Marketing the core 8th edition

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.

1 2 3 4 5 6 7 8 9 LWI 21 20 19

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

iii

iv

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.

v

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

vi

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

vii

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...

13 14

©Shutterstock/wavebreakmedia

For Students

Create

SmartBook iSeeit! Videos Mini Simulation

Marketing Plan Prep

Marketing Analytics

Video Cases/ Analytics

Lo w

er O

rd er

Th in

ki ng

S ki

lls H

ig he

r O rd

er Th

in ki

ng S

ki lls

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.

gre87719_fm_i-xlii.indd 17 14/11/18 9:48 AM

xii

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