Principles of Marketing, 8th European Edition PDF by Philip Kotler, Gary Armstrong, Lloyd C Harris and Hongwei He

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Principles of Marketing, Eighth European Edition

By Philip Kotler, Gary Armstrong, Lloyd C Harris and Hongwei He

Principles of Marketing, 8th European Edition

Contents

Preface xvi

About the authors xx

Acknowledgements xxii

Part 1

Defining marketing and the marketing process

1 Marketing: creating customer value and engagement 2

Chapter preview 2

Learning outcomes 2

What is marketing? 5

Marketing defined 6

The marketing process 6

Understanding the marketplace and customer needs 7

Customer needs, wants and demands 7

Market offerings – products, services and experiences 7

Customer value and satisfaction 8

Exchanges and relationships 9

Markets 9

Designing a customer value-driven marketing strategy and plan 10

Selecting customers to serve 10

Choosing a value proposition 10

Marketing management orientations 11

Preparing an integrated marketing plan and programme 14

Building customer relationships 14

Customer relationship management 14

Partner relationship management 19

Capturing value from customers 20

Creating customer loyalty and retention 20

Growing share of customer 20

Building customer equity 21

The changing marketing landscape 23

The digital age: online, mobile and social media marketing 23

Social media marketing 24

Mobile marketing 24

The changing economic environment 25

The growth of not-for-profit marketing 26

Rapid globalisation 27

Sustainable marketing – the call for more

environmental and social responsibility 27

So, what is marketing? Pulling it all together 28

Learning outcomes review 30

Navigating the key terms 31

Discussion and critical thinking 32

Discussing the concepts 32

Critical-thinking exercises 32

Mini-cases and applications 32

Online, mobile and social media marketing:

The ALS Ice Bucket Challenge 32

Marketing ethics: is Big Brother watching? 32

Marketing by numbers: what’s a customer worth? 33

Video case: Eskimo Joe’s 33

References 33

Company case: Argos: creating customer

value amid change and turbulence 35

2 Company and marketing strategy: partnering to build customer engagement, value and relationships 38

Chapter preview 38

Learning outcomes 38

Company-wide strategic planning: defining marketing’s role 41

Defining a market-oriented mission 41

Setting company objectives and goals 42

Designing the business portfolio 43

Planning marketing: partnering to build customer relationships 47

Partnering with other company departments 47

Partnering with others in the marketing system 48

Marketing strategy and the marketing mix 49

Customer value-driven marketing strategy 49

Developing an integrated marketing mix 51

Managing the marketing effort 53

Marketing analysis 53

Marketing planning 54

Marketing implementation 54

Marketing department organisation 56

Marketing control 56

Measuring and managing marketing return

on investment 57

Learning outcomes review 58

Navigating the key terms 59

Discussion and critical thinking 60

Discussing the concepts 60

Critical-thinking exercises 60

Mini-cases and applications 60

Online, mobile and social media marketing:

Google’s (Alphabet’s) mission 60

Marketing ethics: creating value or distracting consumers? 60

Marketing by numbers: profitability 61

Video case: Konica 62

References 62

Company case: LEGO: one more brick

in the wall? 63

Part 2

Understanding the marketplace

and consumers

3 Analysing the marketing

environment 68

Chapter preview 68

Learning outcomes 68

The microenvironment 71

The company 71

Suppliers 71

Marketing intermediaries 72

Competitors 73

Publics 74

Customers 74

The macroenvironment 75

The demographic environment 75

Geographic shifts in population 81

The economic environment 85

The natural environment 87

The technological environment 90

The political and social environment 91

The cultural environment 93

Responding to the marketing environment 96

Learning outcomes review 97

Navigating the key terms 97

Discussion and critical thinking 98

Discussing the concepts 98

Critical-thinking exercises 98

Mini-cases and applications 98

Online, mobile and social media marketing:

sharing economy 98

Marketing ethics: how young is too young? 98

Marketing by numbers: tiny markets 99

References 99

Company case: Fitbit: riding the fitness

wave to glory 102

4 Managing marketing

information to gain customer

insights 106

Chapter preview 106

Learning outcomes 106

Marketing information and customer insights 109

Marketing information and today’s ‘big data’ 109

Managing marketing information 110

Assessing marketing information needs 110

Developing marketing information 111

Internal data 111

Competitive marketing intelligence 112

Marketing research 113

Defining the problem and research

objectives 114

Developing the research plan 114

Gathering secondary data 115

Primary data collection 116

Implementing the research plan 124

Interpreting and reporting the findings 125

Analysing and using marketing information 125

Customer relationship management (CRM) 125

Big data and marketing analytics 126

Distributing and using marketing information 127

Other marketing information considerations 128

Marketing research in small businesses and

non-profit organisations 128

International marketing research 129

Public policy and ethics in marketing research 130

Learning outcomes review 132

Navigating the key terms 133

Discussion and critical thinking 133

Discussing the concepts 133

Critical-thinking exercises 134

Mini-cases and applications 134

Online, mobile and social media

marketing: the trail you leave behind 134

Marketing ethics: metadata 134

Marketing by numbers: the value of

information 134

Video case: Nielsen 135

References 135

Company case: Holland & Barrett: choosing the

good life! by Dr Eleri Rosier, Cardiff University 137

5 Consumer markets and buyer

behaviour 140

Chapter preview 140

Learning outcomes 140

Model of consumer behaviour 143

Characteristics affecting consumer behaviour 144

Cultural factors 144

Social factors 148

Personal factors 151

Psychological factors 154

Types of buying decision behaviour 157

Complex buying behaviour 157

Dissonance-reducing buying behaviour 158

Habitual buying behaviour 158

Variety-seeking buying behaviour 159

The buyer decision process 159

Need recognition 160

Information search 160

Evaluation of alternatives 161

Purchase decision 161

Post-purchase behaviour 161

The buyer decision process for new products 162

Stages in the adoption process 162

Individual differences in innovativeness 163

Influence of product characteristics on

rate of adoption 163

Learning outcomes review 164

Navigating the key terms 165

Discussion and critical thinking 165

Discussion the concepts 165

Critical-thinking exercises 166

Mini-cases and applications 166

Online, mobile and social media

marketing: digital influencer credibility 166

Marketing ethics: ultimate water 166

Marketing by numbers: evaluating

alternatives 167

Video case: IMG Worldwide 167

References 167

Company case: Porsche: guarding the old

while bringing in the new 169

6 Business markets and business

buyer behaviour 172

Chapter preview 172

Learning outcomes 172

Business markets 175

Market structure and demand 175

Nature of the buying unit 176

Types of decisions and the decision

process 176

Business buyer behaviour 177

Major types of buying situations 177

Participants in the business buying

process 178

Major influences on business buyers 179

The business buying process 181

Engaging business buyers with digital and social marketing 183

E-procurement and online purchasing 183

Business-to-business digital and social media marketing 184

Institutional and government markets 185

Institutional markets 185

Government markets 186

Learning outcomes review 187

Navigating the key terms 188

Discussion and critical thinking 188

Discussing the concepts 188

Critical-thinking exercises 189

Mini-cases and applications 189

Online, mobile and social media marketing: e-procurement and mobile procurement 189

Marketing ethics: commercial bribery 189

Marketing by numbers: salespeople 190

Video case: Eaton 190

References 190

Company case: Procter & Gamble: treating

business customers as strategic partners 191

Part 3

Designing a customer value-driven strategy and mix

7 Customer-driven marketing strategy: creating value for target customers 196

Chapter preview 196

Learning outcomes 196

Customer-driven marketing strategy 199

Market segmentation 200

Segmenting consumer markets 200

Segmenting business markets 205

Segmenting international markets 206

Requirements for effective segmentation 207

Market targeting 207

Evaluating market segments 207

Selecting target market segments 208

Differentiation and positioning 215

Positioning maps 215

Choosing a differentiation and positioning strategy 216

Communicating and delivering the chosen position 221

Learning outcomes review 222

Navigating the key terms 223

Discussion and critical thinking 223

Discussing the concepts 223

Critical-thinking exercises 223

Mini-cases and applications 224

Online, mobile and social media marketing: get your Groupon 224

Marketing ethics: unrealistic bodies 224

Marketing by numbers: USAA 224

References 225

Company case: Volvo cars 226

8 Products, services and brands:

building customer value 230

Chapter preview 230

Learning outcomes 230

What is a product? 233

Products, services and experiences 233

Levels of product and services 234

Product and service classifications 235

Product and service decisions 238

Individual product and service decisions 238

Product line decisions 244

Product mix decisions 245

Services marketing 246

The nature and characteristics of a service 246

Marketing strategies for service firms 247

Branding strategy: building strong brands 251

Brand equity and brand value 251

Building strong brands 252

Managing brands 259

Learning outcomes review 259

Navigating the key terms 260

Discussion and critical thinking 261

Discussing the concepts 261

Critical-thinking exercises 261

Mini-cases and applications 261

Online, mobile and social media

marketing: feeding pets from your

smartphone 261

Marketing ethics: geographical

indication 261

Marketing by numbers: Pop-Tarts Gone

Nutty! 262

References 262

Company case: Telenor Health and Tonic

digital health services by Ilma Nur Chowdhury,

Alliance Manchester Business School,

The University of Manchester 264

9 Developing new products and

managing the product life cycle 268

Chapter preview 268

Learning outcomes 268

New product development strategy 271

The new product development process 271

Idea generation 271

Idea screening 274

Concept development and testing 275

Marketing strategy development 276

Business analysis 277

Product development 277

Test marketing 277

Commercialisation 278

Managing new product development 278

Customer-centred new product

development 279

Team-based new product development 279

Systematic new product development 280

Product life-cycle strategies 282

Introduction stage 285

Growth stage 286

Maturity stage 286

Decline stage 288

Additional product and service

considerations 289

Product decisions and social responsibility 289

International product and services

marketing 290

Learning outcomes review 291

Navigating the key terms 292

Discussion and critical thinking 292

Discussing the concepts 292

Critical-thinking exercises 292

Mini-cases and applications 293

Online, mobile and social media

marketing: telemedicine 293

Marketing ethics: put on your

thinking caps! 293

Marketing by numbers: dental

house-calls 293

References 294

Company case: Dyson: reinventing

continuously, by Yansong Hu, Warwick

Business School 296

10 Pricing: understanding and

capturing customer value 300

Chapter preview 300

Learning outcomes 300

What is a price? 303

Major pricing strategies 303

Customer value-based pricing 304

Cost-based pricing 306

Competition-based pricing 310

Other internal and external considerations

affecting price decisions 311

Overall marketing strategy, objectives

and mix 311

Organisational considerations 312

The market and demand 313

The economy 315

Other external factors 316

Learning outcomes review 316

Navigating the key terms 317

Discussion and critical thinking 317

Discussing the concepts 317

Critical-thinking exercises 317

Mini-cases and applications 318

Online, mobile and social media

marketing: online price tracking 318

Marketing ethics: the cost of a life 318

Marketing by numbers: reseller margins 318

References 319

Company case: Cath Kidston: nostalgic

fantasy that creates value for consumers 319

11 Pricing strategies: additional

considerations 322

Chapter preview 322

Learning outcomes 322

New product pricing strategies 325

Market-skimming pricing 325

Market-penetration pricing 325

Product mix pricing strategies 326

Product line pricing 326

Optional-product pricing 326

Captive-product pricing 327

By-product pricing 327

Product bundle pricing 328

Price adjustment strategies 328

Discount and allowance pricing 328

Segmented pricing 329

Psychological pricing 330

Promotional pricing 331

Geographical pricing 331

Dynamic and online pricing 332

International pricing 334

Price changes 335

Initiating price changes 335

Responding to price changes 337

Public policy and pricing 338

Pricing within channel levels 339

Pricing across channel levels 340

Learning outcomes review 341

Navigating the key terms 342

Discussion and critical thinking 342

Discussing the concepts 342

Critical-thinking exercises 342

Mini-cases and applications 343

Online, mobile and social media

marketing: extreme couponing 343

Marketing ethics: airfare pricing 343

Marketing by numbers: Louis Vuitton

price increase 343

References 344

Company case: Dacia: the birth of a nifty little

Carpathian warrior, by Dr Cristina Sambrook,

Birmingham Business School 345

12 Marketing channels: delivering

customer value 348

Chapter preview 348

Learning outcomes 348

Supply chains and the value delivery network 351

The nature and importance of marketing

channels 352

How channel members add value 352

Number of channel levels 354

Channel behaviour and organisation 355

Channel behaviour 355

Vertical marketing systems 356

Horizontal marketing systems 358

Multi-channel distribution systems 359

Changing channel organisation 360

Channel design decisions 362

Analysing consumer needs 362

Setting channel objectives 363

Identifying major alternatives 363

Evaluating the major alternatives 364

Designing international distribution

channels 365

Channel management decisions 365

Selecting channel members 366

Managing and motivating channel

members 366

Evaluating channel members 367

Public policy and distribution decisions 368

Marketing logistics and supply chain

management 368

Nature and importance of marketing logistics 368

Sustainable supply chains 370

Goals of the logistics system 370

Major logistics functions 371

Integrated logistics management 373

Learning outcomes review 375

Navigating the key terms 376

Discussion and critical thinking 377

Discussing the concepts 377

Critical-thinking exercises 377

Mini-cases and applications 377

Online, mobile and social media

marketing: self-publishing 377

Marketing ethics: supplier safety 377

Marketing by numbers: Tyson expanding

distribution 378

Video case: Progressive 378

References 378

Company case: Thorntons: a journey to

revitalise its brand 380

13 Retailing and wholesaling 384

Chapter preview 384

Learning outcomes 384

Retailing 387

Connecting brands with consumers 387

Types of retailers 387

Retailer marketing decisions 393

Retailing trends and developments 399

Wholesaling 405

Types of wholesalers 406

Wholesaler marketing decisions 408

Trends in wholesaling 410

Learning outcomes review 411

Navigating the key terms 412

Discussion and critical thinking 412

Discussing the concepts 412

Critical-thinking exercises 412

Mini-cases and applications 412

Online, mobile and social media

marketing: skipping the checkout line 412

Marketing ethics: marketplace fairness 413

Marketing by numbers: stockturn rate 413

References 413

Company case: Lush: striving for the ultimate

customer experience 415

14 Engaging consumers and

communicating customer

value: integrated marketing

communications strategy 418

Chapter preview 418

Learning outcomes 418

The promotion mix 421

Integrated marketing communications 421

The new marketing communications

model 422

The need for integrated marketing

communications 423

A view of the communication process 425

Steps in developing effective marketing

communication 426

Identifying the target audience 427

Determining the communication

objectives 427

Designing a message 428

Message content 428

Choosing the communication channels

and media 430

Selecting the message source 431

Collecting feedback 431

Setting the total promotion budget and mix 432

Setting the total promotion budget 432

Shaping the overall promotion mix 433

Integrating the promotion mix 436

Socially responsible marketing

communication 436

Advertising and sales promotion 437

Personal selling 437

Learning outcomes review 438

Navigating the key terms 439

Discussion and critical thinking 439

Discussing the concepts 439

Critical-thinking exercises 439

Mini-cases and applications 439

Online, mobile and social media

marketing: #withoutshoes 439

Marketing ethics: an ethical promotion? 440

Marketing by numbers: advertising-tosales

ratios 440

Video case: OXO 440

References 441

Company case: Marie Curie: understanding

service user experiences, by Philippa

Hunter-Jones, Lynn Sudbury-Riley and Ahmed

Al-Abdin, University of Liverpool Management

School, UK 442

15 Advertising and public relations 446

Chapter preview 446

Learning outcomes 446

Advertising 450

Setting advertising objectives 450

Setting the advertising budget 454

Developing advertising strategy 455

Evaluating advertising effectiveness and

the return on advertising investment 467

Other advertising considerations 468

Public relations 469

The role and impact of PR 471

Major public relations tools 471

Learning outcomes review 472

Navigating the key terms 473

Discussion and critical thinking 473

Discussing the concepts 473

Critical-thinking exercises 473

Mini-cases and applications 474

Online, mobile and social media

marketing: Facebook audience network 474

Marketing ethics: native advertising 474

Marketing by numbers: C3, CPM and CPP 474

References 475

Company case: ASICS Advertising and PR in the era

of social media, by Caterina Presi, Leeds

University Business School 477

16 Personal selling and sales

promotion 480

Chapter preview 480

Learning outcomes 480

Personal selling 482

The nature of personal selling 483

The role of the sales force 484

Managing the sales force 485

Designing the sales force strategy

and structure 485

Recruiting and selecting salespeople 488

Training salespeople 489

Compensating salespeople 490

Supervising and motivating salespeople 491

Evaluating salespeople and sales force

performance 492

Social selling: online, mobile and social

media tools 493

The personal selling process 495

Steps in the selling process 495

Personal selling and managing customer

relationships 498

Sales promotion 499

The rapid growth of sales promotion 499

Sales promotion objectives 500

Major sales promotion tools 500

Developing the sales promotion

programme 504

Learning outcomes review 505

Navigating the key terms 506

Discussion and critical thinking 506

Discussing the concepts 506

Critical-thinking exercises 506

Mini-cases and applications 507

Online, mobile and social media

marketing: snap it and redeem it! 507

Marketing ethics: walking the customer 507

Marketing by numbers: sales force analysis 507

Video case: First Flavor 508

References 508

Company case: SunGard: building sustained

growth by selling the SunGard way 510

17 Direct, online, social media and

mobile marketing 514

Chapter preview 514

Learning outcomes 514

Direct and digital marketing 516

The new direct marketing model 517

Rapid growth of direct and digital

marketing 517

Benefits of direct and digital marketing to

buyers and sellers 518

Forms of direct and digital marketing 519

Marketing, the internet and the digital age 519

Online marketing 520

Social media marketing 525

Mobile marketing 529

Traditional direct marketing forms 531

Direct-mail marketing 531

Catalogue marketing 532

Telemarketing 533

Direct-response television marketing 534

Kiosk marketing 534

Public policy issues in direct and

digital marketing 535

Irritation, unfairness, deception and fraud 535

Consumer privacy 536

A need for action 537

Learning outcomes review 539

Navigating the key terms 541

Discussion and critical thinking 541

Discussing the concepts 541

Critical-thinking exercises 541

Mini-cases and applications 542

Online, mobile and social media

marketing: ‘Buy’ buttons 542

Marketing ethics: #Fail 542

Marketing by numbers: field sales versus

telemarketing 542

Video case: Nutrisystem 543

References 543

Company case: The ASOS experience,

by Ewelina Lacka, University of Edinburgh

Business School 547

Part 4

Extending marketing

18 Creating competitive advantage 550

Chapter preview 550

Learning outcomes 550

Competitor analysis 553

Identifying competitors 553

Assessing competitors 554

Selecting competitors to attack and avoid 556

Designing a competitive intelligence

system 558

Competitive strategies 559

Approaches to marketing strategy 559

Basic competitive strategies 560

Competitive positions 562

Market leader strategies 563

Market challenger strategies 565

Market follower strategies 566

Market nicher strategies 567

Balancing customer and competitor

orientations 568

Learning outcomes review 569

Navigating the key terms 570

Discussion and critical thinking 570

Discussing the concepts 570

Critical-thinking exercises 570

Mini-cases and applications 571

Online, mobile and social media

marketing: social logins 571

Marketing ethics: creating competitive

advantage … to what end? 571

Marketing by numbers: market share 571

Video case: Umpqua Bank 572

References 572

Company case: YouTube: Google’s

quest for video dominance 573

19 The global marketplace 576

Chapter preview 576

Learning outcomes 576

Global marketing today 579

Elements of the global marketing

environment 580

The international trade system 580

Economic environment 583

Political-legal environment 584

Deciding whether to go global 588

Deciding which markets to enter 588

Deciding how to enter the market 589

Exporting 590

Joint venturing 591

Direct investment 592

Deciding on the global marketing

programme 593

Product 594

Promotion 595

Price 597

Distribution channels 598

Deciding on the global marketing

organisation 599

Learning outcomes review 600

Navigating the key terms 600

Discussion and critical thinking 601

Discussing the concepts 601

Critical-thinking exercises 601

Mini-cases and applications 601

Online, mobile and social media

marketing: China’s great firewall 601

Marketing ethics: global safety

standards 602

Marketing by numbers: Netflix’s

global expansion 602

Video case: Monster 602

References 603

Company case: Chang beer: Thainess in a

bottle, by Angela Carroll, Leeds

Business School 605

20 Social responsibility and ethics 608

Chapter preview 608

Learning outcomes 608

Sustainable marketing 611

Social criticisms of marketing 612

Marketing’s impact on individual

consumers 612

Marketing’s impact on society as a whole 616

Marketing’s impact on other businesses 619

Consumer actions to promote sustainable

marketing 620

Consumerism 620

Environmentalism 621

Public actions to regulate marketing 624

Business actions toward sustainable

marketing 624

Sustainable marketing principles 625

Marketing ethics 627

The sustainable company 630

Learning outcomes review 630

Navigating the key terms 631

Discussion and critical thinking 631

Discussing the concepts 631

Critical-thinking exercises 631

Mini-cases and applications 632

Online, mobile and social media

marketing: teenagers and social media 632

Marketing ethics: milking the

international market 632

Marketing by numbers: the cost of

sustainability 632

Video case: Honest Tea 633

References 633

Company case: Innocent Drinks: golden

wind egg or red herring? by Guido Berens,

Rotterdam School of Management 634

Appendix 1: Marketing plan 637

Appendix 2: Marketing by numbers 648

Glossary 666

Index 678

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