New England College of Business Johnson and Johnson Situational Analysis Marketing Plan Milestone 1 This is the first of three papers that will lead you t

New England College of Business Johnson and Johnson Situational Analysis Marketing Plan Milestone 1

This is the first of three papers that will lead you to, and be part of, your final paper. You will need to choose a company that has or could have a marketing problem that needs to be solved. It can be a for-profit or nonprofit organization. Your final paper will combine the Milestones, reflecting feedback received, and add to them. See the full description of the final paper in the course syllabus.

The Milestone 1 paper will identify and describe your chosen company, what business it is in, and set out the problem that needs to be solved. This is a situational analysis. See the description on page 246 of your textbook. Paper length: 3-4 pp. not including title page and references

COMPANY:JOHNSON AND JOHNSON pet29966_fm_i-xiv.qxd 11/20/09 2:27 PM Page i
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A Preface
to Marketing
Management
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A Preface
to Marketing
Management
Twelfth Edition
J. Paul Peter
University of Wisconsin–Madison
James H. Donnelly, Jr.
Gatton College of Business and
Economics University of Kentucky
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A PREFACE TO MARKETING MANAGEMENT, TWELFTH EDITION
Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221
Avenue of the Americas, New York, NY 10020. Copyright © 2011 by The McGraw-Hill Companies, Inc.
All rights reserved. Previous editions © 2008, 2006, and 2003. No part of this publication may be reproduced
or distributed in any form or by any means, or stored in a database or retrieval system, without
the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited
to, in any network or other electronic storage or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available
to customers outside the United States.
This book is printed on acid-free paper.
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ISBN 978-0-07-352996-7
MHID 0-07-352996-6
Vice President & Editor-in-Chief: Brent Gordon
VP EDP/Central Publishing Services: Kimberly Meriwether David
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All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.
Library of Congress Cataloging-in-Publication Data
Peter, J. Paul.
A preface to marketing management / J. Paul Peter, James H. Donnelly, Jr.–Twelfth ed.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-07-352996-7 (alk. paper)
1. Marketing–Management. I. Donnelly, James H. II. Title.
HF5415.13.P388 2010
658.8–dc22
2009043316
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a Web site
does not indicate an endorsement by the authors or McGraw-Hill, and McGraw-Hill does not guarantee the
accuracy of the information presented at these sites.
www.mhhe.com
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To Rose and Angie
J. Paul Peter
To Gayla
Jim Donnelly
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About the Authors
J. Paul Peter
has been a faculty member at the University of Wisconsin since 1981. He was a member
of the faculty at Indiana State, Ohio State, and Washington University before joining the
Wisconsin faculty. While at Ohio State, he was named Outstanding Marketing Professor
by the students and has won the John R. Larson Teaching Award at Wisconsin. He has
taught a variety of courses including Marketing Management, Marketing Strategy, Consumer Behavior, Marketing Research, and Marketing Theory, among others.
Professor Peter’s research has appeared in the Journal of Marketing, the Journal of
Marketing Research, the Journal of Consumer Research, the Journal of Retailing, and the
Academy of Management Journal, among others. His article on construct validity won the
prestigious William O’Dell Award from the Journal of Marketing Research, and he was a
finalist for this award on two other occasions. Recently, he was the recipient of the Churchill
Award for Lifetime Achievement in Marketing Research, given by the American Marketing
Association and the Gaumnitz Distinguished Faculty Award from the School of Business,
University of Wisconsin–Madison. He is an author or editor of over 30 books, including A
Preface to Marketing Management twelfth edition; Marketing Management: Knowledge and
Skills, nineth edition; Consumer Behavior and Marketing Strategy, nineth edition; Strategic
Management: Concepts and Applications, third edition; and Marketing: Creating Value for
Customers, second edition. He is one of the most cited authors in the marketing literature.
Professor Peter has served on the review boards of the Journal of Marketing, Journal of
Marketing Research, Journal of Consumer Research, and Journal of Business Research and
was measurement editor for JMR and professional publications editor for the American
Marketing Association. He has taught in a variety of executive programs and consulted for
several corporations as well as the Federal Trade Commission.
James H. Donnelly, Jr.
has spent his academic career in the Gatton College of Business and Economics at the
University of Kentucky. In 1990 he received the first Chancellor’s Award for Outstanding
Teaching given at the University. Previously, he had twice received the UK Alumni Association’s Great Teacher Award, an award one can only be eligible to receive every 10 years. He has
also received two Outstanding Teacher awards from Beta Gamma Sigma, national business
honorary. In 1992 he received an Acorn Award recognizing “those who shape the future” from
the Kentucky Advocates for Higher Education. In 2001 and 2002 he was selected as “Best
University of Kentucky Professor.” In 1995 he became one of six charter members elected to
the American Bankers Association’s Bank Marketing Hall of Fame. He has also received a
“Distinguished Doctoral Graduate Award” from the University of Maryland.
During his career he has published in the Journal of Marketing Research, Journal of
Marketing, Journal of Retailing, Administrative Science Quarterly, Academy of Management Journal, Journal of Applied Psychology, Personnel Psychology, Journal of Business
Research, and Operations Research among others. He has served on the editorial review
board of the Journal of Marketing. He is the author of more than a dozen books, which
include widely adopted academic texts as well as professional books.
Professor Donnelly is very active in the banking industry where he has served on the board
of directors of the Institute of Certified Bankers and the ABA’s Marketing Network. He has
also served as academic dean of the ABA’s School of Bank Marketing and Management.
vi
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Preface
NOTE FROM THE AUTHORS
The original purpose of A Preface To Marketing Management—to deliver a clear and concise presentation of the basic principles of marketing—is as relevant today as it was in earlier editions. To us this means emphasizing quality content and avoiding excess verbiage,
pictures, and lists. We think we have succeeded in doing so since a reviewer called our book
“pound for pound the best introductory marketing text available.”
We introduce the 12th edition with a sense of accomplishment knowing that our book
and its eight foreign translations have been used throughout the world whenever courses
require an overview of the critical aspects of marketing management. Consequently, the
book has been used successfully in a wide variety of different course settings and is the
best selling book of its kind. We believe it has endured because we continuously fine tune
and update it to ensure that it meets the current and evolving needs of both students and
instructors. Because marketing is about figuring out how to do a superior job of satisfying
customers, we simply seek to practice what we preach. We refer to out book as the Preface.
Welcome to this edition which is organized into four sections.
Section I. Essentials of Marketing Management
This section consists of 13 chapters that present the essentials of marketing management.
Our objective is to present the “must know” content of the field useful in analyzing marketing problems and cases and developing marketing plans. It is divided into four sections
that emphasize introducing the field, understanding target markets, understanding marketing mix variables, and marketing in special fields. Careful study of this section should give
students a clear understanding of the terminology, techniques, tools, and strategies used in
effective marketing management and marketing strategy development.
Section II. Analyzing Marketing Problems and Cases
This section has been widely praised as the best presentation available on the topic. In fact,
it has found its way to other areas of many campuses where it is used by students in fields
where case problems are used but which are unrelated to the field of marketing. It presents
a comprehensive framework for analyzing, preparing, and presenting case analyses.
This section could have been placed at the beginning of the book because it is designed
to be read at the start of a course using cases. However, because it is referred to throughout
the semester, we placed it after the text chapters. Also, for those courses that do not utilize
cases, the book may be used without reference to this section.
Section III. Financial Analysis for Marketing Decisions
It is important for marketing students to appreciate that the ultimate objectives of marketing are usually expressed in financial terms. With this in mind, this section presents important financial calculations that will be useful in evaluating the financial position of a firm
and the financial impact of various marketing decisions and strategies.
Section IV. Developing Marketing Plans
In keeping with the concept of our book and the needs of its users, this section helps readers develop practical planning skills. It contains an approach to developing a marketing
plan by providing a general format for structuring and presenting one.
vii
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viii Preface
THE 12TH EDITION OF THE PREFACE
The content of this book is continuously revised and updated based on extensive feedback from students and faculty members as well as our own intuitions and judgments.
Whether a topic is fundamental or emerging we try to bring innovative content and elements to the book. For example, in this and the previous edition we have added new or
expanded discussions of the major types of marketing, branding, marketing’s role in
cross-functional strategic planning, the most current psychographic and geodemographic
segmentation approaches, organizing the sales force, relationship marketing in service
organizations, the difference between customers and clients in service organizations,
multichannel marketing, and a new section on Porter’s diamond model of national competitive advantage. We have also changed the title and added content to chapter 6, “Product and Brand Strategy” to better reflect current views of these topics.
We have altered two important elements in this edition. “Marketing Insights” replace
our previous “Marketing Highlights” feature. This is more than a simple name change. It
was done to more accurately reflect their purpose of helping students solve marketing
problems, analyze marketing cases, and develop marketing plans. More than 20 Marketing Insights have been added to this edition.
We have also added an “Additional Resources” section to the end of each chapter.
Previously, each chapter ended with a selection of additional readings. This change is
designed to highlight our focus on current resources which students can utilize in solving marketing problems, analyzing marketing cases, and developing marketing plans, as
well as assist in writing projects and case presentations. Each resource has been selected
with prospective students in mind. Our goal is to provide resources accessible to students at various stages of marketing education given the wide spectrum of courses in
which the book is utilized.
UTILIZING THE PREFACE
This book has been used successfully in college courses and practical training that
require an overview of the critical aspects of marketing management and marketing strategy development. It has been used:
• As a primary introductory text primarily at the undergraduate level.
• At the undergraduate and MBA level, where several AACSB core curriculum courses
are team-taught as one multidisciplinary 9-to-12 hour course.
• At the advanced undergraduate and MBA level where it is used as the content foundation in courses that utilize marketing cases and problems.
• In short courses and executive development programs.
INSTRUCTIONAL RESOURCES
The Preface is accompanied by two expanded supplements. They were developed in response
to instructors’ requests. We offer a test bank of nearly 1,300 multiple-choice, true-false, and
brief essay questions. It is available in both print and EZ Test Online. We also offer PowerPoint slides that highlight key text material.
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Acknowledgements
Our book is based on the works of many academic researchers and marketing practitioners.
We want to thank those individuals who contributed their ideas to develop the field of marketing throughout the years. Indeed, our book would not be possible without their contributions. We would also like to thank our teachers, colleagues, and students for their many
contributions to our education. We would also like to publicly acknowledge those individuals who served as reviewers of this and previous editions. We appreciate their advice and
counsel and have done our best to reflect their insightful comments.
Roger D. Absmire
Sam Houston State University
Catherine Axinn
Syracuse University
Andrew Bergstein
Pennsylvania State University
Robert Brock Lawes
Chaminade University of Honolulu
Glenn Chappell
Meridith College
Newell Chiesl
Indiana State University
Reid P. Claxton
East Carolina University
Mike Dailey
University of Texas, Arlington
Linda M. Delene
Western Michigan University
James A. Eckert
Western Michigan University
Robert Finney
California State University, Hayward
Stephen Goldberg
Fordham University
Sol Klein
Northeastern University
Franklyn Manu
Morgan State University
Edward J. Mayo
Western Michigan University
Donald J. Messmer
College of William & Mary
Johannah Jones Nolan
University of Alabama, Birmingham
R. Stephen Parker
Southwest Missouri State University
Debu Purohit
Duke University
Gary K. Rhoads
Brigham Young University
Mike Ballif
University of Utah
Donald Brady
Millersville University
Lee Richardson
University of Baltimore
Matthew H. Sauber
Eastern Michigan University
Ronald L. Schill
Brigham Young University
Vernon R. Stauble
California State Polytechnic University
David Griffith
University of Oklahoma
Lawrence Hamer
DePaul University
Jack Healey
Golden State University
Betty Jean Hebel
Madonna University
JoAnne S. Hooper
Western Carolina University
David Horne
Wayne State University
Fred Hughes
Faulkner University
Benoy Joseph
Cleveland State University
Ann Marie Thompson
Northern Illinois University
John R. Thompson
Memphis State University
ix
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x Acknowledgements
Gordon Urquhart
Cornell College
Kevin Webb
Drexel University
Kathleen R. Whitney
Central Michigan University
J. B. Wilkinson
University of Akron
Dale Wilson
Michigan State University
Eunkyu Lee
Syracuse University
Tina Lowrey
University of Texas at San Antonio
Albert Milhomme
Texas State University
Larry Crowson
University of Central Florida
Gerard DiBartolo
Salisbury University
Casey Donoho
Northern Arizona University
R. E. Evans
University of Oklahoma
Lawrence Feick
University of Pittsburgh
David Good
Grand Valley State University
Perry Haan
Tiffin University
Harry Harmon
Central Missouri
Catherine Holderness
University of North Carolina–Greensboro
Nicole Howatt
UCF
Anupam Jaju
GMU
Chris Joiner
George Mason University
Chip Miller
Drake University
David L. Moore
LeMoyne College
Joan Phillips
University of Notre Dame
Thomas Powers
University of Alabama at Birmingham
John Rayburn
University of Tennessee
Martha Reeves
Duke
Henry Rodkin
DePaul University
Alan Sawyer
University of Florida
Mark Spriggs
University of St. Thomas
Sean Valentine
University of Wyoming
Stacy Vollmers
University of St. Thomas
Anna Andriasova
University of Maryland University College
Ritesh Saini
George Mason University
Ana Valenzuela
Baruch College, CUNY
Matthew Elbeck
Troy University Dothan
Edward Bond
Bradley University
Working with professionals makes everything go smoothly. It is why being a McGrawHill/Irwin author is a pleasure. Thank you to Doug Hughes, our editor, and to Gabriela
Gonzalez, editorial assistant, and welcome aboard. Special thanks to Robin Reed, project
manager, for so many contributions to this project. We are very grateful.
We also wish to acknowledge Michael Knetter, Dean of the School of Business at the
University of Wisconsin, and Devanthan Sudharshan, Dean of Gatton College of Business
and Economics at the University of Kentucky who have always supported our efforts.
J. Paul Peter
James H. Donnelly Jr.
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Contents
SECTION I
ESSENTIALS OF MARKETING
MANAGEMENT 1
PART A
INTRODUCTION 1
Preparation of the Research Report 36
Limitations of the Research Process 36
Marketing Information Systems 38
Conclusion 39
Chapter 3
Consumer Behavior 40
Chapter 1
Strategic Planning and the Marketing
Management Process 2
Social Influences on Consumer Decision Making 41
The Marketing Concept 2
What Is Marketing? 3
What Is Strategic Planning? 4
Marketing Influences on Consumer Decision
Making 43
Strategic Planning and Marketing Management 4
The Strategic Planning Process 5
The Complete Strategic Plan 14
The Marketing Management Process 14
Situation Analysis 14
Marketing Planning 17
Implementation and Control of the Marketing Plan 18
Marketing Information Systems and Marketing
Research 19
The Strategic Plan, the Marketing Plan, and
Other Functional Area Plans 19
Marketing’s Role in Cross-Functional Strategic
Planning 19
Conclusion 20
Appendix
Portfolio Models
23
PART B
MARKETING INFORMATION,
RESEARCH, AND UNDERSTANDING
THE TARGET MARKET 27
Chapter 2
Marketing Research: Process and Systems
for Decision Making 28
The Role of Marketing Research 28
The Marketing Research Process 29
Purpose of the Research 29
Plan of the Research 30
Performance of the Research 35
Processing of Research Data 35
Culture and Subculture 41
Social Class 42
Reference Groups and Families
43
Product Influences 43
Price Influences 43
Promotion Influences 44
Place Influences 44
Situational Influences on Consumer Decision
Making 45
Psychological Influences on Consumer Decision
Making 45
Product Knowledge 45
Product Involvement 46
Consumer Decision Making 46
Need Recognition 47
Alternative Search 48
Alternative Evaluation 49
Purchase Decision 49
Postpurchase Evaluation 50
Conclusion 52
Chapter 4
Business, Government, and Institutional
Buying 53
Categories of Organizational Buyers 53
Producers 53
Intermediaries 54
Government Agencies 54
Other Institutions 54
The Organizational Buying Process 54
Purchase-Type Influences on Organizational Buying 55
Straight Rebuy 55
Modified Rebuy 55
New Task Purchase 55
Structural Influences on Organizational
Buying 56
xi
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xii Contents
Purchasing Roles 56
Organization-Specific Factors 57
Purchasing Policies and Procedures 57
Behavioral Influences on Organizational
Buying 58
Personal Motivations 58
Role Perceptions 58
Stages in the Organizational Buying
Process 60
Organizational Need 61
Vendor Analysis 61
Purchas…
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