Kotler Keller - Marketing Management 14th Edition - PDF Free Download

Kotler Keller - Marketing Management 14th Edition. Recommend Documents. Cape Town Dubai Lo. Delhi Mexico City Sao Paulo. chosen as the L a 1975 survey. H original contribut (SMEI) named hi Educator Award doctoral degrees Economics and Economics, Grou Administration, a. Professor Kot cluding IBM, Ge Michelin, and ot tion, and interna He has been Sciences, a Dire Science Institute Board, and a me of Governors of Board of the Dr and South Amer. most successful brands, including Accenture, A Strauss, Procter & Gamble, and Samsung. Additi with other top companies such as Allstate, B Campbell’s, Colgate, Eli Lilly, ExxonMobil, Gener Johnson, Kodak, L.L.Bean, Mayo Clinic, Nordst Shell Oil, Starbucks, Unilever, and Young & Rubi trustee for the Marketing Science Institute. A popular and highly sought-after speaker, marketing seminars to top executives in a variet ment and marketing training clients have include Cisco, Coca-Cola, Deutsche Telekom, GE, G Novartis, and Wyeth. He has lectured all over t from Sydney to Stockholm, and from Sao Paul speaker at conferences with hundreds to thous. An avid sports, music, and film enthusiast, in manage and market, as well as serve as executive and roll treasures, The Church, as well as Americ Tommy Keene. Additionally, he is the Principal In Motion Records. He is also on the Board of Direct. Autism and the Montshire Museum of Science. wife, Punam (also a Tuck marketing professor), a. Company Orientation toward the. The Production Concept 18. The Product Concept. The Selling Concept 18. The Marketing Concept 18. The Holistic Marketing Concept 1 MARKETING MEMO Marketing Rig and Wrong. Relationship Marketing 20. Integrated Marketing 20. Internal Marketing 21. Performance Marketing 22. The New Four Ps 25. Marketing Management Tasks 26. Developing Marketing Strategies an Plans 26. Capturing Marketing Insights 26 MARKETING MEMO Marketers’ Fre Asked Questions 26. Connecting with Customers 27. The Natural Environment 80. The Technological Environment 81 MARKETING INSIGHT The Green Ma Revolution 82. The Political-Legal Environment 84 Forecasting and Demand. The Measures of Market Demand 85 A Vocabulary for Demand. Estimating Current Demand 88. Estimating Future Demand 90. CHAPTER 4Conducting Marketing. The Marketing Research System 97 The Marketing Research Process 99. What Influences Consumer Behavior. Cultural Factors 151. Social Factors 153. MARKETING MEMO The Average U. Consumer Quiz 155. Personal Factors 155. Key Psychological Processes 160. Motivation: Freud, Maslow, Herzber. MARKETING INSIGHT Made. The Buying Decision Process: The Five-Stage Model 166 Problem Recognition 167. Evaluation of Alternatives 168. Creating Brand Equity 240. What Is Brand Equity? 241. The Role of Brands 242 The Scope of Branding 243 Defining Brand Equity 243. Brand Equity Models 245 MARKETING INSIGHT Brand Bubble Trouble 248. Building Brand Equity 249. Choosing Brand Elements 250. Designing Holistic Marketing Activities. Leveraging Secondary Associations. Internal Branding 253. Brand Communities 253. Measuring Brand Equity 255. Get Closer to Customers 318. Review Budget Allocations 319. Put Forth the Most Compelling Valu. Fine-tune Brand and Product. Shaping the Market. CHAPTER 12 Setting Product Strategy. Product Characteristics and. Product Levels: The Customer-Valu. Product Classifications 327. Step 5: Selecting a Pricing. Step 6: Selecting the Final Price 402. MARKETING INSIGHT Stealth Price. Adapting the Price 403. Geographical Pricing (Cash, Countertr. Price Discounts and Allowances 404. Promotional Pricing 405. Differentiated Pricing 406. Initiating and Responding to Price. Initiating Price Cuts 407. Initiating Price Increases 408. Responding to Competitors’ Price. CHAPTER 17 Designing and Managing In. The Role of Marketing Communicatio. The Changing Marketing Communic. MARKETING INSIGHT Don’t Touch. Marketing Communications, Brand. The Communications Process Mod Developing Effective Communication Identify the Target Audience. 482 Determine the Communications Objectives 482. Design the Communications 484 MARKETING INSIGHT Celebrity Endorsements as a Strategy 486. Select the Communications Channe. Interactive Marketing Communication. MARKETING MEMO How to Maximize. Marketing Value of E-mails 543 MARKETING MEMO Segmenting Tech Users 545. Social Media 546. Buzz and Viral Marketing 549 Opinion Leaders 551. MARKETING MEMO How to Start a B Fire 552. Measuring the Effects of Word of. Designing the Sales Force 553. Sales Force Objectives and Strategy. Sales Force Structure 555. MARKETING INSIGHT Major Account. Joint Ventures 605 Direct Investment 605. Deciding on the Marketing Program. Global Similarities and Differences Marketing Adaptation 607. MARKETING MEMO The Ten. Commandments of Global Branding. Global Product Strategies 608 Global Communication Strategies Global Pricing Strategies 611. Global Distribution Strategies 613. Country-of-Origin Effects 614. Building Country Images 614 Consumer Perceptions of Country o. Deciding on the Marketing Organizati. Export Department 616. International Division 616. Global Organization 616. Summary 617 Applications 617. holistic in wha. Chapter 19, o material to ref. Forecasting ha ing environme. Chapter 5 was stronger area o. Chapters 10 a as “Competitiv an economic d. What Is Marketing Mana consistently refl Marketing Manag customer-and-m mental topics su equity, customer channels, supply. ing principles, especially senior management. Integrated marketing—ensuring that multiple nicating value are employed and combined in t. Relationship marketing—having rich, multifac members, and other marketing partners. Performance marketing—understanding retur and programs, as well as addressing broader con vironmental effects. These four dimensions are woven throughout t The text specifically addresses the following tasks t ment in the 21st century: Developing marketing strategies and plans. Capturing marketing insights and performance. Connecting with customers. Building strong brands. Shaping the market offerings. Delivering and communicating value. Creating successful long-term growth. Universal App marketing: pro business mark small and larg industries. Comprehensiv informed mar istrative mark. Mymarketinglab your progress thr. you achieve succe Features inclu. Personalized S you understan. plan to fit your marketing needs by following easylined steps from strategy to implementation. Clic charts come together to create a powerful mark Handbook, by Marian Burk Wood, supplements t indepth guide to what student marketers really n leads to a complete and actionable marketing plan. ples that illustrate key points, sample marketing pl. John Bowen, Rob Donald Haider, Kotler, Nancy Lee Rath, Irving Rein Shields, Francois and David Young. My overriding time, support, an From Kevin La at Tuck—Punam Golder, Ellie Kyu Dean Paul Danos tions from my fac of gratitude to D career started and I have learned fro insights and expe sistance from two rate, thorough, d provided superb Carolyn and Allis. Sunil Bhatla, Case Western Reserve University. Michael Bruce, Anderson University. Frederic Brunel, Boston University. John Burnett, University of Denver. Lisa Cain, University of California at Berkeley. and Mills College. Surjit Chhabra, DePaul University. Yun Chu, Frostburg State University. Dennis Clayson, University of Northern Iowa Bob Cline, University of Iowa. Brent Cunningham, Jacksonville State Univer. Hugh Daubek, Purdue University. John Deighton, University of Chicago. Kathleen Dominick, Rider University. Tad Duffy, Golden Gate University. Mohan Dutta, Purdue University. Barbara Dyer, University of North Carolina. The talented staff at Prentice Hall deserves pra want to thank our editor, Melissa Sabella, for h thank our project manager, Kierra Bloom, for falling into place in such a personable way, bot benefited greatly from the superb editorial hel ents as a development editor to this edition. W work of Ann Pulido, the creative design work Elizabeth Scarpa. We thank Denise Vaughn for our marketing manager, Anne Fahlgren. In This Chapter, We Will Addre. the Following Questions. Why is marketing important? What is the scope of marketing? What are some core marketing concepts? How has marketing management changed in rece. What are the tasks necessary for successful mark management? Twitter were crucial, perhaps Obama’s most powerful massive 13.5 million–name e-mail list. What were the online efforts? About $500 million (most in sums of was raised online from 3 million donors; 35,000 gr through the Web site, My.BarackObama.com; 1,800 YouTube; the creation of Facebook’s most popula course, the election of the next President of the United. The Importance of. The first decade of the 21st century challenged firms face of an unforgiving economic environment. Mark challenges. Finance, operations, accounting, and o without sufficient demand for products and services there must be a top line for there to be a bottom li marketing ability. After a distasteful video was posted online by two employees, Domino’s Pizza learned a valuable lesson about the power of social media. eBay promot 1970s TV ga people outsid. Johnson & Jo have contribu. Skillful market Good marketers a OfficeMax pr videos and i organizing sy. product or service available. When Nintendo designed its Wii game system, w era line, and when Toyota introduced its Prius were swamped with orders because they had design marketing homework. What Is Marketed? Marketers market 10 main types of entities: goods, properties, organizations, information, and ideas. Let. GOODS Physical goods constitute the bulk of most Each year, U.S. companies market billions of fresh, c millions of cars, refrigerators, televisions, machines, a. SERVICES As economies advance, a growing pr production of services. The U.S. economy today Services include the work of airlines, hotels, c maintenance and repair people, and accountants, b programmers, and management consultants. Man such as a fast-food meal. EVENTS Marketers promote time-based even performances, and company anniversaries. Global s World Cup are promoted aggressively to both compa. PLACES Cities, st company headquar commercial banks, Vegas Convention Here, Stays Here,” convention attend Authority took out Unfortunately, the likely did not help. PROPERTIES Pr financial property marketing. Real es commercial real e and individual inv. ORGANIZATI minds of their ta program reflects th the community supermarket chain and nonprofits all. industries. Infor distribute at a pri. kets, labor market. Figure 1.2 are connected by f. direct mail to the and sales data. Th shows an exchang. Structure of Flows. in a Modern Exchange. MARKETPLACES, MARKETSPACES, AND M such as a store you shop in; the marketspace is di Northwestern University’s Mohan Sawhney has propo cluster of complementary products and services clo spread across a diverse set of industries. Metamarkets are the result of marketers packagin related product/service activities. The automobile meta new and used car dealers, financing companies, insura service shops, auto magazines, classified auto ads in ne A car buyer will engage many parts of this metamar to assist him or her in moving seamlessly through the buyer find the stated features and prices of different search for the lowest-price dealer for financing, access other metamarkets, such as home ownership, parentin. Core Marketing Co. To understand the marketing function, we need to u. Needs, Wants, and Demands Needs are the basic human requirements such as for a also have strong needs for recreation, education, an. which are its target of the target buyer safety is a major co. Offerings Companies addres isfy those needs. T combination of pr A brand is an o associations in peo teous service, and favorable, and uni. The buyer choose tangible and intan combination of q increase with qual We can think monitoring of cus performance in rel tomer is disappoi customer is deligh. for certain parts from Alcoa to reduce the car’s wei. Industries Corporation (SABIC) instead of steel. Clea about its competition if it thought only of other inte Steel is more likely to be hurt by substitute products t. Marketing Environment The marketing environment consists of the task envir environment includes the actors engaged in produci These are the company, suppliers, distributors, dealer are material suppliers and service suppliers, such as m cies, banking and insurance companies, transportatio panies. Distributors and dealers include agents, brok who facilitate finding and selling to customers. The broad environment consists of six component ronment, social-cultural environment, natural envir liticallegal environment. Marketers must pay close these and adjust their marketing strategies as needed that await the right marketing savvy and ingenuity. H. TerraCycle After finding that so with a fertilizer made by feeding table scra TerraCycle founder Tom Szaky came up with a cycling,” finding new ways to use nonrecycla. Globalization made it easier the world. Int countries. Deregulation and growth telecommun competition. Privatization management in Chile and t. Heightened c marketing co erful retailer. megabrands nificant comp. Industry con opportunitie electronics in stream of ent technology fu. Retail transf mail firms; n and ecomm. Consumer buying power. In part, due to disint substantially increased their buying power. From compare product prices and features and orde 24 hours a day, 7 days a week, bypassing limited savings. Even business buyers can run a reverse their business. They can readily join others to a volume discounts. Consumer information. Consumers can col depth as they want about practically anything. tionaries, medical information, movie ratings information sources in many languages from a and user-generated content thrive on social. Del.icio.us (links), Digg (news stories), Wikip 23. (video). Social networking sites—such as Do travelers, and Moterus for bikers—bring toget. CarSpace.com auto enthusiasts talk about chro to find a great local mechanic. Consumer participation. Consumers have f and public opinion. In recognition, companies and even marketing offerings to heighten t Consumers see their favorite companies as wo offerings they want. Consumer resistance. Many customers today so they show less brand loyalty and become search for value, and less tolerant about u. Marketers ca can also creat. Sammy Stephen’s viral video helped his flea market receive unprecedented attention. General Motors, and McDonald’s in embracing c cate with the public and employees. Patagonia’s T mental news, reports the results of its sponsored descriptions of employees’ favorite outdoor locat. Companies can facilitate and speed up inte their employees by using the Internet as a pri query one another, seek advice, and download from and to the company’s main computer. See portal that transcended business units, Genera called mySocrates in 2006 consisting of anno. historical information. GM credits the port savings to date. Companies can improve their cost efficie Internet. Corporate buyers can achieve sub Internet to compare sellers’ prices and purcha posting their own terms in reverse auctions. Co and operations to reap substantial cost savings service quality. Marketing in Practice. Not surprisingly, these new marketing forces and changed marketing management. In theory, the mark of analyzing marketing opportunities, selecting targe strategies, developing marketing programs, and m. see many new challenges in the foreseeable future, and unlik cessions, there may be no assurance that a return to past man practices would ever be successful again. According to Kotler and Caslione, marketers should a ready to activate automatic responses when turbulence whip chaos reigns in. They recommend marketers keep these eight mind as they create “chaotics marketing strategies.” Secure your market share from core customer segme is not a time to get greedy, so get your core customer firmly secured, and be prepared to ward off attacks from tors seeking your most profitable and loyal customers. Push aggressively for greater market share from compe companies fight for market share, and in turbulent and cha many have been weakened. Slashing marketing budgets travel expenses is a sure sign a competitor is buckling un sure. Push. aggressively to add to your core customer segme expense of your weakened competitors. Research customers more now, because their ne wants are in flux. Everyone is under pressure during tim bulence and chaos, and all customers—even those in segments whom you know so well—are changing. Stay. increasingly marketing is not done only by the mar affect every aspect of the customer experience, marke points—store layouts, package designs, product fun logistics methods. Marketing must also be influential product innovation and new-business development marketers must think like executives in other depar must think more like marketers. As the late David Packard of Hewlett-Packard obse to the marketing department.” Companies now kno customer and must see the customer as the source o ning to emphasize interdepartmental teamwork to m smooth management of core business processes, such sition and retention, and order fulfillment. the Marketplace Given these new marketing realities, what philosophy Increasingly, marketers operate consistent with the ho evolution of earlier marketing ideas. vides product pla computer. The marketing tive than competit target markets. H marketing concep. Selling focuse preoccupied idea of satisfy ter of things a. Several scholar superior performa. Without question are leading busin Right and Wrong their marketing. The holistic m marketing progra Holistic marketin grated perspective. The Ten Deadly Sins of Marketing. The company is not sufficiently market focused and customer driven. The company does not fully understand its target customers. The company needs to better define and monitor its competitors. The company has not properly managed its relationships with its stakeholders. The company is not good at finding new opportunities. The company’s marketing plans and planning process are deficient. The company’s product and service policies need tightening. The company’s brand-building and communications skills are weak. The company is not well organized to carry on effective and efficient marketing. The company has not made maximum use of technology. Source: Adapted from Philip Kotler, Ten Deadly Marketing Sins (Ho. proces of “wea spent a number of. credit as well as mi accent and fluency Florida. Because attract relationship mark offering a larger va selling. Marketing partner relations arrangements with nal customers so e. Integrated market ing programs to c greater than the su can create, comm one marketing act Electric’s Medical training services t. Snowshoe Mountain Virginia, embarked on a marketing progra of an “authentic, rustic and engaging wil initiative to define their goals and articula. ness and society f beyond sales reve market share, cust are also considerin programs. FINANCIAL A investments in fin growing the custo the direct and ind firms’ market valu distributor and s quantify and com research and stat marketing activiti the value from ana. SOCIAL RESPO the company and. environmental, leg The organizati satisfy them more sumers’ and socie. They make only promises that they can keep. They feed back customers’ needs and ideas to thos. They serve the same customers for a long period of. They set a high standard for service delivery time a. They operate a knowledgeable and friendly custome tions, handle complaints, and resolve problems in a. They prepare periodic “profitability” reports by prod (regions, sales territories), order sizes, channels, an. They prepare invoices tailored to customer needs a and quickly. They understand and support marketing expenditur longterm customer preference and loyalty. They tailor the financial package to the customer’s f. They make quick decisions on customer creditworth. They send out favorable news about the company a. They act as an internal customer and public advoca. Source: ©Philip Kotler, Kotler on Marketing (New York: Free Press, 1999), pp. Simon & Schuster Adult Publishing Group. Copyright © 1999 by Philip Kotler. A. Ben & Jerry’s “triple bottom line” business philosophy is. based on monitoring the environmental and social effects of its actions in addition to the profits from the sale of its products. about a million pou perils of hormones, cultures or dietary Stonyfield adopted brand in the United. Warranties List price. it can continu ally the players who af custom ers, and co nologic al, political Atlas also need marketi ng. How can we spot and choose the right market segment(s)? How can we differentiate our offerings? How should we respond to customers who buy on price? How can we compete against lower-cost, lower-price competit. How far can we go in customizing our offering for each custom. How can we grow our business? How can we build stronger brands? How can we reduce the cost of customer acquisition? and retail prices, discounts, allowances, and credit te fer’s perceived value; otherwise, buyers will turn to co. Delivering Value Atlas must also determine how to properly deliver to products and services. Channel activities include thos uct accessible and available to target customers (see link various marketing facilitators to supply its prod ket. It must understand the various types of retailers and how they make their decisions (see Chapter 16). Communicating Value Atlas must also adequately communicate to the targe and services. It will need an integrated marketing com vidual and collective contribution of all communicat set up mass communication programs consisting of a. relations (see Chapter 18). It also needs to plan more rect and interactive marketing, as well as hire, train, an. Creating Successful Long-Ter Based on its product positioning, Atlas must initi launching as part of its long-term view (see Chapte changing global opportunities and challenges (see Ch. Today’s marketplace is fundamentally different sult of major societal forces that have resulted new consumer and company capabilities forces have created new opportunities and ch. Applications Marketing Debate. Does Marketing Create or Satisfy Needs? Marketing has often been defined in terms of satisfy tomers’ needs and wants. Critics, however, main marketing goes beyond that and creates needs an that did not exist before. They feel marketers en consumers to spend more money than they sh goods and services they do not really need. Take a position: Marketing shapes consume and wants versus Marketing merely reflects th and wants of consumers. In 1985, Nike signed up then-rookie gu. Jordan as a spokesperson. Jordan was still comer, but he personified superior perform bet paid off—the Air Jordan line of basketba off the shelves and revenues hit over $100 first year alone. As one reporter stated, “Fe have so reliably been able to identify and s who transcend their sports to such great effe. In 1988, Nike aired the first ads in its $20 m It” ad campaign. The campaign, which ultimatel TV spots in all, subtly challenged a generation thusiasts to chase their goals. It was a natural of Nike’s attitude of self-empowerment through. As Nike began expanding overseas t found that its U.S.-style ads were seen as to Nike realized it had to “authenticate” its bran so it. focused on soccer (known as football United States) and became active as a spon leagues, local clubs, and national teams. Nike to build authenticity among the socc consumers had to see professional athlet product, especially athletes who won. Nike came in 1994 when the Brazilian team (the team for which Nike had any real sponsors World Cup. That victory transformed Nik. In 1998, two University PhD students, Larry Page and. Brin, founded a search engine company and n Google. The name plays on the number googol—1 by 100 zeroes—and refers to the massive quantit available online that the company helps users find. corporate mission is “To organize the world’s inf and make it universally accessible and useful.” F beginning, Google has strived to be one of the “go in the corporate world, supporting a touchy-fe. products include all Google products availab devices. Web products are broken down into subsets—advertising (e.g., AdWorks, Double to-Call), communications and publishing ( Docs, Google Calendar, Google Gadgets, Wa ment (e.g., Android, Google Code), mapping Sky, Google Maps), Search (e.g., Google Google Alerts, Google Scholar), and statistics Trends, Google Analytics). Google’s stage of development starts w Labs, which lists new products available for te moves to beta status, where invited users tes types. Once the product is fully tested and re leased to the general public, it moves into th as a core Google product. Google Voice, for in the beta stage. It provides consumers with phone number, which then connects to the office, and cell numbers. The user decides w ring, based on who calls. Due to Google Voic ity and popularity, users can sign up only by i. Google has not spent a lot of money o advertising. Recent efforts have targeted Mi sumers with appeals to use Google’s “cloud applications instead of Microsoft Office or. What does a marketing plan include? Yahoo! faces many strategic challenges. as it attempts to fend off competition from. Google and others. in cash. Discussions with Microsoft about a possible merg. 10-year deal in June 2009 that gave Microsoft full acce search engine, to be used in future Microsoft projects fo engine, Bing. CEO Carol Bartz faced many questions, ho Yahoo! should best move forward. Marketing and Cus. Value The task of any business is to deliver customer valu with increasingly informed buyers faced with abund tuning the value delivery process and choosing, pro. The Value Delivery Process. The traditional view of marketing is that the firm mak taking place in the selling process. Companies that s. sulting customers see whom they ra industries if neces innovative, GE ha The firm’s succ on how well the c These processes in. The marketabout the ma. The new-off launching ne. The customer for new custo. The custome understandin. The fulfillme shipping the. Strong compan responsible for eac tion, service, and b at managing core Whitney have reor in nonprofit and g To be successfu tions, into the val. Core Competencies Traditionally, companies owned and controlled most o labor power, materials, machines, information, and e resources if they can obtain better quality or lower cost The key, then, is to own and nurture the resources the business. Many textile, chemical, and computer/ their own products because offshore manufacturers a focus on product design and development and marke tency has three characteristics: (1) It is a source of co contribution to perceived customer benefits. (2) It h. (3) It is difficult for competitors to imitate. Competitive advantage also accrues to companie. lence in broader business processes. Wharton’s Geo excelling in three distinctive capabilities: market sens. In terms of market sensing, he believes tremendous 10. o signals” from the “periphery” of a business. He offe eral vision, and practical tools and strategies for changes in the environment, by asking three questi evaluating the present, and envisioning the future. Competitive advantage ultimately derives from how cies and distinctive capabilities into tightly interlocking imitate Southwest Airlines, Walmart, and IKEA because. where, and how they want. Value deliver value offering. Successful marketi ing, and sustainin master marketers respond effectively and their other de. To ensure they planning in three. (2) assessing each position and fit in plan for achieving Most large com ness unit, and (4 strategic plan to g cate to each divisi a plan covering th develops a strateg level (product line The marketin effort. It operates. target markets and the firm’s value proposition, base nities. The tactical marketing plan specifies the m promotion, merchandising, pricing, sales channels, mentation, and control cycle of strategic planning is planning at each of these four levels of the organizat. Corporate and Div Planning Some corporations give their business units freed and strategies. Others set goals for their business un. Still others set the goals and participate in developing All corporate headquarters undertake four planni. Defining the corporate mission. Establishing strategic business units. Assigning resources to each strategic business un. Assessing growth opportunities. We’ll briefly look at each process. Kawasaki adv statements, li. Compare the rath losophy on the rig. To build total bran customer value an better, and more c. We build brands a happier by bringin. operate defines its geographical sphere. Some companies operate in a specific city or st Post DHL and Royal Dutch/Shell, which each op. Establishing Strategic Busine. Companies often define themselves in terms of pro “clothing business.” Market definitions of a business, satisfying process. Products are transient; basic n Transportation is a need: the horse and carriage, aut products that meet that need. Viewing businesses in terms of customer needs c Table 2.3 lists companies that have moved from a ness. It highlights the difference between a target mark A target market definition tends to focus on selli Pepsi could define its target market as everyone who tors would therefore be other carbonated soft dri however, also focuses on the potential market. If Pepsi thing to quench their thirst, its competition would water, fruit juices, tea, and coffee. To better compete, P. with promising growth rates. A business can define itself in terms of three dime 17. Consider a small company that defines i. systems for televis. ing; the technolog. for homes, factori. Product-Oriented versus M. Product Defini Union Pacific Railroad We run a railroa Xerox. We sell gasoline Paramount Pictures. We make movie Encyclopaedia Britannica We sell encyclo Carrier. The purpose of identifying the company’s strategi gies and assign appropriate funding. Senior managem includes a number of “yesterday’s has-beens” as well a has put more emphasis on some of its younger bus Jeans, Mexx, and Kate Spade while selling businesse Olsen, and Laundry). Campbell Soup has out-pace developing or keeping only products that ranked nu simple meals, baked snacks, and veggie-based drink nutrition, and convenience. News Corp. Media conglomera ally all aspects of print and broadcast media 2008–2009 had different effects on each. Even though the Fox network retained popu advertising sales took their toll. The cable n. due to lower ad rates and monthly provider fees, was slump in the newspaper and magazine business led the Web sites. News Corp.’s $650 million investment in My network site struggled to attract advertisers. At the same its stride, and News Corp. remained committed to a stro shows and movies that would drive DVD sales and lead t ally to products downloadable to mobile phones. Assessing growth older businesses. management will Figure 2.2 disks called Music five years from th period. Evidently, How can it fill the The first optio opportunities). T. provider in 2007 and partnered with Verizon Wireless to la Company, ESPN earns $5 billion a year in revenue, but brand came from one male focus group respondent: “If E. So how might Musicale use these three major inte could try to encourage its current customers to buy compact disks for data storage in addition to music st tomers if it noticed major weaknesses in their produ could try to convince nonusers of compact disks to st. How can Musicale use a market-development str user groups in the current sales areas. If it has been kets, it might go after office and factory markets. S channels by adding mass merchandising or online ch locations in its home country or abroad. Management should also consider new-produc features, such as additional data storage capabilities. two or more quality levels, or it could research an alte These intensive growth strategies offer several w enough, and management must also look for integrat. INTEGRATIVE GROWTH A business can incr ward, or horizontal integration within its industr selling prescription pharmaceuticals. It formed join. Disney Channel a erties, and offerin. Research In Motion, is a scientist in his own right achievement in film. He has hosted a weekly, inno headquarters that focuses on new research and com culture of innovation here, and [engineers] have ab promote innovation.” Marketing Innovation Innovation in marketing is critical. Imaginative ide 27. company. Senior management should identify and sented groups: employees with youthful or diverse company headquarters, and employees new to the i orthodoxy and stimulate new ideas. German-based Reckitt Benckiser has been an inn ucts industry by generating 40 percent of sales multinational staff is encouraged to dig deep into. co lent performance. “Marketing Insight: Creating Innov companies approach innovation. Firms develop strategy by identifying and selecti Royal Dutch/Shell Group has pioneered scenario an tions of a firm’s possible future using assumptions a uncertainties. Managers think through each scenario pens?” adopt one scenario as the most probable, an disconfirm it. Consider the challenges faced by the. The 12 Dimensions of Busin. Definition Offerings (WHAT) Develop innovative new pr. Use common components. create derivative offerings. Solutions. Create integrated and cus. solve end-to-end custome Customers (WHO) Discover unmet customer. underserved customer seg Customer Experience Redesign customer interac. points and all moments of. offer something t obvious. The seco problem detection an ideal version o their steps in acqu new product or se Marketers need. A company m services that digital photo. Internet to fin. A company ca uals with loca. A company ca for different s stitching and. A company c with the iMac with friends a. A company deliver mail a. A company m created generi. Will the financial rate of return meet or exceed o. In the opportunity matrix in. TV-lighting-equipment company appear in th the lower-right cell (#4) are too minor to consider. T and the lower-left cell (#3) are worth monitorin tiveness and potential. An environmental threat is a challenge posed by the absence of defensive marketing action, would lea trates the threat matrix facing the TV-lighting-equipm are major, because they have a high probability of oc To deal with them, the company needs contingency minor and can be ignored. The firm will want to car lower-left cells in the event they grow more serious. INTERNAL ENVIRONMENT (STRENGTHS thing to find attractive opportunities, and another to ness needs to evaluate its internal strengths and weakn. Loan Bright At the Web site potential homebuyers can get a personalized Bright made its money by selling the homebu Wells Fargo Home Mortgage, Bank of Ameri firms turned the data into leads for their sale. share improveme objectives and the tives must meet fo. They must be objective for increase profi by increasing. Objectives sh on investmen. Goals should ties and stren. Other importa tion of existing m and high growth v Many believe a short-term profits margins are seven Microsoft, and Sa. Strategic Goals indicate wh Every business mu a compatible techn. STRATEGIC ALLIANCES Even giant companie achieve leadership, either nationally or globally, with national companies that complement or leverage thei Just doing business in another country may req joint venture with a local firm, or buy from local su. ments. Many firms have developed global strategic build the better global network. The Star Allia Lufthansa, United Airlines, Singapore Airlines, Air huge global partnership that allows travelers to mak destinations. Many strategic alliances take the form of marketing. Product or service alliances—One company lic companies jointly market their complementary industry is a complicated combination of cards America, credit card companies such as Visa, an. Promotional alliances—One company agrees t product or service. McDonald’s teamed up with to current Disney films as part of its meals for ch. Logistics alliances—One company offers logist Warner Music Group and Sub Pop Records c (ADA) in 1993 as a joint venture to distribute a ent labels. ADA is the leading “indie” distribut physical and digital product. Pricing collaborations—One or more companie and rental car companies often offer mutual pric. 20. Ability to produce on time. 21. Technical manufacturing skill. 22. Visionary, capable leadership. 23. Dedicated employees. 24. Entrepreneurial orientation. 25. Flexible or responsive. their strengths an greater sales impac to develop organi form and manage Both pharmace It’s estimated that through acquisitio operator, Vodafone. Vod source ers. Wi create. leads to higher growth and profits, which leads to more investment, and so on. This virtuous circle spel. According to McKinsey & Company, strategy is o with the letter s—in successful business practice. systems—are considered the “hardware” of success. values—are the “software.” The first “soft” element, style, means company e and behaving. The second, skills, means employe company’s strategy. Staffing means the company and assigned them to the right jobs. The fourth elem same guiding values. When these elements are prese strategy implementation. Feedback and Control. A company’s strategic fit with the environment will ine changes faster than the company’s seven Ss. Thus, a co ness. Peter Drucker pointed out that it is more importan “to do things right”—to be efficient. The most successf Once an organization fails to respond to a change to recapture its lost position. Consider KB Toys. Fou. pany successfully reinvented itself many times, first by by anticipating the growth of shopping malls. The fi the world but ultimately crumbled due to competitio tion of eToys. The company declared bankruptcy in 1 again file bankruptcy and liquidate its assets in late 2. Although the ex one year in anywhe plans, whereas cor effectively, every pa post its marketing on changes. A mar. Executive su contents and. Situation an competitors, how big is it, will use all th. Marketing st cial objective positioning. sales, finance, Financial pro break-even a category, and categories. Th how many ye. A more co (optimistic, p under an assu. threats, and opportunities. As the plan is put into effe toward objectives and identify areas for improvement. Finally, marketing research helps marketers learn expectations, perceptions, satisfaction, and loyalty. T marketing research will be conducted and when, as w. The Role of Relationships Although the marketing plan shows how the compa tomer relationships, it also affects both internal and marketing personnel work with each other and with customers. Second, it affects how the company work achieve the plan’s objectives. Third, it influences the including government regulators, the media, and the all these relationships when developing a marketing p. From Marketing Plan to Mark. Most companies create yearly marketing plans. Mar implementation date to allow time for marketing rese dination between departments. As each action pro investigate any deviation from plans, and take corre gency plans; marketers must be ready to update and a. The marketing plan should define how progress t typically use budgets, schedules, and marketing me. and selecting and managing business partners collaborative networks; and maximizes value de becoming proficient at customer relationship ment, internal resource management, and partnership management. Applications Marketing Debate. What Good Is a Mission Statemen. Mission statements are often the product of much tion and discussion. At the same time, critics cl sometimes lack “teeth” and specificity, or do not va from firm to firm and make the same empty promis. Take a position: Mission statements are criti successful marketing organization versus Missio ments rarely provide useful marketing value. ests with the new president and CEO. O decade, the company grew exponentially, product launches such as patented router platforms, and modems—which significantly to the backbone of the Internet. Cisco op international offices in London and France has opened a number of new international then. During the 1990s, Cisco acquired a fully integrated 49 companies into its core a result, the company’s market capitali faster than for any company in history—fro to $300 billion between 1991 and 1999. In Cisco became the most valuable company with market capitalization peaking at $582 per share. By the end of the 20th century, although t was extremely successful, brand awarenes Cisco was known to many for its stock pric for what it actually did. Cisco developed part. Sony, Matsushita, and US West to co-brand with the Cisco logo in hopes of building its na tion and brand value. In addition, the compa its first television spots as part of a campaign. Intel makes the micro sors found in 80 percent of the world’s computers. Today, it is one of the most valuable in the world, with revenues exceeding $37 billio early days, however, Intel microprocessors wer simply by their engineering numbers, such as “8 “80486.” Since numbers can’t be trademarked, c tors came out with their own “486” chips and Inte way to distinguish itself. Nor could consumers s products, buried deep inside their PCs. Thus, Int hard time convincing consumers to pay more for performance products. As a result, Intel created the quintessential ing branding marketing campaign and made hi chose a name for its latest microprocessor intr. that could be trademarked, Pentium, and launc “Intel Inside” campaign to build brand awarene whole family of microprocessors. This campaig. achieve higher margins and maintain a close relationship customers, which is essential for producing products tha true market demand. By the end of the year, Pegasus also developed relationships with different skate shops begin to sell some of its products through retailers. Target Market Forecast. Potential Customers Growth 2011. Recreational 10% 19,142,500 Fitness 15% 6,820,000 Speed 10% 387,500 Hockey. 6% 2,480,000 Extreme 4% 2,170,000 Total 10.48% 31,000,000. *Compound Annual Growth Rate. Source: Adapted from a sample plan provided by and copyrighted by Palo Alto Software, dedication to the sport will provide it with the nee tion to produce insightfully designed products. Customer service. Exemplary service is requ a sustainable business that has a loyal customer. 2.1.3 Market Trends. Pegasus will distinguish itself by marketing produc ously available to skaters. The emphasis in the pas sell skates and very few replacement parts. Th skaters is not restricted to any one single country, age group, so there is a world market. Pegasus for virtually every group of skaters. The fastest-g ment of this sport is the fitness skater. Therefore, t is being directed toward this group. BladeBoot users to enter establishments without having to skates. BladeBoots will be aimed at the. recreation largest segment. SkateAids, on the other hand, everyone. The sport of skating will also grow through Skat sport is primarily for the medium-to-advanced sk growth potential is tremendous. The sails that Pegas factured have been sold in Europe, following a patt windsurfing. Windsailing originated in Santa Monic take off until it had already grown big in Europe. 2.6 Critical Issues. As a start-up business, Pegasus is still in the early sta critical issues are for Pegasus to: Establish itself as the premier skating accessory comp. Pursue controlled growth that dictates that payroll exp will never exceed the revenue base. This will help prot against recessions. Constantly monitor customer satisfaction, ensuring tha the growth strategy will never compromise service and faction levels. 3.0 Marketing Strategy. The key to the marketing strategy is focusing on the spee and fitness, and recreational skaters. Pegasus can cov 80% of the skating market because it produces product toward each segment. Pegasus is able to address all of t ent segments within the market because, although each is distinct in terms of its users and equipment, its prod useful to all of the different segments. Advertising and promotion. Several differen will be used for the advertising effort. Customer service. Pegasus will strive to ach marked levels of customer care. 3.8 Marketing Research. Pegasus is blessed with the good fortune of being l center of the skating world: Venice, California. It w leverage this opportune location by working with ma ferent skaters that live in the area. Pegasus was abl its products not only with its principals, who are a skaters, but also with the many other dedicated users located in Venice. The extensive product testi variety. of users provided Pegasus with valuable prod and has led to several design improvements. This section will offer the financial overview of Pega marketing activities. Pegasus will address break-e sales forecasts, expense forecast, and indicate how ties link to the marketing strategy. Contribution Margin $398,725 $544,652 $6 Contribution Margin/Sales 75.42% 78.40% The purpose of Pegasus’ marketing plan is to serve as a the organization. The following areas will be monitored t performance: Revenue: monthly and annual. Expenses: monthly and annual. In This Chapter, We Will Addre. the Following Questions. What are the components of a modern marketing system? What are useful internal records for such a system. What makes up a marketing intelligence system? What are some influential macroenvironment deve. How can companies accurately measure and fore. Components of a M. Marketing Informa The major responsibility for identifying significant marketers. Marketers have two advantages for the task tion, and time spent interacting with customers an groups. Some firms have marketing information s wants, preferences, and behavior. Largest refugee population. Highest divorce rate. Highest color TV ownership per 100 households. Mobile telephone subscribers per capita. Highest cinema attendance. Biggest beer drinkers per capita. Biggest wine drinkers per capita. Highest number of smokers per capita. Highest GDP per person. Largest aid donors as % of GDP. Most economically dependent on agriculture. Highest population in workforce. Highest percent of women in workforce. Most crowded road networks. Most deaths in road accidents. Most tourist arrivals. Highest life expectancy. Highest diabetes rate. Source: CIA World Fact Book, https://www.cia.gov/library/publications/the-world-factbo. The company’s marketing information system sho need, what they really need, and what is economicall terview a cross-section of marketing managers to dis displays some useful questions to ask them. What decisions do you regularly make? What information do you need to make these decis. What information do you regularly get? What special studies do you periodically request? What information would you want that you are not. What information would you want daily? Weekly? M. What online or offline newsletters, briefings, blogs, on a regular basis? What topics would you like to be kept informed of? What data analysis and reporting programs would. What are the four most helpful improvements that information system? consu vendor-tion, an averag. Panasonic’s new vendormanaged inventory system met with marketplace success, including from retailers. illustration: “If yo a red one, the sal the yellow Musta yellow Mustangs.” ship. Knowing so much about consumers allows Best precision marketing and customer-triggered incentive positive response rates. Marketing Intellige The Marketing Intelligence S. A marketing intelligence system is a set of procedu everyday information about developments in the m system supplies results data, but the marketing int Marketing managers collect marketing intelligence i ing books, newspapers, and trade publications; talki monitoring social media on the Internet; and meetin. Before the Internet, sometimes you just had to competition. This is what oil and gas entrepreneu learned about a rival’s drilling activity, Pickens recalls [the rival’s] drilling floor from a half mile away with there wasn’t anything they could do about it. Our sp They would count them; each [drill] joint was 30 fee be able to tally the depth of the well.” Pickens knew would be for his rival to get the oil or gas up to the sur an immediate competitive advantage. Set up a cust largest, most GlaxoSmithK far more than loss pill to wh. Take advant an indepth l changing fam July 1, 2008) sumer surve BMW, and S address infor specific clust. Purchase info include firms information media. They their own. Biz analysis of ne social media s. Thanks to the exp cussion forums, c. and disseminates a news bulletin to marketing man works best when it is closely coordinated with the dec. A megatrend form, and onc. To help mark firms offer s nationally ea “anti-bigness A new market nically feasibl. Identifyin The end of the fi decline of the stoc unemployment; c deterioration in t. events were acco foundly influence. Firms must mo cultural, natural, t that their interacti growth (demogra consumers to call products (technol behavior (social-c. If the world were a village of 100 people: 61 villagers would be Asian (of that, 20 would be Ch African, 11 would be European, 8 would be Latin or and only one of the villagers would be from Australia. At least 18 villagers would be unable to read or writ 16 would be online on the Internet. 18 villagers would be under 10 years of age and 11 an equal number of males and females. There would be 18 cars in the village. 63 villagers would have inadequate sanitation. 32 villagers would be Christians, 20 would be Musli 16 would be non-religious, and the remaining 12 w. 30 villagers would be unemployed or underemploye work in agriculture (primary sector), 14 would work ing 28 would work in the service sector (tertiary sec. 53 villagers would live on less than two U.S. dollars a would smoke, and 14 villagers would be obese. By the end of a year, one villager would die and two would climb to 101. Source: David J. Smith and Shelagh Armstrong, If the World Were a Village: A Press, 2002). having to pay the full price the PC would normally command. payment runs out, the PC stops operating and the user prepay restart it. Other firms find “reverse innovation” advantages by d products in countries like China and India and then distribut globally. After GE successfully introduced a $1,000 handhel cardiogram device for rural India and a portable, PC-based u. older. Some mark who travel throug become adults (ro values, preferences. ETHNIC AND extreme is Japan, 25 million people 2000 census, the U Hispanic. The Hisp the population by and Cuban (0.4 p Chinese are the larg. The growth of Hispanics made u. HOUSEHOLD PATTERNS The traditional h children (and sometimes grandparents). Yet by 2010, of a married couple with children under 18. Other h single-parent families (8 percent), childless married c with nonrelatives only (5 percent), and other family s. More people are divorcing or separating, choosin without intending to have children. Each group h single, separated, widowed, and divorced may n smaller appliances, furniture, and furnishings; and Nontraditional households are growing more rap and marketing experts estimate that the gay and lesb 8 percent of the total U.S. population, higher in urb holds have experienced change. Boomer dads marry shop more, and are much more active in raising the high-concept Bugaboo stroller designed a model with the high-end vacuum company, is appealing to dads’ i lutionary technology. Before Dyson entered the U.S. m uum cleaner sales. Now they make up 40 percent of D. The Economic Environment. The available purchasing power in an economy depe and credit availability. As the recent economic dow purchasing power can have a strong impact on busin are geared to high-income and price-sensitive consu.