A FRAMEWORK FOR MARKETING MANAGEMENT Sixth

A FRAMEWORKFORMARKETINGMANAGEMENTSixth EditionGlobal EditionPhilip KotlerNorthwestern UniversityKevin Lane KellerDartmouth CollegePEARSONBoston Columbus Indianapolis New York San Francisco Amsterdam CapeTown Dubai London Madrid Milan Munich Paris Montreal TorontoDelhi Mexico City Säo Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo

ContentsPreface 19Part 11Introduction to Marketing ManagementScope of Marketing for New RealitiesMarketing Management at Unilever 252525The Value of Marketing 26The Scope of Marketing 26What Is Marketing? 26What Is Marketed? 27Who Markets? 28What Is a Market? 28Core Marketing Concepts 29Needs, Wants, and Demands 29Target Markets, Positioning, and SegmentationOfferings and Brands 29Marketing Channels 30Paid, Owned, and Earned Media 30Impressions and Engagement 30Value and Satisfaction 30Supply Chain 30Competition 31Marketing Environment 31The New Marketing Realities 31Technology 31Globalization 32Social Responsibility 32A Dramatically Changed Marketplace 32Company Orientation Toward the Marketplace 34The Production Concept 34The Product Concept 34The Selling Concept 34The Marketing Concept 34The Holistic Marketing Concept 35

8ContentsUpdating The Four Ps 36Marketing Management Tasks 38Executive Summary 39Notes 402Marketing Strategies and Plans 42Marketing Management at Hewlett-Packard42Marketing and Customer Value 43The Value Delivery Process 43The Value Chain 43Core Competencies 44The Central Role of Strategie Planning 44Corporate and Division Strategie Planning 45Defining the Corporate Mission 45Estabiishing Strategie Business Units 45Assigning Resources to Each SBV 46Assessing Growth Opportunities 46Organization and Organizational Culture 47Business Unit Strategie Planning 47The Business Mission 47SWOT Analysis 47Goal Formulation 49Strategy Formulation 49Strategy and Implementation 50The Marketing Plan 50Contents ofa Marketing Plan 50From Marketing Plan to Marketing Action 51Marketing Implementation, Control, and Performance 52Marketing Metrics 52Marketing-Mix Modeling 52Marketing Dashboards 53Marketing Control 54Executive Summary 55Notes 563Marketing Research and Analysis 58Marketing Management at Campbell Soup Company 58The Marketing Information System and MarketingIntelligence 59Internal Records and Database Systems 59Marketing Intelligence 60

ContentsThe Marketing Research System 60Defining Marketing Research 61The Marketing Research Process 62Step 1: Define the Problem, Decision Alternatives,and Research Objectives 62Step 2: Develop the Research Plan 63Step 3: Collect the Data 65Step 4: Analyze the Information 65Step 5: Present the Findings 65Step 6: Make the Decision 65Forecasting and Demand Measurement 66The Measures of Market Demand 66The Market Demand Function 66Estimating Current Demand 68Estimating Future Demand 69Analyzing the Macroenvironment 69Identifying the Major Forces 70The Demographic Environment 70The Economic Environment 72The Sociocultural Environment 72The Natural Environment 73The Technological Environment 74The Political-Legal Environment 74Executive Summary 75Notes 76Part 24Connecting with Customers78Building Long-Term Customer RelationshipsMarketing Management at Pandora 7878Building Customer Value, Satisfaction, and Loyalty 79Customer-Perceived Value 79Total Customer Satisfaction 80Monitoring Satisfaction 81Product and Service Quality 82Maximizing Customer Lifetime Value 83Customer Profitability 83Measuring Customer Lifetime Value 84Cultivating Customer Relationships 84Attracting and Retaining Customers 85Building Loyalty 87Win-Backs 88

Executive Summary 88Notes 89Buying Dynamics of Consumers and BusinessesMarketing Management at Cisco 9292What Influences Consumer Behavior? 93Cultural Factors 93Social Factors 93Personal Factors 94Key Psychological Processes 96Motivation 96Perception 97Learning 98Emotions 98Memory 98The Consumer Buying Decision Process 99Problem Recognition 99Information Search 100Evaluation of Alternatives 101Purchase Decision 102Postpurchase Behavior 102Behavioral Decision Theory and Behavioral EconomicsWhat is Organizational Buying? 104The Business Market versus the Consumer Market 104Institutional and Government Markets 105Business Buying Situations 105Participants in the Business Buying Process 106The Buying Center 106Buying Center Influences 106Targeting Firnis and Buying Centers 107Stages in the Business Buying Process 108Problem Recognition 108General Need Description and Product Specification USupplier Search 109Proposal Solicitation 110Supplier Selection 110Order-Routine Specification 110Performance Review 110Managing Business-to-Business Customer Relationships 110The Benefits of Vertical Coordination 110Risks and Opportunism in Business Relationships 111

ContentsExecutive Summary 111Notes 112Part 36Strategie Brand Management116Target Marketing 116Marketing Management at Linkedln116Bases for Segmenting Consumer Markets 117Geographie Segmentation 117Demographic Segmentation 117Psychographic Segmentation 120Behavioral Segmentation 120Bases for Segmenting Business Markets 123Market Targeting 124Effective Segmentation Criteria 124Evaluating and Selecting Market SegmentsExecutive Summary 128Notes 1287Competitive and Effective Brand PositioningMarketing Management at Burberry 130125130Developing and Establishing a Brand Positioning 131Understanding Positioning and Value PropositionsChoosing a Competitive Frame of Reference 131Identifying Potential Points-of-Dijferenceand Points-of-Parity 132Choosing Specific POPs and PODs 133Emotional Branding 135Brand Mantras 135Establishing a Brand Positioning 135Alternative Approaches to Positioning 136Competitive Strategies for Market Leaders 136Expanding Total Market Demand 138Protecting Market Share 138Increasing Market Share 140Other Competitive Strategies 140Market-Challenger Strategies 140Market-Follower Strategies 141Market-Nicher Strategies 142Executive Summary 142Notes 14313111

12Contents8Branding and Gore Business Growth 145Marketing Management at Gatorade 145How Does Branding Work? 146The Role of Brands 146The Scope of Branding 146Defining Brand Equity 147Customer-Based Brand Equity 147Brand Equity Models 148Building Brand Equity 149Choosing Brand Elements 150Designing Holistic Marketing Activities 150Leveraging Secondary Associations 151Internal Branding 152Measuring and Managing Brand Equity 152Brand Audits and Brand Tracking 152Brand Valuation 152Managing Brand Equity 153Devising a Branding Strategy 153Branding Decisions 153Brand Portfolios 154Brand Extensions 155Customer Equity 156Driving Growth 156Growth Strategies 156Growing the Core 157Executive Summary 158Notes 158Part 49Value Creation162Product Mix and New Otterings 162Marketing Management at Lexus 162Product Characteristics and Classification 163Product Levels: The Customer-Value HierarchyProduct Classifications 164Differentiation 164Product Differentiation 164Services Differentiation 165Design Differentiation 165Product and Brand Relationships 166The Product Hierarchy 166Product Line Analysis 167163

Product Line Length 167Line Modernization, Featuring, and Pruning 168Product Mix Pricing 168Co-Branding and Ingredient Branding 169Packaging, Labeimg, Warranties, and Guarantees 169Packaging 169Labeling 170Warranties and Guarantees 170Managing New Products 170The Innovation Imperative and New ProductSuccess 171New Product Development 171The Consumer-Adoption Process 175Stages in the Adoption Process 175Factors Influencing the Adoption Process 175Product Life-Cycle Marketing Strategies 176Product Life Cycles 177Marketing Strategies: Introduction Stageand the Pioneer Advantage 177Marketing Strategies: Growth Stage 178Marketing Strategies: Maturity Stage 178Marketing Strategies: Decline Stage 178Critique ofthe Product Life-Cycle Concept 178Executive Summary 179Notes 180Analyzing and Marketing Services 183Marketing Management at Emirates Airline 183The Nature of Services 184Categories of Service Mix 184Distinctive Characteristics of Services 184The New Services Realities 186A Shifting Customer Relationship 187Achieving Excellence in Services Marketing 187Differentiating Services 189Managing Service Quality 190Managing Customer Expectations 190Incorporating Self-Service Technologies 192Managing Product-Support Services 193Identifying and Satisfying Customer Needs 193Postsale Service Strategy 193

14ContentsExecutive Summary 194Notes 19411Concepts and Tools for Strategie PricingMarketing Management at Ryanair 197197Understanding Pricing 198Pricing in a Digital World 198A Changing Pricing Environment 198How Companies Price 198Consumer Psychology and Pricing 199Setting the Price 200Step 1: Selecting the Pricing Objective 200Step 2: Determining Demand 201Step 3: Estimating Costs 202Step 4: Analyzing Competitors' Costs, Prices, and Offers 204Step 5: Selecting a Pricing Method 204Step 6: Selecting the Final Price 207Adapting the Price 208Geographical Pricing (Cash, Countertrade, Barter) 208Price Discounts and Allowances 209Promotional Pricing 209Differentiated Pricing 210Initiating and Responding to Price Changes 211Initiating Price Cuts 211Initiating Price Increases 211Anticipating Competitive Responses 211Responding to Competitors' Price Changes 211Executive Summary 212Notes 212Part 512Value Delivery215Developing and Managing Strategie and Integrated MarketingChannels 215Marketing Management at IKEA 215Marketing Channels and Value Networks 216The Importance of Channels 216Multichannel Marketing 216Integrating Multichannel Marketing Systems 217Value Networks 217The Digital Channels Revolution 217The Role of Marketing Channels 218Channel Functions and Flows 218

Channel Levels 219Service Sector Channels 220Channel-Design Decisions 220Analyzing Customer Needs and Wants 220Establishing Objectives and Constraints 221Identifying Major Channel Alternatives 222Evaluating Major Channel Alternatives 222Channel-Management Decisions 223Selecting Channel Members 223Training and Motivating Channel Members 224Evaluating Channel Members 224Modifying Channel Design and Arrangements 224Global Channel Considerations 224Channel Integration and Systems 224Vertical Marketing Systems 225Horizontal Marketing Systems 225E-Commerce and M-Commerce Marketing Practices 226E-Commerce and Pure-Click Companies 226E-Commerce and Brick-and-Click Companies 226M-Commerce Marketing 226Channel Conflict, Cooperation, and Competition 227Types of Conflict and Competition 227Causes of Channel Conflict 228Managing Channel Conflict 228Dilation and Cannibalization 228Legal and Ethical Issues in Channel Relations 228Executive Summary 229Notes 229Managing Retailing, Wholesaling, and LogisticsMarketing Management at Warby Parker 232232Retailing 233Types ofRetailers 233The Modern Retail Marketing Environment 234Retailer Marketing Decisions 235Private Labels 237Role of Private Labels 238Private-Label Success Factors 238Wholesaling 238Wholesaling Functions 239Trends in Wholesaling 240