(BQ) Part 2 book Marketing has contents: Marketing channels, supply chain management, promotional planning for competitive advantage; advertising and public relations; sales promotion and personal selling; pricing concepts, setting the right price, consumer relationship management.
P A R T Distribution Decisions W H A T ’ S IN S ID E Marketing Channels 375 Supply Chain Management 403 © HAZLAN ABDUL HAKIN/ISTOCKPHOTO INTERNATIONAL, INC Retailing 438 374 Marketing Channels C H A P T E R 13 Learning Outcomes LO Explain what a marketing channel is and why intermediaries are needed LO Define the types of channel intermediaries and describe their functions and activities LO Describe the channel structures for consumer and business products and discuss alternative channel arrangements LO LO Discuss the issues that influence channel strategy LO LO LO Explain channel leadership, conflict, and partnering Describe the different channel relationship types and their unique costs and benefits Discuss channels and distribution decisions in global markets Identify the special problems and opportunities associated with distribution in service organizations © SUSAN VAN ETTEN 375 LO Marketing Channels marketing channel (channel of distribution) A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer channel members All parties in the marketing channel that negotiate with one another, buy and sell products, and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer The term channel is derived from the Latin word canalis, which means canal A marketing channel can be viewed as a large canal or pipeline through which products, their ownership, communication, financing and payment, and accompanying risk flow to the consumer Formally, a marketing channel (also called a channel of distribution) is a business structure of interdependent organizations that are involved in the process of making a product or service available for use or consumption by end customers or business users Marketing channels facilitate the physical movement of goods from location to location, thus representing “place” or “distribution” in the marketing mix (product, price, promotion, and place) and encompassing the processes involved in getting the right product to the right place at the right time Many different types of organizations participate in marketing channels Channel members (wholesalers, distributors, and retailers, also sometimes referred to as intermediaries, resellers, and middlemen) negotiate with one another, buy and sell products, and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer As products move through channels, channel members facilitate the distribution process by providing specialization and division of labor, overcoming discrepancies, and providing contact efficiency PROVIDING SPECIALIZATION AND DIVISION OF LABOR According to the concept of specialization and division of labor, breaking down a complex task into smaller, simpler ones and allocating them to specialists will create greater efficiency and lower average production costs Manufacturers achieve economies of scale through the use of efficient equipment capable of producing large quantities of a single product Marketing channels can also attain economies of scale through specialization and divi- Marketing & You Using the following scale, indicate your opinions on the lines before the items Strongly disagree Strongly agree — I would prefer to be a leader — I see myself as a good leader — I will be a success — People always seem to recognize my authority Part COURTESY OF IBM CORPORATION Distribution Decisions — I have a natural talent for influencing people Marketing channels aid in overcoming discrepancies of quantity, like the one suggested by this ad for IBM customer relationship management software 376 — I am assertive — I like to have authority over other people — I am a born leader Now, total your score Read the chapter and find out what your score means at the end sion of labor by aiding producers who lack the motivation, financing, or expertise to market directly to end users or consumers In some cases, as with most consumer convenience goods, such as soft drinks, the cost of marketing directly to millions of consumers—taking and shipping individual orders—is prohibitive For this reason, producers hire channel members, such as wholesalers and retailers, to what the producers are not equipped to or what channel members are better prepared to Channel members can some things more efficiently than producers because they have built good relationships with their customers Therefore, their specialized expertise enhances the overall performance of the channel © FOODPIX/JUPITER IMAGES OVERCOMING DISCREPANCIES discrepancy of quantity The difference between the amount of product produced and the amount an end user wants to buy discrepancy of assortment The lack of all the items a customer needs to receive full satisfaction from a product or products temporal discrepancy A situation that occurs when a product is produced but a customer is not ready to buy it spatial discrepancy The difference between the location of a producer and the location of widely scattered markets PROVIDING CONTACT EFFICIENCY 377 Chapter 13 The third need fulfilled by marketing channels is that they provide contact efficiency Marketing channels provide contact efficiencies by reducing the number of stores customers must shop in to complete their purchases Think about how much time Marketing Channels Marketing channels also aid in overcoming discrepancies of quantity, assortment, time, and space created by economies of scale in production For example, assume that Pillsbury can efficiently produce its Hungry Jack instant pancake mix only at a rate of 5,000 units in a typical day Not even the most ardent pancake fan could consume that amount in a year, much less in a day The quantity produced to achieve low unit costs has created a discrepancy of quantity, which is the difference between the amount of product produced and the amount an end user wants to buy By storing the product and distributing it in the appropriate amounts, marketing channels overcome quantity discrepancies by making products available in the quantities that consumers desire Mass production creates not only discrepancies of quantity but also discrepancies of assortment A discrepancy of assortment occurs when a consumer does not have all of the items needed to receive full satisfaction from a product For pancakes to provide maximum satisfaction, several other products are required to complete the assortment At the very least, most people want a knife, fork, plate, butter, and syrup Others might add orange juice, coffee, cream, sugar, eggs, and bacon or sausage Even though Pillsbury is a large consumer-products company, it does not come close to providing the optimal assortment to go with its Hungry Jack pancakes To overcome discrepancies of assortment, marketing channels assemble in one place many of the products necessary to complete a consumer’s needed assortment A temporal discrepancy is created when a product is produced, but a consumer is not ready to buy it Marketing channels overcome temporal discrepancies by maintaining inventories in anticipation of demand For example, manufacturers of seasonal merchandise, such as Christmas or Halloween decorations, are in operation all year even though consumer demand is concentrated during certain months of the year Furthermore, because mass production requires many potential buyers, markets are usually scattered over large geographic regions, creating a spatial discrepancy Often global, or at least nationwide, markets are needed to absorb the outputs of mass producers Marketing channels overcome spatial discrepancies by making products available in locations convenient to consumers For example, if all the Hungry Jack pancake mix is produced in Boise, Idaho, then Pillsbury must use an intermediary to distribute the product to other regions of the United States Consumers elsewhere would be unwilling to drive to Boise to purchase pancake mix Exhibit 13.1 How Marketing Channels Reduce the Number of Required Transactions JVC Consumer Zenith Consumer Sony Consumer Toshiba RCA Consumer Without an intermediary: producers x consumers = 20 transactions JVC Zenith Sony Toshiba RCA Circuit City Consumer Consumer Consumer Consumer With an intermediary: producers + consumers = transactions you would spend shopping if supermarkets, department stores, and shopping malls did not exist For example, suppose you had to buy your milk at a dairy and your meat at a stockyard Imagine buying your eggs and chicken at a hatchery and your fruits and vegetables at various farms You would spend a great deal of time, money, and energy just shopping for a few groceries Channels simplify distribution by cutting the number of transactions required to get products from manufacturers to consumers and making an assortment of goods available in one location In addition, many consumers in recent years have REVIEW LEARNING OUTCOME begun shopping using a multi-channel approach whereby they view products online, in catalogues, Explain what a marketing channel is and and in the brick-and-mortar retail outlet Savvy retailers are capitalizing on these additional why intermediaries are needed customer contacts by segmenting customers according to buying versus simply shopping Marketing channel channels and providing consistent messages to customers regardless of channel choice.1 Consider the example illustrated in Exhibit 13.1 Four consumers each want to buy a television set Without a retail intermediary like Providing Specialization and Division of Labor Circuit City, television manufacturers JVC, Zenith, Sony, Toshiba, and RCA would each have to make four contacts to reach the four buyers who are in the target market, for a total of 20 transactions Overcoming However, when Circuit City acts as an intermediDiscrepancies ary between the producer and consumers, each producer has to make only one contact, reducing the number of transactions to Each producer Providing Contact sells to one retailer rather than to four consumEfficiency ers In turn, consumers buy from one retailer instead of from five producers Contact efficiency is being enhanced even Supply more by information technology Better informachain tion on product availability and pricing increasingly is reducing the need for consumers to Part Distribution Decisions LO 378 actually shop for bargains or view ads in a traditional manner By making information on products and services easily accessible over the Internet, Google, Yahoo, and similar information assemblers are becoming the starting points for finding and buying products and services As they cull and organize huge digital warehouses of news, images, traffic and weather reports, and information on automobiles, real estate, and other consumer products, inefficiencies will be reduced, as will prices These developments are revolutionizing marketing channels and benefiting consumers because shoppers can find out where the best bargains are without having to search for them.2 LO Channel Intermediaries and Their Functions retailer A channel intermediary that sells mainly to consumers merchant wholesaler An institution that buys goods from manufacturers and resells them to businesses, government agencies, and other wholesalers or retailers and that receives and takes title to goods, stores them in its own warehouses, and later ships them agents and brokers Wholesaling intermediaries who not take title to a product but facilitate its sale from producer to end user by representing retailers, wholesalers, or manufacturers Intermediaries in a channel negotiate with one another, facilitate the change of ownership between buyers and sellers, and physically move products from the manufacturer to the final consumer The most prominent difference separating intermediaries is whether they take title to the product Taking title means they own the merchandise and control the terms of the sale—for example, price and delivery date Retailers and merchant wholesalers are examples of intermediaries that take title to products in the marketing channel and resell them Retailers are firms that sell mainly to consumers Retailers will be discussed in more detail in Chapter 15 Merchant wholesalers are organizations that facilitate the movement of products and services from the manufacturer to producers, resellers, governments, institutions, and retailers All merchant wholesalers take title to the goods they sell, and most of them operate one or more warehouses where they receive goods, store them, and later reship them Customers are mostly small- or moderate-sized retailers, but merchant wholesalers also market to manufacturers and institutional clients Other intermediaries not take title to goods and services they market but facilitate the exchange of ownership between sellers and buyers Agents and brokers simply facilitate the sale of a product from producer to end user by representing retailers, wholesalers, or manufacturers Title reflects ownership, and ownership usually implies control Unlike wholesalers, agents or brokers only facilitate sales and generally have little input into the terms of the sale They do, however, get a fee or commission based on sales volume For example, when selling a home, the owner usually hires a real estate agent who then brings potential buyers to see the house The agent facilitates the sale by bringing the buyer and owner together, but never actually takes ownership of the home Variations in channel structures are due in large part to variations in the numbers and types of wholesaling intermediaries Generally, product characteristics, buyer considerations, and market conditions determine the type of intermediary the manufacturer should use • Buyer considerations affecting the wholesaler choice include how often the product is purchased and how long the buyer is willing to wait to receive the product For example, at the beginning of the school term, a student may be willing to wait a few days for a textbook to get a lower price by ordering online Thus, this type of product can be distributed directly But, if the student waits to buy the book until right before an exam and needs the book immediately, it will have to be purchased at the school bookstore 379 Chapter 13 Product characteristics that may require a certain type of wholesaling intermediary include whether the product is standardized or customized, the complexity of the product, and the gross margin of the product For example, a customized product such as insurance is sold through an insurance agent or broker who may represent one or multiple companies In contrast, a standardized product such as gum is sold through a merchant wholesaler that takes possession of the gum and reships it to the appropriate retailers Marketing Channels • Exhibit 13.2 • Marketing Channel Functions Performed by Intermediaries Type of Function Description Transactional functions Contacting and promoting: Contacting potential customers, promoting products, and soliciting orders Negotiating: Determining how many goods or services to buy and sell, type of transportation to use, when to deliver, and method and timing of payment Risk taking: Assuming the risk of owning inventory Logistical Functions Physically distributing: Transporting and sorting goods to overcome temporal and spatial discrepancies Storing: Maintaining inventories and protecting goods Part Distribution Decisions Sorting: Overcoming discrepancies of quantity and assortment by Sorting out: Breaking down a heterogeneous supply into separate homogeneous stocks Accumulating: Combining similar stocks into a larger homogeneous supply Allocating: Breaking a homogeneous supply into smaller and smaller lots (“breaking bulk”) Assorting: Combining products into collections or assortments that buyers want available at one place Market characteristics determining the wholesaler type include how many buyers are in the market and whether they are concentrated in a general location or are widely dispersed Gum and textbooks, for example, are produced in one location and consumed in many other locations Therefore, a merchant wholesaler is needed to distribute the products In contrast, in a home sale, the buyer and seller are localized in one area, which facilitates the use of an agent/broker relationship CHANNEL FUNCTIONS PERFORMED BY INTERMEDIARIES Retailing and wholesaling intermediaries in marketing channels perform several essential functions that make Facilitating Functions Researching: Gathering information about other channel members and consumers the flow of goods between producer and buyer possible The three basic Financing: Extending credit and other financial services to facilitate the flow of goods through the channel to the final consumer functions that intermediaries perform are summarized in Exhibit 13.2 Transactional functions involve contacting and communicating with prospective buyers to make them aware of existing products and explain their features, advantages, and benefits Intermediaries in the channel also provide logistical functions logistics Logistics is the efficient and cost-effective forward and reverse flow and storage The efficient and cost-effective of goods, services, and related information, into, through, and out of channel memforward and reverse flow as well ber companies Logistics functions typically include transportation and storage of as storage of goods, services, and related information, into, through, assets, as well as their sorting, accumulation, consolidation, and/or allocation for and out of channel member the purpose of conforming to customer requirements For example, grading agriculcompanies Logistics functions tural products typifies the sorting-out process, while consolidation of many lots of typically include transportation and storage of assets, as well grade A eggs from different sources into one lot illustrates the accumulation proas their sorting, accumulation, cess Supermarkets or other retailers perform the assorting function by assembling consolidation, and/or allocation for thousands of different items that match their customers’ desires Similarly, while the purpose of meeting customer requirements large companies typically have direct channels, many small companies depend on wholesalers to promote and distribute their products For example, small beverage manufacturers like Jones Soda, Honest Tea, and Energy Brands depend on wholesalers to distribute their products in a marketplace dominated by large competitors like Coca-Cola and Pepsi The management of logistics is a key component of what has come to be known as supply chain management, which is discussed in greater detail in Chapter 14 The third basic channel function, facilitating, includes research and financing Research provides information about channel members and consumers by getting answers to key questions: Who are the buyers? Where are they located? Why they buy? Financing ensures that channel members have the money to keep products moving through the channel to the ultimate consumer A single company may provide one, two, or all three functions Consider Kramer Beverage Company, a Coors beer distributor As a beer distributor, Kramer provides transactional, logistical, and facilitating channel functions Sales representatives contact local bars and restaurants to negotiate the terms of the sale, possibly giving the customer a discount for large purchases, and arrange for delivery of the beer 380 At the same time, Kramer also provides a facilitating function by extending credit to the customer Kramer merchandising representatives, meanwhile, assist in promoting the beer on a local level by hanging Coors beer signs and posters Kramer also provides logistical functions by accumulating the many types of Coors beer from the Coors manufacturing plant in Golden, Colorado, and storing them in its refrigerated warehouse When an order needs to be filled, Kramer then sorts the beer into heterogeneous collections for each particular customer For example, the local Chili’s Grill & Bar may need two kegs of Coors, three kegs of Coors Light, and two cases of Killian’s Red in bottles The beer will then be loaded onto a refrigerated truck and transported to the restaurant Upon arrival, the Kramer delivery person will transport the kegs and cases of beer into the restaurant’s refrigerator and may also restock the coolers behind the bar Although individual members can be added to or deleted from a channel, someone must still perform these REVIEW LEARNING OUTCOME essential functions They can be performed by producers, Define the types of channel end users or consumers, channel intermediaries such as intermediaries and describe their wholesalers and retailers, and sometimes nonmember functions and activities channel participants For example, if a manufacturer decides to eliminate its private fleet of trucks, it must still have a way to move the goods to the wholesaler This task CHANNEL CHANNEL may be accomplished by the wholesaler, which may have INTERMEDIARIES FUNCTIONS its own fleet of trucks, or by a nonmember channel participant, such as an independent trucking firm Nonmembers Retailers Transactional Perform also provide many other essential functions that may at Wholesalers Logistical one time have been provided by a channel member For exAgents and Facilitating ample, research firms may perform the research function; Brokers advertising agencies may provide the promotion function; transportation and storage firms, the physical distribution function; and banks, the financing function LO LO Channel Structures A product can take many routes to reach its final consumer Marketers search for the most efficient channel from the many alternatives available Marketing a consumer convenience good like gum or candy differs from marketing a specialty good like a Mercedes-Benz The two products require very different distribution channels Likewise, the appropriate channel for a major equipment supplier like Boeing Aircraft would be unsuitable for an accessory equipment producer like Black & Decker The next sections discuss the structures of typical marketing channels for consumer and business-to-business products Alternative channel structures are also discussed direct channel A distribution channel in which producers sell directly to consumers 381 Chapter 13 Exhibit 13.3 illustrates the four ways manufacturers can route products to consumers Producers use the direct channel to sell directly to consumers Direct marketing activities—including telemarketing, mail-order and catalog shopping, and forms of electronic retailing like online shopping and shop-at-home television networks—are a good example of this type of channel structure For example, home computer users can purchase Dell computers directly over the telephone or from Dell’s Internet Web site There are no intermediaries Producer-owned stores and factory outlet stores—like Sherwin-Williams, Polo Ralph Lauren, Oneida, and West Point Pepperell—are other examples of direct channels Farmers’ markets are also direct channels Direct marketing and factory outlets are discussed in more detail in Chapter 15 Marketing Channels CHANNELS FOR CONSUMER PRODUCTS Exhibit 13.3 Marketing Channels for Consumer Products Direct channel Retailer channel Wholesaler channel Agent/broker channel Producer Producer Producer Producer Agents or brokers Consumers Wholesalers Wholesalers Retailers Retailers Retailers Consumers Consumers Consumers © VICKI BEAVER At the other end of the spectrum, an agent/broker channel involves a fairly complicated process Agent/broker channels are typically used in markets with many small manufacturers and many retailers that lack the resources to find each other Agents or brokers bring manufacturers and wholesalers together for negotiations, but they not take title to merchandise Ownership passes directly to one or more wholesalers and then to retailers Finally, retailers sell to the ultimate consumer of the product For example, a food broker represents buyers and sellers of grocery products The broker acts on behalf of many different producers and negotiates the sale of their products to wholesalers that specialize in foodstuffs These wholesalers in turn sell to grocers and convenience stores Most consumer products are sold through distribution channels similar to the other two alternatives: the retailer channel and the wholesaler channel A retailer channel is most common when the retailer is large and can buy in large quantities directly from the manufacturer WalMart, Target, JC Penney, and car dealers are examples of retailers that often bypass a wholesaler A wholesaler channel is commonly used for low-cost items that are frequently purchased, such as candy, cigarettes, and magazines For example, M&M/Mars sells candies and chocolates to wholesalers in large quantities The wholesalers then break these quantities into smaller quantities to satisfy individual retailer orders Part Distribution Decisions CHANNELS FOR BUSINESS AND INDUSTRIAL PRODUCTS As Exhibit 13.4 on the next page illustrates, five channel structures are common in business and industrial markets First, direct channels are typical in business and industrial markets For example, manufacturers buy large quantities of raw materials, major equipment, processed materials, and supplies directly from other manufacturers Manufacturers that require suppliers to meet detailed technical specifications often prefer direct channels The direct communication required between DaimlerChrysler and its suppliers, for example, along with the tremendous size of the orders, makes anything but a direct channel impractical The channel from producer to government buyers is also a direct channel Since much government buying is done through bidding, a direct channel is attractive Dell, for example, the 382 Exhibit 13.4 Channels for Business and Industrial Products Direct channel Direct channel Industrial distributor Agent/broker channel Agent/broker–industrial distributor Producer Producer Producer Producer Producer Agents or brokers Industrial distributor Industrial distributor Industrial user Government buyer Industrial user Agents or brokers Industrial user Industrial user Chapter 13 383 Marketing Channels top seller of desktop computers to federal, state, and local government agencies in the United States, sells the computers through direct channels Companies selling standardized items of moderate or low value often rely on industrial distributors In many ways, an industrial distributor is like a supermarket for organizations Industrial distributors are wholesalers and channel members that buy and take title to products Moreover, they usually keep inventories of their products and sell and service them Often small manufacturers cannot afford to employ their own sales force Instead, they rely on manufacturers’ representatives or selling agents to sell to either industrial distributors or users Today, though, the traditional industrial distributor is facing many challenges Manufacturers are getting bigger due to growth, mergers, and consolidation Through technology, manufacturers and customers have access to information that in the past only the distributor had Consequently, many manufacturers and customers are bypassing distributors and going direct, often via the Internet The Internet has enabled virtual distributors to emerge and forced traditional industrial distributors to expand their business model An example of how the Internet has revolutionized industrial distribution is http://www.pumpbiz.com, which sells pumps for chemicals, wastewater, sumps, water, coolants, and all other industrial process fluids Pump types available include centrifugal, diaphragm, vertical, magnetic drive, and metering pumps The site offers 24/7 purchasing and provides access to information on major manufacturers of pumps, including side-by-side comparisons and reviews; copies of manuals, diagrams, and other installation and repair documentation; warranted installers in the customer’s local area; and instant access to past purchasing and related information on a customer’s account.3 The Internet has also led to the emergence of three other new forms of industrial distribution Some companies serve as agents that link buyers and sellers and charge a fee For example, Expedia.com links business travelers to airlines, hotels, and car rental companies A second form of marketplace has been developed by existing companies looking for a way to drop the intermediary from the channel For example, the Worldwide Retail Exchange is a marketplace created by 17 major retailers including Target, JCPenney, and Walgreens Retailers use the exchange to make purchases that in the past would have required telephone, fax, or face-to-face sales calls Retailers using the exchange estimate they have saved approximately ORGANIZATIONAL INDEX Time Warner Center, 464 TiVo, 516 T.J Maxx, 446, 458, 460, 461 TNS Media Intelligence, 99 Todd Oldham, 388 Tombstone, 448 Tommy Hilfiger, 457 Tony the Tiger, 509 Topol, 43 Toppels, 42 Torrid, 455 Toshiba, 79, 150, 153, 378, 545 Total, 128 Tower Records, 464 Towle, Andrew, 79 Toyota, 79, 89, 91, 111, 128, 131, 146, 175, 190, 210, 220, 237, 308, 327, 335, 415, 417 Toyota Industrial Equipment, 386 Toys “R” Us, 392, 441, 446, 464 Trading Spaces, 314 Travel Weekly, 298 Travelers’ Insurance Company, 351 Travelocity, 579 Treasure Island, 51 Tremor, 46 Trend Micro, 128 Trigger, 266 Trivial Pursuit, 149 Tuesday Morning, 446 Tums, 457 Tupperware, 335, 398 TurboTax, 431 Turner Broadcasting, 161 Tweeter, 442 Twentymile Mine, 109 Ty, 40 Tyco, 70 Tylenol, 39, 502 Tyson, U Underwriters Laboratories, 168 Unilever, 131, 151, 153, 168, 235, 318, 641 Union Carbide, 570 United Airlines, 116 United Artists Theaters, 448 Universal McCann, 532 Universal Sportswear, 583–585 Univision Radio, 179–180 Unocal Corp., 129, 454 uPromote.com, 559 UPS, 49, 109, 155, 353, 421 UPS Worldwide Logistics, 430 Uruguay Round, 135–136 Urban Outfitters, 460 U.S Army, 195, 518 U.S Cellular, 239 U.S Marine Corps, 421 U.S Navy, 195 USAA, 10, 353 USADATA.com, 269 Usbourne Books, 448 USPS, 49 organizational index V Valero Energy, 77 Value Line, 22 ValuJet, 36 VanDorn, Steve, 563 Vanity Fair, 242 Vans, 195, 499, 533, 563, 626 Van’s, 451–452 Vaseline, 151 696 Vaughan, Bill, 625 Vector Marketing Corporation, 565 Veg-O-Matic, 562 Vegpro Kenya, 153 VeloNews, 162 Velveeta, 175 Verizon, 117, 118, 483, 502, 517, 541, 547, 555 Vespa, 97 Viacom, 401, 518 Viagra, 395 Vick, Michael, 63 Victoria’s Secret, 306, 384, 450, 456, 457, 647 View, The, 559 Village Country Inn, 646 Vioxx, 99 Virgin Group, 111, 356, 506, 517 Virgin Mobile, 555 Visa, 541, 557, 570 Visor, 341 Vivendo, 101 Vodafone, 526 Volkswagen, 79, 128, 210, 255, 335, 512 Volvo Construction Equipment, 409 Vonage, 517 W W Hotels, 351 Wachovia Bank, 6, 353 Wal-Mart, 7, 9, 18, 38, 63, 78, 91, 101, 111, 128, 147, 208, 232, 249, 252, 254, 302, 309, 326, 357, 382, 386, 387, 388, 392, 398–399, 421, 422, 429, 439, 440, 442, 445, 446, 455, 456, 458, 460, 461, 466, 487, 527, 528, 572, 579, 583, 590, 601– 602, 603, 604, 605, 609, 624–625, 642 Waldenbooks, 638 Walgreens, 239, 302, 383, 392–393, 440, 458, 625 Wall Street Journal, The, 22, 26, 50, 51, 169, 181, 255, 358, 492, 623 Waltrip, Michael, 526 Wang, Vera, 508 Ward, Anne Sempowski, 103 Warner-Lambert, 42 Washington Alliance of Technology Workers, 420 Washington Mutual, 358 Washkewica, Donald, 578 WaterBeast, 228 Water Horse: Legend of the Deep, The, 520 WD-40 Co., 266, 307 Webber, Mark, 371 Wegman’s Food Markets, 3, 11, 353, 363, 645, 646 Weight Watchers, 42, 280, 311 Wells, William D., 176 Wendy’s, 44, 342, 454, 531 West Elm, 96 West Point Pepperell, 381, 447 Westin, 616 Westin Heavenly Bed, 81 Westin Hotels & Resorts, 311 Weston Group, 329 Weyerhaeuser, 606–607 WH Smiths, 297 Wheat Chex, 617 Wheeler-Lea Act, 112 Whirlpool, 21, 118, 149, 236, 302, 430, 588 White, Shawn, 508 White Cloud, 456 Whole Foods Market, 62 Wholesome Snacks, Inc., 400 Wicked, 498–499 Wii, 464, 627 Wild Hop Lager, 314 Wild Oats Market, 62 William Wrigley Jr Company, 124 Williams, John, 135 Williams, Mona, 527 Williams-Sonoma, 96, 442, 451, 463 Willy Wonka, 346 Windows, 339, 391 Wine.com, 466 Winfrey, Oprah, 524 WingStreet, 311 Winn-Dixie, 460 Wintergreen Research, 269 Wipro, 128 Wired, 464 Wizard of Oz, The, 498–499 WNBA, 645 Wolfgang Puck, 97, 460 Wolverine World Wide, 144–145 Women On Their Way, 188 Woods, Tiger, 510 Woolworths, 297 World Bank, 132, 133, 140 World Book Encyclopedia, 448 World of Warcraft, 518 World Wildlife Federation, 77 Worldcom, 63, 67, 70 Wrigley, 329, 387 Wrigley’s Spearmint, 124 Wyndham Hotels and Resorts, 188 X X-14, 266 Xanga, 186 Xbox, 196, 339, 627 Xerox, 213, 312, 330, 331, 428, 553 XGames, 526 XLA, 109 XM Satellite Radio, 462, 524 Y Yahoo!, 156, 169, 193, 268, 286, 379, 488, 517, 526, 529, 531 Yamaha, 43, 193, 395, 526 Yankelovich, Inc., 97 Yellow Pages, 291, 513, 514 YMCA, 307 Yoga Phone, 248 Yoplait, 6, 81–82, 526, 534 Your $10 Store, 610 YouTube, 149, 195, 257 Yum! Brands, 308, 311, 454 Yves Rocher, 457 Z Zagat, 368, 369 Zale Corporation, 253 Zanga, 94 ZapData, 560 Zappos.com, 353 Zenith, 378 Zero Degrees, 550 Ziglar, Zig, 553 Zillow.com, 655 Zima, 42 Zlotkin, Dr Stanley, 79 Zoom Store, 448 Zulueta, Manny, 70–71 Zune, 471 Zyrtec, 99 © SUSAN VAN ETTEN/PHOTOEDIT 80/20 principle, 243 A B baby boomers market segmentation, 235–236 marketing environment, 97–99 bait pricing, 613 Balanced Scorecard Approach, 427 banner ads, 518 base price, pricing, 607 bases market segmentation, business markets, 243–244 market segmentation, consumer markets, 233–243 positioning, 252–253 basic research, technological, 109 basing-point pricing, 610 B2B e-commerce, defined, 206 B2B online exchange, 216 behavior, consumer See consumer buying decisions behavioral targeting, 287, 358 beliefs, consumer buying decisions, 197–199 benchmarks, 410 benefit segmentation, 242 blogs advertising, 518 communication, 480–481 consumer buying decisions, 185–186 boycotts, 134 brainstorming, new products, 329 brand branding products, 307–312, 315–316 defined, 306 equity, defined, 306 mark, defined, 306 name, defined, 306 break-even analysis, 583–585 brokers, channels, 379, 382, 384 bundling, pricing, 613–615, 620 business analysis, new products, 329–330 business-to-business electronic commerce, defined, 206 business-to-business online exchange, 216 of firm, defining, 11–12 format franchising, 453–454 marketing (See business marketing) processes, supply chain management, 411–416 products, 301–302 products, channels, 382–384 services, business marketing, 220 business marketing buying behavior, 220–224 buying centers, 220–221 buying situations, 222–223 case study, 228–229 company clip, 229 consumer markets, contrasted, 214–218 customer service, 223–225 customers, 211–213 defined, 206 disintermediation, 208–209 697 subject index ABC segmentation, supply chains management, 410–411 accelerator principle, defined, 215 accessory equipment, business marketing, 218 activity-based costing (ABC), supply chain management, 408 adopters, new products, 336–339 advergaming, 518 advertainment, 519 advertising See also communication; promotion; public relations; sales promotion; selling advergaming, 518 advertainment, 519 alternative media, 517–520 anatomy of an advertisement, 534 appeals, 509–510 audience selectivity, 520 banner ads, 518 blogging, 518 campaign, defined, 507–508 careers, 20 case study, 531–532 cell phones, 519–520 company clip, 533 comparative, 506–507 competitive, 506 consumers, effect on, 503–505 cooperative, 515 cost per contact, 520 creative decisions, 507–513 drugs, ethics, 99 effects, 502–503 ethics, 531 exercises, 530–531 frequency, 520 global strategies, 512 infomercials, 516 institutional, 505 Internet, 514, 517–519 magazines, 514, 515 major types, 505–507 market share, 503 media, choosing, 513–522 media scheduling, 522 media selection considerations, 520–522 media types, 514–520 message execution, 510–512 newspapers, 514, 515 objective, defined, 508 outdoor media, 514, 517 pioneering, 505–506 podcasts, 518–519 postcampaign evaluation, 512–513 product, 505–507 product benefits, identifying, 508–509 promotion, 484 radio, 514, 515–516 reach, 520 response function, 503 review, 528–530 sales promotion, defined, 502 search engine ads, 518 stealth marketing, 520 styles, 510 survey, 502, 533 television, 514, 516 unique selling proposition, 509–510 video game, 519 African Americans, marketing environment, 102–103 age consumer buying decisions, 188–189 market segmentation, 234–236 agencies, employment, 22 agents, channels, 379, 382, 384 agile supply chain management, 418–419 AIDA concept, promotion, 486–488 alternative media, 517–520 analyzing data, marketing research, 280, 287 anchor stores, 458 anti-spam legislation, 484 appeals, advertising, 509–510 applied research, technological, 109 Arm’s Length relationships, channels, 389 Asian Americans, marketing environment, 103–105 Asian Indian Americans, marketing environment, 103–104 aspirational reference groups, 183–184 assortment, discrepancies, 377 assurance, services, 353 atmosphere, retail stores, 460 attitudes, consumer buying decisions, 197–199 auctions, online, 588–589 audience selectivity, 520 audit, marketing, 46–47 automatic replenishment programs, 424 automatic vending, 448 average total cost (ATC), 580 average variable cost (AVC), 580 Aviation Security Act, 113 SU BJE C T I ND E X I subject index SU BJ E C T I ND E X 698 business marketing (continued) electronic commerce, 206–209 ethics, 223, 224, 228 evaluative criteria, 221–222 exercises, 227–228 government customers, 212–213 institutions, 212–213 Internet, 206–209 North American Industry Classification System (NAICS), 213–214 online success, measuring, 207–208 original equipment manufacturers (OEMs), 211 producers, 211 product types, 218–220 reintermediation, 209 relationship marketing, 209–211 resellers, 211–212 review, 225–227 segmentation bases, 243–244 strategic alliances, 209–211 survey, 206 trends, Internet, 208–209 buyer See also consumer; customer department stores, 441–442 for export, 144 location, business and consumer markets, 216 buying behavior, business marketing, 220–224 centers, 220–221 decisions, consumer (See consumer buying decisions) promotion (See promotion) buzz marketing, 46 C California’s Notice of Security Breach Law, 116 CAN-SPAM Act, 113 cannibalization, 249 capital-intensive, defined, 129 captain, channel, 391 capturing data, customers, 638–639 careers in marketing, 20–21 case studies advertising, 531–532 business marketing, 228–229 channels, 400–401 consumer buying decisions, 202–203 customer relationships, 652–654 ethics, 85–86 global marketing, 159–160 market segmentation, 257–258 marketing, overview, 18–19 marketing environment, 120–122 marketing research, 295–296 new products, 346–347 personal selling, 562–563 pricing, 594–595, 624–625 products, 320–321 promotion, 498–499 public relations, 531–532 retailing, 468–470 sales promotion, 562–563 services, 370–371 supply chain management, 435–436 target markets, 257–258 cash cow, 42 cash discount, pricing, 607 casuist ethical theory, 65 catalogs, 449–450 cause-related marketing, 81–82, 526 cell phones, advertising, 519–520 Celler-Kefauver Antimerger Act, 112 Central America Free Trade Agreement (CAFTA), 137–138 central-location telephone (CLT) facility, 271 chain stores, 440–441 Channel M2, online focus groups, 285 channels agents, 379, 382, 384 anatomy of, 401 brokers, 379, 382, 384 business products, 382–384 buyer considerations, 379 case study, 400–401 company clip, 401 consumer products, 381–382 contact efficiency, 377–379 direct, 381–384 discrepancies, 377 distribution, customers, 647–648 distribution intensity, 387–388 distributors, 383 division of labor, 376–377 dual distribution, 384 electronics, 401 ethics, 392, 400 exercises, 399–400 facilitating, 380 global, 394–395 industrial products, 382–384 intermediaries, 379–381 kiosks, 384 logistics, 380 market characteristics, 380 market factors, 385–386 members, 376 merchant wholesalers, 379 message transmission, 479 multiple, 384 nontraditional, 384 overview, 376 partnering, 393 producer factors, 386–387 product characteristics, 379 product factors, 385–386 relationship types, 388–390 relationships, managing, 390–393 retailers, 379, 382 review, 397–399 services, 395–396 specialization, 376–377 strategic alliance, 385 strategy decisions, 385–388 structures, 381–385 survey, 376, 401 transactional functions, 380 vending machines, 384 wholesalers, 379, 382 Child Protection and Toy Safety Act, 113 Children’s Online Privacy Protection Act, 113 China consumer buying decisions, 184 global marketing, 132–133 Chinese Americans, marketing environment, 103 Clayton Act, 112 closed-ended questions, 273–274 closing the sale, personal selling, 553 cluster samples, 279 cobranding, 310–311 code of ethics, 69–70 cognitive dissonance, 172 collecting data, marketing research, 280 college placement office, 22 commercialization process, supply chain management, 415–416 common trade alliance, 134 communication See also advertising; promotion; public relations; sales promotion; selling blogs, 480–481 channels, 479 decoding, 479–480 encoding, 478–479 feedback, 480–481 integrated marketing communications (IMC), 488–490, 500 interpersonal, 477 mass, 477–478 message transmission, 479 overview, 477–478 promotion, 485–486 receiver, 479–480 sender, 478–479 community shopping centers, 458 company clips advertising, 533 business marketing, 229 channels, 401 consumer buying decisions, 203 customer relationships, 654 ethics, 86 global marketing, 160 market segmentation, 258–259 marketing, overview, 19 marketing environment, 122 marketing plans, 52 marketing research, 296 new products, 347 pricing, 595–596, 626 products, 321 promotion, 499 public relations, 533 retailing, 470 sales promotion, 563 services, 371 strategic planning, 52 supply chain management, 437 target markets, 258–259 comparative advertising, 506–507 compensating sales force, 556–557 competition competitive advantage, defined, 476 competitive advantage, marketing plan, 37–40 competitive advertising, 506 competitive intelligence (CI), marketing research, 289–291 competitors, new product ideas, 328 marketing environment, 116–117 compiled list, customers, 640 complaints, survey, 632, 654 component lifestyles, 90–91 component parts, business marketing, 219 comprehensive marketing audit, 47 computer technology See also Internet computer-assisted interviews, 271 customer relationship management (CRM), 632–635 supply chain management, 429–430 predictive modeling, 643–644 privacy, 648–649 recency-frequency-monetary analysis (RFM), 642–643 reinforcing purchase decisions, 646 relations, sports team, 657 relations, survey, 632, 654 relationship management (CRM), 632–635 relationship management process, supply chain management, 412–413 relationships, case study, 652–654 relationships, company clips, 654 relationships, controversy, 655 relationships, critical thinking case, 656 relationships, ethics, 652 relationships, exercises, 652 relationships, identifying, 635–636 relationships, review, 650–651 response list, 640 retaining, marketing research, 264 retaining loyal, 645 satisfaction, marketing philosophy, 9–10 segmentation, 642 service, business marketing, 223–225 service, improving, 648 service, retailing, 462–463 service management process, supply chain management, 413 storing data, 639–641 targeted marketing, 646 value, marketing philosophy, 8–9 customization, services, marketing strategy, 356–357 D DAGMAR, 508 data capturing, customer, 638–639 database marketing, 262 mining, customers, 641–642 storing, customer, 638–641 warehouse, 639–640 decision makers, families, 186 decision making, ethical, 68–69 decision support systems (DSS), 261–262, 291 decline stage, new products, 342–343, 492, 586 decoding, communication, 479–480 definitions, 658–671 delayed-quotation pricing, 618 demand business and consumer markets, 215 defined, 573 management process, supply chain management, 413–414 price determinant, 573–578 demographics marketing environment, 93–100, 140–141 segmentation, 234–241 deontological theory of ethics, 64 department stores, 441–442 Depression Generation, market segmentation, 236 depth, product, 456 derived demand, defined, 215 destination stores, 458 699 subject index survey, 166 types of, 172–175 values, 176–180 contact efficiency, channels, 377–379 containing products, packaging, 313 contests, 541–542 continuous media schedule, 522 contract logistics, 430 contract manufacturing, 145–146 control, channel, 391 control, marketing plan, 46–47 convenience products, 302 samples, 278–279 stores, 444 cooperative advertising, 515 cooperative relationships, channels, 390 core service, marketing strategy, 356 corporate blogs, 481 corporate social responsibility arguments against, 77 arguments for, 77–78 cost of ignoring, 80–81 growth of, 78–80 overview, 75–76 pyramid, 76 stakeholder theory, 75–76 sustainability, 75 cosmetics survey, 3, 19 cost competitive advantage, 37–38 per contact, 492–493, 520 pricing, 580–585 counseling, exporting, 143 counterfeits, 146 countertrade, global marketing, 155 coupons, 539–540 cover letter, employment, 24–25 creative decisions, advertising, 507–513 credence quality, 351 crisis management, public relations, 527–528 cross-selling, 645–646 cross-tabulation, 280 culture See also global; global marketing consumer buying decisions, 176–180 global marketing, 130–132 cumulative quantity discount, 607 customers business marketing, 211–213 campaign management, 644 capturing data, 638–639 compiled list, 640 cross-selling, 645–646 customer-centric, 635 data mining, 641–642 data warehouse, 639–640 database, 640 distribution channels, 647–648 ethics, privacy, 648 identifying best, 641–644 integrating data, 639–641 integration, supply chain management, 410–411 interactions, 636–638 Internet, privacy, 649 lifetime value analysis (LTV), 643 new product ideas, 327 new product trials, 647 number of, business and consumer markets, 216 oriented personnel, 10–11 SU BJ E C T I ND E X concentrated targeting, 246–248 concept test, new products, 329 conflict, channel, 391–393 consideration set, 170 consultants, new product ideas, 328–329 consultative selling, 547–548 consumer advertising, effect on, 503–505 bases, market segmentation, 233–243 behavior, defined, 166 buying decisions (See consumer buying decisions) Consumer Credit Protection Act, 113 Consumer Product Safety Act, 113 decision-making process, 166–171 (See also consumer buying decisions) education, public relations, 525 generated media, 286 income, marketing environment, 106–107 markets, contrasted with business markets, 214–218 penalties, 615–616 privacy, marketing environment, 114–116 products, 301–303 products, channels, 381–382 sales promotion, 537, 539–544 consumer buying decisions age, 188–189 anatomy of a buying decision, car, 204 attitudes, 197–199 beliefs, 197–199 blogs, 185–186 case study, 202–203 China, 184 company clip, 203 cultural factors, 176–180 decision-making process, 166–171 ethics, 202 evaluation of alternatives, buying behavior, 166–167, 170–171 exercises, 201–202 family, 186–187 family life-cycle stage, 188–189 gender, 188 individual influences, 187–191 influencing factors, overview, 175–176 information search, 166–167, 168–170 involvement, 172–175 learning, 195–197 lifestyle, 189–191 marketing strategy and involvement level, 175 Maslow’s hierarchy of needs, 194–195 motivation, 194–195 need recognition, 166–168 opinion leaders, 185–186 overview, 166 perception, 191–194 personality, 189–191 postpurchase behavior, 171–172 psychological influences, 191–199 purchase, buying behavior, 166–167, 170–171 reference groups, 182–184 review, 199–201 self-concept, 189–191 social class, 180–182 social influences, 182–187 socialization process, 186 stimulus generalization, 196 subject index SU BJ E C T I ND E X 700 development process, new products, 326–333 diffusion, new products, 336–339 direct channels, 381–384 foreign investment, 147 mail, 449 marketing, 449–450 retailing, 448–449 discount stores, 444–447 discounts, pricing, 607–608 discrepancies, channels, 377 discrimination, price, 605 disintermediation, 208–209 distribution channels (See channels) global marketing, 152–154 intensity, channels, 387–388 nonprofit organization marketing, 365–366 pricing, 586–587 resource planning (DRP), 423–424 retailing (See retailing) services, marketing strategy, 357–359 strategies, marketing mix, 45 structure, business and consumer markets, 216 supply chains (See supply chains, managing) distributors channels, 383 new product ideas, 328 diversification, strategic planning, 41 division of labor, channels, 376–377 Do Not Call Law, 113 dog, 42 Doha Round, 135–136 drug advertising, ethics, 99 drugstores, 443–444 dual distribution channels, 384 dumping, global marketing, 154–155 E e-commerce, 206, 451–452, 464 e-mail spamming, 484 e-tailing, 451–452 early adopters, new products, 336–337 early majority, new products, 337 economic factors, marketing environment, 106–108, 132–133 education, consumer, 525 elasticity of demand, 574–577 electronic commerce, defined, 206 data interchange (EDI), 422 distribution, supply chain management, 430–431 retailing, 450–452 empathy, services, 353 employees See personnel employment agencies, 22 careers in marketing, 20–21 college placement office, 22 cover letter, 24–25 finding jobs, 22–23 Internet, 22 interviews, 25–30 job-hunting expenses, 22 marketing yourself, 21–30 outsourcing jobs, 126–127, 420 preapproach, 23–24 promotions, 30 résumé, 23–24 working conditions, 30 empowerment customer relationships, 635 personnel, 11 encoding, communication, 478–479 environment, marketing African Americans, 102–103 American mobility, 100 American values, 90 Asian Americans, 103–105 baby boomers, 97–99 case study, 120–122 changing families, 91–92 company clip, 122 competition, 116–117 component lifestyles, 90–91 consumer income, 106–107 consumer privacy, 114–116 demographic factors, 93–100, 140–141 economic factors, 106–108, 132–133 ethnic markets, 100–105 exercises, 120 external, overview, 88–90 federal legislation, 112–116 Generation X, 96–97 Generation Y, 95–96 global innovation, 109–110, 111 global marketing, 130–141 Hispanic Americans, 100–102 identity theft, 115–116 inflation, 107–108 lack of time, 92 legal factors, 110–116, 134–135 management, 89–90 multiculturalism, 105 natural resources, 141 political factors, 110–116, 133–140 population, 93 purchasing power, 107 recession, 108 regulatory agencies, 112–116 review, 118–119 social factors, 90–92 state laws, 112–116 survey, 88, 122 technological factors, 109–110, 132–133 teens, 94 tweens, 93–94 women’s income, 106–107 women’s roles, 91–92 environmental issues ethics, 74 packaging, 314 environmental scanning, 36, 89 errors, sampling, 278–279 escalator pricing, 618–619 ethics advertising, 531 business and morality, 67–68 business marketing, 223, 224, 228 case study, 85–86 cause-related marketing, 81–82 channels, 392, 400 company clip, 86 consumer buying decisions, 202 corporate social responsibility, 75–81 cultural differences, 71–74 customer privacy, 648 customer relationships, 652 decision making, 68–69 developing countries, 73–74 drug advertising, 99 environmental issues, 74 exercises, 84–85 Foreign Corrupt Practices Act, 71–73 global marketing, 135, 159 guidelines, 69–71 market segmentation, 257 marketing research, 294–295 morals, 67–68 new products, 345 overview, 63–64 packaging, 314 personal selling, 556–557, 561–562 pricing, 594, 603–607, 612, 624 products, 319 promotion, 484, 498 public relations, 531 retailing, 468 review, 83–84 self-referral, 612 services, 370 social glue, 62–63 stakeholder theory, 75–76 supply chain management, 435 survey, 82, 86 sustainability, corporate social responsibility, 75 target markets, 257 theories, 64–66 tobacco industry, 74 training, 69–71 U.S practices, 73 World’s Most Ethical Companies Award winners, 72 ethnic markets See also global; global marketing market segmentation, 238–239 marketing environment, 100–105 ethnographic marketing research, 276–277 European Union (EU), 138–140 evaluation buying behavior, business marketing, 221–222 marketing plan, 46–47 evaluation of alternatives, buying behavior, 166–167, 170–171 everyday low pricing (EDLP), 460 evoked set, 170 exchange, defined, 3–4 exchange control, 134 exchange rates, global marketing, 154 exclusive distribution, 388 executive interviews, 272 exercises advertising, 530–531 business marketing, 227–228 channels, 399–400 consumer buying decisions, 201–202 customer relationships, 652 ethics, 84–85 global marketing, 158–159 market segmentation, 256–257 marketing, overview, 17–18 marketing environment, 120 marketing plans, 50–51 marketing research, 294–295 new products, 345 personal selling, 561 pricing, 593–594, 624 products, 319 promotion, 497–498 F G gap model, services, 353–355 gender See also women consumer buying decisions, 188 market segmentation, 236–238 General Agreement on Tariffs and Trade (GATT), 136 generating leads, personal selling, 549–550 Generation X market segmentation, 235–236 marketing environment, 96–97 Generation Y market segmentation, 235–236 marketing environment, 95–96 generator stores, 458 generic products versus branded, 307–309 names, 311–312 geodemographic segmentation, 241–242 geographic pricing, 610 segmentation, 234 G.I Generation, market segmentation, 236 global advertising strategies, 512 brand, defined, 306 channels, 394–395 competition, marketing environment, 117 globalization, benefits of, 127 globalization, fear of, 126–127 innovation, marketing environment, 109–110, 111 issues, branding, 315–316 issues, new product development, 334–336 issues, packaging, 315–316 marketing (See global marketing) retailing, 457 supply chain management, 420, 428–429 global marketing anatomy of a multinational corporation, 163 benefits of globalization, 127 case study, 159–160 Central America Free Trade Agreement (CAFTA), 137–138 company clips, 160 contract manufacturing, 145–146 countertrade, 155 culture, 130–132 defined, 124 demographic factors, 140–141 direct foreign investment, 147 distribution, 152–154 Doha Round, 135–136 dumping, 154–155 economic factors, 132–133 ethics, 135, 159 European Union (EU), 138–140 exchange rates, 154 exercises, 158–159 exporting, 142–144 fear of globalization, 126–127 franchising, 144–145 General Agreement on Tariffs and Trade (GATT), 136–137 global vision, 124 individual firms, 141–147 International Monetary Fund (IMF), 140 Internet, 155–156 joint ventures, 146–147 legal factors, 134–135 licensing, 144–145 marketing environment, 130–141 marketing mix, 148–155 multinational corporations, 128–130 natural resources, 141 North American Free Trade Agreement (NAFTA), 136–137 overview, 124–125 place, 152–154 political structure, 133–140 pricing, 154–155 product adaptation, 151 product and promotion, 148–152 product invention, 149–151 promotion adaptation, 151–152 review, 156–158 risk levels, 142 services, 363 standardization, 129–130, 148–149 survey, 124, 160 technological factors, 132–133 United States, importance to, 125–126 Uruguay Round, 135–136 World Bank, 140 World Trade Organization (WTO), 136 glossary, 658–671 goal, organization, 13 Golden Generation, market segmentation, 236 government business marketing customers, 212–213 regulation, marketing environment, 110–116 Gramm-Leach-Bliley Act, 116, 648 gray marketing, 395 green marketing, 6–8 gross margin, 441 group dynamics, 272–273 growth stage, new products, 341, 491, 585 guaranteed price matching, 589 H Hart-Scott-Rodino Act, 112 Health Insurance Portability and Accountability Act, 116 heterogeneity, services, 352 hierarchy of needs, Maslow’s, 194–195 Hispanic Americans, marketing environment, 100–102 Homeland Security Act, 113 horizontal conflict, channel, 391–392 horizontal price fixing, 604 I idea generation, new products, 327–329 ideal self-image, 190 identifying best customers, 641–644 identity theft, 115–116 implementation, marketing plan, 45–46 in-home personal interviews, 270 income, market segmentation, 238 independent marketing audit, 47 independent retailers, 440 India, global marketing, 132–133 individual brands versus family brands, 310 individual firms, global marketing, 141–147 701 subject index factory outlets, 446–447 failure, new products, 333–334 family brands versus individual brands, 310 changing, marketing environment, 91–92 consumer buying decisions, 186–187 life-cycle stage, consumer buying decisions, 188–189 life-cycle stage, market segmentation, 239–241 Federal Food and Drug Act, 113 Federal Hazardous Substances Act, 113 federal legislation, marketing environment, 112–116 Federal Trade Commission Act, 112 Federal Trade Commission (FTC), 113–114 feedback, communication, 480–481 field service firm, 280 Filipino Americans, marketing environment, 103 Financial Services Modernization Act, 116 fine-tuning pricing, 607–616 first stage multinationals, 128 fixed cost, 580 flexibility, media, 520–521 flexible pricing, 611 flighted media schedule, 522 floating exchange rates, 154 fluctuating demand, 215 FOB origin pricing, 610 focus groups, 272–273, 284–285 follow-up, personal selling, 553–554 Food and Drug Administration (FDA), 114 Foreign Corrupt Practices Act, 71–73 foreign investment, direct, 147 fourth stage multinationals, 128 fragmentation, media, 521 frame errors, 279 franchisee, 452 franchises, 440–441, 452–454 franchising, global marketing, 144–145 franchisor, 452 Freestanding Inserts (FSIs), 539 freestanding stores, 458 freight absorption pricing, 610 frequency, 520 frequent buyer programs, 540–541 full-line discount stores, 444–445 functional discount, 607 SU BJ E C T I ND E X public relations, 531 retailing, 467–468 services, 369–370 strategic planning, 50–51 supply chain management, 434–435 target markets, 256–257 experience curves, 38 experience quality, 351 experiments, marketing research, 277–278 exporting export agent, 144 export broker, 144 global marketing, 142–144 intermediaries, 144 U.S Commercial Service assistance, 143–144 extensive decision making, 172 external information search, 168 external marketing environment See environment, marketing extreme-value retailing, 445 subject index SU BJ E C T I ND E X 702 industrial products, 301–303, 382–384 inelastic demand, 215, 574–577 inflation marketing environment, 107–108 pricing, 618–620 influencers, 186 infomercials, 516 information search, buying behavior, 166–167, 168–170 informational labeling, 315 initiators, 186 innovation, new products, 336–339 inseparability, services, 351 installations, business marketing, 218 institutional advertising, 505 institutions, business marketing, 212–213 intangibility, services, 351 integrated marketing communications (IMC), 488–490, 500 Integrated relationships, channels, 389–390 integrating data, customers, 639–641 integration, supply chain management, 406–411 intensive distribution, 387 interactions, customer relationships, 636–638 interactivity, retailing, 463–464 intermediaries, channels, 379–381 internal information search, 168 internal marketing, services, 362 internal operations integration, supply chain management, 409–410 International Monetary Fund (IMF), 140 international partners, locating, 143 Internet advertising, 514, 517–519 behavioral targeting, 287, 358 business marketing, 206–209 Channel M2, online focus groups, 285 client oral presentations, 288 client/research supplier collaboration, 287 consumer generated media, 286 customer privacy, 649 data management, 287 employment, 22 global marketing, 155–156 impact on marketing research, 281–288 impact on pricing, 587–589 observation marketing research, 287 online analysis, 287 online focus groups, 284–285 online market testing new products, 333 online retailing, 451–452 pirating, 395 preparing reports, 288 presenting reports, 288 public relations, 526–527 requests for proposals (RFPs), 287 research sample types, 283 sales promotion, 543–544 secondary market research data, 267–269 surveys, advantages, 282 interpersonal communication, 477 interviews employment, 25–30 marketing research, 270–273 introductory stage, new products, 341, 491, 585 invention, product, global marketing, 149–151 inventory control system, supply chain management, 423–424 investment direct foreign, 147 restrictions, multinational corporations, 129 involvement, consumer buying decisions, 172–175 items, product, 303–307 J Japanese Americans, marketing environment, 104 jobs See employment joint costs, pricing, 617 joint demand, defined, 215 joint ventures, 146–147 judgment samples, 279 K Kefauver-Harris Drug Amendment, 113 keiretsu, defined, 210 keystoning, 583 kiosks, 384 knockoffs, 146 knowledge management, customer relationships, 635–636 Korean Americans, marketing environment, 104 L labeling products, 314–315 laboratory market testing, 332–333 laggards, new products, 337 Lanham Act, 112 late majority, new products, 337 leader, channel, 391 leader pricing, 613 leads, personal selling, 549–551 Leagile supply chain management, 418–419 lean supply chain management, 417–419 learning consumer buying decisions, 195–197 customer relationships, 635 leasing, business and consumer markets, 217 legal factors, marketing environment, 110–116, 134–135 life cycles, product (PLC), 339–343, 348, 491–492, 585–586 life span, media, 521 lifestyle centers, 458 consumer buying decisions, 189–191 lifetime value analysis (LTV), 643 limited decision making, 172 lines, product, 303–307 location, retailing, 457–459 logistics channels, 380 information system, 421 supply chain management, 421–425 loss-leader pricing, 613 loyalty marketing programs, 540–541, 645 M m-commerce, 464 magazines, 514, 515 Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, 317 mail direct, 449 order, 449–450 surveys, 271–272 major equipment, business marketing, 218 malls intercept interviews, 270–271 marketing strategy, 458 management careers, 20 environment, marketing, 89–90 marketing philosophies, 4–14 marketing research, use of, 262–265 manufacturer’s brands versus private brands, 309–310 manufacturing contract, 145–146 flow management process, supply chain management, 414–415 mapping supply chains, 419–420 maquiladoras, 74 marginal cost (MC), 580 marginal revenue (MR), 583 markdown money, 608 market defined, 231 development, strategic planning, 40 factors, channels, 385–386 grouping, 134 opportunity analysis (MOA), 43–44 penetration, strategic planning, 40 research, exporting, 143 segmentation (See segmentation, market) share, 571–572 share, advertising, 503 share, competition for, 116–117 target (See target markets) marketing audit, 46–47 business (See business marketing) careers in, 20–21 case study, Netflix, 18–19 cause-related, 526 cause-related, ethics of, 81–82 channels (See channels) concept marketing philosophy, 5–6, 8–14 consumer involvement level, 175 controlled information source, 169 controversy, 161, 297, 372 critical thinking case, 373 defined, 3–4 direct, 449–450 environment (See environment, marketing) global (See global marketing) management philosophies, 4–14 marketing concept philosophy, 5–6, 8–14 marketing orientation philosophy, 5–6, 8–14 mix, critical thinking case, 162 mix, global marketing, 148–155 mix, marketing plan, 44–45 mix, promotion, role of, 476–477 mix, services, 355–360 myopia, 35 objectives, overview, 36–37 orientation marketing philosophy, 5–6, 8–14 overview, 3–4 message execution, advertising, 510–512 message transmission, 479 metrics, 426 mission statement, 34–35 mixes, product, 303–307 mobile e-commerce, 464 mobility, American, marketing environment, 100 moderators, online focus groups, 284 modified rebuy, business marketing, 223 moral relativists, 65 morals, ethics, 67–68 motivating sales force, 556–557 motivation, consumer buying decisions, 194–195 MRO items, business marketing, 219–220 multiculturalism, marketing environment, 105 multinational corporations anatomy of, 163 capital-intensive, 129 China, business in, 132–133 global marketing, 128–130 India, business in, 132–133 investment restrictions, 129 multiple channels, 384 multiplier effect, defined, 215 multisegment targeting, 246–247, 248–249 mystery shoppers, 275–276 N O observation marketing research, 275–276, 287 odd-even pricing, 613 off-price retailers, 446–447 offshoring, 126–127 one-to-one marketing, 250–251 online See also Internet auctions, 588–589 focus groups, 284–285 market testing, 333 retailing, 451–452 sales promotion, 543–544 open-ended questions, 273–274 operations-oriented pricing, 360 opinion leaders, consumer buying decisions, 185–186 optimizers, 244 order fulfillment process, supply chain management, 414 processing system, supply chain management, 422 to-cash cycle, 414 organic products, 314 original equipment manufacturers (OEMs), 211 outdoor media, 514, 517 outsourcing jobs, 126–127, 420 supply chain management, 430 P packaging, 312–315, 316, 322 partnering, channels, 393 patronage-oriented pricing, 360 penetration pricing, 601–602 perception, consumer buying decisions, 191–194 perceptual mapping, 252 performance management, supply chain management, 426–427 periodic marketing audit, 47 perishability, services, 352 personal care products survey, 3, 19 personal selling See also sales promotion case study, 562–563 closing the sale, 553 compensating sales force, 556–557 703 subject index National Environmental Policy Act, 113 natural resources, global marketing, 141 nature of buying, business and consumer markets, 217 need recognition, 166–168 needs assessment, personal selling, 551 negotiations business and consumer markets, 217 personal selling, 553 new buy, business marketing, 222 new products adopters, 336–339 business analysis, 329–330 case study, 346–347 categories of, 325–326 company clip, 347 concept test, 329 decline stage, 342–343 development, 330–331 development process, 326–333 diffusion, 336–339 ethics, 345 exercises, 345 global issues, 334–336 growth stage, 341 idea generation, 327–329 idea screening, 329 importance of, 324–325 innovation, 336–339 introductory stage, 341 maturity stage, 341–342 new-product strategy, 327 online market testing, 333 product category, 340 product life cycles (PLC), 339–343, 348 review, 344–345 simulated (laboratory) market testing, 332–333 simultaneous product development, 331 spread of, 336–339 success and failure, 333–334 survey, 324, 347 test marketing, 331–333 word-of-mouth, 338–339 newspapers, 514, 515 niche competitive advantage, 39 noise, media, 479, 521 nonaspirational reference groups, 183–184 noncorporate blogs, 481 noncumulative quantity discount, 607 nonmarketing-controlled information source, 168–169 nonprobability samples, 278–279 nonprofit organization marketing, 363–367, 369 nonstore retailing, 448–452 nontraditional channels, 384 norms, defined, 183–184 North American Free Trade Agreement (NAFTA), 136–137 North American Industry Classification System (NAICS), 213–214 SU BJ E C T I ND E X overview, company clip, 19 overview, exercises, 17–18 overview, review, 16–17 perception, consumer buying decisions, 192–194 plan (See marketing plan) production orientation philosophy, 4–5, reasons for studying, 14–15 research (See research, marketing) retailing, strategy, 454–463 sales orientation philosophy, 5, 8–14 societal marketing orientation philosophy, 6–8 unethical practices, 68 yourself, 21–30 marketing plan case study, 51–52 company clip, 52 competitive advantage, 37–40 e-motion example, 53–60 environmental scanning, 36 evaluation and control, 46–47 exercises, 50–51 implementation, 45–46 marketing mix, 44–45 mission statement, 34–35 objectives, 36–37 overview, 32–33 review, 48–50 strategic alternatives, 40–43 SWOT analysis, 35–36 target market strategy, 43–44 writing, 33–34 markup pricing, 581–583 Maslow’s hierarchy of needs, 194–195 mass communication, 477–478 mass customization, services, marketing strategy, 356–357 mass merchandising, 445 material integration, supply chain management, 409 materials-handling, supply chain management, 424–425 materials requirement planning (MRP), 423–424 maturity stage, new products, 341–342, 491, 586 measurement errors, 278 measurement integration, supply chain management, 408 media, advertising alternative media, 517–520 audience selectivity, 520 choosing, overview, 513 cost per contact, 520 frequency, 520 Internet, 514, 517–519 magazines, 514, 515 media planning, 513 mix, 520 newspapers, 514, 515 outdoor media, 514, 517 radio, 514, 515–516 reach, 520 scheduling, 522 selection considerations, 520–522 television, 514, 516 types, 514–520 medium, defined, 513 merchandise mix, 455–456 merchant wholesalers, channels, 379 subject index SU BJ E C T I ND E X 704 personal selling (continued) critical thinking case, 565 developing solutions, 551–552 ethics, 556–557, 561–562 evaluating sales force, 558 exercises, 561 follow-up, 553–554 generating leads, 549–550 motivating sales force, 556–557 needs assessment, 551 negotiation, 553 networking, 550 objections, handling, 552–553 overview, 546 preapproach, 551 promotion, 485 proposing solutions, 551–552 prospecting, 549–550 qualifying leads, 550–551 quotas, 555 recruiting sales force, 555–556 referrals, 550 relationship, 547–548 review, 560–561 sales force structure, 555 sales goals, 555 sales management, 554–558 sales process, 548–554 training sales force, 555–556 personality, consumer buying decisions, 189–191 personnel customer-oriented, 10–11 empowerment, 11 new product ideas, 327–328 retailing, 462–463 teamwork, 11 training, 10–11 persuasive labeling, 314–315 phantom freight, 610 pharmaceuticals, advertising, 99 philosophies, marketing management, 4–14 phishing, 484 pioneering advertising, 505–506 pirating, 395 place global marketing, 152–154 strategies, marketing mix, 45, 357–359, 365–366 planned obsolescence, 305–306 planning See also marketing plan; strategic planning defined, 32 integration, supply chain management, 408–409 survey, 32, 52 podcasts, 518–519 point-of-purchase (P-O-P) promotion, 543 Poison Prevention Labeling Act, 113 political factors, marketing environment, 110–116, 133–140 pop-up shops, 464 population, marketing environment, 93 portfolio matrix, 41–43 positioning, 251–254 postcampaign evaluation, advertising, 512–513 postponement, supply chain management, 418 postpurchase behavior, 171–172 power, channel, 391 power, pricing, 577–578 preapproach employment, 23–24 personal selling, 551 predatory pricing, 605–607 predictive modeling, 643–644 premiums, sales promotions, 540 presentation, retail store, 460–462 prestige pricing, 590–591 pricing bait, 613 base price, 607 basing-point, 610 break-even analysis, 583–585 bundling, 613–615, 620 case study, 594–595, 624–625 cash discount, 607 company clip, 595–596, 626 competition, 586 consumer penalties, 615–616 controversy, 627 cost determinant, 580–585 critical thinking case, 628 cumulative quantity discount, 607 delayed-quotation, 618 demand determinant, 573–578 demands, large customers, 590 discounts, 607–608 distribution strategy, 586–587 elasticity of demand, 574–577 escalator, 618–619 estimating demand, costs, profits, 599 ethics, 594, 603–607, 612, 624 evaluating price, business marketing, 222 exercises, 593–594, 624 fine-tuning, 607–616 flexible, 611 FOB origin, 610 freight absorption, 610 functional discount, 607 geographic, 610 global marketing, 154–155 goals, 598–599 guaranteed price matching, 589 inelastic demand, 574–577 inflation, 618–620 Internet, impact of, 587–589 joint costs, 617 leader, 613 legality, 603–607 loss-leader, 613 marginal revenue (MR), 583 markdown money, 608 market share, 571–572 markup, 581–583 noncumulative quantity discount, 607 nonprofit organization marketing, 366–367 objectives, 569–572 odd-even, 613 online auctions, 588–589 online shopping process, 587 penetration, 601–602 power, 577–578 predatory, 605–607 price, defined, 568 price and profit, 568–569 price and revenue, 568–569 price discrimination, 605 price fixing, 603–604 price lining, 611–612 price shading, 619–620 price skimming, 600–601 price strategy, 599–602 product life cycle stages, 585–586 product line pricing, 617, 629 professional services, 611 profit, 568–569 profit maximization, 569–570, 583 promotion strategy, 589 promotional allowance, 608 psychological, 613 quality, 590–591 quantity discount, 607 rebate, 608 recession, 620–621 relationships between products, 617 resale price maintenance, 604–605 retailing, 441, 459–460 return on investment (ROI), 570–571 revenue, 568–569 review, 591–593, 622–623 sales maximization, 572 satisfactory profits, 570 seasonal discount, 607 self-referral, 612 services, marketing strategy, 359–360 setting, steps, 598–603 shopping bots, 587–588 single-price tactic, 610–611 status quo, 572, 602–603 strategies, marketing mix, 45 survey, 568, 596, 598, 626 targeting technology, 579 trade allowance, 608 trade discount, 607 two-part, 615 unbundling, 614–615, 620 underpricing, 609 unfair trade practices, 603 uniform delivered, 610 unitary elasticity, 575 value-based, 609, 620 variable, 611 yield management systems (YMS), 578–579 zero percent financing, 608 zone, 610 primary data, marketing research, 269–278 primary reference groups, 183–184 privacy consumer, marketing environment, 114–116 customers, 648–649 private brands, 309–310, 456 proactive social responsibility, 78–80 probability samples, 278–279 problem child, 42 problem tracking, marketing research, 263–264 processed materials, business marketing, 219 procurement, supply chain management, 421–422 producers business marketing, 211 factors, channels, 386–387 production orientation marketing philosophy, 4–5, products adaptation, global marketing, 151 advertising, 505–507 anatomy of a packaging decision, 322 pull strategy, promotion, 493–494 pulsing media schedule, 522 purchasing buying behavior, 166–167, 170–171 decisions, reinforcing, 646 power, 107 volume, business and consumer markets, 216 push money, 544 push strategy, promotion, 493–494 pyramid of corporate social responsibility, 76 Q qualifying leads, personal selling, 550–551 quality evaluating, business marketing, 221–222 services, 352–355 quantity, discrepancies, 377 quantity discount, 607 question mark, 42 questionnaire design, marketing research, 273–275 quota samples, 279 quotas imports, 134 sales, 555 R radio, 514, 515–516 radio-frequency identification (RFID), 429 random errors, 279 samples, 278 raw materials, business marketing, 218 R&D, new product ideas, 328–329 reach, 520 real self-image, 190 real-time online focus groups, 284 rebates, 539–540, 608 receiver, communication, 479–480 recency-frequency-monetary analysis (RFM), 642–643 recession marketing environment, 108 pricing, 620–621 reciprocity, business and consumer markets, 217 recruited panels, Internet, 283 sample, Internet, 283 recruiting sales force, 555–556 recycling products, packaging, 314 reference groups, consumer buying decisions, 182–184 regional malls, 458 regulatory agencies, marketing environment, 112–116 reintermediation, 209 relationship channels, managing, 390–393 channels, types, 388–390 commitment, defined, 210 customer, identifying, 635–636 customer, management, 632–635 integration, supply chain management, 407 marketing, business, 209–211 marketing, overview, 10–11 marketing, services, 361–362 selling, 547–548 705 subject index maximization, 569–570, 583 price, 568–569 promotion See also advertising; communication; personal selling; public relations adaptation, global marketing, 151–152 advertising, 484 AIDA concept, 486–488 available funds, 492–493 buying decision, type of, 492 case study, 498–499 communication process, 485–486 company clip, 499 cost per contact, 492–493 e-mail spam, 484 ethics, 484, 498 exercises, 497–498 goals, 482–483 informing goal, 482–483 integrated marketing communications (IMC), 488–490, 500 mix, 483–486, 490–493 nature of product, 490–491 nonprofit organization marketing, 366 personal selling, 485 persuading goal, 483 product, global marketing, 148–152 products, packaging, 313 promotional allowance, 608 promotional methods, business and consumer markets, 218 promotional strategy, defined, 476 pull strategy, 493–494 push strategy, 493–494 reminding goal, 483 review, 494–496 role in marketing mix, 476–477 sales (See sales promotion) stage in product life cycle, 491–492 strategies, marketing mix, 45, 359 strategies, pricing, 589 strategy, retailing, 456–457 survey, 476, 499 target market characteristics, 492 promotions, employment, 30 prospecting, 549–550 psychographics, 190–191, 241–242 psychological influences, consumer buying decisions, 191–199 pricing, 613 Public Health Cigarette Smoking Act, 113 Public Health Smoking Act, 113 public relations See also advertising; communication; promotion; selling case study, 531–532 cause-related marketing, 526 company clip, 533 consumer education, 525 ethics, 531 exercises, 531 new-product publicity, 524 overview, 523–524 product placement, 524–525 promotion, 484–485 review, 529–530 sponsorships, 525–526 unfavorable publicity, 527–528 Web sites, 526–527 public service advertisements (PSAs), 366 publicity, defined, 523 SU BJ E C T I ND E X assortment, 455–456 branding, 307–312 business, channels, 382–384 case study, 320–321 cobranding, 310–311 company clip, 321 consumer, channels, 381–382 convenience, 302 defined, 301 development, strategic planning, 40 development process, supply chain management, 415–416 differentiation, 251–252 ethics, 319 exercises, 319 factors, channels, 385–386 generic versus branded, 307–309 global issues, branding, 315–316 global issues, packaging, 315–316 individual brands versus family brands, 310 industrial, channels, 382–384 invention, global marketing, 149–151 items, 303–307 joint costs, 617 labeling, 314–315 line contraction, 306 line depth, 304–305 line extensions, 306 line pricing, 617, 629 lines, 303–307 management, careers, 21 marketing strategy, services, 355–357 mix width, 304 mixes, 303–307 modifications, 305 nature of, 490–491 new (See new products) new, publicity, 524 nonprofit organizations, 365 offering, retail, 455–456 packaging, 312–315, 316 placement, 524–525 planned obsolescence, 305–306 private brands versus manufacturer’s brands, 309–310 product life cycles (PLC), 339–343, 348, 491–492 product/service differentiation competitive advantage, 39 and promotion, global marketing, 148–152 repositioning, 306 review, 317–319 services (See services) shopping, 302–303 specialty, 303 stage, life cycle, 491–492, 585–586 strategies, marketing mix, 44–45 survey, 301, 321 and trade name franchising, 453 trademarks, 311–312 trial, new customers, 647 types, business marketing, 218–220 types of, 301–303 universal product codes (UPCs), 315 unsought, 303 warranties, 317 professional services pricing, 611 profit competition for, 116–117 subject index SU BJ E C T I ND E X 706 reliability, services, 352–353 renting Internet panels, 283 repositioning, 253–254, 306 requests for proposals (RFPs), 287 resale price maintenance, 604–605 research, marketing analyzing data, 280 behavioral targeting, 287 careers, 21 case study, 295–296 changing market, 264–265 Channel M2, online focus groups, 285 collecting data, 280 company clip, 296 competitive intelligence (CI), 289–291 consumer generated media (CGM), 286 controversy, 297 critical thinking case, 298 cross-tabulation, 280 customers, retaining, 264 database marketing, 262 decision making, management, 263 decision support systems, 261–262 decision support systems, review, 291 design, 269 ethics, 294–295 ethnographic, 276–277 exercises, 294–295 experiments, 277–278 follow-up, 281 Internet, client oral presentations, 288 Internet, client/research supplier collaboration, 287 Internet, data management, 287 Internet, impact of, 281–288 Internet, online analysis, 287 Internet, secondary data, 267–269 Internet sample types, 283 Internet survey advantages, 282 management decision problem, defining, 266–267 management uses, 262–265 mystery shoppers, 275–276 need for, 288–289 objective, defining, 266 observation, 275–276, 287 online focus groups, 284–285 preparing reports, 280–281, 288 presenting reports, 280–281, 288 primary data, 269–278 problem, defining, 266 problem tracking, management, 263–264 project steps, 265–281 questionnaire design, 273–275 requests for proposals (RFPs), 287 review, 291–293 role of, 262–265 sampling plans, 278–279 scanner-based, 288 secondary data, 267–269 survey, 261, 296 survey research, 270–273 technological, marketing environment, 109 research and development, new product ideas, 328–329 resellers, business marketing, 211–212 response function, advertising, 503 response list, customers, 640 responsiveness, services, 353 restaurants, 447 résumé, 23–24 retailing atmosphere, 460–462 automatic vending, 448 careers, 20 case study, 468–470 chain stores, 440–441 classifications, 439–441 company clip, 470 controversy, 471 convenience stores, 444 critical thinking case, 472 customer service, 462–463 department stores, 441–442 direct, 448–449 direct marketing, 449–450 discount stores, 444–447 drugstores, 443–444 electronic, 450–452 ethics, 468 exercises, 467–468 franchises, 440–441, 452–454 global, 457 grocery store layout, 473 gross margin, 441 interactivity, 463–464 level of service, 440 location, 457–459 m-commerce, 464 marketing strategy, 454–463 mix, 454–463 new developments, 463–465 nonstore, 448–452 ownership, 440–441 personnel, 462–463 pop-up shops, 464 presentation, store, 460–462 price, 441, 459–460 product assortment, 440–441 product offering, 455–456 promotion strategy, 456–457 restaurants, 447 retailers, channels, 379, 382 review, 465–467 role of, 439 scrambled merchandising, 443 specialty stores, 442 store in a store, 465 supermarkets, 442–443 survey, 439, 470 target markets, 454–455 types of operations, 441–447 retaining loyal customers, 645 return on investment (ROI), 570–571 returns management process, supply chain management, 416 revenue, price, 568–569 revenue-oriented pricing, 360 review advertising, 528–530 business marketing, 225–227 channels, 397–399 consumer buying decisions, 199–201 customer relationships, 650–651 decision support systems (DSS), 291 ethics, 83–84 global marketing, 156–158 market segmentation, 254–256 marketing, overview, 16–17 marketing environment, 118–119 marketing plans, 48–50 marketing research, 291–293 new products, 344–345 personal selling, 560–561 pricing, 591–593, 622–623 products, 317–319 promotion, 494–496 public relations, 529–530 retailing, 465–467 sales promotion, 559–561 services, 368–369 strategic planning, 48–50 supply chain management, 432–434 target markets, 254–256 Robinson-Patman Act, 112, 605 role specificity, supply chain management, 407 routine response behavior, 172 RSS, 518 S sales careers, 20 maximization, 572 orientation marketing philosophy, 5, 8–14 sales promotion See also advertising; personal selling; promotion case study, 562–563 company clip, 563 consumer, 537, 539–544 contests, 541–542 controversy, 564 coupons, 539–540 defined, 485 free merchandise, 545 frequent buyer programs, 540–541 loyalty marketing programs, 540–541 objectives, 537–538 online, 543–544 overview, 537 point-of-purchase (P-O-P), 543 premiums, 540 push money, 544 rebates, 539–540 review, 559–561 sampling, 542–543 store demonstrations, 545 survey, 563 sweepstakes, 541–542 trade, 544–545 trade allowances, 544 trade association meetings, 545 training, 544–545 sample, defined, 278 sampling, sales promotions, 542–543 sampling errors, 279 sampling plans, marketing research, 278–279 satisficers, 244 scaled-response questions, 273–274 scanner-based marketing research, 288 scheduling, media, 522 scrambled merchandising, 443 screened Internet samples, 283 screening, new products, 329 search engine ads, 518 search quality, 351 seasonal discount, 607 media schedule, 522 second stage multinationals, 128 stores, types of, 441–447 storing data, customers, 639–641 products, packaging, 313–314 straight rebuy, business marketing, 223 strategic alliance channels, 385 alliances, business marketing, 209–211 alternatives, marketing plan, 40–43 business unit (SBU), 35 strategic planning case study, 51–52 company clip, 52 defined, 32 effective, 47–48 environmental scanning, 36 exercises, 50–51 marketing plan, competitive advantage, 37–40 marketing plan, e-motion example, 53–60 marketing plan, evaluation and control, 46–47 marketing plan, implementation, 45–46 marketing plan, marketing mix, 44–45 marketing plan, mission statement, 34–35 marketing plan, objectives, 36–37 marketing plan, overview, 32–33 marketing plan, strategic alternatives, 40–43 marketing plan, SWOT analysis, 35–36 marketing plan, target market strategy, 43–44 marketing plan, writing, 33–34 overview, 32 review, 48–50 stratified samples, 279 strip centers, 458 subcultures, 179–180 success, new products, 333–334 supercenters, 445 supermarkets, 442–443 supplementary services, marketing strategy, 356 supplier relationship management process, supply chain management, 415 supplies, business marketing, 219–220 supply, defined, 573 supply chains, managing ABC segmentation, 410–411 agile supply chain management, 418–419 automatic replenishment programs, 424 Balanced Scorecard Approach, 427 benefits of, 406 business processes, 411–416 case study, 435–436 commercialization process, 415–416 company clips, 437 computer technology, 429–430 customer integration, 410–411 customer relationship management process, 412–413 customer service management process, 413 demand management process, 413–414 distribution resource planning (DRP), 423–424 707 subject index inseparability, 351 intangibility, 351 internal marketing, 362 marketing mixes, 355–360 nonprofit organization marketing, 363–367 perishability, 352 price strategy, 359–360 product strategy, 355–357 promotion strategy, 359 quality, 352–355 relationship marketing, 361–362 reliability, 352–353 responsiveness, 353 review, 368–369 search quality, 351 supplier integration, supply chain management, 409 survey, 350, 371 tangibles, 353 Sherman Act, 112 shop-at-home networks, 450–451 shopping bots, 587–588 centers, 458 products, 302–303 simple random samples, 279 simulated (laboratory) market testing, 332–333 simultaneous product development, 331 single-price tactic, 610–611 situation analysis, marketing plan, 35–36 skimming, price, 600–601 snowball samples, 279 social class, consumer buying decisions, 180–182 factors, marketing environment, 90–92 glue, 62–63 influences, consumer buying decisions, 182–187 responsibility, corporate (See corporate social responsibility) socialization process, 186 societal marketing orientation marketing philosophy, 6–8 solutions, personal selling, 551–552 sourcing, supply chain management, 421–422 spamming, 484 spatial discrepancies, 377 specialization, channels, 376–377 specialty discount stores, 446 products, 303 stores, 442 sponsorships, 525–526 spread of new products, 336–339 stakeholder theory, corporate social responsibility, 75–76 standardization global marketing, 129–130, 148–149 service marketing, 356–357 star, 42 state laws, marketing environment, 112–116 status quo pricing, 572, 602–603 stealth marketing, 520 stickiness, 207 stimulus, defined, 167 stimulus generalization, 196 store in a store, 465 SU BJ E C T I ND E X secondary data, marketing research, 267–269 reference groups, 183–184 security, supply chain management, 431 segmentation, customers, 642 segmentation, market See also target markets age, 234–236 bases, business markets, 243–244 bases, consumer, 233–243 benefit, 242 case study, 257–258 company clip, 258–259 demographic, 234–241 ethics, 257 ethnic, 238–239 exercises, 256–257 family life-cycle, 239–241 gender, 236–238 geodemographic, 241–242 geographic, 234 importance of, 232 income, 238 market segment, defined, 231 overview, 231–232 psychographics, 241–242 review, 254–256 steps, 244–246 successful, criteria for, 232–233 survey, 231, 259 usage-rate, 243 variables, 233–243 women, 236–238 selective distortion, 192 distribution, 387–388 exposure, 191 retention, 192 self-concept, consumer buying decisions, 189–191 self-referral, 612 selling See also advertising; communication; personal selling; promotion against the brand, 586–587 promotion, 485 sender, communication, 478–479 seniors, market segmentation, 235–236 service customer, improving, 648 evaluating, business marketing, 222 level of, retail, 440 marks, 311–312 professional, pricing, 611 services assurance, 353 behavioral targeting, 358 business marketing, 220 case study, 370–371 channels, 395–396 company clip, 371 credence quality, 351 distribution, 357–359 empathy, 353 ethics, 370 exercises, 369–370 experience quality, 351 gap model, 353–355 global issues, 363 goods, distinguished from, 350–352 heterogeneity, 352 importance of, 350 SU BJ E C T I ND E X supply chains, managing (continued) electronic data interchange (EDI), 422 electronic distribution, 430–431 ethics, 435 exercises, 434–435 global, 420, 428–429 integration, 406–411 internal operations integration, 409–410 inventory control system, 423–424 Leagile supply chain management, 418–419 lean supply chain management, 417–419 logistics, 421–425 manufacturing flow management process, 414–415 mapping, 419–420 material integration, 409 materials-handling, 424–425 materials requirement planning (MRP), 423–424 measurement integration, 408 order fulfillment process, 414 order processing system, 422 outsourcing, 430 overview, 404–406 performance management, 426–427 planning integration, 408–409 postponement, 418 procurement, 421–422 product development process, 415–416 radio-frequency identification (RFID), 429 relationship integration, 407 returns management process, 416 review, 432–434 security, 431 service supplier integration, 409 sourcing, 421–422 strategies, 417–419 supplier relationship management process, 415 survey, 404, 437 systems approach, 406 team, 421 technology integration, 408–409 transportation, 425 warehousing, 424–425 survey research, 270–273 sustainability, corporate social responsibility, 75 sustainable competitive advantage, 39 sweepstakes, 541–542 SWOT analysis, marketing plan, 35–36 systematic marketing audit, 47 systematic samples, 279 T subject index tangibles, services, 353 target markets See also segmentation, market bases, positioning, 252–253 cannibalization, 249 case study, 257–258 company clip, 258–259 concentrated targeting, 246–248 708 customer relationships, 646 defined, 88 ethics, 257 exercises, 256–257 marketing philosophy, 12–13 multisegment targeting, 246–247, 248–249 nonprofit organizations, 364–365 one-to-one marketing, 250–251 perceptual mapping, 252 positioning, 251–254 repositioning, 253–254 retailing, 454–455 review, 254–256 selection strategies, 246–249 strategy, 43–44 undifferentiated targeting, 246–247 targeting, behavioral, 287, 358 targeting technology, 579 tariffs, 134 teamwork, personnel, 11 technology customer relationship management (CRM), 632–635 integration, supply chain management, 408–409 marketing environment, 109–110, 132–133 teens market segmentation, 234–236 marketing environment, 94 telemarketing, 450 telephone interviews, 271 television, 514, 516 temporal discrepancies, 377 terms, 658–671 test marketing new products, 331–333 third party logistics firm (3PL), 414 third shift, 146 third stage multinationals, 128 time, lack of, 92 time-extended online focus groups, 285 tobacco industry, ethics, 74 trade agreement, 134 allowance, 544, 608 discount, 607 events, exporting, 143–144 global, fear of, 126–127 sales promotion, 544–545 trademarks, 311–312 training customer-oriented personnel, 10–11 ethics, 69–71 sales force, 555–556 transportation, supply chain management, 425 trust, defined, 210 tweens market segmentation, 234–235 marketing environment, 93–94 two-part pricing, 615 U unbundling, pricing, 614–615, 620 underpricing, 609 undifferentiated targeting, 246–247 unethical practices, marketing, 68 unfair trade practices, 603 unfavorable publicity, 527–528 uniform delivered pricing, 610 unique selling proposition, 509–510 unitary elasticity, 575 universal product codes (UPCs), 315 unsolicited e-mail, 484 unsought products, 303 Uruguay Round, 135–136 usage-rate segmentation, 243 utilitarian ethical theory, 64–65 V value-based pricing, 609, 620 values American, 90 consumer buying decisions, 176–180 variable cost, 580 pricing, 611 variables, market segmentation, 233–243 VCRs, 348 vending automatic, 448 machines, 384 vendors, new product ideas, 328 vertical conflict, channel, 392–393 video game advertising, 519 Vietnamese Americans, marketing environment, 104 virtue ethics, 65–66 vision, global, 124 W want, defined, 167 War Generation, market segmentation, 236 warehouse membership clubs, 446 warehousing, supply chain management, 424–425 warranties, products, 317 Web sites, public relations, 526–527 webinars, 547–548 Wheeler-Lea Act, 112 wholesalers channels, 382 merchant, channels, 379 width, product, 456 women consumer buying decisions, 188 income, marketing environment, 106–107 market segmentation, 236–238 roles, marketing environment, 91–92 word-of-mouth, new products, 338–339 working conditions, employment, 30 World Bank, 140 World Trade Organization (WTO), 136 World’s Most Ethical Companies Award winners, 72 Y yield management systems (YMS), 578–579 Z zero percent financing, 608 zone pricing, 610 Now A N AT O M Y O F A Multinational Company Starbucks Starbucks has coffee shops in 27 different countries Strategic Fit Australia, Austria, Beijing, Brazil, Canada, China, Czech Republic, France, Germany, Greece, Hawaii, Hong Kong, Ireland, Japan, Malaysia, Mexico, New Zealand, Peru, Shanghai, Singapore, South Korea, Spain, Switzerland, Taiwan, Thailand, Turkey, United Kingdom (AP Photo/Moises Castillo) Starbucks chooses locations with shared values and strategic fit Local Culture Familiar logo Customer Experience Adapting to local culture helps maintain global business Familiar logo ensures global marketing standardization Starbucks maintains control of its customer experience through joint ventures and company-owned operations That’s Marketing! NEW! “Anatomy of” Feature Each part in the Tenth Edition of Marketing now includes a unique new graphic that vividly illustrates a particular part concept Each “Anatomy of” is set on a full page and uses exceptional photography to show how the elements of a concept connect Highlighting a multinational company, the buying decision, packaging design, product life cycle, store layout, integrated marketing campaign, and more, these “Anatomies” help you visualize the connection between marketing concepts and your real-world application A N AT O M Y O F A Packaging Decision Barbie Mattel updated Barbie’s packaging to keep her fresh and familiar Familiar brand mark Heat- and impact-tested packaging protects Barbie from damage “Anatomy of” features are integrated throughout the book: Part 1—Chapter 5: Developing a Global Vision Anatomy of a Multinational Company • Starbucks Part 2—Chapter 6: Consumer Decision Making Anatomy of a Buying Decision • Car Part 3—Chapter 10: Product Concepts Anatomy of a Packaging Decision • Barbie Chapter 11: Developing and Managing Products Anatomy of a Product Life Cycle • VCRs Part 4—Chapter 13: Marketing Channels Anatomy of a Marketing Channel • Electronics Chapter 15: Retailing Anatomy of a Store Layout • Grocery Part 5—Chapter 16: Promotional Planning for Competitive Advantage Anatomy of an Integrated Marketing Campaign • Indiana Jones movie Chapter 17: Advertising and Public Relations Anatomy of an Ad • Yoplait Part 6—Chapter 20: Setting the Right Price Anatomy of Product Line Pricing • McDonald’s Part 7—Chapter 21: Customer Relationship Management Anatomy of a Customer Relations Decision • Sports team ... itself 5.1 Part Distribution Decisions LO Explain channel leadership, conflict, power, and partnering Power, control, leadership, conflict, and partnering are the main social dimensions of marketing. .. also direct channels Direct marketing and factory outlets are discussed in more detail in Chapter 15 Marketing Channels CHANNELS FOR CONSUMER PRODUCTS Exhibit 13.3 Marketing Channels for Consumer... channels are power, control, leadership, conflict, and partnering 390 CHANNEL POWER, CONTROL, AND LEADERSHIP channel power The capacity of a particular marketing channel member to control or influence