Marketing, 3rd Edition PDF by Dhruv Grewal, Michael Levy, Shane Mathews, Paul Harrigan, Tania Bucic and Foula Kopanidis


Marketing, Third Edition

By Dhruv Grewal, Michael Levy, Shane Mathews, Paul Harrigan, Tania Bucic and Foula Kopanidis

Marketing, 3rd Edition


About the authors xviii

About the Australian authors xxi

About the digital authors xxiii

Acknowledgments xxiii

Digital resources xxiv

New to this edition xxvi

Text at a glance xxx

Case matrix xxxiv

Overview of marketing xxxix

PART 1 Assessing the marketplace 1


What is marketing? 4

Marketing is about satisfying customer needs and wants 6

Marketing entails an exchange 6

Marketing requires product, price, place and promotion decisions 7

Marketing can be performed by both individuals and organisations 11

Marketing impacts various stakeholders 12

Marketing helps create value 13

How do marketing firms become more value driven? 16

Sharing information 16

Balancing benefits with costs 16

Building relationships with customers 17

Connecting with customers using social media platforms and digital tools 17

Why is marketing important? 19

Marketing expands firms’ global presence 20

Marketing is pervasive across marketing channel members 20

Marketing enriches society 21

Marketing can be entrepreneurial 21

Summing up 24

Key terms 24

Marketing applications 24

Quiz yourself 25

Net savvy 25

Superior service 1.1

Skiing industry offers service enhancements 9

Social media and mobile marketing 1.1

Mobile marketing: changing the landscape of advertising 11

Ethical and societal dilemma 1.1

Making a family business more valuable

by addressing gender inequality in the coffee market 12

Ethical and societal dilemma 1.2

Free fruit for children: what could go wrong? 13

Adding value 1.1

Jeans: from workwear to image-wear 14

Case study 1.1: from A to Z in Australia

By Dr Eugene Chan, Monash University 18

Case study 1.2: Why Telstra and not Belong?

By Dr Eugene Chan, Monash University 22

Chapter case study: Getting real with Dove

By Dr Eugene Chan, Monash University 25


Distinctly digital consumer elements 32

Digital channels 35

Websites 37

Search engines 38

Email 38

Mobile technology 39

Social media 39

Social media marketing 41

The 4E framework for social media 41

Customer engagement 42

Excite the customer 42

Educate the customer 43

Experience the product 44

Going mobile 44

Price-check apps 45

Fashion apps 46

Location-based apps 46

Digital strategy 47

Customer engagement 47

Customer data management 52

The future of digital marketing 53

Virtual worlds, augmented reality and wearable technology 53

Summing up 56

Key terms 57

Marketing applications 57

Quiz yourself 57

Net savvy 57

Adding value 2.1

The Commonwealth Bank invests in its future 36

Adding value 2.2

Engagement at 37

Case study 2.1: BMW: the innovation leader making the technological shift towards

digitalisation By Victoria Jennifer Harrison, Deakin University 39

Adding value 2.3

Dropbox educates its customers 43

Superior service 2.1

Telstra’s social customer service 45

Adding value 2.4

Co-creation with LEGO® 49

Case study 2.2: Sukin: the power of digital marketing in building a brand

By Victoria Jennifer Harrison, Deakin University 50

Superior service 2.2

Moshi Monsters 55

Adding value 2.5

Careers in social media marketing 55

Chapter case study: Coca-Cola: ‘Share a Coke’ By Harleen Dhillon, Deakin University 58


The scope of marketing ethics 67

Ethical issues associated with marketing decisions 67

Creating an ethical climate in the workplace 68

The influence of personal ethics 71

Why people act unethically 71

Ethics and corporate social responsibility 73

A framework for ethical decision-making 76

Step 1: Identify issues 76

Step 2: Gather information and identify stakeholders 76

Step 3: Brainstorm and evaluate alternatives 76

Step 4: Choose a course of action 77

Integrating ethics into marketing strategy 79

Planning phase 79

Implementation phase 80

Control phase 81

Corporate social responsibility 83

Employees 85

Customers 85

Marketplace 86

Society 86

Summing up 87

Key terms 88

Marketing applications 88

Quiz yourself 89

Net savvy 89

Case study 3.1: Shopkins: ‘Real Little’ brands for real little hands

By Dr Delane Osborne, Curtin University, and Dr Carol Osborne, Murdoch University 70

Adding value 3.1 Etiko: wear no evil, do no harm 72

Adding value 3.2 War on plastic bags: are Australian supermarkets taking action? 75

Social media and mobile marketing 3.1

Believe me . . . I’m a celebrity 80 Social media and mobile marketing 3.2

Ethics, information and Facebook: how my data becomes your data 81

Case study 3.2: Barramundi: an Australian icon? 86

Chapter case study: Greenwashing: walking the green talk

By Dr Eugene Chan, Monash University 89


A marketing environment analysis framework 97

The immediate environment 98

Company capabilities 98

Competitors 98

Corporate partners 98

Macroenvironmental factors 99

Culture 99

Demographics 100

Social trends 107

Technological advances 112

Economic situation 114

Political/legal environment 115

Responding to the environment 115

Summing up 118

Key terms 118

Marketing applications 119

Quiz yourself 119

Net savvy 119

Ethical and societal dilemma 4.1 The next target: infants? 101

Superior service 4.1

Chemist Warehouse for Chinese consumers 106

Adding value 4.1

Comparison sites 107

Adding value 4.2

When best is good enough: Netflix’s stellar predictive analytics 110

Case study 4.1: When video games and politics collide

By Dr Jacqueline Burgess, University of the Sunshine Coast 110

Superior service 4.2 Grocery retailers help time-poor consumers 112

Social media and mobile marketing 4.1

TransferWise making banking easier 113

Case study 4.2: The sustainability of luxury fashion

By Dr Jacqueline Burgess, University of the Sunshine Coast 116

Chapter case study: Greensteel at the Whyalla Steelworks

By Dr Jacqueline Burgess, University of the Sunshine Coast


PART 2 Understanding and targeting the marketplace 125


The consumer decision process 129

Need recognition 129

Search for information 130

Factors affecting consumers’ search processes 132

Evaluation of alternatives 134

Purchase and consumption 138

Postpurchase 139

Factors influencing the consumer decision process 143

Psychological factors 144

Social factors 147

Situational factors 148

Involvement and consumer buying decisions 153

Extended problem-solving 153

Limited problem-solving 154

Summing up 155

Key terms 155

Marketing applications 156

Quiz yourself 156

Net savvy 157

Adding value 5.1

Engaging with brands: the Instagram effect 131

Ethical and societal dilemma 5.1

The obesity epidemic and fast foods 133

Ethical and societal dilemma 5.2

Fit to wear the healthy/natural/organic label 135

Social media and mobile marketing 5.1

Shopping online with friends 137

Case study 5.1: Tourism Australia uses ingenious Hollywood magnet to pull in American visitors

By Victoria Jennifer

Harrison, Deakin University 141

Adding value 5.2 Judging a product by its cover 150

Case study 5.2: ‘Paytm karo’: situation changes everything

By Victoria Jennifer Harrison, Deakin University 151

Chapter case study: Influence of advertising on consumer behaviour

By Victoria Jennifer Harrison, Deakin University 157


The segmentation, targeting and positioning process 167

Step 1: Establish overall strategy or objectives 168

Step 2: Segmentation methods 168

Step 3: Evaluate segment attractiveness 178

Step 4: Select target market 180

Step 5: Develop positioning strategy 183

Positioning methods 186

Positioning using perceptual mapping 187

Summing up 190

Key terms 191

Marketing applications 192

Quiz yourself 192

Net savvy 192

Adding value 6.1

Samsung’s many markets 170

Social media and mobile marketing 6.1

Google’s your match 174

Social media and mobile marketing 6.2

Australian Open rebranding 175

Case study 6.1: The Coke story heard around the world

By Dr Eugene Chan, Monash University 177

Social media and mobile marketing 6.3

Spotify’s segments for everyone 180

Superior service 6.1

Customers flock to The ICONIC 182

Adding value 6.2

Zara’s changing logo and positioning 188

Case study 6.2: Starbucks in Australia: a failure to understand

By Dr Eugene Chan, Monash University 189

Chapter case study: One company, multiple brands

By Dr Eugene Chan, Monash University 193


The marketing research process 200

Step 1: Defining the objectives and research needs 201

Step 2: Designing the research 201

Step 3: The data collection process 202

Step 4: Analysing data and developing insights 202

Step 5: Action plan and implementation 204

Secondary data 204 Inexpensive external secondary data 205

Syndicated external secondary data 205

Internal secondary data 208

Primary data collection techniques 210

Observation 211

Social media research 212

In-depth interviews 215

Focus group interviews 216

Survey research 217

Panel and scanner-based research 220

Experimental research 220

Advantages and disadvantages of primary and secondary research 221

Emerging technology and the ethics of using customer information 222

Summing up 225

Key terms 226

Marketing applications 226

Quiz yourself 227

Net savvy 228

Adding value 7.1

Ipsos Australia 207

Superior service 7.1

Data capture and banking incentives 209

Ethical and societal dilemma 7.1

Who is watching whom? 211

Ethical and societal dilemma 7.2

How digital characters work 214

Superior service 7.2

When the sky is the delivery: drones in action 216

Case study 7.1: Many facets of the Ruby

By Dr Leanne Brereton, University of Wollongong 219

Case study 7.2: Digitally ethical connections

By Dr Leanne Brereton, University of Wollongong 224

Chapter case study: Yarra Valley Water and ‘Make every drop count—

Target 155’: the value of market research By Dr Leanne Brereton, University of Wollongong 228

PART 3 Value creation 235


Complexity and types of products 239

Complexity of products 239

Types of products 240

Product mix and product line decisions 241

Increase depth 242

Decrease depth 242

Decrease breadth 243

Increase breadth 243

Branding 245

Value of branding for customers and firms 246

Brand equity 247

Branding strategies 251

Brand ownership 251

Naming brands and product lines 252

Brand and line extensions 253

Co-branding 254

Brand licensing 254

Brand repositioning 254

Packaging 255

Product labelling 256

Summing up 257

Key terms 258

Marketing applications 258

Quiz yourself 259

Net savvy 259

Social media and mobile marketing 8.1

Lynx effect: Lynx Anarchy fragrance 243

Case study 8.1: Zara: never out of fashion By Shivani Gupta, Deakin University 244

Ethical and societal dilemma 8.1

Burger wars in India: fast-food chains are finding creative ways to enter a no-beef market 248

Case study 8.2: Modibodi product innovation in personal hygiene

By Katrina McCarter, Founder and CEO, Marketing to Mums 250

Ethical and societal dilemma 8.2

Pure water? Or pure spin? 256

Chapter case study: Coca-Cola promotes no-sugar consumption

By Dr Aila Khan and Dr Felicitas Evangelista, Western Sydney University 259


Reasons firms create new products 268

New products for growth 268

Changing customer needs 269

Market saturation 271

Managing risk through diversity 272

Fashion cycles 272

Improving business relationships 272

Diffusion of innovation 273

Innovators 275

Early adopters 276

Early majority 276

Late majority 276

Laggards 276

Using the diffusion of innovation theory 277

How firms develop new products 278

Idea generation 278

Concept development 282

Product development 283

Market testing 283

Product launch 284

Evaluation of results 286

The product life cycle 288

Introduction stage 289

Growth stage 289

Maturity stage 290

Decline stage 292

The shape of the product life cycle curve 292

Strategies based on product life cycle: some caveats 293

Summing up 294

Key terms 295

Marketing applications 295

Quiz yourself 296

Net savvy 296

Adding value 9.1

The demand for reusable bags 270

Ethical and societal dilemma 9.1

Innovation at all costs? Privacy concerns at the forefront 271

Ethical and societal dilemma 9.2

Drones 275

Adding value 9.2

LifeStraw: Innovation designed for the other 90

per cent 280

Social media and mobile marketing 9.1

From luxurious and expensive to fast and casual 281

Superior service 9.1

Coca-Cola Freestyle 286

Case study 9.1: Low-fat chocolate: love it, like it, hate it?

By Dr Nguyen (Beo) Thai, University of Wollongong 287

Adding value 9.3 New options to better serve customers 291

Case study 9.2: Vinyl is making a comeback

By Dr Nguyen (Beo) Thai, University of Wollongong 293

Chapter case study: Do co-working spaces really work?

By Dr Nguyen (Beo) Thai, University of Wollongong 296


Services marketing differs from product marketing 304

Intangible 304 Inseparable production and consumption 306

Heterogeneous 306 Perishable 306 Providing great service: the service gaps model 308

The knowledge gap: understanding customer expectations 309

Evaluating service quality using well-established marketing metrics 310

Evaluating the zone of tolerance 312

The standards gap: setting service standards 314

The delivery gap: delivering service quality 314

The communication gap: communicating the service promise 317

Service quality and customer satisfaction and loyalty 319

Service recovery 321

Listening to the customers and involving them in the service recovery 322

Finding a fair solution 323

Resolving problems quickly 324

Summing up 324

Key terms 325

Marketing applications 325

Quiz yourself 326

Net savvy 326

Adding value 10.1

SugarSync cloud backup 305

Case study 10.1: Pet insurance— a service from the heart

By Dr Rajeev Sharma, Charles Darwin University 307

Adding value 10.2 Wolgan Valley service quality 310

Social media and mobile marketing 10.1

Growth of digital marketing in Australia 316

Ethical and societal dilemma 10.1

Fake reviews 317

Superior service 10.1 Amazon: Prime service 319

Case study 10.2: Visiting Uluru— a new set of expectations

By Dr Rajeev Sharma, Charles Darwin University 320

Social media and mobile marketing 10.2

Spotify cares 321

Chapter case study: Happy Airways— how to keep the passengers happy!

By Dr Rajeev Sharma, Charles Darwin University 326

PART 4 Value capture, delivery and communication 331


The five Cs of pricing 336

Pricing: 1. Company objectives 336

Profit orientation 336

Sales orientation 337

Competitor orientation 338

Customer orientation 338

Pricing: 2. Customers 338

Demand curves and pricing 339

Price elasticity of demand 340

Pricing: 3. Costs 344

Variable costs 344

Fixed costs 345

Total cost 345

Break-even analysis and decision-making 345

Markup and target return pricing 347

Pricing: 4. Competition 347

Pricing: 5. Channel members 349

Macro influences on pricing 350

The internet 350

Economic factors 353

Considerations for setting price strategies 353

Cost-based pricing methods 353

Competition-based pricing methods 354

Value-based pricing methods 354

New product pricing strategies 355

Pricing tactics 358

Pricing tactics aimed at consumers 358

Business pricing tactics and discounts 362

Summing up 364

Key terms 365

Marketing applications 365

Quiz yourself 366

Net savvy 366

Adding value 11.1

Price in-store, online and in new markets 338

Ethical and societal dilemma 11.1

The verdict: Apple conspired to raise prices on e-books 342

Superior service 11.1 Great service lowers price elasticity 343

Case study 11.1: Your next cup of coffee 349

Social media and mobile marketing 11.1 Pricing on eBay 352

Case study 11.2: Operating a tall ship in a price-sensitive marketplace

By Vikki Baldwin, University of Notre Dame 357

Superior service 11.2 Leasing for cashflow 360

Chapter case study: The role of pricing in Australia’s streaming media: a case of Netflix versus Disney+

By Shivani Gupta and Shriya Sivaji, Deakin University 367


The importance of marketing channel/ supply chain management 374

Marketing channels add value 376

Marketing channel management affects other aspects of marketing 377

Designing marketing channels 378

Direct marketing channel 378

Indirect marketing channel 378

Managing the marketing channel and supply chain 378

Managing the marketing channel and supply chain through vertical marketing systems 379

Managing marketing channels and supply chains through strategic relationships 381

Making merchandise flow through marketing channels 386

Distribution centres versus direct store delivery 386

The distribution centre 387

Inventory management through just-in-time inventory systems 389

Retailing 391

Choosing retail partners 392

Channel structure 393

Customer expectations 393

Channel member characteristics 394

Distribution intensity 394

Identify types of retailers 395

Food retailers 395

General-merchandise retailers 396

Services retailers 399

Benefits of stores for consumers 400

Browsing 400

Touching and feeling products 400

Personal service 400

Cash and credit payment 400

Entertainment and social experience 400

Immediate gratification 401

Risk reduction 401

Benefits of the internet and multichannel retailing 401

Deeper and broader selection 401

Personalisation 401

Expand market presence 402

Effective multichannel retailing 403

Integrated CRM 403

Brand image 403

Pricing 404

Supply chain 404

Summing up 404

Key terms 406

Marketing applications 406

Quiz yourself 407

Net savvy 407

Adding value 12.1

How will 3D printing alter the supply chain? 375

Ethical and societal dilemma 12.1 Do customers care more about

the newest iPhone or about working conditions in China? 382

Social media and mobile marketing 12.1

Virtual store fronts? What would this mean for the supply chain? 384

Case study 12.1: Retail theft: the dark side of retailing

By Dr Saalem Sadeque, Central Queensland University 385

Case study 12.2: The road ahead for Village Cinemas

By Dr Saalem Sadeque, Central Queensland University 390

Superior service 12.1

Terry White Chemists and online doctor consultation via Skype 398

Superior service 12.2

The globalisation of online retail 402

Chapter case study: Hypercompetition in the Australian retail sector By

Dr Saalem Sadeque, Central Queensl and University 407


Communicating with consumers 414

The communication process 414

How consumers perceive communication 417

The AIDA model 419

Awareness 419

Interest 420

Desire 420

Action 420

Elements of an integrated marketing communications strategy 421

Advertising 421

Step 1: Identify target audience 423

Step 2: Set advertising objectives 423

Informative advertising 423

Persuasive advertising 423

Reminder advertising 424

Focus of advertisements 424

Step 3: Determine the advertising budget 425

Step 4: Convey the message 425

The message 425

The appeal 426

Step 5: Evaluate and select media 426

Mass and niche media 427

Choosing the right medium 427

Determining the advertising schedule 428

Step 6: Create advertisements 428

Step 7: Assess impact using marketing metrics 431

Public relations 433

Sales promotions 435

Types of sales promotion 435

Using sales promotion tools 437

Personal selling 438

Direct marketing 439

Online marketing 440

Planning for and measuring IMC success 441

Goals 441

Setting and allocating the IMC budget 442

Measuring success using marketing metrics 442

Traditional media 443

Web-based media 443

Planning, implementing and evaluating IMC programs: an illustration of Google advertising 443

Summing up 447

Key terms 448

Marketing applications 449

Quiz yourself 450

Net savvy 450

Adding value 13.1

Arts Centre Melbourne ‘Fuelling imaginations’. Agency: Ogilvy Melbourne 415

Social media and mobile marketing 13.1

Tasty: a revolution in marketing or just the latest example of IMC? 417

Ethical and societal dilemma 13.1

Volkswagen tries to put emissions woes behind it as it vows to ‘Think New’ 429

Ethical and societal dilemma 13.2

When make-up companies really do make up models’ faces 430

Case study 13.1: Consumers shopping big for ‘Little Shop’

By Dr Delane Osborne and Dr Carol Osborne, Curtin University 432

Adding value 13.2 Puma’s use of Google Analytics 445

Case study 13.2: Star Wars: an integrated marketing force

By Dr Eugene Chan, Monash University 446

Chapter case study: An ‘All Mitey’ battle

By Shriya Sivaji and Manasa Ramakrishnan, Deakin University 450

Quiz yourself answer key 455

Appendix 1 Understanding ethics using scenarios 458

Appendix 2 Using secondary data to assess Customer Lifetime Value (CLV) 461

Glossary 464

Index 476

Online Appendix Writing a marketing plan

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