Principles of Marketing, Eighth European Edition
By Philip Kotler, Gary Armstrong, Lloyd C Harris and Hongwei He
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