Principles of Marketing 19th Edition Global Edition PDF

This is a special edition of an established title widely used by colleges and GLOBAL universities throughout the world. Pearson published this exclusive edition for the benefit of students outsid...

This is a special edition of an established title widely used by colleges and GLOBAL universities throughout the world. Pearson published this exclusive edition for the benefit of students outside the United States and Canada. If you GLOBAL EDITION purchased this book within the United States or Canada, you should be aware EDITION EDITION GLOB AL that it has been imported without the approval of the Publisher or Author. Principles of Marketing Principles of Marketing presents a comprehensive overview of basic marketing concepts, strategies, and practices within a customer engagement framework, which shows how creating and capturing customer value drives effective marketing strategies. The nineteenth edition continues to reflect the trends and shifting forces that impact marketing, with added discussions on major digital transformations in marketing research; omni-channel marketing; Principles of Marketing real-time customer listening and marketing; and digital, mobile, and social media marketing. It also includes new coverage of how companies are dealing with recent disruptions in the marketing NINETEENTH EDITION environment, such as the rapid rise of digital technologies, large economic swings, extreme environmental patterns, and global health crises. Key Features Philip Kotler NEW and UPDATED—Each chapter contains a chapter-opening vignette and two Real Marketing features that provide engaging marketing stories of real companies, with a special focus on brand marketing strategies and contemporary marketing issues across the globe. Gary Armstrong NEW and UPDATED—A Company Case concludes each chapter and prompts students to apply marketing concepts and critical thinking to challenges faced by real companies and brands. Sridhar Balasubramanian NEW and REVISED—Chapter 17 is now a standalone digital marketing strategy chapter, NINETEENTH organized around a four-step digital marketing process. Updated with new organizing frameworks, EDITION concepts, and examples, Chapters 19 and 20 offer focused coverage of global and sustainable marketing. NEW—Care has been taken to ensure that the interests of diversity, equity, and inclusion (DEI) are responsibly represented in the treatment of marketing topics, examples, and illustrations. Discussions on gender segmentation and gender-neutral marketing, DEI in advertising, and subcultures show how marketers are applying DEI values in their strategies and actions. Balasubramanian Armstrong Kotler Available separately for purchase is MyLab Marketing for Principles of Marketing, the teaching and learning platform that empowers instructors to personalize learning for every student. When combined with Pearson’s trusted educational content, this optional suite helps deliver the desired learning outcomes. CVR_KOTL9364_19_GE_CVR_Vivar.indd All Pages 06/03/23 1:10 PM  PRINCIPLES of MARKETING A01_KOTL9364_19_GE_FM.indd 1 06/03/23 3:40 PM  This page is intentionally left blank A01_KOTL9364_19_GE_FM.indd 2 06/03/23 3:40 PM  ­PRINCIPLES of MARKETING ­Nineteenth Edition Global Edition ­Philip Kotler Northwestern University Gary Armstrong University of North Carolina Sridhar Balasubramanian University of North Carolina A01_KOTL9364_19_GE_FM.indd 3 06/03/23 3:40 PM Product Management: Yajnaseni Das and Ishita Sinha Content Strategy: Steven Jackson, Daniel Luiz, and Kajori Chattopadhyay Product Marketing: Wendy Gordon, Ashish Jain, and Ellen Harris Supplements: Tooba Shafique Production: Jayaprakash Kothandapani and Nikhil Rakshit Digital Studio: Vikram Medepalli Rights and Permissions: Anjali Singh and Ashish Vyas Please contact https://support.pearson.com/getsupport/s/contactsupport with any queries on this content. Cover Photo: Preto Perola/Shutterstock Pearson Education Limited KAO Two KAO Park Hockham Way Harlow Essex CM17 9SR United Kingdom and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsonglobaleditions.com © Pearson Education Limited, 2024 The rights of Philip Kotler, Gary Armstrong, and Sridhar Balasubramanian to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. Authorized adaptation from the United States edition, entitled Principles of Marketing, 19th Edition, ISBN 978-0-13- 786489-8 by Philip Kotler, Gary Armstrong, and Sridhar Balasubramanian, published by Pearson Education © 2024. Acknowledgments of third-party content appear on the appropriate page within the text, which constitutes an extension of this copyright page. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a license permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS. PEARSON, ALWAYS LEARNING, and MYLAB are exclusive trademarks owned by Pearson Education, Inc. or its affiliates in the U.S. and/or other countries. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. For information regarding permissions, request forms, and the appropriate contacts within the Pearson Education Global Rights and Permissions department, please visit www.pearsoned.com/permissions/. This eBook is a standalone product and may or may not include all assets that were part of the print version. It also does not provide access to other Pearson digital products like MyLab and Mastering. The publisher reserves the right to remove any material in this eBook at any time. ISBN 10: 1-292-44936-5 ISBN 13: 978-1-292-44936-4 eBook ISBN: 978-1-292-44933-3 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library 1 21 Typeset in Palatino LT Pro and 9 pt by Integra Software Service ebook formatted by B2R Technologies Pvt. Ltd.  Dedication To Kathy, Mandy, Matt, KC, Keri, Delaney, Molly, Macy, Ben, and Bert; Nancy, Amy, Melissa, and Jessica; and Lakshmi, Karthik, and Meenakshi. A01_KOTL9364_19_GE_FM.indd 5 06/03/23 3:40 PM  Pearson’s Commitment to Diversity, Equity, and Inclusion Pearson is dedicated to creating bias-free content that reflects the diversity, depth, and breadth of all learners’ lived experiences. We embrace the many dimensions of diversity, including but not limited to race, ethnicity, gender, sex, sexual orientation, socioeconomic status, ability, age, and religious or political beliefs. Education is a powerful force for equity and change in our world. It has the potential to deliver opportunities that improve lives and enable economic mobility. As we work with authors to create content for every product and service, we acknowledge our responsibility to demonstrate inclusivity and incorporate diverse scholarship so that everyone can achieve their potential through learning. 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As per Pearson’s content, we want to hear from you about any concerns guidelines for accessible educational Web media, or needs with this Pearson product so that we can we test and retest the capabilities of our products investigate and address them. against the highest standards for every release, Please contact us with concerns about any following the WCAG guidelines in developing new potential bias at products for copyright year 2022 and beyond. https://www.pearson.com/report-bias.html You can learn more about Pearson’s For accessibility-related issues, such as using commitment to accessibility at assistive technology with Pearson products, https://www.pearson.com/us/accessibility.html alternative text requests, or accessibility documentation, email the Pearson Disability Support team at [email protected] A01_KOTL9364_19_GE_FM.indd 6 06/03/23 3:40 PM  Brief Contents ­Preface 15 Part 1 Defining Marketing and the Marketing Process 24 1 Marketing: Creating Customer Value and Engagement 24 2 Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships 58 Part 2 Understanding the Marketplace and Consumer Value 86 3 Analyzing the Marketing Environment 86 4 Managing Marketing Information to Gain Customer Insights 120 5 Consumer Markets and Buyer Behavior 160 6 Business Markets and Business Buyer Behavior 192 Part 3 Designing a Customer Value–Driven Strategy and Mix 214 7 Customer Value–Driven Marketing Strategy: Creating Value for Target Customers 214 8 Products, Services, and Brands: Building Customer Value 246 9 Developing New Products and Managing the Product Life Cycle 282 10 Pricing: Understanding and Capturing Customer Value 310 11 Pricing Strategies: Advanced Topics 334 12 Marketing Channels: Delivering Customer Value 362 13 Retailing and Wholesaling 398 14 Engaging Consumers and Communicating Customer Value: Integrated Marketing Communications Strategy 434 15 Advertising and Public Relations 458 16 Personal Selling and Sales Promotion 484 17 Digital Marketing 514 Part 4 Extending Marketing 548 18 Creating Competitive Advantage 548 19 The Global Marketplace 572 20 Sustainable Marketing: Social Responsibility and Ethics 604 Appendix 1 Marketing Plan 638 Appendix 2 Marketing by the Numbers 648 Appendix 3 Careers in Marketing 665 Glossary 678 References 689 Index 738    7 A01_KOTL9364_19_GE_FM.indd 7 06/03/23 3:40 PM  This page is intentionally left blank A01_KOTL9364_19_GE_FM.indd 8 06/03/23 3:40 PM  ­Contents ­Preface 15 Designing the Business Portfolio 64 Analyzing the Current Business Portfolio 64 | Developing Strategies for Growth and Downsizing 66 Part 1: Defining Marketing and the Marketing Planning Marketing: Partnering to Build Customer Process 24 Relationships 68 Partnering with Other Company Departments 68 | Partnering CHAPTER 1 Marketing: Creating Customer Value with Others in the Marketing System 69 Marketing Strategy and the Marketing Mix 69 and Engagement 24 Customer Value–Driven Marketing Strategy 70 | Developing an Integrated Marketing Mix 74 What Is Marketing? 26 Managing the Marketing Effort and Marketing Return on Marketing Defined 27 | The Marketing Process 27 Investment 75 Understanding the Marketplace and Customer Needs 28 Managing the Marketing Effort 75 | Measuring and Managing Customer Needs, Wants, and Demands 28 | Market Marketing Return on Investment 79 Offerings—Products, Services, Solutions, and REVIEWING AND EXTENDING THE CONCEPTS 81 | Objectives Experiences 29 | Customer Value and Satisfaction 31 | Review 81 | Key Terms 82 | Discussion Questions 82 | Critical Thinking Exchanges and Relationships 31 | Markets 31 Exercises 82 | APPLICATIONS AND CASES 82 | Digital Marketing: Designing a Customer Value–Driven Marketing Lush UK Abandons Social Media 82 | Marketing Ethics: Pharrell Williams’ Strategy and Plan 32 ­Humanrace Brand 83 | Marketing by the Numbers: Alphabet versus Customer Value–Driven Marketing Strategy 32 | Preparing an Meta 83 | Company Case: DuPont: Improving Everyday Life by Solving the Integrated Marketing Mix 36 World’s Most Challenging Problems 84 Managing Customer Relationships and Capturing Customer Value 36 Part 2: Understanding the Marketplace and Engaging Customers and Managing Customer Relation- Consumer Value 86 ships 36 | Capturing Value from Customers 41 3 Analyzing the Marketing The Changing Marketing Landscape 44 The Digital Age: Online, Mobile, and Social Media Marketing 44 | CHAPTER The Growth of Not-for-Profit Marketing 48 | Rapid ­Globalization 49 | Environment 86 Sustainable Marketing: The Call for More Environmental and Social Responsibility 50 | So What Is Marketing? Pulling It All Together 50 | The Microenvironment and Macroenvironment 88 Developing Skills for Your Career 52 The Microenvironment 88 | The Macroenvironment 92 REVIEWING AND EXTENDING THE CONCEPTS 53 | Objectives The Demographic and Economic ­Review 53 | Key Terms 54 | Discussion Questions 54 | Critical Thinking Environments 92 Exercises 54 | APPLICATIONS AND CASES 55 | Di­gital Marketing: The Demographic Environment 92 | The Economic Fionamania 55 | Marketing Ethics: Exaggeration and High Pressure 55 | Environment 101 Marketing by the Numbers: Be on the First Page 55 | Company Case: The The Natural and Technological Walt Disney World Resort: Making Magical ­Moments 55 Environments 102 The Natural Environment 102 | The Technological CHAPTER 2 Company and Marketing Strategy: Environment 104 The Political–Social and Cultural Environments 105 Partnering to Build Customer Engagement, The Political and Social Environment 105 | The Cultural Value, and Relationships 58 Environment 110 Responding to the Marketing Environment 113 Company-Wide Strategic Planning: Defining Marketing’s REVIEWING AND EXTENDING THE CONCEPTS 114 | Objectives Role 60 Review 114 | Key Terms 115 | Discussion Questions 115 | Critical Defining a Market-Oriented Mission 60 | Setting Company Thinking Exercises 115 | APPLICATIONS AND CASES 116 | Digital Objectives and Goals 63 Marketing: The Trendiness of Brand Support for Social Causes 116 |    9 A01_KOTL9364_19_GE_FM.indd 9 06/03/23 3:40 PM  10   CONTENTS Marketing Ethics: Alexa Is HIPPA Compliant 116 | Marketing by the REVIEWING AND EXTENDING THE CONCEPTS 187 | Objectives Numbers: Targeting Americans 65 and Older 116 | Company Case: ­ eview 187 | Key Terms 188 | Discussion Questions 188 | Critical Think- R GoPro: From Hero to Zero and Back 117 ing Exercises 188 | APPLICATIONS AND CASES 189 | Digital M­arketing: Blogvertorials 189 | Marketing Ethics: Limited Forms of ­Payment 189 | 4 Managing Marketing Information Marketing by the Numbers: Evaluating Alternatives 189 | Company Case: CHAPTER Harley-Davidson: Selling Freedom, Independence, Power, and to Gain Customer Insights 120 Authenticity 190 Marketing Information and Customer Insights 122 Marketing Information and Today’s “Big Data” 122 | CHAPTER 6 Business Markets and Business Developing Customer Insights 123 | The Marketing Buyer Behavior 192 Information Ecosystem 123 Business Markets 194 Assessing Information Needs and Developing Data 124 Market Structure and Demand 194 | Nature of the Buying Assessing Marketing Information Needs 124 | Developing Unit 195 | Types of Decisions and the Decision Process 195 Marketing Information 125 | Competitive Marketing Business Buyer Behavior 196 Intelligence 126 Major Types of Buying Situations 197 | Participants in the Marketing Research 128 Business Buying Process 197 | Major Influences on Business Traditional Marketing Research in Transition 129 | Defining Buyers 198 the Problem and Research Objectives 130 | Developing the The Business Buyer Decision Process 201 Research Plan 130 | Gathering Secondary Data 131 | Problem Recognition 202 | General Need Description 202 | Primary Data Collection 132 | Implementing the Product Specification 202 | Supplier Search 202 | Proposal Research Plan 143 | Interpreting and Reporting the Solicitation 203 | Supplier Selection 203 | Order-Routine Findings 144 Specification 203 | Performance Review 203 Analyzing and Using Marketing Information 144 Engaging Business Buyers with Digital and Social Customer Relationship Management (CRM) 144 | Big Data, Marketing 204 Marketing Analytics, and Artificial Intelligence 145 | E-procurement and Online Purchasing 204 | Business-to- Distributing and Using Marketing Information 149 Business Digital and Social Media Marketing 205 Other Marketing Information Considerations 150 Institutional and Government Markets 207 Marketing Research in Small Businesses and Nonprofit Orga- Institutional Markets 207 | Government Markets 208 nizations 150 | International Marketing Research 151 | Public REVIEWING AND EXTENDING THE CONCEPTS 209 | Objectives Policy and Ethics in Marketing Research 152 Review 209 | Key Terms 210 | Discussion Questions 210 | Critical REVIEWING AND EXTENDING THE CONCEPTS 155 | Objectives Thinking Exercises 211 | APPLICATIONS AND CASES 211 | Digital Review 155 | Key Terms 156 | Discussion Questions 156 | Critical Thinking Marketing: E-Procurement and Mobile Procurement 211 | Marketing Exercises 156 | APPLICATIONS AND CASES 157 | Digital Marketing: Ethics: Meals for Institutional Markets 211 | Marketing by the Numbers: Amore Pacific 157 | Marketing Ethics: TikTok 157 | Marketing by the From Gaming to Public Safety 212 | Company Case: Caterpillar: Creating Numbers: Descriptive Research 157 | Company Case: Bayer: Big Data for Value for Industrial Customers 212 Customer Insights 158 Part 3: Designing a Customer Value–Driven CHAPTER 5 Consumer Markets and Buyer Strategy and Mix 214 Behavior 160 Model of Consumer Behavior 162 CHAPTER 7 Customer Value–Driven Marketing Characteristics Affecting Consumer Behavior 163 Strategy: Creating Value for Target Cultural Factors 163 | Social Factors 166 | Personal Customers 214 Factors 171 | Psychological Factors 174 The Buyer Decision Process and Types of Buying Decision Marketing Strategy 216 Behavior 177 Market Segmentation 217 The Buyer Decision Process 177 | Types of Buying Decision Segmenting Consumer Markets 217 | Segmenting Behavior 180 | The Customer Journey 182 Business Markets 224 | Segmenting International The Buyer Decision Process for New Products 183 Markets 225 | ­R equirements for Effective Segmentation 226 Stages in the Adoption Process 185 | Individual Differences in Market Targeting 226 Innovativeness 185 | Influence of Product Characteristics on Evaluating Market Segments 226 | Selecting Target Market Rate of Adoption 186 Segments 227 A01_KOTL9364_19_GE_FM.indd 10 06/03/23 3:40 PM  CONTENTS   11 Differentiation and Positioning 234 Review 306 | Key Terms 306 | Discussion Questions 307 | Critical Thinking Positioning Maps 234 | Choosing a Differentiation and Exercises 307 | APPLICATIONS AND CASES 307 | Digital Marketing: Positioning Strategy 235 | Communicating and Delivering the Barbie in the Digital Age 307 | Marketing Ethics: Space Tourism 307 | Chosen Position 240 Marketing by the Numbers: Dental House Calls 308 | Company Case: Toyota: Developing a Million New Product Ideas Every Year 308 REVIEWING AND EXTENDING THE CONCEPTS 240 | Objectives Review 240 | Key Terms 241 | Discussion Questions 241 | Critical Thinking Exercises 242 | APPLICATIONS AND CASES 242 | Di­gital Marketing: Using Social Media for Inclusive Hyperlocal Segmentation 242­| CHAPTER 10 Pricing: Understanding and Marketing Ethics: Cameo: Do the Celebrity Connections Reinforce Gender Capturing Customer Value 310 Pay Gaps? 242 | Marketing by the Numbers: At-Home Workouts 243 | Company Case: Outschool: Personalized Education for All 243 What Is Price? 312 Major Pricing Strategies 313 CHAPTER 8 Products, Services, and Brands: Customer Value–Based Pricing 313 | Cost-Based Pricing 317 | Competition-Based Pricing 321 Building Customer Value 246 Other Internal and External Considerations Affecting Price Decisions 323 What Is a Product? 248 Overall Marketing Strategy, Objectives, and Mix 323 | Organi- Products, Services, and Experiences 248 | Levels of Product zational Considerations 325 | The Market and Demand 325 | and Services 249 | Product and Service Classifications 250 The Economy 327 | Other External Factors 328 Product and Service Decisions 253 REVIEWING AND EXTENDING THE CONCEPTS 328 | Objectives Individual Product and Service Decisions 253 | Product Line Review 328 | Key Terms 329 | Discussion Questions 330 | Critical Thinking Decisions 259 | Product Mix Decisions 260 Exercises 330 | APPLICATIONS AND CASES 330 | Digital Marketing: Services Marketing 261 Intuit QuickBooks 330 | Marketing Ethics: Should Large Passengers Pay The Nature and Characteristics of a Service 261 | Marketing More for Airline Tickets? 331 | Marketing by the Numbers: Rock Bottom Strategies for Service Firms 263 | The Service Profit Chain 263 Promotional Pricing 331 | Company Case: Gillette: Searching for the Right Price in a Volatile Market 331 Branding Strategy: Building Strong Brands 266 Brand Equity and Brand Value 268 | Building Strong Brands 269 | Managing Brands 277 REVIEWING AND EXTENDING THE CONCEPTS 277 | Objectives CHAPTER 11 Pricing Strategies: Advanced Review 277 | Key Terms 278 | Discussion Questions 279 | Critical Topics 334 Thinking Exercises 279 | APPLICATIONS AND CASES 279 | Digital Marketing: Dyson: A Formula for Brand Extension 279 | Marketing Ethics: New Product Pricing Strategies 336 Cutthroat Prices 279 | Marketing by the Numbers: Coca-Cola Considers Market-Skimming Pricing 336 | Market-Penetration Pricing 336 the Cost of Cannibalization 280 | Company Case: Avocados From Mexico: Product Mix Pricing Strategies 337 Building a Brand in a Brandless Category 280 Product Line Pricing 337 | Optional-Product Pricing 338 | Captive-Product Pricing 338 | By-Product Pricing 339 | CHAPTER 9 Developing New Products and Product Bundle Pricing 339 Price Adjustment Strategies 339 Managing the Product Life Cycle 282 Discount and Allowance Pricing 340 | Segmented Pricing 340 | Psychological Pricing 341 | Promotional Pricing 343 | Geo- New Product Development Strategy 284 graphical Pricing 344 | Dynamic and Personalized Pricing 345 | The New Product Development Process 285 International Pricing 346 Idea Generation 285 | Idea Screening 289 | Concept Develop- Price Changes 349 ment and Testing 289 | Marketing Strategy Development 290 | Initiating Price Changes 349 | Responding to Price Business Analysis 291 | Product De­v elopment 291 | Test ­C hanges 351 Marketing 292 | Commercialization 293 | Managing New Public Policy and Pricing 352 Product Development 293 Pricing within Channel Levels 353 | Pricing across Channel Product Life-Cycle Strategies 295 Levels 355 Introduction Stage 299 | Growth Stage 299 | Maturity REVIEWING AND EXTENDING THE CONCEPTS 356 | Objectives Stage 300 | Decline Stage 301 Review 356 | Key Terms 357 | Discussion Questions 358 | Critical Thinking Additional Product and Service Considerations 304 Exercises 358 | APPLICATIONS AND CASES 358 | Digital Marketing: Product Decisions and Social Responsibility 304 | Interna- RetailMeNot 358 | Marketing Ethics: Changing the Price 359 | Marketing tional Product and Services Marketing 305 by the Numbers: Lose Some Customers, Be Better Off? 359 | Company REVIEWING AND EXTENDING THE CONCEPTS 306 | Objectives Case: Casper: A Pricing Strategy That Flipped the Mattress Industry 359 A01_KOTL9364_19_GE_FM.indd 11 06/03/23 3:40 PM  12   CONTENTS CHAPTER 12 Marketing Channels: Delivering Wholesaling 424 Types of Wholesalers 425 | Trends in Wholesaling 428 Customer Value 362 REVIEWING AND EXTENDING THE CONCEPTS 429 | Objectives Review 429 | Key Terms 430 | Discussion Questions 430 | Critical Thinking Supply Chains and the Value Delivery Network 364 Exercises 431 | APPLICATIONS AND CASES 431 | Digital Marketing: The Nature and Importance of Marketing Channels 365 | How Taco Bell’s Social Media Strategy 431 | Marketing Ethics: Nordstrom’s Channel Members Add Value 365 2025 Corporate Social Responsibility Goals 431 | Marketing by the Channel Behavior and Organization 367 Numbers: The Hauz of Spize 432 | Company Case: Ulta Beauty: Where the Experience Is Beautiful 432 Channel Behavior 368 | Vertical Marketing Systems 369 | Horizontal Marketing Systems 372 | Multichannel Distribution Systems 372 | Changing Channel Organization 373 Channel Design Decisions 376 CHAPTER 14 Engaging Consumers and Analyzing Consumer Needs 377 | Setting Channel Objec- Communicating Customer Value: Integrated tives 377 | Identifying Major Alternatives 378 | Evaluating the Marketing Communications Strategy 434 Major Alternatives 379 | Designing International Dis­t ribution Channels 380 ­ he Promotion Mix 436 T Channel Management Decisions 381 Integrated Marketing Communications 437 Selecting Channel Members 381 | Managing and Motivating The New Marketing Communications Model 437 | ­T he Need Channel Members 381 | Evaluating Channel Members 382 | for Integrated Marketing Communications 438 Public Policy and Distribution Decisions 382 Developing Effective Marketing Communication 441 Marketing Logistics and Supply Chain Management 383 A View of the Communication Process 441 | Steps in Devel- Nature and Importance of Marketing Logistics 383 | Sustain- oping Effective Marketing Communication 443 | Nonpersonal able Supply Chains 386 | Goals of the Logistics System 387 | Communication Channels 446 Major Logistics Functions 387 | Integrated Logistics ­Setting the Total Promotion Budget and Mix 447 Management 390 Setting the Total Promotion Budget 447 | Shaping the Overall Promotion Mix 449 | Integrating the Promotion Mix 451 | REVIEWING AND EXTENDING THE CONCEPTS 392 | Objectives Review 392 | Key Terms 393 | Discussion Questions 393 | Critical ­Socially Responsible Marketing Communication 451 Thinking Exercises 394 | APPLICATIONS AND CASES 394 | Di­gital REVIEWING AND EXTENDING THE CONCEPTS 454 | Objectives Marketing: Members Only? 394 | Marketing Ethics: Ethical Sourc- Review 454 | Key Terms 454 | Discussion Questions 455 | Critical Thinking ing 394 | Marketing by the Numbers: Drinking from the Source 395 | Exercises 455 | APPLICATIONS AND CASES 455 | Digital Marketing: “Your Company Case: Weyerhaeuser: Riding Out the Supply Chain Table Is Ready” 455 | Marketing Ethics: It’s a Powerful Thing to Be Seen 455 | Storm 395 Marketing by the Numbers: Never-Ending Cola War 456 | ­Company Case: Nestlé: Integrating Marketing Communication into Daily Operations 456 CHAPTER 13 Retailing and Wholesaling 398 Retailing 400 CHAPTER 15 Advertising and Public Retailing: Connecting Brands with Consumers 400 | The Relations 458 Shifting Retailing Model 400 | Store Retailing 401 | ­N on-Store Advertising 460 Direct Retailing 407 Major Advertising Decisions 461 Omni-Channel Marketing: Blending In-Store, Online, Mobile, Setting Advertising Objectives 461 | Setting the Advertis- and Social Media Channels 410 ing Budget 462 | Developing Advertising Strategy 464 | Retailer Marketing Decisions 412 ­Evaluating Advertising Effectiveness and the Return on Adver- Segmentation, Targeting, Differentiation, and Positioning tising Investment 473 | Other Advertising Considerations 473 Decisions 412 | Product Assortment and Services Public Relations 475 Decision 413 | Price Decision 414 | Promotion Decision 416 | The Role and Impact of PR 478 Place Decision 417 Major Public Relations Tools 479 Retailing Trends and Developments 418 REVIEWING AND EXTENDING THE CONCEPTS 479 | Objectives Increased Uncertainty and Disruption 418 | Tighter Consum- Review 479 | Key Terms 480 | Discussion Questions 480 | Critical er Spending 418 | New Retail Forms, Shortening Retail Life Thinking Exercises 480 | APPLICATIONS AND CASES 481 | Di­gital Cycles, and Retail Convergence 419 | The Rise of Megare- Marketing: Volkswagen’s “The Last Mile” Campaign 481 | Marketing Eth­ics: tailers 420 | Rapid Advances in Retail Technology 420 | YesStraws 481 | Marketing by the Numbers: Advertising Costs 481 | Sustainable Retailing 421 | Global Expansion of Major Company Case: Hyundai: An Integrated Marketing Communications Retailers 424 Campaign That’s “Wicked Smaht” 482 A01_KOTL9364_19_GE_FM.indd 12 06/03/23 3:40 PM  CONTENTS   13 CHAPTER 16 Personal Selling and Sales Part 4: Extending Marketing 548 Promotion 484 CHAPTER 18 Creating Competitive Advantage 548 Personal Selling 486 Competitor Analysis 550 The Nature of Personal Selling 486 | The Role of the Sales Identifying Competitors 550 | Assessing Competitors 553 | Force 487 Selecting Competitors to Attack and Avoid 555 | Designing a Managing the Sales Force 488 Competitive Intelligence System 558 Designing the Sales Force Strategy and Structure 489 | Competitive Strategies 558 Recruiting and Selecting Salespeople 491 | Training Sales- Approaches to Marketing Strategy 558 | Basic Competitive people 493 | Compensating Salespeople 493 | Supervising Strategies 560 | Competitive Positions 561 | Market Leader and Motivating Salespeople 494 | Evaluating Sales­p eople and Strategies 562 | Market Challenger Strategies 564 | Market Sales Force Performance 495 | Social Selling: Using ­D igital Follower Strategies 565 | Market Nicher Strategies 566 Sales Platforms and Tools 495 Balancing Customer and Competitor Orientations 567 The Personal Selling Process 498 REVIEWING AND EXTENDING THE CONCEPTS 568 | Objectives Steps in the Selling Process 498 | Personal Selling and Review 568 | Key Terms 569 | Discussion Questions 569 | Critical Thinking Managing Customer Relationships 501 Exercises 569 | APPLICATIONS AND CASES 569 | Digital Marketing: Are Sales Promotion 502 the Bells Tolling for the Conventional Automobile? 569 | Marketing Ethics: The Rapid Growth of Sales Promotion 502 | Sales Promotion Is Ugly Produce a True Food Waste Solution? 570 | Marketing by the Objectives 503 | Major Sales Promotion Tools 504 | Develop- Numbers: Changing Numbers in the Smartphone Market 570 | Company ing the Sales Promotion Program 508 Case: Nokia: Finding Strength by Abandoning Its Core Business 570 REVIEWING AND EXTENDING THE CONCEPTS 509 | Objectives Review 509 | Key Terms 510 | Discussion Questions 510 | Critical CHAPTER 19 The Global Marketplace 572 Thinking Exercises 510 | APPLICATIONS AND CASES 511 | Di­gital Marketing: Driving Sales Digitally at Global Industrial 511 | Mark­eting Global Marketing Today 574 Ethics: Selling Both Financial Advisory and Auditing Services to the Same Understanding the Global Marketing Context 576 Customer? 511 | Marketing by the Numbers: The Foundry 511 | Political Context 576 | Economic Context 577 | Sociocultural Con- Company Case: Urban Outfitters: Brand-Building Rewards Program text 577 | Technological Context 583 | The Legal and Institutional Promotions 512 Context 584 | The Environmental and Ecological Context 586 Deciding Whether to Go Global and Which Markets to Enter 587 Deciding Whether to Go Global 587 | Deciding Which Markets CHAPTER 17 Digital Marketing 514 to Enter 587 Deciding How to Enter Global Markets 589 Understanding Digital Marketing 517 Exporting 589 | Joint Venturing 590 | Direct Investment 591 The New Digital Marketing Model 517 | Benefits of Digital Deciding on the Global Marketing Program 592 Marketing to Buyers and Sellers 518 ­Product 593 | Promotion 595 | Price 597 | Distribution Preparing for a Digital Marketing Campaign 519 Channels 597 Knowing the Digital Consumer 520 | Understanding Consumer Deciding on the Global Marketing Organization 598 Omni-Channel Navigation Behavior 521 | Using Experimenta- REVIEWING AND EXTENDING THE CONCEPTS 599 | Objectives tion to Understand What Works 522 ­Review 599 | Key Terms 600 | Discussion Questions 600 | Critical Thinking Exer­cises 601 | APPLICATIONS AND CASES 601 | Digital Employing Digital Channels in an Omni-Channel Marketing: Customized Shoes from Nike by You 601 | Marketing Ethics: Strategy 523 Unlicensed and Counterfeit Products 601 | Marketing by the Numbers: Online Marketing 523 | Social Media Marketing 528 | Mobile Peloton Pedals to Australia 602 | Company Case: Huawei: Running the Marketing 533 | Creating an Integrated Omni-Channel Global Telecommunications Race 602 Strategy 536 Public Policy Issues in Digital Marketing 538 REVIEWING AND EXTENDING THE CONCEPTS 543 | Objectives CHAPTER 20 Sustainable Marketing: Social Review 543 | Key Terms 544 | Discussion Questions 544 | Critical Responsibility and Ethics 604 Thinking Exercises 544 | APPLICATIONS AND CASES 545 | Digital Marketing: Can Social Media Raise Awareness of Uniqlo in the United Sustainable Marketing 606 States? 545 | Marketing Ethics: Customized Insurance 545 | Marketing Social Criticisms of Marketing 607 by the Numbers: Uniqlo’s Fast-Moving Image Campaign 545 | Company Marketing’s Impact on Individual Consumers 608 | Case: Instagram: A Win-Win-Win for the Company, Advertisers, and Marketing’s Impact on Society as a Whole 612 | Marketing’s Instagrammers 546 Impact on Other Businesses 614 A01_KOTL9364_19_GE_FM.indd 13 06/03/23 3:40 PM  14   CONTENTS Pathways to Sustainable Marketing 615 | Marketing by the Numbers: Gouging Their Eyes Out 635 | Company Case: Consumer Actions to Promote Sustainable Marketing 615 | H&M: Offering Sustainable Fashion and Quality at the Best Price 635 Business Actions toward Sustainable Marketing 618 Appendix 1: Marketing Plan 638 Building a Sustainable Marketing Organization 625 Appendix 2: Marketing by the Numbers 648 Sustainable Marketing Principles 625 | The Sustainable Appendix 3: Careers in Marketing 665 Marketing Organization 632 REVIEWING AND EXTENDING THE CONCEPTS 633 | Objectives Glossary 678 Review 633 | Key Terms 634 | Discussion Questions 634 | Critical Thinking Ex- References 689 ercises 634 | APPLICATIONS AND CASES 634 | Digital Marketing: Politically Neutral Social Media 634 | Marketing Ethics: Dr. Bronner Spews the Soap! 635 Index 738 A01_KOTL9364_19_GE_FM.indd 14 06/03/23 3:40 PM  Preface New to This Edition All That’s New: Marketing in a Digital Age of Customer Value and Engagement The nineteenth edition of Principles of Marketing reflects the major trends and shifting forces that impact marketing in this digital age of customer value, engagement, and relationships. Here are just some of the major new and continuing changes you’ll find in this edition. Customer engagement framework: This nineteenth edition continues to build on its cus- tomer engagement framework—creating direct and continuous customer involvement in shaping brands, brand conversations, brand experiences, brand advocacy, and brand community. New coverage and fresh examples throughout the text address the latest customer engagement tools, practices, and developments. Digital marketing: In the nineteenth edition, the Digital Marketing chapter (Chapter 17) is retitled, heavily restructured, and much revised, with substantial new framing and con- tent. Rather than treating digital marketing as a part of the promotion mix, the chapter is now a standalone digital marketing strategy chapter that focuses on special consid- erations in preparing digital marketing campaigns. The recrafted chapter is organized around a four-step digital marketing process that involves understanding digital mar- keting, preparing for a digital marketing campaign, employing digital channels (online, social media, and mobile ­marketing) in an omni-channel strategy, and addressing public policy issues in digital marketing. Marketing information and customer insights management: In the nineteenth edition, the Managing Marketing Information to Gain Customer Insights chapter (Chapter 4) has been heavily restructured and revised to reflect the extensive transformation of marketing re- search and information insights management in the digital age—from data sources and digital insights gathering to big data and marketing analytics. The massive digital shift in managing marketing information is now fully integrated into the chapter. Marketing in the age of disruption: Throughout the nineteenth edition, you’ll find new cov- erage of how companies are dealing with recent major disruptions in the marketing en- vironment. The recent past has been marked by everything from the rapid rise of digital technologies and large economic swings to extreme environmental patterns, social and politi- cal turmoil, and global health crises. For example, the digital age has caused an enormous shift in what, how, and where consumers buy. Wide-ranging social, environmental, and political developments require a new approach to social responsibility, sustainability, diversity, and brand activism. The global COVID-19 pandemic had a huge and lasting impact on consumers and, consequently, on the industries and brands that serve them. Such disruptions create both threats and opportunities for marketers, who must adapt quickly and create flexible strategies that can deal with uncertain times and futures. Diversity, equity, and inclusion (DEI): With guidance from DEI experts, every effort has been made to ensure that the nineteenth edition of Principles of Marketing fully and re- sponsibly represents the interests of diversity, equity, and inclusion in its treatment of marketing topics, examples, and illustrations. We also take care throughout this edition to note how marketers are applying DEI values in their strategies and actions. As just a few examples, see the new Chapter 15 section on Diversity, Equity, and Inclusion (DEI) in Advertising and Real Marketing 15.2: Diversity, Equity, and Inclusion in Advertising: More Than a Catchphrase. Also see the substantially revised and updated Chapter 5 Subculture sections, Chapter 3 Diversit­­y section, and Chapter 7 discussion of gender seg- mentation and gender-neutral marketing. Content marketing and marketing communications: The nineteenth edition continues to track fast-changing developments in marketing communications and the creation of brand content. Marketers no longer simply create advertising and integrated marketing    15 A01_KOTL9364_19_GE_FM.indd 15 06/03/23 3:40 PM  16   PREFACE 17 communications programs; they join with cus- tomers and media to curate and share market- ing content in paid, owned, earned, and shared Digital Marketing media. You won’t find fresher coverage of these important topics in any other marketing text. Global marketing and sustainable marketing: The OBJECTIVES OUTLINE 476 PART 3 | Designing a Customer Value–Driven Strategy and Mix nineteenth edition’s Global Marketing and Sus- OBJECTIVE 17-1 Define digital marketing and discuss its rapid growth and benefits to customers and companies. Diversity, Equity, and Inclusion in Advertising tainable Marketing chapters (Chapters 19 and 20) OBJECTIVE 17-2 Discuss the Real Marketing 15.2 campaign. consumer and market research required to design (DEI): More an effective Than digital a Catchphrase marketing have both been significantly restructured and If you ask Amazon’s Alexa “What is love?,” gifts purchased on Etsy make people of di- of America, Verizon, and GEICO to J.Crew, Alexa will share a response from one of eight verse backgrounds feel seen. Dating app OBJECTIVE 17-3 Discuss the different digital channels and media and explain how companies employ them to people representing eight different back- create an omni-channel marketing strategy. Bumble’s “Find Me on Bumble” campaign Baseball. revised, with new organizing frameworks, GM, Marriott, MetLife, and Major League concepts, and examples. For example, in the grounds. “Love is supporting people in pursu- delivers a powerful message of diversity sim- The first phase of the #ProudParent ing their dreams, no matter their abilities,” says ply by highlighting a diverse group of real-life campaign—“Inform the Head”—was all OBJECTIVE 17-4 Identify and discuss the public policy issues presented by digital marketing. Rajee, a disability activist who was given up Bumble users of different genders, races, about providing information and resources to for adoption in her native India after polio left her with limited leg mobility. “We gotta look out abilities, religions, and sexualities. Almost every brand these days ad- sustainability chapter, the environmental families to provide education and direction. The second phase—“Trigger the Heart”— dresses DEI issues in its advertising and consisted of a short film telling the heart- sustainability sections have much new material, for each other, that’s how we show love,” says CHAPTER In previous chapters, you explored the basics the surge in internet usage and buying as well as rapid advances Jim, an anti-bullying activist who experienced marketing, whether it’s diversity and repre- warming story of a young woman bringing in digital technologies—from smartphones, tablets, and IoT de- PREVIEW of marketing. You learned that the aim of mar- bullying throughout his childhood. “Love is sentations of people in their ads, full cam- her girlfriend home to meet her family for keting is to engage customers and to create vices to the spate of online, mobile, and social media. As you when true allies protect my voice,” says Shujaa, value for them in order to capture value from them in return. a student who started activism work at age 10 paigns supporting DEI causes, or both. read this chapter, remember that although we address special Whatever they do, it’s critical that such ef- including new discussions of carbon footprint/ the first time. In the campaign’s final phase, “Encourage Action,” Oreo created 10,000 working for a collective focused on health jus- Good marketing companies win, keep, and grow customers forts be authentic. Consumers want more packages of #ProudParent Oreos, with considerations in digital marketing strategy separately here, digi- tice for Black people. “Love is opening your by understanding customer needs, designing customer value– doors to others without expecting anything than just superficial DEI tactics. They want tal marketing must be carefully integrated with other elements of to see evidence that companies practice offsetting and a set of specific approaches to seven different-colored cream fillings inspired by the colors of the Pride flag. The limited- driven marketing strategies, constructing marketing strategy and the marketing mix. in return,” says Igor, a filmmaker from Mexico keting programs, engaging customers, and building customer who experienced injustices because he was relationships. In this chapter, we dig deeper into the fastest- what they preach. Nabisco’s Oreo brand does just that. The reducing environmental harm. The final section production cookies were distributed free of Let’s start by looking at Swatch. When the Swiss watch indus- charge to people who followed the @Oreo try needed saving in the 1980s, Swatch burst onto the scene with an immigrant. Each voice presents a different longtime leading cookie brand has also been account on Instagram or Twitter and tagged growing form of marketing: digital marketing (which includes on take on love. But they all center on a common line, social media, and mobile marketing). Over the past decade, theme—that an everyday act by someone bold campaigns that pushed the boundaries of traditional market- a longtime leader in supporting the cause of ing. When Swatch itself needs saving, even bolder digital marketing LGBTQ+ rights. For example, two years ago hashtag. includes a new set of principles for building a it in their photos along with the #ProudParent marketing has undergone a dramatic transformation spurred by campaigns show how the company makes use of the hype train. made them feel seen, heard, included...loved. Alexa’s response isn’t just a clever tactic Oreo launched its #ProudParent campaign, designed to educate and empower par- sustainable marketing organization. Within hours of kickoff, the #ProudParent campaign took over the internet. On social designed to make people see Amazon as a car- ents and families to come out in loud, public media, it produced more than 315 million ing entity. Rather, it’s representative of the kind of inclusive storytelling that lies at the heart of support of their LGBTQ+ child and inspire others to do the same. “As a brand that is Omni-channel marketing and retailing: Linked impressions and 2 million engagements. On Instagram alone, more than 600,000 people MOONSWATCH: Countdown to a Hype-Fueled Launch “Love Has No Labels,” a multimedia campaign interlaced with family bonds,” says the com- with all the new digital marketing develop- posted the campaign hashtag to show their S produced in partnership by Amazon and the pany, “we’ve resolved to take a stand in mo- support. In total, the campaign generated more wiss watches are widely considered the gold standard Ad Council. “We made sure from the concept counterparts. As a result, the Swiss watch industry suffered, fac- ments where these bonds may be threatened. than 400 press placements on every major of timepieces, involving meticulous craftsmanship and through the production...to make this as inclusive as possible,” says an Amazon marketer. “Love serving as a status symbol to those who want to show...A loving world starts with a loving home.” tories were shut down, and watchmakers that had trained for a The #ProudParent campaign was a collabora- ments, this edition addresses the substantial media outlet. And #ProudParent took multiple honors in last year’s Shorty Awards for real-time is unique. It’s very complex, and it’s different for that they appreciate the finest things in life. However, everyone. I think this is a celebration of that.” not so long ago, the Swiss watch industry was on the brink of industry tive effort with PFLAG—the first and largest Swatch is credited with the revival of the Swiss watch support organization for the LGBTQ+ com- and as one of the reasons it was able to endure the shifts toward omni-channel marketing and re- short-form content across the social web. Like Oreo, brands in every industry are At the center of the campaign is a munity. PFLAG works with dozens of other committed to efforts across a wide range of collapse. In the late 1970s, low-cost and cheaply manufacturable documentary-style film that takes a deep dive Japanese quartz-powered watches captured much of the market. quartz crisis. Thanks to technological advancements that “Pride Partners”—ranging from Walmart, Bank tailing. Such discussions are integrated through- DEI issues. For example, to address potential allowed manufacturing of plastic watches at a fraction of the into the stories and life experiences of the eight cost of hand-made luxury watches by Swiss subsidiary ETA people who lent their voices to the campaign. During a period dubbed the quartz crisis, it became clear that Campaign elements include Amazon audio ads, the institution of Swiss watchmaking was not keeping up with SA, Swatch was able to manufacture and release the first line of affordable plastic, quartz-powered, but Swiss-made timepieces out the text, but see especially the Marketing Amazon streaming TV ads, social media place- the times. It had failed to see that, when presented the option, ments, and digital formats, as well as a campaign most buyers preferred the low-frills yet highly reliable cheaper microsite where people can learn more about What really made Swatch stand out was how they mar- Channels and Retailing and Wholesaling chapters keted their largely identically shaped injection-molded watches. (Chapters 12 and 13) and the new sections in the quartz options over their prestigious, heritage-soaked Swiss the campaign, the film, the individuals fea- tured, and how to take action to make others feel loved and included. Ads in the broader Ad Council “Love Has No Labels” campaign proclaim that love has no race, no religion, no Digital Marketing chapter (Chapter 17). Marketing technology: Keeping up with digital sexuality, no disability, no age, and no gender. The “Love Has No Labels” campaign is just one example of how brands large and small are working to make a difference by highlighting issues related to diversity, equity, concepts, technologies, and practices is a top and inclusion (DEI). There’s Nike’s award- winning “You Can’t Stop Us” campaign—one 90-second ad, 24 sports, 53 athletes, and priority and major challenge for today’s mar- 72 clips joined by split-screen magic to cel- ebrate, as only Nike can, the similarities and keters. The nineteenth edition of Principles of Successfully incorporating DEI into the fabric of a brand’s advertising and identity differences of athletes around the world. Or requires a deep and continuous commitment. Love has no race, no age, no gender, Etsy’s “Gift Like You Mean It” campaign, made up of multiple videos highlighting how no religion... no labels. Courtesy of Ad Council Marketing provides thoroughly refreshed, up-to- date coverage of these explosive developments in every chapter—from digital, online, mobile, and social media engagement technologies in Chapters 1, 4, 15, and 17; to “big data,” new mar- keting analytics, the Internet of Things, and artificial intelligence in Chapters 1, 3, 4, and 17; to the massive shift to omni-channel and digital marketing in Chapters 13 and 17; to marketing in the metaverse (Chapters 7 and 17). A Chapter 1 section on The Digital Age: Online, Mobile, and Social Media Marketing introduces the exciting developments in digital and social media marketing. Then a heavily revised Chapter 17 on Digital Marketing digs more deeply into digital marketing strategy and the digital tools by which marketers engage consumers anywhere, anytime via their digital devices. Fast-changing marketing trends and topics: This edition adds fresh coverage of both tra- ditional marketing areas and fast-changing topics such as digital, mobile, and social media marketing; customer engagement marketing; the customer journey; big data, ­artificial intelligence, and new marketing analytics; influencer marketing; the major digital transformation in marketing research; omni-channel marketing and the game- changing shifts in today’s retailing; real-time customer listening and marketing; mar- keting content creation and curation; technology-driven customer service; B-to-B social media and social selling; online and dynamic pricing; and much more. New Real-World Brand Stories, Highlights, Cases, and In-Text Examples The nineteenth edition of Principles of Marketing is loaded with new brand stories, highlight features, cases, in-text examples, and end-of-chapter exercises and features that illustrate brand strategies and contemporary marketing issues and let students apply what they’ve learned. New company cases, applications, and exercises: The nineteenth edition provides 15 new company cases by which students can apply what they learn to actual company A01_KOTL9364_19_GE_FM.indd 16 06/03/23 3:40 PM  PREFACE   17 situations. End-of-chapter discussion questions, CHAPTER 7 | Customer Value–Driven Marketing Strategy: Creating Value for Target Customers 215 critical thinking exercises, and other applica- tions features are also mostly new and revised. can do that. Instead, it has built a portfolio of brands, each tar- geting the diverse needs of different social media segments. Early on, Facebook became the model for a social media network—a place where friends and family meet, share their stories, display their photos, pass along infor- Chapter-opening stories, Real Marketing highlights, mation, and chronicle their lives. But as the platform grew, its interface remained a work in progress. The company added features to appeal to the varying needs of its rapidly and in-text examples: The nineteenth edition diversifying user base. For example, it introduced Facebook Chat, an in-platform messaging service the let users more brings marketing to life with new or heavily re- readily carry on conversations with other users or groups. As it became more popular, Facebook Chat morphed into the Messenger feature on the Facebook mobile app. Finally, vised chapter-opening vignettes, boxed features Messenger became a standalone app, letting its overlap- ping but separate segment of users send, receive, and react that highlight relevant companies and market- to messages, photos, and videos without logging 46 PARTon to1 Defining | Thanks toMarketing successfuland the Marketing segmentation Process Facebook/Meta’s four and targeting, Facebook. huge social media platforms—Facebook, Instagram, WhatsApp, and But as Facebook grew, seemingly without bounds, it be- Messenger—now constitute four or the world’s top five social media ing issues, and loads of new in-text examples came almost too common to be cool for some users. As its brands. Zoom: A Winning Product and Agile Marketing Real Marketing 1.2 user base began “aging up,” many teens and young adults rvlsoft/Shutterstock in the Digital Age and images throughout that illustrate contem- started viewing Facebook as a place for the older gen- eration. Although Facebook continued to grow, generation—with its more visual and interactive ThetheCOVID-19 youngerpandemic den orientations move to the digital triggered questioned world, with Facebook’s thea wisdom own sud- 1900 remote Messenger