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Principles and Practice of
Marketing
The McGraw-Hill Companies London Boston Burr Ridge, IL Dubuque, IA Madison, WI New York San Francisco St. Louis Bangkok Bogota Caracas Kuala Lumpur Lisbon Madrid Mexico City Milan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto
Detailed Table of Contents List of vignettes
xi
Case guide
xiii
Preface
xix
Guided tour
xxi
Technology to enhance learning and teaching
xxiv
About the author
xxvii
Acknowledgements for the 6th edition
xxviii
Study skills
xxxi
1 • Fundamentals of Modern Marketing Thought
1
1 Marketing in the modern organization
2
The marketing concept Marketing versus production orientation Market-driven versus internally orientated businesses Efficiency versus effectiveness Limitations of the marketing concept Creating customer value and satisfaction Developing an effective marketing mix Key characteristics of an effective marketing mix Criticisms of,the 4-Ps approach to marketing management Marketing and business performance
3 4 6 9 10 13 17 20 22 23
Review Key terms Study questions References
25 26 27 27
Case 1 Coca-Cola vs Pepsi: Cola Wars in a Changing Marketing Environment Case 2 H&M Gets Hotter: Fashion at its Fastest
30 33
2 Marketing planning: an overview of marketing The fundamentals of planning The process of marketing planning Marketing objectives Core strategy The rewards of marketing planning Problems in making planning work
37 38 39 48 50 55 55
How to handle marketing planning problems
57
Review Key terms Study questions References
58 59 60 60
Case 3 Vulnerable Volvo: Can the Volvo Brand Succeed in the New Competitive Landscape? Case 4 Heron Engineering: A Strategy for Storage
62 66
2 •Marketing Analysis
71
The marketing environment
72
Political and legal forces Economic forces Ecological/physical environmental forces Social/cultural forces Technological forces The microenvironment Environmental scanning Responses to environmental change
73 76 81 86 90 91 93 95
Review Key terms Study questions References
97 98 98 99
Case 5 Sony Shockwave: In Search of the Next Hit Product Case 6 Marketing Environment: PEEST Analysis Exercise
Understanding consumer behaviour
101 107
108
The dimensions of buyer behaviour Consumer behaviour Influences on consumer behaviour
109 110 120
Review Key terms Study questions References
135 137 138 138
Case 7 Cappuccino Wars: The Battle for the High Street Case 8 Consumer Behaviour: How Do You Decide?
141 144
Understanding organizational buying behaviour 145 Characteristics of organizational buying The dimensions of organizational buying behaviour Influences on organizational buying behaviour
146 148 155
Detailed Table of Contents Developments in purchasing practice Relationship management How to build relationships v
Review Key terms Study questions References
Case 9 Jumbo Choices: Buying Aircraft Case 10 PLANT-ALL: Launching a New Type of Compost
Case 15 Dell Hell: Strategic Change for a Fallen Market Leader 294 Case 16 McDonald's: Repositioning the Golden Arches 297
Understanding marketing ethics and corporate social responsibility
180
Marketing ethics Ethical issues in marketing Corporate social responsibility Societal responses to ethical issues in marketing Legal and regulatory responses to ethical issues in marketing
181 183 188 200 202
Review Key terms Study questions References
203 204 205 205
Case 11 Microsoft: Bully or Benefactor? Case 12 Fairtrade Coffee: Grounds for a Fresh Look at Ethical Consumption?
208 213
Marketing research and information systems Marketing information systems The importance of marketing research Approaches to conducting marketing research Types of marketing research Stages in the marketing research process The essential differences between qualitative and quantitative research The use of marketing information systems and marketing research Ethical issues in marketing research
,
216 217 219 220 222 225 244 245 246
3 • Marketing Mix Decisions
301
Product 9 Managing products: brand and corporate identity management Products and brands The product line and product mix Brand types Why strong brands are important Brand equity Brand building Key branding decisions Rebranding Brand extension and stretching Co-branding Global and pan-European branding Corporate identity management Ethical issues concerning products
Cose 17 iPhone: Is the Apple Smartphone a World-Beater? Case 18 Burberry: Reinventing the Brand
348 351
Review Key terms Study questions References
249 250 251 251
10 Managing products: product life cycle, portfolio planning and product growth strategies 354
Case 13 iPod: Researching Consumers' Perceptions Case 14 Airport Catering: Consumer Satisfaction at Gulf International Airport
254
355 356 361 362 370
Market segmentation and positioning Why bother to segment markets? The process of market segmentation and target marketing Segmenting consumer markets
257
259 260 262 262
Managing product lines and brands over time: the product life cycle Uses of the product life cycle Limitations of the product life cycle Managing brand and product line portfolios ' Product strategies for growth . Review Key terms Study questions References
,
374 375 376 376
Detailed Table of Contents Case 19 Unilever's Quest: Growth by Shedding Brands Case 20 Intel Inside Out: The Search for Growth
11 Developing new products What is a new product? Creating and nurturing an innovative culture Organizing effectively for new product development Managing the new product development process Competitive reaction to new product introductions Review Key terms Study questions References
Case 21 Road to the Future? The Development of the Mini E, the Eco-Friendly Car Case 22 A New Heritage: Shannon Heritage Develops New Tourist Experiences
377 380
383 386 387 388 391 409 410 411 411 412
415 418
Price 12 Pricinq strategy Economists' approach to pricing Cost-orientated pricing Competitor-orientated pricing Marketing-orientated pricing Initiating price changes Reacting to competitors' price changes Ethical issues in pricing Review Key terms Study questions References
Case 23 EasyJet and Ryanair: Flying High with Low Prices
421 422 423 425 427 443 446 447 450 451 451 452
454
Case 24 Netto, LidI, Aldi: The Rise of the Limited Ronge uiscouniers
458
Promotion 13 Advertising Integrated marketing communications The communication process Strong and weak theories of how advertising works Developing an advertising strategy Organizing for campaign development Ethical issues in advertising Review , Key terms Study questions References
Case 25 A Glass and a Half: Cadbury Gets the Love Back for Dairy Milk Case 26 White Horse Whisky: Developing a New Advertising Strategy
464 466 467 469 484 488 490 492 493 493
500
14 Personal selling and sales management
504
Environmental and managerial forces affecting sales
505
Characteristics of modern selling
510
Personal selling skills Sales management Ethical issues in personal selling and sales management
513 520 536
Review Key terms Study questions References
Case 27 Selling in China: Harnessing the Power of the Guanxi Case 28 Bottling it in Europe: Glaztex Sells its Glass Bottling Equipment to Europe
15 Direct marketing
537 539 539 540
542 544
546
Defining direct marketing
547
Growth in direct marketing activity Database marketing
548 549
Customer relationship management Managing a direct marketing campaign Media decisions Ethical issues in direct marketing
554 557 560 572
Review Key terms Study questions References
Case 29 Guinness' Rewards: An Award-Winning Relationship Marketing Programme Case 30 CRM atTesco: From Understanding to Engaging Customers
16 Other promotional mix methods
461
496
Sales promotion Public relations and publicity Sponsorship Exhibitions Product placement Ethical issues in sales promotion and public relations
574 575 576 576
578 583
586 587 595 600 604 607 608
Review Key terms Study questions References
609 611 612 612
Case 31 Wispa: It's Back! Case 32 Beckham & Ronaldo: Sports Celebrity Sponsorship
614 619
Detailed Table of Contents
Pace 17 Distribution Functions of channel intermediaries Types of distribution channel Channel strategy Channel management Physical distribution The physical distribution system Ethical issues in distribution Review Key terms Study questions References
Case 33 ASOS: Setting the Pace in Online Fashion Case 34 iTunes: Facing the Threat of Nokia
624 625 627 632 637 642 644 651 653 654 655 655
657 659
Spanning the marketing mix 18 Digital marketing
664
What is digital marketing? Key elements of the digital age Forms of e-commerce Digital marketing planning
665 667 669 669
Marketing strategy
673
Digital marketing media Benefits and limitations of digital technologies to consumers and organizations Ethical issues in digital marketing
679 687 687
Review Key terms
692 693
Study questions References
693 694
Case 35 Google: Staying Ahead of the Game? Case 36 Giftmaster: Moving Retail Online
4 • Competition end Marketing 19 Analysing competitors and creating a competitive advantage
696 699
703 704
Analysing competitive industry structure Competitor analysis Competitive advantage Creating a differential advantage
705 708 713 719
Creating cost leadership
725
Review Key terms Study questions References
728 729 729 730
Case 37 The Wii Fits Us All! Nintendo Regions Video Game Supremacy Case 38 General Meltdown: What Caused General Motors' • Bankruptcy?
20 Competitive marketing strategy
731 735
740
Competitive behaviour
741
Developing competitive marketing strategies
742
Build objectives
743
Hold objectives Niche objectives Harvest objectives
753 757 758
Divest objectives
759
Review Key terms Study questions References
Case 39 Airbus vs Boeing: The Battle for Air Supremacy Case 40 Displaying Strategy: Finding a Competitive Advantage for Data Display
7 L(\
760 761 762 762
764 768
5 • Marketing Implementation and Application
773
21 Managing marketing implementation, organization and control
774
Marketing strategy, implementation and performance
775
Implementation and the management of change Objectives of marketing implementation and change Barriers to the implementation of the marketing concept
777 779 781
Forms of resistance to marketing implementation and change
784
Developing implementation strategies
785
Marketing organization
795
Marketing control
801
Strategic control
802
Operational control and the use of marketing metrics
803
Review Key terms Study questions References
811 812 813 814
Case 41 Internal Marketing: Influencing the Board at Hansen Bathrooms Case 42 Munster Rugby: Implementing Change
816
818
22 Services marketing
821
The nature of services
822
Managing services
826
Detailed Table of Contents Retailing Marketing in non-profit organizations
847 855
Review Key terms Study questions References
859 860 861 861
Case 43 Build-A-Bear: A Custom-Made Experience Case 44 Services Marketing in a Recession: The Tale of Five Supermarkets
23 International marketing Deciding whether to go international Deciding which markets to enter Deciding how to enter a foreign market
Developing international marketing strategy Organizing for international operations Centralization vs decentralization
884 897 897
865
Review Key terms Study questions References
869
Case 45 IKEA: Building a Cult Global Brand 905 Case 46 Made in China: Marketing Tsingtao Beer Internationally 910
871 872 873 877
Glossary Companies and brands index Subject and author index
