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2.4.1 The Role of Research 60 3.3.8 Political-Legal Environment 95
2.4.2 The Role of Relationships 60 3.4 Forecasting and Demand Measurement 97
2.4.3 From Marketing Plan to Marketing Action 60 3.4.1 The Measures of Market Demand 97
Summary 61 3.4.2 A Vocabulary for Demand Measurement 98
Applications 63 3.4.3 Estimating Current Demand 100
MARKETING LESSON TWG Tea 64 3.4.4 Estimating Future Demand 102
Summary 104
MARKETING LESSON Yum! Brands 66 Applications 106
Sample Marketing Plan: Pegasus Sports International MARKETING LESSON Microsoft 107
69
MARKETING LESSON Uber 109
PART 2 Capturing Marketing Insights 74
Chapter 4 Conducting Marketing Research 112
Chapter 3 Gathering Information and Forecasting
Demand 74 4.1 The Marketing Research System 114
4.2 The Marketing Research Process 115
3.1 Components of a Modern Marketing
4.2.1 Step 1: Define the Problem, the Decision
Information System 76
Alternatives, and the Research Objectives
3.2 Internal Records and Marketing 115
Intelligence 77
4.2.2 Step 2: Develop the Research Plan 116
3.2.1 The Order-to-Payment Cycle 77
3.2.2 Sales Information Systems 77 MARKETING MEMO Conducting Informative Focus
Groups 117
3.2.3 Databases, Data Warehousing, and Data Mining
77 MARKETING MEMO Questionnaire Do’s and Don’ts
MARKETING INSIGHT Making Big Data Work for You 78 120

3.2.4 The Marketing Intelligence System 78 MARKETING INSIGHT Getting into Consumers’ Heads With
3.2.5 Collecting Marketing Intelligence on the Internet Qualitative Research 121
79
3.2.6 Communicating and Acting on Marketing MARKETING INSIGHT Understanding Brain Science 122
Intelligence 80 4.2.3 Step 3: Collect the Information 125
3.3 Analyzing the Macroenvironment 80 4.2.4 Step 4: Analyze the Information 125
3.3.1 Needs and Trends 80 4.2.5 Step 5: Present the Findings 125
MARKETING INSIGHT Ten Forces Forging China’s 4.2.6 Step 6: Make the Decision 125
Future 81 4.3 Marketing Research in Asia 126
3.3.2 Identifying the Major Forces 82 4.4 Measuring Marketing Productivity 128
3.3.3 The Demographic Environment 82 4.4.1 Marketing Metrics 128
4.4.2 Marketing-Mix Modeling 129
MARKETING INSIGHT Finding Gold at the bottom of the
4.4.3 Marketing Dashboards 129
Pyramid 84
MARKETING INSIGHT Marketing Dashboards to Improve
3.3.4 Economic Environment 87
Effectiveness and Efficiency 130
3.3.5 Social-Cultural Environment 90
3.3.6 Natural Environment 92 Summary 132
Applications 134
MARKETING INSIGHT The Green Marketing Revolution
93 MARKETING LESSON Nestlé Malaysia: Lactogen 4 135

3.3.7 Technological Environment 94 MARKETING LESSON Procter & Gamble 139

Contents vii
PART 3 Connecting with Customers 142 6.2.3 Learning 186
6.2.4 Emotions 187
Chapter 5 Creating Customer Value, Satisfaction, and 6.2.5 Memory 188
Loyalty 142
6.3 The Buying Decision Process: The Five-Stage
5.1 Building Customer Value, Satisfaction, and Model 190
Loyalty 144 6.3.1 Problem Recognition 190
5.1.1 Customer Perceived Value 144 6.3.2 Information Search 190
5.1.2 Total Customer Satisfaction 149 6.3.3 Evaluation of Alternatives 191
5.1.3 Monitoring Satisfaction 149 6.3.4 Purchase Decisions 194
5.1.4 Product and Service Quality 150 6.3.5 Postpurchase Behavior 195
5.2 Maximizing Customer Lifetime Value 152 6.3.6 Moderating Effects on Consumer Decision
5.2.1 Customer Profitability 152 Making 197
5.2.2 Measuring Customer Lifetime Value 153 6.4 Behavioral Decision Theory and Behavioral
5.2.3 Attracting and Retaining Customers 153 Economics 198
6.4.1 Decision Heuristics 198
MARKETING MEMO Calculating Customer Lifetime
Value 154 6.4.2 Framing 199
6.4.3 Mental Accounting 200
MARKETING INSIGHT Seven Lessons from Samsung’s Summary 201
Note 7 Crisis 155 Applications 205
5.2.4 Building Loyalty 158 MARKETING LESSON Hello Kitty 206
5.2.5 Win-Backs 160
5.3 Cultivating Customer Relationships 160 MARKETING LESSON Gold Misses 209
5.3.1 Customer Relationship Management (CRM) 160
Chapter 7 Analyzing Business Markets 214
MARKETING INSIGHT The Behavioral Targeting
Controversy 161 7.1 What is Organizational Buying? 216
Summary 164 7.1.1 The Business Market versus the Consumer Market
216
Applications 166
7.1.2 Buying Situations 217
MARKETING LESSON Food Scandals in Taiwan: 7.2 Participants in the Business Buying Process
The Case of Tin Hsin International 218
Group 167
7.2.1 The Buying Center 218
MARKETING LESSON Tesco 170 7.2.2 Buying Center Influences 219
7.2.3 Targeting Firms and Buying Centers 219
Chapter 6 Analyzing Consumer Markets 172 7.3 The Purchasing/Procurement Process 220
7.4 Stages in the Buying Process 221
6.1 What Influences Consumer Behavior? 174
7.4.1 Problem Recognition 221
6.1.1 Cultural Factors 174
7.4.2 General Need Description and Product
6.1.2 Social Factors 175
Specification 222
MARKETING INSIGHT Face-saving and the Chinese 7.4.3 Supplier Search 222
Consumer 177
MARKETING INSIGHT The Asian B2B Environment 223
6.1.3 Personal Factors 178
7.4.4 Proposal Solicitation 224
6.2 Key Psychological Processes 181
7.4.5 Supplier Selection 224
6.2.1 Motivation: Freud, Maslow, Herzberg 181
6.2.2 Perception 183 MARKETING MEMO Developing Compelling Customer
Value Propositions 225
MARKETING MEMO The Power of Sensory
Marketing 183

viii Contents
7.4.6 Order-Routine Specification 226 MARKETING INSIGHT Chasing the Long Tail 265
7.4.7 Performance Review 227 Summary 267
7.5 Developing Effective Business-to-Business Applications 269
Marketing Programs 227
7.5.1 Communication and Branding Activities 227 MARKETING LESSON PT Heinz ABC 270
7.5.2 Systems Buying and Selling 228 MARKETING LESSON Fulla Dolls: The Alternative
MARKETING MEMO Spreading the Word With Customer Barbie 272
Reference Programs 229

7.5.3 Role of Services 229 PART 4 Building Strong Brands 274

7.6 Managing Business-to-Business Customer
Relationships 230 Chapter 9 Creating Brand Equity 274

MARKETING INSIGHT Rules of Social and Business 9.1 How Does Branding Work? 276
Etiquette 230 9.1.1 The Role of Brands 276
9.1.2 The Scope of Branding 278
7.6.1 The Benefits of Vertical Coordination 231
9.2 Defining Brand Equity 278
MARKETING INSIGHT Establishing Corporate Trust, 9.2.1 Brand Equity Models 281
Credibility, and Reputation 232
9.3 Building Brand Equity 284
7.6.2 Business Relationships: Risks and Opportunism 9.3.1 Choosing Brand Elements 285
233
MARKETING INSIGHT Driving Deeper Brand Connection
7.7 Relationship Marketing in the Keiretsu and
in China 289
Chaebol 234
7.8 Institutional and Government Markets 234 9.3.2 Designing Holistic Marketing Activities 290
Summary 237 9.3.3 Brand Communities 291
Applications 239 9.3.4 Leveraging Secondary Association 292
9.4 Measuring Brand Equity 294
MARKETING LESSON Tagit 240
MARKETING INSIGHT The Brand Value Chain 294
MARKETING LESSON Accenture 244
MARKETING INSIGHT What is a Brand Worth? 296
Chapter 8 Identifying Market Segments and Targets 9.5 Managing Brand Equity 296
246 9.5.1 Brand Reinforcement 296
8.1 Bases for Segmenting Consumer 9.5.2 Brand Revitalization 297
Markets 248 9.6 Devising a Branding Strategy 298
8.1.1 Geographic Segmentation 249 9.6.1 Branding Decisions 299
8.1.2 Demographic Segmentation 250 9.6.2 Brand Portfolios 300
8.1.3 Psychographic Segmentation 253 9.6.3 Brand Extensions 302
8.1.4 Behavioral Segmentation 255 9.7 Customer Equity 305
8.2 Bases for Segmenting Business Markets 258
MARKETING MEMO 21st Century Branding 306
8.3 Market Targeting 259
8.3.1 Effective Segmentation Criteria 260 Summary 307
8.3.2 Evaluating and Selecting the Market Segments Applications 310
261 MARKETING LESSON Malaysian Airlines 311
MARKETING INSIGHT Segmentation Strategy for China
MARKETING LESSON McDonald’s 314
263

Contents ix
Chapter 10 Crafting the Brand Positioning 316 11.2.1 Market-Challenger Strategies 356
10.1 Developing and Communicating a Positioning 11.2.2 Market-Follower Strategies 358
Strategy 318 MARKETING INSIGHT Counteracting Counterfeiting 359
10.1.1 Understanding Positioning and Value
11.2.3 Market-Nicher Strategies 360
Propositions 318
10.2 Determining a Competitive Frame of MARKETING MEMO Niche Specialist Roles 361
Reference 319 11.3 Product Life-Cycle Marketing Strategies
10.2.1 Identifying Competitors 319 361
10.2.2 Analyzing Competitors 320 11.3.1 Product Life Cycles (PLC) 362
10.2.3 Identifying Optimal Points-of-Parity and Points- 11.3.2 Style, Fashion, and Fad Life Cycles 362
of-Difference 320 11.3.3 Marketing Strategies: Introduction Stage and
10.2.4 Choosing Specific POPs and PODs 324 the Pioneer Advantage 363
10.3 Brand Mantras 326
MARKETING INSIGHT Understanding Double Jeopardy
10.3.1 Role of Brand Mantras 326 364
10.3.2 Designing a Brand Mantra 327
11.3.4 Marketing Strategies: Growth Stage 366
10.4 Establishing Brand Positioning 328
11.3.5 Marketing Strategies: Maturity Stage 367
10.4.1 Communicating Category Membership 328
11.3.6 Marketing Strategies: Decline Stage 369
MARKETING MEMO Constructing a Brand Positioning 11.3.7 Evidence for the Product Life-Cycle Concept
Bull’s-eye 329 370
10.4.2 Communicating POPs and PODs 330 11.3.8 Critique of the Product Life-Cycle Concept
10.4.3 Monitoring Competition 330 371
10.5 Alternative Approaches to Positioning 331 11.3.9 Market Evolution 371
10.5.1 Brand Narratives and Storytelling 331 11.4 Marketing in a Slow-Growth Economy
10.5.2 Cultural Branding 332 372
10.6 Positioning and Branding a Small Business 11.4.1 Explore the Upside of Increasing Investment
332 372
Summary 334 11.4.2 Get Closer to Customers 372
Applications 336 11.4.3 Review Budget Allocations 372
11.4.4 Put Forth the Most Compelling Value
MARKETING LESSON Under Armour 337 Proposition 373
MARKETING LESSON Nike China 339 11.4.5 Fine-tune Brand and Product Offerings 373
Summary 374
Chapter 11 Competitive Dynamics 344 Applications 377

11.1 Competitive Strategies for Market Leaders MARKETING LESSON Tata Salt (A) 378
346
MARKETING LESSON Tata Salt (B) 382
MARKETING INSIGHT Pokémon Go: A Game-Changer for
Nintendo? 346
PART 5 Shaping the Market Offerings 384
11.1.1 Expanding Total Market Demand 347
11.1.2 Protecting Market Share 349 Chapter 12 Setting Product Strategy 384

MARKETING INSIGHT Sun Tzu Bing Fa: Modern Strategy 12.1 Product Characteristics and Classifications
Insights from Ancient China 350 386
12.1.1 Product Levels: The Customer-Value Hierarchy
11.1.3 Increasing Market Share 354
386
11.2 Other Competitive Strategies 355
12.1.2 Product Classifications 387

x Contents
12.2 Differentiation 389 13.3 Achieving Excellence in Services Marketing
12.2.1 Product Differentiation 389 433
12.2.2 Services Differentiation 391 13.3.1 Marketing Excellence 433
12.3 Design 393 13.3.2 Technology and Service Delivery 434
12.4 Luxury Products 394 MARKETING INSIGHT Tapping Technology for Service
12.4.1 Characterizing Luxury Brands 394 Excellence: Henn-na Hotel 434
12.4.2 Growing Luxury Brands 395
13.3.3 Service in Asia 435
12.4.3 Marketing Luxury Brands 395
13.3.4 Best Practices of Top Service Companies
12.5 Environmental Issues 397 436
MARKETING MEMO A Sip or A Gulp: Environmental MARKETING MEMO Service Excellence: Five Pointers
Concerns in the Water Industry from SIA 436
398
13.3.5 Differentiating Services 440
12.6 Product and Brand Relationships 398
13.4 Managing Service Quality 441
12.6.1 The Product Hierarchy 398
12.6.2 Product Systems and Mixes 399 MARKETING MEMO Recommendations for Improving
Service Quality 443
12.6.3 Product-Line Analysis 400
12.6.4 Product-Line Length 401 13.4.1 Managing Customer Expectations 443
13.4.2 Incorporating Self-Service Technologies
MARKETING INSIGHT When Less Is More 402
(SSTs) 446
12.6.5 Product-Mix Pricing 405 13.5 Managing Product-Support Services 446
MARKETING MEMO Product-Bundle Pricing 13.5.1 Identifying and Satisfying Customer Needs
Considerations 407 447
13.5.2 Post-Sale Service Strategy 447
12.6.6 Co-Branding and Ingredient Branding 407
Summary 449
12.7 Packaging, Labeling, and Warranties and
Guarantees 409 Applications 451
12.7.1 Packaging 409 MARKETING LESSON Shangri-La Bosphorus Hotel 452
12.7.2 Labeling 412
MARKETING LESSON Singapore Airlines 456
12.7.3 Warranties and Guarantees 412
Summary 413
Chapter 14 Developing Pricing Strategies and
Applications 416
Programs 458
MARKETING LESSON Nintendo 417
14.1 Understanding Pricing 460
MARKETING LESSON Toyota 419 14.1.1 Pricing in a Digital World 460

MARKETING INSIGHT Giving It All Away 461

Chapter 13 Designing and Managing Services 422
14.1.2 A Changing Pricing Environment 461
13.1 The Nature of Services 424 14.1.3 How Companies Price 462
13.1.1 Service Industries Are Everywhere 424 14.1.4 Consumer Psychology and Pricing 463
13.1.2 Categories of Service Mix 424 14.2 Setting the Price 466
13.1.3 Distinctive Characteristics of Services 426 14.2.1 Step 1: Selecting the Pricing Objective 466
13.2 The New Service Realities 430
MARKETING INSIGHT Trading Up, Down, and Over 467
13.2.1 A Shifting Customer Relationship 430
14.2.2 Step 2: Determining Demand 469
MARKETING INSIGHT The Japanese Philosophy of Service
14.2.3 Step 3: Estimating Costs 472
432

Contents xi
14.2.4 Step 4: Analyzing Competitors’ Costs, Prices, 15.3.3 Identifying Major Channel Alternatives 513
and Offers 475 15.3.4 Evaluating the Major Alternatives 515
14.2.5 Step 5: Selecting a Pricing Method 476 15.4 Channel-Management Decisions 517
14.2.6 Step 6: Selecting the Final Price 480 15.4.1 Selecting Channel Members 517
MARKETING INSIGHT Stealth Price Increases 481 15.4.2 Training and Motivating Channel
Members 517
14.3 Adapting the Price 482
15.4.3 Evaluating Channel Members 520
14.3.1 Geographical Pricing (Cash, Countertrade,
15.4.4 Modifying Channel Design and Arrangements
Barter) 482
520
14.3.2 Price Discounts and Allowances 483
15.4.5 Global Channel Considerations 521
14.3.3 Promotional Pricing 484
15.5 Channel Integration and Systems 521
14.3.4 Differentiated Pricing 484
15.5.1 Vertical Marketing Systems 521
14.4 Initiating and Responding to Price
15.5.2 Horizontal Marketing Systems 523
Changes 485
15.6 E-Commerce Marketing Practices 523
14.4.1 Initiating Price Cuts 485
15.6.1 Pure-Click Companies 523
14.4.2 Initiating Price Increases 486
15.6.2 Brick-and-Click Companies 526
14.4.3 Responding to Competitors’ Price Changes
487 15.7 M-Commerce Marketing Practices 526
Summary 489 15.7.1 Changes in Customer and Company
Behavior 526
Applications 492
15.7.2 Marketing Practices 526
MARKETING LESSON Siam Park City 493
MARKETING MEMO Lessons from South Korea’s Mobile-
MARKETING LESSON eBay 497 Retailers 527

15.8 Conflict, Cooperation, and

PART 6 Delivering Value 500 Competition 528
15.8.1 Types of Conflict and Competition 528
Chapter 15 Designing and Managing Marketing 15.8.2 Causes of Channel Conflict 528
Channels and Value Networks 500 15.8.3 Managing Channel Conflict 529
15.1 Marketing Channels and Value Networks 15.8.4 Dilution and Cannibalization 529
502 15.8.5 Legal and Ethical Issues in Channel
15.1.1 The Importance of Channels 502 Relations 530
15.1.2 Multichannel Marketing 503 Summary 532
15.1.3 Integrating Multichannel Marketing Systems Applications 536
503
MARKETING LESSON 7-Eleven 537
15.1.4 Value Networks 504
15.1.5 The Digital Channels Revolution 505 MARKETING LESSON Taobao 541
15.2 The Role of Marketing Channels 505
15.2.1 Channel Functions and Flows 505 Chapter 16 Managing Retailing, Wholesaling, and
15.2.2 Channel Levels 507 Logistics 544
15.2.3 Service Sector Channels 509 16.1 Retailing 546
15.3 Channel-Design Decisions 509 16.1.1 Types of Retailers 546
15.3.1 Analyzing Customer Needs and Wants 509
MARKETING INSIGHT Enhancing Online Shopping in Asia
MARKETING INSIGHT Understanding the Showrooming 548
Phenomena 510
16.1.2 The Modern Retail Marketing Environment
15.3.2 Establishing Objectives and Constraints 511 549

xii Contents
MARKETING INSIGHT Franchise Fever in Asia 550 MARKETING INSIGHT Collectivism, Consensus Appeals,
and Credibility 592
16.1.3 Marketing Decisions 553
17.2.4 Select the Communications Channels 592
MARKETING INSIGHT The Growth of Shopper Marketing
554 17.2.5 Establish the Total Marketing
Communications Budget 594
MARKETING MEMO Helping Stores to Sell 559 17.3 Selecting the Marketing Communications
Mix 596
MARKETING INSIGHT Feng Shui and Its Application to
Retailing and Marketing in the Far MARKETING INSIGHT Marketing Communications and
East 561 the Chinese Consumer 597

16.2 Private Labels 562 17.3.1 Characteristics of the Marketing

Communications Mix 597
16.2.1 Role of Private Labels 562
17.3.2 Factors in Setting the Marketing
16.2.2 Private Label Success Factors 563
Communications Mix 600
MARKETING INSIGHT Manufacturer’s Response to the 17.3.3 Measuring Communication Results 601
Private Label Threat 564 17.4 Managing the Integrated Marketing
16.3 Wholesaling 564 Communications Process 602
16.3.1 Trends in Wholesaling 565 17.4.1 Coordinating Media 602
16.4 Market Logistics 565 17.4.2 Implementing IMC 603
16.4.1 Integrated Logistics Systems 566 MARKETING MEMO How Integrated Is Your IMC
16.4.2 Market-logistics Objectives 567 Program? 603
16.4.3 Market-logistics Decisions 568 Summary 604
Summary 570 Applications 607
Applications 572
MARKETING LESSON Red Bull 608
MARKETING LESSON Shanghai Tang 573
MARKETING LESSON Target 610
MARKETING LESSON Amazon.com 577

Chapter 18 Managing Mass Communications:

PART 7 Communicating Value 580 Advertising, Sales Promotions, Events,
and Public Relations 612
Chapter 17 Designing and Managing Integrated
18.1 Developing and Managing an Advertising
Marketing Communications 580
Program 614
17.1 The Role of Marketing Communications 18.1.1 Setting the Advertising Objectives 614
582 18.1.2 Deciding on the Advertising Budget 615
17.1.1 The Changing Marketing Communications 18.1.3 Developing the Advertising Campaign 616
Environment 582
17.1.2 Marketing Communications and Brand Equity MARKETING INSIGHT Safi Rania Gold 618
582
MARKETING INSIGHT Advertising Guidelines for Modern
17.1.3 The Communications Process Models 585 Asia 619
17.2 Developing Effective
Communications 587 MARKETING MEMO Print Ad Evaluation Criteria 621
17.2.1 Identify the Target Audience 587 18.2 Choosing Media 622
17.2.2 Set the Communications Objectives 588 18.2.1 Reach, Frequency, and Impact 622
17.2.3 Design the Communications 588 18.2.2 Choosing among Major Media Types 623
MARKETING INSIGHT Celebrity Endorsements as a 18.2.3 Place Advertising Options 624
Message Strategy 591
MARKETING INSIGHT Playing Games with Brands 626

Contents xiii
18.2.4 Evaluating Advertising Effectiveness 628 MARKETING INSIGHT Tracking Online Buzz 668
18.3 Sales Promotion 630 19.4 Mobile Marketing 668
MARKETING INSIGHT Alibaba’s Singles’ Day Phenomenon 19.4.1 The Scope of Mobile Marketing 668
Sets Sights on Going Global 630 19.4.2 Developing Effective Mobile Marketing
18.3.1 Concerns with Promotion 631 Programs 669
18.3.2 Major Decisions 632 19.4.3 Mobile Marketing across Markets 669
18.4 Events and Experiences 637 Summary 671
Applications 672
MARKETING INSIGHT Brands and Sport Sponsorship
637 MARKETING LESSON Facebook 673

18.4.1 Events Objectives 639 MARKETING LESSON Unilever (Axe and Dove) 675
18.4.2 Major Sponsorship Decisions 640

MARKETING MEMO Measuring High Performance Chapter 20 Managing Personal Communications:

Sponsorship Programs 641 Direct and Database Marketing and
Personal Selling 678
18.4.3 Creating Experiences 642
18.5 Public Relations 642 20.1 Direct Marketing 680
18.5.1 Marketing Public Relations 643 20.1.1 The Benefits of Direct Marketing 680
18.5.2 Major Decisions in Marketing PR 644 20.1.2 Direct Mail 681
Summary 646 20.1.3 Catalog Marketing 682
Applications 649 20.1.4 Telemarketing 683
20.1.5 Public and Ethical Issues in Direct Marketing
MARKETING LESSON Gillette (A) 650 683
MARKETING LESSON Gillette (B) 654 20.2 Customer Databases and Database
Marketing 684
20.2.1 Customer Databases 684
Chapter 19 Managing Digital Communications:
Online, Social Media, and Mobile 656 20.2.2 Data Warehouses and Data Mining 684
20.2.3 The Downside of Database Marketing 686
19.1 Online Marketing 658
20.3 Designing the Sales Force 687
19.1.1 Advantages and Disadvantages of Online
20.3.1 Sales Force Objectives and Strategy 688
Marketing Communications 658
20.3.2 Sales Force Structure 689
MARKETING INSIGHT Asia’s Technologically Savvy
Shoppers 659 MARKETING INSIGHT Major Account Management 690

19.1.2 Online Marketing Communication Options 20.3.3 Sales Force Size 690
659 20.3.4 Sales Force Compensation 691
20.4 Managing the Sales Force 692
MARKETING MEMO How to Maximize the Marketing
Value of Emails 662 20.4.1 Recruiting and Selecting Representatives
692
19.2 Social Media 663 20.4.2 Training and Supervising Sales
19.2.1 Social Media Platforms 663 Representatives 692
19.2.2 Using Social Media 664 20.4.3 Sales Rep Productivity 693
19.3 Word of Mouth 665 20.4.4 Motivating Sales Representatives 694
19.3.1 Forms of Word of Mouth 665 20.4.5 Evaluating Sales Representatives 695
19.3.2 Creating Word-of-Mouth Buzz 665 20.5 Principles of Personal Selling 697
MARKETING MEMO How To Start A Buzz Fire 667 20.5.1 The Six Steps 698
20.5.2 Negotiation 699
19.3.3 Measuring the Effects of Word of Mouth
667 20.5.3 Relationship Marketing 701

xiv Contents
MARKETING INSIGHT Culture and Relationship Marketing 21.5 Managing the Development Process:
702 Concept to Strategy 731

Summary 705 21.5.1 Concept Development and Testing 731

Applications 708 21.5.2 Marketing Strategy Development 734

21.5.3 Business Analysis 735
MARKETING LESSON Progressive 709
21.6 Managing the Development Process:
MARKETING LESSON Victoria’s Secret 711 Development to Commercialization 736
21.6.1 Product Development 737
21.6.2 Market Testing 737
PART 8 Creating Successful Long-Term Growth 714
21.6.3 Commercialization 740
Chapter 21 Introducing New Market Offerings 714 21.7 The Consumer-Adoption Process 742
21.7.1 Stages in the Adoption Process 742
21.1 New-Product Options 716
21.7.2 Factors Influencing the Adoption Process
21.1.1 Make or Buy 716
742
21.1.2 Types of New Products 716
Summary 746
21.2 Challenges in New-Product Development
Applications 750
717
21.2.1 The Innovation Imperative 717 MARKETING LESSON Apple 751

MARKETING INSIGHT Lessons from Google in Creating an MARKETING LESSON Tiger Balm 753
Innovative Culture 718

21.2.2 New-Product Success 719 Chapter 22 Tapping into Global Markets 758
21.2.3 New-Product Failure 720 22.1 Competing on a Global Basis 760
21.2.4 Asian Perspective of New-Product 22.2 Deciding Whether to Go Abroad 761
Development 721
22.3 Deciding Which Markets to Enter 762
21.3 Organizational Arrangements 721
22.3.1 How Many Markets to Enter 762
21.3.1 Budgeting for New-Product Development
22.3.2 Evaluating Potential Markets 763
722
22.3.3 Succeeding in Developing Markets 764
21.3.2 Organizing New-Product Development
722 MARKETING INSIGHT Heinz’s Four A’s for Emerging
21.4 Managing the Development Process: Ideas Market Expansion 767
724
MARKETING INSIGHT How Chinese Brands can Gain
21.4.1 Generating Ideas 724
Global Acceptance 770
MARKETING MEMO Ten Ways to Great New-Product
22.4 Deciding How to Enter the Market 771
Ideas 725
22.4.1 Indirect and Direct Export 771
MARKETING INSIGHT New-Idea Generation in Japanese 22.4.2 Licensing 772
Companies 725 22.4.3 Joint Ventures 773

MARKETING INSIGHT P&G’s New CONNECT + DEVELOP MARKETING INSIGHT Guanxi and Its Application to
Approach to Innovation 726 Marketing in Greater China 774

22.4.4 Direct Investment 775

MARKETING MEMO Seven Ways to Draw New Ideas
from Your Customers 727 22.5 Deciding on the Marketing Program 776
22.5.1 Global Similarities and Differences 777
MARKETING MEMO How to Run a Successful 22.5.2 Marketing Adaptation 778
Brainstorming Session 729
MARKETING MEMO The Ten Commandments Of Global
Branding 779

Contents xv
22.5.3 Global Product Strategies 780 MARKETING INSIGHT Confucius and Marketing in East
22.5.4 Global Communication Strategies 783 Asia 815
22.5.5 Global Pricing Strategies 785 23.3.3 Cause-Related Marketing 816
22.5.6 Global Distribution Strategies 787
MARKETING MEMO Making a Difference: Top 10 Tips for
22.6 Country-of-Origin Effects 789 Cause Branding 817
22.6.1 Building Country Images 789
23.3.4 Social Marketing 818
22.6.2 Consumer Perceptions of Country of Origin
790 23.4 Marketing Implementation and Control
820
Summary 792
23.4.1 Marketing Implementation 820
Applications 795
23.4.2 Marketing Control 821
MARKETING LESSON L’Oréal 796 23.5 The Future of Marketing 827
MARKETING LESSON Volkswagen 798 MARKETING MEMO Major Marketing Weaknesses 827

Summary 829
Chapter 23 Managing a Holistic Marketing Applications 832
Organization 802
MARKETING LESSON Unilever Platinum Stores 833
23.1 Trends in Marketing Practices 804
23.2 Internal Marketing 805 MARKETING LESSON Timberland 837
23.2.1 Organizing the Marketing Department 805 Appendix Tools for Marketing Control 839
MARKETING MEMO Characteristics of Customer-Driven
Company Departments 806 Appendix A1
23.2.2 Relations with Other Departments 809 Endnotes E1
23.2.3 Building a Creative Marketing Organization Glossary G1
810 Image Credits C1
23.3 Socially Responsible Marketing 810 Name Index I1
MARKETING INSIGHT The Marketing CEO 810 Company, Brand, and Organization Index I11
Subject Index II3
23.3.1 Corporate Social Responsibility 812
23.3.2 Socially Responsible Business Models 815

xvi Contents
 MARKETING
MANAGEMENT
AN ASIA PERSPECTIVE Now into its seventh edition,
this book continues to showcase the excellent content that Kotler has created
with examples and case studies that are easily recognized. This enables students
to relate to and grasp marketing concepts better.

IN THIS EDITION, YOU WILL FIND THAT WE HAVE:

1 Global brand names to provide a balanced look at Marketing Management

2 An in-depth look at Asian concepts and practices such as Islamic

marketing, guanxi, online marketing, etc.

3 An emphasis on 3 key marketing changes–Economic, Environmental, and

Technological
 Global brand names to provide a balanced look at Marketing
eting Management
Management
(Seventh Edition)

10%
International companies

40%
in a non-Asian context
• Apple
• PepsiCo Asian companies in
• Accenture an Asian context / non-Asian context
• Ritz-Carlton
• MCM
• Tata
• TaoBoa
• Samsung

50% International companies

in an Asian context
• Google
• Kit Kat
• Uber
• Procter and Gamble

xviii About This Book

 weights
If we knew the
hase decision. r choice.
utes in their purc ict her compute

Asian concepts and practices

ider several attrib we could more reliably pred capacity,
Most buyers cons attributes, puter’s memory
hes to the four e to the com percent to price
. To
that Yishan attac perc ent of the importanc ht, and 10
n assigned 40 weig we
Suppose Yisha ent to size and y-value model,
bility, 20 perc the expectanc tion leads to
graphics capa r, according to This computa
30 percent to for each compute
perceived value puter’s attributes.
find Yishan’s her belie fs about each com
hts by
multiply her weig value s:
perceived
the following

Students are kept up-to-date with and

) = 8.0
) + 0.2(6) + 0.1(4
0.4(10) + 0.3(8
Computer A = ) = 7.8
) + 0.2(8) + 0.1(3

ChaPter 6 ó
r B = 0.4(8) + 0.3(9
Com pute 0) + 0.1(5) = 7.3
r C = 0.4(6 ) + 0.3(8) + 0.2(1
) = 4.7

informed of the concepts and practices in

Compute + 0.2(7) + 0.1(8
0.4(4) + 0.3(3)
Computer D = puter A, whic
h
n will favor com
predict that Yisha
ulation would
y-model form this, a

analyzing Con
An expectanc .49 way. Knowing

Asia.
eived value
highest perc rences the same sions. The marketer
(at 8.0) has the form their prefe
t compute r buye rs ence buye r deci
greater interest MARKETING
Suppose mos
ufacturer can
do a number
of things to influ
following strat
egies to stimulate INSIGHT ASIA’S TECHN
OLOGICALLY
computer man could apply the SAVVY
for example, SHOPPERS
of computer B, Asia’s digital
consumers are

sume
in brand B: consumers, partic technology leapf
rogs.
itioning. ularly those living
ique is called real repos ing. platforms prima outside cities, acces Asian consumers are
likely to make
techn ition rily through mobile s digital

r Markets
computer—This ological repos Thailand, 85 perce phones, bypassing when looking search engines
Redesign the ique is called psych sitioning, nt for prod their first choic

• Islamic marketing
techn depo of consumers not PCs. ucts instead of e
t the brand—T
his d competitive devices for their living in cities use In Web site. checking a comp
Alter beliefs abou strategy, calle ity than it online purchases. any’s
t competitors’
brands—This d has more qual to learn about They enjoy watch mobile Asian consumers
competitor’s bran products, espec ing videos are generally not
Alter beliefs abou buyers mistakenly believe a using cosmetics. ially those invol
ving cooking and platform. There loyal to any partic
e when h more fore, shopping ular
make s sens rs to attac Understanding Social media is using social media suits
to persuade buye 193

• Guanxi
lly has. could try how Asian also perceived them well.
actua The marketer company to deve consu mers buy onlin than official sites as being more
rtance weights— h the brand excels. lop two videos e led one about product trustworthy
Alter the impo attention to hair styling prod in Indonesia to Hanting Hotel, quality, especially
in whic draw buyers’ uct. One video promote its a Chinese mid-p in China.

ChaPter 19
the attributes e marketer could rice hotel chain
importance to attributes—Th
showed a celeb
rity endorsing
, similar to a TV
commercial,
membership cards
through WeCh , gave virtual
to neglected or processing
speed. ideal was adapted to the product. The members and realiz at, resulting in
Call attention

• Online marketing
utes, such as styling ade buye rs to change their times
what Indonesian
shop
other video
Socia
ing 62,000 room
book
500,000 new
neglected attrib try to persu longe r than a typical pers wanted. Nearly l media such ings.
ls—T he marketer could a blogg TV commercia six What sApp
as Facebook,
Insta
r’s idea er demonstrating l, the video featured , and Line allow gram, WeChat,
Shift the buye utes.
50
The longer video how to use the Asian consumers retailers to conn
or more attrib hair styling prod enjoy the intera ect with consu
levels for one received 40 perce uct. mers.

ó Managing
shorter one with nt more viewe not buy simply ction with seller
the celebrity endo rs than the based on price s. They do

Online, Socia
beliefs.
res to Islamic Asian consumers rsement. considerations or the cheapest
ysia that adhe any are also spoilt such as enjoying deal. Instead,
leadi ng toilet ries brand in Mala dient s and are free from e-commerce shop
ping
for choice in
term
and product choic
e are
the online shop
ping experience
ral ingre GOLD important.
Safi—Safi is the mad e from pure natu of its recent launches is the Amazon and eBay, sites. It is a fragm
ented market.
s of Unlike the more
are in there Besid matu
All its products or alcohol. One Malays not only Zalora and Lazad ’s Taobao (in China
), Flipkart (in India
es online shopping re markets, wher
animal origin monly used by s a (in almost all is via credit cards e payment for

Digital Commun
ingredients of l gold is com of the ingredient Qoo10 and Carou South ), customer’s door and there is deliv
ment. The meta m, gold is one sell (in Singapore) east Asian countries),

l Media, and
step, Asians, espe ery
skincare treat old Malay custo ty and ever-lastin
g Kaidee and PanT , Mudah (in Mala areas, have no cially those living to the
for beauty. In ment for beau is ipMarket (in Thail credit cards. Such in rural
jewellery but also l Malayan treat of the region, Thegioididong and), OLX (in Indon ysia), delivery. They consumers prefe
for susu k, a traditiona ates the Islamicization d this into (in Vietnam). Mark esia), and also pick up their r cash-on-
used which pre-d Safi turne et fragmentation such as post office purchased items
. How ever, this practice,
lars as hara m (forbidden). are conc ept means that
paym
s and convenien
ce
at places
youth ic scho GOLD skinc ent there. stores and make
modern Islam introduce the skin their
prohibited by rtunit y to is a pote ntial Sources: Florian

Mobile
this as an oppo belief that gold
Hoppe, Sebas
2016; Cindy Chiu, tien Lamy, and Alessandro Canna

ications:
a positive. It took ed), and draws on Muslims’ comes in nano
(allow 24-carat gold Todd Guild, and rsi,
Gordon Orr, “Five “Can Southeast Asia Live Up to
which is halal technology, the layer of the skin,
producing
dient. Using nano
Keys to Connecting Its E-Commerce
treatment ingre to pene trate into the second appe aran ce of wrinkles. with China’s Wired
Consu
Potential?” Bain
mers,”
& Company, 16
l enough reducing the McKinsey Digita March
size that is smal firming skin and te under the skin. l, August 2015.
more collagen
necessary for stay or accumula the on three mean
gold does not uct worked to s of communicatio 659
nano size, the ined how the prod business—“tele n to build her
Because of its body. Safi expla the halal endo
rsement. phon
the Internet, wher e, telegraph, and tell a wom
multimillion-d
rses out of the on, and received fs; introducing gold,
ollar
an”—would now cosmetics
Instead, it dispe of Halal Certificati ic belie towards
is
GOLD by Safi announce e the company
’s offici have
ic Body Islam e , al to
uct adheres to Consumer attitud
ent from s special offer site describes add
Malaysian Islam the endorsem its adherence
to Islamic beliefswher s and promotion new and old prod
the new prod ; and getting optimized by onal Malayan e they can buy
By ensuring that recently used D. gold as a traditi Estée Lauder prod s, and helps customers locat ucts,
tionally but not de towards GOL the reminder of y, and an endorsement from ucts. e stores
which was tradi to enhance attitu treatment for beaut
Marketers must
, Safi was able go where the custo
the religious body rity. Customers defin mers are, and
the religious autho e the rules of
engagement, increasingly that’
with the help however, and s online.
of agents and insulate them
information they intermediarie selves
need, what offer s if they so choose. They
willing to pay. ings they’re inter define what
India’s largest ested in, and
just like Ama e-commerce
zon as an onlin platform is Flipk what they’re
offers cash-on-d e bookstore, art. Starting off
elivery payment Flipkart beats
logistic service, options to custo Amazon beca
whic mers and has use it
e-commerce ecos h improves the unreliable set up its own
ystem in India 7 delivery netw
. ork of the exist
ing
19.1.27/17/17
Online3:55 PM
A company choo
Marke ting Communic
ses ation Options
in achieving com which forms of online mark
munication and eting will be most
sites, search ads, sales objectives 8 cost-effective
display ads, and . The options
0_CH06.indd
193 email. include Web
978013385646
Web Sites
Companies must
design Web sites
products, and that embody or
vision and that express their purp
enough to enco are ose, history,
urage repeat visits 9 attractive on first viewing
. Jeffrey Rayport and interestin
and Bernard Jawo g
rski propose Estée Lauder has
always relied on
its brands but now word
has added a sizabl of mouth to build
e digital component.

978013385646
0_CH19.indd
659

7/17/17 6:23
PM
Because of insin
skepticism to cere firms jump
environmenta ing on the green
and quality. l claims, but they bandwagon, cons
Firms are risin are also unwilling umers bring a
fuel innovatio g to the chal to sacrifice prod healthy
n. lenge and are uct performan
using the need ce
for sustainab
ility to
23.3.2 Socially

Economic, environmental and technological

Companies that
Responsible Bus
can iness Models
likely to succeed.38 innovate new solutions and
Indeed, socially values
it is consisten
t with responsible mark in a socially responsible way
eting also strike are
asia). Some Asian Confucian values (see Mark s a resonant chor the most
companies even eting Insight: d in Asia as
go all out in their Confucius and
corporate socia Marketing in
l responsibility east

ChaPter 23
efforts:
Tata—The Tata

An emphasis on 3 key marketing changes–economic,

Group not only
the communities” wants to make
it serves. Tata money but to
an honest com has a reputation “improve the quali
pany for being an enlig ty of life
exemplifies Tata’ . It has lost some deals beca htened employer of
s culture. The use it would not and
company is base

environmental, and technological—helps students to understand

Tata’s founder, pay bribes. Tata

ó Managing a
where it is the
by grateful emp biggest employer d in Jamshedpur, a town Steel
loyees) are testa . Statues of Tata named after
social services ments to Tata chairmen (som
of any Indian city. Stee e erected
garbage remo At an annual cost l’s providing the most compreh
val, hospital and of $30 million, ensive
school subsidies it pays for wate

• Marketing during economic downturns and recessions

Tata Steel laid
off 35,000 work , and even rogu r supplies,
salaries until the ers in 1999, e elephant hunt
age of 60. With the company ers. When

holis
competitor Essa 45,000 employee agreed to pay
r produces abou s, the work
Tata wants to t half of Tata Stee Tata Steel remains overstaffed ers’

tic Marketing
“privatize” its l’s outp ut with only 1,30 . Rival

• The rise of sustainability and

chairman Rata urban services
n Tata notes, to scale back 0 employees.
problems.” Perh “we are also its capital outla
aps being loved proud that we’v y. However, as
may be more e never Tata takes social
highly prized than had serious industrial Its social servic
responsibility seriou
sly.
being profitable.39 es programs
paying for water includ
supplies and subsid e

social responsibility

Organization
Corporate phila hospital bills and izing
corporate socia nthropy as a whol school fees.
l responsibility e is on the rise.
marketing, and in the form More firms are
employee volun of cash dona com ing to the belie
“smart thing to teerism programs tions, in-kind f that
do.”40 is the not just contributions,

• The increased development of

the “right thing cause
” but also the
for
panies merce channels
nd-Click Com to open e-com g how 815
15.6.2 Brick-a -and-mortar companies once hesitated
taken to the Inter
net after seein
vy, major MARKETING
y brick most have and e-sav INSIGHT
computing power, the Internet,
Although man nel partners, umers are wired
with their chan a, where cons Con
fear of conflict online. In Kore FuCIus anD
60
.
much business
was generated
s for the onlin
e shopping boom Two Confucian
values, li (礼) MarkeTIng
geared themselve cornerstones of and ren (仁), have In easT asIa
retailers have social structure become the
translated as in East Asia. Matsushita’s ideal
nt stores have

and mobile phones.

rites, Li has been s to society. Mats
dai departme provides the appro ceremonies, etiquette, and highest taxpayer ushita was also
otte, Shin segae, and Hyun to brace themselves for priate beha propriety. It in Japan. very often the
s—L ations Confucius also vior for every Confucianism also
rtment store ile business oper Lotte’s online
mall maintained that social situation.
Korean depa and mob ce grow s. based on the huma Asia. explains certain
marketing
their Internet l marketpla an individual n relations shou The Confucian loyalt
y of friendship amon mix practices in
strengthened on as the virtua ed services on
mora
efforts for the good l sentiment of ren, leading ld be
g online competiti s, offering customer-tailor nction with its
offline businesses provi
des a channel g overseas Chine
more intensifyin prem ium label held in conju p based
of others. These
conc
to positive
comp anies advan tage for local over foreig
se
ction of will be ershi on the solidarity epts
of the family. Confu created a culture
in regional mark
features a colle otional events as well as a partn ets. For example, n
lly, massive prom its own Hmall 61 relationships as cius viewed famil enter Asia, it ran when Kmart tried
basis. Additiona rtment Store has agement.
a social system
of the community y into local retail
ers which could to
. Hyundai Depa ent stock man
of blood families. through the abilit match its price
department store s CJm all for more effici The
rather than
that they matc
y to accept even
lower margins at s
ping’ Japan ese, in particular, hed or the same time
with CJ O Shop Confucian tradit have been deep local retailers receiv bettered Kmart’s quality. This
brok ers, ion, ly influe nced by ing the support was due to
t of a backlash
from retailers,
s and piety to commerce. extending the values of loyalt term suppliers
who were loyal
of most, if not all,
of their long-
intermediarie Two exemplars y and filial
creates the threa both through Kono relate to Soichiro have been based to them.
merce channel is how to sell mediaries: suke Matsushita, who found Honda and on Confucian value Successful ad campaigns
Adding an e-com s. The question gain acceptan
ce from inter bear
er their names. Viewing ed leading busin leader China Life s. While state-own
r intermediarie for trying to e partners highleade their esses which Insur
policies with patrio ance was using ads that equated
ed market
agents, and othe least three strategies net; (2) offer the offlin site but rs had a sense of socia organizations as a family, both tism, buyin
are at Inter the Web Ping An Insurance prom g its
online. There products on
the
(3) take orders
on meaningful empl l responsibility
beyond providing based on perso oted its products
rent brands or ct on sales; and oyment, upgrading nal and family
security. Such
(1) offer diffe negative impa and ensuring
stable and profit the level of their employees,
thinking helped
Ping An capture consumer-based
to cushion the a larger market
commissions payment. customer need able operations However, one nega
lers deliv er and collect s. Both men estab
lished their own
from serving
in Asia, which tive facet perta
share.
ins to product mana
have retai to facilitate socie is adversely affec
tal progress. The foundations gement
ctices new uses for techn Honda Foundatio of respect for ted by the wide
Marketing Pra
ology, while the n prom Intellectual Prope spread lack
PHP Institute prop otes
erce Asia, to respect rty Rights (IPR).
15.7 M-Comm
the In Confucian
connected and agates have no relationsh property rights of those with
consumers as ip depends on whom you
nels and media can keep ts are expe cted to overtake associating those
Mobile chan choose. Table rights with
a brand as they
interacting with ping.
62
lished.
for mobile shop is very well estab and
smart phones m-commerce
of the world, computers
In some parts as their main
rs use their mobile phones ture. Mob ile ads are well
Asian consume d mobile infra
struc South
well-develope e for firms. In
526 benefit from a ively inexpensiv ling on
umers and relat stores for commuters trave
accepted by cons subway e, lifelike store
created virtual activ0_CH2
Inter385646
Korea, Tesco
978013
tion system. osed
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e

rgrou d imag
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Seou l’s unde and bran by simp

range of product home delivery
aisles with a wide r products for Lessons from
umers could orde eting Memo:
on walls. Cons phones. Mark
63
ways. Millions
is popular as the
mobile
snap ping photos with their ers provide some key takea ves a bill 7/17/17
merce d Mobile-retail
9:26 PM
Korea, m-com criber recei
Part 6 ó Deliv

rt tickets to canne month, the subs

In Japan and South almost anything from conce South Korea’s r goods. Each the cost of all
phone is used to
buy
phone to orde usage fee, and
vending machine. gers use their criber fee, the
drinks from the of Japanese teena monthly subs
hone com pany listing the 7-Ele ven store.
from their telep est
paid at the near
ns. Bills can be
the transactio
Behavior
and Company asingly texting to a friend
s in Customer They are incre ping lists,
15.7.1 Changeging the way they shop in stores.use smart phones
to make shop
.
Consumers are
chan
ping in store s. Consumers gram and other social sites
while shop hases on Insta ping experienc
es
about a product os of their purc rol over their shop
and share phot mers more cont
collect coupons, give their custo
trying to apps.
Companies are es into the store via mobile
technologi
by bringing Web

Practices ing to win custo

mers.
15.7.2 Marketing
number of prac
tices in m-market
using a
Marketers are

About This Book xix

PM
7/17/17 5:57

526
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978013385646
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 Preface

What’s New in the Seventh Edition

Welcome to the seventh edition of Marketing Management: An Asian Perspective. With the
seventh edition, a great care was taken to truly reflect the modern realities of marketing in Asia
brought on by technology and the increasing role of social responsibility; while in selected parts
of Asia, culture and heritage nuances suggest adaptation of marketing practices.
Throughout the text, three broad forces—growth and downturns, technology, and social
responsibility—are identified as critical to the success of marketing programmes. These three
topics are evident throughout the text.
As has been the case for a number of editions now, the overriding goal of the revision for the
seventh edition of Marketing Management: An Asian Perspective is to create as comprehensive,
current, and engaging a marketing textbook as possible. Wherever appropriate, new materials
have been added, old materials updated, and no longer relevant or necessary material removed.
While marketing is changing in many significant ways, yet many core elements remain.
We feel that a balanced approach of classic and contemporary approaches and perspectives is
the way to go. Marketing Management: An Asian Perspective seventh edition allows instructors
to build on what they have prepared for teaching previously while at the same time offering a
text that is unsurpassed in breadth, depth, and relevance for students experiencing Marketing
Management: An Asian Perspective for the first time.
Many of the favourably received chapter features such as topical chapter opening vignettes,
in-text boxes highlighting noteworthy companies or issues, and the Marketing Insight and
Marketing Memo boxes that provide in-depth conceptual and practical commentary, have
been retained.
At the end of each chapter, the Summary page consolidates the students’ knowledge and
serves as a speedy revision tool.
The organizational structure of Marketing Management: An Asian Perspective has largely
been preserved although several adjustments have been made to improve student understanding,
as described below.
Significant changes to the seventh edition include:

• Brand-new opening vignettes for over 80 per cent of the chapters set the stage for the
chapter material to follow. By covering topical brands or companies, the vignettes are great
classroom discussion starters.
• Almost half of the in-text boxes are new. These boxes provide vivid illustrations of chapters
using actual companies and situations. The boxes cover a variety of products, services,
and markets. Marketing Insight boxes include contemporary issues such as “The Value of
Whatsapp to Facebook.” They also delve into important marketing topics such as the use of
technology in services marketing in “Tapping on Technology for Service Excellence: Henn-na
Hotel” and developing effective brand names in “Driving Deeper Brand Connection in China.”
Marketing Memo boxes offer practical advice and direction in dealing with various decisions
at all the stages of the marketing management process. Topics covered include “Lessons from
South Korea’s Mobile Retailers” and “Service Excellence: Five Pointers from SIA.”
• Several of the in-text box materials are from Think Business, the knowledge portal of the
National University of Singapore Business School, which carries a wide range of business
articles and videos.
• Each end-of-chapter section includes two expanded Marketing Lessons for case problem
solving. Over 75 per cent of Marketing Lessons are new cases. The rest have been updated.
These cases highlight challenges that companies face in Asia as well as innovative, insightful
marketing accomplishments by leading organizations that businesses, including those in
Asia, can learn from. Each case includes questions that promote classroom discussion and
analysis. Almost all the cases are new. They include companies such as MCM, Yum, Uber,
Unilever, 7-Eleven, Heinz, and Nintendo.
• A brand new Chapter 19 on Managing Digital Communications: Online, Social Media, and
Mobile gives the deserved attention to the impact of the digital revolution on marketing.

Preface xxi
 What Is Marketing Management All About?
Changes are observed in the marketing discipline like fundamental topics such as segmentation,
targeting, and positioning as well as concepts such as brand equity, customer value analysis,
database marketing, e-commerce, value networks, hybrid channels, supply chain management,
and integrated marketing communications.
Asian businesses must acknowledge and respond to the new elements in today’s
marketplace. Firms now sell goods and services through a variety of direct and indirect channels.
Mass advertising is not nearly as effective as it was, so marketers are exploring new forms of
communication, such as experiential, entertainment, and viral marketing. Asian consumers
are telling companies what types of product or services they want and when, where, and how
they want to buy them. They are increasingly reporting to other consumers what they think
of specific companies and products—using email, blogs, and other digital media to do so.
Company messages are becoming a smaller fraction of the total “conversation” about products
and services.
In response, forward-thinking Asian companies are shifting gears from managing product
portfolios to managing customer portfolios. They are compiling databases on individual
customers to better understand them and to construct individualized offerings and messages.
They are doing less product and service standardization and more niching and customization
and are replacing monologues with customer dialogues. They are improving their methods of
measuring customer profitability and customer lifetime value. They are measuring the return on
their marketing investment and its impact on shareholder value. Ethical and social implications
of their marketing decisions are also their area of concern.
As companies change, so does their marketing organization. Marketing is no longer a
company department charged with a limited number of tasks—it is a company-wide undertaking.
It drives the company’s vision, mission, and strategic planning. Marketing includes decisions
like who the company wants as its customers; which of their needs to satisfy; what products and
services to offer; what prices to set; what communications to send and receive; what channels
of distribution to use; and what partnerships to develop. Marketing succeeds only when all
departments work together to achieve goals: when engineering designs the right products,
finance furnishes the required funds, purchasing buys high-quality materials, production makes
high-quality products on time, and accounting measures the profitability of different customers,
products, and areas.
To address all these different shifts, good marketers are practicing holistic marketing.
Holistic marketing is the development, design, and implementation of marketing programs,
processes, and activities that recognize the breadth and interdependencies of today’s marketing
environment. Four key dimensions of holistic marketing are:

1. Internal marketing—ensuring everyone in the organization embraces appropriate

marketing principles, especially senior management.
2. Integrated marketing—ensuring that multiple means of creating, delivering, and
communicating value are employed and combined in the best way.
3. Relationship marketing—having rich, multifaceted relationships with customers, channel
members, and other marketing partners.
4. Performance marketing—understanding returns to the business from marketing activities
and programs, as well as addressing broader concerns and their legal, ethical, social, and
environmental effects.
These four dimensions are woven throughout the book and at times spelled out explicitly.
The text specifically addresses the following tasks that constitute modern marketing management:

1. Developing marketing strategies and plans

2. Capturing marketing insights
3. Connecting with customers

xxii Preface
4. Building strong brands
5. Creating value
6. Delivering value
7. Communicating value
8. Conducting marketing responsibly for long-term success

What Makes Marketing Management the Marketing Leader?

As marketing has maintained its respected position among students, educators, and
businesspeople, Marketing Management: An Asian Perspective has kept up-to-date and remains
contemporary. Students (and instructors) feel that the book is talking directly to them in terms of
both content and delivery.
Marketing Management: An Asian Perspective owes its marketplace success to its ability
to maximize three dimensions that characterize the best marketing texts—depth, breadth, and
relevance—as measured by the following criteria:

• Depth. Does the book have solid academic grounding? Does it contain important
theoretical concepts, models, and frameworks? Does it provide conceptual guidance to solve
practical problems?
• Breadth. Does the book cover all the right topics? Does it provide the proper amount of
emphasis on those topics?
• Relevance. Does the book engage the reader? Is it interesting to read? Does it have lots of
compelling examples?

This seventh edition builds on the fundamental strengths of past editions that collectively
distinguish it from all other marketing management texts:

• Managerial Orientation. The book focuses on the major decisions that marketing managers
and top management face in their efforts to harmonize the organization’s objectives,
capabilities, and resources with marketplace needs and opportunities.
• Analytical Approach. Marketing Management: An Asian Perspective presents conceptual
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and examples illustrate effective marketing principles, strategies, and practices.
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and business markets; profit and nonprofit organizations; domestic and foreign companies;
small and large firms; manufacturing and intermediary businesses; and low and high-
tech industries.
• Asian Insights. This book provides insights with an Asian flavour, drawing from regional
thinkers and business leaders (from Confucius and Sun Tzu to Jong-Yong Yun and Carlos
Ghosn, among others), institutions (chaebol, keiretsu, and so on), Asian trends and events
(China’s reliance on its domestic market, demographic changes, etc.), and practices that
impact Asian marketing (guanxi, mianzi, feng shui, counterfeiting, etc.).
• Comprehensive and Balanced Coverage. Marketing Management: An Asian Perspective
covers all the topics an informed marketing manager needs to understand to execute
strategic, tactical, and administrative marketing.

Preface xxiii
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xxiv Preface
Another random document with
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same railway coach does not mean in any country in the world that
they are socially equal.
The facts seem to show, however, that after the West Indian
negro has carefully weighed his civil and political privileges against
the economic and other advantages to be found in the United States,
he decides that, all things considered, he has a better chance in the
United States than at home. The negro in Haiti votes, but votes have
not made that country happy; or have not even made it free, in any
true sense of the word. There is one other fact I might add to this
comparison: nearly all the negro church organizations in the United
States have mission churches in the islands, as they have also in
Africa.
Does the negro in our country have a fair chance as compared
with the native black man in Africa, the home of the negro? In the
midst of the preparation of this article, I met Bishop Isaiah B. Scott of
the Methodist Episcopal Church, one of the strongest and most
intelligent colored men that I know. Bishop Scott has spent the
greater part of his life in the Southern States, but during the last
seven years he has lived in Liberia and traveled extensively on the
west coast of Africa, where he has come into contact with all classes
of European white people. In answer to my question, Bishop Scott
dictated the following sentence, which he authorized me to use:
“The fairest white man that I have met in dealing with the colored
man is the American white man. He understands the colored man
better because of his contact with him, and he has more respect for
the colored man who has accomplished something.”
Basing my conclusions largely on conversations which I have had
with native Africans, with negro missionaries, and with negro
diplomatic officials who have lived in Africa, especially on the west
coast and in South Africa, I am led to the conclusion that, all things
considered, the negro in the United States has a better chance than
he has in Africa.

THE NEGRO AS A DEPENDENT RACE

 IN certain directions the negro has had greater opportunities in
the States in which he served as a slave than he has had in the
States in which he has been for a century or more a free man. This
statement is borne out by the fact that in the South the negro rarely
has to seek labor, but, on the other hand, labor seeks him. In all my
experience in the Southern States, I have rarely seen a negro man
or woman seeking labor who did not find it. In the South the negro
has business opportunities that he does not have elsewhere. While
in social matters the lines are strictly drawn, the negro is less
handicapped in business in the South than any other part of the
country. He is sought after as a depositor in banks. If he wishes to
borrow money, he gets it from the local bank just as quickly as the
white man with the same business standing. If the negro is in the
grocery business or in the dry-goods trade, or if he operates a drug
store, he gets his goods from the wholesale dealer just as readily
and on as good terms as his white competitor. If the Southern white
man has a dwelling-house, a store-house, factory, school, or court-
house to erect, it is natural for him to employ a colored man as
builder or contractor to perform that work. What is said to be the
finest school building in the city of New Orleans was erected by a
colored contractor. In the North a colored man who ran a large
grocery store would be looked upon as a curiosity. The Southern
white man frequently buys his groceries from a negro merchant.
Fortunately, the greater part of the colored people in the South
have remained as farmers on the soil. The late census shows that
eighty per cent. of Southern negroes live on the land.
There are few cases where a black man cannot buy and own a
farm in the South. It is as a farmer in the Southern States that the
masses of my race have economically and industrially the largest
opportunity. No one stops to ask before purchasing a bale of cotton
or a bushel of corn if it has been produced by a white hand or a
black hand.
The negro now owns, as near as I can estimate, 15,000 grocery
and dry-goods stores, 300 drug stores, and 63 banks. Negroes pay
taxes on between $600,000,000 and $700,000,000 of property of
various kinds in the United States. Unless he had had a reasonably
fair chance in the South, the negro could not have gained and held
this large amount of property, and would not have been able to enter
in the commerce of this country to the extent that he has.

SKILLED NEGRO LABOR BETTER TREATED IN

THE SOUTH THAN IN THE NORTH
AS a skilled laborer, the negro has a better opportunity in the
South than in the North. I think it will be found generally true in the
South as elsewhere that wherever the negro is strong in numbers
and in skill he gets on well with the trades-unions. In these cases the
unions seek to get him in, or they leave him alone, and in the latter
case do not seek to control him. In the Southern States, where the
race enters in large numbers in the trades, the trades-unions have
not had any appreciable effect in hindering the progress of the negro
as a skilled laborer or as a worker in special industries, such as coal-
mining, iron-mining, etc. In border cities, like St. Louis, Washington,
and Baltimore, however, the negro rarely finds work in such
industries as brick-laying and carpentry. One of the saddest
examples of this fact that I ever witnessed was in the City of
Washington, where on the campus of Howard University, a negro
institution, a large brick building was in process of erection. Every
man laying brick on this building was white, every man carrying a
hod was a negro. The white man, in this instance, was willing to
erect a building in which negroes could study Latin, but was not
willing to give negroes a chance to lay the bricks in its walls.
Let us consider for a moment the negro in the professions in the
Southern States. Aside from school teaching and preaching, into
which the racial question enters in only a slight degree, there remain
law and medicine. All told, there are not more than 700 colored
lawyers in the Southern States, while there are perhaps more than
3000 doctors, dentists, and pharmacists. With few exceptions,
colored lawyers feel, as they tell me, that they do not have a fair
chance before a white jury when a white lawyer is on the other side
of the case. Even in communities where negro lawyers are not
discriminated against by juries, their clients feel that there is danger
in intrusting cases to a colored lawyer. Mainly for these two reasons,
colored lawyers are not numerous in the South; yet, in cases where
colored lawyers combine legal practice with trading and real estate,
they have in several instances been highly successful.

THE DIFFICULTY OF OBTAINING UNIFORM

TREATMENT
HERE again, however, it is difficult to generalize. People speak of
the “race question” in the South, overlooking the fact that each one
of the 1300 counties in the Southern States is a law unto itself. The
result is that there are almost as many race problems as there are
counties. The negro may have a fair chance in one county, and have
no chance at all in the adjoining county. The Hon. Josiah T. Settles,
for example, has practised both criminal and civil law for thirty years
in Memphis. He tells me that he meets with no discrimination on
account of his color either from judges, lawyers, or juries. There are
other communities, like New Orleans and Little Rock, where negro
lawyers are accorded the same fair treatment, and, I ought to add,
that, almost without exception, negro lawyers tell me they are treated
fairly by white judges and white lawyers.
The professional man who is making the greatest success in the
South is the negro doctor, and I should include the pharmacists and
dentists with the physicians and surgeons. Except in a few cities,
white doctors are always willing to consult with negro doctors.
The young negro physician in the South soon finds himself with a
large and paying practice, and, as a rule, he makes use of this
opportunity to improve the health conditions of his race in the
community. Some of the most prosperous men of my race in the
South are negro doctors. Again, the very fact that a negro cannot
buy soda-water in a white drug store makes an opportunity for the
colored drug store, which often becomes a sort of social center for
the colored population.
From an economic point of view, the negro in the North, when
compared with the white man, does not have a fair chance. This is
the feeling not only of the colored people themselves, but of almost
every one who has examined into the conditions under which
colored men work. But here also one is likely to form a wrong
opinion. There is, to begin with, this general difference between the
North and the South, that whereas in the South there is, as I have
already suggested, a job looking for every idle man, in the North, on
the contrary, there are frequently two or three idle men looking for
every job. In some of the large cities of the North there are
organizations to secure employment for colored people. For a
number of years I have kept in pretty close touch with those at the
head of these organizations, and they tell me that in many cases
they have been led to believe that the negro has a harder time in
finding employment than is actually true. The reason is that those
who are out of employment seek these organizations. Those who
have steady work, in positions which they have held for years, do not
seek them.
As a matter of fact, I have been surprised to find how large a
number of colored people there are in Boston, New York,
Philadelphia, and Chicago who hold responsible positions in
factories, stores, banks, and other places. In regard to these people
one hears very little. There is a colored man, for example, in
Cleveland who has been for years private secretary to a railway
president. In St. Paul there is a colored man who holds a similar
position; in Baltimore there is still another colored private secretary
to a railway president.

THE SHIFTING OF OCCUPATIONS

IN recent years there has been a great shifting of employment
between the races. A few years ago all the rough work in the mines,
on the railway, and elsewhere was performed by Irish immigrants.
Now this work is done by Poles, Hungarians, and Italians. In cities
like New York, Chicago, and Pittsburg one finds to-day fewer colored
people employed as hotel waiters, barbers, and porters than twenty
years ago. In New York, however, many colored men are employed
in the streets and in the subways. In Pittsburg thousands of colored
men are employed in the iron mills. In Chicago negroes are
employed very largely in the packing-houses. Twenty years ago in
these cities there were almost no colored people in these industries.
In addition to the changes I have mentioned, many colored people
have gone into businesses of various kinds on their own account. It
should be remembered, also, that, while in some trades and in some
places discrimination is made against the negro, in other trades and
in other places this discrimination works in his favor. The case in
point is the Pullman-car service. I question whether any white man,
however efficient, could secure a job as a Pullman-car porter.

BETTER OPPORTUNITY FOR EDUCATION IN THE

NORTH
IN the North, as a rule, the negro has the same opportunities for
education as his white neighbor. When it comes to making use of
this education, however, he is frequently driven to a choice between
becoming an agitator, who makes his living out of the troubles of his
race, or emigrating to the Southern States, where the opportunities
for educated colored men are large. One of the greatest sources of
bitterness and despondency among colored people in the North
grows out of their inability to find a use for their education after they
have obtained it. Again, they are seldom sure of just what they may
or may not do. If one is a stranger in a city, he does not know in what
hotel he will be permitted to stay; he is not certain what seat he may
occupy in the theater, or whether he will be able to obtain a meal in a
restaurant.

THE UNCERTAINTY OF TREATMENT OF THE

RACE IN THE NORTH
THE uncertainty, the constant fear and expectation of rebuff which
the colored man experiences in the North, is often more humiliating
and more wearing than the frank and impersonal discrimination
which he meets in the South. This is all the more true because the
colored youth in most of the Northern States, educated as they are in
the same schools with white youths, taught by the same teachers,
and inspired by the same ideals of American citizenship, are not
prepared for the discrimination that meets them when they leave
school.
Despite all this, it cannot be denied that the negro has
advantages in the North which are denied him in the South. They are
the opportunity to vote and to take part, to some extent, in making
and administering the laws by which he is governed, the opportunity
to obtain an education, and, what is of still greater importance, fair
and unbiased treatment in the courts, the protection of the law.
I have touched upon conditions North and South, which, whether
they affect the negro favorably or adversely, are for the most part so
firmly entrenched in custom, prejudice, and human nature that they
must perhaps be left to the slow changes of time. There are certain
conditions in the South, however, in regard to which colored people
feel perhaps more keenly because they believe if they were
generally understood they would be remedied. Very frequently the
negro people suffer injury and wrong in the South because they have
or believe they have no way of making their grievances known. Not
only are they not represented in the legislatures, but it is sometimes
hard to get a hearing even in the press. On one of my educational
campaigns in the South I was accompanied by a colored newspaper
man. He was an enterprising sort of chap and at every public
meeting we held he would manage in some way to address the
audience on the subject of his paper. On one occasion, after
appealing to the colored people for some time, he turned to the white
portion of the audience.
“You white folks,” he said, “ought to read our colored papers to
find out what colored people are doing. You ought to find out what
they are doing and what they are thinking. You don’t know anything
about us,” he added. “Don’t you know a colored man can’t get his
name in a white paper unless he commits a crime?”
I do not know whether the colored newspaper man succeeded in
getting any subscriptions by this speech or not, but there was much
truth in his statement.

THE GREATEST SOURCE OF DISSATISFACTION

TO THE NEGRO IN THE SOUTH
ONE thing that many negroes feel keenly, although they do not
say much about it to either black or white people, is the conditions of
railway travel in the South.
Now and then the negro is compelled to travel. With few
exceptions, the railroads are almost the only great business
concerns in the South that pursue the policy of taking just as much
money from the black traveler as from the white traveler without
feeling that they ought, as a matter of justice and fair play, not as a
matter of social equality, to give one man for his money just as much
as another man. The failure of most of the roads to do justice to the
negro when he travels is the source of more bitterness than any one
other matter of which I have any knowledge.
It is strange that the wide-awake men who control the railroads in
the Southern States do not see that, as a matter of dollars and cents,
to say nothing of any higher consideration, they ought to encourage,
not discourage, the patronage of nine millions of the black race in the
South. This is a traveling population that is larger than the whole
population of Canada, and yet, with here and there an exception,
railway managers do not seem to see that there is any business
advantage to them in giving this large portion of the population fair
treatment.
What embitters the colored people in regard to railroad travel, I
repeat, is not the separation, but the inadequacy of the
accommodations. The colored people are given half of a baggage-
car or half of a smoking-car. In most cases, the negro portion of the
car is poorly ventilated, poorly lighted, and, above all, rarely kept
clean; and then, to add to the colored man’s discomfort, no matter
how many colored women may be in the colored end of the car, nor
how clean or how well educated these colored women may be, this
car is made the headquarters for the news-boy. He spreads out his
papers, his magazines, his candy, and his cigars over two or three
seats. White men are constantly coming into the car and almost
invariably light cigars while in the colored coach, so that these
women are required to ride in what is virtually a smoking-car.
On some of the roads colored men and colored women are
forced to use the same toilet-room. This is not true of every Southern
railway. There are some railways in the South, notably the Western
Railway of Alabama, which make a special effort to see that the
colored people are given every facility in the day coaches that the
white people have, and the colored people show in many ways that
they appreciate this consideration.
Here is an experience of R. S. Lovinggood, a colored man of
Austin, Texas. I know Mr. Lovinggood well. He is neither a bitter nor
a foolish man. I will venture to say that there is not a single white
man in Austin, Texas, where he lives, who will say that Professor
Lovinggood is anything but a conservative, sensible man.
“At one time,” he said to me, in speaking of some of his traveling
experiences, “I got off at a station almost starved. I begged the
keeper of the restaurant to sell me a lunch in a paper and hand it out
of the window. He refused, and I had to ride a hundred miles farther
before I could get a sandwich.
“At another time I went to a station to purchase my ticket. I was
there thirty minutes before the ticket-office was opened. When it did
finally open I at once appeared at the window. While the ticket-agent
served the white people at one window, I remained there beating the
other until the train pulled out. I was compelled to jump aboard the
train without my ticket and wire back to get my trunk expressed.
Considering the temper of the people, the separate coach law may
be the wisest plan for the South, but the statement that the two races
have equal accommodations is all bosh. I pay the same money, but I
cannot have a chair or a lavatory and rarely a through car. I must
crawl out at all times of night, and in all kinds of weather, in order to
catch another dirty ‘Jim Crow’ coach to make my connections. I do
not ask to ride with white people. I do ask for equal accommodations
for the same money.”
 LACK OF A “SQUARE DEAL” IN EDUCATION IN
THE SOUTH
IN the matter of education, the negro in the South has not had
what Colonel Roosevelt calls a “square deal.” In the North, not only
the Jew, the Slav, the Italian, many of whom are such recent arrivals
that they have not yet become citizens and voters, even under the
easy terms granted them by the naturalization laws of the Northern
States, have all the advantages of education that are granted to
every other portion of the population, but in several States an effort
is now being made to give immigrant peoples special opportunities
for education over and above those given to the average citizen. In
some instances, night schools are started for their special benefit.
Frequently schools which run nine months in the winter are
continued throughout the summer, whenever a sufficient number of
people can be induced to attend them. Sometimes, as for example,
in New York State, where large numbers of men are employed in
digging the Erie Canal and in excavating the Croton Aqueduct, camp
schools are started where the men employed on these public works
in the day may have an opportunity to learn the English language at
night. In some cases a special kind of text-book, written in two or
three different languages, has been prepared for use in these
immigrant schools, and frequently teachers are specially employed
who can teach in the native languages if necessary.
While in the North all this effort is being made to provide
education for these foreign peoples, many of whom are merely
sojourners in this country, and will return in a few months to their
homes in Europe, it is only natural that the negro in the South should
feel that he is unfairly treated when he has, as is often true in the
country districts, either no school at all, or one with a term of no
more than four or five months, taught in the wreck of a log-cabin and
by a teacher who is paid about half the price of a first-class convict.
This is no mere rhetorical statement. If a negro steals or commits
a murderous assault of some kind, he will be tried and imprisoned,
and then, if he is classed as a first-class convict, he will be rented
out at the rate of $46 per month for twelve months in the year. The
negro who does not commit a crime, but prepares himself to serve
the State as a first-grade teacher, will receive from the State for that
service perhaps $30 per month for a period of not more than six
months.
Taking the Southern States as a whole, about $10.23 per capita
is spent in educating the average white boy or girl, and the sum of
$2.82 per capita in educating the average black child.
Let me take as an illustration one of our Southern farming
communities, where the colored population largely outnumbers the
white. In Wilcox County, Alabama, there are nearly 11,000 black
children and 2000 white children of school age. Last year $3569 of
the public school fund went for the education of the black children in
that county, and $30,294 for the education of the white children, this
notwithstanding that there are five times as many negro children as
white. In other words, there was expended for the education of each
negro child in Wilcox County thirty-three cents, and for each white
child $15. In the six counties surrounding and touching Wilcox
County there are 55,000 negro children of school age. There was
appropriated for their education last year from the public school fund
$40,000, while for the 19,622 white children in the same counties
there was appropriated from the public fund $199,000.
There are few, if any, intelligent white people in the South or
anywhere else who will claim that the negro is receiving justice in
these counties in the matter of the public school fund. Especially will
this seem true when it is borne in mind that the negro is the main
dependence for producing the farm products which constitute the
chief wealth of that part of Alabama. I say this because I know there
are thousands of fair-minded and liberal white men in the South who
do not know what is actually going on in their own States.
In the State of Georgia, negroes represent forty-two per cent. of
the farmers of the State, and are largely employed as farm laborers
on the plantations. Notwithstanding this fact, Georgia has two
agricultural colleges and eleven district agricultural high schools for
whites, supported at an annual cost to the State of $140,000, while
there is only one school where negroes have a chance to study
agriculture, and to the support of this the State contributes only
$8000 a year. When one hears it said that the negro farmer of
Georgia is incompetent and inefficient as compared with the white
farmer of Minnesota or Wisconsin, can any one say that this is fair to
the negro?
Not a few Southern white men see what is needed and are not
afraid to say so. A. A. Gunby of Louisiana recently said: “Every one
competent to speak and honest enough to be candid knows that
education benefits and improves the negro. It makes him a better
neighbor and workman, no matter what you put him at.”
Every one agrees that a public library in a city tends to make
better citizens, keeping people usefully employed instead of
spending their time in idleness or in committing crime. Is it fair, as is
true of most of the large cities of the South, to take the negro’s
money in the form of taxes to support a public library, and then to
make no provision for the negro using any library? I am glad to say
that some of the cities, for instance, Louisville, Kentucky, and
Jacksonville, Florida, have already provided library facilities for their
black citizens or are preparing to do so.
One excuse that is frequently made in the South for not giving the
negro a fair share of the moneys expended for education is that the
negro is poor and does not contribute by his taxes sufficient to
support the schools that now exist. True, the negro is poor; but in the
North that would be a reason for giving him more opportunities for
education, not fewer, because it is recognized that one of the
greatest hindrances to progress is ignorance. As far as I know, only
two men have ever given thorough consideration to the question as
to the amount the negro contributes directly or indirectly toward his
own education. Both of these are Southern white men. One of them
is W. N. Sheats, former Superintendent of Education for the State of
Florida. The other is Charles L. Coon, Superintendent of Schools at
Wilson, North Carolina, and formerly connected with the Department
of Education for that State.
 THE NEGRO PAYS MORE THAN HIS SHARE TO
EDUCATION IN THE SOUTH
IN his annual report for 1900, Mr. Sheats made a thorough
analysis of the sources of the school fund in Florida, and of the way
in which it is distributed between the white and negro schools. In
referring to the figures which he obtained, he said:

A glance at the foregoing statistics indicates that the section of the

State designated as “Middle Florida” is considerably behind all the rest in
all stages of educational progress. The usual plea is that this is due to the
intolerable burden of negro education, and a general discouragement and
inactivity is ascribed to this cause. The following figures are given to show
that the education of the negroes of Middle Florida does not cost the white
people of that section one cent. Without discussing the American principle
that it is the duty of all property to educate every citizen as a means of
protection to the State, and with no reference to what taxes that citizen
may pay, it is the purpose of this paragraph to show that the
backwardness of education of the white people is in no degree due to the
presence of the negro, but that the presence of the negro has been
actually contributing to the sustenance of the white schools.

Mr. Sheats shows that the amount paid for negro schools from
negro taxes or from a division of other funds to which negroes
contribute indirectly with the whites, amounted to $23,984. The
actual cost of negro schools, including their pro rata for
administration expenses, was $19,467.
“If this is a fair calculation,” Mr. Sheats concludes, “the schools
for negroes are not only no burden on the white citizens, but $4525
for negro schools contributed from other sources was in some way
diverted to the white schools. A further loss to the negro schools is
due to the fact that so few polls are collected from negroes by county
officials.”
Mr. Coon, in an address on “Public Taxation and Negro Schools”
before the 1909 Conference for Education in the South, at Atlanta,
Georgia, said:
 The South is spending $32,068,851 on her public schools, both white
and black, but what part of this sum is devoted to negro public schools,
which must serve at least forty per cent. of her school population? It is not
possible to answer this question with absolute accuracy, but it is possible
from the several State reports to find out the whole amount spent for
teachers, and in all the States, except Arkansas, what was spent for white
and negro teachers separately. The aggregate amount now being spent
for public teachers of both races in these eleven States is $23,856,914, or
74.4 per cent. of the whole amount expended. Of this sum not more than
$3,818,705 was paid to negro teachers, or twelve per cent. of the total
expenditures.

He also brought out the fact that in Virginia, if, in addition to the
direct taxes paid by negroes, they had received their proportion of
the taxes on corporate property and other special taxes, such as
fertilizers, liquor, etc., there would have been expended on the negro
schools $18,077 more than was expended; that is, they would have
received $507,305 instead of $489,228. In North Carolina there
would have been expended $26,539 more than was expended, the
negroes receiving $429,197 instead of $402,658. In Georgia there
would have been expended on the negro schools $141,682 more
than was expended.
In other words, Superintendent Coon seems to prove that negro
schools in the States referred to are not only no burden to the white
tax-payers, but that the colored people do not get back all the money
for their schools that they themselves pay in taxes. In each case
there is a considerable amount taken from the negroes’ taxes and
spent somewhere else or for other purposes.

CONVICT LABOR A GREAT EVIL IN THE SOUTH

IT would help mightily toward the higher civilization for both races
if more white people would apply their religion to the negro in their
community, and ask themselves how they would like to be treated if
they were in the negro’s place. For example, no white man in
America would feel that he was being treated with justice if every
time he had a case in court, whether civil or criminal, every member
of the jury was of some other race. Yet this is true of the negro in
nearly all of the Southern States. There are few white lawyers or
judges who will not admit privately that it is almost impossible for a
negro to get justice when he has a case against a white man and all
the members of the jury are white. In these circumstances, when a
negro fails to receive justice, the injury to him is temporary, but the
injury to the character of the white man on the jury is permanent.
In Alabama eighty-five per cent. of the convicts are negroes. The
official records show that last year Alabama had turned into its
treasury $1,085,854 from the labor of its convicts. At least $900,000
of this came from negro convicts, who were for the most part rented
to the coal-mining companies in the northern part of the State. The
result of this policy has been to get as many able-bodied convicts as
possible into the mines, so that contractors might increase their
profits. Alabama, of course, is not the only State that has yielded to
the temptation to make money out of human misery. The point is,
however, that while $900,000 is turned into the State treasury from
negro-convict labor, to say nothing of negro taxes, there came out of
the State treasury, to pay negro teachers, only $357,585.
I speak of this matter as much in the interest of the white man as
of the black. Whenever and wherever the white man, acting as a
court officer, feels that he cannot render absolute justice because of
public sentiment, that white man is not free. Injustice in the courts
makes slaves of two races in the South, the white and the black.

THE BALLOT TO THE INTELLIGENT NEGRO

NO influence could ever make me desire to go back to the
conditions of Reconstruction days to secure the ballot for the negro.
That was an order of things that was bad for the negro and bad for
the white man. In most Southern States it is absolutely necessary
that some restriction be placed upon the use of the ballot. The actual
methods by which this restriction was brought about have been
widely advertised, and there is no necessity for me discussing them
here. At the time these measures were passed I urged that,
whatever law went upon the statute-book in regard to the use of the
ballot, it should apply with absolute impartiality to both races. This
policy I advocate again in justice to both white man and negro.
Let me illustrate what I mean. In a certain county of Virginia,
where the county board had charge of registering those who were to
be voters, a colored man, a graduate of Harvard University, who had
long been a resident of the county, a quiet, unassuming man, went
before the board to register. He was refused on the ground that he
was not intelligent enough to vote. Before this colored man left the
room a white man came in who was so intoxicated that he could
scarcely tell where he lived. This white man was registered, and by a
board of intelligent white men who had taken an oath to deal justly in
administering the law.
Will any one say that there is wisdom or statesmanship in such a
policy as that? In my opinion it is a fatal mistake to teach the young
black man and the young white man that the dominance of the white
race in the South rests upon any other basis than absolute justice to
the weaker man. It is a mistake to cultivate in the mind of any
individual or group of individuals the feeling and belief that their
happiness rests upon the misery of some one else, or that their
intelligence is measured by the ignorance of some one else; or their
wealth by the poverty of some one else. I do not advocate that the
negro make politics or the holding of office an important thing in his
life. I do urge, in the interest of fair play for everybody, that a negro
who prepares himself in property, in intelligence, and in character to
cast a ballot, and desires to do so, should have the opportunity.
In these pages I have spoken plainly regarding the South
because I love the South as I love no other part of our country, and I
want to see her white people equal to any white people on the globe
in material wealth, in education, and in intelligence. I am certain,
however, that none of these things can be secured and permanently
maintained except they are founded on justice.

THE CRIME OF LYNCHING

 IN most parts of the United States the colored people feel that
they suffer more than others as the result of the lynching habit.
When he was Governor of Alabama, I heard Governor Jelks say in a
public speech that he knew of five cases during his administration of
innocent colored people having been lynched. If that many innocent
people were known to the governor to have been lynched, it is safe
to say that there were other innocent persons lynched whom the
governor did not know about. What is true of Alabama in this respect
is true of other States. In short, it is safe to say that a large
proportion of the colored people lynched are innocent.
A lynching-bee usually has its origin in a report that some crime
has been committed. The story flies from mouth to mouth.
Excitement spreads. Few take the time to get the facts. A mob forms
and fills itself with bad whisky. Some one is captured. In case rape is
charged, the culprit is frequently taken before the person said to
have been assaulted. In the excitement of the moment, it is natural
that the victim should say that the first person brought before her is
guilty. Then comes more excitement and more whisky. Then comes
the hanging, the shooting, or burning of the body.
Not a few cases have occurred where white people have
blackened their faces and committed a crime, knowing that some
negro would be suspected and mobbed for it. In other cases it is
known that where negroes have committed crimes, innocent men
have been lynched and the guilty ones have escaped and gone on
committing more crimes.
Within the last twelve months there have been seventy-one
cases of lynching, nearly all of colored people. Only seventeen were
charged with the crime of rape. Perhaps they are wrong to do so, but
colored people in the South do not feel that innocence offers them
security against lynching. They do feel, however, that the lynching
habit tends to give greater security to the criminal, white or black.
When ten millions of people feel that they are not sure of being fairly
tried in a court of justice, when charged with crime, is it not natural
that they should feel that they have not had a fair chance?
 I am aware of the fact that in what I have said in regard to the
hardships of the negro in this country I throw myself open to the
criticism of doing what I have all my life condemned and everywhere
sought to avoid; namely, laying over-emphasis on matters in which
the negro race in America has been badly treated, and thereby
overlooking those matters in which the negro has been better treated
in America than anywhere else in the world.
Despite all any one has said or can say in regard to the injustice
and unfair treatment of the people of my race at the hands of the
white men in this country, I venture to say that there is no example in
history of the people of one race who have had the assistance, the
direction, and the sympathy of another race in all its efforts to rise to
such an extent as the negro in the United States.
Notwithstanding all the defects in our system of dealing with him,
the negro in this country owns more property, lives in better houses,
is in a larger measure encouraged in business, wears better clothes,
eats better food, has more school-houses and churches, more
teachers and ministers, than any similar group of negroes anywhere
else in the world.
What has been accomplished in the past years, however, is
merely an indication of what can be done in the future.
As white and black learn day by day to adjust, in a spirit of justice
and fair play, those interests which are individual and racial, and to
see and feel the importance of those fundamental interests which
are common, so will both races grow and prosper. In the long run no
individual and no race can succeed which sets itself at war against
the common good.
 PAUL LAURENCE DUNBAR
BY JAMES D. CORROTHERS

HE came, a dark youth, singing in the dawn

Of a new freedom, glowing o’er his lyre,
Refining, as with great Apollo’s fire,
His people’s gift of song. And, thereupon,
This negro singer, come to Helicon,
Constrained the masters, listening, to admire,
And roused a race to wonder and aspire,
Gazing which way their honest voice was gone,
With ebon face uplit of glory’s crest.
Men marveled at the singer, strong and sweet,
Who brought the cabin’s mirth, the tuneful night,
But faced the morning, beautiful with light,
To die while shadows yet fell toward the west,
And leave his laurels at his people’s feet.

Dunbar, no poet wears your laurels now;

None rises, singing, from your race like you,
Dark melodist, immortal, though the dew
Fell early on the bays upon your brow,
And tinged with pathos every halcyon vow
And brave endeavor. Silence o’er you threw
Flowerets of love. Or, if an envious few
Of your own people brought no garlands, how
Could Malice smite him whom the gods had crowned?
 If, like the meadow-lark, your flight was low,
Your flooded lyrics half the hilltops drowned;
A wide world heard you, and it loved you so
It stilled its heart to list the strains you sang,
And o’er your happy songs its plaudits rang.