Principles of Marketing, Global Edition

Book Preface

The Sixteenth Edition of Kotler/Armstrong’s Principles of Marketing! The World Standard in Undergraduate Marketing Education Across five continents, in more than 40 countries, and in 24 languages, students and professors rely on Kotler/Armstrong’s Principles of Marketing as the most-trusted source for  teaching and learning basic marketing concepts and practices. More than ever, the sixteenth  edition introduces new marketing students to the fascinating world of modern marketing  in an innovative, complete, and authoritative yet fresh, practical, and enjoyable way. In this  sixteenth edition, we’ve once again added substantial new content and poured over every  page, table, figure, fact, and example in order to keep this the best text from which to learn  about and teach marketing. Enhanced by MyMarketingLab, our online homework and personalized study tool, the sixteenth edition of Principles of Marketing remains the world standard in introductory marketing education.

Marketing: Creating Customer Value and Engagement  in the Digital and Social Age
Top marketers share a common goal: putting the consumer at the heart of marketing.  Today’s marketing is all about creating customer value and engagement in a fast-changing,  increasingly digital and social marketplace.

Marketing starts with understanding consumer needs and wants, determining which  target markets the organization can serve best, and developing a compelling value proposition by which the organization can attract and grow valued consumers. Then, more than  just making a sale, today’s marketers want to engage customers and build deep customer  relationships that make their brands a meaningful part of consumers’ conversations and  lives. In this digital age, to go along with their tried-and-true traditional marketing methods, marketers have a dazzling set of new customer relationship-building tools—from  the Internet, smartphones, and tablets to online, mobile, and social media—for engaging  customers anytime, anyplace to shape brand conversations, experiences, and community.

If marketers do these things well, they will reap the rewards in terms of market share,  profits, and customer equity. In the sixteenth edition of Principles of Marketing, you’ll learn  how customer value and customer engagement drive every good marketing strategy.

What’s New in the Sixteenth Edition?

We’ve thoroughly revised the sixteenth edition of Principles of Marketing to reflect the major  trends and forces impacting marketing in this digital age of customer value, engagement,  and relationships. Here are just some of the major and continuing changes you’ll find in  this edition.
• More than any other developments, sweeping new online, social media, mobile, and  other digital technologies are now affecting how marketers, brands, and customers  engage each other. The sixteenth edition features new and revised discussions and  examples of the explosive impact of exciting new digital marketing technologies shaping marketing strategy and practice—from online, mobile, and social media engagement technologies discussed in Chapters 1, 5, 13, 14, 15, and 17; to “real-time listening”  and “big data” research tools in Chapter 4, online influence and brand communities in Chapter 5, and location-based marketing in Chapter 7; to the use of social media  and social selling in business-to-business marketing in Chapters 6 and 16; to consumer  Web, social media, mobile marketing, and other new communications technologies in  Chapters 1, 5, 14, 15, 17, and throughout the text. A new Chapter 1 section on The Digital Age: Online, Mobile, and Social Media Marketing introduces the exciting new developments in digital and social media marketing.
A completely revised Chapter 17 on Direct, Online, Social Media, and Mobile Marketing digs deeply into digital marketing tools such as online sites, social media, mobile ads  and apps, online video, e-mail, blogs, and other digital platforms that engage consumers  anywhere, anytime via their computers, smartphones, tablets, Internet-ready TVs, and  other digital devices. The sixteenth edition is packed with new stories and examples  illustrating how companies employ digital technology to gain competitive advantage— from traditional marketing all-stars such as Nike, P&G, Coca-Cola, Walmart, IBM, and  McDonald’s to new-age digital competitors such as Google, Amazon, Apple, Netflix,  Pinterest, and Facebook.
• The sixteenth edition features completely new and revised coverage of the emerging  trend toward customer engagement marketing—building direct and continuous customer involvement in shaping brands, brand conversations, brand experiences, and  brand community. The burgeoning Internet and social media have created better informed, more connected, and more empowered consumers. Thus, today’s marketers  must now engage consumers rather than interrupt them. Marketers are augmenting  their mass-media marketing efforts with a rich mix of online, mobile, and social media  marketing that promote deep consumer involvement and a sense of customer community surrounding their brands. Today’s new customer engagement-building tools include everything from online sites, blogs, in-person events, and video sharing to online communities and social media such as Facebook, YouTube, Pinterest, Vine, Twitter,  or a company’s own social networking sites.

In all, today’s more engaged consumers are giving as much as they get in the  form of two-way brand relationships. The sixteenth edition contains substantial new  material on customer engagement and related developments such as consumer  empowerment, crowdsourcing, customer co-creation, consumer-generated marketing,  and real-time marketing. A new Chapter 1 section—Engaging Customers—introduces  customer engagement marketing. This and other related customer engagement topics are presented in Chapter 1 (new or revised sections on Customer Engagement and
Today’s Digital and Social Media and Consumer-Generated Marketing); Chapter 4 (big data  and real-time research to gain deeper customer insights); Chapter 5 (managing online influence and customer community through digital and social media marketing);
Chapter 13 (online, social media, and digitized retailing); Chapter 9 (crowdsourcing  and customer-driven new-product development); Chapters 14 and 15 (the new, more  engaging marketing communications model and content marketing); and Chapter 17  (direct digital, online, social media, and mobile marketing).
• The sixteenth edition continues to build on and extend the innovative customer-value  framework from previous editions. The customer value and engagement model presented in the first chapter is fully integrated throughout the remainder of the book. No  other marketing text presents such a clear and compelling customer-value approach.
• The sixteenth edition provides revised and expanded coverage of developments in the  fast-changing area of integrated marketing communications. It tells how marketers  are blending traditional media with new digital and social media tools—everything  from Internet and mobile marketing to blogs, viral videos, and social media—to create  more targeted, personal, and engaging customer relationships. Marketers are no longer  simply creating integrated promotion programs; they are practicing content marketing in paid, owned, earned, and shared media. No other text provides more current or  encompassing coverage of these exciting developments.
• New material throughout the sixteenth edition highlights the increasing importance  of sustainable marketing. The discussion begins in Chapter 1 and ends in Chapter 20,  which pulls marketing together under a sustainable marketing framework. In between,  frequent discussions and examples show how sustainable marketing calls for socially  and environmentally responsible actions that meet both the immediate and the future  needs of customers, companies, and society as a whole. 18 Preface• The sixteenth edition provides new discussions and examples of the growth in global  marketing. As the world becomes a smaller, more competitive place, marketers face  new global marketing challenges and opportunities, especially in fast-growing emerging markets such as China, India, Brazil, Africa, and others. You’ll find much new  coverage of global marketing throughout the text, starting in Chapter 1; the topic is  discussed fully in Chapter 19.
• The sixteenth edition continues its emphasis on measuring and managing return on  marketing, including many new end-of-chapter financial and quantitative marketing  exercises that let students apply analytical thinking to relevant concepts in each chapter and link chapter concepts to the text’s innovative and comprehensive Appendix 2:

Marketing by the Numbers.

• The sixteenth edition continues to improve on its innovative learning design. The text’s  active and integrative presentation includes learning enhancements such as annotated  chapter-opening stories, a chapter-opening objective outline, and explanatory author  comments on major chapter sections and figures. The chapter-opening layout helps to  preview and position the chapter and its key concepts. Figures annotated with author  comments help students to simplify and organize chapter material. End-of-chapter features help to summarize important chapter concepts and highlight important themes,  such as digital and social media marketing, marketing ethics, and financial marketing analysis. This innovative learning design facilitates student understanding and  eases learning.
• The sixteenth edition provides 20 new or revised end-of-chapter company cases by  which students can apply what they learn to actual company situations. The sixteenth  edition also features 20 video cases, with brief end-of-chapter summaries and discussion questions. Finally, all of the chapter-opening stories and Real Marketing highlights  in the sixteenth edition are either new or revised to maintain currency

Content

Preface 17
Acknowledgments 23
Part 1 Defining Marketing and the Marketing Process 26
1 Marketing: Creating Customer Value and Engagement 26
2 Company and Marketing Strategy: Partnering to Build Customer Engagement,
Value, and Relationships 62
Part 2 Understanding the Marketplace and Customer Value 92
3 Analyzing the Marketing Environment 92
4 Managing Marketing Information to Gain Customer Insights 128
5 Consumer Markets and Buyer Behavior 164
6 Business Markets and Business Buyer Behavior 196
Part 3 Designing a Customer Value-Driven Strategy and Mix 220
7 Customer-Driven Marketing Strategy: Creating Value for Target Customers 220
8 Products, Services, and Brands: Building Customer Value 254
9 New Product Development and Product Life-Cycle Strategies 292
10 Pricing: Understanding and Capturing Customer Value 322
11 Pricing Strategies: Additional Considerations 346
12 Marketing Channels: Delivering Customer Value 374
13 Retailing and Wholesaling 408
14 Engaging Customers and Communicating Customer Value 444
15 Advertising and Public Relations 472
16 Personal Selling and Sales Promotion 500
17 Direct, Online, Social Media, and Mobile Marketing 532
Part 4 Extending Marketing 566
18 Creating Competitive Advantage 566
19 The Global Marketplace 592
20 Social Responsibility and Ethics 624
Appendix 1 Marketing Plan 655
Appendix 2 Marketing by the Numbers 665
Appendix 3 Careers in Marketing 681
Glossary 691
Index 699