Marketing Insights
from A to Z
Marketing Insights
from
A to Z
80 Concepts Every Manager Needs To Know
Philip Kotler
John Wiley & Sons, Inc.
Copyright © 2003 by Philip Kotler. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Kotler, Philip.
Marketing insights from A to Z : 80 concepts every manager needs
to know / Philip Kotler.
p. cm.
ISBN 0-471-26867-4
1. Marketing. I. Title.
HF5415 .K63127 2003
658.8—dc21 2002014903
Printed in the United States of America.
10987654321
To all those who have worked in
business and marketing
with a passion to satisfy customer needs
and enhance customer and societal well-being.
reface
ix
My 40-year career in marketing has produced some knowledge and
even a little wisdom. Reflecting on the state of the discipline, it oc-
curred to me that it is time to revisit the basic concepts of marketing.
First, I listed the 80 concepts in marketing critical today and
spent time mulling over their meanings and implications for sound
business practice. My primary aim was to ascertain the best principles
and practices for effective and innovative marketing. I found this
journey to be filled with many surprises, yielding new insights and
perspectives.
I didn’t want to write another 800-page textbook on market-
ing. And I didn’t want to repeat thoughts and passages that I have
written in previous books. I wanted to present fresh and stimulating
ideas and perspectives in a format that could be picked up, sampled,
digested, and put down anytime. This short book is the result, and it
was written with the following audiences in mind:
• Managers who have just learned that they need to know
something about marketing; you could be a financial vice
president, an executive director of a not-for-profit organiza-
tion, or an entrepreneur about to launch a new product. You
may not even have time to read Marketing for Dummies with
its 300 pages. Instead you want to understand some key con-
cepts and marketing principles presented by an authoritative
voice, in a convenient way.
• Managers who may have taken a course on marketing some
years ago and have realized things have changed. You may
want to refresh your understanding of marketing’s essential
concepts and need to know the latest thinking about high-
performance marketing.
• Professional marketers who might feel unanchored in the
daily chaos of marketing events and want to regain some clar-
ity and recharge their understanding by reading this book.
My approach is influenced by Zen. Zen emphasizes learning by
means of meditation and direct, intuitive insights. The thoughts in
this book are a result of my meditations on these fundamental mar-
keting concepts and principles.
Whether I call these meditations, ruminations, or cogitations, I
make no claim that all the thoughts in this book are my own. Some
great thinkers in business and marketing are directly quoted, or they
directly influenced the thoughts here. I have absorbed their ideas
through reading, conversations, teaching, and consulting.
x Preface
ntroduction
xi
Today’s central problem facing business is not a shortage of goods
but a shortage of customers. Most of the world’s industries can pro-
duce far more goods than the world’s consumers can buy. Overca-
pacity results from individual competitors projecting a greater market
share growth than is possible. If each company projects a 10 percent
growth in its sales and the total market is growing by only 3 percent,
the result is excess capacity.
This in turn leads to hypercompetition. Competitors, desperate
to attract customers, lower their prices and add giveaways. These
strategies ultimately mean lower margins, lower profits, some failing
companies, and more mergers and acquisitions.
Marketing is the answer to how to compete on bases other than
price. Because of overcapacity, marketing has become more impor-
tant than ever. Marketing is the company’s customer manufacturing
department.
But marketing is still a terribly misunderstood subject in business
circles and in the public’s mind. Companies think that marketing exists
to help manufacturing get rid of the company’s products. The truth is
the reverse, that manufacturing exists to support marketing. A company
can always outsource its manufacturing. What makes a company
prosper is its marketing ideas and offerings. Manufacturing, purchasing,
research and development (R&D), finance, and other company func-
tions exist to support the company’s work in the customer marketplace.
Marketing is too often confused with selling. Marketing and sell-
ing are almost opposites. “Hard-sell marketing” is a contradiction.
Long ago I said: “Marketing is not the art of finding clever ways to
dispose of what you make. Marketing is the art of creating gen-
uine customer value. It is the art of helping your customers be-
come better off. The marketer’s watchwords are quality, service,
and value.”
Selling starts only when you have a product. Marketing starts
before a product exists. Marketing is the homework your company
does to figure out what people need and what your company should
offer. Marketing determines how to launch, price, distribute, and
promote your product/service offerings to the marketplace. Market-
ing then monitors the results and improves the offering over time.
Marketing also decides if and when to end an offering.
All said, marketing is not a short-term selling effort but a long-
term investment effort. When marketing is done well, it occurs be-
fore the company makes any product or enters any market; and it
continues long after the sale.
Lester Wunderman, of direct marketing fame, contrasted selling
to marketing in the following way: “The chant of the Industrial
Revolution was that of the manufacturer who said, ‘This is what
I make, won’t you please buy it?’ The call of the Information
Age is the consumer asking, ‘This is what I want, won’t you
please make it?’ ”
1
Marketing hopes to understand the target customer so well that
selling isn’t necessary. Peter Drucker held that “the aim of market-
ing is to make selling superfluous.”
2
Mark-eting is the ability to
hit the mark.
Yet there are business leaders who say, “We can’t waste time on
marketing. We haven’t designed the product yet.” Or “We are too suc-
xii Introduction
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