Marketing Management, Second Edition

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9780131405479: Marketing Management, Second Edition

This volume reflects the dynamic environment inhabited by today's marketers, helping readers understand the marketplace and the impact of technology on making strategic marketing decisions. Its modern, integrated presentation and strategy-based approach covers critical, fundamental topics required to succeed in professional work. Subjects include marketing philosophy and strategy such as market research, customer behavior and market structure, and marketing decision-making and analysis, including product decisions, advertising strategy, pricing and customer relationship management. For marketing professionals, product and brand managers.

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About the Author:

Russell S. Winer is the Deputy Dean and William Joyce Professor of Marketing at the Stern School of Business, New York University. He received a B.A. in Economics from Union College (NY) and an M.S. and Ph.D. in Industrial Administration from Carnegie Mellon University. He has been on the faculties of Columbia and Vanderbilt universities and, most recently, the University of California at Berkeley. He has been a visiting faculty member at M.LT., Stanford University, New York University, the Helsinki School of Economics, the University of Tokyo, and Ecole Nationale des Ponts et Chausees.

Winer has written three books: Marketing Management, Analysis for Marketing Planning, and Product Management, and has authored more than 50 papers in marketing on a variety of topics including consumer choice, marketing research methodology, marketing planning, advertising, and pricing. He is a former editor of the Journal of Marketing Research, the current co-editor of the Journal of Interactive Marketing, and is on the editorial boards of the Journal of Marketing, the Journal of Marketing Research, Marketing Science, and the California Management Review.

He has participated in executive education programs around the world, and is currently an advisor to a number of start-up companies.

Excerpt. © Reprinted by permission. All rights reserved.:

Overview: Levi Strauss

Until the 1990s, American visitors to the Soviet Union and Eastern Europe could be almost certain that they would be approached by young people asking whether they had any extra pairs of Levi's jeans they were willing to sell. Such was the strength of Levi's as a worldwide brand. Since the 1990s, however, something has changed. Levi's made up 31 percent of the jeans sold in the U.S. market in 1990, a market share that had shrunk to 16.9 percent by 1998 and to 12.1% by 2002. Today's young people do not want to be seen in the same jeans that their parents wore. Levi's advertising campaigns now receive one star out of four in Advertising Age. What happened in so short a time? How could a world-renowned brand from a world-renowned company have stumbled so badly? In order to recover, in 2002 Levi's decided to supply Wal-Mart, the largest company in the United States, with a low-end brand, called Signature, and created two new brands-the high-end Red and more classic Type 1 and Blue. Can this multiple-brand strategy revive the value of Levi's products and lead the company back to the status it had prior to the 1990s?

Marketing Management: A Strategic Perspective

To understand fully what happened to Levi's and to give prospective marketing managers guidelines for how to be effective in their jobs, we need a marketing management textbook that goes beyond an explanation of basic concepts—it must present a strategic, integrative perspective. After teaching a core marketing management course for more than 20 years, I wrote Marketing Management because I came to understand how important the strategic perspective is and I observed that no textbook provided it. Readers of this book will find a strategic framework set up in Chapter 2 which is used throughout the rest of the text. Using strategy as a framework for the entire course is the chief distinguishing feature of this book.

The strategic framework in this second edition of Marketing Management promotes understanding of the second distinguishing feature of this text: its emphasis on the rapid changes thrust upon marketing managers by information technology in general, and the Internet in particular. Today every marketing textbook includes numerous references to the Internet, and despite the crash in Internet company stocks, it remains the most fundamental change in marketing in the last decade. The Internet is a place where products and services are sold, it is a communications and information medium, it facilitates customer service, and it provides other benefits and opportunities to marketing managers and customers. The fundamental nature of this new, information-intensive technology is interactivity, the ability of customers to be active participants in the exchange between consumers and companies (for more than money for goods). This book also discusses at length the many ways that companies' investments in information technology have changed the marketing manager's job, in areas such as information gathering, communications, pricing, and product development.

While looking at the transformations that information technology has brought, this second edition of Marketing Management also integrates the issues involved with marketing technology-based goods and services. What led me to include material on this topic was not only the 14 years I spent near Silicon Valley teaching at the University of California at Berkeley. In discussions with business students at a variety of schools, I have found that many are interested in careers in computer software, biotechnology, semiconductors, and other technology-based industries. While the basics of marketing are the same across all industries, there are some features of high-technology markets (for example, short product life cycles) that make being a marketing manager for high-tech companies a somewhat different experience than being a brand manager for, say, Procter & Gamble's Crest toothpaste.

I have also included illustrations of global contexts by weaving foreign examples throughout the text to convey to the reader that thinking about global markets is a natural part of the job for many marketing managers. In many companies, developing a global marketing strategy is no longer a separate activity from developing a U.S. strategy since an important task is to develop a unified, global brand image.

Another unique feature of the book is the chapter on customer relationship management (Chapter 14). No other marketing management book covers this topical and vita11y important area of marketing in this depth. Few aspects have received as much attention in recent years as the question of how to maintain and enhance long-term relationships with customers. Considerable research has shown that it is less expensive and more profitable to retain customers than it is to try to get customers to switch from competitors. A good example of this recent emphasis on customer retention is the proliferation of loyalty programs. I discuss these programs in Chapter 14 and also provide several examples. It is also covered in Chapter 11 in the context of direct marketing.

Changes from the First Edition

In developing this second edition, I have been careful to retain the best-liked aspects off the first edition—the easy-to-follow writing style, the integration of information technology into the appropriate topics, and the coverage of new and important areas of marketing like customer relationship management. But I have also listened to adopters, students, and reviewers in working to make this second edition an even more effective teaching and learning tool. Major changes include:

  1. An entirely revamped look and feel. Marketing is a visual discipline, so along with updated text, advertisements, photos, and graphics, the book has a decidedly, twenty-first century appearance.
  2. As would be expected, many of the illustrations have also been updated.
  3. There has been a major reorganization of the chapters:
    • Chapters 1 and 2 from the first edition ("The Concept of Marketing" and "The Marketing Manager's Job") have been combined into Chapter 1 of the second edition ("Marketing and the job of the Marketing Manager") and the running example used in the first edition (personal computers) has been eliminated.
    • Chapters 15 and 16 from the first edition ("Strategies for Technology-Based Markets" and "Global Marketing Strategies") have been eliminated and the material woven into the rest of the book. Feedback indicated that these topics are an integral part of marketing today and should be discussed where appropriate throughout the entire book.
    • A new chapter—Chapter 7, "Product Decisions"—was added. This chapter answers the request-for more material on branding and product positioning as well as for more discussion about product line decisions.
    • Chapter 17 from the first edition, "New Product Development," is now Chapter 8, "New Product Development and Marketing," and follows "Product Decisions." This was to better integrate all decisions related to the product into two consecutive chapters. The material on marketing programs for launching new products is also expanded.
    • The material on channels of distribution formerly covered in one chapter (Chapter 9, "Channels of Distribution") is now divided into general channel strategy and the management of indirect channel systems ("Managing Channels of Distribution," Chapter 10) and issues related to direct channels of distribution (Chapter 11, "Managing Direct Channels: Sales Management and Direct Marketing"). This change was made to consolidate the material on direct channels in one chapter.
  4. Chapter 14 on Customer Relationship Management has been re-focused around a general framework for CRM. This framework provides an action guide for the marketing manager about how to develop a CRM system from scratch.

Organization of the Book

This book is divided into three parts, the contents of which follow this sequence: (1) introduction to the philosophy of marketing, the marketing manager's job, and the complete marketing strategy that forms the backbone of the book, (2) analyses that marketing managers must perform to develop a strategy, and (3) marketing-mix decision making.

The key benefit of this sequence is that it shows very clearly that strategic decisions must be made before tactical decisions. The marketing strategy chapter appears early in the book (Chapter 2) because I do not believe that a discussion about pricing, for example, can take place before students are given a sense of how price must fit into the product's positioning and value proposition or be suitable for the particular market segment being pursued. In other words, marketing managers cannot make pricing decisions without clear direction from the strategy. This is an important feature of the book and distinguishes it clearly from comparable texts. In addition, chapters 3 through 13 repeat the figure (Figure 2-1) describing the overall strategic structure with indications of "where we are" in the development of a complete marketing strategy. This approach continually reinforces the strategic perspective.

Part 1: Marketing Philosophy and Strategy. These two chapters provide a general overview of marketing and the "behind-the-scenes" work that marketing managers do in framing the specific decisions that are ultimately made, such as what price to charge. In addition, the elements of a complete marketing strategy are described. This is a unique aspect of the book since, as noted previously, I cover this material earlier in the discussion than other textbooks.

Chapter 1, "Marketing and the Job of the Marketing Manager," covers the basics of marketing: what it is, why it is important, the importance of a customer/competitor orientation, and the controversy over being led by the customer versus leading the customer. In addition, this chapter covers topics such as marketing orga...

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