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Contents Preface xvi Part I UNDERSTANDING MARKETING MANAGEMENT 1 1. Defining Marketing for the Twenty-First Century 1 The Importance of Marketing 2 The Scope of Marketing 2 What Is Marketing? 2 What Is Marketed? 3 What Is a Market? 4 Who Markets? 5 How Is Marketing Done? 5 Core Marketing Concepts 6 Needs, Wants, and Demands 6 Target Markets, Positioning, and Segmentation 7 Offerings and Brands 7 Value and Satisfaction 8 Marketing Channels 8 Supply Chain 8 Competition 8 Marketing Environment 9 The New Marketing Realities 9 Major Societal Forces 9 New Consumer Capabilities 10 New Company Capabilities 10 Company Orientation Toward the Marketplace 10 The Production Concept 10 The Product Concept 11 The Selling Concept 11 The Marketing Concept 11 The Holistic Marketing Concept 12 Marketing Management Tasks 16 Executive Summary 17 Notes 18 SimConnects for Chapter 1: The Role of the PharmaSim Simulation (page) Roles and Complexity in PharmaSim (page) Experience Core Marketing Concepts with PharmaSim (page) 4Ps Decisions in PharmaSim (page) Marketing Management Tasks in PharmaSim (page) iv 2. Developing and Implementing Marketing Strategies and Plans 20 Marketing and Customer Value 21 The Value Delivery Process 21 The Value Chain 22 Core Competencies 23 A Holistic Marketing Orientation and Customer Value 23 The Central Role of Strategic Planning 25 Corporate and Division Strategic Planning 26 Defining the Corporate Mission 26 Defining the Business 27 Assigning Resources to SBUs 28 Assessing Growth Opportunities 28 Organization, Organizational Culture, and Innovation 29 Business Unit Strategic Planning 29 Business Mission 29 SWOT Analysis 30 Goal Formulation 31 Strategy Formulation 31 Program Formulation and Implementation 32 Feedback and Control 32 The Marketing Plan and Marketing Performance 33 Contents of a Marketing Plan 33 Measuring Marketing Performance 33 Executive Summary 35 Notes 36 SimConnects for Chapter 2: The Value Delivery Process in PharmaSim (page) Developing a Marketing Plan in PharmaSim (page) Measuring Marketing Performance in PharmaSim (page) PharmaSim SWOT Assignment (page) 3. Understanding Markets, Market Demand, and the Marketing Environment 38 Marketing Information, Intelligence, and Research 39 Internal Records 39 Marketing Intelligence System 40 Marketing Research System 40 Forecasting and Demand Measurement 46 Which Market to Measure? 46 Demand Measurement 47 Company Demand and Sales Forecast 48 Estimating Current Demand 48 Estimating Future Demand 50 Contents v vi Contents Macroenvironmental Trends and Forces 50 Demographic Environment 51 Economic Environment 53 Social-Cultural Environment 53 Natural Environment 54 Technological Environment 55 Political-Legal Environment 56 Executive Summary 56 Notes 57 SimConnects for Chapter 3: Understanding the Marketing Environment in PharmaSim (page) The Consumer Survey in PharmaSim (page) Estimating Market Demand in PharmaSim (page) Macro Environmental Trends and Forces in PharmaSim (page) Assignment: Understanding Marketing Research (page) Part II CONNECTING WITH CUSTOMERS 59 4. Creating Customer Value, Satisfaction, and Loyalty 59 Building Customer Value and Satisfaction 60 Customer Perceived Value 60 Total Customer Satisfaction 62 Monitoring Satisfaction 62 Product and Service Quality 64 Maximizing Customer Lifetime Value 64 Customer Profitability 64 Measuring Customer Lifetime Value 66 Cultivating Customer Relationships 67 Attracting and Retaining Customers 67 Building Loyalty 68 Customer Databases and Database Marketing 70 Data Warehouses and Datamining 71 The Downside of Database Marketing and CRM 72 Executive Summary 72 Notes 73 SimConnects for Chapter 4: The Importance of Satisfaction in PharmaSim (page) The Relationship Between Satisfaction and Repurchase Behavior in PharmaSim (page) Measuring the Value of Satisfaction (page) 5. Analyzing Consumer Markets 76 What Influences Consumer Behavior? 77 Cultural Factors 77 Social Factors 77 Personal Factors 79 Key Psychological Processes 81 Motivation: Freud, Maslow, Herzberg 81 Perception 82 Learning 83 Memory 83 Contents vii The Buying Decision Process: The Five-Stage Model 85 Problem Recognition 85 Information Search 85 Evaluation of Alternatives 87 Purchase Decisions 88 Postpurchase Behavior 88 Executive Summary 90 Notes 90 SimConnects for Chapter 5: Segmentation in PharmaSim (page) Relating the Five-Stage Model of the Consumer Buying Process to PharmaSim (page) Real World Buying Process and Segmentation Application (page) 6. Analyzing Business Markets 94 What Is Organizational Buying? 95 The Business Market versus the Consumer Market 95 Institutional and Organizational Markets 95 Buying Situations 97 Systems Buying and Selling 98 Participants in the Business Buying Process 98 The Buying Center 98 Buying Center Influences 99 Buying Center Targeting 100 Stages in the Buying Process 101 Problem Recognition 101 General Need Description and Product Specification 101 Supplier Search 102 Proposal Solicitation 103 Supplier Selection 103 Order-Routine Specification 104 Performance Review 104 Building Business Relationships 104 Executive Summary 106 Notes 107 SimConnects for Chapter 6: The Business Market and PharmaSim (page) 7. Identifying Market Segments and Targets 110 Levels of Market Segmentation 111 Segment Marketing 111 Niche Marketing 111 Local Marketing 112 Individual Marketing 112 Segmenting Consumer and Business Markets 113 Bases for Segmenting Consumer Markets 114 Bases for Segmenting Business Markets 119 viii Contents Market Targeting 120 Effective Segmentation Criteria 121 Evaluating and Selecting Market Segments 122 Additional Considerations 124 Executive Summary 125 Notes 125 SimConnects for Chapter 7: Segmentation in PharmaSim (page) Usage rates in PharmaSim (page) How segmentation is different from product categories (page) Target Market Selection Maps Application Exercise (page) Part III BUILDING STRONG BRANDS 128 8. Creating Brand Equity 128 What is Brand Equity? 129 The Role of Brands 129 The Scope of Branding 129 Defining Brand Equity 130 Brand Equity as a Bridge 131 Building Brand Equity 131 Choosing Brand Elements 132 Designing Holistic Marketing Activities 133 Leveraging Secondary Associations 134 Measuring and Managing Brand Equity 135 Brand Audits and Brand Tracking 135 Brand Valuation 136 Managing Brand Equity 136 Brand Strategy and Customer Equity 137 Branding Decisions 138 Brand Extensions 139 Brand Portfolios 140 Customer Equity 141 Executive Summary 142 Notes 142 SimConnects for Chapter 8: Brand Equity for Allround (page) Line Extensions in PharmaSim (page) The Role of Allround in Allstar?s Portfolio (page) Cannibalization and the Line Extension Decision (page) 9. Crafting the Brand Positioning and Dealing with Competition 147 Developing and Communicating a Positioning Strategy 148 Competitive Frame of Reference 149 Points-of-Parity and Points-of- Difference 149 Establishing Category Membership 150 Choosing POPs and PODs 151 Creating POPs and PODs 151 Contents ix Differentiation Strategies 152 Product Differentiation 152 Services Differentiation 153 Other Dimensions of Differentiation 154 Competitive Forces and Competitors 154 Identifying Competitors 155 Industry and Market Views of Competition 155 Analyzing Competitors 157 Strategies 157 Objectives 158 Strengths and Weaknesses 158 Selecting Competitors 158 Competitive Strategies 159 Market-Leader Strategies 159 Other Competitive Strategies 161 Balancing Customer and Competitor Orientations 163 Executive Summary 164 Notes 165 SimConnects for Chapter 9: Defining Category Membership for Allround (page) Differentiation in PharmaSim (page) Usage Rates in PharmaSim (page) The Value of One Share Point (page) Creating a Value Proposition for Allround (page) Part IV SHAPING THE MARKET OFFERINGS 168 10. Setting Product Strategy and Marketing through the Life Cycle 168 Product Characteristics and Classifications 169 Product Levels 169 Product Classifications 170 Product and Brand Relationships 171 Product-Line Analysis 172 Product-Line Length 172 Line Modernization, Featuring, and Pruning 172 Co-Branding and Ingredient Branding 173 Packaging, Labeling, Warranties, and Guarantees 173 Packaging 173 Labeling 174 Warranties and Guarantees 174 Managing New Products 175 Why New Products Fail?and Succeed 175 New Product Development 175 x Contents The Consumer Adoption Process 181 Stages in the Adoption Process 182 Factors Influencing Adoption 182 Marketing Through the Product Life Cycle 183 Product Life Cycles 183 Marketing Strategies: Introduction Stage and the Pioneer Advantage 184 Marketing Strategies: Growth Stage 184 Marketing Strategies: Maturity Stage 185 Marketing Strategies: Decline Stage 185 Critique of the Product Life-Cycle Concept 186 Executive Summary 187 Notes 187 SimConnects for Chapter 10: Reformulation Decision in PharmaSim (page) Conjoint Analysis in PharmaSim (page) Breakeven Analysis in PharmaSim (page) Stages in the Adoption Process Applied to PharmaSim (page) Marketing Strategies for Allround (page) Apply the Five Product Levels to Allround / Allstar (page) 11. Designing and Managing Services 191 The Nature of Services 192 Categories of Service Mix 192 Distinctive Characteristics of Services 193 Marketing Strategies for Service Firms 194 A Shifting Customer Relationship 195 Holistic Marketing for Services 196 Managing Service Quality 198 Customer Expectations 198 Best Practices of Service-Quality Management 200 Managing Service Brands 202 Differentiating Services 202 Developing Brand Strategies for Services 202 Managing Product Support Services 203 Identifying and Satisfying Customer Needs 203 Post-Sale Service Strategy 204 Executive Summary 204 Notes 205 SimConnects for Chapter 11: Services and PharmaSim (page) 12. Developing Pricing Strategies and Programs 209 Understanding Pricing 210 A Changing Pricing Environment 210 How Companies Price 210 Consumer Psychology and Pricing 211 Setting The Price 212 Step 1: Selecting the Pricing Objective 212 Contents xi Step 2: Determining Demand 213 Step 3: Estimating Costs 214 Step 4: Analyzing Competitors? Costs, Prices, and Offers 216 Step 5: Selecting a Pricing Method 216 Step 6: Selecting the Final Price 221 Adapting the Price 221 Geographical Pricing 222 Price Discounts and Allowances 222 Promotional Pricing 222 Differentiated Pricing 223 Product-Mix Pricing 224 Initiating and Responding to Price Changes 225 Initiating Price Cuts 225 Initiating Price Increases 225 Responding to Competitors? Price Changes 226 Executive Summary 227 Notes 227 SimConnects for Chapter 12: Reference Pricing in PharmaSim (page) Allround?s Pricing Objective (page) Determining Demand in PharmaSim (page) Estimating Costs in PharmaSim (page) Using Trade-offs to Estimate Perceived-Value Pricing (page) Selecting the Final Price (page) Additional Price Decisions (page) The Dangers of Price Cuts in PharmaSim (page) Calculating the Impact of Price Changes (page) Part V DELIVERING VALUE 230 13. Designing and Managing Integrated Marketing Channels 230 Marketing Channels and Value Networks 231 The Importance of Channels 231 Value Networks 232 The Role of Marketing Channels 232 Channel Functions and Flows 232 Channel Levels 234 Service Sector Channels 235 Channel-Design Decisions 235 Analyzing Customers? Desired Service Output Levels 235 Establishing Objectives and Constraints 235 Identifying Major Channel Alternatives 236 Evaluating the Major Alternatives 237 Channel-Management Decisions 238 Selecting Channel Members 238 Training and Motivating Channel Members 238 Evaluating Channel Members 238 Modifying Channel Arrangements 239 xii Contents Channel Integration and Systems 240 Vertical Marketing Systems 240 The New Competition in Retailing 241 Conflict, Cooperation, and Competition 241 Legal and Ethical Issues in Channel Relations 243 E-Commerce Marketing Practices 244 Pure-Click Companies 244 Brick-and-Click Companies 245 M-Commerce 245 Executive Summary 245 Notes 246 SimConnects for Chapter 13: Push and Pull Strategies in PharmaSim (page) Channel Structure in PharmaSim (page) Lot Sizes and Volume Discounts in PharmaSim (page) Intensive Distribution (page) Motivating and Emphasizing Channel Partners (page) Trends in Channel Importance (page) 14. Managing Retailing, Wholesaling, and Logistics 248 Retailing 249 Types of Retailers 249 The New Retail Environment 250 Retailer Marketing Decisions 251 Private Labels 254 House Brands 254 The Private Label Threat 255 Wholesaling 255 Trends in Wholesaling 257 Strengthening Channel Relationships 257 Market Logistics 257 Integrated Logistics Systems 258 Market-Logistics Objectives 259 Market-Logistics Decisions 260 Market Logistics Lessons 262 Executive Summary 262 Notes 263 SimConnects for Chapter 14: Retailers in PharmaSim (page) The Role of Wholesalers in PharmaSim (page) Part VI COMMUNICATING VALUE 265 15. Designing and Managing Integrated Marketing Communications 265 The Role of Marketing Communications 266 The Changing Marketing Communications Environment 266 Marketing Communications, Brand Equity, and Sales 267 Communications Process Models 267 Contents xiii Developing Effective Communications 268 Identify the Target Audience 270 Determine the Communications Objectives 270 Design the Communications 271 Select the Communications Channels 272 Establish the Total Marketing Communications Budget 274 Deciding on the Marketing Communications Mix 275 Characteristics of the Marketing Communications Mix 275 Factors in Setting the Marketing Communications Mix 276 Measuring Communication Results 277 Managing the Integrated Marketing Communications Process 277 Coordinating Media 278 Implementing IMC 278 Executive Summary 279 Notes 279 SimConnects for Chapter 15: Marketing Communications Mix in PharmaSim (page) Identifying the Target Audience (page) Role of the Advertising Agency in PharmaSim (page) Measuring Communications Results (page) Establishing the Total Marketing Communications Budget (page) 16. Managing Mass Communications 282 Developing and Managing an Advertising Program 283 Setting the Objectives 283 Deciding on the Advertising Budget 284 Developing the Advertising Campaign 284 Deciding on Media and Measuring Effectiveness 285 Sales Promotion 289 Sales Promotion Objectives 289 Advertising versus Promotion 290 Major Decisions 290 Events and Experiences 293 Events Objectives 293 Major Sponsorship Decisions 294 Creating Experiences 294 Public Relations 295 Marketing Public Relations 295 Major Decisions in Marketing PR 296 Executive Summary 297 Notes 297 SimConnects for Chapter 16: Advertising Message Objectives in PharmaSim (page) Setting the Advertising Budget (page) Consumer Promotion Tools (page) Trade Promotion Tools (page) Share of Voice (page) xiv Contents 17. Managing Personal Communications 302 Direct Marketing 303 The Benefits of Direct Marketing 303 Direct Mail 303 Catalog Marketing 304 Telemarketing 304 Other Media for Direct-Response Marketing 305 Public and Ethical Issues in Direct Marketing 305 Interactive Marketing 305 Word-of-Mouth 308 Buzz and Viral Marketing 308 Opinion Leaders 308 Blogs 310 Measuring the Effects of Word-of-Mouth 311 Personal Selling and the Sales Force 311 Personal Selling and Relationship Marketing 311 Designing the Sales Force 312 Sales Force Objectives and Strategy 313 Sales Force Structure 313 Sales Force Size 314 Sales Force Compensation 314 Managing the Sales Force 314 Recruiting and Selecting Sales Representatives 315 Training and Supervising Sales Representatives 315 Sales Rep Productivity 316 Motivating Sales Representatives 316 Evaluating Sales Representatives 317 Executive Summary 317 Notes 318 SimConnects for Chapter 17: Managing the Sales Force in PharmaSim (page) Part VII CREATING SUCCESSFUL LONG-TERM GROWTH 323 18. Managing Marketing in the Global Economy 323 Competing on a Global Basis 324 Deciding Whether to Go Abroad 325 Deciding Which Markets to Enter 325 Deciding How to Enter the Market 326 Deciding on the Marketing Program 327 Country-of-Origin Effects 328 Contents xv Internal Marketing 329 Organizing the Marketing Department 329 Relations with Other Departments 331 Managing the Marketing Process 331 Evaluation and Control 331 The Marketing Audit 333 Socially Responsible Marketing 334 Ethical, Legal, and Social Responsibility Behavior 334 Cause-Related Marketing 334 Sustainability 335 Executive Summary 335 Notes 336 SimConnects for Chapter 18: Global Considerations in PharmaSim (page) Evaluation and Control in PharmaSim (page)
Library of Congress Subject Headings for this publication:
Marketing -- Management.