Contemporary marketing 13e by hurt

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contemporary

MARKETING

13e

David L. Kurtz
Distinguished Professor of Marketing and
R.A. and Vivian Young Chair
of Business Administration
University of Arkansas

Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States


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Contemporary Marketing, Thirteenth Edition
David L. Kurtz

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COPYRIGHT © 2008, 2006
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CONTINUING A LEGACY OF EXCELLENCE—
BOONE & KURTZ . . . IN A CLASS BY ITSELF!
Products often begin their lives as something extraordinary, and as they grow they continue to
evolve. The most successful products in the marketplace are those that know their strengths and have
branded and marketed those strengths to form a passionate emotional connection with loyal users
and relationships with new users every step of the way. Just like the very best brands in the business
world, Boone & Kurtz, Contemporary Marketing, continues to evolve, both as a product and as a
brand. This 13th edition of Contemporary Marketing is the first edition written without the collaboration of my longtime co-author, Louis E. (Gene) Boone. As with every good brand, though, the
patterns of innovation and excellence established at the beginning remain steadfast. The goals and
standards of Boone & Kurtz, Contemporary Marketing, remain intact and focused on excellence, as
always. I present to you a text and supplement package that will not only show you why we’ve been
the standard-bearer for so long but also prove to YOU and your STUDENTS why Boone & Kurtz
remains . . . IN A CLASS BY ITSELF!

Putting Instructors in a Class by Themselves
This new edition’s supplement package is designed to propel the instructor into the classroom with
all the materials needed to engage students and help them understand text concepts. All the major
teaching materials have been combined into one resource—the Instructor’s Manual. While this
might not sound revolutionary, good brands know that the heart of the product is in its core
strengths. In the same way, our new Instructor’s Manual combines all of the most important teaching materials in one place. We’ve included collaborative learning exercises directly in the lecture outline, so you’ll know best where to use them. For your convenience, we’ve also included references to
the PowerPoint slides throughout the lecture notes. The Second City Theater, Inc., our brand-new
continuing case, is highlighted in all-new part videos, while chapter videos showcase a stellar list of
companies, including standard-bearers such as Harley-Davidson and companies doing business with
a brand new set of ideals such as American Apparel.

We’ve heard your appreciation for our PowerPoint Presentations and have gone even one step
further: the PowerPoint presentations for this edition are tailored to meet the needs of all instructors,
offering three versions: our expanded multimedia collection, the basic collection, and a student version available on our Web site. In addition, our new CERTIFIED TEST BANK, verified multiple
times, gives instructors that extra edge needed to drive home key concepts and ignite critical thinking, as well as confidence and assurance when creating and issuing tests. We also listened to your
feedback and have incorporated more material on the marketing plan within the CengageNOW
product. Past users will note that the new edition is less theme driven and designed to emphasize the
very best concepts in the marketing world today.
The evolution of a brand or product can be a powerful and compelling undertaking involving every aspect of the marketing process. Understanding this evolution can be a student’s best
help in understanding how marketing is conducted every day. Every chapter now begins with a
new feature called EVOLUTION OF A BRAND. This feature discusses the evolution of the
company or product that is the focus of the opening vignette. We’ve focused our efforts on showing how stellar brands evolve and what this evolution means in the grander scheme of marketing
and product management.

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Helping Students Stand in a Class by Themselves
With contemporary being the operative word, we’ve showcased a new, exciting company, The Second City Theater, Inc., a comedy corporation that has produced stars of Saturday Night Live and

other comedy venues, such as John Belushi and Tina Fey—a company that students can really finding interesting! As always, every chapter is loaded with up-to-the-minute marketing issues and examples to enliven classroom discussion and debate, such as how the Gulf Coast is rebuilding after the
devastation of Hurricanes Katrina and Rita as well as a completely new discussion on CAFTA, the
Central American Free Trade Agreement, which President Bush signed in 2005. Processes, strategies,
and procedures are brought to life through videos highlighting real companies and employees, an
inventive business model, and collaborative learning exercises. Brand-new Voice of Experience interviews are placed at the end of each part so that students can see how real-life marketing careers are
conducted. And to further enhance the student learning process, we’ve developed a Principles of
Marketing-focused technology product, CengageNOW, that integrates personalized learning along
with a research database of articles.

HOW BOONE & KURTZ’S CONTEMPORARY
MARKETING EVOLVED INTO THE
LEADING BRAND IN THE MARKET
For more than three decades, Contemporary Marketing has provided the latest in content and pedagogy. Our current editions have long been the model for our competitors’ next editions. Consider
Boone & Kurtz’s proven record of providing instructors and students with pedagogical firsts:
• Contemporary Marketing was the first introductory marketing text written specifically for the
student—rather than the instructor—featuring a conversational style that students readily
understand and enjoy.
• Contemporary Marketing has always been based on marketing research, written the way instructors actually teach the course.
• Contemporary Marketing has always employed extensive pedagogy—such as opening vignettes
and boxed features—to breathe life into the exciting concepts and issues facing today’s marketers.
• Contemporary Marketing was the first business text to offer end-of-chapter video cases as well as
end-of-part continuing video cases filmed by professional producers, who include text concepts
in each video.
• Contemporary Marketing was the first to use multimedia technology to integrate all ancillary
components: videos, overhead transparencies, and PowerPoint CD-ROMs for both instructors
and students—enabling instructors to custom-create lively lecture presentations.

PEDAGOGY
The reason Boone & Kurtz came together to write the first edition of Contemporary Marketing was
revolutionary. They wanted to write a book about marketing that wasn’t an encyclopedia: a text that

students would find interesting, a text filled with interesting examples and pedagogy. As with every
edition of Contemporary Marketing, the 13th edition is packed with new pedagogical features to keep
students interested and bring the text topics to life:
• Assessment, Assessment, Assessment: In every marketing department in the country, assessment
and assurance of learning among students has become increasingly important. As a result, we’ve
provided you with assessment checks after every main head in every chapter.
• Assurance of Learning Review: Assurance of learning is further enhanced by new end-of-chapter
self-quizzes: In addition to ensuring that students are learning throughout the chapter, we’ve
taken assessment one step further by incorporating new end-of-chapter self-quizzes called Assur-


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ance of Learning Review. These questions are designed to quickly assess whether students
understand the basic concepts covered in the chapter.
• Evolution of a Brand: Products, brands, and people that evolve are the ones that succeed. The
evolution of Contemporary Marketing is what has put BOONE & KURTZ . . . IN A CLASS BY
ITSELF. Every chapter now begins with a new feature called Evolution of a Brand. This feature
discusses the evolution of the company or product that is the focus of the opening vignette and
what this evolution means in the larger picture of marketing strategy and product management.
• Business Etiquette: Schools realize that it has become increasingly important to understand
proper business etiquette when entering the business world, so more and more schools are

adding business etiquette to their curriculums. Every chapter of Contemporary Marketing contains an Etiquette Tips for Marketing Professionals box, addressing all aspects of proper behavior including communications etiquette, business dinners, and even the most effective way to
create customer relationships.
• Voice of Experience: Students often have an amazing ability to grasp chapter concepts and
intellectually understand marketing and what a marketing career entails. However, they often
do not understand how careers are created and maintained and fail to understand in a real-life
sense what a career in marketing may involve on a day-to-day basis. Every part in the text now
ends with an interview of an actual marketing professional and includes information about his
or her education, career path, and day-to-day responsibilities. These professionals come from all
aspects of marketing, from entrepreneurs to vice presidents at some of students’ favorite companies. The traits all of them have in common are their hard work, dedication, professionalism,
and success. This feature gives students a true understanding of how to launch a real marketing
career for themselves through the Voices of Experience.

CONTINUING TO BUILD THE BOONE & KURTZ BRAND
Because the business world moves at an unprecedented pace today, the Principles of Marketing
course must race to keep up. Trends, strategies, and practices are constantly changing, though a few
things remain the same—the need for excellence and the necessity to evolve and innovate.
You’ve come to trust Contemporary Marketing to cover every aspect of marketing with a critical
but fair eye. Let’s face it: there are best practices and those we’d never want to repeat. However, both
provide learning opportunities and we’ve always chosen to take a critical look at the way business is
being done in the world and help students understand what they need to know in order to have a
long and illustrious career in marketing. Keeping this in mind, here are just a few of the important
trends and practices we’ve focused on for this edition:
• Planning a Career in Marketing (section preceding Chapter 1): This popular Boone & Kurtz
feature has been revised to include an enhanced discussion of internships as well as a complete
update on the current job market. Students in Principles of Marketing courses must keep up
with the newest trends and shifts in career fields. The 13th edition of Contemporary Marketing
helps them answer the question, “Where do I fit in the marketing world?” with an improved
discussion of marketing career options.
• Every chapter in the text now includes a section titled Evolution of a Brand that follows the
opening vignette and enhances the discussion of whatever brand or product was discussed in

that opening scenario. This section also asks students to think critically about what these brands
have done and continue to do to remain at the top of their markets.
• Chapter 1 includes the American Marketing Association (AMA) definition of marketing and
has an improved section on technology, including coverage of Internet Protocol TV and mobile
marketing.
• Chapter 2 now includes examples of the strategic window as well as a completely updated
appendix, “Creating an Effective Marketing Plan.”
• Two new laws concerning national identity cards and banning the sale of cell phone records
have been added to Chapter 3.

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• Chapter 4 now focuses more strategically on e-marketing and has an improved discussion of
B2B, B2C, and the challenges associated with online marketing and e-business.
• Chapter 5 now includes a discussion on nearshoring along with improved terminology and
updated statistics.
• A discussion of CAFTA as well as FTAA information is now included in an updated and

improved Chapter 7.
• Blogs and advergames are discussed in Chapter 8, which also now reflects the most current
information on marketing research companies and publishers.
• Chapter 9 contains a new expanded section on the cohort effect, and new information and statistics on demographic and psychographic information is included.
• Web services have been added to the discussion on EDI in Chapter 10, and an outdated section
on virtual relationships has been deleted.
• Chapter 12’s section on category management has been expanded and improved, and information on the Food Allergen Labeling and Consumer Protection Act has been included. RFID
information has been added after the discussion of UPCs.
• An improved and more balanced discussion of sponsorships is now included in Chapter 15,
and Chapter 16 now includes a discussion of advergames and adware.
• Chapter 17 includes a streamlined and improved discussion of the sales process and also
includes a short discussion of cold calling.
• Chapters 18 and 19 have both been updated and include better examples. Chapter 18 also now
includes an improved discussion of the modified breakeven concept and yield management.

THE SECOND CITY THEATER INC. CONTINUING VIDEO CASE
You’ve come to expect only the best from us in choosing our continuing video case company, and
we’ve taken it one step further with our new choice. No other company combines Second City Theater’s unique brand of social and political satire with successful and proven business and marketing
practices. These unique practices have helped The Second City grow from a small but successful
comedy troupe into a large international business. With several theaters in two countries, troupes
performing every day all over the world, and performances on international cruise lines, The Second
City has found a way to turn comedy into business—and in the process they’ve had fun! Students
and instructors alike know and love many of the famous faces that started performing at Second
City—John Belushi, Dan Aykroyd, John Candy, Gilda Radner, Chris Farley, Tina Fey, and the list
goes on and on. But how many students realize just how important good business and marketing
strategies are in keeping a comedy business that started in 1959 thriving and growing all the way
into 2007 and beyond? We’ve focused on all the aspects of The Second City Theater’s marketing
strategy so that students can learn—in a way that’s interesting and fun. So sit back, get some popcorn, and enjoy the show!
Written case segments at the end of each part of the text contain critical-thinking questions
designed to provoke discussion and interaction in the classroom setting. Answers to the questions

can be found in the Instructor’s Manual, as can a complete video synopsis, a list of text concepts covered in the videos, and even more critical-thinking exercises.

END-OF-CHAPTER VIDEO CASES
In addition to a stellar new continuing video case, we’ve produced a whole new batch of video cases
for each and every chapter, designed to exceed your every expectation. Students need to know the
basics about life in the real world of marketing and how businesses succeed and grow—but they
don’t need a bunch of talking heads putting them to sleep. So although we admit that you will
indeed see a few talking heads, they’re just there because they really do know what they’re talking
about, and they have something important for students to hear. But do trust us . . . the videos we’ve
created for this new edition of Contemporary Marketing contain so much more!


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A complete set of written cases accompanies these chapter videos and can be found in the endof-book video case appendix. The written segments contain discussion questions. As with the Second
City cases, answers to the questions can be found in the Instructor’s Manual, as can a complete video
synopsis, a list of text concepts covered in the videos, and even more critical-thinking exercises. The
video cases are as follows:
Chapter 1: Harley-Davidson Keeps Riders Coming Back
Chapter 2: Timbuk2’s Success Is in the Bag
Chapter 3: Organic Valley Farms: Producing Food That’s Good for People and the Earth
Chapter 4: Pick Your Bananas Online at Peapod

Chapter 5: Nielsen Media Research Watches the TV Watchers
Chapter 6: High Sierra Sport Company Excels in B2B
Chapter 7: Lonely Planet Brings You the World
Chapter 8: Nielsen Media Research Plays the Rating Game
Chapter 9: Harley-Davidson Rules the Road by Understanding Its Customers
Chapter 10: The Little Guys Home Electronics: Big on Customer Relationships
Chapter 11: Wild Oats Natural Marketplace: Offering Products at their Peak
Chapter 12: Rebranding at JPMorgan Chase
Chapter 13: American Apparel: Supply Fits the Demand
Chapter 14: BP Connects with Drivers
Chapter 15: The Toledo Mud Hens: Family Fun ϭ A Winning Strategy
Chapter 16: BP: Beyond Petroleum
Chapter 17: Harley-Davidson: Selling the Thrill
Chapter 18: Washburn Guitars: How Much Is the Maya Worth?
Chapter 19: Whirlpool: Innovation for Every Price Point

THE CONTEMPORARY MARKETING
RESOURCE PACKAGE
Since the first edition of this book was published, Boone & Kurtz has exceeded the expectations of
instructors, and it quickly became the benchmark for other texts. With its precedent-setting learning
materials, Contemporary Marketing has continued to improve on its signature package features—
equipping students and instructors with the most comprehensive collection of learning tools, teaching materials, and innovative resources available. As expected, the 13th edition continues to serve as
the industry benchmark by delivering the most extensive, technologically advanced, user-friendly
package on the market.

FOR THE INSTRUCTOR
CengageNOW
Designed by instructors and students for instructors and students, CengageNOW gives you what
you want to do, how you want to do it. CengageNOW is an integrated online suite of services and
resources with proven ease of use and efficient paths to success, delivering the results you want—

NOW! CengageNOW includes self-assessments that generate a personalized study plan, autograded homework assignments, a gradebook, an e-book, and more. CengageNOW also includes

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content that is tagged to the core marketing outcomes, as well as to AACSB outcomes. Instructors
can track students’ progress toward the core outcomes in their class. Figures from the text are used as
interactive drag-and-drop exercises, and video clips are included with assignable gradeable questions.
Students will find this product fun, and instructors will find it extremely useful. CengageNOW also
includes seamless integration with WebCT and Blackboard.

Instructor’s Manual with Collaborative Learning Exercises
and Media Guide (ISBN: 0-324-53657-7)
The 13th edition of Contemporary Marketing has a brand-new, extremely easy-to-use Instructor’s
Manual. This valuable tool completely integrates the various supplements and the text. A detailed
lecture outline provides guidance about how to teach the chapter concepts. Collaborative learning
exercises are included for each chapter, which give students a completely different way to apply chapter concepts to their own lives. References to the PowerPoint slides are included in the lecture outline. You’ll also find answers to all of the end-of-chapter materials and various critical-thinking exercises. Full descriptions of the CengageNOW product and BCRC exercises can be found in the
Media Guide along with complete video synopses, outlines, and extra questions.

Chapter Video Cases on DVD (ISBN: 0-324-53652-6)
Brand-new end-of-chapter video cases for every chapter of the text focus on successful real companies’ processes, strategies, and procedures. Real employees explain real marketing situations with
which they have been faced, bringing key concepts from the chapter to life.

The Second City Theater, Inc. Continuing Case Video on DVD
(ISBN: 0-324-53652-6)
This brand-new continuing video case combines the entrepreneurial and creative spirit with which
Second City was founded with the reality of successful marketing and business strategies. Rarely has
a creative enterprise so uniquely brought real business savvy to its success. In these videos we examine the history of the theater company as well as the successful business practices that have allowed
for its expansion and growth. The written and video cases are divided into seven sections and are created to be used at the end of each part of the text.

Certified Test Bank (ISBN: 0-324-53656-9)
Containing more than 4,000 questions, this is the most accurate test bank we’ve had in years. For
the first time we’ve put our test bank through a complete verification process. Every question and
answer has been read and reviewed for accuracy by multiple sources. Each chapter of the test bank is
organized by chapter objective, and each question categorized by difficulty level, type of question,
and text page reference, and has also been tagged for AACSB requirements.

Basic and Expanded PowerPoint Presentations on CD
(ISBN: 0-324-53653-4)
After reviewing competitive offerings, we are convinced that our PowerPoint presentations are the
best you’ll find. We offer two separate collections. The Basic PowerPoint collection contains 10 to 20
slides per chapter. This collection is a basic outline of the chapter, with Web links that bring chapter
concepts to life; it also includes figures and tables from the text. The Expanded PowerPoint collection includes 20 to 40 slides per chapter and provides a more complete overview of the chapter. The
Expanded collection includes figures and tables from the chapter, Web links, and video links.

JoinIn™ on TurningPoint®
JoinIn on TurningPoint transforms lectures into powerful two-way experiences integrating the interactivity of today’s keypad technology right into your Microsoft PowerPoint presentations. Energize
your class presentations with JoinIn on TurningPoint, transforming your classroom with seamless

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integration with Blackboard and WebCT. Visit for more details.
For the 13th edition of Contemporary Marketing, we’ve provided Premium Content TurningPoint
slides that are already incorporated into our Expanded PowerPoint collection. These all-new questions cover basic chapter concepts, difficult concepts so you can see student progress, and polling
questions for use as opinion-gathering discussion starters.

Instructor’s Resource CD (ISBN: 0-324-53654-2)
The IRCD includes electronic versions of all of the instructor supplements: Instructor’s Manual, Collaborative Learning Exercises and Media Guide, Test Bank, and Examview testing files and software.

Examview Testing Software on IRCD (ISBN: 0-324-53654-2)
Examview Testing Software is a Windows-based software program that is both easy to use and attractive. We can say with confidence that this is the most accurate test bank we’ve had in years because it
has been through our certification process and every question and answer has been verified multiple
times. Each chapter of the test bank is organized by chapter objective, and each question is categorized by difficulty level, type of question, and text page reference, and has also been tagged for
AACSB requirements.

Business & Company Resource Center (BCRC)
BCRC puts a complete business library at your students’ fingertips. BCRC is a premier online business research tool that allows students to seamlessly search thousands of periodicals, journals, references, financial information sources, market share reports, company histories, and much more. Links
to articles and discussion questions for BCRC can be found in CengageNOW and on the text Web
site at academic.cengage.com/marketing/boone. View a guided tour of the Business & Company

Resource Center at />
Contemporary Marketing, 13th Edition Web Site
Our text Web site (academic.cengage.com/marketing/boone) is filled with a whole set of useful tools.
Instructors will find all the key instructor resources in electronic format: Test Bank, PowerPoint
collections, Instructor’s Manual with Collaborative Learning Exercises and Media Guide, and BCRC
Exercises. Students will also find a host of valuable resources.

Resource Integration Guide (RIG)
The RIG is written to provide the instructor with a clear and concise guide to all of the ancillaries
that accompany the text as well as how best to use these items in teaching a Principles of Marketing
course. Not only are all of the book’s ancillaries organized clearly for you, but we also provide planning suggestions, lecture ideas, and help in creating assignments. This guide will help instructors prepare for teaching the course, execute teaching plans, and evaluate student performance. The RIG can
be found on the text Web site (academic.cengage.com/marketing/boone) in the Instructor’s Resource
section.

Custom Solutions for Contemporary Marketing, 13th Edition
Cengage Custom Solutions develops personalized solutions to meet your business education needs.
Match your learning materials to your syllabus and create the perfect learning solution. Consider the
following when looking at your customization options for Contemporary Marketing, 13th edition:
• Remove chapters you do not cover or rearrange their order, creating a streamlined and efficient
text that students will appreciate.
• Add your own material to cover new topics or information, saving you time and providing students with a fully integrated course resource.
Cengage Custom Solutions offers the fastest and easiest way to create unique customized learning
materials delivered the way you want. Our custom solutions also include accessing on-demand cases

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from leading business case providers such as Harvard Business School Publishing, Ivey, Darden and
NACRA; building a tailored text online with ; and publishing your original
materials. For more information about custom publishing options, visit www.custom.cengage.com or
contact your local Cengage representative.

FOR THE STUDENT
CengageNOW
Designed by instructors and students for instructors and students, CengageNOW gives you what you
want to do, how you want to do it. CengageNOW is an integrated online suite of services and
resources with proven ease of use and efficient paths to success, delivering the results you want—
NOW! CengageNOW includes self-assessments that generate a personalized study plan, auto-graded
homework assignments, a gradebook, an e-book, and more. CengageNOW also includes content
that is tagged to the core marketing outcomes as well as to AACSB outcomes. Instructors can track
students’ progress to the core outcomes in their class. Figures from the text are used as interactive
drag-and-drop exercises and video clips are included with assignable gradeable questions. Students
will find this product fun and instructors will find it extremely useful.

Contemporary Marketing, 13th Edition Web Site
Our text Web site (academic.cengage.com/marketing/boone) is filled with a whole set of useful tools.
Students will find a host of valuable resources including key terms with definitions, quizzes for each
chapter, chapter summaries, and recent marketing news tied directly to chapter concepts.

Chapter Audio Reviews
These audio reviews, found in the CengageNOW product, contain short summaries of the chapter
objectives and major concepts in each chapter and are a good review of reading assignments. Listen
to them before you read the chapter as a preview of what’s to come—or after you read the chapter as
a reinforcement of what you’ve read. Listen to them on the way to class as a refresher before the lecture—or after you’ve left class as a review of what the instructor just discussed. However you choose
to listen to them, these concise summaries will be helpful in reinforcing all the major concepts for
each chapter.

ACKNOWLEDGMENTS
Over the years, Contemporary Marketing has benefited from the suggestions of hundreds of marketing instructors. I am most appreciative of their efforts and thoughts. Previous reviewers have
included the following people:
Keith Absher
University of North Alabama
Alicia T. Aldridge
Appalachian State University
Amardeep Assar
City University of New York
Tom F. Badgett
Angelo State University
Joe K. Ballenger
Stephen F. Austin State
University
Michael Bernacchi
University of Detroit Mercy

David Blanchette
Rhode Island College
Barbara Brown
San Jose State University

Reginald E. Brown
Louisiana Tech University
Marvin Burnett
St. Louis Community College—
Florissant
Scott Burton
University of Arkansas
Howard Cox
Fitchberg State University

James Coyle
Baruch College
Elizabeth Creyer
University of Arkansas
Geoff Crosslin
Kalamazoo Valley Community
College
William Demkey
Bakersfield College
Michael Drafke
College of DuPage
Joanne Eckstein
Macomb Community College


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John Frankel
San Juan College
Robert Georgen
Trident Technical College
Robert Googins
Shasta College
Arlene Green
Indian River Community
College
Joel Haynes
State University of West Georgia
Mabre Holder
Roane State Community
College
Andrew W. Honeycutt
Clark Atlanta University
Dr. H. Houston
California State University—
Los Angeles
John Howe
Santa Ana College
Tom Jensen
University of Arkansas
Marcella Kelly
Santa Monica College

Stephen C. King
Keene State College
Kathleen Krentler
San Diego State University
Laddie Logan
Arkansas State University
Kent Lundin
College of the Sequoias
Patricia Macro
Madison Area Tech College
Frank Markley
Arapahoe Community College
Tom Marshall
Owens Community College
Dennis C. Mathern
The University of Findlay
Lee McGinnis
University of Nebraska
Michael McGinnis
Pennsylvania State University
Norma Mendoza
University of Arkansas

Mohan Menon
University of South Alabama
Anthony Miyazaki
University of Miami
Jerry W. Moorman
Mesa State College
Linda Morable

Richland College
Diane Moretz
Ashland University
Eugene Moynihan
Rockland Community College
Margaret Myers
Northern Kentucky University
Thomas S. O’Connor
University of New Orleans
Nita Paden
Northern Arizona University
George Palz
Erie Community College—
North
George Prough
University of Akron
Warren Purdy
University of Southern Maine
Salim Qureshi
Bloomsburg University
Thomas Read
Sierra College
Joel Reedy
University of South Florida
Dominic Rella
Polk Community College
Ken Ridgedell
Southeastern Louisiana
University
Fernando Rodriguez

Florida Community College
Lillian Roy
McHenry County College
Arthur Saltzman
California State—San
Bernardino
Elise T. Sautter
New Mexico State University
Jonathan E. Schroeder
University of Rhode Island

Farouk Shaaban
Governors State University
John Sondey
South Dakota State University
James Spiers
Arizona State University
David Starr
Shoreline Community
College
Bob Stassen
University of Arkansas
Sue Taylor
Belleville Area College
Lars Thording
Arizona State University—
West Campus
Rajiv Vaidyanathan
University of Minnesota
Sal Veas

Santa Monica College
Charles Vitaska
Metro State College of Denver
Cortez Walker
Baltimore City Community
College
Roger Waller
San Joaquin Delta College
Mary M. Weber
Emporia State University
Vicki L. West
Southwest Texas State University
Elizabeth White
Orange County Community
College
David Wiley
Anne Arundel Community
College
William Wilkinson
Governors State University
James Williams
Richard Stockton College
of New Jersey
Mary Wolfindarger
California State University—
Long Beach
Joyce Wood
North Virginia Community
College

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Preface

Earlier contributors include:
Keith Absher
Kerri L. Acheson
Zafar U. Ahmed
M. Wayne Alexander
Bruce Allen
Linda Anglin
Allen Appell
Paul Arsenault
Dub Ashton
Amardeep Assar
Tom F. Badgett
Joe K. Ballenger
Wayne Bascom
Richard D. Becherer

Tom Becker
Richard F. Beltramini
Robert Bielski
Carol C. Bienstock
Roger D. Blackwell
Jocelyn C. Bojack
Michele D. Bunn
James Camerius
Les Carlson
John Carmichael
Jacob Chacko
Robert Collins
Elizabeth Cooper-Martin
Deborah L. Cowles
Howard B. Cox
John E. Crawford
Michael R. Czinkota
Kathy Daruty
Grant Davis
Gilberto de los Santos
Carol W. DeMoranville
Fran DePaul
Gordon Di Paolo
John G. Doering
Jeffrey T. Doutt
Sid Dudley
John W. Earnest

Philip E. Egdorf
Michael Elliot

Amy Enders
Bob Farris
Lori Feldman
Sandra M. Ferriter
Dale Fodness
Gary T. Ford
Michael Fowler
Edward Friese
Sam Fullerton
Ralph M. Gaedeke
G. P. Gallo
Nimish Gandhi
Sheryl A. Gatto
Robert Georgen
Don Gibson
David W. Glascoff
James Gould
Donald Granbois
John Grant
Paul E. Green
William Green
Blaine Greenfield
Matthew Gross
Robert F. Gwinner
Raymond M. Haas
John H. Hallaq
Cary Hawthorn
E. Paul Hayes
Hoyt Hayes
Betty Jean Hebel

Debbora Heflin-Bullock
John (Jack) J. Heinsius
Sanford B. Helman
Nathan Himelstein
Robert D. Hisrich
Ray S. House
George Housewright
Donald Howard
Michael D. Hutt

Gregory P. Iwaniuk
Don L. James
James Jeck
Candida Johnson
David Johnson
Eugene M. Johnson
James C. Johnson
Harold H. Kassarjian
Bernard Katz
Stephen K. Keiser
Michelle Keller
J. Steven Kelly
James H. Kennedy
Charles Keuthan
Maryon King
Randall S. Kingsbury
Donald L. Knight
Linda S. Koffel
Philip Kotler
Terrence Kroeten

Russell Laczniak
Martha Laham
L. Keith Larimore
Edwin Laube
Ken Lawrence
Francis J. Leary, Jr.
Mary Lou Lockerby
James Lollar
Paul Londrigan
David L. Loudon
Dorothy Maass
James C. Makens
Lou Mansfield
Warren Martin
James McCormick
Carl McDaniel
Michael McGinnis
James McHugh
Faye McIntyre
H. Lee Meadow
Mohan Menon


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Preface

William E. (Gene) Merkle
John D. Milewicz
Robert D. Miller
Laura M. Milner
Banwari Mittal
Harry J. Moak
J. Dale Molander
John F. Monoky
James R. Moore
Thomas M. Moran
Susan Logan Nelson
Colin F. Neuhaus
Robert T. Newcomb
Jacqueline Z. Nicholson
Tom O’Connor
Robert O’Keefe
Sukgoo Pak
Eric Panitz
Dennis D. Pappas
Constantine Petrides
Barbara Piasta
Dennis D. Pitta
Barbara Pletcher
Carolyn E. Predmore
Arthur E. Prell
Bill Quain
Rosemary Ramsey

Thomas C. Reading
Gary Edward Reiman
Glen Riecken

Arnold M. Rieger
C. Richard Roberts
Patrick J. Robinson
William C. Rodgers
William H. Ronald
Bert Rosenbloom
Barbara Rosenthal
Carol Rowery
Ronald S. Rubin
Don Ryktarsyk
Rafael Santos
Duane Schecter
Dennis W. Schneider
Larry J. Schuetz
Bruce Seaton
Howard Seigelman
Jack Seitz
Steven L. Shapiro
F. Kelly Shuptrine
Ricardo Singson
Norman Smothers
Carol S. Soroos
James Spiers
Miriam B. Stamps
William Staples
David Steenstra

Bruce Stern
Robert Stevens
Kermit Swanson
G. Knude Swenson

Cathy Owens Swift
Clint B. Tankersley
Ruth Taylor
Donald L. Temple
Vern Terpstra
Ann Marie Thompson
Howard A. Thompson
John E. Timmerman
Frank Titlow
Rex Toh
Dennis H. Tootelian
Fred Trawick
Richard Lee Utecht
Rajiv Vaidyanathan
Toni Valdez
Peter Vanderhagen
Dinoo T. Vanier
Gayle D. Wasson
Donald Weinrauch
Fred Weinthal
Susan B. Wessels
John J. Whithey
Debbora Whitson
Robert J. Williams
Nicholas C. Williamson

Cecilia Wittmayer
Van R. Wood
Julian Yudelson
Robert J. Zimmer

IN CONCLUSION
I would like to thank Karen Hill of Elm Street Publishing and Ron Jost and Katherine Wilson of
Lachina Publishing Services. Their ability to meet tight deadlines is truly appreciated.
Let me conclude by mentioning that the new edition would never have become a reality without the superior efforts of the South-Western production and marketing teams. My editors Neil
Marquardt, Rebecca von Gillern, Amy Hackett, Vicky True, and Kristen Meere provided another
Contemporary Marketing winner. Special thanks also go to my marketing manager, Nicole Moore.

Dave Kurtz

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about the author
During Dave Kurtz’s high school days, no one in Salisbury, Maryland, would have mistaken
him for a scholar. In fact, he was a mediocre student, so bad that his father steered him toward
higher education by finding him a succession of backbreaking summer jobs. Thankfully, most of
them have been erased from his memory, but a few linger, including picking peaches, loading watermelons on trucks headed for market, and working as a pipefitter’s helper. Unfortunately, these jobs
had zero impact on his academic standing. Worse yet for Dave’s ego, he was no better than average
as a high school athlete in football and track.
But four years at Davis & Elkins College in Elkins, West Virginia, turned him around. Excellent instructors helped get Dave on a sound academic footing. His grade point average soared—
enough to get him accepted by the graduate business school at the University of Arkansas, where he
met Gene Boone. Gene and Dave became longtime co-authors; together they produced more than
50 books. In addition to writing, Dave and Gene were involved in several entrepreneurial ventures.
Today, Dave is back teaching at the University of Arkansas, after tours of duty in Ypsilanti,
Michigan; Seattle, Washington; and Melbourne, Australia. He is the proud grandfather of five “perfect” kids and a sportsman with a golf handicap too high to mention. Dave, his wife, Diane, and
four demanding canine companions (Daisy, Lucy, Molly, and Sally) live in Rogers, Arkansas. Dave
holds a distinguished professorship at the Sam M. Walton College of Business in nearby Fayetteville,
home of the Arkansas Razorbacks.

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Dedication

Dear Colleagues,
This edition is dedicated to my longtime co-author, Louis E. “Gene” Boone. Gene passed
away after the previous edition was published. Many marketing and business instructors
knew Gene over his lengthy and distinguished career. These folks can remember the numerous contributions he made to business education. Gene was truly a pioneer in our discipline.
From my perspective, he was my best friend and one of the brightest people I have ever
encountered.
At several points in preparing this new edition, I would stop and say to myself, “Gene would
or would not have liked this idea.” In short, his input is still evident in the 13th edition.
And it will remain there in the editions to come.
Gene Boone was arguably the best and most creative business writer of his generation. I
intend to ensure that the tradition of excellence he established will be forever part of Boone
& Kurtz’s Contemporary Marketing.

David L. Kurtz

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contents in brief
Preface v
Prologue xxxix

PART 1

DESIGNING CUSTOMER-ORIENTED MARKETING STRATEGIES

Chapter 1
Chapter 2
Chapter 3
Chapter 4

Marketing: The Art and Science of Satisfying Customers 2
Strategic Planning and the Marketing Process 34

The Marketing Environment, Ethics, and Social Responsibility 74
E-Business in Contemporary Marketing 110

PART 2

UNDERSTANDING BUYERS AND MARKETS 145

Chapter 5
Chapter 6
Chapter 7

Consumer Behavior 146
Business-to-Business (B2B) Marketing 176
Global Marketing 210

PART 3

TARGET MARKET SELECTION 245

Chapter 8
Chapter 9
Chapter 10

Marketing Research and Sales Forecasting 246
Market Segmentation, Targeting, and Positioning 278
Relationship Marketing and Customer Relationship Management (CRM) 310

PART 4

PRODUCT DECISIONS 343

Chapter 11
Chapter 12

Product and Service Strategies 344
Developing and Managing Brand and Product Categories 376

PART 5

DISTRIBUTION DECISIONS 411

Chapter 13
Chapter 14

Marketing Channels and Supply Chain Management 412
Retailers, Wholesalers, and Direct Marketers 448

PART 6

PROMOTIONAL DECISIONS 485

Chapter 15
Chapter 16
Chapter 17

Integrated Marketing Communications 486
Advertising and Public Relations 524
Personal Selling and Sales Promotion 560

PART 7

PRICING DECISIONS 599

Chapter 18
Chapter 19

Pricing Concepts 600
Pricing Strategies 634

Appendix A-1
Video Cases VC-1
Notes N-1
Glossary G-1
Indexes I-1

1

PHOTOS: CORVETTE ADVERTISEMENTS REPRODUCED WITH PERMISSION OF GM CORP. LICENSING GROUP

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contents
Preface v
Prologue xxxix

Opening Vignette
Starbucks: Connecting
with Customers
2
Etiquette Tips for
Marketing Professionals
Forms of Address: Which
One Do You Use, and
When? 15
Marketing Success
What’s a Google? 18
Solving an Ethical
Controversy
FEMA and Katrina: The
Hurricane after the

Hurricane 25

PART 1
DESIGNING CUSTOMER-ORIENTED
MARKETING STRATEGIES
1
chapter 1
Marketing: The Art and Science
of Satisfying Customers
2
What Is Marketing?

5

A Definition of Marketing 7

Today’s Global Marketplace 7

Four Eras in the History of Marketing

8

The Production Era 9
The Sales Era 9
Era 10
Converting Needs to Wants 11

Avoiding Marketing Myopia

The Marketing Era 9

11

Extending the Traditional Boundaries of Marketing
Marketing in Not-for-Profit Organizations 12
Marketing 13

PHOTO: CORVETTE ADVERTISEMENT REPRODUCED WITH PERMISSION OF GM CORP. LICENSING GROUP

Nontraditional Marketing

The Relationship

12

Characteristics of Not-for-Profit

14

Person Marketing 14
Place Marketing 15
Marketing 16
Organization Marketing 17

Creativity and Critical Thinking

Cause Marketing 16

Event

17

The Technology Revolution in Marketing
Interactive and Internet Marketing 19

18

Broadband 20

Wireless 20

From Transaction-Based Marketing to Relationship Marketing

21

Developing Partnerships and Strategic Alliances 22

Costs and Functions of Marketing

23

Ethics and Social Responsibility: Doing Well by Doing Good
Strategic Implications of Marketing in the 21st Century
Review of Chapter Objectives

24

26

27

Assessment Check Answers 28
Marketing Terms You Need to Know 30
Other
Important Marketing Terms 30 Assurance of Learning Review 30
Projects and
Teamwork Exercises 31
Critical-Thinking Exercises 31
Ethics Exercise 31
Internet Exercises 32
Case 1.1 Golfers Are Joining the Hybrid Club 32
Video Case 1.2 Harley-Davidson Keeps Riders Coming Back 33
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Contents

Opening Vignette
Westin Starts the Bed
Wars

34

chapter 2
Strategic Planning and the Marketing Process
Marketing Planning: The Basis for Strategy and Tactics

Marketing Success
Home Depot versus
Lowe’s 38
Etiquette Tips for
Marketing Professionals
How to Handle
Interruptions
40
Solving an Ethical
Controversy
Should Retailers Ban the
Salvation Army from Their
Sidewalks?
51

Strategic Planning versus Tactical Planning 38
Levels 39

Steps in the Marketing Planning Process

34

37

Planning at Different Organizational

41

Defining the Organization’s Mission and Objectives 41
Assessing Organizational
Resources and Evaluating Environmental Risks and Opportunities 42
Formulating,
Implementing, and Monitoring a Marketing Strategy 42

Successful Strategies: Tools and Techniques

43

Porter’s Five Forces Model 43
First Mover and Second Mover Strategies 45
SWOT Analysis 45
The Strategic Window 46

Elements of a Marketing Strategy
The Target Market 47
Environment 50

47

Marketing Mix Variables 48

Methods for Marketing Planning
Business Portfolio Analysis 52

The Marketing

52
The BCG Matrix 52

Strategic Implications of Marketing in the 21st Century
Review of Chapter Objectives

53

54

Assessment Check Answers 55
Marketing Terms You Need to Know 56
Other
Important Marketing Terms 56
Assurance of Learning Review 56
Projects and
Teamwork Exercises 57
Critical-Thinking Exercises 57
Ethics Exercise 57
Internet Exercises 58
Case 2.1 A Farewell to Regional Jets? 58
Video Case 2.2 Timbuk2’s Success Is in the Bag 59

appendix
Creating an Effective Marketing Plan
Components of a Business Plan
Creating a Marketing Plan

60

60

61

Formulating an Overall Marketing Strategy 61
The Executive Summary, Competitive
Analysis, and Mission Statement 63
Description of the Company 64
Statement of Goals and Core Competencies 64
Outline of the Marketing Environment
(Situation Analysis) 64
The Target Market and Marketing Mix 65
Budget, Schedule, and Monitoring 65

Sample Marketing Plan

66

Five-Year Marketing Planblue Sky Clothing, Inc. 67


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Contents

chapter 3
T h e M a r k e t i n g E n v i r o n m e n t , E t h i c s,
and Social Responsibility 74

Opening Vignette
Risky Business:
Avian Flu and the
Marketplace
74

Environmental Scanning and Environmental Management

Marketing Failure
Healthcare Legislation: Do
Wal-Mart Workers Win or
Lose?
86
Etiquette Tips for
Marketing Professionals
To Give or Not to Give—at
the Office
89
Solving an Ethical
Controversy
Corporate Criminals in the
Classroom
96

The Competitive Environment
Types of Competition 79
Competition 81

77

78

Developing a Competitive Strategy 80

The Political-Legal Environment

Time-Based

81

Government Regulation 82
Government Regulatory Agencies 84
Other
Regulatory Forces 84
Controlling the Political-Legal Environment 85

The Economic Environment

86

Stages in the Business Cycle 86
Economic Environment 90

Inflation and Deflation 87

The Technological Environment

The International

91

Applying Technology 92

The Social-Cultural Environment

92

Consumerism 93

Ethical Issues in Marketing

94

Ethics in Marketing Research 97
Ethics in Product Strategy 98
Ethics in
Distribution 98
Ethics in Promotion 99
Ethics in Pricing 99

Social Responsibility in Marketing
Marketing’s Responsibilities 101

100
Marketing and Ecology 101

Strategic Implications of Marketing in the 21st Century
Review of Chapter Objectives

Opening Vignette
Southwest Airlines
Spreads Its Wings

110

Marketing Success
Bank of America
Clicks with Online
Customers
120
Solving an Ethical
Controversy
Amazon.com: Helpful or
Intrusive? 125

103

Assessment Check Answers 105
Marketing Terms You Need to Know 106
Other Important Marketing Terms 106
Assurance of Learning Review 106
Projects and Teamwork Exercises 107
Critical-Thinking Exercises 107

Ethics
Exercise 108
Internet Exercises 108
Case 3.1 The Selling of Cell Phone Logs 109
Video Case 3.2 Organic Valley Farms: Producing Food That’s Good for People
and the Earth 109

chapter 4
E-Business in Contemporary Marketing
What is E-Business?

110

114

Capabilities and Benefits of E-Marketing 114

B2B E-Marketing
Etiquette Tips for
Marketing Professionals
Blogging Basics 130

103

Types of Business Web Sites 115

116

Electronic Data Interchange, Web Services, Extranets, and Private Exchanges 117
Electronic Exchanges and E-Procurement 118

Online Shopping and B2C E-Marketing

119

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Contents

Electronic Storefronts 119
Sellers 122

Benefits of B2C E-Marketing 120

E-Business and E-Marketing Challenges

Online Buyers and

123

Online Payment Systems 123
Privacy Issues 123
Internet Fraud 124
Web Site Design and Service 126
Channel Conflicts 127

Using the Web’s Communication Function
Online Communities 128

Managing a Web Site

Blogs 128

127
Web-Based Promotions 129

130

Developing Successful Web Sites 131

Measuring Web Site Effectiveness 133

Strategic Implications of Marketing in the 21st Century
Review of Chapter Objectives

134

135

Assessment Check Answers 136
Marketing Terms You Need to Know 138
Other
Important Marketing Terms 138
Assurance of Learning Review 139
Projects and
Teamwork Exercises 139
Critical Thinking Exercises 139
Ethics Exercise 140
Internet Exercises 140
Case 4.1 iTunes and the Future of Music 140
Video Case 4.2 Pick Your Bananas Online at Peapod 141
Voice of Experience: Talking about Marketing Careers with Michael L. Hutzel, Jr. 142
Second City: Continuing Video Case: Laughter’s Part of the Plan 144

PART 2
UNDERSTANDING BUYERS AND MARKETS

Solving an Ethical
Controversy
Kids, Parents, and Violent
Video Games 157
Marketing Success
Airlines Make Boarding
Easier 162
Etiquette Tips for
Marketing Professionals
Handling Angry
Customers 168

146

Interpersonal Determinants of Consumer Behavior
Cultural Influences 149

Social Influences 153

Personal Determinants of Consumer Behavior
Needs and Motives 158
Self-Concept Theory 165

Perceptions 160

The Consumer Decision Process

149
Family Influences 156

158
Attitudes 162

Learning 163

165

Problem or Opportunity Recognition 166
Search 166
Evaluation of Alternatives
167
Purchase Decision and Purchase Act 167

Postpurchase Evaluation 168
Classifying Consumer Problem-Solving Processes 169

Strategic Implications of Marketing in the 21st Century
Review of Chapter Objectives

170

170

Assessment Check Answers 171
Marketing Terms You Need to Know 172
Other
Important Marketing Terms 173
Assurance of Learning Review 173
Projects and
Teamwork Exercises 173
Critical-Thinking Exercises 173
Ethics Exercise 174
Internet Exercises 174
Case 5.1 Burger King’s Whopper-Sized Portions 174
Video Case 5.2 Nielsen Media Research Watches the TV Watchers 175

PHOTO: CORVETTE ADVERTISEMENT REPRODUCED WITH PERMISSION OF GM CORP. LICENSING GROUP

Opening Vignette
Who Buys Hybrid Cars—
and Why? 146

chapter 5

Consumer Behavior

145


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Contents

Opening Vignette
The Biggest Rebuilding
Effort Ever 176

chapter 6
Business-to-Business (B2B) Marketing
Nature of the Business Market

Marketing Success
Boeing Soars to New
Heights 180
Solving an Ethical
Controversy
How Should Buying Firms
Deal with Vendors? 186

Etiquette Tips for
Marketing Professionals
Keeping Customers out of
Voice Response Hell 193

176

178

Components of the Business Market 180
B2B Markets: The Internet
Connection 181
Differences In Foreign Business Markets 182

Segmenting B2B Markets

182

Segmentation by Demographic Characteristics 182
182
Segmentation by End-Use Application 184
Categories 184

Characteristics of the B2B Market

Segmentation by Customer Type
Segmentation by Purchase

184

Geographic Market Concentration 185
Sizes and Numbers of Buyers 185
The
Purchase Decision Process 185
Buyer-Seller Relationships 186
Evaluating
International Business Markets 187

Business Market Demand

188

Derived Demand 188
Volatile Demand 188
Demand 189
Inventory Adjustments 189

The Make, Buy, Or Lease Decision

Inelastic

189

The Rise of Offshoring and Outsourcing 190
Outsourcing 191

The Business Buying Process

Joint Demand 188

Problems with Offshoring and

191

Influences on Purchase Decisions 192
Model of the Organizational Buying
Process 194
Classifying Business Buying Situations 196
Analysis Tools 197

The Buying Center Concept
Buying Center Roles 198

198
International Buying Centers 199

Team Selling 199

Developing Effective Business-To-Business Marketing Strategies
Challenges of Government Markets 200
Challenges of International Markets 202

Strategic Implications of Marketing in the 21st Century
Review of Chapter Objectives

200

Challenges of Institutional Markets 201

203

203

Assessment Check Answers 204
Marketing Terms You Need to Know 206
Other
Important Marketing Terms 206
Assurance of Learning Review 207
Projects and
Teamwork Exercises 207
Critical-Thinking Exercises 208
Ethics Exercise 208
Internet Exercises 208
Case 6.1 Chip Wars: Intel vs. AMD in the B2B Market 209
Video Case 6.2 High Sierra Sport Company Excels in B2B 209

chapter 7
Global Marketing

210

The Importance of Global Marketing
Service and Retail Exports 214

213

Benefits of Going Global 216

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