GLOBAL EDITION Principles of MARKETING EIGHTEENTH EDITION B2/E03940 Philip Kotler • Gary Armstrong Principles of MARKETING Principles of MARKETING GLOBAL EDITION Philip Kotler Northwestern University Gary Armstrong University of North Carolina With Marc Oliver Opresnik St. Gallen Management Institute DAI HQC NGAN HANG TP. h6 CHf MINH THU vi£n W/E03940 © Pearson Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Dubai • Singapore • Hong Kong Tokyo • Seoul • Taipei • New Delhi • Cape Town • Sao Paulo • Mexico City • Madrid • Amsterdam • Munich • Paris • Milan Please contact https://support.eom/getsupport/s/contactsupportwith any queries on this content. Pearson Education Limited KAOTwo KAO Park Hockham Way Harlow Essex CM179SR United Kingdom and Associated Companies throughout the world Visit us on the World Wide Web at www.com © Pearson Education Limited, 2021 The rights of Philip Kotler, Gary Armstrong, and Marc Oliver Opresnik to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
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ISBN 10:1-292-34113-0 ISBN 13:978-1-292-341132 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library 8 22 Typeset in Palatino LT Pro-Roman by Integra Software Services Typeset Printed in Slovakia by Neografia To Kathy, Betty, Mandy, Matt, KC, Keri, Delaney, Molly, Macy, and Ben; and Nancy, Amy, Melissa, and Jessica Brief Contents Preface 15 Acknowledgments 19 Part 1 Defining Marketing and the Marketing Process 22 1 Marketing: Creating Customer Value and Engagement 22 2 Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships 56 Part 2 Understanding the Marketplace and Consumer Value 84 3 Analyzing the Marketing Environment 84 4 Managing Marketing Information to Gain Customer Insights 7 76 5 Consumer Markets and Buyer Behavior 750 6 Business Markets and Business Buyer Behavior 780 Part 3 Designing a Customer Value-Driven Strategy and Mix 202 7 Customer Value-Driven Marketing Strategy: Creating Value for Target Customers 202 8 Products, Services, and Brands: Building Customer Value 232 9 Developing New Products and Managing the Product Life Cycle 268 10 Pricing: Understanding and Capturing Customer Value 294 11 Pricing Strategies: Additional Considerations 376 12 Marketing Channels: Delivering Customer Value 342 13 Retailing and Wholesaling 374 14 Engaging Consumers and Communicating Customer Value: Integrated Marketing Communications Strategy 408 15 Advertising and Public Relations 434 16 Personal Selling and Sales Promotion 462 17 Direct, Online, Social Media, and Mobile Marketing 492 ■ Part 4 Extending Marketing 524 18 Creating Competitive Advantage 524 19 The Global Marketplace 550 20 Sustainable Marketing: Social Responsibility and Ethics 580 Appendix 1 Marketing Plan 609 Appendix 2 Marketing by the Numbers 679 Appendix 3 Careers in Marketing 637 Glossary 649 References 659 Index 703 7 Contents Preface 15 Designing the Business Portfolio 62 Acknowledgments 79 Analyzing the Current Business Portfolio 63 | The Boston Consulting Group Approach 63 | Developing Strategies for Part 1: Defining Marketing and the Marketing Growth and Downsizing 65 Process 22 Planning Marketing: Partnering to Build Customer Relationships 66 chapter 1 Marketing: Creating Customer Value Partnering with Other Company Departments 67 | Partnering with Others in the Marketing System 68 and Engagement 22 Marketing Strategy and the Marketing Mix 68 What Is Marketing? 24 Customer Value-Driven Marketing Strategy 69 | Developing an Marketing Defined 25 | The Marketing Process 25 Integrated Marketing Mix 70 Understanding the Marketplace and Customer Needs 26 Managing the Marketing Effort and Marketing Customer Needs, Wants, and Demands 26 | Market Offerings— Return on Investment 73 Products, Services, and Experiences 27 | Customer Value and Managing the Marketing Effort 73 | Measuring and Managing Satisfaction 29 | Exchanges and Relationships 29 | Markets 29 Marketing Return on Investment 77 Designing a Customer Value-Driven Marketing REVIEWING AND EXTENDING THE CONCEPTS 79 | Objectives Strategy and Plan 30 Review 791 Key Terms 801 Discussion Questions 80 | Critical Thinking Customer Value-Driven Marketing Strategy 30 | Preparing an Exercises 801 APPLICATIONS AND CASES 80 | Online, Mobile, and Integrated Marketing Plan and Program 34 Social Media Marketing: Lush UK Abandons Social Media 80 | Marketing Managing Customer Relationships and Capturing Ethics: Creating Value or Distracting Consumers? 81 | Marketing by the Customer Value 34 Numbers: Facebook versus Google 81 | Company Case: Dyson: Solving Engaging Customers and Managing Customer Customer Problems in Ways They Never Imagined 81 Relationships 34 | Capturing Value from Customers 39 The Changing Marketing Landscape 42 Part 2: Understanding the Marketplace and The Digital Age: Online, Mobile, and Social Media Consumer Value 84 Marketing 42 | The Growth of Not-for-Profit Marketing 45 | Rapid Globalization 46 | Sustainable Marketing: The Call for chapter 3 Analyzing the Marketing More Environmental and Social Responsibility 47 | So, What Environment 84 Is Marketing? Pulling It All Together 47 | Developing Skills for Your Career 49 The Microenvironment and Macroenvironment 86 REVIEWING AND EXTENDING THE CONCEPTS 50 | Objectives The Microenvironment 86 | The Macroenvironment 90 Review 501 Key Terms 51 | Discussion Questions 51 | Critical Thinking The Demographic and Economic Environments 90 Exercises 51 | APPLICATIONS AND CASES 52 | Online, Mobile, and The Demographic Environment 901 The Economic Environment 97 Social Media Marketing: Fionamania 52 | Marketing Ethics: Exaggeration The Natural and Technological Environments 98 and High Pressure 52 | Marketing by the Numbers: Be on the First The Natural Environment 981 The Technological Environment 100 Page 52 | Company Case: Argos: Creating Customer Value amid The Political-Social and Cultural Environments 101 Change and Turbulence 53 The Political and Social Environment 101 | The Cultural Environment 105 Responding to the Marketing Environment 109 chapter 2 Company and Marketing Strategy: REVIEWING AND EXTENDING THE CONCEPTS 111 i Objectives Partnering to Build Customer Engagement, Review 111 | Key Terms 1121 Discussion Questions 1121 Critical Value, and Relationships 56 Thinking Exercises 112 | APPLICATIONS AND CASES 113 j Onlne. Mobile, and Social Media Marketing: #MeToo 1131 Marketing Eth.cs: Company-Wide Strategic Planning: Defining Marketing's Role 58 Automatic Auto Renewals 1131 Marketing by the Numbers: An Aging Defining a Market-Oriented Mission 58 | Setting Company America 1131 Company Case: Square: In Re’entiess Rjrsuit cl a k ce Objectives and Goals 59 Elegant Payment Experience 114 _ 10 CONTENTS Marketing by the Numbers: Evaluating Alternatives 177 | Company Case: CHAPTER 4 Managing Marketing Information to Kraft Heinz: Once a Taste Maker Now Struggles as Consumer Tastes Gain Customer Insights 116 Change 178 Marketing Information and Customer Insights 118 Marketing Information and Today’s “Big Data” 118 | Managing chapter IB Business Markets and Business Marketing Information 119 Buyer Behavior 180 Assessing Information Needs and Developing Data 120 Business Markets 182 Assessing Marketing Information Needs 120 | Developing Market Structure and Demand 183 | Nature of the Buying Marketing Information 121 Unit 183 | Types of Decisions and the Decision Process 184 Marketing Research 123 Business Buyer Behavior 184 Traditional Marketing Research in Transition 123 | Defining Major Types of Buying Situations 185 | Participants in the the Problem and Research Objectives 124 | Developing the Business Buying Process 186 | Major Influences on Business Research Plan 125 | Gathering Secondary Data 126 | Buyers 187 Primary Data Collection 126 | Implementing the Research Plan 136 | Interpreting and Reporting the The Business Buyer Decision Process 189 Problem Recognition 189 | General Need Description 190 | Findings 136 Product Specification 190 | Supplier Search 190 | Proposal Analyzing and Using Marketing Information 136 Solicitation 190 | Supplier Selection 191 | Order-Routine Customer Relationship Management (CRM) 136 | Big Data, Specification 191 | Performance Review 191 Marketing Analytics, and Artificial Intelligence 137 | Distributing Engaging Business Buyers with Digital and and Using Marketing Information 138 Social Marketing 192 Other Marketing Information Considerations 140 E-procurement and Online Purchasing 192 | Business-to- Marketing Research in Small Businesses and Nonprofit Business Digital and Social Media Marketing 192 Organizations 140 | International Marketing Research 141 | Institutional and Government Markets 193 Public Policy and Ethics in Marketing Research 142 Institutional Markets 193 | Government Markets 195 REVIEWING AND EXTENDING THE CONCEPTS 145 | Objectives REVIEWING AND EXTENDING THE CONCEPTS 198 | Objectives Revew 1451 Key Terms 146 (Discussion Questions 146 (Critical Review 1981 Key Terms 198 ( Discussion Questions 199 (Critical Tr-nking Exercises 146 | APPLICATIONS AND CASES 147 ( Thinking Exercises 199 | APPLICATIONS AND CASES 199 (Online, Online, Mobile, and Sociai Mede Marketing: Creepy Data 147 | Mobile, and Social Media Marketing: E-procurement and Mobile Maketng Eth.es: WeCnat 147 | Marketing by the Numbers: What’s Procurement 1991 Marketing Ethics: Big Tech for Military Activities 2001 four Sample? 147 jCompany Case: Bayer: Big Data for Customer Marketing by the Numbers: From Gaming to Public Safety 2001 Company Irsghts 148 Case: Shopify: An E-commerce Giant That Doesn’t Sell to End Users 200 chapter 5 Consumer Markets and Buyer Part 3: Designing a Customer Value-Driven Behavior 150 Strategy and Mix 202 Model of Consumer Behavior 152 Characteristics Affecting Consumer Behavior 153 chapter 7 Customer Value-Driven Cultural Factors 153 I Social Factors 157 | Personal Marketing Strategy: Creating Value for Factors 160 ; Psychological Factors 162 Target Customers 202 Buying Decision Behavior and the Buyer Decision Process 167 Marketing Strategy 204 Types of Buying Decision Behavior 167I The Buyer Decision Market Segmentation 205 Process 169 i The Customer Journey 171 Segmenting Consumer Markets 205 | Segmenting Business The Buyer Decision Process for New Products 172 Markets 211 ( Segmenting International Markets 212 | Stages in the Adoption Process 172 | Individual Differences in Requirements for Effective Segmentation 213 Innovativeness 173 | Influence of Product Characteristics on Market Targeting 213 Rate of Adoption 174 Evaluating Market Segments 213 | Selecting Target Market REVIEWING AND EXTENDING THE CONCEPTS 175 | Segments 214 Objectives Review 175' Key Terns 176 (Discussion Differentiation and Positioning 221 Questions 176 | O' * cal Tr> Exercises 176j APPLICATIONS Positioning Maps 221 | Choosing a Differentiation and AND CASES 176 (Or/' h, '■Lvj <>. and Social Media Marketing: Positioning Strategy 222 | Communicating and Delivering the B ccver'ofa's '75 i/arketirg Ethics: Mate Yourself Feel Good 1771 Chosen Position 226 CONTENTS 11 REVIEWING AND EXTENDING THE CONCEPTS 227 | Objectives Thinking Exercises 2901 APPLICATIONS AND CASES 291| Online, Review 227 | Key Terms 2281 Discussion Questions 2281 Critical Mobile, and Social Media Marketing: Share the Robot Vacuum Love 2911 Thinking Exercises 228 | APPLICATIONS AND CASES 228 | Online, Marketing Ethics: Autonomous Autos 291 | Marketing by the Numbers: Taking Mobile, and Social Media Marketing: Influence Not Accepted as It on the Road 291 | Company Case: Toyota: Developing a Million Payment 228 | Marketing Ethics: Allegiant Airlines: Value Creation or Flying New Product Ideas Every Year 292 Public at Risk?