Marketing: Defined, Explained, Applied Second Edition

Michael Levens

Walsh College

Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo

Contents

IV

Contents PART

1 / ^ , Explaining 2

I EXAMPLE! Competitive Environment 17 [EXAMPLII Technological Environment 18 Consumer Markets

(Chapters 1-5)

19

Consumer Markets Explained Consumer Markets Applied

| The Meaning of Marketing

2

Business Markets

19 19

20

Business Markets Explained Chapter Outline Marketing

2

Business Markets Applied

3

20 21

[EXAMPCEI Business Markets 21

Marketing Explained ' 3 Marketing Applied

Visual Summary

23

3

[EXAMPLE [ Marketing

Marketing Concept

4

@ ©fospteir @ | Planning and Marketing in an Organization

5

Marketing Concept Explained Marketing Concept Applied

5

Chapter Outline

26

5 Planning Process

[EXAMPLE [ Marketing Concept

5

27

' Planning Process Explained

Evolution of Marketing: Early Years Until 1950 6 Evolution of Marketing: 1950-Present

Planning Process Applied

27 27

6 Strategic Planning

[EXAMPLE] Evolution of Marketing: 1950-Present

29

7 Strategic Planning Explained

Evolution of Marketing: Social Responsibility

7

LEXAMPLEJ Evolution of Marketing: Social Responsibility Marketing Functions

Strategic Planning Applied 8

29 30

[EXAMPLEI Strategic Planning, BCG Matrix 30

9

| EXAMPLE] Strategic Planning, Teva Balanced Scorecard 31

Marketing Functions Explained

9

Internal Marketing Participants

Marketing Planning

9

External Marketing Participants

32

Marketing Planning Explained

9

32

[ EXAMPLE ] External Marketing Participants 10

[EXAMPLE] Marketing Planning 32

Marketing Functions Applied

Marketing Planning Applied

Visual Summary

10

I | The Market in Marketing

34

14

A Broader Perspective

Marketing Environment

15

Marketing Environment Explained Marketing Environment Applied

Chapter Outline 15 15

15

[EXAMPLE I Microenvironment

38

Marketing and Society

Marketing and Society Applied

39 39

16

16

[EXAMPLE I Macroenvironment

39

Marketing and Society Explained

Marketing and Culture Macroenvironment

.38

on Marketing.

14

Microenvironment

33

[I^MEyD Marketing Planning, SWOT 33

11

Visual Summary

Chapter Outline

26

40

Marketing and Culture Explained 16

| EXAMPLE | Economic Environment 17

Marketing and Culture Applied [EXAMPLE j Culture

40

40 40

Contents Consumerism

41

Environmentalism

Creating 68

PART 2

[" EXAMPLE"] Consumerism

42

42

[EXAMPLE ] Environmentalism

43

(Chapters 6-9;

Marketing and the Law 44 Marketing and the Law Explained Marketing and the Law Applied | EXAMPTE] Regulations

44

Value for Customers

45

Marketing and Social Responsibility

46

Marketing and Social Responsibility Explained Marketing and Social Responsibility Applied

Chapter Outline

68

Customer Value

69

Customer Value Explained

46

Customer Value Applied

46

Customer Satisfaction

[ f x M « l ] Social Responsibility 47

69 69

71

Customer Satisfaction Explained

(JXAMPLE] Corporate Social Responsibility 47 Visual Summary

68

44

Customer Satisfaction Applied

48

71 71

Measuring Customer Satisfaction

72

[MAMPLt] Customer Satisfaction 72

Global Marketing Chapter Outline

52

Global Marketing

Customer Loyalty

72

The Value of a Customer

72

Customer Lifetime Value

73

Customer Retention

53

Global Marketing Explained Global Marketing Applied

Global Marketing Environment

Relationship Marketing

Relationship Marketing Applied 55

Global Trade 55

74 74

j EXAMPIEI Relationship Marketing Customer Relationship Management

[EXAMPLE] Global Trade 56

74 75

Customer Relationship Management Explained

57

Customer Relationship Management Applied

Political 57

Customer Identification

[ H A M R I ] Political

58

Legal 58 O^AMPL-EJ Legal 59

Customization

Global Marketing Environment Applied

59

61

Global Marketing Processes Explained

Visual Summary

78

(@) ©Cuspteir 1 | A Perspective on Consumer Behavior 82

[EXAMPLEI Market Selection 61

Chapter Outline 63

[EXAMPLE"] Global Marketing Processes 63 64

76

61

Market Selection .61

Market Entry Strategies 62 Global Marketing Strategy 62 Global Marketing Processes Applied

76

[EXAMPLE] Loyalty Programs 76 Technology

Global Marketing Processes

75

76

76

Loyalty Programs

59

75 75

75

Customer Differentiation

;

Customer Interaction

Visual Summary

74

Relationship Marketing Explained

55

Global Marketing Environment Explained

Cultural

73

| EXAMPLE] Customer Retention 73

53 53

I EXAMPLE | Global Marketing 54

Economic

52

82

Consumer Behavior

83

Consumer Behavior Explained Consumer Behavior Applied

83 83

VI

Contents

Consumer Decision-Making Process

84

The Brand

Consumer Decision-Making Process Explained 84 [EXAMPLE 1 Consumer Decision Making 84

Chapter Outline 114

Consumer Decision-Making Process Applied 85

Brand

115

Personal Influence on Decision Making 85

Brand Explained

[EXAMPLE [ Age and Life Stage 86

Brand Applied

["EXAMPLE! Affluence

[EXAMPLE! Brand

87

Psychological Influence on Decision Making 87

Brand Equity

115 115 116

117

Situational Influence on Decision Making 87

Brand Equity Explained

| EXAMPLE | Purchase Environment 88

Brand Equity Applied Brand Valuation

[ EXAMPLE I Digital Environment 88

[EXAMPIJE! Subculture [EXAMPLE] Groups

117 117

117

Building Brand Equity Social Influence on Decision Making 88

118

I EXAMPLE j Brand Equity 118

89

Global Brand Equity

118

j EXAMPLE | Global Brand Equity 119

90

Business-to-Business Brand Equity

Consumer Problem Solving 91

Building Strong Brands Explained " 120

Consumer Problem Solving Applied 91

Building Strong Brands Applied | EXAMPLE] Consumer Problem Solving 91

Brand Positioning

Brand Sponsorship

Chapter B | Consumer Insight

96

121

121

[EXAMPIE] Brand Sponsorship 121

Chapter Outline 96

[EXAMPLE] Licensing

Consumer Insight 97

[EXAMPLE] Co-Branding

Consumer Insight Explained 97

Brand Development

Consumer Insight Applied 97

122 122

122

| EXAMPLE I Line Extensions 123

Marketing Research 99

[EXAMPLE] Brand Extensions 123

Marketing Research Explained 99

[EXAMPLE] New Brands

99

Managing Brands

["EXAMPLE] Marketing Research 99

123

125

Managing Brands Explained

Define the Problem 100 Design the Research

120

120

Brand Name Selection

92

Marketing Research Applied

119

Building Strong Brands 120

Consumer Problem Solving Explained 91

Visual Summary

114

Managing Brands Applied

100

Brand Protection

125 125

125

[ EXAMPLE [ Marketing Research, Syndicated [EXAMP~LE] Brand Protection 126

Research 101 [ EXAMPLE | Marketing Research, Ethnographic Research 102

Visual Summary

PART 3

127

Strafegizing 130

[EXAMPLE [ Marketing Research, Internet Research Panel 103 Conduct the Research 105 Analyze the Research

106

Address the Problem in a Research Report Marketing Information System

107

Marketing Information System Explained Marketing Information System Applied

107 107

[EXAMPLE j Marketing Information System 108 Visual Summary 109

(Chapters 10-11)

106

and Positioning Chapter Outline 130 Segmentation

131

Segmenting, Targeting,

130

Contents Segmentation Explained Segmentation Applied

131

[ EXAMPLE [ Interior Views LLC Executive Summary 149

131

Company Description, Purpose, and Goals

Segmentation Base 133

150

| EXAMPLE j Interior Views LLC Company Description, Purpose,

Segmentation Base Explained

133

and Goals 150

'| EXAMPLE] Demographic Segmentation 133

Marketing Situation

151

[EXAMPLE I Psychoflraphic Segmentation 134

[EXAMPLE I Interior Views LLC Company Marketing

Segmentation Base Applied

Situation 151

134

Segmenting Business Markets

Forecasting

134

153

[EXAMPLE I Segmenting Business Markets 135

[ixAMPiFj interior Views LLC Forecasting 153

Segmenting International Markets

Marketing Strategy

135

155

[ EXAMPLE! Interior Views LLC Marketing Strategy 155

[EXAMPLE] Segmenting International Markets 135

Measurement and Controls

Targeting 136 Targeting Explained Targeting Applied

157

Interior Views LLC Measurement and Controls 157

136 136

HEXAMPLE] Targeting

VII

[EXAMPLE] Marketing Plan 158

136

Undifferentiated Marketing

Visual Summary

PART 4

[EXAMPLE] Undifferentiated Marketing 137 Differentiated Marketing

159

137

Managing. 162

137

[EXAMPLEI Differentiated Marketing 137 Niche Marketing

138

(Chapters 12--17)

| EXAMPLE | Niche Marketing 138 Global Targeting

138

2 | Product and Service

Selecting a Target 138 Positioning

Strategies

162

139

Positioning Explained Positioning Applied

Chapter Outline 162

139 139

[JXAMPL|] Positioning

Products and Services 139

Products and Services Explained Products and Services Applied

Using a Perceptual Map 140 j EXAMPLE] Perceptual Map

Selecting a Position

Levels of Product

140

163 163

164

[EXAMPLE] Levels of a Product 164

140

Developing a Brand Position Statement

Product Classifications

140

164

[EXAMPLF] Product Classifications 165

UXAMPLF] Brand Position Statement 141 Visual Summary

163

New Product Development

142

165

[EXAMPLF | New Product Development 166

©Chapter HH | The Marketing Plan

Product-Development Steps—Roles and Requirements Product and Service Quality Product Design

Chapter Outline 146

167

167

| EXAMPLE! Product Design 168

Business Plan 147 Business Plan Explained Business Plan Applied

147 147

["EXAMPLE I Business Plan 148

Product Portfolio

169

Product Portfolio Explained Product Portfolio Applied

169 169

[EXAMPLE! Product Portfolio 169

Marketing Plan 149 Marketing Plan Explained Marketing Plan Applied Executive Summary

;..146

149 149

149

Product Life Cycle 171 Product Life Cycle Explained Product Life Cycle Applied

171 171

167

VIII

Contents

Product Life Cycle and Marketing Strategies Duration of the Product Life Cycle

Channel Strategies Applied

172

172

Limitations of the Product Life Cycle

Channel Structure

173

199

199

Channel Organization 200 Channel Management

Visual Summary 174

200

[EXAMPLE] Channel Strategies 201

113 Pricing Strategies

178

202

Logistics Explained 202

Chapter Outline 178

Logistics Applied 202

Establishing Prices 179 Establishing Prices Explained Establishing Prices Applied Market Structure

Logistics

[ EXAMPLE I Logistics Systems 203

179

Physical Distribution

179

180

Cost-Based Pricing

204

Physical Distribution Explained 204

180

Physical Distribution Applied

204

[EXAMPLE I Cost-Based Pricing 182

Transportation

Demand and Price Elasticity 182

Warehousing

[EXWJPFEI Demand and Price Elasticity 182

I EXAMPLE ] Physical Distribution 205

Pricing Practices Explained Legal Requirements

205

Visual Summary

Pricing Practices 184

Pricing Practices Applied

204

207

184

(§) ©tafpteir US | Retailing and Wholesaling Strategies 210

184

184

I EXAMPLE] Legal Requirements 185.

Chapter Outline 210

Pricing Strategies 187 Retailing Pricing Strategies Explained Pricing Strategies Applied

Retailing Explained 211

187

Retailing Applied

[EXAMPLE] Pricing Strategies 187 188

Nonstore Retailing 213

[EXAMPLE] New Product and Service Pricing Strategies 188 Online and Storefront Pricing Strategies

189

214

Retail Strategies Explained

214

Retail Strategies Applied 214

190

Price Adjustment Strategies

["EXAMPLE! Nonstore Retailing 213 Retail Strategies

189

[EXAMPLE I Auction Pricing Strategies 190 Portfolio Pricing Strategies

211

Types of Retailers 211

New Product and Service Pricing Strategies

Auction Pricing Strategies

211

187

Merchandise Assortment

190

214

Level of Service 214 Atmospherics

I EXAMPLE] Price Adjustment Strategies 191

215

Location 215

Visual Summary 192

Promotion 215

p | Supply Chain and Distribution Strategies

Retail Price Policy 215

.196

[EXAMPLE] Retail Strategies 215 Wholesaling 217

Chapter Outline 196

Wholesaling Explained 217 Marketing Channels

197

Wholesaling Applied 217

Marketing Channels Explained Marketing Channels Applied

197 197

Types of Channel Intermediaries

198

[EXAMPLE! Marketing Channels 198 Channel Strategies

217

Types of Wholesalers 217 Merchant Wholesalers

217

Agents and Brokers 219 Manufacturers'Branches

199

Channel Strategies Explained

[EXAMPLE] Wholesaling

199

Visual Summary

220

219

Contents

IX

Step 4: Sales Presentation 242

ip H© | Advertising and Sales Promotion Strategies

.224

Step 5: Overcome Objections

242

Step 6: Close the Sale 242 Step 7: Follow-up 242

Chapter Outline 224

[EXAMPLE! Personal Selling Process 242 Marketing Communications

225

Marketing Communications Explained 225 Marketing Communications Applied

225

Sales Management

243

Sales Management Explained 243 Sales Management Applied 243

Communication Objectives 225 [EXAMPIE] Communication Objectives 226 Control and Credibility 226

LEXAMPLEJ Sales Management 243 Sales Management Process 244

: EXAMPLE [ Word of Mouth 227

Sales Management Process Explained

Relationship Building 227

Sales Management Process Applied 244 Setting Sales Force Objectives

Advertising 228

244

Developing the Sales Force Strategy "Advertising Explained 228 Advertising Applied Advertising Budget

Force 245

228

Evaluating the Sales Force 245

229

Message and Creative Strategy 229 Media Selection 229

[EXAMPLE] Employee Training 246 Direct Marketing

Evaluation 229

247

Direct Marketing Explained 247

' EXAMPLE" 1 Advertising

Sales Promotion

244

Recruiting, Compensating, Training, and Motivating the Sales

228

Advertising Objectives

244

230

Direct Marketing Applied 247 Mailorder

231

248

Telemarketing 249 Sales Promotion Explained 231 Sales Promotion Applied

Direct-Response Advertising 249

231 EUAMPLE] Direct-Response Advertising 249

•^EXAMPLE I Sales Promotion

231 • Internet 249

Public Relations 233

Consumer Privacy 250

Public Relations Explained 233

Visual Summary

251

Public Relations Applied 233 [EXAMPLE ] Public Relations 233 [EXAMPLE] Sponsorship

Visual Summary

PART s

Integrating 254

234

235

V (Chapters 1 8 - 2 0 )

O) ©Dnapteir H1 | Personal Selling and Direct Marketing Strategies 238

I The Communications Mix....254

Chapter Outline 238 Chapter Outline 254 Personal Selling 239 Integrated Marketing Communications

255

Personal Selling Explained 239 Integrated Marketing Communications Explained 255

Personal Selling Applied 239

Integrated Marketing Communications Applied 255 : EXAMPLE] Personal Selling 240 D|XAMPL|] Integrated Marketing Personal Selling Process 241

Communications 255

Personal Selling Process Explained 241 Personal Selling Process Applied Step 1: Prospecting 241 Step 2: Preapproach

241

Step 3: Approach 242

241

Communications Mix 256 Communications Mix Explained 256 [EXAMPLEI Communications Mix 256 Communications Mix Applied 256

Contents Media Types

258

Marketing-Mix Models

Media Types Explained Media Types Applied Broadcast

Marketing-Mix Models Explained

258

Marketing-Mix Models Applied

258

279 279

[EXAMPLEJ Marketing-Mix Models

| EXAMPLE | CPM

Print

258

279

280

259

Visual Summary

259

[EXAMPLE] Media Types Out-of-Home

260

Digital Media

261

281

260

E® | Marketing Performance " " Measurement

[EXAMPLE] Digital Media Branded Entertainment

261

Chapter Outline

284

262

[EXAMPLE] Branded Entertainment

Marketing Accountability

262

285

Marketing Accountability Explained Media Selection

285

263 [EXAMPLE] Marketing Accountability

Media Selection Explained Media Selection Applied Media Planning Media Buying

Marketing Accountability Applied

263

Measuring Marketing

264 264

Media Optimization

286

287

Measuring Marketing Explained Measuring Marketing Applied

266

Media Optimization Explained Media Optimization Applied

287 287

[EXAMPLE [ Measuring Marketing

266 266

[EXAMPLE] Media Optimization Visual Summary

Measuring Advertising 267

288

289

Measuring Advertising Explained Measuring Advertising Applied

268

289 289

[EXAMPLE] Measuring Advertising

©Gusipter HD | The Marketing Mix Chapter Outline Marketing Mix

272

272

Marketing Mix Applied

273

Marketing-Mix Strategies Applied Within the Marketing Mix

Return on Marketing Investment

275

Marketing-Mix Strategies Explained

292

293

Return on Marketing Investment Explained Return on Marketing Investment Applied

275 275

Visual Summary

293 293

294

275

| EXAMPLE] Marketing-Mix Strategies: Situation 1

276

[EXAMPLE I Marketing-Mix Strategies: Situation 2

276

j EXAMPLE | Marketing-Mix Strategies: Situation 3

276

i EXAMPLE | Marketing-Mix Strategies: Situation 4

277

rE~XAMPLE] Marketing-Mix Strategies: Situation 5

277

| EXAMPLE I Marketing-Mix Strategies: Situation 6

277

278

291 291

| EXAMPLE j Measuring Brand Health

273

Marketing-Mix Strategies

290

291

Measuring Brand Health Explained

273

Beyond the 4 Ps

Measuring Brand Health

Measuring Brand Health Applied

Marketing Mix Explained

285

263

Appendix

Notes

334

Glossary Index

Interior Views Marketing Plan

341

335

298

284