Marketing Management 15 Global Edition PHILIP KOTLER KEVIN .

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MarketingManagement15Global EditionPHILIP KOTLERNorthwestern UniversityKEVIN LANE KELLERDartmouth CollegePEARSONBoston Columbus Indianapolis New York San Francisco Amsterdam Cape TownDubai London Madrid Milan Munich Paris Montreal TorontoDelhi Mexico City Säo Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo

ContentsPreface 17PART 1Understanding MarketingManagementChapter 124Defining Marketing for the NewRealities 25The Value of Marketing 25Marketing Decision Making 25Winning Marketing 26The Scope of Marketing 27What Is Marketing? 27What Is Marketed? 27Who Markets? 29Gore Marketing Concepts 31Needs, Wants, and Demands 31Target Markets, Positioning, andSegmentation 31Otterings and Brands 32Marketing Channels 32Faid, Owned, and Earned Media 32Impressions and Engagement 32Value and Satisfaction 33Supply Chain 33Competition 34Marketing Environment 34The New Marketing Realities 35Technology 35Globalization 36Social Responsibility 36MARKETING INSIGHT Understanding the4 As of Marketing 48Marketing Management Tasks 49Developing Marketing Strategies andPlans 49Capturing Marketing Insights 50Connecting with Customers 50Building Strang Brands 50Creating Value 51Delivering Value 51Communicating Value 51Conducting Marketing Responsibly forLong-Term Success 51Summary 51Applications 52MARKETING EXCELLENCE Nike 52MARKETING EXCELLENCE Google 54Chapter 238MARKETING MEMO Reinventing Marketingat Coca-Cola 42Marketing Accountability 42Marketing in the Organization 42Company Orientation toward theMarketplace 42The Production Concept 42The Product Concept 4343MARKETING MEMO Marketers' FrequentlyAsked Questions 50MARKETING INSIGHT GettingtoMarketing 3.0 37A Dramatically Changed MarketplaceNew Consumer Capabilities 38New Company Capabilities 39Changing Channels 41Heightened Competition 41Marketing in Practice 41Marketing Balance 41The Selling Concept 43The Marketing Concept 43The Holistic Marketing ConceptUpdating the Four Ps 47Developing Marketing Strategiesand Plans 57Marketing and Customer Value 57The Value Delivery Process 57The Value Chain 58Core Competencies 58The Central Role of Strategie Flanning 59Corporate and Division Strategie Flanning 60MARKETING MEMO What Does It Taketo Be a Successful CMO? 61Defining the Corporate Mission 61Establishing Strategie Business Units 64Assigning Resources to Each SBU 64Assessing Growth Opportunities 64Organization and Organizational Culture 68Marketing Innovation 69MARKETING INSIGHT Creating InnovativeMarketing 69Business Unit Strategie Flanning 70The Business Mission 71SWOT Analysis 71

MARKETING MEMO Checklist for EvaluatingStrengths/Weaknesses Analysis 73Goal Formulation 74Strategie Formulation 74Program Formulation andImplementation 75MARKETING INSIGHT Businesses Chartinga New Direction 76Feedback and Control 77The Nature and Contents of a MarketingPlan 77MARKETING MEMO Marketing PlanCriteria 77The Role of Research 78The Role of Relationships 78From Marketing Plan to MarketingAction 79Summary 79Applications 80MARKETING EXCELLENCE Electrolux 80MARKETING EXCELLENCE Emirates 81Sample Marketing Plan: Pegasus SportsInternational 83PART 2Capturing MarketingInsightsChapter 388Collecting Information andForecasting Demand 89Components of a Modern MarketingInformation System 89Internal Records 91The Order-to-Payment Cycle 91Sales Information Systems 91Databases, Data Warehousing, and DataMining 91MARKETING INSIGHT Digging Into BigData 92Marketing Intelligence 92The Marketing Intelligence System 92Collecting Marketing Intelligence on theInternet 94Communicating and Acting on MarketingIntelligence 94Analyzing the Macroenvironment 94Needs and Trends 95Identifying the Major Forces 95The Demographic Environment 96MARKETING MEMO Finding Gold at theBottom of the Pyramid 97The Economic Environment 99The Sociocultural Environment 100The Natural Environment 101MARKETING INSIGHT The Green MarketingRevolution 103The Technological Environment 104The Political-Legal Environment 105MARKETING INSIGHT Watching Out for BigBrother 107Forecasting and Demand Measurement 107The Measures of Market Demand 108A Vocabulary for Demand Measurement 109Estimating Current Demand 111Estimating Future Demand 113Summary 115Applications 116MARKETING EXCELLENCE Microsoft 116MARKETING EXCELLENCE Ferrero 117Chapter 4Conducting MarketingResearch 121The Scope of Marketing Research 121Importance of Marketing Insights 121Who Does Marketing Research? 122Overcoming Barriers to the Use of MarketingResearch 123The Marketing Research Process 124Step 1: Define the Problem, the DecisionAlternatives, and the ResearchObjectives 124Step 2: Develop the Research Plan 125MARKETING MEMO Conducting InformativeFocus Groups 127MARKETING MEMO MarketingQuestionnaire Dos And Don'ts 130MARKETING INSIGHT Getting into theHeads of Consumers 131MARKETING INSIGHT Understanding BrainScience 133Step 3: Collect the Information 135Step 4: Analyze the Information 135Step 5: Present the Findings 135MARKETING INSIGHT Bringing MarketingResearch to Life with Personas 136

Step 6: Make the Decision 136Measuring Marketing Productivity 137Marketing Metrics 137MARKETING MEMO Measuring SocialMedia ROI 139Marketing-Mix Modeling 140Marketing Dashboards 140Summary 143Applications 143MARKETING EXCELLENCE IDEO 144MARKETING EXCELLENCE Intuit 146Connecting withCustomersChapter 5Analyzing Consumer Markets 179What Influences Consumer Behavior? 179Cultural Factors 179Social Factors 181Personal Factors 183MARKETING MEMO The Average U.S.Consumer Quiz 184MARKETING MEMO Designing EffectiveMarketing Dashboards 141PART 3Chapter 6148Creating Long-Term LoyaltyRelationships 149Building Customer Value, Satisfaction, andLoyalty 149Customer-Perceived Value 150Total Customer Satisfaction 153Monitoring Satisfaction 155Product and Service Quality 156MARKETING INSIGHT Net Promoter andCustomer Satisfaction 157Maximizing Customer Lifetime Value 158Customer Profitability 159Measuring Customer LifetimeValue 160Attracting and Retaining Customers 160MARKETING MEMO Calculating CustomerLifetime Value 161Key Psychological Processes 187Motivation 187Perception 189MARKETING MEMO The Power of SensoryMarketing 189Learning 191Emotions 192Memory 193The Buying Decision Processi The Five-StageModel 194Problem Recognition 195Information Search 196Evaluation of Alternatives 197Purchase Decision 198Postpurchase Behavior 200Moderating Effects on Consumer DecisionMaking 202Behavioral Decision Theory and BehavioralEconomics 202Decision Heuristics 203Framing 204Summary 205Applications 205MARKETING EXCELLENCE Disney 206MARKETING EXCELLENCE IKEA 207Chapter 7Analyzing Business Markets211MARKETING INSIGHT The BehavioralTargeting Controversy 169What is Organizational Buying? 211The Business Market versus the ConsumerMarket 211Buying Situations 214Participants in the Business BuyingProcess 215The Buying Center 216Buying Center Influences 216Targeting Firms and Buying Centers 217Summary 174Applications 174MARKETING INSIGHT Big Sales to SmallBusinesses 218Building Loyalty 164Brand Communities 165Win-Backs 168Cultivating Customer Relationships 168Customer Relationship Management 168MARKETING EXCELLENCE AudiMARKETING EXCELLENCEHarley-Davidson 176175The Purchasing/Procurement ProcessStages in the Buying Process 220Problem Recognition 220219

General Need Description and ProductSpecification 221Supplier Search 221Proposal Solicitation 223Supplier Selection 223MARKETING MEMO Developing CompellingCustomer Value Propositions 224Order-Routine Specification 226Performance Review 226Developing Effective Business-to-BusinessMarketing Programs 226Communication and Branding Activities 226Systems Buying and Selling 228MARKETING INSIGHT EstablishingCorporate Trust, Credibility, andReputation 231233235MARKETING EXCELLENCE GE 236Chapter 8Tapping into Global Markets 239Competing on a Global Basis 239Deciding Whether to Go Abroad 241Deciding Which Markets to Enter 242How Many Markets to Enter 242Evaluating Potential Markets 243Succeeding in DevelopingMarkets 243Deciding How to Enter the Market 248Indirect and Direct Export 249Licensing 249Joint Ventures 250Direct Investment 250Acquisition 250Deciding on the Marketing Program 251Global Similarities and Differences 252Marketing Adaptation 253Global Product Strategies 254MARKETING EXCELLENCE L'OrealChapter 9264Building StrongBrandsRole of Services 229Managing Business-to-Business CustomerRelationships 230The Benefits of Vertical Coordination 230MARKETING EXCELLENCE AccentureMARKETING EXCELLENCE Twitter 263PART 4MARKETING MEMO Spreading the Wordwith Customer Reference Programs 229Risks and Opportunism in BusinessRelationships 231Institutional and Government MarketsSummary 234Applications 235Global Communication Strategies 257Global Pricing Strategies 257Global Distribution Strategies 259Country-of-Origin Effects 260Building Country Images 260Consumer Perceptions of Country ofOrigin 261Summary 262Applications 263266Identifying Market Segments andTargets 267Bases for Segmenting ConsumerMarkets 268Geographie Segmentation 268Demographic Segmentation 271Psychographic Segmentation 280Behavioral Segmentation 281How Should Business Markets BeSegmented? 283Market Targeting 284Effective Segmentation Criteria 285Evaluating and Selecting the MarketSegments 286MARKETING INSIGHT Chasing the LongTail 289MARKETING MEMO Protecting KidsOnline 291Summary 291Applications 292MARKETING EXCELLENCE HSBC 292MARKETING EXCELLENCE BMW 294Chapter 10 Crafting the Brand PositioningDeveloping a Brand Positioning 297Understanding Positioning and ValuePropositions 297Choosing a Competitive Frame ofReference 298Identifying Potential Points-of-Differenceand Points-of-Parity 300297

Choosing Specific POPs and PODs 304Brand Mantras 307Establishing a Brand Positioning 309Summary 352Applications 352MARKETING MEMO Constructing a BrandPositioning Bull's-eye 309MARKETING EXCELLENCEProcter & Gamble 354Alternative Approaches to Positioning 313Brand Narratives and Storytelling 313Cultural Branding 314Positioning and Branding for A SmallBusiness 314Summary 317Applications 317MARKETING EXCELLENCENespresso 318MARKETING EXCELLENCEPhilips 319Chapter 11 Creating Brand Equity321How Does Branding Work? 321The Role of Brands 322The Scope of Branding 323Defining Brand Equity 324Brand Equity Models 326MARKETING INSIGHT Brand BubbleTrouble 328Building Brand Equity 331MARKETING MEMO The Marketing Magic ofCharacters 332Designing Holistic Marketing Activities 332Leveraging Secondary Associations 334Internal Branding 336Measuring Brand Equity 337MARKETING INSIGHT The Brand ValueChain 337MARKETING INSIGHT What Is a BrandWorth? 339Managing Brand Equity 340Brand Reinforcement 340Brand Revitalization 341Devising a Branding Strategy 343Branding Decisions 344Brand Portfolios 345Brand Extensions 347Customer Equity 350MARKETING MEMO Twenty-First-CenturyBranding 351MARKETING EXCELLENCE McDonald's 353Chapter 12 Addressing Competition andDriving Growth 357Growth 357Growth Strategies 357Growing the Gore 358Competitive Strategies for MarketLeaders 359Expanding Total Market Demand 360Protecting Market Share 361Increasing Market Share 363Other Competitive Strategies 364Market-Challenger Strategies 364Market-Follower Strategies 366MARKETING INSIGHT The Costs andBenefits of Fast Fashion 367Market-Nicher Strategies 368MARKETING MEMO Niche SpecialistRoles 370Product Life-Cycle Marketing Strategies 370Product Life Cycles 370Style, Fashion, and Fad Life Cycles 371Marketing Strategies: Introduction Stage andthe Pioneer Advantage 373MARKETING INSIGHT UnderstandingDouble Jeopardy 374Marketing Strategies: Growth Stage 375Marketing Strategies: Maturity Stage 376Marketing Strategies: Decline Stage 377MARKETING MEMO Managing a MarketingCrisis 378Evidence for the Product Life-CycleConcept 380Critique of the Product Life-CycleConcept 381Market Evolution 381Marketing in a Slow-Growth Economy 381Explore the Upside of IncreasingInvestment 381Get Closer to Customers 382Review Budget Allocations 382Put Förth the Most Compelling ValueProposition 382Fine-Tune Brand and Product Offerings 383

Summary 384Applications 384MARKETING EXCELLENCENivea 416MARKETING EXCELLENCESamsung 385MARKETING EXCELLENCEToyota 418MARKETING EXCELLENCE SABIC 386PART 5Creating Value388Chapter 13 Setting Product Strategy 389Product Characteristics andClassifications 389Product Levels: The Customer-ValueHierarchy 389Product Classifications 391Differentiation 392Product Differentiation 393Services Differentiation 394Design 396Design Leaders 396Power of Design 397Approaches to Design 397Luxury Products 398Characterizing Luxury Brands 398Growing Luxury Brands 398Marketing Luxury Brands 399Environmental Issues 400MARKETING MEMO A Sip or A Gulp:Environmental Concerns in the WaterIndustry 401Product and Brand Relationships 401The Product Hierarchy 402Product Systems and Mixes 402Product Line Analysis 403Product Line Length 404MARKETING INSIGHT When Less IsMore 405Product Mix Pricing 408Co-Branding and IngredientBranding 409MARKETING MEMO Product-Bundle PricingConsiderations 410Packaging, Labeling, Warranties, andGuarantees 412Packaging 412Labeling 414Warranties and Guarantees 415Summary 415Applications 416Chapter 14 Designing and ManagingServices 421The Nature of Services 421Service Industries Are Everywhere 421Categories of Service Mix 422Distinctive Characteristics of Services 424The New Services Realities 428A Shifting Customer Relationship 428MARKETING MEMO Lights! Cameras!Customer Service Disasters! 430Achieving Excellence In ServicesMarketing 431Marketing Excellence 431Technology and ServiceDelivery 432Best Practices of Top ServiceCompanies 433Differentiating Services 435MARKETING INSIGHT Improving CompanyCall Centers 436Managing Service Quality 439Managing Customer Expectations440MARKETING MEMO Recommendations forImproving Service Quality 441Incorporating Self-Service Technologies(SSTS) 443Managing Product-Support Services 444Identifying and Satisfying CustomerNeeds 444Postsale Service Strategy 445Summary 445Applications 446MARKETING EXCELLENCEClub Med 446MARKETING EXCELLENCEParkway Group Hotels 448Chapter 15 Introducing New MarketOtterings 451New-Product Options 451Make or Buy 451Types of New Products 452

Challenges in New-ProductDevelopment 453The Innovation Imperative 454New-Product Success 454New-Product Failure 455Organizational Arrangements 456Budgeting for New-Product Development 456Organizing New-Product Development 457Managing the Development Process: Ideas 460Generating Ideas 460MARKETING MEMO Ten Ways to Find GreatNew-Product Ideas 460MARKETING INSIGHT P&G'S Connect Develop Approach to Innovation 461MARKETING MEMO Seven Ways to DrawNew Ideas from Your Customers 462MARKETING MEMO Howto Run aSuccessful Brainstorming Session 464Using Idea Screening 465Managing the Development Process: Conceptto Strategy 467Concept Development and Testing 467Marketing Strategy Development 470Business Analysis 470Managing the Development Process:Development to Commercialization 472Product Development 472Market Testing 473Commercialization 475The Consumer-Adoption Process 476Stages in the Adoption Process 476Factors Influencing the AdoptionProcess 476Summary 478Applications 479MARKETING EXCELLENCE Apple479MARKETING EXCELLENCESalesforce.com 481Chapter 16 Developing Pricing Strategiesand Programs 483Understanding Pricing 483Pricing in a Digital World 484A Changing Pricing Environment 484MARKETING INSIGHT Giving It All AwayHow Companies Price 486Consumer Psychology and Pricing487485Setting the Price 489Step 1: Selecting the Pricing Objective 489MARKETING INSIGHT Trading Up, Down,and Over 490Step 2: Determining Demand 492Step 3: Estimating Costs 494MARKETING MEMO How to Cut Costs 496Step 4: Analyzing Competitors' Costs, Prices,and Offers 496Step 5: Selecting a Pricing Method 497Step 6: Selecting the Final Price 502MARKETING INSIGHT Stealth PriceIncreases 503Adapting the Price 504Geographica! Pricing (Cash, Countertrade,Barter) 504Price Discounts and Allowances 504Promotional Pricing 505Differentiated Pricing 506Initiating and Responding to PriceChanges 507Initiating Price Cuts 507Initiating Price Increases 508Anticipating Competitive Responses 508Responding to Competitors' PriceChanges 509Summary 510Applications 510MARKETING EXCELLENCE eBay 511MARKETING EXCELLENCEAir Arabia 512PART 6Delivering Value514Chapter 17 Designing and Managing IntegratedMarketing Channels 515Marketing Channels and ValueNetworks 516The Importance of Channels 516Multichannel Marketing 516Integrating Multichannel MarketingSystems 517Value Networks 519The Digital Channels Revolution 520The Role of Marketing Channels 521Channel Functions and Flows 522Channel Levels 523Service Sector Channels 524

Channel-Design Decisions 525Analyzing Customer Needs and Wants 525MARKETING INSIGHT Understanding theShowrooming Phenomena 525Establishing Objectives and Constraints 526Identifying Major Channel Alternatives 527Evaluating Major ChannelAlternatives 529Channel-Management Decisions 530Selecting Channel Members 530Training and Motivating ChannelMembers 530Evaluating Channel Members 531Modifying Channel Design andArrangements 532Channel Modification Decisions 532Global Channel Considerations 532Channel Integration and Systems 534Vertical Marketing Systems 534Horizontal Marketing Systems 536E-Commerce Marketing Practices 536Pure-Click Companies 536Brick-and-Click Companies 537M-Commerce Marketing Practices 538Changes in Customer and CompanyBehavior 539M-Commerce Marketing Practices 539Privacy 540Conflict, Cooperation, and Competition 540Types of Conflict and Competition 541Causes of Channel Conflict 541Managing Channel Conflict 541Dilution and Cannibalization 543Legal and Ethical Issues in ChannelRelations 543Summary 543Applications 544MARKETING EXCELLENCEAmazon.com 544MARKETING EXCELLENCE Tesco 546Chapter 18 Managing Retailing,Wholesaling,and Logistics 549Retailing 549Types of Retailers 550MARKETING MEMO Innovative RetailOrganizations 55114The Modern Retail MarketingEnvironment 554MARKETING INSIGHT The Growth ofShopper Marketing 556Marketing Decisions557MARKETING MEMO Helping Stores to Seil 562Private Labels 563Role of Private Labels 564Private-Label Success Factors564MARKETING INSIGHT Manufacturer'sResponse to the Private-LabelThreat 565Wholesaling 565Trends in Wholesaling 567Market Logistics 567Integrated Logistics Systems 568Market-Logistics Objectives 569Market-Logistics Decisions 570Summary 573Applications 574MARKETING EXCELLENCE Zara 574MARKETING EXCELLENCE Best BuyPART 7Communicating Value576578Chapter 19 Designing and ManagingIntegrated MarketingCommunications 579The Role of Marketing Communications 580The Changing Marketing CommunicationsEnvironment 580MARKETING INSIGHT Don't Touch ThatRemote 580Marketing Communications Mix 581How Do Marketing CommunicationsWork? 583The Communications Process Models 584Developing Effective Communications 586Identify the Target Audience 586Set the Communications Objectives 587Design the Communications 587Select the CommunicationsChannels 590MARKETING MEMO CelebrityEndorsements as a MessageStrategy 591MARKETING INSIGHT Playing Tricks toBuild a Brand 593

Establish the Total MarketingCommunications Budget 594Selecting the Marketing CommunicationsMix 595Characteristics of the MarketingCommunications Mix 596Factors in Setting the MarketingCommunications Mix 597Measuring Communication Results 599Managing the Integrated MarketingCommunications Process 599Coordinating Media 601Implementing IMG 601MARKETING MEMO How Integrated Is YourIMC Program? 601Summary 602Applications 603MARKETING EXCELLENCE Red Bull 603MARKETING EXCELLENCE L'Oreal 604Chapter 20Managing Mass Communications:Advertising, Sales Promotions,Events and Experiences, and PublicRelations 607Developing and Managing an AdvertisingProgram 608Setting the Advertising Objectives 609Deciding on the Advertising Budget 609Developing the AdvertisingCampaign 610MARKETING MEMO Print Ad EvaluationCriteria 612MARKETING INSIGHT Off-Air Ad Batties 614Choosing Media615MARKET

Marketing Management 15 Global Edition PHILIP KOTLER Northwestern University KEVIN LANE KELLER Dartmouth College . Sample Marketing Plan: Pegasus Sports International 83 PART 2 Capturing Marketing Insights 88 . MARKETING MEMO Managing a Marketing Crisis 378 Evidence for the Product Life-Cycle

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