a marketing strategy planning approach
TRANSCRIPT
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A Marketing Strategy Planning Approach
William D. Perreault, Jr., Ph.D.UNIVERSITY OF NORTH CAROLINA
Joseph P. Cannon, Ph.D.COLORADO STATE UNIVERSITY
E. Jerome McCarthy, Ph.D.MICHIGAN STATE UNIVERSITY
McGraw-HillIrwin
CHAPTER ONE
Marketing's Value to Consumers,Firms, and Society 2
Marketing—What's It All About? 4
Marketing Is Important to You 5
How Should We Define Marketing? 6 /
Macro-Marketing 8
The Role of Marketing in Economic Systems 12
Marketing's Role Has Changed a Lot over the Years 15
What Does the Marketing Concept Mean? 16
The Marketing Concept and Customer Value 18
The Marketing Concept Applies in Nonprofit Organizations 21
The Marketing Concept, Social Responsibility, and
Marketing Ethics 22
Conclusion 26KeuTerms 27Questions and Problems 27Suggested Cases 28Computer-Aided Problem 28
CHAPTER TWO
Marketing Strategy Planning 30
The Management Job in Marketing 32
What Is a Marketing Strategy? 33
Selecting a Market-Oriented Strategy Is TargetMarketing 34
Developing Marketing Mixes for Target Markets 35
The Marketing Plan Is a Guide to Implementation
and Control 40
The Marketing Program Should Build CustomerEquity 42
The Importance of Marketing StrategyPlanning 44
What Are Attractive Opportunities? 46
Marketing Strategy Planning Process Highlights
Opportunities 47
Types of Opportunities to Pursue 50 •
International Opportunities Should BeConsidered 52
Conclusion 53Key Terms 54Questions and Problems 54Creating Marketing Plans 54Suggested Cases 55Computer-Aided Problem 55
CHAPTERTHREE
Evaluating Opportunities in theChanging Market Environment 56
The Market Environment 58
Objectives Should Set Firm's Course 59
Company Resources May Limit Search for
Opportunities 62
Analyzing Competitors and the Competitive
Environment 63
The Economic Environment 67
The Technological Environment 69
The Political Environment 71
The Legal Environment 72
The Cultural and Social Environment 75
Using Screening Criteria to Narrow Down
to Strategies 77
Planning Grids Help Evaluate a Portfolio of
Opportunities 80
Multiproduct Firms Have a Difficult Strategy-Planning
Job 81
Evaluating Opportunities in InternationalMarkets 82
Conclusion 83Key Terms 84Questions and Problems 84Creating Marketing Plans 85Suggested Cases 85Computer-Aided Problem 85
CHAPTER FOUR
Focusing Marketing Strategy withSegmentation and Positioning 86
Search for Opportunities Can Begin by UnderstandingMarkets 88
Naming Product-Markets and Generic Markets 91
Market Segmentation Defines Possible Target
Markets 92
What Dimensions Are Used to Segment Markets? 98
A Best Practice Approach to Segmenting
Product-Markets 103
More Sophisticated Techniques May Help
in Segmenting 108
Differentiation and Positioning Take the CustomerPoint of View 110
Conclusion 113Key Terms 114Questions and Problem 114 'Creating Marketing Plans 114Suggested Cases 114
Computer-Aided Problem 114
CHAPTER FIVE
Demographic Dimensions of GlobalConsumer Markets 116
Target Marketers Focus on the Customer 118
Global Consumer Markets 119
Population Trends in the U.S. ConsumerMarket 127
Income Dimensions of the U.S. Market 133
Spending and the Family Life Cycle 137
Ethnic Dimensions of the U.S. Market 139
Conclusion 142Key Terms 142Questions and Problems 142Creating Marketing Plans 143Suggested Cases 143Computer-Aided Problem 143
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CHAPTER SIX
Final Consumers and Their BuyingBehavior 144
Consumer Behavior: Why Do They Buy WhatThey Buy? 146
Economic Needs Affect Most Buying Decisions 146
Psychological Influences within an Individual 149
Social Influences Affect Consumer Behavior 157
Individuals Are Affected by the Purchase
Situation 160
The Consumer Decision Process 162
Consumer Behavior in InternationalMarkets 165
Conclusion 166Key Terms 167Questions and Problems 167Creating Marketing Plans 168Suggested Cases 168Computer-Aided Problem 168 3
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CHAPTER SEVEN
Business and Organizational Customersand Their Buying Behavior 170
Business and Organizational Customers—A BigOpportunity 172
Organizational Customers Are Different 173
Many Different People May Influence
a Decision 175
Organizational Buyers Are Problem Solvers 180
Buyer-Seller Relationships in BusinessMarkets 184
Manufacturers Are Important Customers 188
Producers of Services—Smaller and More Spread
Out 190
Retailers and Wholesalers Buy for Their
Customers 191
The Government Market 193
Conclusion 195Key Terms 195
Questions and Problems 196
Creating Marketing Plans 196
Suggested Cases 196
Computer-Aided Problem 196
CHAPTER EIGHT
Improving Decisions with MarketingInformation 198
Effective Marketing Requires Good Information 200
Changes Are Under Way in Marketing Information
Systems 201
The Scientific Method and Marketing Research 205
Five-Step Approach to Marketing Research 205
Defining the Problem—Step 1 206
Analyzing the Situation—Step 2 206
Getting Problem-Specific Data—Step 3 210
Interpreting the Data—Step 4 218
Solving the Problem—Step 5 221
International Marketing Research 222
Conclusion 223Key Terms 223Questions and Problems 224Creating Marketing Plans 224Suggested Cases 224Computer-Aided Problem 225
CHAPTER NINE
Elements of Product Planningfor Goods and Services 226
The Product Area Involves Many StrategyDecisions 228
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What Is a Product? 228
Differences in Goods and Services 231
Whole Product Lines Must Be Developed Too 233
Branding Is a Strategy Decision 233
Conditions Favorable to Branding 235
Achieving Brand Familiarity Is Not Easy 235
Protecting Brand Names and Trademarks 238
What Kind of Brand to Use? 238
Who Should Do the Branding? 239
The Strategic Importance of Packaging 240
What Is Socially Responsible Packaging? 241
Warranty Policies Are a Part of Strategy Planning 243
Product Classes Help Plan Marketing Strategies 244
Consumer Product Classes 245
Business Products Are Different 247
Business Product Classes—How They Are Defined 248
Conclusion 251Key Terms 251Questions and Problems 252Creating Marketing Plans 253Suggested Cases 253Computer-Aided Problem 253
CHAPTER TEN
Product Management and New-ProductDevelopment 254
Innovation and Market Changes CreateOpportunities 256
Managing Products over Their Life Cycles 257
Product Life Cycles Should Be Related to Specific
Markets 259
Product Life Cycles Vary in Length 260
Planning for Different Stages of the Product LifeCycle 262
New-Product Planning 266
An Organized New-Product Development ProcessIs Critical 267
New-Product Development: A Total Company
Effort 273
Need for Product Managers 275
Managing Product Quality 276
Conclusion 280Key Terms 280Questions and Problems 280Creating Marketing Plans 281Suggested Cases 281Computer-Aided Problem 281
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CHAPTER ELEVEN
Place and Development of ChannelSystems 282
Marketing Strategy Planning Decisions for Place 284
Place Decisions Are Guided by "Ideal" Place
Objectives 285
Channel System May Be Direct or Indirect 286
Channel Specialists May Reduce Discrepancies
and Separations 290
Channel Relationship Must Be Managed 293
Vertical Marketing Systems Focus on Final
Customers 296
The Best Channel System Should Achieve Ideal
Market Exposure 298
Channel Systems Can Be Complex 301
Entering International Markets 304
Conclusion 306Key Terms 306Questions and Problems 306Creating Marketing Plans 307Suggested Cases .307Computer-Aided Problem 307
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CHAPTER TWELVE
Distribution Customer Serviceand Logistics 308
Physical Distribution Gets It to Customers 310
Physical Distribution Customer Service 311
Physical Distribution Concept Focuses on the Whole
Distribution System 313
Coordinating Logistics Activities among Firms 315
The Transporting Function Adds Value to a Marketing
Strategy 318
Which Transporting Alternative Is Best? 320
The Storing Function and Marketing Strategy 324
Specialized Storing Facilities May Be Required 325
The Distribution Center—A Different Kind ofWarehouse 326
Conclusion 328Key Terms 328Questions and Problems 328Creating Marketing Plans 329Suggested Cases 329Computer-Aided Problem 329
CHAPTER THIRTEEN
Retailers, Wholesalers, and TheirStrategy Planning 330
Retailers and Wholesalers Plan Their OwnStrategies 332
The Nature of Retailing 333
Planning a Retailer's Strategy 334
Conventional Retailers—Try to Avoid Price
Competition 336
Expand Assortment and Service—To Compete
at a High Price 337
Evolution of Mass-Merchandising Retailers 337
Some Retailers Focus on Added Convenience 340
Retailing on the Internet 341
Why Retailers Evolve and Change 344
Retailer Size and Profits 345
Differences in Retailing in Different Nations 346
What Is a Wholesaler? 348
Wholesaling Is Changing with the Times 348
Wholesalers Add Value in Different Ways 350
Merchant Wholesalers Are the Most Numerous 351
Agents Are Strong on Selling 353
What Will Happen to Retailers and Wholesalersin the Future? 355
Conclusion 355Key Terms 356Questions and Problems 356Creating Marketing Plans 357Suggested Cases 357Computer-Aided Problem 357
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CHAPTER FOURTEEN
Promotion—Introduction to IntegratedMarketing Communications 358
Promotion Communicates to Target Markets 360
Several Promotion Methods Are Available 361
Someone Must Plan, Integrate, and Manage the
Promotion Blend 363
Which Methods to Use Depends on Promotion
Objectives 365
Promotion Requires Effective Communication 367
Integrated Direct-Response Promotion Is Very
Targeted 369
The Customer May Initiate the Communication
Process 370
How Typical Promotion Plans Are Blended and
Integrated 373
Adoption Processes Can Guide Promotion '
Planning 375
Promotion Blends Vary over the Life Cycle 379
Setting the Promotion Budget 380Conclusion 381Key Terms 382Questions and Problems 382Creating Marketing Plans 383Suggested Cases 383Computer-Aided Problem 383
CHAPTER FIFTEEN
Personal Selling and CustomerService 384
The Importance and Role of Personal Selling 386
What Kinds of Personal Selling Are Needed? 389
Order Getters Develop New Business
Relationships 389
Order Takers Nurture Relationships to Keep the
Business Coming 390
Supporting Sales Force Informs and Promotes in the
Channel 391
Customer Service Promotes the Next Purchase 393
The Right Structure Helps Assign Responsibility 394
Information Technology Provides Tools to Do
the job 399
Sound Selection and Training to Build a Sales
Force 401
Compensating and Motivating Salespeople 403
Personal Selling Techniques—Prospecting andPresenting 405
Conclusion 409Key Terms 410Questions and Problems 410Creating Marketing Plans 411Suggested Cases 411Computer-Aided Problem 411
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CHAPTER SIXTEEN
Advertising, Publicity, and SalesPromotion 412
Advertising, Publicity, Sales Promotion, and MarketingStrategy Planning 414
Advertising Is Big Business 416
Advertising Objectives Are a Strategy Decision 418
Objectives Determine the Kinds of Advertising
Needed 419
Coordinating Advertising Efforts with Cooperative
Relationships 421
Choosing the "Best" Medium—How to Deliver the
Message 422
Advertising on the Internet 425
Planning the "Best" Message—What to ,
Communicate 427
Advertising Agencies Often Do the Work 430
Measuring Advertising Effectiveness Is Not Easy 431
How to Avoid Unfair Advertising 432
Customer Communication and Types of Publicity 433
Sales Promotion—Do Something Different
to Stimulate Change 441
Problems in Managing Sales Promotion 443
Different Types of Sales Promotion for DifferentTargets 444
Conclusion 446Key Terms 447Questions and Problems 447Creating Marketing Plans 448Suggested Cases 448Computer-Aided Problem 448
CHAPTERSEVENTEEN
Pricing Objectives and Policies 450
Price Has Many Strategy Dimensions 452
Objectives Should Guide Strategy Planning
for Price 454
Profit-Oriented Objectives 455
Sales-Oriented Objectives 456
Status Quo Pricing Objectives 457
Most Firms Set Specific Pricing Policies—To Reach
Objectives 457
Price Flexibility Policies 458
Price-Level Policies—Over the Product Life
Cycle 460Discount Policies—Reductions from List Prices 464
Allowance Policies—Off List Prices 467
Some Customers Get Something Extra 468
List Price May Depend on Geographic Pricing
Policies 469
Pricing Policies Combine to Impact Customer
Value 470
Legality of Pricing Policies 473
Conclusion 477Key Terms 477Questions and Problems 477Creating Marketing Plans 478Suggested Cases 478Computer-Aided Problem 478
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CHAPTER EIGHTEEN
Price Setting in theBusiness World 480
Price Setting Is a Key Strategy Decision 482
Some Firms Just Use Markups 482
Average-Cost Pricing Is Common and Can Be
Dangerous 486
Marketing Managers Must Consider Various Kinds
of Costs 488
Break-Even Analysis Can Evaluate Possible
Prices 491
Marginal Analysis Considers Both Costs and
Demand 493
Demand-Oriented Approaches for Setting
Prices 497Pricing a Full Line 504
Bid Pricing and Negotiated Pricing Depend Heavilyon Costs 506
Conclusion 508
Key Terms 508Questions and Problems 508
Creating Marketing Plans 509Suggested Cases 509Computer-Aided Problem 509
CHAPTER NINETEEN
Implementing and ControllingMarketing Plans: Evolution andRevolution 510
Good Plans Set the Framework for Implementationand Control 512
Speed Up Information for Better Implementation and
Control 513
Effective Implementation Means That Plans Work as
Intended 515
Control Provides Feedback to Improve Plans and
Implementation 518
Sales Analysis Shows What's Happening 519
Performance Analysis Looks for Differences 521
Performance Indexes Simplify Human Analysis 522
A Series of Performance Analyses May Find the Real
Problem 523
Marketing Cost Analysis—Controlling Costs Too 526
Planning and Control Combined 531
The Marketing Audit 531
Conclusion 533Key Terms 533Questions and Problems 533Creating Marketing Plans 534Suggested Cases 534Computer-Aided Problem 534
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CHAPTER TWENTY
Managing Marketing's Linkwith Other Functional Areas 536
Marketing in the Broader Context 538
The Finance Function: Money to Implement
Marketing Plans 539
Production Must Be Coordinated with the
Marketing Plan 545
Accounting Data Can Help in Understanding
Costs and Profit 550
People Put Plans into Action 555
Conclusion 557Key Terms 558Questions and Problems 558Creating Marketing Plans 559Suggested Cases 559
CHAPTER TWENTY-ONE
Ethical Marketing in a Consumer-Oriented World: Appraisal andChallenges 560
How Should Marketing Be Evaluated? 562
Can Consumer Satisfaction Be Measured? 564
Micro-Marketing Often Does Cost Too Much 565
Macro-Marketing Does Not Cost Too Much 567
Marketing Strategy Planning Process Requires Logic
and Creativity 570
The Marketing Plan Brings All the Details Together 572
Challenges Facing Marketers 573
How Far Should the Marketing Concept Go? 583
Conclusion 583Questions and Problems 584Creating Marketing Plans 584Suggested Cases 585
Appendix A EconomicsFundamentals 586
Appendix B Marketing Arithmetic 599
Appendix C Career Planning inMarketing 616
VIDEO CASES 630
1. Chick-fil-A: "Eat Mor Chickin" (Except onSunday) 631
2. Bass Pro Shops (Outdoor World) 632
3. Toyota Prius: The Power of Excellence in ProductInnovation and Marketing 633
4. Potbelly Sandwich Works Grows through "Quirky"Marketing 635
5. Suburban Regional Shopping Malls: Can the MagicBe Restored? 636
6. Strategic Marketing Planning in Big Brothers Big -Sisters of America 639
7. Invacare Says, "Yes, You Can!" to CustomersWorldwide 642
8. Segway Finds Niche Markets for Its HumanTransporter Technology 644
CASES 647
1. McDonald's "Seniors" Restaurant 648
2. Sunnyvale Foods, Inc. 648
3. Rocky Soccer Academy 649
4. Lakeside Technology Services 650
5. ApplPoly Products 651
6. Steelco 6527. Ben Ohau Lodge 653
8. Palio's Ristorante 654
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9. GoodNight Inn 655
10. Swan's Ice Arena 656
11. Fleet of Foot 657
12. DrGlen.com—Elite Vitamins and Supplements 658
13. Office Supplies, Inc. (OSI) 659
14. Showtime Media 660
15. The Herrera Group 66116. Wright Wood Company 662
17. Pure and Sparkling Water, Inc. (PSW) 664
18. Ralston Valley Volunteer Fire Department
(RVVFD) 665
19. SplendidWedding.com 666
20. Spare Time Equipment 668
21. Worldwide ChemPlastics, Inc. (WCI) 669
22. Bright Light Innovations: The Starlight Stove 670
23. Furniture Today 671
24. A Better Wire, Inc, 672
25. Harbor Plastics Mfg., Inc. 673
26. Harmony Valley Canning, Inc. 674
27. Excel Molding, Inc. 675
28. A Cut Above, Inc. (ACA) 676
29. Custom Castings, Inc. 677
30. River Ridge Mills, Ltd. 678
31. Domicile Health Providers, Inc. (DHP) 679
32. Lever, Ltd. 681
33. Allen & Lynch (A&L) 683
34. Creative Aluminum Products, Inc. (CAP) 684
35. De Angelo's Pizzeria 686
36. Mountain View Builders 688
Computer-Aided Problems 690
Notes 695
Illustration Credits 743
Name Index 1-1
Company Index 1-12
Subject Index 1-17
Glossary G-l
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