Marketing roger kerin 14th edition pdf

Strategic Marketing

Strategic Marketing

Roger A. Kerin Steven W. Hartley

MARKETING THE CORE

Eighth Edition

MARKETING: THE CORE

Eighth Edition

Roger A. Kerin Southern Methodist University

Steven W. Hartley University of Denver

MARKETING: THE CORE, EIGHTH EDITION

Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2020 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous editions © 2018, 2016, and 2013. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

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ISBN 978-1-260-71145-5 (bound edition) MHID 1-260-71145-5 (bound edition) ISBN 978-1-260-08886-1 (loose-leaf edition) MHID 1-260-08886-3 (loose-leaf edition)

Executive Brand Manager: Meredith Fossel Senior Product Developer: Kelly I. Pekelder Senior Marketing Manager: Nicole Young Lead Content Project Manager: Christine Vaughan Senior Content Project Manager: Danielle Clement Senior Buyer: Susan K. Culbertson Senior Designer: Matt Diamond Lead Content Licensing Specialist: Carrie Burger Cover Image: ©@by Feldman_1/Getty Images Compositor: Aptara®, Inc.

All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.

Library of Congress Cataloging-in-Publication Data

Names: Kerin, Roger A., author. | Hartley, Steven William, author. Title: Marketing : the core / Roger A. Kerin, Southern Methodist University, Steven W. Hartley, University of Denver. Description: Eighth edition. | New York, NY : McGraw-Hill Education, [2020] | Audience: 18+ Identifiers: LCCN 2018048487| ISBN 9781260088861 (alk. paper) | ISBN 1260088863 (alk. paper) Subjects: LCSH: Marketing. Classification: LCC HF5415 .K452 2020 | DDC 658.8—dc23 LC record available at https://lccn.loc.gov/2018048487

The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.

mheducation.com/highered

WELCOME FROM THE AUTHORS!

Is technology an integral part of yo ur life? Are you innovative and entr

epreneurial? Do you consider

purpose-driven work important? Ha ve you ever thought you could cha

nge the world? If the answer

to any of these questions is yes, yo ur decision to study marketing is a

perfect match! In addition, if

you are curious about robots in the marketplace, virtual reality and aug

mented reality in advertising,

wearable technology, YouTube cha nnel brand advocates, shopping on

Pinterest, or the gamification

of almost everything, you will be exc ited by the insights you will learn du

ring your studies. And we are

excited to have the opportunity to h elp you along the way with our text

book about this exciting field!

We know from our experiences in the classroom that students choo

se to study marketing for

many reasons. For marketing majo rs this course is the first of many o

n the way to a marketing de-

gree. For students from other busi ness majors this may be a required

course in a business “core.”

For many other students, marketin g is an elective chosen because

of a personal interest in the

marketplace. Regardless of your r easons for taking this course, it is

our pleasure to help you ex-

plore the many new trends, conc epts, practices, challenges, and o

pportunities that are part of

marketing today. We encourage yo u to use your own past experience

s and future interests to cre-

ate a personalized journey of expl oration and study.

The dynamic nature of the marke ting discipline necessitates equa

lly dynamic learning re-

sources. As a result, we have focus ed our time and energy on ensurin

g that our textbook provides

the most current, insightful, and co mprehensive coverage of the mar

ketplace today. The dramatic

changes in student learning styles —from traditional observational sty

les to contemporary collab-

orative styles—are also reflected in our efforts as we have included m

any features to match these

interests. Our approach to present ing the complexities of marketing a

nd facilitating the changes in

learning is based on three importa nt dimensions:

• Engagement. As professors we have benefited from interactions

with many exceptional stu-

dents, managers, and instructors. T heir insights have contributed to o

ur approach to teaching

and, subsequently, to our efforts as textbook authors. One of the esse

ntial elements of our ap-

proach is a commitment to active l earning through engaging, integra

ted, and timely materials.

In-class activities, an interactive bl og, marketing plan exercises, and

in-text links to online ads

and web pages are just a few exam ples of the components of our eng

agement model.

• Leadership. Our approach is als o based on a commitment to takin

g a leadership role in the

development and presentation of new ideas, principles, theories, an

d practices in marketing.

This is more important now than e ver before, as the pace of change

in our discipline acceler-

ates and influences almost every a spect of traditional marketing. We a

re certain that exposure

to leading-edge material related to topics such as social media, data

analytics, and marketing

metrics can help students become leaders in their jobs and careers.

• Innovation. New educational tec hnologies and innovative teaching

tools have magnified the

engagement and leadership aspe cts of our approach. Connect, Lea

rnSmart, and SmartBook,

for example, provide a digital and interactive platform that embrace

s the “anytime and any-

where” style of today’s students. In addition, we have provided new v

ideos and increased the

visual impact of the text and Pow erPoint materials to facilitate mul

timedia approaches to

learning.

Through the previous 7 U.S. editio ns—and 19 international editions in

11 languages—we have

been gratified by the enthusiastic feedback we have received from

students and instructors. We

are very excited to have this oppo rtunity to share our passion for thi

s exciting discipline with you

today. Welcome to the 8th edition of Marketing: The Core! Roger A. Kerin

Steven W. Hartley

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Marketing: The Core utilizes a unique, innovative, and effective pedagogical approach developed by the authors through the integration of their combined classroom, college, and university experiences. The elements of this approach have been the foundation for each edition of Marketing: The Core and serve as the core of the text and its supplements as they evolve and adapt to changes in student learning styles, the growth of the marketing discipline, and the development of new instructional technologies. The distinctive features of the approach are illustrated below:

The goal of the 8th edition of Marketing: The Core is to create an exceptional experience for today’s students and instructors of marketing. The development of Marketing: The Core was based on a rigorous process of assessment, and the outcome of the process is a text and package of learning tools that are based on engagement, leadership, and innovation in marketing education.

PREFACE

Personalized Marketing A vivid and accurate

description of businesses, marketing professionals, and

entrepreneurs—through cases, exercises, and testimonials—

that allows students to personalize marketing and

identify possible career interests.

Marketing: The Core 8/e

Pedagogical Approach

High-Engagement Style Easy-to-read, high-

involvement, interactive writing style that engages students through active

learning techniques.

Rigorous Framework A pedagogy based on the use of learning objectives, learning reviews, learning objectives reviews, and

supportive student supplements.

Traditional and Contemporary Coverage

Comprehensive and integrated coverage of

traditional and contemporary marketing concepts.

Integrated Technology The use of powerful

technical resources and learning solutions, such as

Connect, LearnSmart, SmartBook, the Kerin &

Hartley Blog (www.kerinmarketing.com),

and in-text video links.

Marketing Decision Making

The use of extended examples, cases, and videos

involving people making marketing decisions.

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The members of this author team have benefited from extraordinary experiences as instructors, researchers, and consultants, as well as the feedback of users of previous editions of Marketing: The Core—now more than one million students! The authors believe that success in marketing education in the future will require the highest levels of engagement. They ensure engagement by facilitating interaction between students and four learning partners—the instructor, other students, busi- nesses, and the publisher. Some examples of the high-engagement elements of Marketing: The Core include:

In-Class Activities and Digital In-Class Activities. The in-class activities, located in the Instructor’s Manual, are designed to engage students in discussions with the instructor and among themselves. They involve surveys, online resources, out-of-class assignments, and personal observations. Each activity illustrates a con- cept from the textbook and can be done individually or as a team. Examples include: Designing a Candy Bar, Marketing Yourself, Pepsi vs. Coke Taste Test, and What Makes a Memorable TV Commercial? In addition, digital in-class activities have been added to selected chapters. These activities, located in the Instructor Resources, focus on the use of web resources and the marketing data they can provide students.

Interactive Web Page and Blog (www.kerinmarketing.com). Students can access recent articles about marketing and post comments for other students. The site also provides access to a Marketing: The Core Twitter feed!

Building Your Marketing Plan. The Building Your Marketing Plan guides at the end of each chapter are based on the format of the Marketing Plan presented in Appendix A. On the basis of self-study or as part of a course assignment, students can use the activities to organize interactions with businesses to build a marketing plan. Students and employers often suggest that a well-written plan in a student’s portfolio is an asset in today’s competitive job market.

ENGAGEMENT

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The popularity of Marketing: The Core in the United States and around the globe is the result, in part, of the leadership role of the authors in developing and presenting new marketing content and pedagogies. For example, Marketing: The Core was the first text to integrate ethics, technology, and interactive marketing. It was also the first text to develop custom-made videos to help illustrate marketing principles and practices and bring them to life for students as they read the text. The authors have also been leaders in developing new learning tools, such as a three-step learning process that includes learning objectives, learning reviews, and learning objectives reviews and new testing materials that are based on Bloom’s learning taxonomy. Other elements that show how Marketing: The Core is a leader in the discipline include:

Chapter 17: Using Social Media and Mobile Marketing to Connect with Consumers. Marketing: The Core features a dedicated chapter for social media and mobile marketing. This new environment is rapidly changing and constantly growing. The authors cover the building blocks of social media and mobile market- ing and provide thorough, relevant content and examples. The authors discuss major social media platforms like Twitter, Facebook, LinkedIn, and YouTube. They explain how managers and companies can use those outlets for marketing purposes. Chapter 17 also includes a section titled Social Media Marketing Programs and Customer Engagement that addresses criteria for selecting social media, how social media can produce sales, and methods of measuring a company’s suc- cess with social media and mobile marketing. This chapter is one of many ways Marketing: The Core is on the cutting edge of the field.

Applying Marketing Metrics. The Applying Marketing Metrics feature in the text delivers two of the newest elements of the business and marketing environment today—performance metrics and dashboards to visualize them. Some of the met- rics included in the text are: category development index (CDI), brand development index (BDI), load factor (a capacity management metric), price premium, sales per square foot, same-store sales growth, promotion-to-sales ratio, and cost per thou- sand (CPM) impressions. The feature is designed to allow readers to learn, practice, and apply marketing metrics.

Color-Coded Graphs and Tables. The use of color in the graphs and tables enhances their readability and adds a visual level of learning to the textbook for readers. In addition, these color highlights increase student comprehension by link- ing the text discussion to colored elements in the graphs and tables.

New Video Cases. Each chapter ends with a case that is supported by a video to illustrate the issues in the chapter. New cases such as IBM, Toyota, Justin’s, and Body Glove, and recent cases such as GoPro and Coppertone provide current and relevant examples that are familiar to students.

LEADERSHIP

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In today’s fast-paced and demanding educational environment, innovation is es- sential to effective learning. To maintain Marketing: The Core’s leadership position in the marketplace, the author team consistently creates innovative pedagogical tools that match contemporary students’ learning styles and interests. The authors keep their fingers on the pulse of technology to bring real innovation to their text and package. Innovations such as in-text links, a Twitter feed, hyperlinked Power- Point slides, and an online blog augment the McGraw-Hill Education online innova- tions such as Connect, LearnSmart, and SmartBook.

In-Text Links. You can see Internet links in magazine ads; on television program- ming; as part of catalogs, in-store displays, and product packaging; and throughout Marketing: The Core! These links bring the text to life with ads and videos about products and companies that are discussed in the text. These videos also keep the text even more current. While each link in the text has a caption, the links are up- dated to reflect new campaigns and market changes. In addition, the links allow readers to stream the video cases at the end of each chapter. You can simply click on the links in the digital book or use your smartphone or computer to follow the links.

Twitter Feed and Online Blog. Visit www.kerinmarketing.com to participate in Marketing: The Core’s online blog discussion and to see Twitter feed updates. You can also subscribe to the Twitter feed to receive the Marketing Question of the Day and respond with the #QotD hashtag.

Connect, LearnSmart, and SmartBook Integration. These McGraw-Hill Educa- tion products provide a comprehensive package of online resources to enable stu- dents to learn faster, study more efficiently, and increase knowledge retention. The products represent the gold standard in online, interactive, and adaptive learning tools and have received accolades from industry experts for their Library and Study Center elements, filtering and reporting functions, and immediate student feedback capabilities. In addition, the authors have developed book-specific interactive assignments, including (a) auto-graded applications based on the marketing plan exercises, and (b) activities based on the Applying Marketing Metrics boxes and marketing metrics presented in the text.

Innovative Test Bank. Containing more than 5,000 multiple-choice and essay questions, the Marketing: The Core Test Bank reflects more than two decades of innovations. The Test Bank also includes “visual test questions” in each chapter to reward students who made an effort to understand key graphs, tables, and images in the chapter.

INNOVATION

You’re in the driver’s seat. Want to build your own course? No problem. Prefer to use our turnkey, prebuilt course? Easy. Want to make changes throughout the semester? Sure. And you’ll save time with Connect’s auto-grading too.

They’ll thank you for it. Adaptive study resources like SmartBook® help your students be better prepared in less time. You can transform your class time from dull definitions to dynamic debates. Hear from your peers about the benefits of Connect at www.mheducation.com/highered/connect

Make it simple, make it affordable. Connect makes it easy with seamless integration using any of the major Learning Management Systems—Blackboard®, Canvas, and D2L, among others—to let you organize your course in one convenient location. Give your students access to digital materials at a discount with our inclusive access program. Ask your McGraw-Hill representative for more information.

Solutions for your challenges. A product isn’t a solution. Real solutions are affordable, reliable, and come with training and ongoing support when you need it and how you want it. Our Customer Experience Group can also help you troubleshoot tech problems—although Connect’s 99% uptime means you might not need to call them. See for yourself at status.mheducation.com

Students—study more efficiently, retain more and achieve better outcomes. Instructors—focus on what you love—teaching.

SUCCESSFUL SEMESTERS INCLUDE CONNECT

65% Less Time Grading

©Hill Street Studios/Tobin Rogers/Blend Images LLC

For Instructors

Effective, efficient studying. Connect helps you be more productive with your study time and get better grades using tools like SmartBook, which highlights key concepts and creates a personalized study plan. Connect sets you up for success, so you walk into class with confidence and walk out with better grades.

Study anytime, anywhere. Download the free ReadAnywhere app and access your online eBook when it’s convenient, even if you’re offline. And since the app automatically syncs with your eBook in Connect, all of your notes are available every time you open it. Find out more at www.mheducation.com/readanywhere

No surprises. The Connect Calendar and Reports tools keep you on track with the work you need to get done and your assignment scores. Life gets busy; Connect tools help you keep learning through it all.

Learning for everyone. McGraw-Hill works directly with Accessibility Services Departments and faculty to meet the learning needs of all students. Please contact your Accessibility Services office and ask them to email accessibility@mheducation.com, or visit www.mheducation.com/about/accessibility.html for more information.

“I really liked this app—it made it easy to study when

you don’t have your text- book in front of you.”

— Jordan Cunningham, Eastern Washington University

Chapter 12 Quiz Chapter 11 Quiz

Chapter 7 Quiz

Chapter 13 Evidence of Evolution Chapter 11 DNA Technology

Chapter 7 DNA Structure and Gene...

and 7 more...

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©Shutterstock/wavebreakmedia

For Students

Create

SmartBook iSeeit! Videos Mini Simulation

Marketing Plan Prep

Marketing Analytics

Video Cases/ Analytics

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Asset Alignment with Bloom’s Taxonomy

Evaluate

Analyze

Apply

Understand

Remember

We Take Students Higher

As a learning science company we create content that supports higher order thinking skills. Interactive learning tools within McGraw-Hill Connect are tagged accordingly, so you can filter, search, assign, and receive reports on your students’ level of learning. The result—increased pedagogical insights and learning process efficiency that facilitate a stronger connection between the course material and the student.

The chart below shows a few of the key assignable marketing assets with McGraw-Hill Connect aligned with Bloom’s Taxonomy. Take your students higher by assigning a variety of applications, moving them from simple memorization to concept application.

Principles of Marketing

Asset Alignment with Bloom’s Taxonomy

• Adaptively aids students to study more efficiently by highlighting where in the chapter to focus, asking review questions and pointing them to resources until they understand.

• Short, contemporary videos provide engaging, animated introductions to key course concepts. Available at the chapter level. Perfect for launching lectures and assigning pre- or post-lecture.

• Mini-cases and scenarios of real-world firms accompanied by questions that help students analyze and apply marketing theory and other core concepts.

SmartBook

iSeeit! Videos

Video Cases & Case Analyses

Mini Simulation

Marketing Plan Prep

Marketing Analytics

• These newest auto-graded, data analytics activities challenge students to make decisions using metrics commonly seen across Marketing professions. The goal of this activity is to give students practice analyzing and using marketing data to make decisions.

• Marketing Mini Sims help students apply and understand the interconnections of elements in the marketing mix by having them take on the role of Marketing Manager for a backpack manufacturing company.

• Mini Sims can be assigned by topic or in its entirety.

• These exercises use guided activities and examples to help students understand and differentiate the various elements of a marketing plan.

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Chapter 1: Update of Chobani’s Success Story, New Showstopper Analysis, and New Material on Ritz- Carlton and Patagonia. Chobani’s continued success at creating customer value is discussed and updated. The company’s guiding mission, “Better food for more people,” new products such as Drink Chobani, Chobani Flip, Smooth Yogurt, and Chobani Savor, and advertis- ing campaigns such as “Love This Life” are presented. Discussion of Elon Musk and his success with entrepre- neurial endeavors such as Zip2, PayPal, SpaceX, and Tesla has been added to the Marketing and Your Career section. New-product examples such as smart glasses and the YoYo car subscription service have been added to the discussion of potential “showstoppers” for new- product launches. Discussion of the Ritz-Carlton’s use of relationship marketing concepts and Patagonia’s Common Threads Initiative have also been added.

Chapter 2: New IBM Video Case, Updated Chapter Opening Example, Addition of a New Example of Social Entrepreneurship, and New Discussion of Uber’s Changing Business Definition. The Chapter 2 opening example discusses Ben & Jerry’s mission to make fantastic, sustainable, world-changing ice cream. Free Cone Day has been added to the discussion of cre- ative marketing strategies used by the company to help accomplish its mission. The social entrepreneur venture NexGenVest has been added to the 30 Under 30 Forbes Social Entrepreneurs discussion in the Making Responsi- ble Decisions box. In addition, the discussion of business definitions and business models now describes how Uber has changed its definition from a cab service, to a ride-sharing service, to a delivery service. The applica- tion of the Boston Consulting Group business portfolio model to Apple’s product line has been updated to in- clude changes related to the Apple Watch, the iPhone, and the iPad/iPad mini tablet devices. The end-of-chap- ter video case is completely new, and features the recent IBM campaign and strategy: “Let’s Put Smart to Work.”

Chapter 3: New Toyota Video Case, Update of New Trends in Marketing, New Discussion on Generation

Z, and New Discussion of Gender-Neutral Marketing Actions. The discussion of new trends, such as the growing popularity of brand advocates, the increasing application of virtual reality and augmented reality, and the surging scrutiny regarding the collection and use of consumer data, has been updated. Generation Z, the post-millennial generation, has been added to the discussion of generational cohorts. The Making Responsible Decisions box includes new examples such as P&G’s recyclable shampoo bottles, Unilever’s “brands with purpose,” and Apple’s “greenest building on the planet.” New gender-neutral marketing actions have been added to the Culture section. A discussion of new trends in technology, such as the growth of au- tomation (e.g., autonomous cars, drones, and robots), digital assistants (e.g., Amazon’s Alexa), and wearable technology, has also been added. In addition, the chapter ends with a completely new video case about Toyota, its transition to a “mobility” company, and its marketing activities related to the hydrogen fuel-cell vehicle, the Mirai.

Chapter 4: New Section on Consumer Touchpoints and Consumer Journey Maps, and New Figure to Il- lustrate a Consumer Journey Map. A new section de- scribes consumer touchpoints, the product, service, or brand points of contact with a consumer, and consumer journey maps, the visual representation of all touch- points where a consumer comes into contact with a company’s products, services, or brands. The new Figure 4–4 illustrates consumer touchpoints and a con- sumer journey map for electronic devices sold by Apple in stores. The Marketing Matters box has been updated to reflect the latest procedures for BzzAgents.

Chapter 5: New Examples Including Lockheed Mar- tin and BMW, and Updated Marketing Matters Box Regarding eBay Business Supply. The description of government markets has been updated to include the Orion Multi-Purpose Crew Vehicle being developed by Lockheed Martin. In addition, the Buyer–Seller Relationship section now includes GT Advanced

NEW AND REVISED CONTENT

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Technology’s $578 million contract with Apple to pro- duce iPhone camera lenses and screens as an exam- ple of a long-term agreement. BMW’s purchase of a Cloud-based data management system from IBM has been added as an example of a new buy. In addition, the Marketing Matters box has been updated to re- flect eBay’s trading platform, eBay Business Supply, which generates $4 billion in sales annually.

Chapter 6: Updated Chapter Opening Example Regarding Amazon in India, and Addition of UK Withdrawal from the EU. The chapter opening ex- ample is completely updated to describe the opportu- nities and challenges Amazon faces as it invests billions of dollars in India. The Economic Integration among Countries section has been revised to reflect increasing economic protectionism, including the withdrawal of the United Kingdom from the European Union, and discussions regarding possible changes in the North American Free Trade Agreement. In addi- tion, Listerine has been added as a new example of product adaptation in the Product and Promotion Strategies section.

Chapter 7: Updated Chapter Opening Example, New Primary and Secondary Data Coverage, and New Discussion of Artificial Intelligence. The chap- ter opening example has been updated to reflect the use of marketing research in movies such as Atomic Blonde, Edge of Tomorrow, and War Dogs. An update of the Secondary Data section reflects the upcoming 2020 Census. The Primary Data section has been up- dated to include new Nielsen program ranking data, an example of Gillette’s use of observational data, a discussion of the growing use of neuromarketing technologies, and a description of McDonald’s use of test markets in developing its delivery service. In ad- dition, artificial intelligence is discussed as part of the Intelligent Marketing Enterprise Platform presented in Figure 7–5.

Chapter 8: Update of Zappos’s Use of Behavioral Segmentation, New Segmentation Examples, and New Patronage Example Data. The chapter opening

example has been updated to describe how Zappos uses behavioral segmentation to deliver “happiness” to its customers. The Multiple Products and Multiple Market Segments section includes a new discussion of Ford’s shift in strategy to reduce its product line and provide higher quality at lower prices. In addition, in the Patronage of Fast-Food Restaurants section, the patronage and user/nonuser data have been updated; also, the Future Strategies for Your Wendy’s Restau- rant section has been updated.

Chapter 9: New Discussion of the Apple-Enabled iCar and New Marketing Matters Box Coverage of Feature Fatigue. The chapter opening example has been updated to include a discussion of Apple’s next innovation—the Apple-enabled iCar. The concept of feature bloat and fatigue is now introduced and illus- trated in the Marketing Matters box. Keurig Kold and the HP Tablet are introduced as examples in the Marketing Reasons for New-Product Failures section. An example of the success of Aaron Krause’s Scrub Daddy, originally pitched on Shark Tank, has been added to the section on inventors as a source of innovation.

Chapter 10: New Justin’s Video Case, New Material on Gatorade’s “Smart Cap,” New Co-Branding and Brand Dilution Coverage, and New Examples. The Chapter 10 discussion of Gatorade in the chapter opener now includes material on the microchip-fitted “smart cap” and the digital sweat patch for athletes and fitness buffs. In addition, new discussions of co- branding and brand dilution have been added to the Multiproduct Branding Strategy section. New examples include Olay Skin Care Advisor, the NFL and NBA, and P&G’s acquisition of Gillette. The chapter ends with a new video case titled Justin’s: Managing a Successful Product with Passion, which describes the inspiring story of entrepreneur Justin Gold, and the application of product management concepts to the Justin’s brand of organic nut butters.

Chapter 11: Updated Chapter Opening Example about VIZIO, and Discussion of Apple iPhone X, 8,

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and 8-Plus Pricing. The updated chapter opening ex- ample describes VIZIO’s approach to pricing the 50 mil- lion HDTVs it has sold since its founding. Microsoft’s approach to pricing its Xbox One X videogame console is now included in the Skimming Pricing section. In ad- dition, examples of penetration pricing, odd-even pric- ing, standard markup pricing, and cost-plus pricing have been updated to reflect the current marketplace.

Chapter 12: New Chapter Opening Example about Multichannel Marketing at Eddie Bauer, Updated Marketing Matters Box about IBM’s Watson, and Updated Making Responsible Decisions Box. A new chapter opening example describes Eddie Bauer’s “brick, click, and flip” multichannel marketing strategy. The Marketing Matters box has been updated to reflect IBM’s use of artificial intelligence to manage its supply chain. In addition, the discussion of recycling e-waste in the Making Responsible Decisions box has been updated.

Chapter 13: Updated Chapter Opening Example about Smart Stores, Updated Making Responsible Decisions Box, and New Discussion about YouTube Programming, Robocalls, and EDLP 2.0. Chapter 13 opens with a description of the potential impact of smart stores on the customer journey. The Internet of Things, biometric scanners, virtual reality, 3D modeling tools, and wearable technology are discussed. The Making Responsible Decisions box now includes infor- mation about California’s “zero-waste” laws. New infor- mation, such as banks’ attempts to change ATMs into smart self-service devices, has been added to the Self- Service section. In addition, YouTube’s live program- ming, the FTC’s discussion regarding robocalls, and Walmart’s development of EDLP 2.0 are discussed.

Chapter 14: Expanded Discussion about Personaliza- tion; New Section Titled How Consumers Shop and Buy Online, including Coverage of Social Commerce; Broadened Implementing Multichannel Marketing Section; and New Figure Illustrating a Multichannel Consumer Journey Map. The Interactivity, Individuality, and Customer Relationships in Marketspace section has

an expanded discussion about the differences between collaborative filtering and personalization and includes Sunglass Hut as an example of a company using person- alization techniques. The use of chatbots has been added to the Communication section. A new section titled How Consumers Shop and Buy Online has been added and covers social commerce—the use of social networks for browsing and buying. In addition, the Implementing Multichannel Marketing section has been rewritten with new coverage of cross-channel consumer behavior, mutually reinforcing channels, and monitoring and mea- suring channel performance. New Figure 14–5 illustrates a multichannel marketing consumer journey map. This chapter was previously located later in the sequence of chapters and has been moved to follow coverage of mar- keting channels and supply chains (now Chapter 12) and retailing and wholesaling (now Chapter 13).

Chapter 15: Updated Chapter Opening Example, New Advertisements, New Example of an IMC Program for a Movie, and New Discussion of the Media Agency of the Year. The chapter opening ex- ample has been completely updated to reflect Taco Bell’s recent IMC activities. The company’s Love & Tacos Contest; new restaurant in Las Vegas; Happily Ever After sweepstakes; superbowl ads; collabora- tions with Sony, the NBA, and Airbnb; and social media tactics such as Taco Tales and Clip Show posts are all discussed. New advertisements include examples from The North Face, Sony, and Humira. The IMC pro- gram used to promote the movie Star Wars: The Last Jedi has been added to the Scheduling the Promotion section. In addition, the work of Advertising Age’s Media Agency of the Year, PHD Media, is discussed.

Chapter 16: Updated Chapter Opening Example about Virtual Reality and Augmented Reality in Ad- vertising, New Advertisements and Sales Promo- tion Examples, and New Discussion of the Advertising Agency of the Year. The growing impact of virtual reality (VR) and augmented reality (AR) on advertising is discussed in the chapter opening exam- ple. New examples of VR and AR campaigns include McDonald’s Happy Goggles and Lowe’s Holoroom. Coverage includes new advertising examples from

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Mercedes-Benz, Progressive, Duracell, Milk Life, Ama- zon, AG, and Sonos and new sales promotion exam- ples from Nabisco and Ben & Jerry’s. The Identifying the Target Audience section now includes Mountain Dew and Lululemon campaigns as examples, and the Message Content section includes a discussion of the increasing use of gender—neutral advertising. The chapter also includes new discussion of Advertising Age’s Agency of the Year—Anomaly. In addition, the results of a recent Association of National Advertisers survey about the most common forms of compensa- tion for ad agencies are discussed.

Chapter 17: New Body Glove Video Case, New Dis- cussion on Internet-Connected Cars, New Section on Influencer Marketing, New Material on Live Streaming at Facebook, and Updated Marketing Matters Box on Vloggers. Chapter 17 opens with a discussion of the new level of mobile marketing en- abled by Internet-connected cars. The discussion ad- dresses three channels that can reach cars—social media, e-mail, and messaging apps. In addition, a new section titled Emergence of Influencer Marketing ad- dresses the growth of social media influencers such as Kendall Jenner who has close to 100 million Instagram followers. New discussions about Facebook’s privacy protection, its new dating feature, and Facebook Live have been added to the section on Mobile Marketing at Facebook. The overview of Twitter now includes an example of teenager Carter Wilkerson obtaining

enough retweets to win free chicken nuggets for a year. The Marketing Matters box has been updated to describe how vloggers are becoming the online ver- sion of traditional celebrities and the Pepsi MAX “Friend Finder” YouTube video is included as an ex- ample of Pepsi’s use of social media. The revised sec- tion titled Social Media Marketing Programs and Customer Engagement introduces new key terms and definitions for social media marketing programs and customer engagement. The chapter ends with a new video case about Body Glove and the role social media play in the company’s marketing plan.

Chapter 18: New Material on Upselling and Cross- Selling, Updated Marketing Matters Box, and New Discussion of Customer Relationship Marketing Systems and Technology, including Sales Force Au- tomation, Marketing Automation, and Customer Service and Support Automation. The Consultative Selling section now includes discussion of upselling and cross-selling. The Marketing Matters box has been updated to include the most recent emotional intelli- gence test and the current link. In addition, the discus- sion of CRM systems and technology includes new material on the consolidation of customer and sales information, how marketing automation emphasizes sophisticated analytical techniques to track the behav- ior of anyone showing an interest in a product or service, and how customer service and support auto- mation provides services such as “live chat.”

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INSTRUCTOR RESOURCES

Practice Marketing Practice Marketing is a 3D, online, single or multiplayer game that helps students apply the four Ps by taking on the role of marketing manager for a backpack com- pany. By playing the game individually and/or in teams, students come to understand how their decisions and elements of the marketing mix affect one another. Practice Marketing is easy to use, fully mobile, and provides an interactive alternative to marketing plan projects. Log in to mhpractice.com with your Connect credentials to access a demo, or contact your local McGraw-Hill representative for more details.

Marketing Mini Sims—Now Assignable within Connect! Marketing Mini Sims are building-block sims based on our full Practice Marketing simulation that require students to take on the role of a marketing decision maker for a backpack manufacturing company. Each of the 9 Mini Sims focuses on one aspect of the marketing mix and serves to both reinforce the understanding of key concepts as well as allow students to make business decisions.

To view a demonstration video and/or see a list of available simulations, please visit the McGraw-Hill Marketing Discipline Landing page at http://bit.ly/ MHEmarketing

Video Cases A unique series of 18 marketing

video cases includes new videos featuring IBM, Toyota,

Justin’s, and Body Glove.

Marketing: The Core 8/e

Instructor Resources

Instructor’s Manual The IM includes lecture

notes, video case teaching notes, and In-Class Activities.

Test Bank We offer almost 5,000 test questions categorized by topic, learning objectives,

and level of learning.

Blog www.kerinmarketing.com

A blog written specifically for use in the classroom!

Throughout each term we post new examples of

marketing campaigns, along with a classroom discussion

and participation guide. Practice Marketing

(Simulation) Practice Marketing is a 3D,

online, multiplayer game that enables students to gain

practical experiences in an interactive environment.

Connect, LearnSmart, and SmartBook

The unique content platform delivering powerful technical

resources and adaptive learning solutions. Includes

new Marketing Analytics Exercises.

In-Class Activities Chapter-specific in-class

activities for today’s students who learn from active,

participative experiences. PowerPoint Slides

Media-enhanced and hyperlinked slides enable engaging and interesting classroom discussions.

Digital In-Class Activities Digital In-Class Activities focus on the use of web

resources and the marketing data they can provide

students.

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Acknowledgments

To ensure continuous improvement of our textbook and supplements we have utilized an extensive review and development process for each of our past editions. Building on that history, the Marketing: The Core, 8th edition development process included several phases of evaluation and a variety of stakeholder audiences (e.g., students, instructors, etc.).

Reviewers who were vital in the changes that were made to the 8th and previous editions and its supplements include:

A. Diane Barlar Abe Qastin Abhay Shah Abhi Biswas Abhik Roy Adrienne Hinds Ahmed Maamoun Al Holden Alan Bush Alexander Edsel Alicia Revely Allan Palmer Allen Smith Amy Frank Anand Kumar Andrei Strijnev Andrew Dartt Andrew Thacker Andy Aylesworth Angela Stanton Anil Pandya Ann Kuzma Ann Little Ann Lucht Ann Veeck Annette George Anthony Koh Anthony R. Fruzzetti Aysen Bakir Barbara Evans Barbara Ribbens Barnett Greenberg Barry Bunn Bashar Gammoh Beibei Dong Ben Oumlil Beth Deinert Bill Curtis Bill Murphy Bill Peterson

Blaise Waguespack Jr. Bob Dahlstrom Bob Dwyer Bob E. Smiley Bob McMillen Bob Newberry Brent Cunningham Brian Kinard Brian Murray Bronis J. Verhage Bruce Brown Bruce Chadbourne Bruce Ramsey Bruce Robertson Bryan Hayes Carl Obermiller Carmen Powers Carmina Cavazos Carol Bienstock Carol M. Motley Carolyn Massiah Casey Donoho Catherine Campbell Cathie Rich-Duval Cathleen H. Behan Cathleen Hohner Cecil Leonard Cesar Maloles Charla Mathwick Charles Bodkin Charles Ford Charles Schewe Cheryl Stansfield Chiranjeev Kohli Chris Anicich Chris Ratcliffe Christie Amato Christine Lai Christopher Blocker Christopher Kondo

Christopher Ziemnowicz Chuck Pickett Cindy Leverenz Clare Comm Clark Compton Clay Rasmussen Clint Tankersley Clyde Rupert Connie Bateman Corinne Asher Craig Stacey Cristanna Cook Cydney Johnson Dan Darrow Dan Goebel Dan Sherrel Dan Toy Daniel Butler Daniel Rajaratnam Darrell Goudge Dave Olson David Erickson David Gerth David J. Burns David Jamison David Kuhlmeier David Smith David Terry Paul Deana Ray Deb Jansky Debbie Coleman Debra Laverie Deepa Pillai Dennis Pappas Dennis Rosen Diana Joy Colarusso Diane Dowdell Diane T. McCrohan Don Weinrauch Donald Chang

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Donald F. Mulvihill Donald Fuller Donald G. Norris Donald Hoffer Donald Larson Donald R. Jackson Donald V. Harper Donna Wertalik Doris M. Shaw Dotty Harpool Douglas Kornemann Duncan G. LaBay Eberhard Scheuling Ed Gonsalves Ed Laube Ed McLaughlin Eddie V. Easley Edna Ragins Edwin Nelson Elaine Notarantonio Eldon L. Little Elena Martinez Elizabeth R. Flynn Ellen Benowitz Eric Ecklund Eric Newman Eric Shaw Erin Baca Blaugrund Erin Cavusgil Erin Wilkinson Ernan Haruvy Eugene Flynn Farrokh Moshiri Fekri Meziou Frances Depaul Francis DeFea Francisco Coronel Frank A. Chiaverini Fred Honerkamp Fred Hurvitz Fred Morgan Fred Trawick Frederick J. Beier Gail M. Zank Gary Carson Gary F. McKinnon Gary Law Gary Poorman Gary Tucker George Kelley George Miaoulis

George Young Gerald O. Cavallo Gerard Athaide Gerald Waddle Glen Brodowsky Glen Gelderloos Godwin Ariguzo Gonca Soysal Gordon Mosley Greg Kitzmiller Guy Lochiatto Harlan Wallingford Harold Lucius Harold S. Sekiguchi Havva Jale Meric Heidi Rottier Heikki Rinne Helen Koons Herbert A. Miller Herbert Katzenstein Howard Combs Hsin-Min Tong Hugh Daubek Imran Khan Irene Dickey Irene Lange Ismet Anitsal J. Ford Laumer Jacqueline Karen Jacqueline Williams James A. Henley Jr. James A. Muncy James C. Johnson James Cross James Garry Smith James Gaubert James Ginther James Gould James H. Barnes James H. Donnelly James L. Grimm James Lollar James Marco James McAlexander James Meszaros James Munch James Olver James P. Rakowski James V. Spiers James Wilkins James Zemanek

Jane Cromartie Jane Lang Jane McKay-Nesbitt Janet Ciccarelli Janet Murray Janice Karlen Janice Taylor Janice Williams Jarrett Hudnal Jason Little Jay Lambe Jean Murray Jean Romeo Jeanne Munger Jeff Blodgett Jeff Finley Jeffrey W. von Freymann Jefrey R. Woodall Jennie Mitchell Jennifer Nelson Jerry Peerbolte Jerry W. Wilson Jianfeng Jiang Jim McHugh Jo Ann McManamy Joan Williams Joanne Orabone Jobie Devinney-Walsh Joe Cronin Joe Kim Joe M. Garza Joe Puzi Joe Ricks Joe Stasio John Benavidez John Brandon John C. Keyt John Coppett John Cox John Finlayson John Fitzpatrick John Gaskins John H. Cunningham John Kuzma John Penrose John Striebich Jonathan Hibbard Joseph Belonax Joseph Defilippe Joseph Myslivec Joseph Wisenblit

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Juan (Gloria) Meng Judy Bulin Judy Foxman Judy Wagner Julie Haworth Julie Sneath Jun Ma June E. Parr Karen Becker-Olsen Karen Berger Karen Flaherty Karen Gore Karen LeMasters Kasia Firlej Katalin Eibel-Spanyi Kathleen Krentler Kathleen Stuenkel Kathleen Williamson Kathryn Schifferle Kathy Meyer Katie Kemp Kay Chomic Kaylene Williams Keith B. Murray Keith Jones Keith Murray Kellie Emrich Ken Crocker Ken Fairweather Ken Herbst Ken Murdock Ken Shaw Kenneth Goodenday Kenneth Jameson Kenneth Maricle Kerri Acheson Kevin Feldt Kevin W. Bittle Kim Montney Kim Richmond Kim Sebastiano Kim Wong Kimberly D. Smith Kimberly Grantham Kin Thompson Kirti Celly Koren Borges Kristen Regine Kristine Hovsepian Kristy McManus Kumar Sarangee

Kunal Sethi Lan Wu Larry Borgen Larry Carter Larry Feick Larry Goldstein Larry Marks Larry Rottmeyer Laura Dwyer Lauren Wright Lawrence Duke Lawrence Marks Lee Meadow Leon Zurawicki Leonard Lindenmuth Leslie A. Goldgehn Leta Beard Linda Anglin Linda M. Delene Linda Morable Linda Munilla Linda N. LaMarca Linda Rochford Lindell Phillip Chew Lisa M. Sciulli Lisa Siegal Lisa Simon Lisa Troy Lisa Zingaro Lori Feldman Lowell E. Crow Lynn Harris Lynn Loudenback Marc Goldberg Maria McConnell Maria Randazzo-Nardin Maria Sanella Marilyn Lavin Mark Collins Mark Weber Mark Young Martin Bressler Martin Decatur Martin St. John Marton L. Macchiete Martyn Kingston Marva Hunt Mary Ann McGrath Mary Beth DeConinck Mary Conran Mary Joyce

Mary Schramm Mary Tripp Matt Meuter Max White Mayukh Dass Melissa Clark Melissa Moore Michael Callow Michael Drafke Michael Fowler Michael Mayo Michael Peters Michael Pontikos Michael R. Luthy Michael Swenson Michelle Kunz Michelle Wetherbee Mike Hagan Mike Hyman Mike Luckett Milton Pressley Miriam B. Stamps Nadia J. Abgrab Nancy Bloom Nancy Boykin Nancy Grassilli Nanda Kumar Nathan Himelstein Neel Das Nikolai Ostapenko Norman Smothers Notis Pagiavlas Ottilia Voegtli Pamela Grimm Pamela Hulen Parimal Bhagat Pat Spirou Patricia Baconride Patricia Bernson Patricia Manninen Paul Dion Paul Dowling Paul Jackson Paul Londrigan Paul Myer Peter J. McClure Philip Kearney Philip Parron Philip Shum Phyllis Fein Phyllis McGinnis

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Poh-Lin Yeoh Pola B. Gupta Priscilla G. Aaltonen Priscilla LaBarbera Priyali Rajagopal Rae Caloura Rajesh Iyer Rajiv Kashyap Ram Kesaran Randall E. Wade Randy Stuart Ravi Shanmugam Raymond Marzilli Reid Claxton Renee Foster Renee Pfeifer-Luckett Rex Moody Rhonda Mack Rhonda Taylor Richard C. Leventhal Richard D. Parker Richard Hansen Richard Hargrove Richard J. Lutz Richard Lapidus Richard M. Hill Richard Penn Rick Sweeney Rita Dynan Robert C. Harris Robert Jones Robert Lawson Robert Luke Robert Morris Robert S. Welsh Robert Swerdlow Robert W. Ruekert Robert Williams Robert Witherspoon Roberta Schultz Roger McIntyre Roger W. Egerton Ron Dougherty Ron Hasty Ron Larson Ron Weston Ronald A. Feinberg Ronald Michaels Rosemary Ramsey Roy Adler Roy Klages

Ruth Ann Smith Ruth Rosales Ruth Taylor S. Choi Chan S. Tamer Cavusgil Sally Sledge Samuel E. McNeely Sanal Mazvancheryl Sandipan Sen Sandra Robertson Sandra Smith Sandra Young Sang Choe Sanjay S. Mehta Santhi Harvey Scott Cragin Scott Swan Scott Thorne Shabnam Zanjani Sheila Wexler Sherry Cook Siva Balasubramanian Soon Hong Min Srdan Zdravkovic Stacia Gray Stan Garfunkel Stan Scott Starr F. Schlobohm Stephen Calcich Stephen Garrott Stephen Pirog Stephen W. Miller Steve Hertzenberg Steve Taylor Steven Engel Steven Moff Sudhir Karunakaran Sue Lewis Sue McGorry Sue Umashankar Suman Basuroy Sundaram Dorai Sunder Narayanan Susan Godar Susan Peterson Susan Sieloff Susan Stanix Susie Pryor Suzanne Murray Sylvia Keyes Tamara Masters

Teri Root Terrance Kevin McNamara Terry Kroeten Theodore Mitchell Theresa Flaherty Thom J. Belich Thomas Brashear Thomas L. Trittipo Thomas M. Bertsch Thomas Passero Tim Aurand Tim Landry Timothy Donahue Timothy Reisenwitz Tina L. Williams Tino DeMarco Tom Castle Tom Deckelman Tom Marshall Tom Rossi Tom Stevenson Tom Thompson Tracy Fulce Vahwere Kavota Van R. Wood Vicki Rostedt Victoria Miller Vincent P. Taiani Vladimir Pashkevich Vonda Powell Walter Kendall Wendy Achey Wendy Wood Wesley Johnston William B. Dodds William Brown William D. Ash William Foxx William G. Browne William G. Mitchell William J. Carner William Motz William Pertula William R. Wynd William Rodgers William S. Piper Wilton Lelund Yi He Yue Pan Yunchuan Liu

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Thanks are due to many people, including current and past students, marketing educa- tors around the globe, university staff, business journal and periodical authors, company representatives, and marketing professionals of every kind. Their assistance has been essential in our efforts to continue to provide the most comprehensive, up-to-date, and integrated teaching and learning package available. We have been fortunate to have so many people be part of our team! In particular, however, we continue to benefit from the insights and guidance of our long-time friend, colleague, and coauthor, William Rudelius. His contributions to the textbook are truly timeless.

Nancy Harrower of Concordia University, St. Paul, led our efforts on the Instructor’s Man- ual, the PowerPoint slides, the In-Class Activities, and the new Digital In-Class Activities. In addition, she provides the content for our blog (kerinmarketing.com). Tia Quinlan- Wilder of the University of Denver was responsible for the Test Bank and Quizzes and the LearnSmart component of our interactive learning package. Erin Steffes of Towson University was responsible for the Connect application exercises and the new Marketing Analytics exercises. All of these professors are exceptional educators and we are very fortunate that they are part of our team. Michael Vessey, our long-time collaborator who recently passed away, also provided assistance in the preparation of materials that are still in use.

Thanks are also due to many other colleagues who contributed to the text, cases, and supplements. They include: Richard Lutz of the University of Florida; Linda Rochford of the University of Minnesota–Duluth; Kevin Upton of the University of Minnesota–Twin Cities; Nancy Nentl of Metropolitan State University; Leslie Kendrick of Johns Hopkins University; Lau Geok Theng of the National University of Singapore; and Leigh McAlister of the University of Texas at Austin. Rick Armstrong of Armstrong Photography, Dan Hundley and George Heck of Token Media, Nick Kaufman and Michelle Morgan of NKP Media, Bruce McLean of World Class Communication Technologies, Paul Fagan of Fagan Productions, Martin Walter of White Room Digital, Scott Bolin of Bolin Marketing, and Andrew Schones of Pure Imagination produced the videos.

Many businesspeople also provided substantial assistance by making available informa- tion that appears in the text, videos, and supplements—much of it for the first time in col- lege materials. Thanks are due to Ann Rubin, Teresa Yoo, and Kathleen Cremmins of IBM; Jana Hartline, Rommel Momen, Joanie Swearingen, and Amy Ulloa of Toyota; Justin Gold and Mike Guanella of Justin’s; Lisa Selk of CytoSport; Jeff Ettinger of Hormel; Russ Lesser, Billy Meistrell, Nick Meistrell, and Jenna Meistrell of Body Glove; Peter Maule of Marquee Brands; Daniel Jasper, Jill Renslow, and Sarah Schmidt of Mall of America; Mike Pohl of ACES Flight Simulation; Chris Klein, Jaime Cardenas, Casey Leppanen, Heather Peace, and Lori Nevares of LA Galaxy; Ian Wolfman and Jana Boone of meplusyou; David Ford and Don Rylander of Ford Consulting Group; Mark Rehborg of Tony’s Pizza; Vivian Callaway, Sandy Proctor, and Anna Stoesz of General Mills; David Windorski, Tom Barnidge, and Erica Schiebel of 3M; Nicholas Skally, Jeremy Stonier, and Joe Olivas of Prince Sports; Brian Niccol of Pizza Hut; Tom Cassady of JCPenney, Inc.; Charles Besio of the Sewell Automotive Group, Inc.; Lindsey Smith of GE Healthcare; Beverly Roberts of the U.S. Census Bureau; Sheryl Adkins-Green of Mary Kay, Inc.; Mattison Crowe of Seven Cycles, Inc.; Alisa Allen, Kirk Hodgdon, Patrick Hodgdon, and Nick Naumann of Altus Marketing and Business Development; and Nelson Ng from Dundas Data Visualization, Inc.

Those who provided the resources for use in the Marketing: The Core, 8th edition text- book, Instructor’s Manual, and/or PowerPoint presentations include: Todd Walker and Jean Golden of Million Dollar Idea; Karen Cohick of Susan G. Komen for the Cure; Liz Stewart of Ben & Jerry’s; John Formella and Patricia Lipari of Kodak; Erica Schiebel of 3M; Joe Diliberti of Consumer Reports; Patricia Breman of Strategic Business Insights (VALS); Brian Nielsen of the Nielsen Company; David Walonick of StatPac; Mark Reh- borg of Schwan’s Consumer Brands (Tony’s Pizza); Jennifer Olson of Experian Simmons;

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Kitty Munger and Mary Wykoff of Wendy’s; Mark Heller of RetailSails; Nicky Hutcheon of ZenithOptimedia; Amy Thompson and Jennifer Allison of Dell, Inc.; Adriana Carlton of Walmart and Rick Hill of Bernstein-Rein Advertising (Walmart); Janine Bolin of Saks, Inc.; Dr. Yory Wurmser of the Data and Marketing Association; and Elizabeth Clendenin of Unilever (Caress).

We also want to thank the following people who generously provided assistance with our Marketing: The Core, 8th edition In-Class Activities (ICAs) and associated PowerPoint presentations: Mitch Forster and Carla Silveira of Ghirardelli Chocolate Company; Karolyn Warfel and Betsy Boyer of Woodstream Corp. (Victor Pest); Leonard Fuld of Fuld & Co.; Maggie Jantzen of Starbucks Coffee Company; Michelle Green and Victoria Glazier of the U.S. Census Bureau; Lisa Castaldo of Pepsi; Muffie Taggert of General Mills; Robert M. McMath, formerly of NewProductWorks; Greg Rodriguez; Jeremy Tucker, Julia Wells, and Lisa Cone of Frito-Lay (Doritos); Susan Carroll and Bob Robinson of Apple, Inc.; Willard Oberton of Fastenal Company; Scott Wosniak and Jennifer Arnold of Toro; Kim Eskro of Fallon Worldwide (Gold’n Plump); Robin Grayson of TBWA/Chiat/Day (Apple); Katie Kramer of Valassis Communications, Inc. (Nutella/Advil); Triestina Greco of Nutella/Ferrero; Tim Stauber of Wyeth Consumer Healthcare (Advil); and Yvonne Pendleton and Lucille Storms of Mary Kay.

Staff support from the Southern Methodist University and the University of Denver was essential. We gratefully acknowledge the help of Jeanne Milazzo and Gabriela Barcenas for their many contributions.

Checking countless details related to layout, graphics, and photos, and managing last- minute text changes is essential for a sound and accurate textbook. This also involves coordinating activities of authors, designers, editors, compositors, and production spe- cialists. Christine Vaughan, our lead content project manager, of McGraw-Hill Education’s production staff provided the necessary oversight and attention to detail while retaining an extraordinary level of professionalism, often under tight deadlines. We are very fortu- nate that Christine was part of our team. Thank you again!

Finally, we acknowledge the professional efforts of the McGraw-Hill Education staff. Com- pletion of our book and its many supplements required the attention and commitment of many editorial, production, marketing, and research personnel. Our McGraw-Hill team included Susan Gouijnstook, Meredith Fossel, Nicole Young, Kelly Pekelder, Danielle Clement, Susan Culbertson, Matt Diamond, Carrie Burger, and many others. In addition, we relied on David Tietz for constant attention regarding the photo elements of the text, and Claire Hunter for management of the details of the online authoring system. Handling the countless details of our text, supplement, and support technologies has become an incredibly complex challenge. We thank all these people for their efforts!

Roger A. Kerin Steven W. Hartley

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BRIEF CONTENTS

Part 1 Initiating the Marketing Process 1 Creating Customer Relationships and Value through Marketing 2 2 Developing Successful Organizational and Marketing Strategies 26

Appendix A Building an Effective Marketing Plan 56 3 Understanding the Marketing Environment, Ethical Behavior,

and Social Responsibility 72

Part 2 Understanding Buyers and Markets 4 Understanding Consumer Behavior 98 5 Understanding Organizations as Customers 128 6 Understanding and Reaching Global Consumers and Markets 148

Part 3 Targeting Marketing Opportunities 7 Marketing Research: From Customer Insights to Actions 178 8 Market Segmentation, Targeting, and Positioning 210

Part 4 Satisfying Marketing Opportunities 9 Developing New Products and Services 236 10 Managing Successful Products, Services, and Brands 266 11 Pricing Products and Services 298 12 Managing Marketing Channels and Supply Chains 324 13 Retailing and Wholesaling 350 14 Implementing Interactive and Multichannel Marketing 378 15 Integrated Marketing Communications and Direct Marketing 402 16 Advertising, Sales Promotion, and Public Relations 428 17 Using Social Media and Mobile Marketing to Connect

with Consumers 460 18 Personal Selling and Sales Management 488

Appendix B Planning a Career in Marketing 516

Glossary 531 Name Index 539 Company/Product Index 549 Subject Index 558

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DETAILED CONTENTS

Part 1 Initiating the Marketing Process 1 CREATING CUSTOMER RELATIONSHIPS AND

VALUE THROUGH MARKETING 2

Creating Customer Value: The Chobani Way! 2 Creating an Exceptional Product 2 Connecting with Customers 2 Chobani Today 3 Chobani, Marketing, and You 4

What Is Marketing? 4 Marketing and Your Career 4 Marketing: Delivering Value to Customers 5 The Diverse Elements Influencing Marketing Actions 5 What Is Needed for Marketing to Occur 6

How Marketing Discovers and Satisfies Consumer Needs 7 Discovering Consumer Needs 7 The Challenge: Meeting Consumer Needs with New Products 8 Satisfying Consumer Needs 10

The Marketing Program: How Customer Relationships Are Built 11 Relationship Marketing: Easy to Understand, Hard to Do 11 The Marketing Program and Market Segments 12 3M’s Strategy and Marketing Program to Help Students Study 13

How Marketing Became So Important 15 Evolution of the Market Orientation 15 Focusing on Customer Relationship Management 15 Ethics and Social Responsibility in Marketing: Balancing the Interests of Different Groups 16 The Breadth and Depth of Marketing 17

Learning Objectives Review 18

Learning Review Answers 19

Focusing on Key Terms 19

Applying Marketing Knowledge 20

Building Your Marketing Plan 20

Video Case 1: Chobani®: Making Greek Yogurt a Household Name 20

Chapter Notes 24

2 DEVELOPING SUCCESSFUL ORGANIZATIONAL AND MARKETING STRATEGIES 26

Ben and Jerry Are on a Mission: To Make Fantastic, Sustainable, World-Changing Ice Cream 26

Today’s Organizations 28 Kinds of Organizations 28

©Diane Bond areff/Invision

for

Chobani/AP Images

©McGraw-Hi ll Education/E

velyn

Nicole Kirkse y, Photograp

her

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Making Responsible Decisions: New Types of Organizations Help Entrepreneurs Focus on Passion and Purpose 29

What Is Strategy? 30 The Structure of Today’s Organizations 30

Strategy in Visionary Organizations 31 Organizational Foundation: Why Does It Exist? 31 Organizational Direction: What Will It Do? 32 Organizational Strategies: How Will It Do It? 34 Tracking Strategic Performance with Marketing Analytics 34

Setting Strategic Directions 36 A Look Around: Where Are We Now? 36

Applying Marketing Metrics: How Well Is Ben & Jerry’s Doing? 36

Growth Strategies: Where Do We Want to Go? 37 The Strategic Marketing Process 41

Principles Underlying the Strategic Marketing Process 41 The Planning Phase of the Strategic Marketing Process 42 The Implementation Phase of the Strategic Marketing Process 44 The Evaluation Phase of the Strategic Marketing Process 46

Learning Objectives Review 48

Learning Review Answers 49

Focusing on Key Terms 50

Applying Marketing Knowledge 50

Building Your Marketing Plan 50

Video Case 2: IBM: Putting Smart Strategy to Work 50

Chapter Notes 53

Appendix A Building an Effective Marketing Plan 56

3 UNDERSTANDING THE MARKETING ENVIRONMENT, ETHICAL BEHAVIOR, AND SOCIAL RESPONSIBILITY 72

Fortune’s Businessperson of the Year: “I’m in This to Build Something Cool!” 72

Facebook in the Future 73 Environmental Scanning 74

An Environmental Scan of Today’s Marketplace 74 Social Forces 74

Demographics 74 Culture 76

Making Responsible Decisions: Balancing Profits and Purpose—Millennial Style 76

©David Paul Morris/Bloom

berg

via Getty Ima ges

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Economic Forces 77 Macroeconomic Conditions 77 Consumer Income 78

Technological Forces 79 Technology of Tomorrow 79 Technology’s Impact on Customer Value 80 Technology Enables Data Analytics 80

Competitive Forces 81 Alternative Forms of Competition 81 Small Businesses as Competitors 81

Regulatory Forces 82 Protecting Competition 82 Protecting Producers and Consumers 82 Control through Self-Regulation 83

Understanding Ethical Marketing Behavior 84 Societal Culture and Norms 84 Business Culture and Industry Practices 85 Corporate Culture and Expectations 85 Your Personal Moral Philosophy and Ethical Behavior 86

Making Responsible Decisions: Corporate Conscience in the Cola War 86

Understanding Social Responsibility for Sustainable Marketing 87 Three Concepts of Social Responsibility 87 Sustainable Development: Doing Well by Doing Good 89

Marketing Matters: Will Consumers Switch Brands for a Cause? Yes, If . . . 89

Learning Objectives Review 90

Learning Review Answers 90

Focusing on Key Terms 91

Applying Marketing Knowledge 91

Building Your Marketing Plan 92

Video Case 3: Toyota: Where the Future Is Available Today 92

Chapter Notes 95

Part 2 Understanding Buyers and Markets 4 UNDERSTANDING CONSUMER BEHAVIOR 98

Enlightened Carmakers Know What Custom(h)ers and Influenc(h)ers Value 98

Consumer Purchase Decision Process and Experience 100 Problem Recognition: Perceiving a Need 100 Information Search: Seeking Value 100 Alternative Evaluation: Assessing Value 101 Purchase Decision: Buying Value 102©Whisson/Jordan

/Corbis/Getty Images

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Postpurchase Behavior: Realizing Value 102 Consumer Involvement Affects Problem Solving 103

Marketing Matters: How Much Is a Satisfied Customer Worth? 103

Situational Influences That Affect Purchase Decisions 105 Putting the Purchase Decision Process into Practice: Consumer Touchpoints and Consumer Journey Maps 105

Psychological Influences on Consumer Behavior 107 Consumer Motivation and Personality 107 Consumer Perception 109 Consumer Learning 110

Making Responsible Decisions: The Ethics of Subliminal Messages 110

Consumer Values, Beliefs, and Attitudes 111 Consumer Lifestyle 112

Sociocultural Influences on Consumer Behavior 113 Personal Influence 113

Marketing Matters: BzzAgent—The Buzz Experience 115

Reference Group Influence 116 Family Influence 116 Culture and Subculture Influences 118

Learning Objectives Review 121

Learning Review Answers 121

Focusing on Key Terms 122

Applying Marketing Knowledge 122

Building Your Marketing Plan 122

Video Case 4: Coppertone: Creating the Leading Sun Care Brand by Understanding Consumers 123

Chapter Notes 125

5 UNDERSTANDING ORGANIZATIONS AS CUSTOMERS 128

Organizational Buying Is Marketing, Too! Purchasing Publication Paper for JCPenney 128

Business-to-Business Marketing and Organizational Buyers 130 Organizational Buyers 130 Organizational Markets 130 Measuring Organizational Markets 131

Characteristics of Organizational Buying 132 Demand Characteristics 132 Size of the Order or Purchase 132 Number of Potential Buyers 133 Organizational Buying Objectives 133 Organizational Buying Criteria 133 Buyer–Seller Relationships and Supply Partnerships 134Cou

rtesy of JCPe nney

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Marketing Matters: At Milsco Manufacturing, “Our Marketing Philosophy Is Designed to Develop Partnerships” and Deliver a Great Ride for Customers’ Seats 135

The Organizational Buying Function and Process and the Buying Center 136

The Buying Function in Organizations 136

Making Responsible Decisions: Sustainable Procurement for Sustainable Growth at Starbucks 136

Stages in the Organizational Buying Process 137 The Buying Center: A Cross-Functional Group 137

Online Buying in Business-to-Business Marketing 140 Prominence of Online Buying in Organizational Markets 140 E-Marketplaces: Virtual Organizational Markets 140 Online Auctions in Organizational Markets 141

Marketing Matters: eBay Means Business for Business-to- Business Marketing Entrepreneurs, Too! 141

Learning Objectives Review 142

Learning Review Answers 143

Focusing on Key Terms 143

Applying Marketing Knowledge 143

Building Your Marketing Plan 144

Video Case 5: Trek: Building Better Bikes through Organizational Buying 144

Chapter Notes 147

6 UNDERSTANDING AND REACHING GLOBAL CONSUMERS AND MARKETS 148

Transforming the Way India Sells and Transforming the Way India Buys: Amazon India Builds a Multibillion-Dollar Operation from the Ground up to the Cloud 148

Amazon’s Awesome Opportunity in India 148 Amazon’s Awesome Challenges in India 148 Failure Is Not an Option 149

Dynamics of World Trade 150 Global Perspective on World Trade 150 United States’ Perspective on World Trade 151

Marketing in a Dynamic Global Economy 152 Economic Protectionism by Individual Countries 152

Making Responsible Decisions: Global Ethics and Global Economics—The Case of Protectionism 153

Economic Integration among Countries 154 Global Competition among Global Companies for Global Consumers 155 The Presence of a Networked Global Marketspace 158

Photo: ©And rey Arkusha/

Shutterstock , Logo: ©Edit

orial/

Alamy Stock Photo

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Marketing Matters: The Global Teenager—A Market of Voracious Consumers 158

Prevalence of Economic Espionage 159 A Global Environmental Scan 160

Cultural Diversity 160 Economic Considerations 163 Political-Regulatory Climate 165

Comparing Global Market-Entry Strategies 166 Exporting 166 Licensing 167

Marketing Matters: Creative Cosmetics and Creative Export Marketing in Japan 167

Joint Venture 168 Direct Investment 168

Crafting a Worldwide Marketing Program 169 Product and Promotion Strategies 169 Distribution Strategy 171 Pricing Strategy 171

Learning Objectives Review 172

Learning Review Answers 173

Focusing on Key Terms 173

Applying Marketing Knowledge 173

Building Your Marketing Plan 173

Video Case 6: Mary Kay, Inc.: Building a Brand in India 174

Chapter Notes 176

Part 3 Targeting Marketing Opportunities 7 MARKETING RESEARCH: FROM CUSTOMER INSIGHTS

TO ACTIONS 178

Hollywood Loves Marketing Research! 178 A Film Industry Secret 178

The Role of Marketing Research 180 What Is Marketing Research? 180 The Challenges in Doing Good Marketing Research 181 Five-Step Marketing Research Approach 181

Step 1: Define the Problem 181 Set the Research Objectives 182 Identify Possible Marketing Actions 182

Step 2: Develop the Research Plan 182 Specify Constraints 182 Identify Data Needed for Marketing Actions 183 Determine How to Collect Data 183

Step 3: Collect Relevant Information 184 Secondary Data: Internal 184

©Moviestore Collection Lt

d./Alamy

Stock Photo

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Secondary Data: External 185 Advantages and Disadvantages of Secondary Data 185 Primary Data: Watching People 186

Marketing Matters: Online Databases and Internet Resources Useful to Marketers 186

Primary Data: Asking People 188 Primary Data: Other Sources 192

Applying Marketing Metrics: Are the Carmex Social Media Programs Working Well? 194

Advantages and Disadvantages of Primary Data 195 Step 4: Develop Findings 195

Making Responsible Decisions: No More Personal Secrets: The Downside of Data Mining and Predictive Modeling 197

Present the Findings 198 Step 5: Take Marketing Actions 199

Make Action Recommendations 199 Implement the Action Recommendations 200 Evaluate the Results 200

Sales Forecasting Techniques 200 Judgments of the Decision Maker 201 Surveys of Knowledgeable Groups 201 Statistical Methods 201

Learning Objectives Review 202

Learning Review Answers 203

Focusing on Key Terms 204

Applying Marketing Knowledge 204

Building Your Marketing Plan 204

Video Case 7: Carmex® (A): Leveraging Facebook for Marketing Research 205

Chapter Notes 208

8 MARKET SEGMENTATION, TARGETING, AND POSITIONING 210

Segmentation Rules in the Kingdom of Happiness! 210 Zappos’s Secret to Success 210 Delivering WOW Customer Service 210

Why Segment Markets? 212 What Market Segmentation Means 212 When and How to Segment Markets 213

Steps in Segmenting and Targeting Markets 216 Step 1: Group Potential Buyers into Segments 216 Step 2: Group Products to Be Sold into Categories 220 Step 3: Develop a Market-Product Grid and Estimate the Size of Markets 222©Brad Swonetz/R

edux

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Step 4: Select Target Markets 223 Step 5: Take Marketing Actions to Reach Target Markets 224 Market-Product Synergies: A Balancing Act 226

Marketing Matters: Apple’s Segmentation Strategy—Camp Runamok No Longer 227

Positioning the Product 228 Two Approaches to Product Positioning 228 Writing a Positioning Statement 228 Product Positioning Using Perceptual Maps 228 A Perceptual Map to Reposition Chocolate Milk for Adults 229

Learning Objectives Review 230

Learning Review Answers 230

Focusing on Key Terms 231

Applying Marketing Knowledge 231

Building Your Marketing Plan 231

Video Case 8: Prince Sports, Inc.: Tennis Racquets for Every Segment 232

Chapter Notes 234

Part 4 Satisfying Marketing Opportunities 9 DEVELOPING NEW PRODUCTS AND SERVICES 236

Apple: The World-Class New-Product Machine 236 Apple’s New-Product Development Successes 236 Apple’s New-Product Development Stumbles 237 The Next Chapter in Apple’s Story: An Apple-Enabled iCar? 238

What Are Products and Services? 238 A Look at Goods, Services, and Ideas 238 Classifying Products 239 Classifying Services 239 The Uniqueness of Services 241 Assessing and Improving Service Quality 242 Product Classes, Forms, Items, Lines, and Mixes 242

New Products and Why They Succeed or Fail 244 What Is a New Product? 244

Marketing Matters: Too Much of a Good Thing: Feature Bloat and Feature Fatigue in New-Product Development 245

Why Products and Services Succeed or Fail 246 How Applying Marketing Metrics Can Monitor New-Product Performance 249

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Applying Marketing Metrics: Which States Are Underperforming? 249

The New-Product Development Process 250 Stage 1: New-Product Strategy Development 250 Stage 2: Idea Generation 251 Stage 3: Screening and Evaluation 253

Marketing Matters: Was the Google Glass Half Full or Half Empty? 254

Stage 4: Business Analysis 255 Stage 5: Development 255 Stage 6: Market Testing 256 Stage 7: Commercialization 257

Learning Objectives Review 258

Learning Review Answers 259

Focusing on Key Terms 260

Applying Marketing Knowledge 260

Building Your Marketing Plan 260

Video Case 9: GoPro: Making All of Us Heroes with Exciting New Products 261

Chapter Notes 264

10 MANAGING SUCCESSFUL PRODUCTS, SERVICES, AND BRANDS 266

Gatorade: Bringing Science to Sweat for More Than 50 Years 266

Creating the Gatorade Brand 266 Building the Gatorade Brand 267

Charting the Product Life Cycle 268 Introduction Stage 268 Growth Stage 270 Maturity Stage 271 Decline Stage 271 Three Aspects of the Product Life Cycle 272

Marketing Matters: Will E-mail Spell Extinction for Fax Machines? 272

Managing the Product Life Cycle 276 Role of a Product Manager 276 Modifying the Product 276 Modifying the Market 277

Applying Marketing Metrics: Knowing Your CDI and BDI 277

Repositioning the Product 278

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Making Responsible Decisions: Consumer Economics of Downsizing—Get Less, Pay More 279

Branding and Brand Management 280 Brand Personality and Brand Equity 280 Picking a Good Brand Name 282 Branding Strategies 283

Packaging and Labeling Products 286 Creating Customer Value and Competitive Advantage through Packaging and Labeling 286

Marketing Matters: Creating Customer Value through Packaging—Pez Heads Dispense More Than Candy 287

Packaging and Labeling Challenges and Responses 288 The Marketing of Services 289

Product (Service) 289 Price 289 Place (Distribution) 290 Promotion 290 People 290 Physical Environment 290 Process 291

Learning Objectives Review 291

Learning Review Answers 292

Focusing on Key Terms 293

Applying Marketing Knowledge 293

Building Your Marketing Plan 293

Video Case 10: Justin’s: Managing a Successful Product with Passion 293

Chapter Notes 296

11 PRICING PRODUCTS AND SERVICES 298

Vizio, Inc.—Building a Smart TV Brand at a Great Value 298

Nature and Importance of Price 300 What Is a Price? 300 Price as an Indicator of Value 301 Price in the Marketing Mix 302

Marketing Matters: Does Spirit Airlines Engage in Value Pricing? For Some Yes, for Others No 302

Common Pricing Approaches 303 Demand-Oriented Pricing Approaches 303 Cost-Oriented Pricing Approaches 304

Marketing Matters: Energizer’s Lesson in Price Perception—Value Lies in the Eye of the Beholder 305

Profit-Oriented Pricing Approaches 306

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Competition-Oriented Pricing Approaches 307

Applying Marketing Metrics: Are Red Bull Prices Above, At, or Below the Market? 308

Estimating Demand and Revenue 309 Estimating Demand 309 Price Elasticity of Demand 311 Fundamentals of Estimating Revenue 311

Determining Cost, Volume, and Profit Relationships 312 The Importance of Controlling Costs 312 Break-Even Analysis 312

Pricing Objectives and Constraints 314 Identifying Pricing Objectives 314 Identifying Pricing Constraints 315

Setting a Final Price 316 Step 1: Select an Approximate Price Level 316 Step 2: Set the List or Quoted Price 317 Step 3: Make Special Adjustments to the List or Quoted Price 317

Making Responsible Decisions: The Ethics and Economics of Surge Pricing 318

Learning Objectives Review 319

Learning Review Answers 320

Focusing on Key Terms 320

Applying Marketing Knowledge 320

Building Your Marketing Plan 321

Video Case 11: Carmex (B): Setting the Price of the Number One Lip Balm 321

Chapter Notes 323

12 MANAGING MARKETING CHANNELS AND SUPPLY CHAINS 324

Eddie Bauer: The “Brick, Click, and Flip” Pick for the Active Outdoor Enthusiast 324

Eddie Bauer’s Multichannel Marketing Strategy 324 Supply Chain Dynamics at Eddie Bauer 325

Nature and Importance of Marketing Channels 326 What Is a Marketing Channel of Distribution? 326 How Customer Value Is Created by Intermediaries 326

Marketing Channel Structure and Organization 328 Marketing Channels for Consumer Products and Services 328 Marketing Channels for Business Products and Services 329 Internet Marketing Channels 330 Direct and Multichannel Marketing 330 Dual Distribution and Strategic Channel Alliances 331 Vertical Marketing Systems 332

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Marketing Matters: Nestlé and General Mills—Cereal Partners Worldwide 332

Marketing Channel Choice and Management 334 Factors Affecting Channel Choice and Management 334

Applying Marketing Metrics: Channel Sales and Profit at Charlesburg Furniture 336

Managing Channel Relationships: Conflict and Cooperation 337

Logistics and Supply Chain Management 338 Supply Chains versus Marketing Channels 339 Sourcing, Assembling, and Delivering a New Car: The Automotive Supply Chain 339 Supply Chain Management and Marketing Strategy 340

Marketing Matters: IBM’s Watson Supply Chain—Delivering a Total Solution for Its Customers 341

Two Concepts of Logistics Management in a Supply Chain 342 Total Logistics Cost Concept 342 Customer Service Concept 342

Closing the Loop: Reverse Logistics 343

Making Responsible Decisions: Reverse Logistics and Green Marketing Go Together at Hewlett-Packard: Recycling e-Waste 344

Learning Objectives Review 345

Learning Review Answers 345

Focusing on Key Terms 346

Applying Marketing Knowledge 346

Building Your Marketing Plan 346

Video Case 12: Amazon: Delivering the Earth’s Biggest Selection! 347

Chapter Notes 349

13 RETAILING AND WHOLESALING 350

Smart Stores Are Changing the Customer Journey! 350 The Value of Retailing 352

Consumer Utilities Offered by Retailing 352 The Global Economic Impact of Retailing 353

Classifying Retail Outlets 353 Form of Ownership 354

Making Responsible Decisions: How Green Is Your Retailer? The Rankings Are Out! 354

Level of Service 356 Type of Merchandise Line 356

Nonstore Retailing 357

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Automatic Vending 358 Direct Mail and Catalogs 358 Television Home Shopping 359 Online Retailing 359 Telemarketing 360 Direct Selling 361

Retailing Strategy 361

Applying Marketing Metrics: Why Apple Stores May Be the Best in the United States! 365

The Changing Nature of Retailing 366 The Wheel of Retailing 366 The Retail Life Cycle 367 Data Analytics 368

Wholesaling 368 Merchant Wholesalers 369 Agents and Brokers 369 Manufacturers’ Branches and Offices 370

Learning Objectives Review 370

Learning Review Answers 371

Focusing on Key Terms 371

Applying Marketing Knowledge 372

Building Your Marketing Plan 372

Video Case 13: Mall of America®: America’s Biggest Mall Knows the Secret to Successful Retailing! 372

Chapter Notes 375

14 IMPLEMENTING INTERACTIVE AND MULTICHANNEL MARKETING 378

Seven Cycles Delivers Just One Bike. Yours. 378 Creating Customer Value, Relationships,

and Experiences in Marketspace 380 Marketing Challenges in Two Environments 380 Creating Customer Value in Marketspace 380 Interactivity, Individuality, and Customer Relationships in Marketspace 382 Creating a Compelling Online Customer Experience 383

Online Consumer Behavior and Marketing Opportunities and Practices 386

Who Is the Online Consumer? 386

Applying Marketing Metrics: Sizing Up Site Stickiness at Sewell Automotive Companies 386

What Consumers Buy Online 387 Why Consumers Shop and Buy Online 387 When and Where Consumers Shop and Buy Online 391 How Consumers Shop and Buy Online 392

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Making Responsible Decisions: Who Is Responsible for Internet Privacy and Security? 392

Cross-Channel Consumers and Multichannel Marketing 393 Who Is the Cross-Channel Consumer? 393 Implementing Multichannel Marketing 393

Learning Objectives Review 395

Learning Review Answers 396

Focusing on Key Terms 396

Applying Marketing Knowledge 397

Building Your Marketing Plan 397

Video Case 14: Pizza Hut and imc2: Becoming a Multichannel Marketer 397

Chapter Notes 401

15 INTEGRATED MARKETING COMMUNICATIONS AND DIRECT MARKETING 402

Sometimes Taco Bell Leads to Wedding Bells! 402 The Communication Process 404

Encoding and Decoding Messages 405 Feedback 405 Noise 406

The Promotional Elements 406 Advertising 406 Personal Selling 407 Public Relations 408 Sales Promotion 409 Direct Marketing 409

Integrated Marketing Communications—Developing the Promotional Mix 410

The Target Audience 410 The Product Life Cycle 410

Marketing Matters: Hey Marketers, College Students Are Digital and Mobile! 411

Channel Strategies 412 Developing an Integrated Marketing Communications Program 413

Identifying the Target Audience 413 Specifying Promotion Objectives 414 Setting the Promotion Budget 414 Selecting the Right Promotional Tools 415

Applying Marketing Metrics: How Much Should You Spend on IMC? 415

Designing the Promotion 416 Scheduling the Promotion 416

Executing and Assessing the Promotion Program 417

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Direct Marketing 418 The Growth of Direct Marketing 418 The Value of Direct Marketing 419 Technological, Global, and Ethical Issues in Direct Marketing 419

Making Responsible Decisions: What Is the Future of Your Privacy? 420

Learning Objectives Review 421

Learning Review Answers 421

Focusing on Key Terms 422

Applying Marketing Knowledge 422

Building Your Marketing Plan 423

Video Case 15: Taco Bell: Using IMC to Help Customers Live Más! 423

Chapter Notes 425

16 ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS 428

Fantasy Is Becoming Reality for Advertisers! 428 Types of Advertisements 430

Product Advertisements 430 Institutional Advertisements 431

Developing the Advertising Program 432 Identifying the Target Audience 432 Specifying Advertising Objectives 432 Setting the Advertising Budget 432 Designing the Advertisement 433 Selecting the Right Media 435

Applying Marketing Metrics: What Is the Best Way to Reach 1,000 Customers? 436

Different Media Alternatives 437 Scheduling the Advertising 441

Making Responsible Decisions: Who Is Responsible for Preventing Click Fraud? 441

Executing the Advertising Program 442 Pretesting the Advertising 442 Carrying Out the Advertising Program 443

Assessing the Advertising Program 443 Posttesting the Advertising 443 Making Needed Changes 444

Sales Promotion 444 Consumer-Oriented Sales Promotions 444 Trade-Oriented Sales Promotions 448

Public Relations 449

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Learning Objectives Review 450

Learning review Answers 451

Focusing on Key Terms 452

Applying Marketing Knowledge 452

Building Your Marketing Plan 452

Video Case 16: Google, Inc.: The Right Ads at the Right Time 453

Chapter Notes 455

17 USING SOCIAL MEDIA AND MOBILE MARKETING TO CONNECT WITH CONSUMERS 460

Mobile Moments Will Soon Include a Nice Ride! 460 Understanding Social Media 462

What Are Social Media? 462 Why and How Social Media Transformed Marketing Communications 463

A Look at Four Important Social Media 465 Comparing Four Social Media 465 Facebook 465 Twitter 467 LinkedIn 468 YouTube 469

Social Media Marketing Programs and Customer Engagement 471 Selecting Social Media 471

Marketing Matters: Vloggers Are the New Power Players, Worldwide! 471

Selecting Social Media Content 472 Measuring the Results of Social Media Marketing Programs 473 Carmex Goes Viral with Luck and a LeBron James Bear Hug 475

The Future: Convergence and Mobility 477 The Convergence of Real and Digital Worlds 477 Mobile Marketing: Tightening Links to Marketing Actions 478

Learning Objectives Review 480

Learning Review Answers 480

Focusing on Key Terms 481

Applying Marketing Knowledge 481

Building Your Marketing Plan 482

Video Case 17: Body Glove: Helping Consumers Do What They Love! 482

Chapter Notes 485

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18 PERSONAL SELLING AND SALES MANAGEMENT 488

Meet Today’s Sales Professional 488 Scope and Significance of Personal Selling

and Sales Management 490 Nature of Personal Selling and Sales Management 490 Selling Happens Almost Everywhere 490 Personal Selling in Marketing and Entrepreneurship 491 Creating Customer Solutions and Value through Salespeople: Relationship and Partnership Selling 491

The Many Forms of Personal Selling 492 Order-Taking Salespeople 492

Marketing Matters: Science and Selling: Is Customer Value Creation in Your Genes? 492

Order-Getting Salespeople 493 Customer Sales Support Personnel 493

The Personal Selling Process: Building Customer Relationships 495

Marketing Matters: Creating and Sustaining Customer Value through Cross-Functional Team Selling 495

Prospecting: Identifying and Qualifying Prospective Customers 496 Preapproach: Preparing for the Sales Call 497 Approach: Making the First Impression 498 Presentation: Tailoring a Solution for a Customer’s Needs 498

Marketing Matters: Imagine This . . . Putting the Customer into Customer Solutions! 500

Close: Asking for the Customer’s Order or Business 501 Follow-up: Solidifying the Customer Relationship 501

The Sales Management Process 502 Sales Plan Formulation: Setting Direction 502

Making Responsible Decisions: The Ethics of Asking Customers about Competitors 503

Sales Plan Implementation: Putting the Plan into Action 504

Marketing Matters: What Is Your Emotional Intelligence? You Might Be Surprised. 505

Salesforce Evaluation: Measuring Results 506 Customer Relationship Management Systems and Technology 507

Applying Marketing Metrics: Tracking Salesperson Performance at Moore Chemical & Sanitation Supply, Inc. 508

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Learning Objectives Review 510

Learning Review Answers 510

Focusing on Key Terms 511

Applying Marketing Knowledge 511

Building Your Marketing Plan 512

Video Case 18: Xerox: Building Customer Relationships through Personal Selling 512

Chapter Notes 514

Appendix B Planning a Career in Marketing 516

Glossary 531 Name Index 539 Company/Product Index 549 Subject Index 558

MARKETING: THE CORE

Creating Customer Relationships and Value through Marketing

Le a r n i ng Ob j e c t i v e s After reading this chapter you should be able to:

Define marketing and identify the diverse factors that influence marketing actions.

Explain how marketing discovers and satisfies consumer needs.

Distinguish between marketing mix factors and environmental forces.

Explain how organizations build strong customer relationships and customer value through marketing.

Describe the characteristics of a market orientation.

LO 1-1

LO 1-2

LO 1-3

LO 1-4

LO 1-5

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Creating Customer Value: The Chobani Way! Are you a health-conscious consumer? Are you determined to find food products that are a good value for you? Then you may have noticed Chobani yogurt while you were shopping!

If you purchased Chobani and enjoyed the product, it was the result of an ex- traordinary marketing success story. Just a few years ago the U.S. yogurt market was dominated by Dannon and Yoplait. Then Hamdi Ulukaya created Chobani with less sugar and more protein to better match the changing tastes of American consumers. Today Chobani has more than $1.5 billion in annual sales and was recently recognized as one of the most innovative companies in the world “for stirring it up in the grocery store.”1

What is the secret to Chobani’s success? Read on to hear the rest of the story!

Creating an Exceptional Product The Chobani website proclaims that its guiding mission is “better food for more people.” The process starts with milk from local sources and then uses a strain- ing procedure that makes the yogurt extra thick and gives it twice as much protein. Finally, only real fruit and natural sweeteners are added. The recipe is the result of a commitment to a high-quality product. “I was very picky. It took us 18 months to get the recipe right. I knew I had only one shot, and it had to be perfect,” says Ulukaya. To produce the yogurt, Ulukaya purchased a closed dairy in a small town in New York using a Small Business Administration loan. He remodeled the facility using sustainability as a theme to reflect a focus on envi- ronment and community.2

Connecting with Customers Chobani had little money for traditional advertising, so it relied on positive word of mouth, with one happy customer telling another about the new style of yogurt. In addition, Chobani used social media such as Twitter and Facebook to connect with consumers and a mobile yogurt food truck

3

Creating Customer Relationships and Value through Marketing

called the CHOmobile to hand out free samples to encourage consumers to try Chobani’s Greek Yogurt for the first time. One of Chobani’s biggest breakthroughs in gaining public awareness was its sponsorship of the U.S. Olympic and Paralym- pic Teams.

Chobani also pushed for distribution in major grocery chains, rather than smaller niche stores, and encouraged placement of the product in the main dairy cases of the stores, not the specialty or health food sections. Ulukaya was convinced that Americans would really like Greek yogurt if they tried it and that they would try it if they heard about it and could find it easily in their grocery store.3

Chobani Today Chobani continues to monitor changing consumer tastes and offers new products to accommodate them. For example, the company recently introduced a yogurt drink called Drink Chobani, a package with a second compartment of crunchy toppings to add to the yogurt called Chobani Flip, a less tart product called Smooth Yogurt, and a squeezable package called Chobani Savor. The products are designed for new and existing consumers and for new eating occasions.

Video 1-1 Chobani Fruit Symphony Ad kerin.tv/cr8e/v1-1

Source: Chobani, LLC

Source: Chobani, LLC Source: Chobani, LLC

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One way Chobani stays in touch with consumer interests is through its yogurt cafés in New York’s SoHo and Tribeca neigh- borhoods. New ideas are continually tested on the menu and the feedback has been so useful that Chobani plans to open similar outlets in Los Angeles, San Francisco, Chicago, and other U.S. cities. Chobani also recently announced a plan to open the Chobani Food Incubator, which is designed to invest in and culti- vate ideas from emerging food entrepreneurs.

Today, Chobani boasts a 40 percent market share of the Greek yogurt segment, which makes up almost half of the $8 billion yogurt market. Chobani advertising, such as the “Believe in Food,” “No Bad Stuff,” and “Love This Life” campaigns, are featured on the Chobani YouTube channel. The

company’s success has even led to a Super Bowl ad featuring a 1,400-pound bear in search of a healthy snack!4

Chobani, Marketing, and You Will Hamdi Ulukaya and his Chobani Greek Yogurt continue this fantastic success story— especially with the recent appearance of competing Greek yogurts from Yoplait, Dannon, Annie’s, Noosa, and Fage? For Ulukaya, one key factor will be how well Chobani under- stands and uses marketing—the subject of this book.

Are you a marketing expert? If so, what would you pay for this cutting-edge TV? ©Kobby Dagan/VWPics via AP Images

Located in New York City, Chobani SoHo is the brand’s first-of-its-kind retail concept, serving yogurt creations with innovative toppings. ©Diane Bondareff/Invision for Chobani/AP Images

WHAT IS MARKETING?

The good news is that you are already a marketing expert! You perform many market- ing activities and make marketing-related decisions every day. For example, would you sell more LG Signature 77-inch 4K OLED TVs at $24,999 or $7,999? You an- swered $7,999, right? So your experience in shopping gives you some expertise in marketing. As a consumer, you’ve been involved in thousands of marketing decisions, mostly on the buying and not the selling side.

The bad news is that good marketing isn’t always easy. That’s why every year thousands of new products fail in the marketplace and then quietly slide into oblivion.

Marketing and Your Career Marketing affects all individuals, all organizations, all industries, and all countries. This book seeks to teach you marketing concepts, often by having you actually “do marketing”—by putting you in the shoes of a marketing manager facing actual marketing decisions. The book also shows marketing’s many applications and how it affects our lives. This knowledge should make you a better consumer and enable you to be a more informed citizen, and it may even help you in your career planning.

Perhaps your future will involve doing sales and marketing for a large organization. Working for a well-known company—Apple, Ford, Facebook, or General Mills—can be personally satisfying and financially rewarding, and you may gain special respect from your friends.

Start-ups and small businesses also offer marketing careers. Small businesses are the source of the majority of new U.S. jobs. So you might become your own boss by being an entrepreneur and starting your own business.

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Shortly after leaving Stanford, Elon Musk, for example, started and sold a web software company called Zip2. With the proceeds from that business he started another business which merged with another and became PayPal. When PayPal was purchased by eBay, Musk founded another venture called SpaceX, which develops and manufactures space launch vehicles and currently launches satellites and delivers cargo to the International Space Station. Since those initial business start-ups, Musk has also started the electric car company Tesla and a solar power company called SolarCity. In addi- tion, he has started a design competition for a high-speed transportation system called Hyperloop, a not-for-profit arti- ficial intelligence company called OpenAI, and a neurotech- nology company called Neuralink. Perhaps your interest in marketing will lead to new business successes like Musk’s!5

Marketing: Delivering Value to Customers The American Marketing Association represents individuals and organizations in- volved in the development and practice of marketing worldwide. It defines marketing as the activity, set of institutions, and processes for creating, communicating, deliver- ing, and exchanging offerings that have value for customers, clients, partners, and so- ciety at large.6 This definition shows that marketing is far more than simply advertising or personal selling. It stresses the need to deliver genuine value in the offerings of goods, services, and ideas marketed to customers. Also, notice that an organization’s marketing activities should also create value for its partners and for society.

To serve both buyers and sellers, marketing seeks (1) to discover the needs and wants of prospective customers and (2) to satisfy them. These prospective customers include both individuals, buying for themselves and their households, and organiza- tions, buying for their own use (such as manufacturers) or for resale (such as wholesal- ers and retailers). The key to achieving these two objectives is the idea of exchange, which is the trade of things of value between a buyer and a seller so that each is better off after the trade.7

The Diverse Elements Influencing Marketing Actions Although an organization’s marketing activity focuses on assessing and satisfying con- sumer needs, countless other people, groups, and forces interact to shape the nature of its actions (see Figure 1–1). Foremost is the organization itself, whose mission and objectives determine what business it is in and what goals it seeks. Within the organi- zation, management is responsible for establishing these goals. The marketing depart- ment works closely with a network of other departments and employees to help provide the customer-satisfying products required for the organization to survive and prosper.

Figure 1–1 also shows the key people, groups, and forces outside the organization that influence its marketing activities. The marketing department is responsible for facilitating relationships, partnerships, and alliances with the organization’s custom- ers, its shareholders (or often representatives of nonprofit organizations), its suppliers, and other organizations. Environmental forces involving social, economic, technologi- cal, competitive, and regulatory considerations also shape an organization’s marketing actions. Finally, an organization’s marketing decisions are affected by and, in turn, often have an important impact on society as a whole.

The organization must strike a balance among the sometimes differing interests of these groups. For example, it is not possible to simultaneously provide the lowest- priced and highest-quality products to customers and pay the highest prices to suppli- ers, the highest wages to employees, and the maximum dividends to shareholders.

LO 1-1 Define marketing and identify the diverse factors that influence marketing actions.

The chief executive officer of Tesla and SpaceX began building businesses shortly after graduating from college. ©Reuters/Alamy Stock Photo

marketing The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

exchange The trade of things of value between buyer and seller so that each is better off after the trade.

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The Organization and Its Departments

SocietySociety

Other organizations

Suppliers

Partnerships

Alliances

Relationships

Ownership

Customers

Shareholders (owners)

Competitive RegulatorySocial Economic Technological

Environmental forces

Marketing department

Information technology department

Human resources

department

Research and

development department

Finance department

Senior management

Manufacturing department

What Is Needed for Marketing to Occur For marketing to occur, at least four factors are required: (1) two or more parties (indi- viduals or organizations) with unsatisfied needs, (2) a desire and ability on their part to have their needs satisfied, (3) a way for the parties to communicate, and (4) something to exchange.

Two or More Parties with Unsatisfied Needs Suppose you’ve developed an unmet need—a desire for a late-night meal after studying for an exam—but you don’t yet

know that Domino’s has a location in your area. Also unknown to you is that Domino’s has a special “mix & match” offer for any two or more of its menu items, just waiting to be ordered and picked up or delivered. This is an example of two parties with unmet needs: you, desiring a meal, and your local Domino’s owner, needing someone to place an order.

Desire and Ability to Satisfy These Needs Both you and the Domino’s owner want to satisfy these unmet needs. Further- more, you have the money to pay for a pur- chase and the time to place an order online, over the telephone, or at a Domino’s loca- tion. The Domino’s owner has the desire to sell its products but also the ability to do so since the items are easily made and delivered to (or picked up by) you.

A Way for the Parties to Communicate The marketing transaction of purchasing a

FIGURE 1–1 A marketing department relates to many people, organizations, and forces. Note that the marketing department both shapes and is shaped by its relation ship with these internal and external groups.

Marketing doesn’t happen in a vacuum. The text describes the four factors needed to buy a product from Domino’s Mix & Match menu. Source: Domino’s Pizza

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Domino’s pizza or one of its other products will never occur unless you are aware the prod- uct exists and you know how to make a purchase (at a street address, through a URL, or via a phone number). Similarly, Domino’s won’t be able to sell its products unless there’s a market of potential buyers nearby. When you receive a coupon on your phone or drive by and see the Domino’s store location, this communication barrier between you (the buyer) and the Domino’s owner (the seller) is overcome.

Something to Exchange Marketing occurs when the transaction takes place and both the buyer and seller exchange something of value. In this case, you exchange your money ($5.99) for each item ordered from Domino’s Mix & Match menu. Both you and the Domino’s owner have gained and also given up something, but you are both better off because each of you has satisfied the other’s unmet needs. You have the opportunity to eat Domino’s food items to satisfy your hunger, but you gave up some money to do so; the Domino’s owner gave up the pizza, salad, and other items but received money, which will help the owner remain in business. The ethical and regulatory foundations of this exchange process are central to marketing and are dis- cussed in Chapter 3.

1-1. What is marketing?

1-2. Marketing focuses on and consumer needs.

1-3. What four factors are needed for marketing to occur?

learning review

HOW MARKETING DISCOVERS AND SATISFIES CONSUMER NEEDS

The importance of discovering and satisfying consumer needs in order to develop and offer successful products is so critical to understanding marketing that we look at each of these two steps in detail next. Let’s start by asking you to analyze the three products below.

Discovering Consumer Needs The first objective in marketing is discovering the needs of prospective customers. Marketers often use customer surveys, concept tests, and other forms of marketing re- search (discussed in detail in Chapter 7) to better understand customer ideas. Many

LO 1-2 Explain how marketing discovers and satisfies consumer needs.

For these three products, identify (1) what benefits the product provides buyers and (2) what factors or “showstoppers” might doom the product in the marketplace. Answers are discussed in the text. (Left): ©Victor Virgile/Gamma- Rapho via Getty Images; (Middle): Source: The Coca-Cola Company; (Right): Source: YOYO

A wearable computer. A no sugar soda. A subscription service for automobiles.

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firms also use “crowdsourcing” websites to solicit and evaluate ideas from customers. At LEGO Group, for example, ideas that receive 10,000 votes from site visitors are considered for possible addition to the product line. LEGO Group products that were discovered through the website include its Ghostbusters Ectomobile ambulance, its Mars Curiosity Rover, and a set based on the Minecraft video game! Sometimes, how- ever, customers may not know or be able to describe what they need and want. Smart- phones, connected homes, and electric cars are all examples of this, in which case an accurate long-term prediction of consumer needs is essential.8

The Challenge: Meeting Consumer Needs with New Products While marketers are improving the ways they can generate new product ideas, experts estimate that it takes 3,000 raw ideas to generate one commercial success. Market intel- ligence agency Mintel estimates that 33,000 new products are introduced worldwide each month. In addition, studies of new-product launches indicate that about 40 percent of the products fail. Robert M. McMath, who has studied more than 110,000 new- product launches, has two key suggestions: (1) focus on what the customer benefit is, and (2) learn from past mistakes.9

The solution to preventing product failures seems embarrassingly obvious. First, find out what consumers need and want. Second, produce what they need and want, and don’t produce what they don’t need and want. The three products shown previ- ously illustrate just how difficult it is to achieve new-product success, a topic covered in more detail in Chapter 9.

Without reading further, think about the potential benefits to customers and possi- ble “showstoppers”—factors that might doom the product—for each of the three prod- ucts pictured. Some of the products may come out of your past, and others may be on your horizon. Here’s a quick analysis of the three products:

∙ Google Glass. In 2014 Google launched a wearable computer called Google Glass. The new product was head-mounted and similar in appearance to a pair of glasses. In addition, though, the glasses had Internet capabilities, a camera, phone, speaker, microphone, touch pad, and a heads-up display. Less than a year later Google announced that it would stop producing Google Glass. While the product was popular among technology enthusiasts it did not attract a mass market. Show- stoppers included its $1,500 price tag, a general perception that it looked “nerdy,” and concerns that wearing the device might violate privacy rights. Google is re- portedly working on a redesigned model, however, so watch for a new Glass!10

∙ Coca-Cola Stevia No Sugar. As consumer preferences have shifted, beverage com- panies have expanded their offerings to include drinks with less sugar. Soda pro- ducers, for example, have offered new products such as Pepsi True and Coca-Cola Life which are sweetened with sugar and stevia leaf extract. New products are also being developed in anticipation of the U.S. Food & Drug Administration’s new Nutrition Facts label requirements, taking effect in 2020, which will provide more information about added sugars. Coca-Cola, for example, is testing Coca-Cola Stevia which will be sweetened only with stevia. A potential showstopper: In the past consumers reported that products with stevia sweetener had a bitter aftertaste. Will Coca-Cola Stevia be different? As always, as a consumer you will be the judge!11

∙ YoYo. This pay-per-mile car subscription service hopes to disrupt the traditional car purchase and ownership experience by offering consumers access to any type of vehicle at any time at a cost lower than the $9,500 consumers spend on per- sonal transportation each year. Selection takes place on a smartphone and the vehicle can cost as little as $0.50 per mile, which also compares favorably with car-sharing costs such as $0.96 per mile for an Uber vehicle, or $1.50 per mile for a Zipcar. What are potential showstoppers? Consumers might not value ac- cess to different types of vehicles, always driving a new vehicle, or avoiding the responsibilities of ownership.12