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Marketing: Real People, Real Choices, Fifth Edition

by Michael R. Solomon - Saint Joseph’s University; Greg W. Marshall - Rollins College; Elnora W. Stuart - The American University in Cairo

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Copyright, ii
Dedication, iii
Preface, xix
Real People, Real Choices, xix
Meet Real Marketers, Who Make Decisions, xx
Real Marketing Topics and Events, xxii
An Easy-to-Follow Marketing Plan Template, xxiii
An Exciting Company to Follow: QODE, xxiii
Measuring the Value of Marketing Through Marketing Metrics, xxiv
Learning How to Market Yourself: Brand You, xxiv
All End-of-Chapter Cases Are New to This Edition, xxv
Supplements, xxvi
Real People, Real Choices Videos, xxvi
Instructor’s Manual, xxvi
Test Item File: Brand New for You, xxvii
TestGen Software, xxvii
PowerPoints, xxvii
The Video Library, xxviii
Instructor’s Resource Center (IRC), xxviii
OneKey Companion Website, xxix
Study Guide, xxix
VangoNotes, xxix
Brand You Handbook, xxx
About the Authors, xxxi
Michael R. Solomon, xxxi
Greg W. Marshall, xxxi
Elnora W. Stuart, xxxi
Acknowledgments, xxxii
Reviewers, xxxii
Focus Group Participants, xxxii
Executives, Professors, and Students, 1
Executives Featured in “Real People, Real Choices”, 1
Faculty Featured in “Real People, Other Voices”, 1
Students Featured in “Real People, Other Voices”, 1
Reviewers of Previous Editions, 1
Part 1. Making Marketing Value Decisions, 2
1. Welcome to the World of Marketing: Creating and Delivering Value, 2
Welcome to a Branded World, 5
Welcome to Brand You, 5
The Who and Where of Marketing, 6
Marketing’s Role in the Firm: Working Cross-Functionally, 7
Where Do You Fit In? Careers in Marketing, 7
The Value of Marketing, 9
Marketing Is About Meeting Needs, 9
Marketing Is About Creating Utility, 10
Marketing Is About Exchange Relationships, 11
When Did Marketing Begin? The Evolution of a Concept, 12
The Production Era, 13
The Selling Era, 13
The Consumer Era, 14
The New Era: Make Money and Act Ethically, 14
Measuring Value, 16
What Can Be Marketed?, 16
Consumer Goods and Services, 17
Business-to-Business Goods and Services, 17
Not-for-Profit Marketing, 18
Idea, Place, and People Marketing, 18
The Marketing of Value, 19
Value from the Customer’s Perspective, 19
Value from the Seller’s Perspective, 20
Value from Society’s Perspective, 24
The Dark Side of Marketing, 25
Marketing as a Process, 26
Marketing Planning, 27
Marketing’s Tools: The Marketing Mix, 28
Chapter Summary, 31
Key Terms, 32
Chapter Review, 32
Marketing Concepts: Testing Your Knowledge, 32
Marketing Concepts: Discussing Choices and Ethical Issues, 32
Marketing Practice: Applying What You’ve Learned, 33
Marketing Miniproject: Learning by Doing, 33
Marketing Plan Exercise, 34
2. Strategic Market Planning: Capturing the Big Picture, 36
Business Planning: Composing the Big Picture, 40
The Three Levels of Business Planning, 41
Strategic Planning: Framing the Picture, 42
Step 1: Define the Mission, 42
Step 2: Evaluate the Internal and External Environment, 43
Step 3: Set Organizational or SBU Objectives, 45
Step 4: Establish the Business Portfolio, 46
Step 5: Develop Growth Strategies, 48
Marketing Planning: Selecting the Camera Setting, 51
Step 1: Perform a Situation Analysis, 51
Step 2: Set Marketing Objectives, 51
Step 3: Develop Marketing Strategies, 52
Step 4: Implement and Control the Marketing Plan, 54
Creating and Working with a Marketing Plan: Snapping the Picture, 56
Make Your Life Easier!: Use the Marketing Planning Template, 57
Operational Planning: Day-to-Day Execution of Marketing Plans, 57
The Value of a Marketing Culture, 57
Chapter Summary, 60
Key Terms, 60
Chapter Review, 61
Marketing Concepts: Testing Your Knowledge, 61
Marketing Concepts: Discussing Choices and Ethical Issues, 61
Marketing Practice: Applying What You’ve Learned, 61
Marketing Miniproject: Learning by Doing, 62
Marketing Plan Exercise, 62
3. Thriving in the Marketing Environment: The World Is Flat, 64
Welcome to the New Era of Marketing, 67
Doing Good: Ethical Behavior in the Marketplace, 68
Business Ethics, 68
Consumerism: People Fighting Back, 69
Ethics in the Marketing Mix, 71
Doing It Right: Promoting Social Responsibility, 72
Serving the Environment, 73
Serving Society: Cause Marketing, 74
Serving the Community: Promoting Cultural Diversity, 74
Playing on an International Stage: The Complicated World of Global Marketing, 75
World Trade, 75
Making the Decision to Go Global, 76
Road Blocks at the Borders, 77
The Global Marketing Environment, 80
The Economic Environment, 80
The Competitive Environment, 82
The Technological Environment, 84
The Political and Legal Environment, 84
The Sociocultural Environment, 87
Is the World Flat or Not? How “Global” Should a Global Marketing Strategy Be?, 91
Company-Level Decisions: Choosing a Market-Entry Strategy, 91
Born-Global Firms, 93
Product-Level Decisions: Choosing a Marketing Mix Strategy, 94
Standardization versus Localization, 94
Chapter Summary, 98
Key Terms, 99
Chapter Review, 100
Marketing Concepts: Testing Your Knowledge, 100
Marketing Concepts: Discussing Choices and Ethical Issues, 100
Marketing Practice: Applying What You’ve Learned, 100
Marketing Miniproject: Learning by Doing, 101
Marketing Plan Exercise, 102
Part 2. Understanding Consumers’ Value Needs, 104
4. Marketing Research: Gathering, Analyzing, and Using Information, 104
Knowledge Is Power, 107
The Marketing Information System, 107
Marketing Decision Support Systems, 111
Searching for Gold: Data Mining, 112
What Marketers Can Do with Data Mining, 112
Steps in the Marketing Research Process, 113
Step 1: Define the Research Problem, 114
Step 2: Determine the Research Design, 115
Step 3: Choose the Method for Collecting Primary Data, 120
Step 4: Design the Sample, 128
Step 5: Collect the Data, 129
Step 6: Analyze and Interpret the Data, 130
Step 7: Prepare the Research Report, 131
Chapter Summary, 133
Key Terms, 133
Chapter Review, 134
Marketing Concepts: Testing Your Knowledge, 134
Marketing Concepts: Discussing Choices and Ethical Issues, 134
Marketing Practice: Applying What You’ve Learned, 134
Marketing Miniproject: Learning by Doing, 135
Marketing Plan Exercise, 136
5. Consumer Behavior: How and Why People Buy, 138
Decisions, Decisions, 141
Steps in the Consumer Decision-Making Process, 141
Extended Problem Solving versus Habitual Decision Making, 141
Step 1: Problem Recognition, 143
Step 2: Information Search, 144
Step 3: Evaluation of Alternatives, 145
Step 4: Product Choice, 145
Step 5: Postpurchase Evaluation, 146
Internal Influences on Consumers’ Decisions, 147
Perception, 147
Motivation, 149
Learning, 150
Attitudes, 151
Personality, 152
Age Group, 153
The Family Life Cycle, 154
Lifestyle, 154
Situational Influences on Consumers’ Decisions, 155
The Physical Environment, 156
Time, 157
Social Influences on Consumers’ Decisions, 157
Culture, 157
Subculture, 159
Social Class, 159
Group Membership, 160
Opinion Leaders, 162
Gender Roles, 162
Consumer-To-Consumer E-Commerce, 163
Blogs, 164
Chapter Summary, 166
Key Terms, 167
Chapter Review, 167
Marketing Concepts: Testing Your Knowledge, 167
Marketing Concepts: Discussing Choices and Ethical Issues, 167
Marketing Practice: Applying What You’ve Learned, 168
Marketing Miniproject: Learning by Doing, 169
Marketing Plan Exercise, 169
6. Business-to-Business Markets: How and Why Organizations Buy, 172
Business Markets: Buying and Selling When Stakes Are High, 175
Characteristics That Make a Difference in Business Markets, 176
Multiple Buyers, 177
Number of Customers, 177
Size of Purchases, 177
Geographic Concentration, 177
Business-to-Business Demand, 178
Derived Demand, 178
Inelastic Demand, 179
Fluctuating Demand, 179
Joint Demand, 179
Types of Business-to-Business Markets, 179
Producers, 180
Resellers, 180
Organizations, 180
North American Industry Classification System, 181
The Nature of Business Buying, 182
The Buying Situation, 182
The Professional Buyer, 184
The Buying Center, 184
The Business Buying Decision Process, 186
Business-to-Business E-Commerce, 190
Intranets, Extranets, and Private Exchanges, 191
Security Threats, 192
Chapter Summary, 194
Key Terms, 194
Chapter Review, 195
Marketing Concepts: Testing Your Knowledge, 195
Marketing Concepts: Discussing Choices and Ethical Issues, 195
Marketing Practice: Applying What You’ve Learned, 195
Marketing Miniproject: Learning by Doing, 196
Marketing Plan Exercise, 197
7. Sharpening the Focus: Target Marketing Strategies and Customer Relationship Management, 200
Target Marketing Strategy: Selecting and Entering a Market, 203
Step 1: Segmentation, 203
Segmenting Consumer Markets, 204
Segmenting Business-to-Business Markets, 216
Step 2: Targeting, 216
Evaluating Market Segments, 216
Developing Segment Profiles, 218
Choosing a Targeting Strategy, 218
Step 3: Positioning, 220
Developing a Positioning Strategy, 220
Bringing a Product to Life: The Brand Personality, 222
Customer Relationship Management: Toward a Segment of One, 224
Four Steps in One-to-One Marketing, 224
CRM: A New Perspective on an Old Problem, 225
Characteristics of CRM, 226
Chapter Summary, 229
Key Terms, 229
Chapter Review, 230
Marketing Concepts: Testing Your Knowledge, 230
Marketing Concepts: Discussing Choices and Ethical Issues, 230
Marketing Practice: Applying What You’ve Learned, 230
Marketing Miniproject: Learning by Doing, 231
Marketing Plan Exercise, 232
Part 3. Creating the Value Proposition, 234
8. Creating the Product, 234
Build a Better Mousetrap: The Value Proposition, 237
Layers of the Product Concept, 238
The Core Product, 239
The Actual Product, 239
The Augmented Product, 239
Classifying Products, 241
Classifying Goods: How Long Does the Product Last?, 242
Classifying Goods: How Do Consumers Buy the Product?, 242
Business-to-Business Products, 244
“New and Improved!:” The Process of Innovation, 245
It’s Important to Understand How Innovations Work, 246
Types of Innovations, 246
Developing New Products, 249
Phase 1: Idea Generation, 250
Phase 2: Product Concept Development and Screening, 251
Phase 3: Marketing Strategy Development, 253
Phase 4: Business Analysis, 253
Phase 5: Technical Development, 254
Phase 6: Test Marketing, 255
Phase 7: Commercialization, 256
Adoption and Diffusion of New Products, 256
Stages in Consumer Adoption of a New Product, 257
The Diffusion of Innovations, 260
How Organizational Differences Affect Adoption, 263
Chapter Summary, 266
Key Terms, 266
Chapter Review, 267
Marketing Concepts: Testing Your Knowledge, 267
Marketing Concepts: Discussing Choices and Ethical Issues, 267
Marketing Practice: Applying What You’ve Learned, 267
Marketing Miniproject: Learning by Doing, 268
Marketing Plan Exercise, 268
9. Managing the Product, 270
Product Planning: Taking the Next Step, 273
Using Product Objectives to Decide on a Product Strategy, 273
Objectives and Strategies for Individual Products, 274
Objectives and Strategies for Multiple Products, 275
Quality as a Product Objective, 278
Marketing Throughout the Product Life Cycle, 281
The Introduction Stage, 282
The Growth Stage, 283
The Maturity Stage, 283
The Decline Stage, 284
Creating Product Identity: Branding Decisions, 286
What’s in a Name (or a Symbol)?, 286
The Importance of Branding, 287
Branding Strategies, 290
Creating Product Identity: Packaging and Labeling Decisions, 293
Packaging Functions, 293
Designing Effective Packaging, 294
Labeling Regulations, 295
Organizing for Effective Product Management, 295
Management of Existing Products, 295
Organizing for New-Product Development, 296
Chapter Summary, 298
Key Terms, 299
Chapter Review, 299
Marketing Concepts: Testing Your Knowledge, 299
Marketing Concepts: Discussing Choices and Ethical Issues, 299
Marketing Practice: Applying What You’ve Learned, 300
Marketing Miniproject: Learning by Doing, 300
Marketing Plan Exercise, 301
10. Services and Other Intangibles: Marketing the Product That Isn’t There, 304
Marketing What Isn’t There, 307
Does Marketing Work for Intangibles?, 307
What Is a Service?, 309
Characteristics of Services, 309
Classifying Services, 312
Core and Augmented Services, 315
Services on the Internet, 316
The Service Encounter, 317
Providing Quality Service, 319
Service Quality Attributes, 319
Measuring Service Quality, 320
Strategic Issues in Service Quality, 322
The Future of Services, 323
Marketing People, Places, and Ideas, 325
Marketing People, 325
Marketing Places, 327
Marketing Ideas, 327
Chapter Summary, 329
Key Terms, 330
Chapter Review, 330
Marketing Concepts: Testing Your Knowledge, 330
Marketing Concepts: Discussing Choices and Ethical Issues, 330
Marketing Practice: Applying What You’ve Learned, 331
Marketing Miniproject: Learning by Doing, 331
Marketing Plan Exercise, 332
11. Pricing the Product, 334
“Yes, but What Does It Cost?”, 337
Step 1: Develop Pricing Objectives, 338
Sales or Market Share Objectives, 338
Profit Objectives, 339
Competitive Effect Objectives, 339
Customer Satisfaction Objectives, 340
Image Enhancement Objectives, 340
Step 2: Estimate Demand, 340
Demand Curves, 340
Price Elasticity of Demand, 343
Step 3: Determine Costs, 345
Types of Costs, 345
Break-Even Analysis, 347
Marginal Analysis, 348
Step 4: Evaluate the Pricing Environment, 349
The Economy, 350
The Competition, 350
Consumer Trends, 351
Step 5: Choose a Pricing Strategy, 351
Pricing Strategies Based on Cost, 351
Pricing Strategies Based on Demand, 352
Pricing Strategies Based on the Competition, 354
Pricing Strategies Based on Customers’ Needs, 354
New-Product Pricing, 355
Step 6: Develop Pricing Tactics, 356
Pricing for Individual Products, 356
Pricing for Multiple Products, 356
Distribution-Based Pricing, 357
Discounting for Channel Members, 357
Pricing and Electronic Commerce, 358
Dynamic Pricing Strategies, 359
Auctions, 359
Pricing Advantages for Online Shoppers, 359
Psychological Issues in Pricing, 360
Buyers’ Pricing Expectation, 360
Psychological Pricing Strategies, 361
Legal and Ethical Considerations in Pricing, 363
Deceptive Pricing Practices, 363
Unfair Sales Acts, 363
Illegal Business-to-Business Price Discrimination, 364
Price-Fixing, 364
Predatory Pricing, 364
Chapter Summary, 366
Key Terms, 367
Chapter Review, 367
Marketing Concepts: Testing Your Knowledge, 367
Marketing Concepts: Discussing Choices and Ethical Issues, 367
Marketing Practice: Applying What You’ve Learned, 368
Marketing Miniproject: Learning by Doing, 368
Marketing Plan Exercise, 369
Part 4. Communicating the Value Proposition, 372
12. Catching the Buzz: Promotional Strategy and Integrated Marketing Communication, 372
Tailoring Marketing Communication to Customers, 375
The Communication Model, 377
Encoding by the Source (the Marketer), 377
The Message, 378
The Medium, 378
Decoding by the Receiver, 379
Noise, 379
Feedback, 379
Marketing Communication Strategy and the Promotion Mix, 380
Mass Appeals, 380
Personal Appeals, 381
Buzz Appeals, 383
Integrated Marketing Communication, 387
Characteristics of IMC, 388
IMC and Database Marketing, 390
Developing the IMC Plan, 391
Step 1: Identify the Target Audiences, 391
Step 2: Establish the Communication Objectives, 392
Step 3: Determine and Allocate the Marketing Communication Budget, 394
Step 4: Design the Promotion Mix, 396
Step 5: Evaluate the Effectiveness of the Communication Program, 397
Chapter Summary, 400
Key Terms, 401
Chapter Review, 401
Marketing Concepts: Testing Your Knowledge, 401
Marketing Concepts: Discussing Choices and Ethical Issues, 401
Marketing Practice: Applying What You’ve Learned, 401
Marketing Miniproject: Learning by Doing, 402
13. Advertising, Sales Promotion, and Public Relations, 404
Advertising: The Image of Marketing, 407
Types of Advertising, 408
Who Creates Advertising?, 409
Developing the Advertising Campaign, 411
Step 1: Identify the Target Audience, 411
Step 2: Establish Message and Budget Objectives, 412
Step 3: Design the Ads, 412
Step 4: Pretest What the Ads Will Say, 415
Step 5: Choose the Media Type(s) and Media Schedule, 415
Step 6: Evaluate the Advertising, 422
Sales Promotion, 422
Sales Promotion Directed toward the Trade, 423
Sales Promotion Directed toward Consumers, 425
Public Relations, 429
Objectives of Public Relations, 430
Planning a Public Relations Campaign, 432
Public Relations Activities, 432
Chapter Summary, 437
Key Terms, 438
Chapter Review, 438
Marketing Concepts: Testing Your Knowledge, 438
Marketing Concepts: Discussing Choices and Ethical Issues, 438
Marketing Practice: Applying What You’ve Learned, 439
Marketing Miniproject: Learning by Doing, 439
Marketing Plan Exercise, 440
14. Personal Selling, Sales Management, and Direct Marketing, 442
Advertising Is Not the Only Game in Town!, 445
Personal Selling, 445
The Role of Personal Selling, 446
Technology and Personal Selling, 447
Types of Sales Jobs, 448
Approaches to Personal Selling, 449
The Creative Selling Process, 449
Sales Management, 453
Setting Sales Force Objectives, 453
Creating a Sales Force Strategy, 453
Recruiting, Training, and Rewarding the Sales Force, 454
Evaluating the Sales Force, 456
Direct Marketing, 457
Mail Order, 457
Direct-Response Advertising, 458
M-Commerce, 459
Chapter Summary, 460
Key Terms, 461
Chapter Review, 461
Marketing Concepts: Testing Your Knowledge, 461
Marketing Concepts: Discussing Choices and Ethical Issues, 461
Marketing Practice: Applying What You’ve Learned, 461
Marketing Miniproject: Learning by Doing, 462
Marketing Plan Exercise, 462
Part 5. Delivering the Value Proposition, 464
15. Delivering Value through Supply Chain Management: Channels of Distribution and Logistics, 464
Place: The Final Frontier, 467
The Value Chain, 468
Links in the Supply Chain, 469
The Importance of Distribution: You Can’t Sell What Isn’t There!, 471
Functions of Distribution Channels, 471
The Internet in the Distribution Channel, 473
Channel Composition: Types of Wholesaling Intermediaries, 475
Independent Intermediaries, 475
Manufacturer-Owned Intermediaries, 478
Types of Distribution Channels, 478
Consumer Channels, 480
Business-to-Business Channels, 481
Dual Distribution Systems, 481
Hybrid Marketing Systems, 482
Planning a Channel Strategy, 482
Step 1: Develop Distribution Objectives, 482
Step 2: Evaluate Internal and External Environmental Influences, 483
Step 3: Choose a Distribution Strategy, 484
Step 4: Develop Distribution Tactics, 487
Distribution Channels and the Marketing Mix, 489
Logistics: Implementing the Supply Chain, 489
The Lowdown on Logistics, 490
Logistics Functions, 490
Chapter Summary, 495
Key Terms, 496
Chapter Review, 496
Marketing Concepts: Testing Your Knowledge, 496
Marketing Concepts: Discussing Choices and Ethical Issues, 496
Marketing Practice: Applying What You’ve Learned, 496
Marketing Miniproject: Learning by Doing, 497
Marketing Plan Exercise, 497
16. Retailing: Bricks and Clicks, 500
Retailing: Special Delivery, 503
Retailing: A Mixed (Shopping) Bag, 503
The Evolution of Retailing, 504
The Evolution Continues: What’s “In Store” for the Future?, 507
From Mom-and-Pop to Super Wal-Mart: Classifying Retail Stores, 510
Classifying Retailers by What They Sell, 510
Classifying Retailers by Level of Service, 511
Classifying Retailers by Merchandise Selection, 511
Nonstore Retailing, 516
Direct Selling, 516
Automatic Vending, 517
B2C E-Commerce, 518
Benefits of B2C E-Commerce, 518
Limitations of B2C E-Commerce, 520
B2C’s Effect on the Future of Retailing, 522
Developing a Store Positioning Strategy: Retailing as Theater, 522
Store Image, 524
Building the Theater: Store Location, 527
Chapter Summary, 531
Key Terms, 531
Chapter Review, 532
Marketing Concepts: Testing Your Knowledge, 532
Marketing Concepts: Discussing Choices and Ethical Issues, 532
Marketing Practice: Applying What You’ve Learned, 532
Marketing Miniproject: Learning by Doing, 533
Marketing Plan Exercise, 534
A. Qode in Action: Implementing a Marketing Plan, 537
Questions for Rick Szatkowski, 538
Now It’s Your Turn to Do Some Marketing Planning, 542
B. Sample Marketing Plan: The S&S Smoothie Company, 543
Executive Summary, 543
Situation Analysis, 543
Marketing Objectives, 543
Marketing Strategies, 544
Implementation and Control, 544
Situation Analysis, 544
Internal Environment, 544
External Environment, 547
SWOT Analysis, 548
Marketing Objectives, 549
Marketing Strategies, 549
Target Markets, 549
Positioning the Product, 550
Product Strategies, 550
Pricing Strategies, 551
Promotion Strategies, 551
Supply Chain Strategies, 552
Implementation, 552
Measurement and Control Strategies, 552
Research, 552
Trend Analysis, 552
C. Marketing Math, 555
Income Statement and Balance Sheet, 555
Important Financial Performance Ratios, 557
Operating Ratios, 558
Inventory Turnover Rate, 559
Return on Investment, 559
Price Elasticity, 560
Cost-Plus Pricing, 561
Markup on Cost, 561
Markup on Selling Price, 561
Economic Order Quantity, 563
Notes, 565
Chapter 1, 565
Chapter 2, 566
Chapter 3, 566
Chapter 4, 567
Chapter 5, 568
Chapter 6, 569
Chapter 7, 570
Chapter 8, 571
Chapter 9, 571
Chapter 10, 572
Chapter 11, 573
Chapter 12, 573
Chapter 13, 574
Chapter 14, 576
Chapter 15, 576
Chapter 16, 576
Glossary, 579
Index, 595

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