Marketing management Chapter 1 potx

Upper Saddle River, New Jersey 07458
PHILIP KOTLER
Northwestern University
k
KEVIN LANE KELLER
Dartmouth College
Library of Congress Cataloging-in-Publication Data
Kotler, Philip.
Marketing management / Philip Kotler, Kevin Keller.—Twelfth ed.
p.
cm.
Includes bibliographical references and index.
ISBN 0-13-145757-8
1.
Marketing—Management. I. Keller, Kevin Lane, 1956- II. Title.
HF5415.13.K64 2006
658.8—dc22
2004029595
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PEARSON
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This book is dedicated to my wife and best
friend, Nancy, with love.
This book is dedicated to my wife, Punam,
and my two daughters, Carolyn and Allison,
with much love and thanks.
DEDICATION
ABOUT THE AUTHORS
Philip Kotler is one of the world's leading authorities on marketing. He is the 5. C.
Johnson & Son Distinguished Professor of International Marketing at the Kellogg
School of Management, Northwestern University. He received his master's degree
at the University of Chicago and his Ph.D. at MIT, both in economics. He did post-
doctoral work in mathematics at Harvard University and in behavioral science at the
University of Chicago.
Dr. Kotler is the co-author of Principles of Marketing and Marketing: An
Introduction. His Strategic Marketing for Nonprofit Organizations, now in its sixth
edition, is the best seller in that specialized area. Dr. Kotler's other books include
Marketing Models; The New Competition; Marketing Professional Services;
Strategic Marketing for Educational Institutions; Marketing for Health Care
Organizations; Marketing Congregations; High Visibility; Social Marketing;
Marketing Places; The Marketing of Nations; Marketing for Hospitality and

Tourism;
Standing Room Only—Strategies for Marketing the Performing Arts;
Museum Strategy and Marketing; Marketing Moves; Kotler on Marketing; Lateral
Marketing:
Ten Deadly Marketing Sins; and Corporate Social Responsibility.
In addition, he has published more than one hundred articles in leading
jour-
nals, including the Harvard Business Review, Sloan Management Review, Business
Horizons, California Management Review, the Journal of Marketing, the Journal
of Marketing Research, Management Science, the Journal of Business Strategy,
and Futurist. He is the only three-time winner of the coveted Alpha Kappa Psi
award for the best annual article published in the Journal of Marketing.
Professor Kotler was the first recipient of the American Marketing
Association's (AMA) Distinguished Marketing Educator Award (1985). The
European Association of Marketing Consultants and Sales Trainers awarded him
their Prize for Marketing Excellence. He was chosen as the Leader in Marketing
Thought by the Academic Members of the AM A in a 1975 survey. He also
received the 1978 Paul Converse Award of the AM
A,
honoring his original con-
tribution to marketing. In 1995, the Sales and Marketing Executives International
(SMEI) named him Marketer of the
Year.
In 2002, Professor Kotler received the
Distinguished Educator Award from The Academy of Marketing Science. He has
received honorary doctoral degrees from Stockholm University, the University of
Zurich, Athens University of Economics and Business, DePaul University, the
Cracow School of Business and Economics, Groupe
H.E.C.
in Paris, the Budapest

School of Economic Science and Public Administration, and the University of
Economics and Business Administration in Vienna.
Professor Kotler has been a consultant to many major U.S. and foreign com-
panies, including IBM, General Electric,
AT&T,
Honeywell, Bank of America,
Merck, SAS Airlines, Michelin, and others in the areas of marketing strategy and
planning, marketing organization, and international marketing.
He has been Chairman of the College of Marketing of the Institute of
Management Sciences, a Director of the American Marketing Association, a Trustee
of the Marketing Science Institute, a Director of the MAC Group, a member of the
Yankelovich Advisory Board, and a member of the Copernicus Advisory Board. He
was a member of the Board of Governors of the School of the Art Institute of
Chicago and a member of the Advisory Board of the Drucker Foundation. He has
traveled extensively throughout Europe, Asia, and South America, advising and lec-
turing to many companies about global marketing opportunities.
Kevin Lane Keller is the E. B. Osborn Professor of Marketing at the Tuck School of
Business at Dartmouth College. Professor Keller has degrees from Cornell,
Carnegie-Mellon, and Duke universities. At Dartmouth, he teaches an MBA elec-
tive on strategic brand management and lectures in executive programs on that
topic. Previously, Professor Keller was on the faculty of the Graduate School of
Business at Stanford University, where he also served as the head of the market-
ing group. Additionally, he has been on the marketing faculty at the University of
California at Berkeley and the University of North Carolina at Chapel
Hill,
been a
visiting professor at Duke University and the Australian Graduate School of
Management, and has two years of industry experience as Marketing Consultant
for Bank of America.
Professor Keller's general area of expertise is in consumer marketing. His spe-

cific research interest is in how understanding theories and concepts related to
consumer behavior can improve marketing strategies. The research has been
published in over fifty papers in three of the major marketing journals—the
Journal of Marketing, the Journal of Marketing Research, and the Journal of
Consumer Research. He also has served on the Editorial Review Boards of those
journals. His research has been widely cited and has received numerous awards.
Professor Keller is acknowledged as one of the international leaders in the
study of brands, branding, and strategic brand management. Actively involved
with industry, he has worked on a host of different types of marketing projects.
He has served as brand confidant to marketers for some of the world's most suc-
cessful brands, including Accenture, American Express, Disney, Ford, Intel, Levi
Strauss, Miller Brewing, Procter & Gamble, and Starbucks. He has done addition-
al brand consulting with other top companies such as Allstate, Beiersdorf (Nivea),
Blue Cross Blue Shield, Campbell Soup, General Mills, Goodyear, Kodak, The
Mayo Clinic, Nordstrom, Shell Oil, Unilever, and Young & Rubicam. He is also an
academic trustee for the Marketing Science Institute. A popular speaker, he has
conducted marketing seminars and workshops with top executives in a variety of
forums.
Professor Keller is currently conducting studies that address marketing strate-
gies and tactics to build, measure, and manage brand equity. His textbook on
those subjects, Strategic Brand Management, the second edition of which was
published September 2002 by Prentice-Hall, has been heralded as the "bible of
branding."
An avid sports, music, and film enthusiast, in his spare time, he helps to man-
age and market one of Australia's great rock and roll treasures, The Church.
Professor Keller lives in New Hampshire with his wife, Punam (also a Tuck
mar-
keting professor), and his two daughters, Carolyn and Allison.
BRIEF CONTENTS
Preface xxix

PART 1 Understanding Marketing Management 2
Chapter 1 Defining Marketing for the 21st Century 3
Chapter 2 Developing Marketing Strategies and Plans 35
PART 2 Capturing Marketing Insights 70
Chapter 3 Gathering Information and Scanning the Environment 71
Chapter 4 Conducting Marketing Research and Forecasting Demand 101
PART 3 Connecting with Customers 138
Chapter 5 Creating Customer Value, Satisfaction, and Loyalty 139
Chapter 6 Analyzing Consumer Markets 173
Chapter 7 Analyzing Business Markets 209
Chapter 8 Identifying Market Segments and Targets 239
PART 4 Building Strong Brands 272
Chapter 9 Creating Brand Equity 273
Chapter 10 Crafting the Brand Positioning 309
Chapter 11 Dealing with Competition 341
PART 5 Shaping the Market Offerings 370
Chapter 12 Setting Product Strategy 371
Chapter 13 Designing and Managing Services 401
Chapter 14 Developing Pricing Strategies and Programs 431
PART 6 Delivering Value 466
Chapter 15 Designing and Managing Value Networks and Channels 467
Chapter 16 Managing Retailing, Wholesaling, and Logistics 503
PART 7 Communicating Value 534
Chapter 17 Designing and Managing Integrated Marketing Communications 535
Chapter 18 Managing Mass Communications: Advertising, Sales Promotions,
Events, and Public Relations 567
Chapter 19 Managing Personal Communications: Direct Marketing
and Personal Selling 603
PART 8 Creating Successful Long-Term Growth 632
Chapter 20 Introducing New Market Offerings 633

Chapter 21 Tapping into Global Markets 667
Chapter 22 Managing a Holistic Marketing Organization 695
Appendix A1
Glossary G1
Image Credits C1
Name Index 11
Company, Brand, and Organization Index 14
Subject Index 112
(
CONTENTS
Preface xxix
PART 1 Understanding Marketing Management 2
Chapter 1 Defining Marketing for the 21st Century 3
The Importance of Marketing 4
The Scope of Marketing 5
What Is Marketing? 5
MARKETING MEMO Marketers' Frequently Asked Questions 6
Exchange and Transactions 6
What Is Marketed? 8
Who Markets? 10
MARKETING INSIGHT New Consumer Capabilities 11
How Business and Marketing Are Changing 13
MARKETING MEMO The Ten Rules of Radical Marketing 13
Company Orientations Toward the Marketplace 15
The Production Concept 15
The Product Concept 15
The Selling Concept 15
The Marketing Concept 16
The Holistic Marketing Concept 16

MARKETING INSIGHT The Internet Advantage 17
Fundamental Marketing Concepts, Trends, and Tasks 24
Core Concepts 24
Shifts in Marketing Management 27
Marketing Management Tasks 29
Summary 31
Applications 31
Notes 32
Chapter 2 Developing Marketing Strategies and Plans 35
Marketing and Customer Value 36
The Value Delivery Process 36
The Value Chain 38
Core Competencies 39
A Holistic Marketing Orientation and Customer Value 40
The Central Role of Strategic Planning 41
MARKETING INSIGHT Views on Marketing from Chief
Executive Officers 42
MARKETING INSIGHT Keys to Long-Term Market
Leadership 43
xi
f CONTENTS 1
Corporate and Division Strategic Planning 44
Defining the Corporate Mission 44
Defining the Business 45
Assessing Growth Opportunities 47
Organization and Organizational Culture 50
Business Unit Strategic Planning 51
The Business Mission 51
SWOT Analysis 52
Goal Formulation 54

MARKETING MEMO Checklist for Performing
Strengths/Weaknesses Analysis 55
Strategic Formulation 56
Program Formulation and Implementation 58
MARKETING INSIGHT Marketing's Contribution to
Shareholder Value 58
Feedback and Control 59
Product Planning: The Nature and Contents of a Marketing
Plan 60
Contents of the Marketing Plan 60
TING MEMO Marketing Plan Criteria 61
Summary 67
Applications 67
Notes 68
PART 2 Capturing Marketing Insights 70
Chapter 3 Gathering Information and Scanning the Environment 71
Components of a Modern Marketing Information System 72
Internal Records and Marketing Intelligence 73
The Order-to-Payment Cycle 73
Sales Information Systems 73
Databases, Data Warehousing, and Data Mining 74
The Marketing Intelligence System 74
MARKETING INSIGHT Putting Data to Work with Business
Integration Software 75
Analyzing the Macroenvironment 77
MARKETING MEMO Clicking on the Competition 77
Needs and Trends 77
MARKETING INSIGHT Ten Megatrends Shaping the
Consumer Landscape 78
Identifying the Major Forces 78

The Demographic Environment 79
Worldwide Population Growth 79
Population Age Mix 80
Ethnic and Other Markets 81
Educational Groups 83
Household Patterns 83
Geographical Shifts in Population 84
Other Major Macroenvironments 85
Economic Environment 85
Social-Cultural Environment 87
Natural Environment 89
MARKETING INSIGHT Green Marketing 91
Technological Environment 92
Political-Legal Environment 93
Summary 95
Applications 96
Notes 97
Chapter 4 Conducting Marketing Research and Forecasting Demand 101
The Marketing Research System 102
The Marketing Research Process 103
Step 1: Define the Problem, the Decision Alternatives, and the
Research Objectives 104
Step 2: Develop the Research Plan 104
MARKETING INSIGHT Conducting Informative Focus
Groups 106
MARKETING MEMO Questionnaire Dos and Don'ts 107
MARKETING INSIGHT Getting into Consumers' Heads with
Qualitative Research 109
Step 3: Collect the Information 112
MARKETING MEMO Pros and Cons of Online Research 113

MARKETING INSIGHT Global Online Market Research
Challenges 114
Step 4: Analyze the Information 114
Step 5: Present the Findings 114
Step 6: Make the Decision 115
Overcoming Barriers to the Use of Marketing Research 116
Measuring Marketing Productivity 116
Marketing Metrics 117
MARKETING INSIGHT Seeing the Big Picture and Getting
to the Bottom Line in Marketing 117
Measuring Marketing Plan Performance 119
Profitability Analysis 122
Marketinq-Mix Modeling 125
3 3
XIII
[CONTENTS
Forecasting and Demand Measurement 125
The Measures of Market Demand 126
A Vocabulary for Demand Measurement 127
Estimating Current Demand 130
Estimating Future Demand 132
Summary 134
Applications 135
Notes 136
PART 3 Connecting with Customers 138
Chapter 5 Creating Customer Value, Satisfaction, and Loyalty 139
Building Customer Value, Satisfaction, and Loyalty 140
Customer Perceived Value 141
Total Customer Satisfaction 144
Measuring Satisfaction 145

Product and Service Quality 146
Total Quality Management 147
Maximizing Customer Lifetime Value 148
Customer Profitability 149
Measuring Customer Lifetime Value 150
Customer Equity 151
Cultivating Customer Relationships 152
Customer Relationship Management (CRM) 152
MARKETING INSIGHT Progress and Priorities in Customer
Equity Management 153
Attracting,
Retaining, and Growing Customers 154
MARKETING MEMO How to Handle Customer Complaints 156
Building Loyalty 157
Reducing Customer Defection 158
Forming Strong Customer Bonds 159
MEMO Asking Questions when Customers
Leave 159
MARKETING MEMO Forming Strong Customer Bonds 160
Customer Databases and Database Marketing 162
Customer Databases 162
Data Warehouses and Datamining 163
The Downside of Database Marketing and CRM 165
MARKETING INSIGHT Succeeding at CRM 167
Summary 167
Applications 168
Notes 169
CONTENTS
Chapter 6 Analyzing Consumer Markets 173
What Influences Consumer Behavior? 174

Cultural Factors 174
MARKETING INSIGHT Consumer Trends for the Future 176
Social Factors 176
MARKETING INSIGHT Marketing to Cultural Market
Segments 178
Personal Factors 180
MARKETING MEMO The Average American Consumer
Quiz 181
Key Psychological Processes 184
Motivation:
Freud, Maslow, Herzberg 184
Perception 185
Learning 187
Memory 187
The Buying Decision Process: The Five-Stage Model 191
Problem Recognition 191
Information Search 191
Evaluation of Alternatives 193
MARKETING MEMO Applying Customer Value Analysis 196
Purchase Decisions 196
Postpurchase Behavior 198
Other Theories of Consumer Decision Making 199
Level of Consumer Involvement 200
Decision Heuristics and Biases 201
MARKETING MEMO Decision Traps 202
Mental Accounting 202
Profiling the Customer Buying Decision Process 203
Summary 203
Applications 203
Notes 205

Chapter 7 Analyzing Business Markets 209
What Is Organizational Buying? 210
The Business Market Versus the Consumer Market 210
MARKETING INSIGHT Big Sales to Small Business 210
Buying Situations 212
MARKETING MEMO Guidelines for Selling to Small
Business 212
Systems Buying and Selling 213
XV
Participants in the Business Buying Process 214
The Buying Center 214
Buying Center Influences 215
Buying Center Targeting 215
The Purchasing/Procurement Process 217
Purchasing Orientations 218
Types of Purchasing Processes 218
Purchasing Organization and Administration 219
Stages in the Buying Process 219
Problem Recognition 220
General Need Description and Product Specification 221
Supplier Search 222
E-Procurement 222
MARKETING INSIGHT The Business-to-Business (B2B)
Cyberbuying Bazaar 223
Proposal Solicitation 225
Supplier Selection 225
MARKETING MEMO Methods of Assessing Customer Value 226
Order-Routine Specification 227
Performance Review 227
MARKETING INSIGHT Establishing Corporate Trust

and Credibility 228
Managing Business-to-Business Customer Relationships 228
The Benefits of Vertical Coordination 228
Business Relationships: Risks and Opportunism 230
Institutional and Government Markets 230
MARKETING MEMO Selling Tech to the Government 233
Summary 234
Applications 234
Notes 235
Chapter 8 Identifying Market Segments and Targets 239
Levels of Market Segmentation 240
Segment Marketing 240
Niche Marketing 242
Local Marketing 244
MARKETING INSIGHT Experiential Marketing 245
Customerization 246
Segmenting Consumer Markets 247
Geographic Segmentation 247
Demographic Segmentation 249
Psychographic Segmentation 252
MARKETING INSIGHT Marketing to Generation Y 253
MARKETING MEMO Cheat Sheet for 21-Year-Olds 253
Behavioral Segmentation 254
Bases for Segmenting Business Markets 258
Marketing to Small Businesses 258
Sequential Segmentation 260
Market Targeting 261
Effective Segmentation Criteria 262
Evaluating and Selecting the Market Segments 262
Additional Considerations 264

Summary 268
Applications 268
Notes 269
PART 4 Building Strong Brands 272
Chapter 9 Creating Brand Equity 273
What Is Brand Equity? 274
The Role of Brands 274
MARKETING MEMO The Brand Report Card 275
The Scope of Branding 275
Defining Brand Equity 276
Brand Equity as a Bridge 278
Brand Equity Models 278
Building Brand Equity 281
Choosing Brand Elements 281
Designing Holistic Marketing Activities 284
MARKETING INSIGHT Applying Permission
Marketing 285
Leveraging Secondary Associations 287
Measuring Brand Equity 288
MARKETING INSIGHT The Brand Value Chain 288
Brand Audits 289
Brand Tracking 290
Brand Valuation 290
Managing Brand Equity 291
Brand Reinforcement 291
MARKETING INSIGHT What Is a Brand Worth? 292
MARKETING MEMO Twenty-First-Century
Branding 294
Brand Revitalization 294
Brand Crisis 295

xvii
Devising a Branding Strategy 296
Branding Decision: To Brand or Not to Brand? 297
Brand Extensions 297
Brand Portfolios 301
MARKETING MEMO Research Insights on Brand
Extensions 301
Summary 303
Applications 303
Notes 304
Chapter 10 Crafting the Brand Positioning 309
Developing and Communicating a Positioning Strategy 310
Competitive Frame of Reference 311
MARKETING INSIGHT Value Disciplines Positioning 311
Points-of-Parity and Points-of-Difference 312
Establishing Category Membership 314
Choosing POPs and PODs 315
Creating POPs and PODs 316
i MEMO Writing a Positioning Statement 316
Differentiation Strategies 318
MARI ETING MEMO How to Derive Fresh Consumer Insights to
Differentiate Products and Services 318
Product Differentiation 319
Personnel Differentiation 319
Channel Differentiation 320
Image Differentiation 320
Product Life-Cycle Marketing Strategies 321
MARKETING MEMO Exceeding Customer Expectations 322
Product Life Cycles 322
Style,

Fashion, and Fad Life Cycles 323
Marketing Strategies: Introduction Stage and the Pioneer
Advantage 324
Marketing Strategies: Growth Stage 325
Marketing Strategies: Maturity Stage 326
Marketing Strategies: Decline Stage 329
The Product Life-Cycle Concept: Critique 331
Market Evolution 331
MARKETING INSIGHT Dynamics of Attribute Competition 334
Summary 335
Applications 335
Notes 337
xviii
Chapter 11 Dealing with Competition 341
Competitive Forces 342
Identifying Competitors 343
Industry Concept of Competition 344
Market Concept of Competition 346
Analyzing Competitors 347
Strategies 347
Objectives 347
Strengths and Weaknesses 347
Selecting Competitors 348
Competitive Strategies for Market Leaders 349
MARKETING MEMO Benchmarking to Improve Competitive
Performance 349
Expanding the Total Market 350
MARKETING INSIGHT When Your Competitor Delivers
More for Less 351
Defending Market Share 352

Expanding Market Share 355
Other Competitive Strategies 355
Market-Challenger Strategies 355
Market-Follower Strategies 359
MARKETING MEMO Making Smaller Better 360
Market-Nicher Strategies 362
MARKETING MEMO Niche Specialist Roles 364
MARKETING MEMO Strategies for Entering Markets Held
by Incumbent Firms 364
Balancing Customer and Competitor Orientations 365
Competitor-Centered Companies 365
Customer-Centered Companies 365
Summary 366
Applications 366
Notes 367
PART 5 Shaping the Market Offerings 370
Chapter 12 Setting Product Strategy 371
Product Characteristics and Classifications 372
Product Levels: The Customer Value Hierarchy 372
Product Classifications 373
Differentiation 376
Product Differentiation 376
Design:
The Integrative Force 377
xix
Services Differentiation 378
MARKETING INSIGHT Design as a Powerful Marketing
Tool 379
Product and Brand Relationships 380
The Product Hierarchy 380

Product Systems and Mixes 381
Product-Line Analysis 382
Product-Line Length 384
MARKETING INSIGHT Rationalizing Brand Portfolios
for Growth 387
Product-Mix Pricing 387
Co-Branding and Ingredient Branding 390
Packaging, Labeling, Warranties, and Guarantees 392
MARKETING MEMO Making Ingredient Branding Work 392
Packaging 393
Labeling 394
Warranties and Guarantees 395
Summary 396
Applications 397
Notes 398
Chapter 13 Designing and Managing Services 401
The Nature of Services 402
Service Industries Are Everywhere 402
Categories of Service Mix 403
Distinctive Characteristics of Services 405
Marketing Strategies for Service Firms 408
A Shifting Customer Relationship 408
MARKETING MEMO A Service Marketing Checklist 409
Holistic Marketing for Services 410
MARKETING INSIGHT Voice Mail Hell 410
Managing Service Quality 412
Customer Expectations 412
Best Practices of Service-Quality Management 414
MARKETING INSIGHT The Role of Expectations in Service-
Quality Perceptions 415

MARKETING MEMO Assessing E-Service Quality 416
MARKETING MEMO Recommendations for Improving
Service Quality 417
MARKETING MEMO Getting Self-Service Kiosks Off the
Ground 418
Managing Service Brands 421
Differentiating Services 422
Developing Brand Strategies for Services 423
Managing Product Support Services 424
Identifying and Satisfying Customer Needs 425
Postsale Service Strategy 425
Summary 426
Applications 426
Notes 427
Chapter 14 Developing Pricing Strategies and Programs 431
Understanding Pricing 432
MARKETING INSIGHT The Internet and Pricing Effects
on Sellers and Buyers 433
How Companies Price 433
Consumer Psychology and Pricing 434
Setting the Price 436
Step 1: Selecting the Pricing Objective 437
MARKETING MEMO When to Use Price Cues 437
Step 2: Determining Demand 439
Step 3: Estimating Costs 441
MARKETING MEMO Three Myths about Pricing Strategy 441
Step 4: Analyzing Competitors' Costs, Prices, and Offers 443
Step 5: Selecting a Pricing Method 444
Step 6: Selecting the Final Price 448
MARKETING INSIGHT Stealth Price Increases 449

Adapting the Price 450
Geographical Pricing (Cash, Countertrade, Barter) 450
Price Discounts and Allowances 451
Promotional Pricing 452
Differentiated Pricing 453
Initiating and Responding to Price Changes 455
Initiating Price Cuts 455
Initiating Price Increases 455
MARKETING INSIGHT Smart Pricing Takes Off 456
MARKETING MEMO Marketing Strategies to Avoid Raising
Prices 458
Reactions to Price Changes 458
Responding to Competitors' Price Changes 460
Summary 461
Applications 461
Notes 463
PART 6 Delivering Value 466
Chapter 15 Designing and Managing Value Networks and Channels 467
Marketing Channels and Value Networks 468
The Importance of Channels 468
Channel Development 469
MARKETING MEMO Multichannel Shopping Checklist 470
Value Networks 470
The Role of Marketing Channels 472
Channel Functions and Flows 472
Channel Levels 474
MARKETING INSIGHT M-Commerce Opens Up New
Opportunities for Marketers 475
Service Sector Channels 476
Channel-Design Decisions 476

Analyzing Customers' Desired Service Output Levels 476
Establishing Objectives and Constraints 477
Identifying Major Channel Alternatives 477
MARKETING INSIGHT How Carmax is Transforming
the Auto Business 479
Evaluating the Major Alternatives 481
Channel-Management Decisions 483
Selecting Channel Members 483
Training Channel Members 483
Motivating Channel Members 483
Evaluating Channel Members 485
Modifying Channel Arrangements 485
Channel Integration and Systems 486
Vertical Marketing Systems 486
MARKETING MEMO Designing a Customer-Driven
Distribution System 487
Horizontal Marketing Systems 488
Multichannel Marketing Systems 489
Conflict, Cooperation, and Competition 491
Types of Conflict and Competition 491
Causes of Channel Conflict 491
Managing Channel Conflict 492
Legal and Ethical Issues in Channel Relations 493
E-Commerce Marketing Practices 493
Pure-Click Companies 494
MARKETING INSIGHT Burst of the Dot-Com Bubble 495
Brick-and-Click Companies 495
xxii
Summary 497
Applications 498

Notes 499
Chapter 16 Managing Retailing, Wholesaling, and Logistics 503
Retailing 504
Types of Retailers 504
New Models for Success 506
MARKETING INSIGHT Franchise Fever 508
MARKETING MEMO Helping Stores to Sell 509
Marketing Decisions 509
MARKETING INSIGHT Making Labels Smarter 513
MARKETING MEMO What Women Want from Customer
Service 514
Trends in Retailing 517
Private Labels 518
House Brands 518
The Private Label Threat 519
Wholesaling 520
The Growth and Types of Wholesaling 521
Wholesaler Marketing Decisions 521
Trends in Wholesaling 522
Market Logistics 523
MARKETING MEMO Strategies for High-Performance
Wholesaler-Distributors 524
Integrated Logistics Systems 524
Market-Logistics Objectives 525
Market-Logistics Decisions 526
Organizational Lessons 529
Summary 530
Applications 530
Notes 532
PART 7 Communicating Value 534

Chapter 17 Designing and Managing Integrated Marketing
Communications 535
The Role of Marketing Communications 536
Marketing Communications and Brand Equity 536
The Communications Process Models 539
Developing Effective Communications 541
Identify the Target Audience 541
Determine the Communications Objectives 542
Design the Communications 544
MARKETING INSIGHT Celebrity Endorsements as a
Strategy 547
Select the Communications Channels 548
MARKETING INSIGHT Buzz Marketing 549
Establish the Total Marketing Communications Budget 552
MARKETING INSIGHT Hitting the Bull's Eye in a Post-
Mass-Market World 553
Deciding on the Marketing Communications Mix 554
Characteristics of the Marketing Communications Mix 555
Factors in Setting the Marketing Communications Mix 556
Measuring Communication Results 557
Managing the Integrated Marketing Communications
Process 558
Coordinating Media 558
Implementing IMC 560
MARKETING INSIGHT Coordinating Media to Build Brand
Equity 560
MARKETING MEMO How Integrated Is Your IMC Program? 562
Summary 562
Applications 563
Notes 564

Chapter 18 Managing Mass Communications: Advertising, Sales
Promotions, Events, and Public Relations 567
Developing and Managing an Advertising Program 568
Setting the Objectives 568
Deciding on the Advertising Budget 569
Developing the Advertising Campaign 570
MARKETING MEMO Print AD Evaluation Criteria 573
Deciding on Media and Measuring Effectiveness 574
Deciding on Reach, Frequency, and Impact 574
Choosing Among Major Media Types 575
Alternative Advertising Options 576
Selecting Specific Vehicles 579
MARKETING INSIGHT Playing Games with Brands 581
Deciding on Media Timing and Allocation 581
Evaluating Advertising Effectiveness 583
How to Sell in Hard Times 584
MARKETING INSIGHT Understanding the Effects of
Advertising and Promotion 585
xxiv
Sales Promotion 585
Objectives 585
Advertising versus Promotion 586
Major Decisions 587
Events and Experiences 591
Events Objectives 591
Major Decisions 592
Public Relations 593
Marketing Public Relations 594
Major Decisions in Marketing PR 595
Summary 596

Applications 597
Notes 598
Chapter 19 Managing Personal Communications: Direct Marketing
and Personal Selling 603
Direct Marketing 604
The Benefits of Direct Marketing 604
Direct Mail 606
MARKETING MEMO The Public and Ethical Issues in Direct
Marketing 606
MARKETING MEMO When Your Customer Is a Committee 608
Catalog Marketing 609
Telemarketing 611
Other Media for Direct-Response Marketing 611
Interactive Marketing 612
The Benefits of Interactive Marketing 613
Designing an Attractive Web Site 613
MARKETING MEMO Just Your Type 614
Placing Ads and Promotion Online 614
E-Marketing Guidelines 615
Designing the Sales Force 616
Sales Force Objectives and Strategy 617
Sales Force Structure 618
Sales Force Size 618
MARKETING INSIGHT Major Account Management 619
Sales Force Compensation 619
Managing the Sales Force 620
Recruiting and Selecting Representatives 620
Training and Supervising Sales Representatives 620
Sales Rep Productivity 621
Motivating Sales Representatives 623

Evaluating Sales Representatives 624