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Aug 31, 2011 ... Philip Kotler Award for Excellence in Health Care Marketing, presented ... As a team, Philip Kotler and Gary Armstrong provide a blend of skills ...

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About the Authors As a team, Philip Kotler and Gary Armstrong provide a blend of skills uniquely suited to writing an introductory marketing text. Professor Kotler is one of the world’s leading authorities on marketing. Professor Armstrong is an award-winning teacher of undergraduate business students. Together they make the complex world of marketing practical, approachable, and enjoyable.

Gary Armstrong is the Crist W. Blackwell Distinguished Professor of Undergraduate Education in the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill. He holds undergraduate and master’s degrees in business from Wayne State University in Detroit, and he received his PhD in marketing from Northwestern University. Professor Armstrong has contributed numerous articles to leading business journals. As a consultant and researcher, he has worked with many companies on marketing research, sales management, and marketing strategy. But Professor Armstrong’s first love has always been teaching. His Blackwell Distinguished Professorship is the only permanent endowed professorship for distinguished undergraduate teaching at the University of North Carolina at Chapel Hill. He has been very active in the teaching and administration of Kenan-Flagler’s undergraduate program. His administrative posts have included Chair of Marketing, Associate Director of the Undergraduate Business Program, Director of the Business Honors Program, and many others. He has worked closely with business student groups and has received several campuswide and Business School teaching awards. He is the only repeat recipient of the school’s highly regarded Award for Excellence in Undergraduate Teaching, which he has received three times. Most recently, Professor Armstrong received the UNC Board of Governors Award for Excellence in Teaching, the highest teaching honor bestowed by the 16-campus University of North Carolina system.

Philip Kotler

is the S. 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 PhD at MIT, both in economics. Professor Kotler is the author of Marketing Management (Pearson Prentice Hall), now in its thirteenth edition and the most widely used marketing text book in graduate business schools worldwide. He has authored dozens of other successful books and has written more than 100 articles in leading journals. He is the only three-time winner of the coveted Alpha Kappa Psi award for the best annual article in the Journal of Marketing. Professor Kotler was named the first recipient of two major awards: the Distinguished Marketing Educator of the Year Award, given by the American Marketing Association and the Philip Kotler Award for Excellence in Health Care Marketing, presented by the Academy for Health Care Services Marketing. His numerous other major honors include the Sales and Marketing Executives International Marketing Educator of the Year Award; the European Association of Marketing Consultants and Trainers Marketing Excellence Award; the Charles Coolidge Parlin Marketing Research Award; and the Paul D. Converse Award, given by the American Marketing Association to honor “outstanding contributions to science in marketing.” In a recent Financial Times poll of 1,000 senior executives across the world, Professor Kotler was ranked as the fourth “most influential business writer/guru” of the twenty-first century. Professor Kotler has served as chairman of the College on Marketing of the Institute of Management Sciences, a director of the American Marketing Association, and a trustee of the Marketing Science Institute. He has consulted with many major U.S. and international companies in the areas of marketing strategy and planning, marketing organization, and international marketing. He has traveled extensively throughout Europe, Asia, and South America, advising companies and governments about global marketing practices and opportunities.

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About the Authors

Anwar Habib

is a faculty member at the Dubai Women’s College, Higher Colleges of Technology in United Arab Emirates. He holds an MBA from the University of Dhaka, Bangladesh, and is currently completing his DBA at the Business School Laussane, Switzerland. He has been teaching marketing since 2006. Anwar Habib has 20 years of practical marketing experience working for Unilever, CibaGeigy and Johnson & Johnson, in South Asia, Australia and the Middle East. He started out as a brand manager at Unilever, and gradually progressed through senior roles in marketing and sales. His last role before teaching was General Manager of Johnson & Johnson Vision Care for the Middle East and North Africa region.

Ahmed Tolba

is Assistant Professor of Marketing in the School of Business at the American University in Cairo. He is also Director of El-Khazindar Business Research and Case Center (KCC), which is the first center in the MENA region to focus on developing world-class refereed case studies. He was awarded his PhD from the George Washington University in 2006, and his MBA & BSc from the American University in Cairo in 1997 and 2001 respectively. His professional experience includes four years at Procter & Gamble Egypt; he also worked as a marketing consultant for several local firms. His research focuses on brand equity, nation branding, branding strategies, and social marketing. His work has been published and presented in leading academic journals, such as the Journal of Product and Brand Management, the Journal of Technology Marketing, the International Journal of Marketing Studies, and the Journal of International Business and Cultural Studies, and presented at conferences for the American Marketing Association (AMA), the Academy of Marketing Science (AMS), the Society for Marketing Advances, the Academy of Management (SMA), the Thought Leaders International Conference on Brand Management, Frontiers in Services Conference, and the Association for Global Business, among others.

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Brief Contents Features matrix xiv Foreword xvii Preface xviii Acknowledgments xxiii

Part 1 Defining Marketing and the Marketing Process 1 1 Marketing: Creating and Capturing Customer Value 2 2 Company and Marketing Strategy: Partnering to Build Customer Relationships 36

Part 2 Understanding the Marketplace and Consumers 65 3 4 5 6

Analyzing the Marketing Environment 66 Marketing Research 94 Consumer Behavior 124 Business Markets and Business Buyer Behavior 152

Part 3 Designing a Customer-Driven Strategy and Mix 175 7 8 9 10 11 12 13 14

Customer-Driven Marketing Strategy: Segmentation, Targeting & Positioning 176 Products, Services, and Brands: Building Customer Value 202 New-Product Development and Product Life-Cycle Strategies 238 Pricing 266 Communicating Customer Value: Integrated Marketing Communications Strategy 300 Promotion Mix Strategies: Advertising and Public Relations 326 Direct and Online Marketing: Building Direct Customer Relationships 368 Managing Marketing Channels 400

Part 4 Extending Marketing 439 15 Creating Competitive Advantage 440 16 The Global Marketplace 466 17 Sustainable Marketing: Social Responsibility and Ethics 494 Appendix 1 Marketing Plan A1 Appendix 2 Marketing by the Numbers A11 Appendix 3 Careers in Marketing A29 References R1 English-Arabic Glossary G1 Index I1 Credits C1

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Contents Part 1

Defining Marketing and the Marketing Process 1

Chapter 1

Marketing: Creating and Capturing Customer Value 2

Chapter Preview 2 Objective Outline 4 What Is Marketing? 4

Customer Needs, Wants, and Demands 6 | Market Offerings— Products, Services, and Experiences 7 | Customer Value and Satisfaction 7 | Exchanges and Relationships 8 | Markets 8

Designing a Customer-Driven Marketing Strategy 9 Selecting Customers to Serve 9 | Choosing a Value Proposition 10 | Marketing Management Orientations 10

Preparing an Integrated Marketing Plan and Program 13 Building Customer Relationships 13

Analyzing the Current Business Portfolio 41 | Developing Strategies for Growth and Downsizing 43

Partnering with Other Company Departments 46 | Partnering with Others in the Marketing System 47

Marketing Strategy and the Marketing Mix 48 Customer-Driven Marketing Strategy 49 Real Marketing 2.2 Niching Voluntourism, A New Way to See the World 51 Developing an Integrated Marketing Mix 52

Managing the Marketing Effort 53 Marketing Analysis 54 | Marketing Planning 54 | Marketing Implementation 56 | Marketing Department Organization 56 | Marketing Control 57

Measuring and Managing Return on Marketing Investment 58

Customer Relationship Management 14

Reviewing Objectives and Key Terms 60 | Key Terms 61 | Discussing and Applying the Concepts 61 | Focus on Technology 61 | Focus on Ethics 62 | Marketing by the Numbers 62

Real Marketing 1.1 Etisalat: Delighting Customers 15 The Changing Nature of Customer Relationships 16 Real Marketing 1.2 Media and Direct Communication Trends in the Arab World 19

Video Case: Live Nation 62 Company Case Bahrain Bay: Building Customer

Partner Relationship Management 20

Capturing Value from Customers 21 Creating Customer Loyalty and Retention 21 | Growing Share of Customer 22 | Building Customer Equity 22

The Changing Marketing Landscape 24 The Digital Age 24 | Rapid Globalization 26 | The Call for More Ethics and Social Responsibility 27 | The Growth of Not-for-Profit Marketing 27

So, What is Marketing? Pulling It All Together 28 Reviewing Objectives and Key Terms 30 | Key Terms 31 | Discussing & Applying the Concepts 32 | Focus on Technology 32 | Focus on Ethics 32 | Marketing by the Numbers 33 33

Company and Marketing Strategy: Partnering to Build Customer Relationships 36

Chapter Preview 36 Objective Outline 38

Designing the Business Portfolio 41

Real Marketing 2.1 Mo’men Sandwich: A Recipe for Success 44

Marketing Defined 5 | The Marketing Process 5

Chapter 2

Defining a Market-Oriented Mission 39 | Setting Company Objectives and Goals 39

Planning Marketing: Partnering to Build Customer Relationships 46

Understanding the Marketplace and Customer Needs 6

Video Case: Harley-Davidson 33 Company Case Diwan: A Tale of Heart Over Matter

Companywide Strategic Planning: Defining Marketing’s Role 37

Relations for the Future 63

Part 2

Understanding the Marketplace and Consumers 65

Chapter 3

Analyzing the Marketing Environment 66

Chapter Preview 66 Objective Outline 68 The Company’s Microenvironment 68 The Company 69 | Suppliers 69 | Marketing Intermediaries 69 | Competitors 70 | Publics 70 | Customers 71

The Company’s Macroenvironment 71 Demographic Environment 72 Changing Age Structure of the Population 73 | The Changing Arab Family 75 Real Marketing 3.1 Niching: ‘On the Run’ in Egypt 76 Geographic Shifts in Population 77 | Education and Employment 77 | Increasing Diversity 78

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Contents

Economic Environment 79 Changes in Income 79 | Changing Consumer Spending Patterns 80

Natural Environment 80 Technological Environment 82 Political and Social Environment 83

Cultural Environment 85

Responding to the Marketing Environment 88 Real Marketing 3.2 First National Bank: Now You Can Be a Movie Star 89 Reviewing Objectives and Key Terms 90 | Key Terms 90 | Discussing and Applying the Concepts 91 | Focus on Technology 91 | Focus on Ethics 91 | Marketing by the Numbers 92 92

Marketing Research 94

Chapter Preview 94 Objective Outline 96 Marketing Information and Customer Insights 95 Assessing Marketing Information Needs 97 Developing Marketing Information 98 Internal Data 98 | Marketing Intelligence 99

Marketing Research 100 Defining the Problem and Research Objectives 100 | Developing the Research Plan 101 | Gathering Secondary Data 101 | Primary Data Collection 103 Real Marketing 4.1 Collecting Brand Information in the Arab World 109 Implementing the Research Plan 111 | Interpreting and Reporting the Findings 111

Analyzing and Using Marketing Information 112 Customer Relationship Management (CRM) 112 | Distributing and Using Marketing Information 113

Other Marketing Information Considerations 114 Marketing Research in Small Businesses and Nonprofit Organizations 114 | International Marketing Research 115 | Public Policy and Ethics in Marketing Research 116 Real Marketing 4.2 Luxury Brands in the UAE 117 Reviewing Objectives and Key Terms 119 | Key Terms 120 | Discussing & Applying the Concepts 120 | Focus on Technology 120 | Focus on Ethics 121 Marketing by the Numbers 121

Company Case Ariel in Egypt: The Value of Consumer Insight 121

Chapter 5

Consumer Behavior 124

Chapter Preview 124 Objective Outline 126 Model of Consumer Behavior 126 Characteristics Affecting Consumer Behavior 127 Cultural Factors 127

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Social Factors 131 | Personal Factors 134 | Psychological Factors 136 Complex Buying Behavior 139 | Dissonance-Reducing Buying Behavior 140 | Habitual Buying Behavior 140 | Variety-Seeking Buying Behavior 140

The Buyer Decision Process 141

Persistence of Cultural Values 85 | Shifts in Secondary Cultural Values 86

Chapter 4

Real Marketing 5.1 How McDonald’s Markets to the Arab Consumers 129

Types of Buying Decision Behavior 139

Legislation Regulating Business 83 | Increased Emphasis on Ethics and Socially Responsible Actions 84

Video Case: TOMS Shoes 92 Company Case Al Jazirah: The Genius Inventor

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Need Recognition 141 | Information Search 141 | Evaluation of Alternatives 142 | Purchase Decision 142 | Postpurchase Behavior 143

The Buyer Decision Process for New Products 143 Real Marketing 5.2 Lexus: Delighting Customers After the Sale to Keep Them Coming Back 144 Stages in the Adoption Process 145 | Individual Differences in Innovativeness 145

Influence of Product Characteristics on Rate of Adoption 146 Reviewing Objectives and Key Terms 147 | Key Terms 148 | Discussing & Applying the Concepts 148 | Focus on Technology 148 | Focus on Ethics 149 | Marketing by the Numbers 149

Video Case: Wild Planet 149 Company Case Arabic BlackBerry: Adapting to the Language of the Market 150

Chapter 6

Business Markets and Business Buyer Behavior 152

Chapter Preview 152 Objective Outline 154 Business Markets 154 Market Structure and Demand 154 | Nature of the Buying Unit 155 | Types of Decisions and the Decision Process 156 Real Marketing 6.1 Aramex Partners with Business Customers 157

Business Buyer Behavior 162 Major Types of Buying Situations 158 | Participants in the Business Buying Process 159 | Major Influences on Business Buyers 161

The Business Buying Process 162 Problem Recognition 162 | General Need Description 163 | Product Specification 163 | Supplier Search 163 | Proposal Solicitation 163 | Supplier Selection 163 Real Marketing 6.2 International Marketing Manners: When in Rome, Do as the Romans Do 164 Order-Routine Specification 164 | Performance Review 165

E-Procurement: Buying on the Internet 166 Institutional and Government Markets 167 Institutional Markets 167 | Government Markets 168 Reviewing Objectives and Key Terms 170 | Key Terms 171 | Discussing & Applying the Concepts 171 | Focus on Technology 171 | Focus on Ethics 172 | Marketing by the Numbers 172

Video Case: Eaton 172 Company Case Boeing: Selling a Dream(liner)

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Part 3

Designing a Customer-Driven Strategy and Mix 175

Chapter 7

Customer-Driven Marketing Strategy: Segmentation, Targeting, and Positioning 176

Chapter Preview 176 Objective Outline 178 Market Segmentation 178 Segmenting Consumer Markets 178 Real Marketing 7.1 Ramadan Spirit in the Arab World 183 Segmenting Business Markets 184 | Segmenting International Markets 184 | Requirements for Effective Segmentation 185

Market Targeting 186 Evaluating Market Segments 186 | Selecting Target Market Segments 187 Real Marketing 7.2 Islamic Banking 189 Socially Responsible Target Marketing 191

Differentiation and Positioning 192 Positioning Maps 193 | Choosing a Differentiation and Positioning Strategy 193 | Communicating and Delivering the Chosen Position 197 Reviewing Objectives and Key Terms 198 | Key Terms 199 | Discussing & Applying the Concepts 199 | Focus on Technology 199 | Focus on Ethics 200 | Marketing by the Numbers 200

Video Case: Meredith 200 Company Case The Arab Online World—Microsoft Maren 200 Chapter 8

Products, Services, and Brands: Building Customer Value 202

Chapter Preview 202 Objective Outline 204 What is a Product? 204 Products, Services, and Experiences 204 | Levels of Product and Services 205 | Product and Service Classifications 206

Product and Service Decisions 209 Individual Product and Service Decisions 209 | Product Line Decisions 213 | Product Mix Decisions 214

Branding Strategy: Building Strong Brands 215

Video Case: Swiss Army Brands 235 Company Case Alshaya: The House of Brands Chapter 9

New-Product Development and Product Life-Cycle Strategies 238

Chapter Preview 238 Objective Outline 240 New-Product Development Strategy 240 The New-Product Development Process 241 Idea Generation 242 | Idea Screening 243 | Concept Development and Testing 244 | Concept Testing 244 | Marketing Strategy Development 245 | Business Analysis 246 | Product Development 246 | Test Marketing 247 | Commercialization 249

Managing New-Product Development 250 Customer-Centered New-Product Development 250 | Team-Based New-Product Development 251 | Systematic New-Product Development 251 Real Marketing 9.1 Nasamat Al Riyadh: TMG’s New Product in the Kingdom of Saudi Arabia 252

Product Life-cycle Strategies 253 Introduction Stage 255 | Growth Stage 255 | Maturity Stage 256 Real Marketing 9.2 Etisalat Challenges Different Stages of the Product Life Cycle 257 Decline Stage 258

Additional Product and Service Considerations 258 Product Decisions and Social Responsibility 258 | International Product and Services Marketing 259 Reviewing Objectives and Key Terms 261 | Key Terms 262 | Discussing & Applying the Concepts 262 | Focus on Technology 263 | Focus on Ethics 263 | Marketing by the Numbers 263

Video Case: Electrolux 264 Company Case Activia in Egypt 264 Chapter 10

Pricing 266

Chapter Preview 266 Objective Outline 268 What is a Price? 267 Factors to Consider When Setting Prices 269

Brand Equity 215

Customer Perceptions of Value 269

Real Marketing 8.1 Breakaway Brands: Connecting with Customers 217

Company and Product Costs 271

Building Strong Brands 218 | Managing Brands 223 | International and Regional Branding Decisions 224

Services Marketing 224 Real Marketing 8.2 Fayrouz: An International Brand Built in the Region 225 Nature and Characteristics of a Service 225 | Marketing Strategies for Service Firms 227 Real Marketing 8.3 Service Marketing 230 Reviewing Objectives and Key Terms 232 | Key Terms 233 | Discussing & Applying the Concepts 233 | Focus on Technology 233 | Focus on Ethics 234 | Marketing by the Numbers 234

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Value-Based Pricing 269 Types of Costs 271 Real Marketing 10.1 Cheap Chinese Products Flood into Arab Markets 272 Costs at Different Levels of Production 272 | Costs as a Function of Production Experience 273 | Cost-Plus Pricing 274 | Break-Even Analysis and Target Profit Pricing 274

Other Internal and External Considerations Affecting Price Decisions 276 Overall Marketing Strategy, Objectives, and Mix 276 | Organizational Considerations 277 | The Market and Demand 277 Real Marketing 10.2 The World Wonder, Dubai 278 Other External Factors 282

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New-Product Pricing Strategies 283

Chapter 12

Market-Skimming Pricing 283 | Market-Penetration Pricing 283

Product Mix Pricing Strategies 284

Setting Advertising Objectives 329 | Setting the Advertising Budget 330 | Developing Advertising Strategy 331 Evaluating Advertising Effectiveness and Return on Advertising Investment 338 | Other Advertising Considerations 338

Price-Adjustment Strategies 286 Discount and Allowance Pricing 286 | Segmented Pricing 287 | Psychological Pricing 287 | Promotional Pricing 288 | Geographical Pricing 289 | Dynamic Pricing 290 | International Pricing 291

Real Marketing 12.1 Dove: Championing Real Beauty in the Arab World 340

Price Changes 292

Public Relations 341

Initiating Price Changes 292 | Responding to Price Changes 293 Reviewing Objectives and Key Terms 295 | Key Terms 296 | Discussing & Applying the Concepts 296 | Focus on Technology 297 | Focus on Ethics 297 | Marketing by the Numbers 297

Video Case: Ikea 298 Company Case Flydubai Pricing Strategy: Flydubai Enters the Airline Market 298

Personal Selling 345 The Role of the Sales Force 346

Managing the Sales Force 347 Designing Sales Force Strategy and Structure 348 | Recruiting and Selecting Salespeople 350 | Training Salespeople 351 | Compensating Salespeople 352 | Supervising and Motivating Salespeople 352 | Evaluating Salespeople and Sales-Force Performance 355 Steps in the Selling Process 355 | Personal Selling and Managing Customer Relationships 357

Sales Promotion 358 Rapid Growth of Sales Promotion 358

Chapter Preview 300 Objective Outline 302 The Promotion Mix 301 Integrated Marketing Communications 303

Real Marketing 12.2 Qatar Automobiles Company 359 Sales Promotion Objectives 359 | Major Sales Promotion Tools 360 | Developing the Sales Promotion Program 362

The New Marketing Communications Landscape 303 | The Shifting Marketing Communications Model 303 The Need for Integrated Marketing Communications 304

Reviewing Objectives and Key Terms 363 | Key Terms 365 | Discussing & Applying the Concepts 365 | Focus on Technology 365 | Focus on Ethics 365 | Marketing by the Numbers 366

Real Marketing 11.1 Economic Slowdown and the Digital Advertising Boom in the Arab World 305

Video Case: The Principal Financial Group 366 Company Case Coca-Cola: Advertising Hits

A View of the Communications Process 307 Steps in Developing Effective Marketing Communications 308

Chapter 13

Identifying the Target Audienc 308 | Determining the Communication Objectives 308 | Designing a Message 309 | Choosing Media 311 | Selecting the Message Source 313 | Collecting Feedback 313

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Direct and Online Marketing: Building Direct Customer Relationships 368

Chapter Preview 368 Objective Outline 370 The New Direct Marketing Model 370 Growth and Benefits of Direct Marketing 371

Setting the Total Promotion Budget and Mix 314 Setting the Total Promotion Budget 314 Real Marketing 11.2 Qatar Airways 315

Benefits to Buyers 371 | Benefits to Sellers 372

Shaping the Overall Promotion Mix 316 Integrating the Promotion Mix 319

Customer Databases and Direct Marketing 373 Forms of Direct Marketing 373

Socially Responsible Marketing Communication 319

Direct-Mail Marketing 374 | Telephone Marketing 375 | DirectResponse Television Marketing 375 | Kiosk Marketing 376 | New Digital Direct Marketing Technologies 377

Advertising and Sales Promotion 319 | Personal Selling 320

Online Marketing 379

Reviewing Objectives and Key Terms 320 | Key Terms 321 | Discussing & Applying the Concepts 321 | Focus on Technology 322 | Focus on Ethics 322 | Marketing by the Numbers 322

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The Role and Impact of Public Relations 342 | Major Public Relations Tools 343

The Personal Selling Process 355

Communicating Customer Value: Integrated Marketing Communications Strategy 300

Video Case: Crispin Porter + Bogusky 323 Company Case Burger King: Promoting a Food Fight

Promotion Mix Strategies: Advertising and Public Relations 326

Chapter Preview 326 Objective Outline 328 Advertising 328

Product Line Pricing 284 | Optional-Product Pricing 285 | Captive-Product Pricing 285 | By-Product Pricing 285 | Product Bundle Pricing 286

Chapter 11

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Marketing and the Internet 379 | Online Marketing Domains 380 Real Marketing 13.1 Online Business in the Arab World 381

Setting Up An Online Marketing Presence 384 Creating a Website 384 | Placing Ads and Promotions Online 386 | Creating or Participating in Online Social Networks 387

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Contents

Real Marketing 13.2 Social Networks in the Arab World 388 Using Email 389

The Promise and Challenges of Online Marketing 390 Public Policy Issues in Direct Marketing 390 Irritation, Unfairness, Deception, and Fraud 390 | Invasion of Privacy 391 Reviewing Objectives and Key Terms 392 | Key Terms 393 | Discussing & Applying the Concepts 394 | Focus on Technology 394 | Focus on Ethics 394 | Marketing by the Numbers 395

Video Case: Google 395 Company Case Elsou2.com: The First Online Supermarket in the Arab World 395

Chapter 14

Managing Marketing Channels 400

Chapter Preview 400 Objective Outline 402 Supply Chains and the Value Delivery Network 401 The Nature and Importance of Marketing Channels 403 How Channel Members Add Value 403 | Number of Channel Levels 404

Channel Behavior and Organization 405 Channel Behavior 406 | Vertical Marketing Systems 407 | Horizontal Marketing Systems 409 | Multichannel Distribution Systems 409 | Changing Channel Organization 410

Channel Design Decisions 411 Analyzing Consumer Needs 411 | Setting Channel Objectives 412 | Identifying Major Alternatives 412 | Evaluating the Major Alternatives 414 | Designing International Distribution Channels 414

Channel Management Decisions 415 Selecting Channel Members 415 | Managing and Motivating Channel Members 415 Real Marketing 14.1 Toys “R” Us 416 Public Policy and Distribution Decisions 417

Marketing Logistics and Supply Chain Management 417 Nature and Importance of Marketing Logistics 417 | Goals of the Logistics System 419 | Major Logistics Functions 419 | Integrated Logistics Management 421

Retailing 423 Types of Retailers 424

Retailer Marketing Decisions 427 Segmentation, Targeting, Differentiation, and Positioning Decisions 427 | Product Assortment and Services Division 428 Real Marketing 14.2 Orchestrating the Retail Experience 429 Price Decision 430 | Promotion Decision 430 | Place Decision 430

Wholesaling 431 Agents and Distributors 431 Reviewing Objectives and Key Terms 433 | Key Terms 434 | Discussing & Applying the Concepts 435 | Focus on Technology 435 | Focus on Ethics 435 | Marketing by the Numbers 436

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Video Case: Progressive 436 Company Case Zara: The Technology Giant of the Fashion World 436

Part 4

Extending Marketing 439

Chapter 15

Creating Competitive Advantage 440

Chapter Preview 440 Objective Outline 442 Competitor Analysis 442 Identifying Competitors 442 | Assessing Competitors 443 | Selecting Competitors to Attack and Avoid 445 Real Marketing 15.1 Middle Eastern Airlines Filling the Market Gaps 448 Designing a Competitive Intelligence System 448

Competitive Strategies 449 Approaches to Marketing Strategy 449 | Basic Competitive Strategies 451 | Competitive Positions 452 Real Marketing 15.2 Ritz-Carlton: Creating Customer Intimacy 453 Market Leader Strategies 454 | Market Challenger Strategies 456 | Market Follower Strategies 458 | Market Nicher Strategies 458

Balancing Customer and Competitor Orientations 459 Reviewing Objectives and Key Terms 460 | Key Terms 461 | Discussing & Applying the Concepts 461 | Focus on Technology 461 | Focus on Ethics 462 | Marketing by the Numbers 462

Video Case: Umpqua Bank 462 Company Case Bose: Competing by Being Truly Different Chapter 16

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The Global Marketplace 466

Chapter Preview 466 Objective Outline 468 Global Marketing Today 468 Looking at the Global Marketing Environment 470 The International Trade System 470 | Economic Environment 472 | Political-Legal Environment 473 | Cultural Environment 474

Deciding Whether to Go Global 477 Deciding Which Markets to Enter 478 Deciding How to Enter the Market 479 Exporting 480 | Joint Venturing 480 | Direct Investment 481

Deciding on the Global Marketing Program 482 Real Marketing 16.1 Oreos and Milk, Chinese Style 483 Product 484 Real Marketing 16.2 Desserts in Ramadan 485 Promotion 485 | Price 486 | Distribution Channels 487

Deciding on the Global Marketing Organization 488 Reviewing Objectives and Key Terms 489 | Key Terms 490 | Discussing & Applying the Concepts 490 | Focus on Technology 490 | Focus on Ethics 491 | Marketing by the Numbers 491

Video Case: Nivea 491 Company Case B-Tech: A Successful Regional Brand

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Contents Chapter 17

Sustainable Marketing: Social Responsibility and Ethics 494

Chapter Preview 494 Objective Outline 496 Sustainable Marketing 496 Social Criticisms of Marketing 498 Marketing’s Impact on Individual Consumers 498 | Marketing’s Impact on Society as a Whole 503 | Marketing’s Impact on Other Businesses 505

Consumer Actions to Promote Sustainable Marketing 506 Consumerism 506 Real Marketing 17.1 Improving Society Via Cultural and Islamic Virtues 507 Environmentalism 508 | Public Actions to Regulate Marketing 512

Business Actions Toward Sustainable Marketing 513 Sustainable Marketing Principles 513

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Real Marketing 17.2 Takaful: A True Customer-Driven Product 514

Marketing Ethics 517 The Sustainable Company 519 Reviewing Objectives and Key Terms 521 | Key Terms 522 | Discussing & Applying the Concepts 522 | Focus on Technology 523 | Focus on Ethics 523 | Marketing by the Numbers 523

Video Case: Land Rover 524 Company Case ExxonMobil: Social Responsibility in a Commodity Market 524

Appendix 1 Marketing Plan A1 Appendix 2 Marketing by the Numbers A11 Appendix 3 Careers in Marketing A29 References R1 English-Arabic Glossary G1 Index I1 Credits C1

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Feature matrix Chapter 1

Chapter opening case Real Marketing 1.1 Real Marketing 1.2 Company Case

BBK, formerly known as The Bank of Bahrain and Kuwait B.S.C. Etisalat: Delighting Customers Media and Direct Communication Trends in the Arab World Diwan: A Tale of Heart Over Matter

Regional Regional Regional Egypt

Chapter 2

Chapter opening case Real Marketing 2.1 Real Marketing 2.2 Company Case

The London Olympics Mo’men Sandwich: A Recipe for Success Niching: Voluntourism, A New Way to See the World Bahrain Bay: Building Customer Relations for the Future

United Kingdom Egypt Regional Bahrain

Chapter 3

Chapter opening case Real Marketing 3.1 Real Marketing 3.2 Company Case

The Dubai property market Niching: ‘On the Run’ in Egypt First National Bank: Now You Can Be a Movie Star Al Jazirah: The Genius Inventor

UAE Egypt Lebanon Saudi Arabia

Chapter 4

Chapter opening case Real Marketing 4.1 Real Marketing 4.2 Company Case

Maktoob Research’s ‘Arab Eye’ website Collecting Brand Information in the Arab World Luxury Brands in the UAE Ariel in Egypt: The Value of Consumer Insight

Regional Regional UAE Egypt

Chapter 5

Chapter opening case Real Marketing 5.1 Real Marketing 5.2

Al-Ahli and Zamalek football teams How McDonald’s Markets to the Arab Consumers Lexus: Delighting Customers After the Sale to Keep Them Coming Back Arabic BlackBerry: Adapting to the Language of the Market

Egypt Regional UAE

Saudi Arabia Regional Global

Company Case

Advanced Electronics Company Aramex Partners with Business Customers International Marketing Manners: When in Rome, Do as the Romans Do Boeing: Selling a Dream(Liner)

Chapter 7

Chapter opening Case Real Marketing 7.1 Real Marketing 7.2 Company Case

Damas Group Ramadan Spirit in the Arab World Islamic Banking The Arab Online World—Microsoft Maren

Regional Regional Regional Regional

Chapter 8

Chapter opening case Real Marketing 8.1 Real Marketing 8.2 Real Marketing 8.3 Company Case

Bahrain Islamic Bank Breakaway Brands: Connecting with Customers Fayrouz: An International Brand Built in the Region Service Marketing Alshaya: The House of Brands

Bahrain Global Egypt Global Regional

Company Case Chapter 6

Chapter opening case Real Marketing 6.1 Real Marketing 6.2

Regional

United States

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Feature matrix

Global Saudi Arabia

Company Case

Apple Nasamat Al Riyadh: TMG’s New Product in the Kingdom of Saudi Arabia Etisalat Challenges Different Stages of the Product Life Cycle Activia in Egypt

Chapter 10

Chapter opening case Real Marketing 10.1 Real Marketing 10.2 Company Case

Carrefour Cheap Chinese Products Flood into Arab Markets The World Wonder, Dubai Flydubai Pricing Strategy

Regional Regional UAE UAE

Chapter 11

Chapter opening case Real Marketing 11.1

Regional Regional

Real Marketing 11.2 Company Case

Unilever Arabia Economic Slowdown and the Digital Advertising Boom in the Arab World Qatar Airways Burger King: Promoting a Food Fight

Qatar Global

Chapter 12

Chapter opening case Real Marketing 12.1 Real Marketing 12.2 Company Case

TBWA\RAAD Dove: Championing Real Beauty in the Arab World Qatar Automobiles Company Coca-Cola: Advertising Hits

UAE Regional Qatar Regional

Chapter 13

Chapter opening case Real Marketing 13.1 Real Marketing 13.2 Company Case

Amazon.com Online Business in the Arab World Social Networks in the Arab World Elsou2.com: The First Online Supermarket in the Arab World

Global Regional Regional Egypt

Chapter 14

Chapter opening case Real Marketing 14.1 Real Marketing 14.2 Company Case

Al Zaytoun Toys “R” Us Orchestrating the Retail Experience Zara: The Technology Giant of the Fashion World

Palestine Regional Global Global

Chapter 15

Chapter opening case Real Marketing 15.1 Real Marketing 15.2 Company Case

Bahrain Polytechnic Middle Eastern Airlines Filling the Market Gaps Ritz-Carlton: Creating Customer Intimacy Bose: Competing by Being Truly Different

Bahrain Regional Global Global

Chapter 16

Chapter opening case Real Marketing 16.1 Real Marketing 16.2 Company Case

McDonald’s Oreos and Milk, Chinese Style Ramadan Desserts B-Tech: A Successful Regional Brand

Global China Regional Egypt

Chapter 17

Chapter opening case Real Marketing 17.1 Real Marketing 17.2 Company Case

CSR Middle East

Regional

Improving Society Via Cultural and Islamic Virtues Takaful: A True Customer-Driven Product ExxonMobil: Social Responsibility in a Commodity Market

Regional Regional United States

Chapter 9

Chapter opening Case Real Marketing 9.1 Real Marketing 9.2

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Foreword We are very pleased to see the Arab World Edition of Principles of Marketing.The text was first published for the North America region and has been successfully adopted by hundreds of universities in the Middle East and in other parts of the world. This great edition for the Arab world demonstrates that this textbook, in its scope and depth, effectively meets the demands of educators for a book that offers a comprehensive focus on marketing as a tool for creating valuable customer experiences in various and changing cultural settings. The Arab World Edition brings to the readers the local marketing scenario, perspectives, and practices through case studies and examples. The book provides local insights into the exciting world of marketing in a region that has become a competing arena for increasing numbers of national and multinational corporations. While maintaining the essence of the original U.S. edition, this Arab world version provides students with concepts, approaches, and examples relevant to the Arab culture and its business environment. We are thrilled to see it available for educators and students in the Arab world and hope that they find it useful. Philip Kotler Gary Armstrong

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Preface The New Arab World Edition! Creating More Value for You! The goal of every marketer is to create more value for customers. So it makes sense that our goal for the new Arab World Edition of Kotler & Armstrong’s Principles of Marketing is to continue creating more value for you—our customer. Our goal is to introduce you to the fascinating world of modern marketing in an innovative yet practical and enjoyable way, incorporating relevant examples from across the Arab region and across the globe. In this way, the Arab World Edition has the advantage of offering the best of both the regional, as well as the global, worlds of marketing. This Arab World Edition aims to help students in the region to understand and apply the concepts and practices of modern marketing, by relating marketing strategies and theory to students’ experiences in daily life. We have tried to bring to life global marketing concepts by showcasing and analyzing regional marketing initiatives and practices from all over the Arab world. Of course, we have also retained global examples which demonstrate marketing theory and practice in an international context. In this way, the Arab World Edition has the advantage of offering the best of both the regional, as well as the global, worlds of marketing.

Marketing: Creating Customer Value and Relationships A recent survey of top marketers showed that they all share a common goal: putting the consumer at the heart of marketing. Today’s marketing is all about creating customer value and building profitable customer relationships. It starts with understanding consumer needs and wants, deciding which target markets the organization can serve best, and developing a compelling value proposition by which the organization can attract, keep, and grow targeted consumers. If the organization does these things well, it will reap the rewards in terms of market share, profits, and customer equity.

Five Major Value Themes From beginning to end, the Arab World Edition of Principles of Marketing develops an innovative customer-value and customer-relationships framework that captures the essence of today’s marketing. It builds on five major value themes: 1. Creating value for customers in order to capture value from customers in return. Today’s marketers must be good at creating customer value and managing customer relationships. Outstanding marketing companies understand the marketplace and customer needs, design value-creating marketing strategies, develop integrated marketing programs that deliver customer value and delight, and build strong customer relationships. In return, they capture value from customers in the form of sales, profits, and customer loyalty. This innovative customer-value framework is introduced at the start of Chapter 1 in a fivestep marketing process model, which details how marketing creates customer value and captures value in return. The framework is carefully explained in the first two chapters and then fully integrated throughout the remainder of the text. 2. Building and managing strong, value-creating brands. Well-positioned brands with strong brand equity provide the basis upon which to build customer value and profitable customer relationships. Today’s marketers must position their brands powerfully and manage them well. They must build close brand relationships and experiences with customers. 3. Measuring and managing return on marketing. Marketing managers must ensure that their marketing budgets are being spent wisely. In the past, many marketers spent freely on big, expensive marketing programs, often without thinking carefully about the financial returns on their spending. But that has all been changing in recent years. ‘Marketing

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accountability’—measuring and managing return on marketing investments—has now become an important part of strategic marketing decision making. This emphasis on marketing accountability is addressed throughout this book. 4. Harnessing new marketing technologies. New digital and other high-tech marketing developments are dramatically changing how consumers and marketers relate to one another. The Arab World Edition thoroughly explores the new technologies impacting marketing, from ‘Web 2.0’ in Chapter 1 to new-age digital marketing and online technologies in Chapters 12 and 13 to the exploding use of online social networks and customer-generated marketing in Chapters 1, 5, 11, 13, and elsewhere. 5. Sustainable marketing around the globe. As technological developments make the world an increasingly smaller and more fragile place, marketers must be good at marketing their brands globally and in responsible and ethical ways. Material and examples throughout the Arab World Edition emphasize the concept of sustainable marketing—meeting the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs.

Adapted for Students in the Arab World We’ve thoroughly adapted Principles of Marketing to meet the needs of students in the Arab region, by including examples which reflect the marketing environment and experience of businesses operating in the Arab region, while still retaining a global perspective overall. We have also included cultural and social insights which will be more familiar and relevant to our audience. We retain Kotler & Armstrong’s successful formula: a sharp focus on how to create, communicate and deliver value to customers, and we discuss the major trends and forces impacting marketing in this era of customer value and relationships. Here are just some of the ways in which we’ve adapted the book to be ideal for students in the Arab world. • Throughout each chapter, Arab businesses and familiar cultural examples are integrated into the text, making the whole book more relevant for our readers. • In-depth case studies in each chapter show marketing principles and concepts in practice, at the Chapter Openers, the in-chapter “Real Marketing” boxes, and end-of-chapter Company Cases. These now feature a well-balanced spread of global examples alongside companies and examples from across the Arab region including Saudi Arabia, the United Arab Emirates, Egypt, Jordan, Palestine, Lebanon, Qatar, Bahrain, Kuwait, Northern Africa, and elsewhere. • An English-Arabic Glossary has been added at the end of the book, providing a translation of the key terms found in each chapter. • Each chapter has been carefully edited to adapt the English vocabulary to be sympathetic to students whose first language is not English. We have ensured that over-complicated words, sayings or idioms are replaced with straightforward language so that students can focus their energy on understanding the concepts. • The book has been reduced in length to 17 focused chapters, to meet the demand for a resource which is easier to handle and cover in the time available.

Real Value Through Real Marketing Principles of Marketing features in-depth, real-world examples and stories that show concepts in action and reveal the drama of modern marketing. In the Arab World Edition, every Chapter Opening case study, “Real Marketing” box and end-of-chapter Company Case has been reviewed for its relevance to you, our Arab world audience. We have replaced many of these case studies throughout the book with examples from the Arab region which will provide familiar, fresh and relevant insights into real marketing practices. We have deliberately retained many other examples from across the world to emphasize the global nature of modern day marketing. A selection of these examples include the following: • BBK Bank (formerly The Bank of Bahrain and Kuwait) has grown to become a leading commercial bank in its markets, by focusing on client-driven customer service, employee development and brand building. (Chapter 1)

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Preface • The ‘voluntourism’ movement has sprung up to meet the needs of a particular niche – we explore voluntourism programmes operating in Jordan, Syria, Lebanon and elsewhere. (Chapter 2) • Saudi Arabian company Al Jazirah has capitalized on environmental factors in successfully developing and marketing its evaporative coolers. (Chapter 3) • Proctor & Gamble launched its Ariel product into Egypt, based on rigorous market research and a solid understanding of the current habits and needs of potential customers. (Chapter 4) • The devoted and divided fan bases of the Egyptian football teams Al-Ahly and Zamalek show the importance of social and cultural interests such as football in shaping consumer behavior. (Chapter 5) • Advanced Electronics Company (AEC), the Saudi-based company, has developed an international client base including Boeing, Lockheed Martin, Rockwell International, Saudi Ministry of Water & Electricity, Aramco, Siemens, Nokia. It has built an approach to business-to-business marketing based on deep relationships with clients, to become a strategic, problem-solving partner. (Chapter 6) • Damas Group, the jewelry and watch retailer operating across the Arab world and beyond, uses segmentation wisely to target different customer groups. (Chapter 7) • Microsoft developed its Maren product, which represented a leap forward in addressing the problem of using Arabic language online and with a QWERTY keyboard, by working to understand customer needs and responses in depth. (Chapter 7) • Alshaya understands the importance of brands, and uses this knowledge to operate franchises of many international brands in the Arab world. (Chapter 8) • Apple founder Steve Jobs used dazzling customer-driven innovation to first start the company and then to remake it again 20 years later. (Chapter 9) • Flydubai used pricing strategy to meet the demand for low cost flights and launch as a new airline in the UAE. (Chapter 10) • Coca-Cola combines music and advertising to appeal to its customers, with recent campaigns in the Middle East including Nancy Ajram to raise profile. (Chapter 12) • Amazon.com has developed industry-leading expertise in using the internet as a tool for delivering customer value. (Chapter 13) • Bahrain Polytechnic has created a clear competitive advantage for its target students by distinctly differentiating itself from its competitors. (Chapter 15) • McDonald’s, the quintessential all-American company, now sells more burgers and fries outside the United States than within. We explore its journey into the Russian market. (Chapter 16) • CSR Middle East promotes corporate social responsibility across the region by working closely with a range of businesses, organizations and NGOs. (Chapter 17) Each chapter is packed with countless real, relevant, and timely examples that reinforce key concepts and bring marketing to life.

Valuable Learning Aids The Arab World Edition continues the hallmark approach to text design crafted in Principles of Marketing, to inspire students and present everything as clearly as possible. A wealth of chapteropening, in-chapter, and end-of-chapter learning devices help students to learn, link, and apply major concepts: • Chapter Preview. As part of an active and integrative chapter-opening design, a brief section at the beginning of each chapter previews chapter concepts, links them with previous chapter concepts, and introduces the chapter-opening story. • Chapter-opening marketing stories. Each chapter begins with an engaging, deeply developed, illustrated, and annotated marketing story that introduces the chapter material and sparks student interest. Many relevant and inspiring examples from the Arab world have been added. • Objective outline. This chapter-opening feature provides a helpful preview outline of chapter contents and learning objectives. • Author comments and figure annotations. Throughout the chapter, author comments ease and enhance student learning by introducing and explaining major chapter sections. There are also comment bubbles on the figures to help explain concepts to students.

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• Real Marketing boxes. Each chapter contains two boxed case study features that provide an indepth look at real marketing practices of large and small companies, including a wide range of new examples from the Arab world. • Reviewing the Objectives and Key Terms. A summary at the end of each chapter reviews major chapter concepts, chapter objectives, and key terms. • Discussing and Applying the Concepts. Each chapter contains a set of discussion questions and application exercises covering major chapter concepts. • Focus on Technology. Application exercises at the end of each chapter provide discussion of important and emerging marketing technologies in this digital age. • Focus on Ethics. Situation descriptions and questions highlight important issues in marketing ethics at the end of each chapter. • Marketing by the Numbers. An exercise at the end of each chapter lets students apply analytical and financial thinking to relevant chapter concepts and links the chapter to Appendix 2: Marketing by the Numbers. • Company Cases. Company cases for class or written discussion are provided at the end of each chapter—many of these are now developed specifically for the Arab World Edition. These cases challenge students to apply marketing principles to real companies in real situations. • Video Cases. Short cases and discussion questions appear at the end of every chapter, to be used with the set of 4- to 6-minute videos that accompany this edition. • Marketing Plan appendix. Appendix 1 contains a sample marketing plan that helps students to apply important marketing planning concepts. • Marketing by the Numbers appendix. An innovative Appendix 2 provides students with a comprehensive introduction to the marketing financial analysis that helps to guide, assess, and support marketing decisions. More than ever before, the Arab World Edition of Principles of Marketing creates value for you—it gives you all you need to know about marketing in an effective and enjoyable total learning package!

A Valuable Learning Package A successful marketing course requires more than a well-written book. A total package of resources extends this edition’s emphasis on creating value for you. The following aids support Principles of Marketing.

Videos The video library features exciting segments for this edition. All segments are available in mymarketinglab. Here are just a few of the videos offered: Live Nation’s Customer Relationships TOMS Shoes’ Marketing Environment E*TRADE’s Advertising and PR Strategies Principle Financial Group’s Personal Selling Umpqua Bank’s Competitive Advantage

mymarketinglab (www.pearsoned.co.uk/kotler) gives you the opportunity to test yourself on key concepts and skills, track your own progress through the course, and use the personalized study plan activities—all to help you achieve success in the classroom. Features include: • Personalized study plans—Pre- and post-tests with remediation activities directed to help you understand and apply the concepts where you need the most help. • Self-assessments—Prebuilt self-assessments allow you to test yourself.

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Preface • Interactive elements—A wealth of hands-on activities and exercises let you experience and learn firsthand. Whether it is with the online e-book where you can search for specific keywords or page numbers, highlight specific sections, enter notes right on the e-book page, and print reading assignments with notes for later review or with other materials including “Real People Real Choices Video Cases,” online end-of-chapter activities, “Active Flashcards,” and much more. • iQuizzes—Study anytime, anywhere—iQuizzes work on any color-screen iPod and are comprised of a sequence of quiz questions, specifically created for the iPod screen. Find out more at www.pearsoned.co.uk/kotler. No book is the work only of its authors. We greatly appreciate the valuable contributions of several people who helped make this new edition possible. Anwar Habib: I would like to acknowledge the continuous inspiration and support of my wife Fahmida in writing this text. I would also like to thank Nada Yaghi, my ex-student, for her valuable research and support in selecting appropriate regional examples for the text. Finally I would like to thank all the regional organizations, like MAF group, Unilever, Masafi, and Al Islami Foods, who have supported me with case study materials and other information. I’d also like to extend a special thanks to Sarah Wightman for her excellent editorial support. Ahmed Tolba: I would like to dedicate this edition to my wife Nayla and my kids Ismail and Amina. I would also like thank Ahmed El Banhawy for his significant contribution to the completion of this textbook, and my teaching assistants Laila Yassin and Ali El Gendy for their remarkable efforts in finding appropriate regional case studies. Finally, I would like to thank everyone at Pearson for their significant efforts and professional support. Anwar Habib Ahmed Tolba

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Acknowledgments We would like to thank the following reviewers for their thoughtful comments and suggestions for this new Arab World Edition: Dr Saleh AlShebil, King Fahd University of Petroleum & Minerals, Saudi Arabia Dr Ibrahim Hegazy, American University of Cairo, Egypt Professor Peter Mason, American University of Sharjah, UAE Dr Ahmad Zamil, King Saud University, Saudi Arabia Dr Abdullah Sultan, Kuwait University, Kuwait Professor Hassan Naja, Lebanese American University, Lebanon Dr Imad Baalbaki, American University of Beirut, Lebanon Dr Jean Boisvert, American University of Sharjah, UAE Dr Samaa Attia, British University in Egypt, Egypt Professor Mariam Abou-Youssef, German University in Cairo, Egypt Professor Abbas Abu Altimen, University of Sharjah, UAE Dr Ahmed Ghoneim, Cairo University, Egypt Dr Hani Al-Dmour, University of Jordan, Jordan Dr Rania Hussein, Cairo University, Egypt Dr Khaled Hanafy, Arab Academy for Science, Technology & Maritime Transport, Egypt Dr Mohamed A. Radwan, American University in Cairo, Egypt We would also like to thank contributors Dr. Mohamed A. Radwan, Adjunct Faculty at American University in Cairo and Managing Director of Platinum Partners, Mike Lewicki, Marketing Instructor at the University College of Bahrain, and Owen Davies, who provided additional material for this text. Their excellent work has added real value to this edition. Many reviewers and contributors have provided valuable comments and suggestions for previous editions of Principles of Marketing. We’d like to thank them all for their insights, which have informed our work on this adaptation.

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PART 3 Designing a Customer-Driven Strategy and Mix CHAPTER 7

Customer-Driven Marketing Strategy: Segmentation, Targeting, and Positioning

CHAPTER 8

Products, Services, and Brands: Building Customer Value

CHAPTER 9

New-Product Development and Product Life-Cycle Strategies

CHAPTER 10

Pricing

CHAPTER 11

Communicating Customer Value: Integrated Marketing Communications Strategy

CHAPTER 12

Promotion Mix Strategies: Advertising and Public Relations

CHAPTER 13

Direct and Online Marketing: Building Direct Customer Relationships

CHAPTER 14

Managing Marketing Channels

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Chapter 7

Part Part Part Part

1 2 3 4

Defining Marketing and the Marketing Process (Chapters 1, 2) Understanding the Marketplace and Consumers (Chapters 3, 4, 5, 6) Designing a Customer-Driven Strategy and Mix (Chapters 7, 8, 9, 10, 11, 12, 13, 14) Extending Marketing (Chapters 15, 16, 17)

Customer-Driven Marketing

Strategy

Segmentation, Targeting, and Positioning

Chapter PREVIEW

So far, you’ve learned what marketing is and about the importance of understanding consumers and the marketplace environment. With that as background, you’re now ready to delve deeper into marketing strategy and tactics. This chapter looks further into key customer-driven marketing strategy decisions—how to divide up

D

amas Group is a jewelry and watch retailer that has expanded into 18 countries around the world with about 450 stores. The group is the most widespread jewelry and watch retailer in the Arab world, in terms of number of stores. The group has subsidiaries mainly in the Arab world, India, and Italy. It also has jointly controlled entities and associates in the Arab world, Europe, North Africa, and other locations. Damas sells its own brands, and it also sells other top international and Arab world brands. It might be perceived that Damas focuses merely on the high-end consumer, yet this is not absolutely correct. Essentially, Damas targets three types of consumers through selling its brands in three types of stores: Les Exclusives stores, Semi-Exclusive stores, and Damas 22K stores. The Les Exclusives stores mainly serve “high net worth consumers,” and offer highly extravagant worldwide brands in addition to Damas’ own products. Semi-Exclusive stores target “upper-middle income consumers” with products that are relatively less unique, but appeal to a broader spectrum of consumers, such as tourists and expatriates, professionals, and office workers. These stores sell international brands, along with Damas’ products. Thirdly, Damas 22K stores target “middle income and working class immigrant populations,” and sell Damas’ products along with some regional brands. While the above are the main stores, Damas targets other segments by selling in other stores, such as Damas Kids for youngsters and families, and Mono-stores specializing in certain global brands, including Tiffany & Co, Paspaley, Graff, Parmigiani, Stefan Hafner, Links of London, Roberto Coin, Roberta Porrati and Folli Follie.1 Let’s take a closer look at Damas’ A-segment in its Les Exclusives Boutiques. In Dubai, Damas holds the Luxury Week event, which displays the extravagant and up-to-date jewelry and watch collections at the city’s renowned shopping site. Shoppers at that event are treated with gifts with every purchase they make. The occasion, which is attended by journalists and VIPs, gives A-class buyers the chance to purchase the latest fashionable brands in the

markets into meaningful customer groups (segmentation), choose which customer groups to serve (targeting), create market offerings that best serve targeted customers (differentiation), and position the offerings in the minds of consumers (positioning). Then, the chapters that follow explore the tactical marketing tools—the Four Ps—by which marketers bring these strategies to life. A good example of segmentation in the Arab world is Damas, as discussed in the example here.

jewelry and watch markets brought from all over the world. The list ranges from standard brands to modish celebrated worldwide brand names, such as Carrera y Carrera and Mikimoto; world-renowned Italian jewelry brands such as Roberto Coin, Marco Bicego, Fope, Luca Carati, and Leo Pizzo; famous Spanish brand Magerit; in addition to a wide collection of watches crafted by legendary watch brands, including Chronoswiss, Parmigiani, Perrelet, Roger Dubuis, and Sarcar. Tamjid Abdullah, deputy managing Damas has its own director, Damas, says: “In keeping with designs, targeting the growing international profile of Dubai, different segments Damas has always sought to bring customers from different age a versatile array of brands acknowledged for ranges and differtheir style definition and creative exuberance. ent income levels. And I am happy to say that it is their enthusiastic appreciation and support of our efforts that has provided us the incentive to forge ahead as true pioneers. During the Damas Luxury Week, shoppers will be treated to a thrilling selection of the most exclusive diamond, gold and pearl jewelry collections, by the world’s leading jewelry and watch brands. Such events also provide brilliant testimony to the tremendous trust Damas enjoys with its international partners.”2

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Recently, Les Exclusives Boutiques in the UAE have added a new collection of the leading Italian design house, Roberto Coin. Roberto Coin is featured by its best-selling Cento Collection, which is based on the artistic designs of the luxurious 100-facet Cento diamonds. In Les Exclusives shops, Roberto Coin offers the latest of its collections. Tawhid Abdullah, managing director of Damas, added: “The extensive Roberto Coin collection has been launched to create [a] distinct modern look for contemporary woman and set a different trend this festive season. Thus on one side it captures the hearts of discerning followers of fashion and on the other complement[s] the personality of the wearer. Roberto Coin’s vibrant creations blend color and an eye for detail that has helped the brand carve a niche in the highly competitive Middle East market and Mr Coin’s recent visit to Dubai is proof of his close affinity to jewelry lovers in this part of the globe.”3 Roberto Coin, CEO of the brand, commented: “You must understand that Roberto Coin is a niche jewelry brand which unwaveringly upholds and perfects its standards to stay at the top important market for us and the growth Damas Les Exclusives by constant innovation and creativity. We use some of the world’s potential for Italian jewelry is enormous. I in Dubai holds the finest jewels and our treatment of the most precious metals and am extremely happy to know that Roberto Luxury Week event, stones have given new meaning to the words ’top-class.’ Thus I creCoin has found a loyal following driven by which displays the ate jewelry for a woman who has her own personal style, is intellia huge demand from the style conscious of extravagant and 5 gent, witty and has grace. So it is natural that my inspiration comes the region.” up-to-date jewelry 4 The Arab world has become a from the elegance of femininity.” and watch collections Around the world, Roberto Coin’s name appeals to the promising region for the most luxurious at the city’s renowned A-segment; this includes famous Hollywood stars and VIPs in all brands, local and global. In fact, the region shopping site. fields in Europe. Roberto Coin now is positioned among the most displays a wide array of demographic famous jewelry brands in segmentation from highly the United States, and is rich to low-income buyers. When Damas decided to target and position itself in the the leading Italian jewelry This makes it easy for marmarket, it created a variety of store brands targeting the brand. Roberto Coin finds keters to find their target; his target niche in the Arab however, it is a tougher job different segments not only by income but also according world as well. Coin said, to convey sound product to age and ethnicity. “The Middle East is a very positioning.

Market segmentation Dividing a market into smaller groups with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes.

Market targeting (targeting) The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.

Differentiation Actually differentiating the market offering to create superior customer value.

Positioning Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

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Companies today recognize that they cannot appeal to all buyers in the marketplace, or at least not to all buyers in the same way. Buyers are too numerous, too widely scattered, and too varied in their needs and buying practices. Moreover, the companies themselves vary widely in their abilities to serve different segments of the market. Instead, a company must identify the parts of the market that it can serve best and most profitably. It must design customerdriven marketing strategies that build the right relationships with the right customers. Thus, most companies have moved away from mass marketing and toward target marketing—identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each. Instead of scattering their marketing efforts, firms are focusing on the buyers who have greater interest in the values they create best. Figure 7.1 shows the four major steps in designing a customer-driven marketing strategy. In the first two steps, the company selects the customers that it will serve. Market segmentation involves dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes. The company identifies different ways to segment the market and develops profiles of the resulting market segments. Market targeting (or targeting) consists of evaluating each market segment’s attractiveness and selecting one or more market segments to enter. In the final two steps, the company decides on a value proposition—on how it will create value for target customers. Differentiation involves actually differentiating the firm’s market offering to create superior customer value. Positioning consists of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. We discuss each of these steps in turn.

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Objective Outline OBJECTIVE 1 Define the major steps in designing a customer-driven marketing strategy: market segmentation, targeting, differentiation, and positioning.

Customer-Driven Marketing Strategy 177 OBJECTIVE 2 List and discuss the major bases for segmenting consumer and

business markets. Market Segmentation 178–186 OBJECTIVE 3 Explain how companies identify attractive market segments and choose a market-targeting strategy.

Market Targeting 186–192 OBJECTIVE 4 Discuss how companies differentiate and position their products

for maximum competitive advantage in the marketplace. Differentiation and Positioning 192–198

Market Segmentation (pp 178–186)

Author Market segmentation Comment addresses the first simple-

Buyers in any market differ in their wants, resources, locations, buying attitudes, and buying practices. Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs. In this section, we discuss four important segmentation topics: segmenting consumer markets, segmenting business markets, segmenting international markets, and requirements for effective segmentation.

sounding marketing question: What customers will we serve? The answer will be different for each company. For example, The Four Seasons targets the top 5 percent of corporate and leisure travelers. Holiday Inn targets middleclass people traveling on a budget.

Segmenting Consumer Markets There is no single way to segment a market. A marketer has to try different segmentation variables, alone and in combination, to find the best way to view the market structure. Table 7.1 outlines the major variables that might be used in segmenting consumer markets. Here we look at the major geographic, demographic, psychographic, and behavioral variables. Geographic segmentation Dividing a market into different geographical units such as nations, provinces, regions, cities, or neighborhoods.

FIGURE | 7.1 Designing a CustomerDriven Marketing Strategy In concept, marketing boils down to two questions: (1) Which customers will we serve? and (2) How will we serve them? Of course, the tough part is coming up with good answers to these simple-sounding but difficult questions. The goal is to create more value for the customers we serve than competitors do.

Geographic Segmentation Geographic segmentation calls for dividing the market into different geographical units such as nations, regions, provinces, parishes, cities, or even neighborhoods. A company

Select customers to serve

Decide on a value proposition

Segmentation Divide the total market into smaller segments

Differentiation Differentiate the market offering to create superior customer value

Targeting Select the segment or segments to enter

Create value for targeted customers

Positioning Position the market offering in the minds of target customers

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TABLE | 7.1

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179

Major Segmentation Variables for Consumer Markets

Geographic

Examples

World region or country

Western Europe, Arab world, Pacific Rim, China, India, Canada, Mexico, North America

Country region

North Africa, The Gulf, Near East

City or metro size

Under 5,000; 5,000–20,000; 20,000–50,000; 50,000–100,000; 100,000–250,000; 250,000–500,000; 500,000–1,000,000; 1,000,000–4,000,000; over 4,000,000

Density

Urban, suburban, ex-urban, rural

Climate

Northern, southern

Demographic

Examples

Age

Under 6, 6–11, 12–19, 20–34, 35–49, 50–64, 65+

Gender

Male, female

Family size

1–2, 3–4, 5+

Family life cycle

Young, single; married, no children; married with children; widowed; older, married, no children under 18; older, single; other

Income

Under US$20,000; $20,000–$30,000; $30,000–$50,000; $50,000–$100,000; $100,000–$250,000; $250,000 and over

Occupation

Professional and technical; managers, officials, and proprietors; clerical; sales; craftspeople; supervisors; farmers; retired; students; homemakers; unemployed

Education

Primary school or less; some secondary school; secondary school graduate; some college; college graduate

Religion

Muslim, Christian, Jewish, other

Nationality

Egyptian, Saudi, Syrian, Lebanese, American, British, French, Indian

Psychographic

Examples

Social class

Lower lowers, upper lowers, working class, middle class, upper middles, lower uppers, upper uppers

Lifestyle

Achievers, strivers, survivors

Personality

Compulsive, gregarious, authoritarian, ambitious

Behavioral

Examples

Occasions

Regular occasion; special occasion; holiday; seasonal

Benefits

Quality, service, economy, convenience, speed

User status

Nonuser, ex-user, potential user, first-time user, regular user

User rates

Light user, medium user, heavy user

Loyalty status

None, medium, strong, absolute

Readiness stage

Unaware, aware, informed, interested, desirous, intending to buy

Attitude toward product

Enthusiastic, positive, indifferent, negative, hostile

may decide to operate in one or a few geographical areas, or to operate in all areas but pay attention to geographical differences in needs and wants. Many companies today are localizing their products, advertising, promotion, and sales efforts to fit the needs of individual regions, cities, and even neighborhoods. For example, one consumer-products company ships additional cases of its ‘power bar’ (protein bars) to stores in neighborhoods near Gold’s Gym centers. Citibank offers different mixes of branch banking services depending on neighborhood demographics. And the ice-cream maker Baskin Robbins practices what it calls ‘three-mile marketing,’ emphasizing local events and promotions close to its local store locations. On a global scale, video

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Part Three

| Designing a Customer-Driven Strategy and Mix game companies create different versions of their games depending on the world region in which the game is sold.

For example, Protrac Online is an Egyptian company that specializes in providing the latest technologies in geo-marketing research and services by employing researchers, data analysts, and geo-professionals, and a large scale of data maps and tools. Protrac refers to geo-marketing as a sophisticated marketing science that uses geographical information for analyzing distribution channels of products. Protrac provides insight into the competition and target segments surrounding a specific distribution point. Hence, this allows companies to understand the specific changes needed in terms of distributing products so as to better serve the targeted consumers. This is based on the assumption that people buy products or use services based on the product’s or the service’s proximity. Geo-marketing allows Protrac’s clients to see the map of their outlets and their competitors’ outlets as well. This also allows clients to understand where to go to pursue their target. Accordingly, geo-marketing can be of highly effective benefit to all kinds of marketing applications. Protrac offers three types of products: Geographical Digital Maps, Socio-Demographic Data, and Trade Channels Census and Survey Data. Hossam Ragheb, CEO of Protrac, said that using digital maps for marketing purposes is crucial, especially for Fast-Moving Consumer Goods companies (FMCGs), such as Coca-Cola, Proctor & Gamble, and Unilever. Ragheb added that “[for suppliers] to know where to sell the products ... and where this outlet is, not only in terms of address, but the [demographics] of the area—[for example] how many people above 15 years [of age] are living in this area— Geographic information systems are used for marketing purposes, in defining gives them a sort of direction to know which the location of the target market, distribution channels, and socio-demographic products should go where.”6 data. Some companies are seeking to cultivate as-yet-untapped geographic territory. For example, some large companies are fleeing the fiercely competitive major cities and suburbs to set up shops in small towns. Meanwhile others are developing new store concepts that will give them access to higher-density urban areas. Metro Group has done a mix of both. It opened a chain of wholesale retail shops, Makro, which run using a subscription-only access. Not only is Makro different from any other wholesale retail model but also the shops are located outside of the main cities but in low-income areas close to them.

Demographic Segmentation Demographic segmentation

Demographic segmentation divides the market into groups based on variables such as

Dividing the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality.

age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. Demographic factors are the most popular bases for segmenting customer groups. One reason is that consumer needs, wants, and usage rates often vary closely with demographic variables. Another is that demographic variables are easier to measure than most other types of variables. Even when marketers first define segments using other bases, such as benefits sought or behavior, they must know segment demographic characteristics in order to assess the size of the target market and to reach it efficiently.

Age and life-cycle segmentation

Age and Life-Cycle Stage. Consumer needs and wants change with age. Some companies use age and life-cycle segmentation, offering different products or using different marketing approaches for different age and life-cycle groups. For example, whereas

Dividing a market into different age and life-cycle groups.

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HP targets adult buyers with its “The Computer Is Personal Again” campaign, along with ads featuring price and value, it developed a special “Society for Parental Mind Control” campaign targeting teenagers. Research shows that although parents are the predominant buyers of computers, teens are key recommenders. “It’s such an old story, but kids are the arbiters of cool,” says one analyst.7 Marketers must be careful to guard against stereotypes when using age and life-cycle segmentation. Although some 80-year-olds fit the weary stereotypes, others play tennis. Similarly, whereas some 40-year-old couples are sending their children off to college, others are just beginning new families. Thus, age is often a poor predictor of a person’s life cycle, health, work or family status, needs, and buying power. Companies marketing to mature consumers usually employ positive images and appeals. Gender segmentation

Gender. Gender segmentation has long been used in clothing, cosmetics, toiletries,

Dividing a market into different groups based on gender.

and magazines. For example, Heineken decided to target men for its non-alcoholic beer Birell, and developed a campaign called “Be a Man”. On the other hand, Galaxy targeted women with its chocolate and emphasized that in its advertising campaigns.

Income. The marketers of products and services such as automobiles, clothing, cosmetics, financial services, and travel have long used income segmentation. Many companies target affluent consumers with luxury goods and convenience services. However, not all companies that use income segmentation target the affluent. For example, many retailers—such as pound and dollar stores—successfully target low- and middle-income groups. The core market for such stores is families with incomes under US$30,000. When real-estate experts scout locations for new pound and dollar stores, they look for lower-middle-class neighborhoods where people wear less-expensive shoes and drive old cars that drip a lot of oil. With their low-income strategies, stores such as these have become fast-growing retailers. They have been so successful that giant discounters are taking notice. An example of income segmentation in the Arab world is mobile phone service providers targeting low-income populations. Companies such as Zain, Qtel, STC, and Etisalat earn most of their revenues from countries where the populations are large with low income, as in Sub-Saharan Africa and South Luxury yachts can easily cost over US$1 million, and are Asia. The main challenge for those companies is the low generated targeted at the most affluent section of society. revenues per mobile phone user, which comes as a result of competitive and price-cutting measures taken by companies in the field.8

Income segmentation

Dividing a market into different income groups.

Psychographic Segmentation Psychographic segmentation

Psychographic segmentation divides buyers into different groups based on social class,

Dividing a market into different groups based on social class, lifestyle, or personality characteristics.

Behavioral segmentation

lifestyle, or personality characteristics. People in the same demographic group can have very different psychographic characteristics. In Chapter 5, we discussed how the products people buy reflect their lifestyles. As a result, marketers often segment their markets by consumer lifestyles and base their marketing strategies on lifestyle appeals. Marketers also use personality variables to segment markets. For example, Sprite launched a new campaign called “This is who I am…,” targeting teenagers who are rebellious and independent. This is considered a very unique and emerging segment in the Arab world.

Dividing a market into groups based on consumer knowledge, attitudes, uses, or responses to a product.

Behavioral Segmentation

Occasion segmentation Dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item.

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Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product. Many marketers believe that behavior variables are the best starting point for building market segments.

Occasions. Buyers can be grouped according to occasions when they get the idea to buy, actually make their purchase, or use the purchased item. Occasion segmentation can

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| Designing a Customer-Driven Strategy and Mix help firms build up product usage. For example, many marketers prepare special offers and ads for holiday occasions. Ramadan and the two Islamic Feasts are the most critical times in the Arab world, where offers and advertisements intensify as a result of increased viewership driven from family and group gatherings. Real Marketing 7.1 discusses how consumers behave during the holy month of Ramadan.

Benefits Sought. A powerful form of segmentation is to group buyers according to the Benefit segmentation Dividing the market into groups according to the different benefits that consumers seek from the product.

different benefits that they seek from the product. Benefit segmentation requires finding the major benefits people look for in the product class, the kinds of people who look for each benefit, and the major brands that deliver each benefit. Champion athletic wear segments its markets according to benefits that different consumers seek from its activewear. For example, ‘Fit and Polish’ consumers seek a balance between function and style—they exercise for results but want to look good doing it. ‘Serious Sports Competitors’ exercise heavily and live in and love their activewear— they seek performance and function. By contrast, ‘Value-Seeking Parents’ have low sports interest and low activewear involvement—they buy for the family and seek durability and value. Thus, each segment seeks a different mix of benefits. Champion must target the benefit segment or segments that it can serve best and most profitably, using appeals that match each segment’s benefit preferences.

User Status. Markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users of a product. Marketers want to reinforce and retain regular users, attract targeted nonusers, and revive relationships with ex-users. Included in the potential users group are consumers facing lifestage changes—such as newlyweds and new parents—who can be turned into heavy users.

Usage Rate. Markets can also be segmented into light, medium, and heavy product users. Heavy users are often a small percentage of the market but account for a high percentage of total consumption. For example, Burger King targets what it calls ‘Super Fans,’ young (age 18 to 34), burger-eating males who make up 18 percent of the chain’s customers but account for almost half of all customer visits. They eat at Burger King an average of 16 times a month.9 Burger King targets these Super Fans openly with ads that exalt huge burgers containing meat, cheese, and more meat and cheese.

Loyalty Status. A market can also be segmented by consumer loyalty. Consumers can be loyal to brands (Apple), stores (Carrefour), and companies (Toyota). Buyers can be divided into groups according to their degree of loyalty. Some consumers are completely loyal—they buy one brand all the time. For example, Apple Computer has an almost cultlike following of loyal users:10

Consumer loyalty: ‘Mac fanatics’—fanatically loyal Apple Computer users—helped keep Apple afloat during the lean years, and they are now at the forefront of Apple’s burgeoning empire.

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There are Mac folks who happen to own a Mac and use it for emailing, blogging, browsing, buying, and social networking. Then there are the Apple diehards—the Mac fanatics who buy Apple products and accessories that maximize their Mac lives. Some of these fans buy two iPhones—one for themselves and the other just to take apart, to see what it looks like on the inside, and maybe, just to marvel at Apple’s ingenious ability to cram so much into a tight little elegant package. These Mac fanatics (also called MacHeads or Macolytes) see Apple founder and CEO Steve Jobs as a wizard of technology. Say the word ‘Apple’

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Marketing 7.1

Ramadan Spirit in the Arab World An example of occasional targeting in the Arab world is the holy month of Ramadan. According to a study conducted by Maktoob Research regarding Ramadan in the region, 71 percent of respondents believe that the month enables them to experience a feeling of “solidarity and brotherhood with fellow Muslims.” The study has found out that 67 percent perceive Ramadan to be a commercial occasion for many companies. The study gathered the opinions of 6,128 Muslims from around the Arab world, just ahead of the holy month in 2008. Discussing the results, Tamara Deprez, director of Maktoob Research, added: “The survey’s findings show that despite the pace of modern life and the changes in people’s lifestyle, the Arab world retains its spiritual essence and remains largely tradition-bound where matters of faith are concerned—more so during the Holy Month of Ramadan.” It was discovered that most of the respondents enjoyed having Iftar (breaking their fast) with their families at home compared with the significant portion, but not a majority, who said that they liked to have Iftar in restaurants. Ramadan is also characterized by the sense of charity. During Ramadan, in many countries in the Arab world, just before the dusk prayer (the time for fast breaking), people hurry to one another in streets to give little snacks, saying, “Ramadan Kareem, Iftar Shahy” (“Hearty Iftar”). People are there always to provide each other with dates and drinks, ensuring that people have their Iftar on time. Also, rich Muslim people rush to make Mawa’ed Rahaman (free public eateries), where poor people are offered free food at Iftar time. Accordingly, it is a good chance for businesses to show their support in corporate social responsibility (CSR) and to promote the Ramadan spirit. For instance, in 2008, Saudi Telecom (STC) set up a food tent to cater for more than 7,000 people daily in Ramadan in more than 80 different locations all around Jeddah. McDonald’s provided Iftar, incorporating entertainment activities for orphans in one of the malls. There is also the Food Bank, sponsored by Olympic Group and Elsewedy Cables, which delivered food to low-income people during

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the month. Further, some food and beverage companies offer free products on streets at Iftar time, primarily aiming to promote those products. In addition, Ramadan is considered an optimal time to reach the consumer through television advertisements. In Egypt, both the finance and transport ministries broadcast their advertisements throughout the month. In countries such as the UAE, companies market their products in line with the Ramadan theme of family gathering. For example, du, the mobile services provider, made special Ramadan offers in 2009 to enable families to keep in touch with each other even if they are in distant locations. The Ramadan promotional offer entailed 1 fils credit (0.3 US cents) for Often charity work and social activities increase during each second of night-time the holy month of Ramadan, which affects the demand worldwide calls, and users can and supply of nutrition products. double their call time using the Pay as You Go services. “du’s desire to help its valued customers strengthen their social bonds and communicate more easily and the like experience a substantial increase with loved ones during the Holy Month is in demand during Ramadan, and they face the foundation of all our Ramadan offers,” the challenge of satisfying the large number said Farid Faraidooni, executive vice presiof customers queuing in lines, particularly dent, Commercial, du. “As a telecom proright before Iftar time. Of course, the price vider with strong local roots, we know the of television ads skyrockets during the month high value all residents place on staying in as a result of family gatherings in front of the touch. Our unique offers give customers television after Iftar, to watch programs and the peace of mind that comes with affordsoap operas. As a result, companies intenability, plus the flexibility and convenience sify their advertising campaigns during the of exceptional calling benefits during a very month, in anticipation of increased demand special time of year.” du’s main offer during and viewership. the night time aims to serve customers who have been fasting during the day, through exclusive price cuts during the month of Sources: “Ramadan Continues to Inspire the Faithful Ramadan. Customers get 1 fils free credit Throughout the Arab World,” Maktoob Research, for every international call made during the 2008, www.maktoob-research.com/PR-Maktoob%20 night time. No matter how far away family Research-Ramadan-English-FINAL.pdf; “Special members are, du provides the same price Ramadan Offers from du,” BI-ME, August 18, 2009, www.bi-me.com/main.php?id=39691&t=1; Safaa deductions on calls. Abdoun, “The Spirit of Giving During Ramadan,” Another interesting consumer behavior The Daily News Egypt, September 19, 2008, www. during the holy month of Ramadan is the thedailynewsegypt.com; Amira Howeidy, “Made special types of foods that are demanded to Measure,” Al Ahram Weekly, September 10–16, during that time. For example, stores selling 2009, Issue No. 964, http://weekly.ahram.org. Eastern desserts, such as Konafa, Basbousa, eg/2009/964/eg5.htm.

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| Designing a Customer-Driven Strategy and Mix in front of Mac fans and they’ll go into ecstasy about the superiority of the brand. Put two MacHeads together and you’ll never shut them up. “The Mac [comes] not just as a machine in a box, it [comes] with a whole community,” notes one observer. Such fanatically loyal users helped keep Apple afloat during the lean years, and they are now at the forefront of Apple’s rapidly growing empire.11 Other consumers are somewhat loyal—they are loyal to two or three brands of a given product or favor one brand while sometimes buying others. Still other buyers show no loyalty to any brand. They either want something different each time they buy or they buy whatever’s on sale. A company can learn a lot by analyzing loyalty patterns in its market. It should start by studying its own loyal customers. For example, by studying Mac fanatics, Apple can better pinpoint its target market and develop marketing appeals. By studying its less-loyal buyers, the company can detect which brands are most competitive with its own. By looking at customers who are shifting away from its brand, the company can learn about its marketing weaknesses.

Using Multiple Segmentation Bases Marketers rarely limit their segmentation analysis to only one or a few variables. Rather, they often use multiple segmentation bases in an effort to identify smaller, better-defined target groups. Thus, a bank may not only identify a group of wealthy retired adults but also, within that group, distinguish several segments based on their current income, assets, savings and risk preferences, housing, and lifestyles. Such segmentation provides a powerful tool for marketers of all kinds. It can help companies to identify and better understand key customer segments, target them more efficiently, and tailor market offerings and messages to their specific needs.

Segmenting Business Markets Consumer and business marketers use many of the same variables to segment their markets. Business buyers can be segmented geographically, demographically (industry, company size), or by benefits sought, user status, usage rate, and loyalty status. Yet, business marketers also use some additional variables, such as customer operating characteristics, purchasing approaches, situational factors, and personal characteristics. By going after segments instead of the whole market, companies can deliver just the right value proposition to each segment served and capture more value in return. Almost every company serves at least some business markets. For example, Visa targets businesses in one of the four merchant levels based on Visa transaction volumes over a 12-month period. Level one are merchants processing over six million Visa transactions annually, level two are merchants channel-processing one to six million Visa transactions per year, level three are merchants processing 20,000 to one million Visa e-commerce transactions per year, and so on, for every level of merchant. The overall business offering is variable: the higher the level, the more privileges are offered, and the lower rates the merchant pays.12 Many companies set up separate systems for dealing with larger or multiple-location customers. For example, IBM first segments customers into main industries, including banking, and aviation. Next, company salespeople work with independent partners to handle smaller, local, or regional customers in each segment. But many national, multiple-location customers have special needs that may reach beyond the scope of individual partners. So IBM uses national account managers to help its dealer networks handle its national accounts. Within a given target industry and customer size, the company can segment by purchase approaches and criteria. As in consumer segmentation, many marketers believe that buying behavior and benefits provide the best basis for segmenting business markets.13

Segmenting International Markets Few companies have either the resources or the will to operate in all, or even most, of the countries that dot the globe. Although some large companies, such as Coca-Cola or Sony, sell products in more than 200 countries, most international firms focus on a smaller set.

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Intermarket segmentation Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries.

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Operating in many countries presents new challenges. Different countries, even those that are close together, can vary greatly in their economic, cultural, and political makeup. Thus, just as they do within their domestic markets, international firms need to group their world markets into segments with distinct buying needs and behaviors. Companies can segment international markets using one or a combination of several variables. They can segment by geographic location, grouping countries by regions such as Western Europe, the Pacific Rim, the Arab world, or Africa. Geographic segmentation assumes that nations close to one another will have many common traits and behaviors. Although this is often the case, there are many exceptions. For example, companies in the Arab world face the challenge of classifying customers across the region, and they need to effectively segment the market in a way that allows them to satisfy varied customers’ needs. It does not make sense to group countries such as Qatar (with small population and high income) with a country such as Sudan (with large population and low income). Also, it would be strange to group countries in North Africa (Tunisia, Algeria, and Morocco) with Gulf countries given the differences in language and culture. World markets can also be segmented on the basis of economic factors. For example, countries might be grouped by population income levels or by their overall level of economic development. A country’s economic structure shapes its population’s product and service needs and, therefore, the marketing opportunities it offers. Countries can be segmented by political and legal factors such as the type and stability of government, receptivity to foreign firms, monetary regulations, and amount of bureaucracy. Cultural factors can also be used, grouping markets according to common languages, religions, values and attitudes, customs, and behavioral patterns. An important aspect in the Arab world is the availability of media channels that are being watched by consumers through satellite broadcasting. Companies targeting consumers of different countries in the region benefit from that; yet they face the challenge of sending consistent messages to all countries. As a result, they attempt to find attractive regional intermarket segments. Segmenting international markets based on geographic, economic, political, cultural, and other factors assumes that segments should consist of clusters of countries. However, as new communications technologies, such as satellite television and the Internet, connect consumers around the world, marketers can define and reach segments of like-minded consumers no matter where in the world they are. Using intermarket segmentation (also called cross-market segmentation), they form segments of consumers who have similar needs and buying behaviors even though they are located in different countries. For example, CocaCola creates special programs to target teens, core consumers of its soft drinks the world over. Coca-Cola wants to relate to the world’s teens. To accomplish that, the global soft drinks marketer needed to figure out what the majority of teens finds appealing. The answer: music. So, throughout the world, Coca-Cola links itself with the local pop music scene. For example, in the United States, Coke is the official sponsor of American Idol, the country’s number-one television show and a teen magnet. In the Arab world, Coca-Cola commercials feature Arab pop stars, such as Nancy Ajram— Coca-Cola even sponsors her world tour. In Europe, Coke has created the Coca-Cola Music Network, which features signed and unsigned musicians online at CokeMusic. com, on stage, and in podcasts. And in Uganda, Coca-Cola sponsored the search for a new MTV VJ. The winner, Carol Mugasha, became host of the weekly music chart show MTV Coca-Cola Chart Express.14

Requirements for Effective Segmentation Clearly, there are many ways to segment a market, but not all segmentations are effective. For example, buyers of table salt could be divided into blond and brunette customers. But hair color obviously does not affect the purchase of salt. Furthermore, if all salt buyers bought the same amount of salt each month, believed that all salt is the same, and wanted to pay the same price, the company would not benefit from segmenting this market.

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| Designing a Customer-Driven Strategy and Mix To be useful, market segments must be:

The ‘Leftie’ segment can be hard to identify and measure. As a result, few companies tailor their offers to left-handers. However, some nichers such as Anything Left-Handed in the United Kingdom target this segment.



Measurable: The size, purchasing power, and profiles of the segments can be measured. Certain segmentation variables are difficult to measure. For example, there are many lefthanded people in the world. Yet few products are targeted toward this left-handed segment. The major problem may be that the segment is hard to identify and measure. There is little data on the demographics of ‘lefties.’ Private data companies keep reams of statistics on other demographic segments but not on left-handers.



Accessible: The market segments can be effectively reached and served. Suppose a fragrance company finds that heavy users of its brand are single men and women who stay out late and socialize a lot. Unless this group lives or shops at certain places and is exposed to certain media, its members will be difficult to reach.



Substantial: The market segments are large or profitable enough to serve. A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing program. It would not pay, for example, for an automobile manufacturer to develop cars especially for people whose height is greater than two meters.



Differentiable: The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. If married and unmarried women respond similarly to a sale on perfume, they do not constitute separate segments.



Actionable: Effective programs can be designed for attracting and serving the segments. For example, although one small airline identified seven market segments, its staff was too small to develop separate marketing programs for each segment.

Author Now that we’ve divided Comment the market into segments,

Market Targeting (pp 186–192)

it’s time to answer that first seemingly simple marketing strategy question we raised in Figure 7.1: Which customers will the company serve?

Market segmentation reveals the firm’s market segment opportunities. The firm now has to evaluate the various segments and decide how many and which segments it can serve best. We now look at how companies evaluate and select target segments.

Evaluating Market Segments In evaluating different market segments, a firm must look at three factors: segment size and growth, segment structural attractiveness, and company objectives and resources. The company must first collect and analyze data on current segment sales, growth rates, and expected profitability for various segments. It will be interested in segments that have the right size and growth characteristics. But ‘right size and growth’ is a relative matter. The largest, fastest-growing segments are not always the most attractive ones for every company. Smaller companies may lack the skills and resources needed to serve the larger segments. Or they may find these segments too competitive. Such companies may target segments that are smaller and less attractive, in an absolute sense, but that are potentially more profitable for them. The company also needs to examine major structural factors that affect long-run segment attractiveness.15 For example, a segment is less attractive if it already contains many strong and aggressive competitors. The existence of many actual or potential substitute products may limit prices and the profits that can be earned in a segment. The relative power of buyers also affects segment attractiveness. Buyers with strong bargaining power relative to sellers will try to force prices down, demand more services, and set competitors against one another—all at the expense of seller profitability. Finally, a segment may be less attractive

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FIGURE | 7.2 Marketing Targeting Strategies This figure covers a pretty broad range of targeting strategies, from mass marketing (virtually no targeting) to individual marketing (customizing products and programs to individual customers). An example of individual marketing: At myMMs.com you can order a batch of M&Ms with your face and personal message printed on each little candy.

Undifferentiated (mass) marketing

Differentiated (segmented) marketing

Concentrated (niche) marketing

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Micromarketing (local or individual marketing) Targeting narrowly

Targeting broadly

if it contains powerful suppliers who can control prices or reduce the quality or quantity of ordered goods and services. Even if a segment has the right size and growth and is structurally attractive, the company must consider its own objectives and resources. Some attractive segments can be dismissed quickly because they do not mesh with the company’s long-run objectives. Or the company may lack the skills and resources needed to succeed in an attractive segment. For example, given current economic conditions, the economy segment of the automobile market is large and growing. But given its objectives and resources, it would make little sense for luxury-performance carmaker BMW to enter this segment. A company should enter only segments in which it can create superior customer value and gain advantages over competitors.

Selecting Target Market Segments Target market A set of buyers sharing common needs or characteristics that the company decides to serve.

Undifferentiated (mass) marketing A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.

Differentiated (segmented) marketing A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.

After evaluating different segments, the company must decide which and how many segments it will target. A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. Market targeting can be carried out at several different levels. Figure 7.2 shows that companies can target very broadly (undifferentiated marketing), very narrowly (micromarketing), or somewhere in between (differentiated or concentrated marketing).

Undifferentiated Marketing Using an undifferentiated marketing (or mass-marketing) strategy, a firm might decide to ignore market segment differences and target the whole market with one offer. This mass-marketing strategy focuses on what is common in the needs of consumers rather than on what is different. The company designs a product and a marketing program that will appeal to the largest number of buyers. As noted earlier in the chapter, most modern marketers have strong doubts about this strategy. Difficulties arise in developing a product or brand that will satisfy all consumers. Moreover, mass marketers often have trouble competing with more focused firms that do a better job of satisfying the needs of specific segments and niches.

Differentiated Marketing

Differentiated marketing: Procter & Gamble markets six different laundry detergents, including Tide—each with multiple forms and formulations— that compete with each other on store shelves.

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Using a differentiated marketing (or segmented marketing) strategy, a firm decides to target several market segments and designs separate offers for each. General Motors tries to produce a car for every “purse, purpose, and personality.” Procter & Gamble markets six different laundry detergent brands, which compete with each other on supermarket shelves. By offering product and marketing variations to segments, companies hope for higher sales and a stronger position within each market segment. Developing a stronger position within several segments creates more total sales than undifferentiated marketing across all segments. But differentiated marketing also increases the costs of doing business. A firm usually finds it more

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| Designing a Customer-Driven Strategy and Mix expensive to develop and produce, say, 10 units of 10 different products than 100 units of one product. Developing separate marketing plans for the separate segments requires extra marketing research, forecasting, sales analysis, promotion planning, and channel management. And trying to reach different market segments with different advertising campaigns increases promotion costs. Thus, the company must weigh increased sales against increased costs when deciding on a differentiated marketing strategy.

Concentrated Marketing Concentrated (niche) marketing A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.

Using a concentrated marketing (or niche marketing) strategy, instead of going after a small share of a large market, the firm goes after a large share of one or a few smaller segments or niches. For example, Bindawood, a local supermarket chain in the Kingdom of Saudi Arabia, has many stores in different areas in Mecca and Madinah that target mainly the visitors of the holy sites. Through concentrated marketing, the firm achieves a strong market position because of its greater knowledge of consumer needs in the niches it serves and the special reputation it acquires. It can market more effectively by fine-tuning its products, prices, and programs to the needs of carefully defined segments. It can also market more efficiently, targeting its products or services, channels, and communications programs toward only consumers that it can serve best and most profitably. Whereas segments are fairly large and normally attract several competitors, niches are smaller and may attract only one or a few competitors. Niching lets smaller companies focus their limited resources on serving niches that may be unimportant to or overlooked by larger competitors. Many companies start as nichers to get a foothold against larger, more resourceful competitors and then grow into broader competitors. Aramex offers new services such as “Shop and Ship” for the customers in the Arab world willing to buy products from online shops in the United States and Europe, in order to differentiate itself from large competitors such as DHL, UPS, and FedEx. In contrast, as markets change, some megamarketers develop niche markets to create sales growth. For example, in recent years, Pepsi has introduced several niche products, such as Seven-Up with Lemon, Pepsi Twist, and Miranda Tangerine. Today, the low cost of setting up shop on the Internet makes it even more profitable to serve seemingly miniscule niches. Small businesses, in particular, are realizing riches from serving small niches on the web. Concentrated marketing can be highly profitable. At the same time, it involves higher-thannormal risks. Companies that rely on one or a few segments for all of their business will suffer greatly if the segment turns sour. Or larger competitors may decide to enter the same segment with greater resources. For these reasons, many companies prefer to diversify in several market segments. In the Arab world, there is a clear need for Islamic banking services. As a result, a variety of banks, led by HSBC, introduced Islamic banking initiatives in the region. Real Marketing 7.2 highlights the concept of Islamic banking and its application in the Arab world.

Micromarketing Micromarketing The practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups—includes local marketing and individual marketing.

Local marketing Tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, and even specific stores.

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Differentiated and concentrated marketers tailor their offers and marketing programs to meet the needs of various market segments and niches. At the same time, however, they do not customize their offers to each individual customer. Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. Rather than seeing a customer in every individual, micromarketers see the individual in every customer. Micromarketing includes local marketing and individual marketing.

Local Marketing. Local marketing involves tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, and even specific stores. For example, McDonald’s introduced a new sandwich, McArabia, which suited the local culture in the Arab world. Advances in communications technology have given rise to a new high-tech version of location-based marketing. By coupling mobile phone services with GPS devices, many marketers are now targeting customers wherever they are with what they want.16

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Islamic Banking A significant type of behavioral targeting taking place in the Arab world is Islamic banking. A recent report by Morgan Stanley analyzing Dubai Islamic Bank and Kuwait Finance House has concluded that Islamic assets will have increased to 18 percent of total assets in the GCC’S banking system by 2012. Currently, there are 22 Islamic banks that possess more than US$300 billion of sharia-compliant assets. An analyst at Morgan Stanley says: “There are a number of reasons why the sector is growing, and will continue to grow, strongly. A buoyant macro-economic backdrop and increased infrastructure spending, and continued diversification from oil economies are driving the banking sector generally . . . In terms of factors behind the growth in Islamic finance, a greater focus on Islamic identity, government backing for the development and promotion of Islamic banking, low penetration, and competition among conventional banks makes Islamic banking more attractive, and more favorable industry dynamics are all likely to fuel the growth.” Despite the expected growth in that behavioral segment, which fosters the Islamic identity, there are some obstacles to the concept. The main difficulty remains that the product is not a regular one that can easily be identified. As such, Islamic banks are subject to more than one regulatory body, such as the local Central Banks as well as the Shari’a Supervisory Board (SSB), which must be established by the banks to advise them and ensure that all their activities are compliant with Shari’a Islamic rules principles, in order to formulate Islamic services. Another issue is the fact that people tend to be less familiar with how the system works compared with the regular banking systems. There are also some aspects in Islamic banking that are not welcomed by other financial institutions and customers, such as not allowing hedging (fixing currency value for long periods in the currency exchange market). A 2008 Morgan Stanley report, however, suggests an exponential growth for the sector. Islamic banking mainly targets ‘devout Muslims’ in Muslim communities and Muslim minorities in non-Muslim countries. In addition, it attracts non-Muslim individuals and societies that demand ethical financial solutions. Islamic financial institutions were established in the 1960s and 1970s. Since that time Islamic bank-

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Islamic banking has gained a strong reputation in the past few years, especially after the financial crisis in 2008 which revealed many of the defects in international banking systems.

ing has sprawled in several Islamic countries primarily in the Arab world, South and Southeast Asia, and in the West where Muslim minorities live. Now Bahrain is the most flourishing country in the Islamic finance field; other non-Arab cities enjoyed growth in the field, including Kuala Lumpur and London. Islamic banks are available in different formats, including “commercial banks, investment banks, investment and finance companies, insurance (Takaful) companies, and financial service companies.” However, they pursue distinct banking models: private organizations in a traditional economy (in the GCC and the West), national banking institutions (such as those in Sudan, Iran, and Pakistan), and dual banking systems (such as in Malaysia and the UAE). Moreover, they are present in different models: fully Islamic institutions, Islamic subsidiaries of traditional banking groups, and Islamic banking ‘windows’ inside traditional banks. Islamic banking services range from commercial banking to syndicated transactions and equities, and have recently moved into debt issuance and structured products. The growth in the segment is attributed to the growing economy of oil-producing countries. Thus, this made the Islamic financial services highly demanded by a large number of people. Let’s take a look at an example of an international bank that has adapted to the needs of the Islamic segment. HSBC Amanah—Islamic Financial Solutions was “established to serve the particular financial needs of Muslim communities.” According

to HSBC’s mission, “Amanah is committed to improving the lives of our customers worldwide by providing them with the highest quality Islamic banking solutions.” Accordingly, there is commitment to Shari’a to the greatest extent. HSBC Islamic banking services are present in several GCC countries, including Bahrain, UAE, Saudi Arabia, Qatar, and other non-Arab Muslim countries, including Bangladesh, Brunei, Indonesia, Malaysia, and other countries as well. HSBC Amanah is supervised by the Global Shari’a Advisory Board (GSAB) and Regional Shari’a Committees (RSC). Moreover, HBSC has a team of professionals who are there to guarantee that Shari’a are applied in ‘letter’ and ‘spirit.’ GSAB pursues continuous updating of the Islamic financial services. The board consists of delegate scholars from all RSC of HSBC Amanah and other Shari’a scholars from all around the world. HSBC depends on known scholars from different origins to ensure the convention of all scholars on its Islamic financial matters. Amanah has different Islamic services all using the same principles, yet they are based on the needs of the various types of customers. There are three common Islamic financial instruments, which are: •

Mudaraba: An investment partnership, whereby an agreement takes place between an investor (or financer) and an entrepreneur or investment manager, called the Mudarib. They both divide risks Continued on next page

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and profits. When there are profits, they earn their agreed-upon shares. When there are losses, the investor incurs a loss of capital, whereas the Mudarib loses time and effort. Ijara, which means an Islamic lease. The financial institution buys an asset and leases it to a customer in return for a set monthly fee. The



lessee has the choice to purchase the asset at the end of the lease. Murabaha, which is a sale at an agreed-upon profit. In this transaction, the bank buys something

from a third party and sells it to a client at a set profit on a deferred payment system. Murabaha ensures that the client buys something without taking interest on a loan.

Sources: Justin Smith, “Morgan Stanley Initiates Coverage on Islamic Banking Stocks,” BI-ME, February 19, 2008, www.bi-me.com/main.php?id=17576&t=1&c=34&cg=; “Our Vision,” “The Industry,” “Shariah Supervision,” and “Financial Instruments,” HSBC Amanah, www.hsbcamanah.com/amanah/about-amanah/ islamic-banking.

Location. Location. Location. This is the mantra of the real-estate business. But it may not be long before marketers quote it, too. “Location-based technology allows [marketers] to reach people when they’re mobile, near their stores, looking to make a decision,” says one marketing expert. “When customers get information—even advertising information—linked to their location, research shows that’s often perceived as value-added information, not as an advertisement.” For example, Starbucks recently launched a store locator service for mobile devices, which allows people to use their phones and in-car GPS systems to search for the nearest Starbucks shop. A consumer sends a text message to “MYSBUX” (697289) including his or her postal code. Within 10 seconds, Starbucks replies with up to three nearby store locations. Starbucks plans to expand the service to include a wider range of text-messaging conversations with local customers that will “showcase Starbucks as a brand that truly listens.” Such location-based marketing will grow astronomically as the sales of GPS devices skyrocket. Local marketing has some drawbacks. It can drive up manufacturing and marketing costs by reducing economies of scale. It can also create logistics problems as companies try to meet the varied requirements of different regional and local markets. Further, a brand’s overall image might be diluted if the product and message vary too much in different localities. Local marketing: By coupling mobile phone Still, as companies face increasingly fragmented markets, and as new supportservices with GPS devices, marketers such as Starbucks are now targeting customers ing technologies develop, the advantages of local marketing often outweigh the wherever they are with what they want. drawbacks. Local marketing helps a company to market more effectively in the face of pronounced regional and local differences in demographics and lifestyles. It also meets the needs of the company’s first-line customers—retailers—who prefer more finely tuned product assortments for their neighborhoods. Individual marketing

Individual Marketing. In the extreme, micromarketing becomes individual marketing—

Tailoring products and marketing programs to the needs and preferences of individual customers—also labeled ‘oneto-one marketing,’ ‘customized marketing,’ and ‘markets-of-one marketing.’

tailoring products and marketing programs to the needs and preferences of individual customers. Individual marketing has also been labeled one-to-one marketing, mass customization, and markets-of-one marketing. The widespread use of mass marketing has obscured the fact that for centuries consumers were served as individuals: The tailor custom-made the suit, the cobbler designed shoes for the individual, the cabinetmaker made furniture to order. Today, however, new technologies are permitting many companies to return to customized marketing. More powerful computers, detailed databases, robotic production and flexible manufacturing, and interactive communication media such as cellphones and the Internet—all have combined to foster ‘mass customization.’ Mass customization is the process through which firms interact one-to-one with masses of customers to design products and services tailor-made to individual needs. Dell creates custom-configured computers. Visitors to Nike’s NikeID website can personalize their sneakers by choosing from hundreds of colors. Marketers are also finding new ways to personalize promotional messages. Service providers such as Vodafone have been sending customers personalized office stationery,

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calendars, and giveaways showing their names and titles. Newsletters from different providers have mapped customer interests to make their material more relevant and personal. Business-to-business marketers are also finding new ways to customize their offerings. For example, John Deere manufactures seeding equipment that can be configured in more than two million versions to individual customer specifications. The seeders are produced one at a time, in any sequence, on a single production line. Mass customization provides a way to stand out against competitors. Unlike mass production, which eliminates the need for human interaction, one-to-one marketing has made relationships with customers more important than ever. Just as mass production was the marketing principle of the past century, interactive marketing is becoming a marketing principle for the twenty-first century. The world appears to be coming full circle—from the good old days when customers were treated as individuals, to mass marketing John Deere manufactures a wide range of seeding equipment and other planting equipment that matches the various needs when nobody knew your name, and back again. of customers’ specifications. The move toward individual marketing mirrors the trend in consumer self-marketing. Increasingly, individual customers are taking more responsibility for shaping both the products they buy and the buying experience. Consider two business buyers with two different purchasing styles. The first sees several salespeople, each trying to persuade him to buy his or her product. The second sees no salespeople but rather logs on to the web. She searches for information on available products; interacts online with various suppliers, users, and product analysts; and then decides which offer is best. The second purchasing agent has taken more responsibility for the buying process, and the marketer has had less influence over the buying decision. As the trend toward more interactive dialogue and less marketing monologue continues, marketers will need to influence the buying process in new ways. They will need to involve customers more in all phases of the product development and buying processes, increasing opportunities for buyers to practice self-marketing.

Choosing a Targeting Strategy Companies need to consider many factors when choosing a market-targeting strategy. Which strategy is best depends on company resources. When the firm’s resources are limited, concentrated marketing makes the most sense. The best strategy also depends on the degree of product variability. Undifferentiated marketing is more suited for uniform products such as grapefruit or steel. Products that can vary in design, such as cameras and automobiles, are more suited to differentiation or concentration. The product’s life-cycle stage also must be considered. When a firm introduces a new product, it may be practical to launch only one version, and undifferentiated marketing or concentrated marketing may make the most sense. In the mature stage of the product life cycle, however, differentiated marketing begins to make more sense. Another factor is market variability. If most buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts, undifferentiated marketing is appropriate. Finally, competitors’ marketing strategies are important. When competitors use differentiated or concentrated marketing, undifferentiated marketing can be suicidal. Conversely, when competitors use undifferentiated marketing, a firm can gain an advantage by using differentiated or concentrated marketing, focusing on the needs of buyers in specific segments.

Socially Responsible Target Marketing Smart targeting helps companies to be more efficient and effective by focusing on the segments that they can satisfy best and most profitably. Targeting also benefits consumers—companies serve specific groups of consumers with offers carefully tailored to their needs. However, target marketing sometimes generates controversy and concern. The biggest issues usually involve the targeting of vulnerable or disadvantaged consumers with controversial or potentially harmful products.

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For example, over the years, marketers in a wide range of industries—from cereal and toys to fast food and fashion—have been heavily criticized for their marketing efforts directed toward children. Critics worry that premium offers and high-powered advertising appeals presented through the mouths of lovable animated characters will overwhelm children’s defenses. Other problems arise when the marketing of adult products spills over into the child segment—intentionally or unintentionally. Some critics have even called for a complete ban on advertising to children. The growth of the Internet and other carefully targeted direct media has raised fresh concerns about potential targeting abuses. The Internet allows increasing refinement of audiences and, in turn, more precise targeting. This might help makers of questionable products or deceptive advertisers to more readily Not only does Colgate offer a wide selection of products targeting children, but also it holds many campaigns for children in the Arab world victimize the most vulnerable audiences. Unprincipled marketto increase awareness about the importance of brushing their teeth. ers can now send tailor-made deceptive messages directly to the computers of millions of unsuspecting consumers.17 Not all attempts to target children, minorities, or other special segments draw such criticism. In fact, most provide benefits to targeted consumers. For example, Pantene markets Relaxed and Natural hair products to women of color. Samsung markets the Jitterbug phone directly to seniors who need a simpler cellphone that is bigger and has a louder speaker. And Colgate makes a large selection of toothbrush shapes and toothpaste flavors for children. Such products help make tooth brushing more fun and get children to brush longer and more often. Thus, in target marketing, the issue is not really who is targeted but rather how and for what. Controversies arise when marketers attempt to profit at the expense of targeted segments—when they unfairly target vulnerable segments or target them with questionable products or tactics. Socially responsible marketing calls for segmentation and targeting that serve not just the interests of the company but also the interests of those targeted.

Author At the same time that it’s Comment answering the first sim-

ple-sounding question (Which customers will we serve?), the company must be asking the second question (How will we serve them?). For example, Ritz-Carlton serves the top 5 percent of corporate and leisure travelers. Its value proposition is ‘The Ritz-Carlton Experience’—one that “enlivens the senses, instills a sense of well-being, and fulfills even the unexpressed wishes and needs of our guests.”

Product position The way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products.

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Differentiation and Positioning (pp 192–198) Beyond deciding which segments of the market it will target, the company must decide on a value proposition—on how it will create differentiated value for targeted segments and what positions it wants to occupy in those segments. A product’s position is the way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products. “Products are created in the factory, but brands are created in the mind,” says a positioning expert.18 Tide is positioned as a powerful, all-purpose family detergent. At Subway restaurants, you “Eat Fresh.” In the automobile market, Mercedes and Cadillac are positioned on luxury, and Porsche and BMW on performance. Volvo positions powerfully on safety. And Toyota positions its fuel-efficient, hybrid Prius as a high-tech solution to the energy shortage. “How far will you go to save the planet?” it asks. Consumers are overloaded with information about products and services. They cannot reevaluate products every time they make a buying decision. To simplify the buying process, consumers organize products, services, and companies into categories and ‘position’ them in their minds. A product’s position is the complex set of perceptions, impressions, and feelings that consumers have for the product compared with competing products. Consumers position products with or without the help of marketers. But marketers do not want to leave their products’ positions to chance. They must plan positions that will give their products the greatest advantage in selected target markets, and they must design marketing mixes to create these planned positions.

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FIGURE | 7.3 Positioning Map: Large Luxury Sport Utility Vehicles

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160

Price (thousands of $)

Escalade Escalade ESV Hummer H1

120

Hummer H2 Infiniti QX56 Range Rover Lexus LX470 Navigator

80

Land Cruiser

40

Luxury

Performance Orientation

The location of each circle shows where consumers position a brand on two dimensions: price and luxury-performance orientation. The size of each circle indicates the brand’s relative market share in the segment. Thus, Toyota's Land Cruiser is a niche brand that is perceived to be relatively affordable and more performance oriented.

Positioning Maps In planning their differentiation and positioning strategies, marketers often prepare perceptual positioning maps, which show consumer perceptions of their brands versus competing products on important buying dimensions. Figure 7.3 shows a positioning map for the U.S. large luxury sport utility vehicle market.19

Choosing a Differentiation and Positioning Strategy Some firms find it easy to choose a differentiation and positioning strategy. For example, a firm well known for quality in certain segments will go for this position in a new segment if there are enough buyers seeking quality. But in many cases, two or more firms will go after the same position. Then, each will have to find other ways to set itself apart. Each firm must differentiate its offer by building a unique bundle of benefits that appeals to a substantial group within the segment. Above all else, a brand’s positioning must serve the needs and preferences of welldefined target markets. For example, Mobinil is positioning itself in the Egyptian market as the competent local service provider, and builds its communication campaigns on the concept of patriotism. On the other hand, Vodafone is positioning itself as an international and professional brand. The differentiation and positioning task consists of three steps: identifying a set of differentiating competitive advantages upon which to build a position, choosing the right competitive advantages, and selecting an overall positioning strategy. The company must then effectively communicate and deliver the chosen position to the market.

Identifying Possible Value Differences and Competitive Advantages

Competitive advantage An advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices.

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To build profitable relationships with target customers, marketers must understand customer needs better than competitors do and deliver more customer value. To the extent that a company can differentiate and position itself as providing superior customer value, it gains competitive advantage. But solid positions cannot be built on empty promises. If a company positions its product as offering the best quality and service, it must actually differentiate the product so

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| Designing a Customer-Driven Strategy and Mix that it delivers the promised quality and service. Companies must do much more than simply shout out their positions in ad slogans and taglines. They must first live the slogan.

To find points of differentiation, marketers must think through the customer’s entire experience with the company’s product or service. An alert company can find ways to differentiate itself at every customer-contact point. In what specific ways can a company differentiate itself or its market offer? It can differentiate along the lines of product, services, channels, people, or image. Through product differentiation brands can be differentiated on features, performance, or style and design. Thus, Panasonic positions its Toughbook PCs, designed to stand up to rugged use on the road or in the field. The Toughbook website offers “Tough Stories,” complete with pictures of battered and abused Toughbooks still functioning well. Beyond differentiating its physical product, a firm can also differentiate the services that accompany the product. Some companies gain services differentiation through speedy, convenient, or careful delivery. For example, Al-Baraka Bank has positioned itself as “the commercial Islamic Bank”—it offers retail, corporate and investment banking, and treasury services which should abide by the principles of Islamic Shari’a.20 Others differentiate their service based on high-quality customer care. Lexus makes fine cars but is perhaps even better known for the quality service that creates outstanding ownership experiences for Lexus owners. Firms that practice channel differentiation gain competitive advantage through Toughbook is positioned as the durable, reliable, wireless notebook that can protect the customer’s the way they design their channel’s coverage, expertise, and performance. Amazon. work even in the toughest environments. com and GEICO set themselves apart with their smooth-functioning direct channels. Companies can also gain a strong competitive advantage through people differentiation—hiring and training better people than their competitors do. And Singapore Airlines enjoys an excellent reputation, largely because of the grace of its flight attendants. People differentiation requires that a company select its customer-contact people carefully and train them well. For example, the entertainment company Disney trains its theme park people thoroughly to ensure that they are competent, polite, and friendly—from the hotel check-in agents, to the monorail drivers, to the ride attendants, to the people who sweep its parks. Each employee is carefully trained to understand customers and to “make people happy.” Even when competing offers look the same, buyers may perceive a difference based on company or brand image differentiation. A company or brand image should convey the product’s distinctive benefits and positioning. Developing a strong and distinctive image calls for creativity and hard work. A company cannot develop an image in the public’s mind overnight using only a few advertisements. If Ritz-Carlton means quality, this image must be supported by everything the company says and does. Symbols—such as the McDonald’s golden arches, the Nike swoosh, or Google’s colorful logo—can provide strong company or brand recognition and image differentiation. The company might build a brand around a famous person, as Nike did with its Air Jordan basketball shoes and Tiger Woods golfing products. Some companies even become associated with colors, such as IBM (blue), UPS (brown), or Coca-Cola (red). The chosen symbols, characters, and other image elements must be communicated through advertising that conveys the company’s or brand’s personality.

Choosing the Right Competitive Advantages Suppose a company is fortunate enough to discover several potential differentiations that provide competitive advantages. It now must choose the ones on which it will build its positioning strategy. It must decide how many differences to promote and which ones.

How Many Differences to Promote. Many marketers think that companies should aggressively promote only one benefit to the target market. Ad man Rosser Reeves, for example, said a company should develop a unique selling proposition (USP) for each brand and stick to it. Each

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brand should pick an attribute and tout itself as ‘number one’ on that attribute. Buyers tend to remember number one better, especially in this overcommunicated society. Thus, Wal-Mart promotes its always low prices and Burger King promotes personal choice—“have it your way.” Other marketers think that companies should position themselves on more than one differentiator. This may be necessary if two or more firms are claiming to be best on the same attribute. Today, in a time when the mass market is fragmenting into many small segments, companies are trying to broaden their positioning strategies to appeal to more segments. For example, S.C. Johnson recently introduced a new Pledge multi-surface cleaner. Known mainly as a brand for cleaning and dusting wood furniture, the new Pledge is positioned as a cleaner that works on wood, electronics, glass, marble, stainless steel, and other surfaces. Says its website, “No need to keep switching products—this multi-surface cleaner is perfect for a quick and easy cleanup of the whole room!” Clearly, many buyers want these multiple benefits. The challenge was to convince them that one brand can do it all. However, as companies increase the number of claims for their brands, they risk disbelief and a loss of clear positioning.

Which Differences to Promote. Not all brand differences are meaningful or worthwhile; not every difference makes a good differentiator. Each difference has the potential to create company costs as well as customer benefits. A difference is worth establishing to the extent that it satisfies the following criteria: •

Important: The difference delivers a highly valued benefit to target buyers.



Distinctive: Competitors do not offer the difference, or the company can offer it in a more distinctive way.



Superior: The difference is superior to other ways that customers might obtain the same benefit.



Communicable: The difference is communicable and visible to buyers.



Preemptive: Competitors cannot easily copy the difference.



Affordable: Buyers can afford to pay for the difference.



Profitable: The company can introduce the difference profitably.

Many companies have introduced differentiations that failed one or more of these tests. When the Westin Stamford Hotel in Singapore once advertised that it is the world’s tallest hotel, it was a distinction that was not important to most tourists—in fact, it turned many off. Thus, choosing competitive advantages upon which to position a product or service can be difficult, yet such choices may be crucial to success.

Selecting an Overall Positioning Strategy Value proposition The full positioning of a brand—the full mix of benefits upon which it is positioned.

The full positioning of a brand is called the brand’s value proposition—the full mix of benefits upon which the brand is differentiated and positioned. It is the answer to the customer’s question “Why should I buy your brand?” Volvo’s value proposition hinges on safety but also includes reliability, roominess, and styling, all for a price that is higher than average but seems fair for this mix of benefits. Figure 7.4 shows possible value propositions upon which a company might position its products. In the figure, the five green cells represent winning value propositions— differentiation and positioning that gives the company competitive advantage. The red cells, however, represent losing value propositions. The center yellow cell represents at best a marginal proposition. In the following sections, we discuss the five winning value propositions upon which companies can position their products: more for more, more for the same, the same for less, less for much less, and more for less.

More for More. ‘More-for-more’ positioning involves providing the most upscale product or service and charging a higher price to cover the higher costs. Ritz-Carlton Hotels, Mont Blanc writing instruments, Mercedes automobiles—each claims superior quality, craftsmanship, durability, performance, or style and charges a price to match. Not only is the market offering high in quality, it also gives prestige to the buyer. It symbolizes status and a loftier lifestyle. Often, the price difference exceeds the actual increment in quality.

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FIGURE | 7.4 Possible Value Propositions

More

Benefits

More

The same

Less These are losers.

More for more

Price The same More for the same

Less More for less

These are winning value propositions.

The same for less

Less for much less

Sellers offering ‘only the best’ can be found in every product and service category, from hotels, restaurants, food, and fashion to cars and household appliances. Consumers are sometimes surprised, even delighted, when a new competitor enters a category with an unusually high-priced brand. Starbucks coffee entered as a very expensive brand in a largely commodity category. When Apple premiered its iPhone, it offered higher-quality features than a traditional cellphone, with a hefty price tag to match. In general, companies should be on the lookout for opportunities to introduce a ‘morefor-more’ brand in any underdeveloped product or service category. Yet ‘more-for-more’ brands can be vulnerable. They often invite imitators who claim the same quality but at a lower price. Luxury goods that sell well during good times may be at risk during economic downturns when buyers become more cautious in their spending.

More for the Same. Companies can attack a competitor’s more-for-more positioning by introducing a brand offering comparable quality but at a lower price. For example, Toyota introduced its Lexus line with a ‘more-for-the-same’ value proposition versus Mercedes and BMW. Its first ad headline read: “Perhaps the first time in history that trading a $72,000 car for a $36,000 car could be considered trading up.” It communicated the high quality of its new Lexus through rave reviews in car magazines and through a widely distributed videotape showing side-by-side comparisons of Lexus and Mercedes automobiles. It published surveys showing that Lexus dealers were providing customers with better sales and service experiences than were Mercedes dealerships. Many Mercedes owners switched to Lexus, and the Lexus repurchase rate has been 60 percent, twice the industry average. The Same for Less. Offering ‘the same for less’ can be a powerful value proposition— everyone likes a good deal. Hypermarkets, such as Carrefour, also use this positioning. They don’t claim to offer different or better products. Instead, they offer many of the same brands as department stores and specialty stores but at deep discounts based on superior purchasing power and lower-cost operations. Other companies develop imitative but lower-priced brands in an effort to lure customers away from the market leader. For example, AMD makes less-expensive versions of Intel’s market-leading microprocessor chips.

Less for Much Less. A market almost always exists for products that offer less and therefore cost less. Few people need, want, or can afford ‘the very best’ in everything they buy. In many cases, consumers will gladly settle for less than optimal performance or give up some of the extra features in exchange for a lower price. For example, Nokia has a series of mobile phones with limited features for lower prices targeting consumers who are not willing to pay for features they will not use. ‘Less-for-much-less’ positioning involves meeting consumers’ lower performance or quality requirements at a much lower price. For example, Chinese products have invaded the Arab world markets with relatively low quality products, but at very low prices, which have attracted a large number of consumers.

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More for Less. Of course, the winning value proposition would be to offer ‘more for less.’ Many companies claim to do this. And, in the short run, some companies can actually achieve it. Several mobile operators have built consumption segments where the more minutes a user consumes talking on the phone, the cheaper each minute becomes. For example, Zain, a mobile operator in Kuwait, offers unlimited communication at a fixed price based on the duration of users’ subscription. For a one-day unlimited usage, the user pays US$5.4 per day; if the user subscribes for a week, they pay US$3.6 per day, and if the user subscribes for 30 days, they pay US$2.8 per day.21 Yet in the long run, companies will find it very difficult to sustain such best-of-both positioning. Offering more usually costs more, making it difficult to deliver on the ‘for-less’ promise. Companies that try to deliver both may lose out to more focused competitors. All said, each brand must adopt a positioning strategy designed to serve the needs and wants of its target markets. ‘More for more’ will draw one target market, ‘less for much less’ will draw another, and so on. Thus, in any market, there is usually room for many different companies, each successfully occupying different positions. The important thing is that each company must develop its own winning positioning strategy, one that makes it special to its target consumers. Developing a Positioning Statement Company and brand positioning should be summed up in a positioning statement. The statement should follow the form: To (target segment and need) our (brand) is (concept) that (point-of-difference).22 For example: “To busy, mobile professionals who need to always be in the loop, BlackBerry is a wireless connectivity solution that gives you an easier, more reliable way to stay connected to data, people, and resources while on the go.”23 Note that the positioning first states the product’s membership in a Home Centre in Egypt was one of the first movers in the category (wireless connectivity solution) and then shows its point-of-difdirection of ‘more for less’ offers after the revolution in January 2011. ference from other members of the category (easier, more reliable connections to data, people, and resources). Placing a brand in a specific category suggests similarities that it might share with other products in the category. But the case for the brand’s superiority is made on its points of difference. Positioning statement Sometimes marketers put a brand in a surprisingly different category before indicating A statement that summarizes company or the points of difference. Nestlé’s Nescafé brand has several products in the instant coffee brand positioning—it takes this form: To market, including Nescafé Gold, positioned as better instant coffee, and Nescafé Espresso, (target segment and need) our (brand) is positioned as the Italian instant coffee (instant coffee that looks better and tastes like (concept) that (point-of-difference). espresso). The positioning of Nescafé Espresso as gourmet coffee puts it in a completely different category versus the other instant coffee products in the market.

Communicating and Delivering the Chosen Position Once it has chosen a position, the company must take strong steps to deliver and communicate the desired position to target consumers. All the company’s marketing mix efforts must support the positioning strategy. Positioning the company calls for concrete action, not just talk. If the company decides to build a position on better quality and service, it must first deliver that position. Designing the marketing mix—product, price, place, and promotion—involves working out the tactical details of the positioning strategy. Thus, a firm that seizes on a more-for-more position knows that it must produce high-quality products, charge a high price, distribute through high-quality dealers, and advertise in high-quality media. It must hire and train more service people, find retailers who have a good reputation for service, and develop sales and advertising messages that broadcast its superior service. This is the only way to build a consistent and believable more-for-more position.

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| Designing a Customer-Driven Strategy and Mix Companies often find it easier to come up with a good positioning strategy than to implement it. Establishing a position or changing one usually takes a long time. In contrast, positions that have taken years to build can quickly be lost. Once a company has built the desired position, it must take care to maintain the position through consistent performance and communication. It must closely monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies. However, the company should avoid abrupt changes that might confuse consumers. Instead, a product’s position should evolve gradually as it adapts to the ever-changing marketing environment.

REVIEWING Objectives AND KEY Terms In this chapter, you’ve learned about the major elements of a customer-driven marketing strategy: segmentation, targeting, differentiation, and positioning. Marketers know that they cannot appeal to all buyers in their markets, or at least not to all buyers in the same way. Buyers are too numerous, too widely scattered, and too varied in their needs and buying practices. Therefore, most companies today practice target marketing— identifying market segments, selecting one or more of them, and developing products and marketing mixes tailored to each.

by business consumer demographics (industry, company size), operating characteristics, purchasing approaches, situational factors, and personal characteristics. The effectiveness of segmentation analysis depends on finding segments that are measurable, accessible, substantial, differentiable, and actionable. OBJECTIVE 3 Explain how companies identify attractive market segments and choose a market-targeting strategy. (pp 186–192)

OBJECTIVE 1 Define the major steps in designing a customer-driven marketing strategy: market segmentation, targeting, differentiation, and positioning. (p 177) Customer-driven marketing strategy begins with selecting which customers to serve and deciding on a value proposition that best serves them. It consists of four steps. Market segmentation is the act of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors who might require separate products or marketing mixes. Once the groups have been identified, market targeting evaluates each market segment’s attractiveness and selects one or more segments to serve. Market targeting consists of designing strategies to build the right relationships with the right customers. Differentiation involves actually differentiating the market offering to create superior customer value. Positioning consists of positioning the market offering in the minds of target customers. OBJECTIVE 2 List and discuss the major bases for segmenting consumer and business markets. (pp 178–186) There is no single way to segment a market. Therefore, the marketer tries different variables to see which give the best segmentation opportunities. For consumer marketing, the major segmentation variables are geographic, demographic, psychographic, and behavioral. In geographic segmentation, the market is divided into different geographical units such as nations, regions, provinces, parishes, cities, or neighborhoods. In demographic segmentation, the market is divided into groups based on demographic variables, including age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. In psychographic segmentation, the market is divided into different groups based on social class, lifestyle, or personality characteristics. In behavioral segmentation, the market is divided into groups based on consumers’ knowledge, attitudes, uses, or responses to a product. Business marketers use many of the same variables to segment their markets. But business markets also can be segmented

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To target the best market segments, the company first evaluates each segment’s size and growth characteristics, structural attractiveness, and compatibility with company objectives and resources. It then chooses one of four market-targeting strategies—ranging from very broad to very narrow targeting. The seller can ignore segment differences and target broadly using undifferentiated (or mass) marketing. This involves mass producing, mass distributing, and mass promoting about the same product in about the same way to all consumers. Or the seller can adopt differentiated marketing— developing different market offers for several segments. Concentrated marketing (or niche marketing) involves focusing on only one or a few market segments. Finally, micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. Micromarketing includes local marketing and individual marketing. Which targeting strategy is best depends on company resources, product variability, product lifecycle stage, market variability, and competitive marketing strategies.

OBJECTIVE 4 Discuss how companies differentiate and position their products for maximum competitive advantage in the marketplace. (pp 192–198) Once a company has decided which segments to enter, it must decide on its differentiation and positioning strategy. The differentiation and positioning task consists of three steps: identifying a set of possible differentiations that create competitive advantage, choosing advantages upon which to build a position, and selecting an overall positioning strategy. The brand’s full positioning is called its value proposition—the full mix of benefits upon which the brand is positioned. In general, companies can choose from one of five winning value propositions upon which to position their products: more for more, more for the same, the same for less, less for much less, or more for less. Company and brand positioning are summarized in positioning statements that state the target segment and need, positioning concept, and specific points of difference. The company must then effectively communicate and deliver the chosen position to the market.

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KEY Terms Market segmentation (p 177) Market targeting (targeting) (p 177) Differentiation (p 177) Positioning (p 177)

Psychographic segmentation (p 181) Behavioral segmentation (p 181) Occasion segmentation (p 181) Benefit segmentation (p 182) Intermarket segmentation (p 185)

Concentrated (niche) marketing (p 188) Micromarketing (p 188) Local marketing (p 188) Individual marketing (p 190)

OBJECTIVE 2

OBJECTIVE 3

OBJECTIVE 4

Geographic segmentation (p 178) Demographic segmentation (p 180) Age and life-cycle segmentation (p 180) Gender segmentation (p 181) Income segmentation (p 181)

Target market (p 187) Undifferentiated (mass) marketing (p 187) Differentiated (segmented) marketing (p 187)

Product position (p 192) Competitive advantage (p 193) Value proposition (p 195) Positioning statement (p 197)

OBJECTIVE 1

DISCUSSING & APPLYING THE Concepts Discussing the Concepts 1. Briefly describe the four major steps in designing a customerdriven marketing strategy.

2. Name and describe the four major sets of variables that might be used in segmenting consumer markets. Which segmenting variable(s) do you think Starbucks is using?

3. Explain how marketers can segment international markets. 4. Compare and contrast undifferentiated, differentiated, concentrated, and micromarketing targeting strategies. Which strategy is best?

5. What is a product’s ‘position’ and how do marketers know what it is?

6. Name and define the five winning value propositions described in the chapter. Which value proposition describes Wal-Mart? Explain your answer.

Applying the Concepts 1. The chapter described psychographics as one major variable used by marketers when segmenting consumer markets. SRI Consulting has developed a typology of consumers based

on their values and lifestyles; specifically it places U.S. adult consumers into one of eight segments. Go to the website (www.sric-bi.com), and click on the VALS survey in the right side of the page. Take the test. How accurately do the VALS types describe you? What amendments to the survey would you need to make in order for it to be more appropriate to your country’s adult consumers. How would the survey results be affected if your changes were made?

2. Assume you work at a regional university in your country. The traditional market for the university is post-secondary school students in your region who have attained sufficiently high qualifications. However, the university’s target market is shrinking. In addition, it will decrease by around 5 percent over the course of the next 10 years. Recommend other potential market segments the university could pursue, and discuss the criteria it should consider to ensure that the segments you identified are effectively targeted.

3. Form a small group and create an idea for a new reality television show. Using the format provided in the chapter, develop a positioning statement for this television show. What competitive advantage does the show have over existing shows? How many and which differences would you promote?

FOCUS ON Technology Have you noticed that ads on websites seem to reflect your interests? Do you ever wonder if someone is watching your Internet behavior? Well, someone (that is, a computer) probably is watching and tracking you. Marketers use such tracking information to send targeted ads to consumers —it’s called behavioral targeting. You’ve no doubt heard of ‘cookies,’ the files deposited on your computer when you visit a website. If you’ve ever given personally identifying information at a site, it remembers you when you return—it’s all stored in the cookie file. But even if you don’t give personally identifying information on a website, Internet protocol addresses (IP addresses) can be tracked to follow where you go and where you’ve been on the Internet. This tracking lets marketers tailor web pages, information, offers, and prices to individuals based on their

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behavioral characteristics. Behavioral targeting is coveted because it allows marketers to implement micromarketing strategies.

1. TACODA is a behavioral targeting ad network. Visit www. tacoda.com to learn more about this company. Explore this website to learn how it lets marketers send Internet ads to targeted consumers. Then, write a brief report explaining behavioral targeting and how marketers are using it.

2. Many individuals are concerned that Internet behavioral tracking violates their privacy. Most websites have access to users’ IP addresses. Do IP addresses alone qualify as ‘user identifiable’ information? Learn more about this issue and write a brief report about it.

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FOCUS ON Ethics The increasing number of infomercials and advertisements in the Arab world for weight control pills has started to trigger reactions in society. People have been bombarded with advertisements featuring beautiful bodies in revealing clothing, sitting lazily and ingesting multiple food supplements, and ending up looking like movie stars. The vast majority of these supplements are not approved by any formal authority or regulated by any government. There is no authority that places standards on what should or could be shown to the masses and what message it should communicate. Many of these products turn out to be a scam, with no actual value. The organizations offering these products are able to advertise them on television to the majority of the Arab world because of the lack of regulatory authority. Critics argue that the ads are misleading the customers about what could be a health-damaging product, and also that the resulting aspiration for achieving the

perfect body through instant, non-effective, and non-healthy means requires some supervision and management. The channels showing these ads have also been criticized for their role in promoting them. Some channels have taken the initiative of managing the material being advertised. That has resulted in new satellite channels which use a business model of plugging in the infomercials into entertainment programs to overcome the limitations of the television channels and also to save the cost of their advertisement.

1. Do you think the channels that show the infomercials have any form of liability?

2. Give an example of an organization or a governmental authority that has taken the responsibility of managing the honesty of a television advertisement.

MARKETING BY THE Numbers China’s fast-paced economic growth and the Chinese’s increasing levels of disposable income have had a major impact on the pet industry. The latest research suggests that pet ownership is on the rise in China. The demand for pet food products in the country is also growing. Although the pet food market in China is still small by Western standards, it offers high growth potential.

1. Refer to Appendix 2: Marketing by the Numbers. Carry out research to estimate what the potential market for dog food in China might be. 2. What big, overseas pet food companies are already doing business in China? 3. How does the Mexican market for pet food compare with China’s pet food market?

VIDEO Case Meredith The Meredith Corporation has developed an expertise in building customer relationships through segmentation, targeting, and positioning. Amazingly, however, it has done this by focusing on only half of the population—the female half. Meredith has developed the largest database of any U.S. media company and uses that database to meet the specific needs and desires of women. Meredith is known for leading titles such as Better Homes and Gardens, Family Circle, and Ladies’ Home Journal. But that list has grown to a portfolio of 14 magazines and more than 200 special interest publications. Through these magazines alone, Meredith regularly reaches about 30 million readers. By focusing on core categories of home, family, and personal development, Meredith

has developed a product mix designed to meet various needs of women. This creates multiple touch points as individual women engage with more than one magazine, as well as with specialty books and websites. After viewing the video featuring Meredith, answer the following questions about segmenting, targeting, and positioning: 1. On what main variables has Meredith focused in segmenting its markets? 2. Which target marketing strategy best describes Meredith’s efforts? Support your choice. 3. How does Meredith use its variety of products to build relationships with the right customers?

COMPANY Case The Arab Online World— Microsoft Maren The Arab world has become more and more lucrative for the international market over the years. It is one of the largest

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growing regions in the world and provides many organizations with huge growth potential. The Arab world alone has 63,240,946 Internet users as of 2010, out of a total population of 212,336,924. That means that more than 29 percent of the population are Internet users. The North Africa region has 40,356,400 Internet users as of 2010, out of a total population

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| Customer-Driven Marketing Strategy: Segmentation, Targeting, and Positioning

of 205,716,142, equivalent to 19 percent of the population. Over the last 10 years, Internet usage in the Arab world has shown growth of around 1,825 percent compared with 432 percent for the rest of the world. The Arabic language is the seventh most spoken language worldwide. It is estimated that 18 percent of Arabic speakers are Internet users. Between 2000 and 2010 the amount of online content in the Arabic language grew by 2,501 percent, far outstripping the rest of the world and making the potential for marketing in the region huge. The Internet has become the life blood of many organizations. Companies such as Microsoft, Google, Yahoo!, Amazon, and Facebook make their living when more people are online, and it is not a modest living by any means. As a result of the nature and the culture of the region, the product offering to the Arab world has to be customized to meet their lifestyle and expectations.

BARRIERS One of the barriers to increasing Internet usage in the Arab world is language. The rich culture of the Arab world is not yet matched by the content and usage online. Many companies have started building Arabic versions of their products, which are strictly targeted at the lucrative, growing region. With all these companies being in the interactive business, they faced problems communicating with the users in their language. Even where the products were in Arabic, the user had several challenges in using them. Microsoft launched its Arabic language support in the early 1990s, allowing users to type in their native language within the Microsoft products and online. The language plug-in was highly appreciated, but left the customer with much to desire. Keyboards did not have Arabic support, and the users were unaccustomed to the letter layout. The users were so familiar with the QWERTY keyboard that learning a new keyboard layout was very challenging for many of them. The first attempt to break that barrier was with typing teachers. Many were published, downloaded, and used. But typing teachers were insufficient and required a great deal of effort on the part of the user. Another approach was the virtual keyboard, in the Arabic alphabet, but this required continuous switching between applications to produce the Arabic text the user desired.

THE MOVEMENT OF THE PEOPLE Independently, the users resorted to transliteration: this involves using Roman characters to spell out Arabic words phonetically. This approach creates what is known as Arabish (also known as ‘Aralish,’ ‘Franco-Arabic, or Arabizi’). This character encoding of Arabic to the Roman alphabet and the Hindu-Arabic numerals is also known as Arabic Chat Alphabet because it is most commonly used to communicate on online chat services. Some users have also developed special notations to use in place of letters that don’t exist in the Roman alphabet. For example: The user types: ana raye7 el gam3a el sa3a 3 el 3asr. Meaning: “‫ ﺍﻟﻌﺼﺮ‬3 ‫”ﺍﻧﺎ ﺭﺍﻳﺢ ﺍﻟﺠﺎﻣﻌﻪ ﺍﻟﺴﺎﻋﻪ‬ English translation: “I’m going to college at 3pm.” The user types: kif sa7tak, chou 3am ta3mil?. Saying: “‫ ﺷﻮ ﻋﻤﺘﻌﻤﻞ؟‬،‫”ﻛﻴﻒ ﺻﺤﺘﻚ‬ English translation: “How is your health, what are you doing?”

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As soon as organizations became aware of the massive trend of Arabish, wanting to tap into this market, they started advertising and communicating in this language form. Ads using the Arabish language began to appear online, on television, on products and even in movie posters.

ARABISH IS NOT ENOUGH After capitalizing on the Arabish language, and as Internet usage grew tremendously, controversy started. There was a backlash against Arabish, with some believing it was changing the heritage of the Arab world. Reacting to this controversy, by knowing their customers well, companies such as Microsoft began to offer actual Arabic text in order to assure the maximum reach, acceptance, and adoption of their products by all sectors of society. A team at Microsoft’s Innovation Lab, led by Mostafa Ashour, started to build a product that translated Arabish into Arabic. Microsoft Maren, though not the first of its kind, was the most impressive. Microsoft Maren seamlessly integrated into Windows and allowed users to capitalize on their familiarity with the QWERTY keyboard, and still produce Arabic text. For example, if a user typed “saba7 el kheir” meaning “good morning”, ‫ﺻﺒﺎﺡ ﺍﻟﺨﻴﺮ‬ would appear on the screen. The advantage Maren had over rival products was that it was built into the users’ system, and logging in to websites, typing, copying, and pasting were no longer required. The product was welcomed by online users. Now the users’ chat, blogs, posts, and comments were perfectly accessible to all their target audience. There were more than 250,000 downloads of Maren from Microsoft pages alone, in addition to those downloaded from other sources. Mostafa Ashour, program manager at Microsoft, says, “This is a real life scenario where communicating in your own language makes all the difference. Expressing your intense feelings of joy or sorrow is better served using your native tongue. Maren helps you communicate efficiently in Arabic if you lack access to an Arabic keyboard or you are not familiar with one.” The evolution of products for the Arab world is very interesting to observe, by knowing the market, not least because companies can trap into the huge potential for sales in the region.

Questions for Discussion 1. Using www.internetworldstats.com select one country in the Arab world and analyze the market demographics, then select a lucrative market segment and explain your choice. 2. For that segment propose a product offering based on Internet usage that delivers value to the customer. 3. Define the positioning that you will offer to your customers based on what you know about the behavior of the selected segment. 4. How does the launch of Maren affect the business of Microsoft in the Arab world? Sources: “Internet World Stats: Usage and Population Statistics,” 2011, www.internetworldstats.com; “Your Maren Story,” Miscrosoft Maren (MSDN Blogs), July 22, 2009, http://blogs.msdn.com/b/maren/ archive/2009/07/22/your-maren-story.aspx; “Arabic chat albhabet,” wikipedia, http://en.wikipedia.org/wiki/Arabic_chat_alphabet. This case was provided by Mohamed Radwan, adjunct faculty member at the American University in Cairo and managing director for Platinum Partners.

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Glossary Adapted global marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻌﺎﻟﻤﻲ ﺍﻟﻤﻌﺪﻝ ﺣﺴﺐ ﻛﻞ ﺳﻮﻕ‬

Benchmarking | ‫ﺍﻟﻤﻘﺎﺭﻧﺔ ﺍﻟﻤﺮﺟﻌﻴﺔ‬

An international marketing strategy for adjusting the marketing strategy and mix elements to each international target market, bearing more costs but hoping for a larger market share and return.

The process of comparing the company’s products and processes to those of competitors or leading firms in other industries to identify “best practices” and find ways to improve quality and performance.

Administered VMS | ‫ﻧﻈﺎﻡ ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﺮﺃﺳﻲ ﺍﻟﻤﺤﻜﻢ‬ A vertical marketing system that coordinates successive stages of production and distribution, not through common ownership or contractual ties, but through the size and power of one of the parties.

Benefit segmentation | ‫ﺗﻘﺴﻴﻢ ﺍﻟﺴﻮﻕ ﻭﻓﻘﺎ ﻟﻠﻔﺎﺋﺪﺓ ﺍﻟﺘﻰ ﻳﺴﻌﻰ ﺇﻟﻴﻬﺎ ﺍﻟﻤﺴﺘﻬﻠﻚ‬

Adoption process | ‫ﻋﻤﻠﻴﺔ ﺗﺒﻨﻲ ﻓﻜﺮﺓ ﺟﺪﻳﺪﺓ‬

Brand equity |

The mental process through which an individual passes from first hearing about an innovation to final adoption.

Advertising | ‫ﺍﻟﺪﻋﺎﻳﺔ‬

Dividing the market into groups according to the different benefits that consumers seek from the product.

‫ﺗﻘﺴﻴﻢ ﺍﻟﺴﻮﻕ ﻭﻓﻘﺎ ﻟﻠﻔﺎﺋﺪﺓ ﺍﻟﺘﻰ ﻳﺴﻌﻰ ﺇﻟﻴﻬﺎ ﺍﻟﻤﺴﺘﻬﻠﻚ‬ The differential effect that knowing the brand name has on customer response to the product or its marketing.

Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Brand extension | ‫ﺗﻮﺳﻴﻊ ﺍﺳﺘﺨﺪﺍﻡ ﺍﻟﻌﻼﻣﺔ ﺍﻟﺘﺠﺎﺭﻳﺔ‬

Advertising agency | ‫ﻭﻛﺎﻟﺔ ﺇﻋﻼﻧﺎﺕ‬

Brand personality | ‫ﺳﻤﺎﺕ ﺍﻟﻌﻼﻣﺔ ﺍﻟﺘﺠﺎﺭﻳﺔ‬

A marketing services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs.

Advertising budget | ‫ﻣﻴﺰﺍﻧﻴﺔ ﺍﻟﺪﻋﺎﻳﺔ‬ The dollars and other resources allocated to a product or company advertising program.

Advertising media | ‫ﻭﺳﺎﺋﻞ ﺍﻹﻋﻼﻥ‬ The vehicles through which advertising messages are delivered to their intended audiences.

Extending an existing brand name to new product categories. The specific mix of human traits that may be attributed to a particular brand.

Brand | ‫ﺍﻟﻌﻼﻣﺔ ﺍﻟﺘﺠﺎﺭﻳﺔ‬ A name, term, sign, symbol, design, or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors.

Break-even pricing (target profit pricing) |

(‫ﺍﻟﺘﺴﻌﻴﺮ ﻋﻠﻰ ﺃﺳﺎﺱ ﻧﻘﻄﺔ ﺍﻟﺘﻌﺎﺩﻝ )ﺍﻟﺘﺴﻌﻴﺮ ﻋﻠﻰ ﺃﺳﺎﺱ ﺍﻟﺮﺑﺢ ﺍﻟﻤﺴﺘﻬﺪﻑ‬

Advertising objective | ‫ﺍﻟﻬﺪﻑ ﺍﻹﻋﻼﻧﻲ‬

Analysis to determine the unit volume and dollar sales needed to be profitable given a particular price and cost structure.

A specific communication task to be accomplished with a specific target audience during a specific period of time.

Business analysis | ‫ﺗﺤﻠﻴﻞ ﺍﻷﻧﺸﻄﺔ ﺍﻟﺘﺠﺎﺭﻳﺔ‬

Advertising strategy | ‫ﺍﺳﺘﺮﺍﺗﻴﺠﻴﺔ ﺍﻟﺪﻋﺎﻳﺔ‬ The strategy by which the company accomplishes its advertising objectives. It consists of two major elements: creating advertising messages and selecting advertising media.

Affordable method | ‫ﻣﻴﺰﺍﻧﻴﺔ ﺩﻋﺎﻳﺔ ﻳﻤﻜﻦ ﺗﺤﻤﻠﻬﺎ‬ Setting the promotion budget at the level management thinks the company can afford.

Age and life-cycle segmentation |

‫ﺍﻟﺘﻘﺴﻴﻢ ﻭﻓﻘًﺎ ﻟﻠﻔﺌﺔ ﺍﻟﻌﻤﺮﻳﺔ ﻭﺍﻟﺪﻭﺭﺓ ﺍﻟﺤﻴﺎﺗﻴﺔ‬ Dividing a market into different age and life-cycle groups.

Alternative evaluation | ‫ﺍﻟﺘﻘﻴﻴﻢ ﺍﻟﺒﺪﻳﻞ‬ The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set.

Approach | (‫ﺍﻟﻤﻘﺎﺑﻠﺔ ﺍﻷﻭﻟﻰ )ﻓﻲ ﻋﻤﻠﻴﺔ ﺍﻟﺒﻴﻊ‬ The step in the selling process in which the salesperson meets the customer for the first time.

Attitude | ‫ﻣﻮﻗﻒ‬ A person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea.

Baby boomers | 1964 ‫ﻣﻮﺍﻟﻴﺪ ﻣﺎ ﺑﻌﺪ ﺍﻟﺤﺮﺏ ﺍﻟﻌﺎﻟﻤﻴﺔ ﺍﻟﺜﺎﻧﻴﺔ ﻭﺣﺘﻰ ﻋﺎﻡ‬ The 78 million people born during the baby boom following World War II and lasting until 1964.

Behavioural segmentation | ‫ﺍﻟﺘﻘﺴﻴﻢ ﻋﻠﻰ ﺃﺳﺎﺱ ﺍﻟﺴﻠﻮﻙ‬ Dividing a market into groups based on consumer knowledge, attitudes, uses, or responses to a product.

Belief | ‫ﺍﻻﻋﺘﻘﺎﺩ‬ A descriptive thought that a person holds about something.

A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives.

Business buyer behaviour |

‫ﺳﻠﻮﻙ ﻣﺸﺘﺮﻱ ﻣﻨﺘﺠﺎﺕ ﺃﻭ ﺧﺪﻣﺎﺕ ﺍﻷﻧﺸﻄﺔ ﺍﻟﺘﺠﺎﺭﻳﺔ‬ The buying behavior of the organizations that buy goods and services for use in the production of other products and services or to resell or rent them to others at a profit.

Business buying process | ‫ﻋﻤﻠﻴﺔ ﺷﺮﺍء ﺍﻟﺨﺪﻣﺎﺕ ﻭﺍﻟﺴﻠﻊ ﺍﻟﺘﺠﺎﺭﻳﺔ‬ The decision process by which business buyers determine which products and services their organizations need to purchase, and then find, evaluate, and choose among alternative suppliers and brands.

Business portfolio |

‫ﻣﺠﻤﻮﻉ ﺍﻻﻋﻤﺎﻝ ﺍﻟﺘﺠﺎﺭﻳﺔ ﻭ ﺍﻟﻤﻨﺘﺠﺎﺕ ﺍﻟﺘﻲ ﺗﺘﻜﻮﻥ ﻣﻨﻬﺎ ﻭ ﺗﻘﺪﻣﻬﺎ ﺍﻟﺸﺮﻛﺔ‬ The collection of businesses and products that make up the company.

Business promotions | ‫ﺍﻟﻌﺮﻭﺽ ﺍﻟﺘﺮﻭﻳﺠﻴﺔ ﻟﻠﻨﺸﺎﻁ ﺍﻟﺘﺠﺎﺭﻱ‬ Sales promotion tools used to generate business leads, stimulate purchases, reward customers, and motivate salespeople.

Business-to business (BB) online marketing |

‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻹﻟﻜﺘﺮﻭﻧﻲ ﻓﻴﻤﺎ ﺑﻴﻦ ﺍﻟﻤﺆﺳﺴﺎﺕ ﺍﻟﺘﺠﺎﺭﻳﺔ‬ Businesses using B2B Web sites, e-mail, online catalogs, online trading networks, and other online resources to reach new business customers, serve current customers more effectively, and obtain buying efficiencies and better prices.

Business-to-consumer (BC) online marketing |

‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻹﻟﻜﺘﺮﻭﻧﻲ ﺑﻴﻦ ﺍﻟﺸﺮﻛﺎﺕ ﻭﺍﻟﻌﻤﻼء‬ Businesses selling goods and services online to final consumers.

G1

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G2

Glossary Competitive marketing strategies | ‫ﺍﺳﺘﺮﺍﺗﻴﺠﻴﺎﺕ ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﺘﻨﺎﻓﺴﻴﺔ‬

Buyer-readiness stages |

‫ﺍﻟﻤﺮﺍﺣﻞ ﺍﻟﺘﻲ ﻳﻤﺮ ﺧﻼﻟﻬﺎ ﺍﻟﻤﺴﺘﻬﻠﻚ ﻗﺒﻞ ﻋﻤﻠﻴﺔ ﺇﺗﺨﺎﺫ ﻗﺮﺍﺭ ﺍﻟﺸﺮﺍء‬ The stages consumers normally pass through on their way to purchase, including awareness, knowledge, liking, preference, conviction, and purchase.

Buyers | ‫ﺍﻟﻤﺸﺘﺮﻳﻦ‬

Strategies that strongly position the company against competitors and that give the company the strongest possible strategic advantage.

Competitive-parity method | ‫ﻃﺮﻳﻘﺔ ﺍﻟﺘﻤﺎﺛﻞ ﺍﻟﺘﻨﺎﻓﺴﻴﺔ‬ Setting the promotion budget to match competitors’ outlays.

The people in the organization’s buying center who make an actual purchase.

Buying center | ‫ﻣﺮﻛﺰ ﺍﻟﺸﺮﺍء‬ All the individuals and units that play a role in the purchase decision making process.

Buzz marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺑﻠﻔﺖ ﺍﻻﻧﺘﺒﺎﻩ‬ Cultivating opinion leaders and getting them to spread information about a product or service to others in their communities.

By-product pricing | ‫ﺗﺴﻌﻴﺮ ﺍﻟﻤﻨﺘﺠﺎﺕ ﺍﻟﻔﺮﻋﻴﺔ‬

Competitor analysis | ‫ﺗﺤﻠﻴﻞ ﺍﻟﺠﻬﺔ ﺍﻟﻤﻨﺎﻓﺴﺔ‬ The process of identifying key competitors; assessing their objectives, strategies, strengths and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid.

Competitor-centered company | ‫ﺷﺮﻛﺔ ﺗﺮﻛﺰ ﻋﻠﻰ ﺍﻟﻤﻨﺎﻓﺲ‬ A company whose moves are mainly based on competitors’ actions and reactions.

Complex buying behaviour | ‫ﺳﻠﻮﻙ ﺍﻟﺸﺮﺍء ﺍﻟﻤﻌﻘﺪ‬

Setting a price for by-products in order to make the main product’s price more competitive.

Consumer buying behavior in situations characterized by high consumer involvement in a purchase and significant perceived differences among brands.

Captive-product pricing | ‫ﺗﺴﻌﻴﺮ ﺍﻟﻤﻨﺘﺠﺎﺕ ﺍﻟﻤﺴﺎﻧﺪﺓ‬

Concentrated (niche) marketing | (‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﺮﻛﺰ )ﻣﺘﺨﺼﺺ‬

Setting a price for products that must be used along with a main product, such as blades for a razor and film for a camera.

A market coverage strategy in which a firm goes after a large share of one or a few segments or niches.

Causal research |

Concept testing | ‫ﺍﺧﺘﺒﺎﺭ ﺍﻟﻤﻔﺎﻫﻴﻢ‬

‫ﺍﻟﺒﺤﺚ ﺍﻟﺘﺴﻮﻳﻘﻲ ﺍﻻﻋﺘﻴﺎﺩﻱ ﺍﻟﺬﻯ ﻳﺨﺘﺒﺮ ﺍﻟﻔﺮﺿﻴﺎﺕ ﺣﻮﻝ ﺍﻟﻌﻼﻗﺔ ﺑﻴﻦ ﺍﻟﺴﺒﺐ ﻭﺍﻟﺘﺄﺛﻴﺮ‬ Marketing research to test hypotheses about cause-and-effect relationships.

Chain stores | (‫ﻣﺘﺎﺟﺮ ﻣﺘﻌﺪﺩﺓ ﺍﻟﻔﺮﻭﻉ )ﺳﻠﺴﻠﺔ ﻣﺘﺎﺟﺮ‬

Testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal.

Consumer buyer behaviour | ‫ﺳﻠﻮﻙ ﺍﻟﻤﺴﺘﻬﻠﻚ ﺍﻟﺸﺮﺍﺋﻲ‬

Two or more outlets that are commonly owned and controlled.

The buying behavior of final consumers—individuals and households that buy goods and services for personal consumption.

Channel conflict | ‫ﺍﻟﺼﺮﺍﻉ ﺑﻴﻦ ﺍﻟﻘﻨﻮﺍﺕ ﺍﻟﺘﺴﻮﻳﻘﻴﺔ‬

Consumer market | ‫ﺳﻮﻕ ﺍﻟﻤﺴﺘﻬﻠﻚ‬

Disagreement among marketing channel members on goals and roles—who should do what and for what rewards.

All the individuals and households who buy or acquire goods and services for personal consumption.

Channel level | ‫ﻣﺴﺘﻮﻯ ﺍﻟﺘﻮﺯﻳﻊ‬

Consumer product | ‫ﻣﻨﺘﺞ ﺍﻻﺳﺘﻬﻼﻛﻲ‬

A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer

A product bought by final consumer for personal consumption.

Click-and-mortar companies |

Sales promotion tools used to boost short-term customer buying and involvement or to enhance longterm customer relationships.

‫ﺷﺮﻛﺎﺕ ﺗﻘﻮﻡ ﺑﺘﺴﻮﻳﻖ ﻣﻨﺘﺠﺎﺗﻬﺎ ﺑﺎﻟﻄﺮﻕ ﺍﻟﺘﻘﻠﻴﺪﻳﺔ ﺑﺎﻹﺿﺎﻓﺔ ﺇﻟﻰ ﺍﻹﻧﺘﺮﻧﺖ‬ Traditional brick-and-mortar companies that have added online marketing to their operations.

Click-only companies | ‫ﺷﺮﻛﺎﺕ ﺗﻘﻮﻡ ﺑﺘﺴﻮﻳﻖ ﻣﻨﺘﺠﺎﺗﻬﺎ ﻋﺒﺮ ﺍﻹﻧﺘﺮﻧﺖ ﻓﻘﻂ‬ The so-called dotcoms, which operate only online without any brickand-mortar market presence.

Closing | ‫ﺍﺗﻤﺎﻡ ﻋﻤﻠﻴﺔ ﺍﻟﺒﻴﻊ‬ The step in the selling process in which the salesperson asks the customer for an order.

Co-branding | ‫ﻋﻼﻣﺔ ﺗﺠﺎﺭﻳﺔ ﻣﺸﺘﺮﻛﺔ‬ The practice of using the established brand names of two different companies on the same product.

Cognitive dissonance | ‫ﺍﻟﺸﻌﻮﺭ ﺑﻌﺪﻡ ﺍﻟﺮﺿﺎ ﺑﻌﺪ ﺷﺮﺍء ﺍﻟﻤﻨﺘﺞ‬ Buyer discomfort caused by postpurchase conflict.

Commercial online databases | ‫ﻗﻮﺍﻋﺪ ﺍﻟﺒﻴﺎﻧﺎﺕ ﺍﻟﺘﺠﺎﺭﻳﺔ ﻋﻠﻰ ﺍﻹﻧﺘﺮﻧﺖ‬

Consumer promotions | ‫ﺍﻟﻌﺮﻭﺽ ﺍﻟﺘﺮﻭﻳﺠﻴﺔ ﻟﻠﻌﻤﻴﻞ‬

Consumer-generated marketing | ‫ﺗﺴﻮﻳﻖ ﻳﻘﻮﻡ ﺑﻪ ﺍﻟﻤﺴﺘﻬﻠﻚ ﻟﻠﺴﻠﻌﺔ‬ Marketing messages, ads, and other brand exchanges created by consumers themselves—both invited and uninvited.

Consumerism | ‫ﺣﻤﺎﻳﺔ ﺍﻟﻤﺴﺘﻬﻠﻚ‬ An organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers.

Consumer-oriented marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﻮﺟﻪ ﻟﻠﻤﺴﺘﻬﻠﻚ‬ The philosophy of sustainable marketing that holds that the company should view and organize its marketing activities from the consumer’s point of view.

Consumer-to-business (CB) online marketing |

‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻹﻟﻜﺘﺮﻭﻧﻲ ﻓﻴﻤﺎ ﺑﻴﻦ ﺍﻟﻤﺴﺘﻬﻠﻜﻴﻦ ﻭﺍﻟﻤﺆﺳﺴﺎﺕ ﺍﻟﺘﺠﺎﺭﻳﺔ‬ Online exchanges in which consumers search out sellers, learn about their offers, and initiate purchases, sometimes even driving transaction terms.

Computerized collections of information available from online commercial sources or via the Internet.

Consumer-to-consumer (CC) online marketing |

Commercialization | ‫ﺗﻘﺪﻳﻢ ﻣﻨﺘﺞ ﺟﺪﻳﺪ ﻟﻠﺴﻮﻕ‬

Online exchanges of goods and information between final consumers.

‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻹﻟﻜﺘﺮﻭﻧﻲ ﻓﻴﻤﺎ ﺑﻴﻦ ﺍﻟﻤﺴﺘﻬﻠﻜﻴﻦ‬

Introducing a new product into the market.

Contract manufacturing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻹﻟﻜﺘﺮﻭﻧﻲ ﻓﻴﻤﺎ ﺑﻴﻦ ﺍﻟﻤﺴﺘﻬﻠﻜﻴﻦ‬

Communication adaptation |

A joint venture in which a company contracts with manufacturers in a foreign market to produce the product or provide its service.

‫ﻣﻮﺍﺋﻤﺔ ﺍﻹﻋﻼﻧﺎﺕ ﺍﻟﺘﺠﺎﺭﻳﺔ ﻟﻼﺳﻮﺍﻕ ﺍﻟﻤﺤﻠﻴﺔ ﺍﻟﻤﺨﺘﻠﻔﺔ‬ A global communication strategy of fully adapting advertising messages to local markets.

Competitive advantage | ‫ﺍﻟﻤﻴﺰﺓ ﺍﻟﺘﻨﺎﻓﺴﻴﺔ‬ An advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices.

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Contractual VMS | ‫ﻧﻈﺎﻡ ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﺮﺃﺳﻲ ﺍﻟﺘﻌﺎﻗﺪﻱ‬ A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than they could achieve alone.

Convenience product | (‫ﺴّﺮ‬ َ ‫ﻣﻨﺘﺞ ﺳﻬﻞ ﺍﻟﻤﻨﺎﻝ )ﻣﻴ‬ A consumer product that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort.

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G3

Glossary Convenience store | ‫ﻣﺘﺎﺟﺮ ﺻﻐﻴﺮﺓ‬

Customer-centered company | ‫ﺷﺮﻛﺔ ﺗﺮﻛﺰ ﻋﻠﻰ ﺍﻟﻌﻤﻴﻞ‬

A small store, located near a residential area, that is open long hours seven days a week and carries a limited line of high-turnover convenience goods.

A company that pays balanced attention to both customers and competitors in designing its marketing strategies.

Customer-centered new-product development |

‫ﺗﻄﻮﻳﺮ ﺍﻟﻤﻨﺘﺠﺎﺕ ﺍﻟﺠﺪﻳﺪﺓ ﺍﻟﻤﺴﺘﻬﻔﺔ ﻟﻠﻌﻤﻼء‬

Conventional distribution channel | ‫ﻗﻨﻮﺍﺕ ﺍﻟﺘﻮﺯﻳﻊ ﺍﻟﺘﻘﻠﻴﺪﻳﺔ‬ A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits even at the expense of profits for the system as a whole.

New-product development that focuses on finding new ways to solve customer problems and create more customer satisfying experiences.

Corporate (or brand) website |

The customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.

(‫ﺍﻟﻤﻮﻗﻊ ﺍﻹﻟﻜﺘﺮﻭﻧﻲ ﻟﻠﺸﺮﻛﺔ )ﺃﻭ ﺍﻟﻌﻼﻣﺔ ﺍﻟﺘﺠﺎﺭﻳﺔ‬ A website designed to build customer goodwill, collect customer feedback, and supplement other sales channels, rather than to sell the company’s products directly.

Corporate VMS | ‫ﻧﻈﺎﻡ ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﺮﺃﺳﻲ ﻟﻠﺸﺮﻛﺎﺕ‬ A vertical marketing system that combines successive stages of production and distribution under single ownership—channel leadership is established through common ownership.

Cost-based pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﺍﻟﻘﺎﺋﻢ ﻋﻠﻰ ﺍﻟﺘﻜﻠﻔﺔ‬ Setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.

Customer-perceived value | ‫ﺍﻟﻘﻴﻤﺔ ﺍﻟﻤﺪﺭﻛﺔ ﻟﻠﻤﺴﺘﻬﻠﻚ‬

Customer relationship management (CRM) |

‫ﺍﺩﺍﺭﺓ ﻋﻼﻗﺎﺕ ﺍﻟﻤﺴﺘﻬﻠﻜﻴﻦ‬ Managing detailed information about individual customers and carefully managing customer ‘touch points’ in order to maximize customer loyalty.

Customer-value marketing | ‫ﻗﻴﻤﺔ ﺍﻟﻤﺴﺘﻬﻠﻚ ﺍﻟﺘﺴﻮﻳﻘﻴﺔ‬ A principle of sustainable marketing that holds that a company should put most of its resources into customer value-building marketing investments.

Deciders | ‫ﺃﺻﺤﺎﺏ ﺍﻟﻘﺮﺍﺭ‬

Adding a standard markup to the cost of the product.

People in the organization’s buying center who have formal or informal power to select or approve the final suppliers.

Countertrade | (‫ﺍﻟﺘﺠﺎﺭﺓ ﻋﻦ ﻃﺮﻳﻖ ﺗﺒﺎﺩﻝ ﺍﻟﺴﻠﻊ ﺑﺪﻻ ﻣﻦ ﺍﻟﻤﺎﻝ )ﺍﻟﻤﻘﺎﻳﻀﺔ‬

Decline stage | ‫ﻣﺮﺣﻠﺔ ﺍﻟﺘﺪﻫﻮﺭ‬

International trade involving the direct or indirect exchange of goods for other goods instead of cash.

The product life-cycle stage in which a product’s sales decline.

Deficient products | ‫ﺍﻟﻤﻨﺘﺠﺎﺕ ﺍﻟﻤﻌﻴﺒﺔ‬

Creative concept | ‫ﻣﻔﻬﻮﻡ ﺍﻹﺑﺪﺍﻉ‬

Products that have neither immediate appeal nor long-run benefits

Cost-plus pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﻋﻠﻰ ﺃﺳﺎﺱ ﺍﺟﻤﺎﻟﻲ ﺍﻟﺘﻜﻠﻔﺔ ﻭﺍﻟﺮﺑﺢ‬

The compelling “big idea” that will bring the advertising message strategy to life in a distinctive and memorable way.

Cultural environment | ‫ﺍﻟﺒﻴﺌﺔ ﺍﻟﺜﻘﺎﻓﻴﺔ‬

Demand curve | ‫ﻣﻨﺤﻨﻰ ﺍﻟﻄﻠﺐ‬ A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged.

Institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors.

Demands | ‫ﺍﻟﻤﺘﻄﻠﺒﺎﺕ‬

Culture | ‫ﺍﻟﺜﻘﺎﻓﺔ‬

Demographic segmentation | ‫ﺍﻟﺘﻘﺴﻴﻢ ﺍﻟﺪﻳﻤﻮﻏﺮﺍﻓﻲ‬

The set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions.

Dividing the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality.

Customer database | ‫ﻗﻮﺍﻋﺪ ﺑﻴﺎﻧﺎﺕ ﺍﻟﻌﻤﻼء‬

Human wants that are backed by buying power.

An organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data.

Demography | (‫ﺍﻟﺪﻳﻤﻐﺮﺍﻓﻴﺎ )ﻋﻠﻢ ﺩﺭﺍﺳﺔ ﺍﻟﺴﻜﺎﻥ‬

Customer equity | ‫ﻗﻴﻤﺔ ﺍﻟﻌﻤﻴﻞ‬

Department store | ‫ﻣﺘﺎﺟﺮ ﻛﺒﺮﻯ‬

The total combined customer lifetime values of all of the company’s customers.

A retail organization that carries a wide variety of product lines— each line is operated as a separate department managed by specialist buyers or merchandisers.

Customer insights | ‫ﺭﺅﻯ ﺍﻟﻌﻤﻼء‬

The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.

Fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships.

Derived demand | ‫ﺍﻟﻄﻠﺐ ﺍﻻﺷﺘﻘﺎﻗﻲ‬

Customer lifetime value | ‫ﺍﻟﻘﻴﻤﺔ ﺍﻟﺪﺍﺋﻤﺔ ﻟﻠﻌﻤﻴﻞ‬

Descriptive research | ‫ﺍﻟﺒﺤﺚ ﺍﻟﻮﺻﻔﻲ‬

The value of the entire stream of purchases that the Customer would make over a lifetime of patronage.

Marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers.

Customer relationship management | ‫ﺇﺩﺍﺭﺓ ﻋﻼﻗﺎﺕ ﺍﻟﻌﻤﻼء‬

Business demand that ultimately comes from (derives from) the demand for consumer goods.

Managing detailed information about individual customers and carefully managing customer “touch points” in order to maximize customer loyalty.

Desirable products | ‫ﺍﻟﻤﻨﺘﺠﺎﺕ ﺍﻟﻤﺮﻏﻮﺑﺔ‬

Customer sales force structure | ‫ﻫﻴﻜﻞ ﻗﻮﻯ ﺍﻟﺒﻴﻊ ﻟﻠﻌﻤﻼء‬

Differentiated (segmented) marketing | (‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﺘﻨﻮﻉ )ﺍﻟﻤﺠﺰﺃ‬

A sales force organization under which salespeople specialize in selling only to certain customers or industries.

A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.

Customer satisfaction | ‫ﺭﺿﺎ ﺍﻟﻤﺴﺘﻬﻠﻚ‬

Differentiation | ‫ﺍﻟﻤﻔﺎﺿﻠﺔ‬

The extent to which a product’s perceived performance matches a buyer’s expectations.

Actually differentiating the market offering to create superior customer value.

Customer value analysis | ‫ﺗﺤﻠﻴﻞ ﺍﻟﻔﻮﺍﺋﺪ ﺍﻟﺘﻰ ﻳﻌﺘﺒﺮﻫﺎ ﺍﻟﻌﻤﻴﻞ ﻗﻴﻤﺔ‬

Differentiation | ‫ﺍﻟﻤﻔﺎﺿﻠﺔ‬

Analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitors’ offers.

Actually differentiating the market offering to create superior customer value.

Z05_KOTL5681_01_SE_GLOS.indd G3

Products that give both high immediate satisfaction and high longrun benefits.

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G4

Glossary

Direct investment | ‫ﺍﺳﺘﺜﻤﺎﺭ ﻣﺒﺎﺷﺮ‬

Environmentalism | ‫ﺣﻤﺎﻳﺔ ﺍﻟﺒﻴﺌﺔ‬

Entering a foreign market by developing foreign-based assembly or manufacturing facilities.

An organized movement of concerned citizens and government agencies to protect and improve people’s current and future living environment.

Direct marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﺒﺎﺷﺮ‬ Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships—the use of direct mail, the telephone, direct response television, e-mail, the Internet, and other tools to communicate directly with specific consumers.

E-procurement | ‫ﺍﻟﺸﺮﺍء ﺍﻹﻟﻜﺘﺮﻭﻧﻲ‬ Purchasing through electronic connections between buyers and sellers—usually online.

Ethnographic research | ‫ﺍﻟﺒﺤﺚ ﺍﻹﺛﻨﻮﻏﺮﺍﻓﻲ‬

A marketing channel that has no intermediary levels.

A form of observational research that involves Sending trained observers to watch and interact with consumers in their “natural habitat.”

Direct-mail marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﺒﺎﺷﺮ ﻋﺒﺮ ﺍﻟﺒﺮﻳﺪ‬

Event marketing | ‫ﺗﺴﻮﻳﻖ ﺍﻟﺤﺪﺙ‬

Direct marketing by sending an offer, announcement, reminder, or other item to a person at a particular physical or virtual address.

Creating a brand marketing event or serving as a sole or participating sponsor of events created by others.

Direct-response television marketing |

Exchange | ‫ﺗﺒﺎﺩﻝ‬

Direct marketing channel | ‫ﻗﻨﻮﺍﺕ ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﺒﺎﺷﺮ‬

‫ﺍﻟﺘﺴﻮﻳﻖ ﺑﺎﻻﺳﺘﺠﺎﺑﺔ ﺍﻟﻤﺒﺎﺷﺮﺓ ﻋﺒﺮ ﺍﻟﺘﻠﻴﻔﺰﻳﻮﻥ‬ Direct marketing via television, including direct-response television advertising (or infomercials) and home shopping channels.

Discount | ‫ﺍﻟﺨﺼﻢ‬

The act of obtaining a desired object from someone by offering something in return.

Exclusive distribution | ‫ﺍﻟﺘﻮﺯﻳﻊ ﺍﻟﺤﺼﺮﻱ‬

A straight reduction in price on purchases during a stated period of time.

Giving a limited number of dealers the exclusive right to distribute the company’s products in their territories.

Discount store | ‫ﻣﻌﺮﺽ ﻟﻠﺴﻠﻊ ﺍﻟﻤﺨﻔﻀﺔ‬

Exclusive distributor | ‫ﺍﻟﻤﻮﺯﻉ ﺍﻟﺤﺼﺮﻱ‬

A retail operation that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume.

A representative who buys, stocks, and sells the products ofaforeign company to a retailer and wholesaler in his or her territory.

Disintermediation | ‫ﺣﺬﻑ ﺍﻟﻮﺳﻄﺎء‬

Execution style | ‫ﺃﺳﻠﻮﺏ ﺍﻟﺘﻨﻔﻴﺬ‬

The cutting out of marketing channel intermediaries by product or service producers, or the displacement of traditional resellers by radical new types of intermediaries.

The approach, style, tone, words, and format used for executing an advertising message.

Dissonance-reducing buying behavior |

The drop in the average per-unit production cost that comes with accumulated production experience.

‫ﺳﻠﻮﻙ ﺍﻟﻤﺸﺘﺮﻱ ﻋﻨﺪ ﺷﺮﺍء ﻣﻨﺘﺞ ﺑﺎﻫﻆ ﺍﻟﺜﻤﻦ ﻣﻊ ﻭﺟﻮﺩ ﺑﻀﻌﺔ ﺍﺧﺘﻼﻓﺎﺕ ﺑﻴﻦ ﺍﻟﻤﺎﺭﻛﺎﺕ‬ Consumer buying behaviour in situations characterized by high involvement but few perceived differences among brands.

Distribution center | ‫ﻣﺮﻛﺰ ﺗﻮﺯﻳﻊ‬ A large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible.

Diversification | ‫ﺍﻟﺘﻨﻮﻳﻊ‬ A strategy for company growth through starting up or acquiring businesses outside the company’s current products and markets.

Experience curve (learning curve) | (‫ﻣﻨﺤﻨﻰ ﺍﻟﺨﺒﺮﺓ )ﻣﻨﺤﻨﻰ ﺍﻟﺘﻌﻠﻢ‬

Experimental research | ‫ﺍﻟﺒﺤﺚ ﺍﻟﺘﺠﺮﻳﺒﻲ‬ Gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses.

Exploratory research | ‫ﺍﻟﺒﺤﺚ ﺍﻻﺳﺘﻜﺸﺎﻓﻲ‬ Marketing research to gather preliminary information that will help define problems and suggest hypotheses.

Exporting | ‫ﺍﻟﺘﺼﺪﻳﺮ‬

Downsizing | ‫ﺍﻟﺘﻘﻠﻴﺺ‬

Entering a foreign market by selling goods produced in the company’s home country, often with little modification.

Reducing the business portfolio by eliminating products of business units that are not profitable or that no longer fit the company’s overall strategy.

Factory outlet | ‫ﻣﻨﺎﻓﺬ ﺑﻴﻊ ﺍﻟﻤﺼﻨﻊ‬

Dynamic pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﺍﻟﺪﻳﻨﺎﻣﻴﻜﻲ‬ Adjusting prices continually to meet the characteristics and needs of individual customers and situations.

Economic community | ‫ﺍﻟﻤﺠﺘﻤﻊ ﺍﻻﻗﺘﺼﺎﺩﻱ‬ A group of nations organized to work toward common goals in the regulation of international trade.

An off-price retailing operation that is owned and operated by a manufacturer and that normally carries the manufacturer’s surplus, discontinued, or irregular goods.

Fad | ‫ﺯﻳﺎﺩﺓ ﻣﺆﻗﺘﺔ ﻓﻰ ﺍﻟﻤﺒﻴﻌﺎﺕ ﻧﺘﻴﺠﺔ ﻟﺸﻬﺮﺓ ﻣﻨﺘﺞ ﺃﻭ ﻋﻼﻣﺔ ﺗﺠﺎﺭﻳﺔ ﻣﺎ‬ A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity.

Fashion | ‫ﻣﻮﺿﺔ‬

Economic environment | ‫ﺍﻟﻤﻨﺎﺥ ﺍﻻﻗﺘﺼﺎﺩﻱ‬

A currently accepted or popular style in a given field.

Factors that affect consumer buying power and spending patterns.

Fixed costs (overhead) | (‫ﺍﻟﺘﻜﺎﻟﻴﻒ ﺍﻟﺜﺎﺑﺘﺔ )ﺍﻟﻤﺒﺎﺷﺮﺓ‬

Engel’s laws | ‫ﻗﻮﺍﻧﻴﻦ ﺍﻧﺠﻞ‬

Costs that do not vary with production or sales level.

Differences noted over a century ago by Ernst Engel in how people shift their spending across food, housing, transportation, health care, and other goods and services categories as family income rises.

FOB-origin pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﻋﻠﻰ ﺃﺳﺎﺱ ﻣﻜﺎﻥ ﺍﻟﺘﺴﻠﻴﻢ‬

Environmental sustainability | ‫ﺍﻻﺳﺘﺪﺍﻣﺔ ﺍﻟﺒﻴﺌﻴﺔ‬ A management approach that involves developing strategies that both sustain the environment and produce profits for the company.

Environmental sustainability | ‫ﺍﻻﺳﺘﺪﺍﻣﺔ ﺍﻟﺒﻴﺌﻴﺔ‬ A management approach that involves developing strategies that both sustain the environment and produce profits for the company.

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A geographical pricing strategy in which goods are placed free on board a carrier; the customer pays the freight from the factory to the destination.

Focus group interviewing |

‫ﻣﻘﺎﺑﻠﺔ ﺗﻀﻢ ﻣﺠﻤﻮﻋﺔ ﻣﻦ ﺍﻷﻓﺮﺍﺩ ﺗﺮﻛﺰ ﻋﻠﻰ ﻣﻮﺿﻮﻉ ﻣﺎ ﺑﺸﻜﻞ ﻣﻌﻤﻖ‬ Personal interviewing that involves inviting six to ten people to gather for a few hours with a trained interviewer to talk about a product, service, or organization. The interviewer “focuses” the group discussion on important issues.

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G5

Glossary Follow-up | ‫ﺍﻟﻤﺘﺎﺑﻌﺔ‬

Hypermarket | ‫ﻣﺤﻞ ﺗﺠﺎﺭﻯ ﺿﺨﻢ‬

The last step in the selling process in which the salesperson follows up after the sale to ensure customer satisfaction and repeat business.

Very large stores traditionally aimed at meeting consumers’ total needs for routinely purchased food and nonfood items. Includes combined supermarket and discount stores, and category killers, which carry a deep assortment in a particular category and have a knowledgeable staff.

Franchise | ‫ﺍﻻﻣﺘﻴﺎﺯ‬ A contractual association between a manufacturer, wholesaler, or service organization (a franchiser) and independent businesspeople (franchisees) who buy the right to own and operate one or more units in the franchise system.

Idea generation | ‫ﺗﻮﻟﻴﺪ ﺍﻷﻓﻜﺎﺭ‬ The systematic search for new-product ideas.

Franchise organization | ‫ﻣﻨﻈﻤﺔ ﺍﻻﻣﺘﻴﺎﺯ‬

Idea screening | ‫ﺗﺼﻔﻴﺔ ﺍﻷﻓﻜﺎﺭ‬

A contractual vertical marketing system in which a channel member, called a franchiser, links several stages in the production-distribution process.

Screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible.

Freight-absorption pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﻋﻠﻰ ﺃﺳﺎﺱ ﺗﺤﻤﻞ ﻗﻴﻤﺔ ﺍﻟﺸﺤﻦ‬

Income segmentation | ‫ﺗﻘﺴﻴﻢ ﺍﻟﺪﺧﻞ‬

A geographical pricing strategy in which the seller absorbs all or part of the freight charges in order to get the desired business.

Dividing a market into different income groups.

Gatekeepers | ‫ﻣﻨﺴﻘﻲ ﺗﺪﺍﻭﻝ ﺍﻟﻤﻌﻠﻮﻣﺎﺕ‬

An off-price retailer that is either independently owned and run or is a division of a larger retail corporation.

People in the organization’s buying center who control the flow of information to others.

Independent off-price retailer | ‫ﺑﺎﺋﻊ ﺗﺠﺰﺋﺔ ﻣﺴﺘﻘﻞ ﻟﻠﺴﻠﻊ ﺍﻟﻤﺨﻔﻀﺔ‬

Indirect marketing channel | ‫ﻗﻨﻮﺍﺕ ﺍﻟﺘﺴﻮﻳﻖ ﻏﻴﺮ ﺍﻟﻤﺒﺎﺷﺮﺓ‬

Gender segmentation | ‫ﺍﻟﺘﺠﺰﺋﺔ ﻋﻠﻰ ﺃﺳﺎﺱ ﺍﻟﺠﻨﺲ‬

Channel containing one or more intermediary levels.

Dividing a market into different groups based on gender.

Individual marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻔﺮﺩﻱ‬

General need description | ‫ﺍﻟﻮﺻﻒ ﺍﻟﻌﺎﻡ ﻟﻠﺤﺎﺟﺎﺕ‬ The stage in the business buying process in which the company describes the general characteristics and quantity of a needed item.

Tailoring products and marketing programs to the needs and preferences of individual customers—also labeled “one-to-one marketing,” “customized marketing,” and “markets-of-one marketing.”

Generation X | ‫ﺟﻴﻞ ﺇﻛﺲ‬

Industrial product | ‫ﻣﻨﺘﺞ ﺻﻨﺎﻋﻲ‬

The 45 million people born between 1965 and 1976 in the “birth dearth” following the baby boom.

A product bought by individuals and organizations for further processing or for use in conducting a business.

Geographic pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﺍﻟﺠﻐﺮﺍﻓﻲ‬

Influencers | ‫ﺃﺻﺤﺎﺏ ﺍﻟﺘﺄﺛﻴﺮ‬

Setting prices for customers located in different parts of the country or world.

People in an organization’s buying center who affect the buying decision; they often help define specifications and also provide information for evaluating alternatives.

Geographic segmentation | ‫ﺍﻟﺘﺠﺰﺋﺔ ﺍﻟﺠﻐﺮﺍﻓﻴﺔ‬ Dividing a market into different geographical units such as nations, states, regions, counties, cities, or neighborhoods.

Global firm | ‫ﺷﺮﻛﺔ ﺩﻭﻟﻴﺔ‬ A firm that, by operating in more than one country, gains R&D, production, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors.

Good-value pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﺍﻟﻤﺒﻨﻲ ﻋﻠﻰ ﻗﻴﻤﺔ ﺍﻟﻤﻨﺘﺞ‬ Offering just the right combination of quality and good service at a fair price.

Government market | ‫ﺍﻟﺴﻮﻕ ﺍﻟﺤﻜﻮﻣﻲ‬ Governmental units— federal, state, and local—that purchase or rent goods and services for carrying out the main functions of government.

Group | ‫ﻓﺌﺔ‬ Two or more people who interact to accomplish individual or mutual goals.

Growth stage | ‫ﻣﺮﺣﻠﺔ ﺍﻟﻨﻤﻮ‬ The product life-cycle stage in which a product’s sales start climbing quickly.

Information search | ‫ﺍﻟﺒﺤﺚ ﻋﻦ ﺍﻟﻤﻌﻠﻮﻣﺎﺕ‬ The stage of the buyer decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into an active information search.

Innovative marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﺒﺘﻜﺮ‬ A principle of sustainable marketing that requires that a company seek real product and marketing improvements.

Inside sales force | ‫ﻗﻮﻯ ﺍﻟﺒﻴﻊ ﺍﻟﺪﺍﺧﻠﻴﺔ‬ Inside salespeople who conduct business from their offices via telephone, the Internet, or visits from prospective buyers.

Institutional market | ‫ﺍﻟﺴﻮﻕ ﺍﻟﻤﺆﺳﺴﻲ‬ Schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care.

Integrated logistics management | ‫ﺍﻹﺩﺍﺭﺓ ﺍﻟﻤﺘﻜﺎﻣﻠﺔ ﻟﻺﻣﺪﺍﺩﺍﺕ‬ The logistics concept that emphasizes teamwork, both inside the company and among all the marketing channel organizations, to maximize the performance of the entire distribution system.

Integrated marketing communications (IMC) |

‫ﺍﻻﺗﺼﺎﻻﺕ ﺍﻟﺘﺴﻮﻳﻘﻴﺔ ﺍﻟﻤﺘﻜﺎﻣﻠﺔ‬

Growth-share matrix | ‫ﻣﺼﻔﻮﻓﺔ ﺣﺼﺔ ﺍﻟﻨﻤﻮ‬ A portfolio-planning method that evaluates a company’s strategic business units in terms of its market growth rate and relative market share. SBUs are classified as stars, cash cows, question marks, or dogs.

Carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent, and compelling message about the organization and its products.

Habitual buying behavior | ‫ﺍﻟﺴﻠﻮﻙ ﺍﻟﻤﻌﺘﺎﺩ ﻓﻲ ﺍﻟﺸﺮﺍء‬

Intensive distribution | ‫ﺍﻟﺘﻮﺯﻳﻊ ﺍﻟﻤﻜﺘﻒ‬

Consumer buying behavior in situations characterized by low-consumer involvement and few significantly perceived brand differences.

Stocking the product in as many outlets as possible.

Handling objections | ‫ﻣﻌﺎﻟﺠﺔ ﺍﻻﻋﺘﺮﺍﺽ ﻋﻠﻰ ﺍﻟﺸﺮﺍء‬

Training service employees in the fine art of interacting with customers to satisfy their needs.

The step in the selling process in which the salesperson seeks out, clarifies, and overcomes customer objections to buying.

Horizontal marketing system | ‫ﻧﻈﺎﻡ ﺍﻟﺘﺴﻮﻳﻖ ﺍﻷﻓﻘﻲ‬ A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity.

Z05_KOTL5681_01_SE_GLOS.indd G5

Interactive marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﺘﻔﺎﻋﻠﻲ‬

Intermarket segmentation |

‫ﺗﻘﺴﻴﻢ ﺍﻟﻤﺴﺘﻬﻠﻜﻴﻦ ﻃﺒﻘﺎ ﻟﺘﺸﺎﺑﻪ ﻣﺘﻄﻠﺒﺎﺗﻬﻢ ﺍﻟﺸﺮﺍﺋﻴﺔ ﺭﻏﻢ ﺍﺧﺘﻼﻑ ﺑﻼﺩﻫﻢ‬ Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries.

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G6

Glossary

Intermodal transportation | ‫ﺍﻟﻨﻘﻞ ﻣﺘﻌﺪﺩ ﺍﻟﻮﺳﺎﺋﻂ‬

Market leader | ‫ﺷﺮﻛﺔ ﺭﺍﺋﺪﺓ ﻓﻲ ﺍﻟﺴﻮﻕ‬

Combining two or more modes of transportation.

The firm in an industry with the largest market share.

Internal databases | ‫ﻗﻮﺍﻋﺪ ﺍﻟﺒﻴﺎﻧﺎﺕ ﺍﻟﺪﺍﺧﻠﻴﺔ‬

Market nicher | ‫ﺷﺮﻛﺔ ﻣﺘﺨﺼﺼﺔ ﺗﻌﻤﻞ ﻓﻲ ﺳﻮﻕ ﻻ ﻳﺘﻨﺎﻓﺲ ﻓﻴﻪ ﺍﻟﻜﺜﻴﺮ‬

Electronic collections of consumer and market information obtained from data sources within the company network.

A firm that serves small segments that the other firms in an industry overlook or ignore.

Internal marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﺪﺍﺧﻠﻲ‬

Market offering | ‫ﺍﻟﻄﺮﺡ ﻓﻲ ﺍﻷﺳﻮﺍﻕ‬

Orienting and motivating customer-contact employees and supporting service people to work as a team to provide customer satisfaction.

Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

Introduction stage | ‫ﻣﺮﺣﻠﺔ ﺗﻘﺪﻳﻢ ﺍﻟﻤﻨﺘﺞ ﺇﻟﻰ ﺍﻟﺴﻮﻕ‬

A strategy for company growth by increasing sales of current products to current market segments without changing the product.

The product life-cycle stage in which the new product is first distributed and made available for purchase.

Joint ownership | ‫ﻣﻠﻜﻴﺔ ﻣﺸﺘﺮﻛﺔ‬ A joint venture in which a company joins investors in a foreign market to create a local business in which the company shares joint ownership and control.

Joint venturing | ‫ﺍﻟﻤﺸﺮﻭﻉ ﺍﻟﻤﺸﺘﺮﻙ‬ Entering foreign markets by joining with foreign companies to produce or market a product or service.

Learning | ‫ﺍﻟﺘﻌﻠﻢ‬

Market penetration | ‫ﺍﻟﻨﻔﺎﺫ ﺇﻟﻰ ﺍﻷﺳﻮﺍﻕ‬

Market segment | ‫ﺍﻟﺸﺮﻳﺤﺔ ﺍﻟﺴﻮﻗﻴﺔ‬ A group of consumers who respond in a similar way to a given set of marketing efforts.

Market segmentation | ‫ﺗﺠﺰﺋﺔ ﺍﻟﺴﻮﻕ‬ Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs.

Market targeting (targeting) | (‫ﺍﺳﺘﻬﺪﺍﻑ ﺍﻟﺴﻮﻕ )ﺃﻭ ﺍﻻﺳﺘﻬﺪﺍﻑ‬

Changes in an individual’s behavior arising from experience.

The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.

Licensing | ‫ﺍﻟﺘﺮﺧﻴﺺ‬

Market-centered company |

A method of entering a foreign market in which the company enters into an agreement with a licensee in the foreign market, offering the right to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty.

A company that pays balanced attention to both customers and competitors in designing its marketing strategies.

Lifestyle | ‫ﻧﻤﻂ ﺍﻟﻤﻌﻴﺸﺔ‬

‫ﺍﻟﺸﺮﻛﺔ ﺍﻟﺘﻲ ﺗﻌﻴﻦ ﺍﻫﺘﻤﺎﻣﺎ ﻣﺘﺴﺎﻭﻳﺎ ﻟﻌﻤﻼﺋﻬﺎ ﻭﻣﻨﺎﻓﺴﻴﻬﺎ‬

Marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ‬

A person’s pattern of living as expressed in his or her activities, interests, and opinions.

The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

Line extension | ‫ﺗﻮﺳﻴﻊ ﺧﻂ ﺍﻹﻧﺘﺎﺝ‬

Marketing channel (distribution channel) |

Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category.

Local agents | ‫ﻭﻛﻼء ﻣﺤﻠﻴﻴﻦ‬

(‫ﻗﻨﺎﺓ ﺍﻟﺘﺴﻮﻳﻖ )ﻗﺘﺎﺓ ﺍﻟﺘﻮﺯﻳﻊ‬ A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user.

Act as brokers between the local buyer and the foreign company

Marketing channel design | ‫ﺗﺼﻤﻴﻢ ﻗﻨﺎﺓ ﺗﺴﻮﻳﻘﻴﺔ‬

Local marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﺤﻠﻲ‬

Designing effective marketing channels by analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating them.

Tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, and even specific stores.

Macroenvironment | ‫ﺍﻟﺒﻴﺌﺔ ﺍﻟﻜﻠﻴﺔ‬

Marketing channel management | ‫ﺇﺩﺍﺭﺓ ﻗﻨﻮﺍﺕ ﺍﻟﺘﺴﻮﻳﻖ‬

The larger societal forces that affect the microenvironment— demographic, economic, natural, technological, political, and cultural forces.

Selecting, managing, and motivating individual channel members and evaluating their performance over time.

Marketing concept | ‫ﻣﻔﻬﻮﻡ ﺍﻟﺘﺴﻮﻳﻖ‬

Madison & Vine | ‫ﻣﺎﺩﻳﺴﻮﻥ ﻭﻓﻴﻦ‬

The marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.

A term that has come to represent the merging of advertising and entertainment in an effort to break through the clutter and create new avenues for reaching consumers with more engaging messages.

Management contracting | ‫ﺍﻟﺘﻌﺎﻗﺪ ﺍﻹﺩﺍﺭﻱ‬ A joint venture in which the domestic firm supplies the management knowhow to a foreign company that supplies the capital; the domestic firm exports management services rather than products.

Market | ‫ﺍﻟﺴﻮﻕ‬ The set of all actual and potential buyers of a product or service.

Market challenger | ‫ﻣﻨﺎﻓﺲ ﻗﻮﻱ ﻓﻰ ﺍﻟﺴﻮﻕ‬ A runner-up firm that is fighting hard to increase its market share in an industry.

Market development | ‫ﺗﻨﻤﻴﺔ ﺍﻷﺳﻮﺍﻕ‬ A strategy for company growth by identifying and developing new market segments for current company products.

Market follower | ‫ﺷﺮﻛﺔ ﺗﺎﺑﻌﺔ ﻓﻲ ﺍﻟﺴﻮﻕ‬ A runner-up firm that wants to hold its share in an industry without rocking the boat.

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Marketing control | ‫ﺍﻟﺮﻗﺎﺑﺔ ﺍﻟﺘﺴﻮﻳﻘﻴﺔ‬ The process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved.

Marketing environment | ‫ﺍﻟﻤﻨﺎﺥ ﺍﻟﺘﺴﻮﻳﻘﻲ‬ The actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.

Marketing implementation | ‫ﺍﻟﺘﻨﻔﻴﺬ ﺍﻟﺘﺴﻮﻳﻘﻲ‬ The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives.

Marketing information system (MIS) | ‫ﻧﻈﺎﻡ ﺍﻟﻤﻌﻠﻮﻣﺎﺕ ﺍﻟﺘﺴﻮﻳﻘﻴﺔ‬ People and procedures for assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights.

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G7

Glossary Marketing intelligence | ‫ﺍﻻﺳﺘﺨﺒﺎﺭﺍﺕ ﺍﻟﺘﺴﻮﻳﻘﻴﺔ‬

Mission statement | ‫ﻣﻬﻤﺔ ﺍﻟﺸﺮﻛﺔ‬

The systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment.

A statement of the organization’s purpose—what it wants to accomplish in the larger environment.

Marketing intermediaries | ‫ﺍﻟﻮﺳﻄﺎء ﺍﻟﺘﺴﻮﻳﻘﻴﻴﻦ‬

A business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers.

Firms that help the company to promote, sell, and distribute its goods to final buyers.

Marketing logistics (physical distribution) |

‫ﺍﻟﺘﻮﺯﻳﻊ ﺍﻟﻤﺎﺩﻱ‬-‫ﺍﻹﻣﺪﺍﺩﺍﺕ ﺍﻟﺘﺴﻮﻳﻘﻴﺔ‬

Modified rebuy | ‫ﺇﻋﺎﺩﺓ ﺍﻟﺸﺮﺍء ﺑﻌﺪ ﺗﻌﺪﻳﻞ ﺍﻟﻤﻨﺘﺞ‬

Motive (drive) | (‫ﺣﺎﻓﺰ )ﺩﺍﻓﻊ‬ A need that is sufficiently pressing to direct the person to seek satisfaction of the need.

Planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Multichannel distribution system | ‫ﻧﻈﺎﻡ ﺍﻟﺘﻮﺯﻳﻊ ﻣﺘﻌﺪﺩ ﺍﻟﻘﻨﻮﺍﺕ‬

Marketing management | ‫ﺇﺩﺍﺭﺓ ﺍﻟﺘﺴﻮﻳﻖ‬

Natural environment | ‫ﺍﻟﻌﻮﺍﻣﻞ ﺍﻟﻄﺒﻴﻌﻴﺔ‬

The art and science of choosing target markets and building profitable relationships with them.

Marketing mix | ‫ﺍﻟﻤﺰﻳﺞ ﺍﻟﺘﺴﻮﻳﻘﻲ‬ The set of controllable tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market.

Marketing myopia | ‫ﻗﺼﺮ ﺍﻟﻨﻈﺮ ﺍﻟﺘﺴﻮﻳﻘﻲ‬ The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products.

Marketing research | ‫ﺍﻟﺒﺤﺚ ﺍﻟﺘﺴﻮﻳﻘﻲ‬ The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

Marketing strategy | ‫ﺍﺳﺘﺮﺍﺗﻴﺠﻴﻪ ﺍﻟﺘﺴﻮﻳﻖ‬ The marketing logic by which the business unit hopes to create customer value and achieve profitable customer relationships.

Marketing strategy development | ‫ﺗﻄﻮﻳﺮ ﺍﺳﺘﺮﺍﺗﻴﺠﻴﺎﺕ ﺍﻟﺘﺴﻮﻳﻖ‬ Designing an initial marketing strategy for a new product based on the product concept.

A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments. Natural resources that are needed as inputs by marketers or that are affected by marketing activities.

Need recognition | ‫ﺍﻟﺸﻌﻮﺭ ﺑﺎﻟﺤﺎﺟﺔ‬ The first stage of the buyer decision process, in which the consumer recognizes a problem or need.

Needs | ‫ﺍﻻﺣﺘﻴﺎﺟﺎﺕ‬ States of felt deprivation

New product | ‫ﻣﻨﺘﺞ ﺟﺪﻳﺪ‬ A good, service, or idea that is perceived by some potential customers as new.

New task | ‫ﻣﻬﻤﺔ ﺟﺪﻳﺪﺓ‬ A business buying situation in which the buyer purchases a product or service for the first time.

New-product development | ‫ﺗﻄﻮﻳﺮ ﺍﻟﻤﻨﺘﺞ ﺍﻟﺠﺪﻳﺪ‬ The development of original products, product improvements, product modifications, and new brands through the firm’s own product development efforts.

Nonpersonal communication channels | ‫ﻗﻨﻮﺍﺕ ﺍﻻﺗﺼﺎﻝ ﻏﻴﺮ ﺍﻟﺸﺨﺼﻴﺔ‬

Marketing Web site | ‫ﻣﻮﻗﻊ ﺍﻟﻜﺘﺮﻭﻧﻲ ﻟﻠﺘﺴﻮﻳﻖ‬

Media that carry messages without personal contact or feedback, including major media, atmospheres, and events.

A website that engages consumers in interactions that will move them closer to a direct purchase or other marketing outcome.

Objective-and-task method | ‫ﻃﺮﻳﻘﺔ ﺍﻟﻬﺪﻑ ﻭﺍﻟﻤﻬﻤﺔ‬

Market-penetration pricing |

‫ﻭﺿﻊ ﺳﻌﺮ ﻣﻨﺨﻔﺾ ﻟﻤﻨﺘﺞ ﺟﺪﻳﺪ ﺑﻐﻴﺔ ﺟﺬﺏ ﻋﺪﺩ ﻛﺒﻴﺮ ﻣﻦ ﺍﻟﻤﺸﺘﺮﻛﻴﻦ ﻭ ﺍﻟﺤﺼﻮﻝ ﻋﻠﻰ‬ ‫ﺣﺼﺔ ﻛﺒﻴﺮﺓ ﻣﻦ ﺍﻟﺴﻮﻕ‬ Setting a low price for a new product in order to attract a large number of buyers and a large market share.

Market-skimming pricing |

‫ﻭﺿﻊ ﺳﻌﺮ ﺃﻋﻠﻰ ﻟﺰﺑﺎﺋﻦ ﻣﻌﻴﻴﻨﻴﻦ ﻳﺮﻏﺒﻮﻥ ﺑﺪﻓﻊ ﻗﻴﻤﺔ ﺃﻋﻠﻰ ﻣﻘﺎﺑﻞ ﺍﻟﺤﺼﻮﻝ ﻋﻠﻰ ﺍﻣﺘﻴﺎﺯ‬ ‫ﺍﻟﺤﺼﻮﻝ ﻋﻠﻰ ﺍﻟﻤﻨﺘﺞ ﺃﻭﻻ‬

Developing the promotion budget by (1) defining specific objectives; (2) determining the tasks that must be performed to achieve these objectives; and (3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.

Observational research | ‫ﺍﻟﺒﺤﺚ ﺍﻟﻘﺎﺋﻢ ﻋﻠﻰ ﺍﻟﻤﻼﺣﻈﺔ‬ Gathering primary data by observing relevant people, actions, and situations.

Occasion segmentation | ‫ﺍﻟﺘﺠﺰﺋﺔ ﻋﻠﻰ ﺃﺳﺎﺱ ﺍﻟﻤﻨﺎﺳﺒﺎﺕ‬

Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales.

Dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the

Maturity stage | ‫ﻣﺮﺣﻠﺔ ﺍﻟﻨﻀﻮﺝ‬ The product life-cycle stage in which sales growth slows or levels off.

Advertising that appears while consumers are surfing the Web, including display ads, search-related ads, online classifieds, and other forms.

Microenvironment | ‫ﺍﻟﺒﻴﺌﺔ ﺍﻟﺘﺴﻮﻳﻘﻴﺔ ﺍﻟﺠﺰﺋﻴﺔ‬

Online focus groups | ‫ﺇﻋﺪﺍﺩ ﻣﺠﻤﻮﻋﺎﺕ ﻧﻘﺎﺵ ﻣﺮﻛﺰﺓ ﻋﻠﻰ ﺍﻹﻧﺘﺮﻧﺖ‬

The actors close to the company that affect its ability to serve its customers—the company, suppliers, marketing intermediaries, customer markets, competitors, and publics.

Gathering a small group of people online with a trained moderator to chat about a product, service, or organization and gain qualitative insights about consumer attitudes and behavior.

Micromarketing | ‫ ﺗﺴﻮﻳﻖ ﺿﻴﻖ ﺍﻟﻨﻄﺎﻕ‬- ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﺠﺰﺋﻲ‬

Online marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻹﻟﻜﺘﺮﻭﻧﻲ‬

The practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups— includes local marketing and individual marketing.

Company efforts to market products and services and build customer relationships over the Internet.

Millennials (Generation Y) | (‫ﺟﻴﻞ ﺍﻷﻟﻔﻴﺔ )ﺟﻴﻞ ﻭﺍﻱ‬

Collecting primary data online through Internet surveys, online focus groups, Web-based experiments, or tracking consumers’ online behavior.

The 83 million children of the baby boomers, born between 1977 and 2000.

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Online advertising | ‫ﺍﻹﻋﻼﻥ ﻋﻠﻰ ﺍﻹﻧﺘﺮﻧﺖ‬

Online marketing research | ‫ﺑﺤﺚ ﺍﻟﺘﺴﻮﻳﻖ ﻋﺒﺮ ﺍﻹﻧﺘﺮﻧﺖ‬

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G8

Glossary

Online social networks | ‫ﺍﻟﺮﺑﻂ ﺍﻹﺟﺘﻤﺎﻋﻲ ﻋﺒﺮ ﺍﻹﻧﺘﺮﻧﺖ‬

Positioning statement | ‫ﺑﻴﺎﻥ ﺍﻟﺘﻤﺮﻛﺰ‬

Online social communities—blogs, social networking Web sites, or even virtual worlds—where people socialize or exchange information and opinions.

A statement that summarizes company or brand positioning— it takes this form: To (target segment and need) our (brand) is (concept) that (pointof-difference).

Opinion leader | ‫ﻗﺎﺩﺓ ﺍﻟﺮﺃﻱ‬

Postpurchase behaviour | ‫ﺳﻠﻮﻙ ﻣﺎ ﺑﻌﺪ ﺍﻟﺸﺮﺍء‬

Person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others.

The stage of the buyer decision process in which the consumers take further action after purchase, based on their satisfaction or dissatisfaction.

Optional-product pricing | ‫ﺗﺴﻌﻴﺮ ﺍﻟﻤﻨﺘﺠﺎﺕ ﻏﻴﺮ ﺍﻟﻀﺮﻭﺭﻳﺔ‬ The pricing of optional or accessory products along with a main product.

Order-routine specification | ‫ﺍﻟﻤﻮﺍﺻﻔﺎﺕ ﺍﻟﺮﻭﺗﻴﻨﻴﺔ ﻟﻠﻄﻠﺒﻴﺎﺕ‬

Pre approach | ‫ﺍﻟﺘﺤﻀﻴﺮ ﺍﻟﻤﺴﺒﻖ‬ The step in the selling process in which the salesperson or company identifies qualified potential customers.

The stage of the business buying process in which the buyer writes the final order with the chosen supplier(s), listing the technical specifications, quantity needed, expected time of delivery, return policies, and warranties.

Presentation | ‫ﻋﺮﺽ ﺍﻟﻤﻨﺘﺞ‬

Outside sales force (field sales force) |

Price | ‫ﺍﻟﺴﻌﺮ‬

(‫ﻗﻮﻯ ﺍﻟﺒﻴﻊ ﺍﻟﺨﺎﺭﺟﻴﺔ )ﻣﻮﻇﻔﻮ ﺍﻟﺒﻴﻊ ﺍﻟﻤﻴﺪﺍﻧﻴﻴﻦ‬ Outside salespeople who travel to call on customers in the field.

Packaging | ‫ﺍﻟﺘﻌﺒﺌﺔ ﻭﺍﻟﺘﻐﻠﻴﻒ‬

The step in the selling process in which the salesperson tells the “value story” to the buyer, showing how the company’s offer solves the customer’s problems. The amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service.

The activities of designing and producing the container or wrapper for a product.

Price elasticity | ‫ﺍﻟﻤﺮﻭﻧﺔ ﺍﻟﺴﻌﺮﻳﺔ‬

Partner relationship management | ‫ﺇﺩﺍﺭﺓ ﺍﻟﻌﻼﻗﺎﺕ ﻣﻊ ﺍﻟﺸﺮﻛﺎء‬

Primary data | ‫ﺑﻴﺎﻧﺎﺕ ﺃﻭﻟﻴﺔ‬

Working closely with partners in other company departments and outside the company to jointly bring greater value to customers.

Information collected for the specific purpose at hand.

Percent-of-sales method |

The first stage of the business buying process in which someone in the company recognizes a problem or need that can be met by acquiring a good or a service.

‫ﺗﺤﺪﻳﺪ ﻣﻴﺰﺍﻧﻴﺔ ﺍﻟﺪﻋﺎﻳﺔ ﻋﻠﻰ ﺃﺳﺎﺱ ﻧﺴﺒﺔ ﻣﻌﻴﻨﺔ ﻣﻦ ﺍﻟﻤﺒﻴﻌﺎﺕ‬ Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price.

Perception | ‫ﺍﻹﺩﺍﺭﻙ‬ The process by which people select, organize, and interpret information to form a meaningful picture of the world.

Performance review | ‫ﻣﺮﺍﺟﻌﺔ ﺍﻷﺩﺍء‬ The stage of the business buying process in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the arrangement.

Personal communication channels | ‫ﻗﻨﻮﺍﺕ ﺍﻻﺗﺼﺎﻝ ﺍﻟﺸﺨﺼﻲ‬

A measure of the sensitivity of demand to changes in price.

Problem recognition | ‫ﺇﺩﺭﺍﻙ ﺍﻟﻤﺸﻜﻠﺔ‬

Product | ‫ﺍﻟﻤﻨﺘﺞ‬ Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

Product adaptation | ‫ﻣﻮﺍﺋﻤﺔ ﺍﻟﻤﻨﺘﺞ‬ Adapting a product to meet local conditions or wants in foreign markets.

Product bundle pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﻋﻠﻰ ﺃﺳﺎﺱ ﺣﺰﻡ ﺍﻟﻤﻨﺘﺠﺎﺕ‬ Combining several products and offering the bundle at a reduced price.

Channels through which two or more people communicate directly with each other, including face to face, on the phone, through mail or e-mail, or even through an Internet “chat.”

Product concept | ‫ﻣﻔﻬﻮﻡ ﺍﻟﻤﻨﺘﺞ‬

Personal selling | ‫ﺍﻟﺒﻴﻊ ﺍﻟﺸﺨﺼﻲ‬

Product development | ‫ﺗﻄﻮﻳﺮ ﺍﻟﻤﻨﺘﺞ ﻣﻦ ﻓﻜﺮﺓ ﺇﻟﻰ ﻣﻨﺘﺞ ﻓﻌﻠﻲ‬

Personal interactions between a customers and the firm’s sales force for the purpose of making sales and building customer relationships.

Developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable market offering.

Personality | ‫ﺍﻟﺸﺨﺼﻴﺔ‬

Product development (p 44) | ‫ﺗﻄﻮﻳﺮ ﻣﻨﺘﺠﺎﺕ ﺍﻟﺸﺮﻛﺔ ﻟﺘﺴﺎﻫﻢ ﻓﻰ ﻧﻤﻮﻫﺎ‬

The unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment.

A strategy for company growth by offering modified or new products to current market segments.

Pleasing products | ‫ﺍﻟﻤﻨﺘﺠﺎﺕ ﺍﻟﻤﻤﺘﻌﺔ‬

Product invention | ‫ﺍﺧﺘﺮﺍﻉ ﺍﻟﻤﻨﺘﺞ‬

Products that give high immediate satisfaction but may hurt consumers in the long run.

Creating new products or services for foreign markets.

Political environment | ‫ﺍﻟﺒﻴﺌﺔ ﺍﻟﺴﻴﺎﺳﻴﺔ‬ Laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society.

The course of a product’s sales and profits over its lifetime. It involves five distinct stages: product development, introduction, growth, maturity, and decline.

Portfolio analysis | (‫ﺗﺤﻠﻴﻞ ﺍﻟﺤﻘﻴﺒﺔ ﺍﻻﺳﺘﺜﻤﺎﺭﻳﺔ )ﺍﻟﻌﻤﻞ ﺍﻟﻤﺆﺳﺴﻲ‬

Product line pricing | ‫ﺗﺴﻌﻴﺮ ﺧﻂ ﺍﻹﻧﺘﺎﺝ‬

The process by which management evaluates the products and businesses that make up the company.

Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors’ prices.

Positioning | ‫ﺍﻟﺘﻤﺮﻛﺰ‬ Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

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A detailed version of the new-product idea stated in meaningful consumer terms.

Product life cycle | ‫ﺩﻭﺭﺓ ﺣﻴﺎﺓ ﺍﻟﻤﻨﺘﺞ‬

Product line | ‫ﺧﻂ ﺍﻹﻧﺘﺎﺝ‬ A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are

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G9

Glossary marketed through the same types of outlets, or fall within given price ranges.

creating a demand vacuum that “pulls” the product through the channel.

Product mix (product portfolio) |

Purchase decision | ‫ﻗﺮﺍﺭ ﺍﻟﺸﺮﺍء‬

(‫ﺍﻟﻤﻨﺘﺠﺎﺕ ﺍﻟﻤﺘﻨﻮﻋﺔ ﺍﻟﻤﻌﺮﻭﺿﺔ ﻟﻠﺒﻴﻊ )ﻗﺎﺋﻤﺔ ﺍﻟﻤﻨﺘﺠﺎﺕ‬ The set of all product lines and items that a particular seller offers for sale.

Product position | ‫ﻣﺮﻛﺰ ﺍﻟﻤﻨﺘﺞ‬

The buyer’s decision about which brand to purchase.

Push strategy | ‫ﺍﺳﺘﺮﺍﺗﻴﺠﻴﻪ ﺍﻟﺪﻓﻊ‬

The way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products.

A promotion strategy that calls for using the sales force and trade promotion to push the product through channels. The producer promotes the product to channel members who in turn promote it to final consumers.

Product quality | ‫ﺟﻮﺩﺓ ﺍﻟﻤﻨﺘﺞ‬

Reference prices | ‫ﺍﻷﺳﻌﺎﺭ ﺍﻟﻤﺮﺟﻌﻴﺔ‬

The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.

Prices that buyers carry in their minds and refer to when they look at a given product.

Product sales force structure |

Retailer | ‫ﺑﺎﺋﻊ ﺍﻟﺘﺠﺰﺋﺔ‬

‫ﻫﻴﻜﻞ ﻗﻮﻯ ﺑﻴﻊ ﺟﺰء ﻣﻦ ﻣﻨﺘﺠﺎﺕ ﺍﻟﺸﺮﻛﺔ ﻟﻠﻌﻤﻼء‬ A sales force organization under which salespeople specialize in selling only a portion of the company’s products or lines

Product specification | ‫ﻣﻮﺍﺻﻔﺎﺕ ﺍﻟﻤﻨﺘﺞ‬ The stage of the business buying process in which the buying organization decides on and specifies the best technical product characteristics for a needed item.

Product/market expansion grid | ‫ﺍﻟﺴﻮﻕ‬/‫ﺷﺒﻜﺔ ﺗﻮﺳﻴﻊ ﺣﺠﻢ ﺍﻟﻤﻨﺘﺞ‬ A portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification.

A business whose sales come primarily from retailing.

Retailing | ‫ﺍﻟﺒﻴﻊ ﺑﺎﻟﺘﺠﺰﺋﺔ‬ All activities involved in selling goods or services directly to final consumers for their personal, non-business use.

Return on advertising investment | ‫ﺍﻟﻌﺎﺋﺪ ﻣﻦ ﺍﻻﺳﺘﺜﻤﺎﺭ ﺍﻹﻋﻼﻧﻲ‬ The net return on advertising investment divided by the costs of the advertising investment.

Return on marketing investment | ‫ﻋﺎﺋﺪ ﺍﺳﺘﺜﻤﺎﺭ ﺍﻟﺘﺴﻮﻳﻖ‬ The net return from a marketing investment divided by the costs of the marketing investment.

Production concept | ‫ﻣﻔﻬﻮﻡ ﺍﻹﻧﺘﺎﺝ‬

Sales force management | ‫ﺇﺩﺍﺭﺓ ﻗﻮﻯ ﺍﻟﺒﻴﻊ‬

The idea that consumers will favor products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency.

The analysis, planning, implementation, and control of sales force activities. It includes designing sales force strategy and structure and recruiting, selecting, training, supervising, compensating, and evaluating the firm’s salespeople.

Promotion mix (marketing communications mix) |

(‫ﻣﺰﻳﺞ ﺗﺮﻭﻳﺠﻲ )ﻣﺰﻳﺞ ﺍﻻﺗﺼﺎﻻﺕ ﺍﻟﺘﺴﻮﻳﻘﻴﺔ‬ The specific blend of advertising, sales promotion, public relations, personal selling, and direct-marketing tools that the company uses to persuasively communicate customer value and build customer relationships.

Promotional pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﺍﻟﺘﺮﻭﻳﺠﻲ‬ Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales.

Proposal solicitation | ‫ﻃﻠﺐ ﺍﻟﻌﺮﻭﺽ‬ The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals.

Prospecting | ‫ﺍﻟﺒﺤﺚ ﻋﻦ ﺍﻟﻌﻤﻼء‬ The step in the selling process in which the salesperson or company identifies qualified potential customers.

Psychographic segmentation | ‫ﺍﻟﺘﺠﺰﺋﺔ ﺍﻟﺴﻴﻜﻮﻏﺮﺍﻓﻴﺔ‬ Dividing a market into different groups based on social class, lifestyle, or personality characteristics.

Psychological pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﺍﻟﺴﻴﻜﻮﻟﻮﺟﻲ‬

Sales promotion | ‫ﺍﻟﺘﺮﻭﻳﺞ ﻟﻠﻤﺒﻴﻌﺎﺕ‬ Short-term incentives to encourage the purchase or sale of a product or service.

Sales quota | ‫ﺣﺼﺔ ﺍﻟﻤﺒﻴﻌﺎﺕ‬ A standard that states the amount a salesperson should sell and how sales should be divided among the company’s products.

Salesperson | ‫ﻣﻨﺪﻭﺏ ﻣﺒﻴﻌﺎﺕ‬ An individual representing a company to customers by performing one or more of the following activities: prospecting, communicating, selling, servicing, information gathering, and relationship building.

Salutary products | (‫ ﻭﻟﻜﻨﻬﺎ ﻣﻔﻴﺪﺓ ﻟﻬﻢ ﻋﻠﻰ ﺍﻟﻤﺪﻯ ﺍﻟﺒﻌﻴﺪ‬, ‫ﺍﻟﻤﻨﺘﺠﺎﺕ ﺍﻟﻤﻔﻴﺪﺓ )ﻣﻨﺘﺠﺎﺕ ﺿﺌﻴﻠﻪ ﺍﻟﺠﺎﺫﺑﻴﺔ ﺑﺎﻟﻨﺴﺒﺔ ﻟﻠﻌﻤﻼء‬ Products that have low appeal but may benefit consumers in the long run.

Sample | ‫ﻋﻴﻨﺔ‬ A segment of the population selected for marketing research to represent the population as a whole.

A pricing approach that considers the psychology of prices and not simply the economics; the price is used to say something about the product.

Secondary data | ‫ﺑﻴﺎﻧﺎﺕ ﺛﺎﻧﻮﻳﺔ‬

Public | ‫ﺍﻟﺠﻤﻬﻮﺭ‬

Segmented pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﺍﻟﻤﺠﺰﺉ‬

Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives.

Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs.

Public relations | ‫ﺍﻟﻌﻼﻗﺎﺕ ﺍﻟﻌﺎﻣﺔ‬

Selective distribution | ‫ﺍﻟﺘﻮﺯﻳﻊ ﺍﻻﻧﺘﻘﺎﺋﻲ‬

Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.

The use of more than one, but fewer than all, of the intermediaries who are willing to carry the company’s products.

Pull strategy | ‫ﺍﺳﺘﺮﺍﺗﻴﺠﻴﻪ ﺍﻟﺴﺤﺐ‬ A promotion strategy that calls for spending a lot on advertising and consumer promotion to induce final consumers to buy the product,

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Information that already exists somewhere, having been collected for another purpose.

Selling concept | ‫ﻣﻔﻬﻮﻡ ﺍﻟﺒﻴﻊ‬ The idea that that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort.

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G10

Glossary

Selling process | ‫ﻋﻤﻠﻴﺔ ﺍﻟﺒﻴﻊ‬

Specialty store | ‫ﻣﺘﺠﺮ ﺍﻟﺼﻨﺎﻋﺎﺕ ﺍﻟﻤﺘﺨﺼﺼﺔ‬

The steps that the salesperson follows when selling, which include prospecting and qualifying, preapproach, approach, presentation and demonstration, handling objections, closing, and follow-up.

A retail store that carries a narrow product line with a deep assortment within that line.

Sense-of-mission marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﻋﻠﻰ ﺃﺳﺎﺱ ﺍﻹﺣﺴﺎﺱ ﺑﺎﻟﻤﺴﺌﻮﻟﻴﺔ‬

An international marketing strategy for using basically the same marketing strategy and mix in all the company’s international markets.

A principle of sustainable marketing that holds that a company should define its mission in broad social terms rather than narrow product terms.

Standardized global marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻌﺎﻟﻤﻲ ﺍﻟﻤﻮﺣﺪ‬

Store brand (private brand) |

Service | ‫ﺍﻟﺨﺪﻣﺎﺕ‬ Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.

Service inseparability | ‫ﺗﻼﺯﻡ ﺍﻟﺨﺪﻣﺎﺕ‬ A major characteristic of services—they are produced and consumed at the same time and cannot be separated from their providers.

Service intangibility | ‫ﺍﻟﺨﺪﻣﺎﺕ ﻏﻴﺮ ﺍﻟﻤﻠﻤﻮﺳﺔ‬ A major characteristic of services—they cannot be seen, tasted, felt, heard, or smelled before they are bought.

Service perishability | ‫ﻋﺪﻡ ﻗﺎﺑﻠﻴﺔ ﺗﺨﺰﻳﻦ ﺍﻟﺨﺪﻣﺔ‬ A major characteristic of services—they cannot be stored for later sale or use.

Service retailer | (‫ﺑﺎﺋﻊ ﺗﺠﺰﺋﺔ )ﺧﺪﻣﺎﺕ‬ A retailer whose product line is actually a service, including hotels, airlines, banks, colleges, and many others.

Service variability | ‫ﺗﻨﻮﻉ ﺍﻟﺨﺪﻣﺎﺕ‬ A major characteristic of services—their quality may vary greatly, depending on who provides them and when, where, and how.

Service-profit chain | ‫ﺳﻠﺴﻠﺔ ﺭﺑﺤﻴﺔ ﺍﻟﺨﺪﻣﺔ‬ The chain that links service firm profits with employee and customer satisfaction.

(‫ﻋﻼﻣﺔ ﺗﺠﺎﺭﻳﺔ ﻣﻤﻠﻮﻛﺔ ﻟﺘﺎﺟﺮ)ﻋﻼﻣﺔ ﺗﺠﺎﺭﻳﺔ ﺧﺎﺻﺔ‬ A brand created and owned by a reseller of a product or service

Straight product extension |

‫ﺗﻮﺳﻴﻊ ﻧﻄﺎﻕ ﺗﺴﻮﻳﻖ ﺍﻟﻤﻨﺘﺞ ﺩﻭﻥ ﺇﺣﺪﺍﺙ ﺍﻱ ﺗﻐﻴﻴﺮ ﻓﻴﻪ‬ Marketing a product in a foreign market without any change.

Straight rebuy | ‫ﺇﻋﺎﺩﺓ ﺍﻟﺸﺮﺍء ﺍﻟﻤﺒﺎﺷﺮ‬ A business buying situation in which the buyer routinely reorders something without any modifications.

Strategic group | ‫ﺍﻟﻤﺠﻤﻮﻋﺔ ﺍﻹﺳﺘﺮﺍﺗﻴﺠﻴﺔ‬ A group of firms in an industry following the same or a similar strategy.

Strategic planning | ‫ﺍﻟﺘﺨﻄﻴﻂ ﺍﻻﺳﺘﺮﺍﺗﻴﺠﻲ‬ The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.

Style | ‫ﻧﻤﻂ‬ A basic and distinctive mode of expression.

Subculture | ‫ﺍﻟﺠﻤﺎﻋﺔ ﺍﻟﻔﺮﻋﻴﺔ‬ A group of people with shared value systems based on common life experiences and situations.

Supermarket | ‫ﺍﻟﺴﻮﺑﺮ ﻣﺎﺭﻛﺖ‬

Share of customer | ‫ﺣﺼﺔ ﺍﻟﻌﻤﻴﻞ‬

A large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of grocery and household products.

The portion of the customer’s purchasing that a company gets in its product categories.

Supplier development | ‫ﺗﻄﻮﻳﺮ ﺃﺩﺍء ﺍﻟﻤﻮﺭﺩﻳﻦ‬

Shopping center | ‫ﻣﺮﻛﺰ ﺗﺴﻮﻕ‬ A group of retail businesses planned, developed, owned, and managed as a unit.

Shopping product | ‫ﻣﻨﺘﺞ ﺷﺮﺍﺋﻲ‬ A consumer product that the customer, in the process of selection and purchase, usually compares on such bases as suitability, quality, price, and style.

Systematic development of networks of supplier partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others.

Supplier search | ‫ﺍﻟﺒﺤﺚ ﻋﻦ ﻣﻮﺭﱢﺩ‬ The stage of the business buying process in which the buyer tries to find the best vendors.

Supplier selection | ‫ﺍﺧﺘﻴﺎﺭ ﺍﻟﻤﻮﺭﺩ‬

Social class | ‫ﻃﺒﻘﺔ ﺇﺟﺘﻤﺎﻋﻴﺔ‬

The stage of the business buying process in which the buyer reviews proposals and selects a supplier or suppliers.

Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors.

Supply chain management | ‫ﺇﺩﺍﺭﺓ ﺳﻠﺴﻠﺔ ﺍﻹﻣﺪﺍﺩ‬

Social marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻻﺟﺘﻤﺎﻋﻲ‬ The use of commercial marketing concepts and tools in programs designed to influence individuals’ behavior to improve their wellbeing and that of society.

Societal marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﺠﺘﻤﻌﻲ‬ A principle of sustainable marketing that holds that a company should make marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ longrun interests, and society’s long-run interests.

Societal marketing concept | ‫ﻣﻔﻬﻮﻡ ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﺠﺘﻤﻌﻲ‬

Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers.

Survey research | ‫ﺍﻟﺒﺤﺚ ﺍﻟﻤﺴﺤﻲ‬ Gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior.

Sustainable marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﺴﺘﺪﺍﻡ‬ A principle of sustainable marketing that holds that a company should make marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ longrun interests, and society’s long-run interests.

The idea that a company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests.

SWOT analysis | (‫ﺗﺤﻠﻴﻞ ﺳﻮﺕ )ﻧﻘﺎﻁ ﺍﻟﻘﻮﺓ ﻭﺍﻟﻀﻌﻒ ﻭﺍﻟﻔﺮﺹ ﻭﺍﻟﺘﻬﺪﻳﺪﺍﺕ‬

Spam | ‫ﺍﻟﺒﺮﻳﺪ ﻏﻴﺮ ﺍﻟﻤﺮﻏﻮﺏ‬

Systems selling (solutions selling) | (‫ﺑﻴﻊ ﺍﻷﻧﻈﻤﺔ )ﺑﻴﻊ ﺍﻟﺤﻠﻮﻝ‬

Unsolicited, unwanted commercial e-mail messages

Buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation.

Specialty product | ‫ﻣﻨﺘﺞ ﺧﺎﺹ‬ A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort.

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An overall evaluation of the company’s strengths (S), weaknesses (W), opportunities (O), and threats (T).

Target costing | ‫ﺍﻟﺘﻜﺎﻟﻴﻒ ﺍﻟﻤﺴﺘﻬﺪﻓﺔ‬ Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met.

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G11

Glossary Target market | ‫ﺍﻟﺴﻮﻕ ﺍﻟﻤﺴﺘﻬﺪﻓﺔ‬

Value chain | ‫ﺳﻠﺴﻠﺔ ﺍﻹﻣﺪﺍﺩﺍﺕ؛ ﺳﻠﺴﻠﺔ ﺍﻷﻧﺸﻄﺔ ﺍﻟﻤﻀﻴﻔﺔ ﻟﻠﻘﻴﻤﺔ‬

A set of buyers sharing common needs or characteristics that the company decides to serve.

The series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products.

Team selling | ‫ﺍﻟﺒﻴﻊ ﺑﻮﺍﺳﻄﺔ ﺍﻟﻔﺮﻕ‬

Value delivery network | ‫ﺷﺒﻜﺔ ﺗﻮﻓﻴﺮ ﺍﻟﻘﻴﻤﺔ‬

Using teams of people from sales, marketing, engineering, finance, technical support, and even upper management to service large, complex accounts.

The network made up of the company, suppliers, distributors, and ultimately customers who “partner” with each other to improve the performance of the entire system in delivering customer value.

Team-based new-product development |

‫ﺗﻄﻮﻳﺮ ﻣﻨﺘﺞ ﺟﺪﻳﺪ ﺑﺎﻻﻋﺘﻤﺎﺩ ﻋﻠﻰ ﻓﺮﻳﻖ ﺍﻟﻌﻤﻞ‬

Value proposition | ‫ﻗﻴﻤﺔ ﺍﻟﻤﻨﺘﺞ‬

An approach to developing new products in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness.

The full positioning of a brand—the full mix of benefits upon which it is positioned.

Technological environment | ‫ﺍﻟﺒﻴﺌﺔ ﺍﻟﺘﻜﻨﻮﻟﻮﺟﻴﺔ‬

Attaching value added features and services to differentiate a company’s offers and charging higher prices.

Forces that create new technologies, creating new product and market opportunities.

Telephone marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﻋﻦ ﻃﺮﻳﻖ ﺍﻟﺘﻠﻴﻔﻮﻥ‬

Value-added pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﺍﻟﻘﺎﺋﻢ ﻋﻠﻰ ﺍﻟﻘﻴﻤﺔ ﺍﻟﻤﻀﺎﻓﺔ‬

Value-based pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﺍﻟﻤﺒﻨﻲ ﻋﻠﻰ ﺍﻟﻘﻴﻤﺔ‬

Using the telephone to sell directly to customers.

Setting price based on buyers’ perceptions of value rather than on the seller’s cost.

Territorial sales force structure |

Variable costs | ‫ﺍﻟﺘﻜﺎﻟﻴﻒ ﺍﻟﻤﺘﻐﻴﺮﺓ‬

‫ﺍﻟﻬﻴﻜﻞ ﺍﻟﺘﻨﻈﻴﻤﻲ ﻟﻤﻨﺪﻭﺑﻲ ﺍﻟﻤﺒﻴﻌﺎﺕ ﻓﻲ ﻣﻨﺎﻃﻖ ﺟﻐﺮﺍﻓﻴﺔ ﻣﺨﺘﻠﻔﺔ‬

Costs that vary directly with the level of production.

A sales force organization that assigns each salesperson to an exclusive geographic territory in which that salesperson sells the company’s full line.

Variety-seeking buying behaviour | ‫ﺳﻠﻮﻙ ﺍﻟﺸﺮﺍء ﺍﻟﻤﺘﺴﻢ ﺑﺎﻟﺘﻨﻮﻉ‬

Test marketing | ‫ﺍﻹﺧﺘﺒﺎﺭ ﺍﻟﺘﺴﻮﻳﻘﻲ‬

Vertical marketing system (VMS) | ‫ﻧﻈﺎﻡ ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﺮﺃﺳﻲ‬

The stage of new-product development in which the product and marketing program are tested in realistic market settings.

A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate

Third-party logistics (PL) provider | ‫ﻣﻘﺪﻡ ﺍﻟﺨﺪﻣﺎﺕ ﺍﻟﻠﻮﺟﺴﺘﻴﺔ ﺍﻟﻤﺴﺘﻘﻞ‬ An independent logistics provider that performs any or all of the functions required to get its client’s product to market.

Total costs | ‫ﺍﻟﺘﻜﺎﻟﻴﻒ ﺍﻹﺟﻤﺎﻟﻴﺔ‬ The sum of the fixed and variable costs for any given level of production.

Trade promotions | ‫ﺍﻟﻌﺮﻭﺽ ﺍﻟﺘﺮﻭﻳﺠﻴﺔ ﺍﻟﺘﺠﺎﺭﻳﺔ‬ Sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to consumers.

Undifferentiated (mass) marketing | (‫ﺍﻟﺘﺴﻮﻳﻖ ﺍﻟﻤﻔﺘﻮﺡ )ﺍﻟﻤﻮﺳﱠﻊ‬ A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.

Consumer buying behavior in situations characterized by low consumer involvement but significant perceived brand differences.

Viral marketing | ‫ﺍﻟﺘﺴﻮﻳﻖ ﻋﺒﺮ ﺍﻟﺘﻨﺘﺎﻗﻞ ﺍﻹﻟﻜﺘﺮﻭﻧﻲ‬ The Internet version of word-of-mouth marketing—Web sites, videos, e-mail messages, or other marketing events that are so infectious that customers will want to pass them along to friends.

Wants | ‫ﺍﻟﺮﻏﺒﺎﺕ‬ The form human needs take as shaped by culture and individual personality.

Whole-channel view | ‫ﺍﻟﻤﻨﻈﻮﺭ ﺍﻟﻜﺎﻣﻞ ﻟﻘﻨﻮﺍﺕ ﺍﻟﺘﺴﻮﻳﻖ‬ Designing international channels that take into account the entire global supply chain and marketing channel, forging and effective global value delivery network.

Wholesaler | ‫ﺗﺎﺟﺮ ﺍﻟﺠﻤﻠﺔ‬ A firm engaged primarily in wholesaling activities.

Uniform-delivered pricing | ‫ﺍﻟﺘﺴﻌﻴﺮﺓ ﺍﻟﻤﻮﺣﺪﺓ ﻟﻠﺘﻮﺻﻴﻞ‬

Wholesaling | ‫ﺍﻟﺒﻴﻊ ﺑﺎﻟﺠﻤﻠﺔ‬

A geographical pricing strategy in which the company charges the same price plus freight to all customers, regardless of their location.

All activities involved in selling goods and services to those buying for resale or business use.

Unsought product | ‫ﻣﻨﺘﺞ ﻏﻴﺮ ﻣﻄﻠﻮﺏ‬ A consumer product that the consumer either does not know about or knows about but does not normally think of buying.

Users | ‫ﺍﻟﻤﺴﺘﺨﺪﻣﻮﻥ‬ Members of the buying organization who will actually use the purchased product or service.

Z05_KOTL5681_01_SE_GLOS.indd G11

Word-of-mouth influence | ‫ﺗﺄﺛﻴﺮ ﺍﻟﻜﻠﻤﺔ ﺍﻟﻤﻨﻄﻮﻗﺔ‬ Personal communication about a product between target buyers and neighbors, friends, family members, and associates.

Zone pricing | ‫ﺍﻟﺘﺴﻌﻴﺮ ﺣﺴﺐ ﺍﻟﻤﻨﺎﻃﻖ‬ A geographical pricing strategy in which the company sets up two or more zones. All customers within a zone pay the same total price; the more distant the zone, the higher the price.

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Principles of

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Marketing

Discover what makes a marketing campaign successful in this rapidly developing region through the Arab edition of this widely acclaimed textbook. Kotler and Armstrong’s hugely successful approach has been adapted specifically for the Arab world, using Arab-world business examples, case studies and statistics as well as cultural and demographic insights. Emphasis is placed on making marketing ideas and concepts come alive by encouraging readers to apply established marketing principles to real companies in real situations.

Arab World Edition

The essential marketing textbook for the Arab region and beyond.

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PRINCIPLES OF

MARKETING Philip Kotler Gary Armstrong Ahmed Tolba Anwar Habib

Philip Kotle Gary Armstrong Ahmed Tolba Anwar Habib