Marketing an introduction 13th edition pearson

Full-Circle Learning MyLab™: Learning Full Circle for Marketing,

Management, Business Communication, and Intro to Business

BEFORE CLASS

AFTER CLASS DURING

CLASS

Decision Sims, Videos, and Learning

Catalytics

DSMs, pre-lecture homework,

eText

Writing Space, Video

Cases, Quizzes/ Tests

MyLab

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MyMarketingLab: Improves Student Engagement Before, During, and After Class

• NEW! VIDEO LIBRARY – Robust video library with over 100 new book-specific videos that include easy-to-assign assessments, the ability for instructors to add YouTube or other sources, the ability for students to upload video submissions, and the ability for polling and teamwork.

• Decision-making simulations – NEW and improved feedback for students. Place your students in the role of a key decision-maker! Simulations branch based on the decisions students make, providing a variation of scenario paths. Upon completion students receive a grade, as well as a detailed report of the choices and the associated consequences of those decisions.

• Video exercises – UPDATED with new exercises. Engaging videos that bring business concepts to life and explore business topics related to the theory students are learning in class. Quizzes then assess students’ comprehension of the concepts covered in each video.

• Learning Catalytics – A “bring your own device” student engagement, assessment, and classroom intelligence system helps instructors analyze students’ critical-thinking skills during lecture.

• Dynamic Study Modules (DSMs) – UPDATED with additional questions. Through adaptive learning, students get personalized guidance where and when they need it most, creating greater engagement, improving knowledge retention, and supporting subject-matter mastery. Also available on mobile devices.

• Writing Space – UPDATED with new commenting tabs, new prompts, and a new tool for students called Pearson Writer. A single location to develop and assess concept mastery and critical thinking, the Writing Space offers automatic graded, assisted graded, and create your own writing assignments, allowing you to exchange personalized feedback with students quickly and easily.

Writing Space can also check students’ work for improper citation or plagiarism by comparing it against the world’s most accurate text comparison database available from Turnitin.

• Additional Features – Included with the MyLab are a powerful homework and test manager, robust gradebook tracking, Reporting Dashboard, comprehensive online course content, and easily scalable and shareable content.

http://www.pearsonmylabandmastering.com

BREAKTHROUGH

Prep and Engagement

BREAK THRO

UGH

To better resultsTo better results

Critical Thinking

Decision Making

http://www.pearsonmylabandmastering.com
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Marketing An Introduction Thirteenth Edition

GAry ArmstronG University of North Carolina

PhIlIP Kotler Northwestern University

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vii

About the Authors As a team, Gary Armstrong and Philip Kotler provide a blend of skills uniquely suited to writing an introductory marketing text. Professor Armstrong is an award-winning teacher of undergraduate business students. Professor Kotler is one of the world’s leading authorities on marketing. Together they make the complex world of marketing practical, approachable, and enjoyable.

GAry ArmstronG is Crist W. Blackwell Distinguished Professor Emeritus of Undergraduate Education in the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill. He holds undergraduate and master’s degrees in business from Wayne State University in Detroit, and he received his Ph.D. in marketing from North- western University. Dr. Armstrong has contributed numerous articles to leading business journals. As a consultant and researcher, he has worked with many companies on market- ing research, sales management, and marketing strategy.

But Professor Armstrong’s first love has always been teaching. His long-held Black- well Distinguished Professorship is the only permanent endowed professorship for distinguished undergraduate teaching at the University of North Carolina at Chapel Hill. He has been very active in the teaching and administration of Kenan-Flagler’s undergraduate program. His administrative posts have included Chair of Marketing, Associate Director of the Undergraduate Business Program, Director of the Business Honors Program, and many others. Through the years, he has worked closely with business student groups and has received several UNC campuswide and Business School teaching awards. He is the only repeat recipient of the school’s highly regarded Award for Excellence in Undergraduate Teaching, which he received three times. Most recently, Professor Armstrong received the UNC Board of Governors Award for Excellence in Teaching, the highest teaching honor bestowed by the 16-campus University of North Carolina system.

PhIlIP Kotler is S. C. Johnson & Son Distinguished Professor of International Mar- keting at the Kellogg School of Management, Northwestern University. He received his master’s degree at the University of Chicago and his Ph.D. at M.I.T., both in economics. Dr. Kotler is author of Marketing Management (Pearson), now in its 15th edition and the most widely used marketing textbook in graduate schools of business worldwide. He has authored dozens of other successful books and has written more than 50 books and 150 articles in leading journals. He is the only three-time winner of the coveted Alpha Kappa Psi award for the best annual article in the Journal of Marketing.

Professor Kotler was named the first recipient of four major awards: the Distinguished Marketing Educator of the Year Award and the William L. Wilkie “Marketing for a Bet- ter World” Award, both given by the American Marketing Association; the Philip Kotler Award for Excellence in Health Care Marketing presented by the Academy for Health Care Services Marketing; and the Sheth Foundation Medal for Exceptional Contribution to Mar- keting Scholarship and Practice. He is a charter member of the Marketing Hall of Fame, was voted the first Leader in Marketing Thought by the American Marketing Associa- tion, and was named the Founder of Modern Marketing Management in the Handbook of Management Thinking. His numerous other major honors include the Sales and Marketing Executives International Marketing Educator of the Year Award; the European Association of Marketing Consultants and Trainers Marketing Excellence Award; the Charles Coolidge Parlin Marketing Research Award; and the Paul D. Converse Award, given by the Ameri- can Marketing Association to honor “outstanding contributions to science in marketing.” A recent Forbes survey ranks Professor Kotler in the top 10 of the world’s most influential business thinkers. And in a recent Financial Times poll of 1,000 senior executives across

viii About the Authors

the world, Professor Kotler was ranked as the fourth “most influential business writer/ guru” of the twenty-first century.

Dr. Kotler has served as chairman of the College of Marketing of the Institute of Man- agement Sciences, a director of the American Marketing Association, and a trustee of the Marketing Science Institute. He has consulted with many major U.S. and international companies in the areas of marketing strategy and planning, marketing organization, and international marketing. He has traveled and lectured extensively throughout Europe, Asia, and South America, advising companies and governments about global marketing practices and opportunities.

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Brief Contents PArt 1 DefInInG mArKetInG AnD the mArKetInG ProCess 2

1 Marketing: Creating Customer Value and Engagement 2 2 Company and Marketing Strategy: Partnering to Build Customer Engagement, Value,

and Relationships 38

PArt 2 UnDerstAnDInG the mArKetPlACe AnD CUstomer VAlUe 66

3 Analyzing the Marketing Environment 66 4 Managing Marketing Information to Gain Customer Insights 98 5 Understanding Consumer and Business Buyer Behavior 132

PArt 3 DesIGnInG A CUstomer VAlUe-DrIVen strAteGy AnD mIx 168

6 Customer Value-Driven Marketing Strategy: Creating Value for Target Customers 168 7 Products, Services, and Brands: Building Customer Value 200 8 Developing New Products and Managing the Product Life Cycle 236 9 Pricing: Understanding and Capturing Customer Value 262 10 Marketing Channels: Delivering Customer Value 298 11 Retailing and Wholesaling 332 12 Engaging Customers and Communicating Customer Value: Advertising and Public Relations 364 13 Personal Selling and Sales Promotion 398 14 Direct, Online, Social Media, and Mobile Marketing 428

PArt 4 extenDInG mArKetInG 458

15 The Global Marketplace 458 16 Sustainable Marketing: Social Responsibility and Ethics 488

APPenDIx 1 Company Cases 519 APPenDIx 2 Marketing Plan 551 APPenDIx 3 Marketing by the Numbers 561 APPenDIx 4 Careers in Marketing 579

Glossary 591 References 601 Index 623

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xi

Contents Preface xxi Acknowledgments xxvii

PArt 1 DefInInG mArKetInG AnD the mArKetInG ProCess 2

1 marketing: Creating Customer Value and Engagement 2 ChAPter roAD mAP 2

Objective Outline 2 • Previewing the Concepts 2 • First Stop: Nike’s Customer Value-Driven Marketing 3

What Is marketing? 4 Marketing Defined 5 • The Marketing Process 5

Understanding the marketplace and Customer needs 6 Customer Needs, Wants, and Demands 6 • Market Offerings—Products, Services, and Experiences 6 • Customer Value and Satisfaction 7 • Exchanges and Relationships 7 • Markets 8

Designing a Customer Value-Driven marketing strategy 9 Selecting Customers to Serve 9 • Choosing a Value Proposition 9 • Marketing Management Orientations 9

Preparing an Integrated marketing Plan and Program 12

engaging Customers and managing Customer relationships 13 Customer Relationship Management 13

marketing at Work 1.1: JetBlue: Delighting Customers and Bringing Humanity Back to Air Travel 15 Engaging Customers 18 • Customer Engagement and Today’s Digital and Social Media 18 • Consumer-Generated Marketing 19 • Partner Relationship Management 20

Capturing Value from Customers 20 Creating Customer Loyalty and Retention 21 • Growing Share of Customer 21 • Building Customer Equity 22

the Changing marketing landscape 24 The Digital Age: Online, Mobile, and Social Media Marketing 24

marketing at Work 1.2: Real-Time Marketing: Engaging Consumers in the Moment 26 The Changing Economic Environment 28 • The Growth of Not-for-Profit Marketing 28 • Rapid Globalization 29 • Sustainable Marketing—The Call for More Environmental and Social Responsibility 30

so, What Is marketing? Pulling It All together 31

reVIeWInG AnD extenDInG the ConCePts 33 CHAPTER REVIEW AND CRITICAL THINKING • Objectives Review 33 • Key Terms 34 • Discussion Questions 34 • Critical Thinking Exercises 35 • MINICASES AND APPLICATIONS • Online, Mobile, and Social Media Marketing 35 • Marketing Ethics 35 • Marketing by the Numbers 36 • Video Case 36 • Company Cases 37

xii Contents

2 Company and marketing strategy: Partnering to Build Customer Engagement, Value, and Relationships 38

ChAPter roAD mAP 38

Objective Outline 38 • Previewing the Concepts 38 • First Stop: Starbucks’s Customer Value-Driven Marketing Strategy 39

Company-Wide strategic Planning: Defining marketin