE FIRM: LEADERSHIP AND CULTURE 127 Planning Phase 127 Implementation Phase 128 Social & Mobile Marketing 4.1: How Mobile Phones and Payments Have Created a Viable New Market at the Bottom of the Pyramid 129 Control Phase 129 xxviii table of contents MARKETING ETHICS AS A CONSCIOUS MARKETING PRINCIPLE 130 The Nature of Ethical and Unethical Marketing Decisions 130 Ethics and Corporate Social Responsibility 131 A Framework for Ethical Decision Making 132 Review Learning Objectives 136 Key Terms 137 Marketing Digitally 137 Marketing Applications 138 Quiz Yourself 138 Chapter Case Study: Is There an App for Good Parenting? 138 Appendix 4A: Understanding Ethics Using Scenarios 143 5 ANALYZING THE MARKETING ENVIRONMENT 148 A MARKETING ENVIRONMENT ANALYSIS FRAMEWORK 150 THE IMMEDIATE ENVIRONMENT 151 Company Capabilities 151 Competitors 151 Corporate Partners 152 © B. O’Kane/Alamy MACROENVIRONMENTAL FACTORS 153 Culture 153 Demographics 155 Social & Mobile Marketing 5.1: Understanding Connections, Both with and by Young Consumers 156 Social Trends 159 Superior Service 5.1: The MinuteClinic Mobile App: The Latest Service Expansion by CVS 161 Ethical & Societal Dilemma 5.1: Green Cereal? 162 Technological Advances 162 Marketing Analytics 5.1: When the Best Is Good Enough: Netflix’s Stellar Predictive Analytics 163 Adding Value 5.1: Are We There Yet? Google’s Moves to Get Us Closer to Driverless Cars 164 Economic Situation 164 Political/Regulatory Environment 165 Responding to the Environment 166 Reviewing Learning Objectives 167 Key Terms 168 Marketing Digitally 168 Marketing Applications 168 Quiz Yourself 169 Chapter Case Study: A Next-Generation Cleanser 169  table of contents xxix SECTION 2 UNDERSTANDING THE MARKETPLACE 173 6 CONSUMER BEHAVIOR 174 THE CONSUMER DECISION PROCESS 176 Need Recognition 176 Marketing Analytics 6.1: Tax Time Tactics by H&R Block 178 Search for Information 178 Social & Mobile Marketing 6.1: The Future of Health Is Mobile 180 Evaluation of Alternatives 181 Ethical & Societal Dilemma 6.1: Wearing the “Healthy” Label: Natural and Organic Foods 183 Purchase and Consumption 184 Postpurchase 185 FACTORS INFLUENCING THE CONSUMER DECISION PROCESS 188 Psychological Factors 188 Ethical & Societal Dilemma 6.2: Can Marketing Be Life Threatening? © Zuma Press, Inc./Alamy Allegations of Unethical Practices by Pharmaceutical Firms 191 Social Factors 192 Situational Factors 194 Adding Value 6.1: Doing Everything Right—H-E-B Supermarkets 195 Social & Mobile Marketing 6.2: Ensuring Mobile Dominance through In-Store Promotion 197 INVOLVEMENT AND CONSUMER BUYING DECISIONS 198 Extended Problem Solving 199 Limited Problem Solving 199 Reviewing Learning Objectives 200 Key Terms 201 Marketing Digitally 202 Marketing Applications 202 Quiz Yourself 203 Chapter Case Study: The Diet Battle—Weight Watchers, Jenny Craig, and Slim-Fast 203 7 BUSINESS-TO-BUSINESS MARKETING 208 B2B MARKETS 211 Manufacturers and Service Providers 211 Marketing Analytics 7.1: Clouding over Computing Power 213 Resellers 213 Adding Value 7.1: The “Alfonso Versant” Fashion Show: Creating Excitement for a New Xerox Printer 214 © dpa picture alliance/Alamy Institutions 214 Government 214 Social & Mobile Marketing 7.1: iPads Go to Work 215 THE BUSINESS‐TO‐BUSINESS BUYING PROCESS 216 Stage 1: Need Recognition 216 Stage 2: Product Specification 216 Stage 3: RFP Process 217 xxx table of contents Stage 4: Proposal Analysis, Vendor Negotiation, and Selection 217 Stage 5: Order Specification 217 Stage 6: Vendor Performance Assessment Using Metrics 218 THE BUYING CENTER 219 Organizational Culture 220 Ethical & Societal Dilemma 7.1: Is It Business or Bribery? 221 Building B2B Relationships 223 Social & Mobile Marketing 7.2: Making the Most of LinkedIn 224 THE BUYING SITUATION 225 Adding Value 7.2: Getting Out the Message with Inbound Marketing 227 Reviewing Learning Objectives 228 Key Terms 229 Marketing Digitally 229 Marketing Applications 230 Quiz Yourself 230 Chapter Case Study: Staples: The Big Box Retailer That’s Really a B2B Powerhouse 231 8 GLOBAL MARKETING 234 ASSESSING GLOBAL MARKETS 237 Economic Analysis Using Metrics 237 Analyzing Infrastructure and Technological Capabilities 240 Analyzing Governmental Actions 240 Ethical & Societal Dilemma 8.1: How Chinese Regulations Change Car-Buying © Pascal Sittler/REA/Redux Practices 241 Analyzing Sociocultural Factors 244 The Appeal of the BRIC Countries 246 Social & Mobile Marketing 8.1: The Growth of Social Networking—Brazil’s Free Market versus China’s Restriction 249 CHOOSING A GLOBAL ENTRY STRATEGY 250 Exporting 250 Franchising 251 Strategic Alliance 251 Joint Venture 251 Adding Value 8.1: Tata Starbucks and the Indian Coffee Culture 252 Direct Investment 252 CHOOSING A GLOBAL MARKETING STRATEGY 253 Target Market: Segmentation, Targeting, and Positioning 253 Adding Value 8.2: Ponying Up the Latest Ford Mustang 254 Reviewing Learning Objectives 258 Key Terms 259 Marketing Digitally 259 Marketing Applications 259 Quiz Yourself 260 Chapter Case Study: The Globalization of the Most Ubiquitous of American Cuisines— the Hamburger 260  table of contents xxxi SECTION 3 TARGETING THE MARKETPLACE 265 9 SEGMENTATION, TARGETING, AND POSITIONING 266 THE SEGMENTATION, TARGETING, AND POSITIONING PROCESS 268 Step 1: Establish the Overall Strategy or Objectives 268 Step 2: Use Segmentation Methods 270 Social & Mobile Marketing 9.1: Is Facebook Over? 272 Marketing Analytics 9.1: A Complete Ecosystem for Coffee Drinkers: The Starbucks Mobile Plan 278 © ABC Family/Courtesy Everett Collection Step 3: Evaluate Segment Attractiveness 279 Ethical & Societal Dilemma 9.1: Congressional Hearings and the Ethical Considerations for Modern Loyalty Programs 280 Superior Service 9.1: Symbiosis in Your Stay: How Hotels Leverage Their Proximity to Universities 281 Step 4: Select a Target Market 283 Step 5: Identify and Develop Positioning Strategy 286 Positioning Methods 289 Positioning Using Perceptual Mapping 291 Reviewing Learning Objectives 294 Key Terms 295 Marketing Digitally 295 Marketing Applications 295 Quiz Yourself 296 Chapter Case Study: Mercedes-Benz 296 10 MARKETING RESEARCH 300 THE MARKETING RESEARCH PROCESS 302 Marketing Research Process Step 1: Defining the Objectives and Research Needs 303 Marketing Research Process Step 2: Designing the Research 303 Adding Value 10.1: A Key Motivation for Waking Teens Early on Weekends Disappears: Breakfast All Day at McDonalds 304 © David Paul Morris/Getty Images Marketing Research Process Step 3: Collecting the Data 304 Marketing Research Process Step 4: Analyzing the Data and Developing Insights 305 Superior Service 10.1: Did You Hit the Weights or Swim a Lap Today? Your University Wants to Know—For a Good Reason 307 Marketing Research Process Step 5: Developing and Implementing an Action Plan 308 SECONDARY DATA 309 Inexpensive External Secondary Data 309 Syndicated External Secondary Data 309 Social & Mobile Marketing 10.1: Nielsen Seeds to Track Viewership, Regardless of the Media People Use to Watch 311 Internal Secondary Data 312 Marketing Analytics 10.1: Google Analytics Promises Movie Studios the Ability to Predict Performance Weeks Prior to Opening 314 xxxii table of contents PRIMARY DATA COLLECTION TECHNIQUES 314 Observation 315 Social Media 316 In‐Depth Interviews 317 Focus‐Group Interviews 318 Survey Research 318 Panel‐ and Scanner‐Based Research 320 Experimental Research 320 Advantages and Disadvantages of Primary and Secondary Research 322 THE ETHICS OF USING CUSTOMER INFORMATION 323