McGraw-Hill/Irwin Series in Marketing

Alreck & SettleThe Survey Research HandbookThird Edition

Alsem & WittinkStrategic Marketing: A Practical ApproachFirst Edition

Anderson, Beveridge, Lawton & ScottMerlin: A Marketing SimulationFirst Edition

AreasContemporary AdvertisingTenth Edition

Arnould, Price & ZinkhanConsumersSecond Edition

Bearden, Ingrain & LaForgeMarketing: Principles & PerspectivesFourth Edition

Belch & BelchAdvertising & Promotion: An IntegratedMarketing Communications ApproachSixth Edition

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EisenmannInternet Business Models: Text and CasesFirst Edition

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ForrestInteract Marketing IntelligenceFirst Edition

FutrellABCs of Relationship SellingEighth Edition

FutrellFundamentals of SellingNinth Edition

Gourville, Quelch & RanganCases in Health Care MarketingFirst Edition

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JohanssonGlobal MarketingFototh Edition

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Kerin, Hartley & RudeliusMarketing: The CoreFirst Edition

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Lehmann &WinerAnalysis for Marketing PlanningSixth Edition

Lehnamm &WinerProduct ManagementFoorth Edition

Levy & WeitzRetailing ManagementF(/lh Edition

Mason & PerreaultThe Marketing Game!Third Edition

McDonaldDirect Marketing: An Integrated ApproachFirst Edition

Mohammeck Fisher, Jaworski & Paddisonlnternet Marketing: Building Advantage in aNetworked EconomySecond Edition

MolinariMarketing Research Project ManualFirst Edition

MonroePricingThird Edition

Mullins, Walker, Boyd & Larrdch~Marketing Management: A StrategicDecision-Making ApproachF(fth Edition

Nentl & MillerSimSeries Simulations:SimSellSimSales ManagementSimMarketingSimMarketing ResearchSImCRMFirst Edition

Perreault &/VlcCarthyBasic Marketing: A Global ManagerialApproachF(/?eenth Edition

Perreanlt & McCarthyEssentials of Marketing: A GlobalManagerial ApproachTenth Edition

Peter & DonnellyA Preface to Marketing ManagementTenth Edition

Peter & DonnellyMarketing Management: Knmvledgeand SkillsSeventh Edition

Peter & OlsonConsumer BehaviorSeventh Edition

Pnrvis & BurtonWhicb Ad Pulled Best?Ninth Edition

Quelch, Rangan & LalMarketing Management Text and CasesFirst Edition

Rayport & JaworskiIntroduction to e-CommerceSecond Edition

Rayport & Jaworskie-CommerceFirst Edition

Rayport & JaworskiCases in e-CommerceFirst Edition

RichardsonInternet MarketingFirst Edition

RobertsInternet Marketing: Integrating Onlineand Offline StrategiesFirst Edition

Spiro, Stanton & RichManagement of a Sales ForceEleventh Edition

Stock & LambertStrategic Logistics ManagementFourth Edition

Ulrich & EppingerProduct Design and DevelopmentThird Edition

Walker, Mullins, Boyd & Larr~ch~Marketing Strategy: A Decision-FocusedApproachFfth Edition

Weitz, Castleberry & TannerSelling: Building PartnershipsF!fth Edition

Zeithaml & BitnerServices MarketingFourth Edition

Marketing Strategy

A Decision-Focused Approach Fifth Edition

Orville C. Walker, Jr.James D. Watkins Professor of Marketing,Emeritus

University of Minnesota

John W. MullinsAssociate Professor of Management Practice

London Business School

Harper W. Boyd, Jr.Donaghey Distinguished Professorof Marketing

University of Arkansas--Little Rock

Jean-Claude Larr~ch~Alfred H. Heineken Professor of Marketing

European Institute of Business Administration

INSEAD

McGraw-HillIrwin

Boston Burr Ridge, IL Dubuque, IA Madison, Wl New York San Francisco St, LouisBangkok Bogotg~ Caracas Kuala Lumpur Lisbon London Madrid Mexico CityMilan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto

McGraw-Hill/Irwin Series in Marketing

Alreck & SettleThe Survey Research HandbookThird Edition

Alsem & WittinkStrategic Marketing: A Practical ApproachFirst Edition

Anderson, Beveridge, Lawton & ScottMerlin: A Marketing SimulationFirst Edition

AreasContemporary AdvertisingTenth Edition

Arnould, Price & ZinkhanConsumersSecond Edition

Bearden, Ingrain & LaForgeMarketing: Principles & PerspectivesFourth Edition

Belch & BelchAdvertising & Promotion: An IntegratedMarketing Communications ApproachSixth Edition

Bingham & GomesBusiness MarketingThird Edition

Cateora & GrahamInternational MarketingTwe~/th Edition

Cole & MishlerConsumer and Business CreditManagementEleventtt Edition

Cooper & SchindlerMarketing ResearchFitwt Edition

Cravens & PiercyStrategic MarketingEighth Edition

Cravens, Lamb & CrittendenStrategic Marketing Management CasesSeventh Edition

Crawford & Di BenedettoNew Products ManagementEighth Edition

DuncanPrinciples of Advertising and IMCSecond Edition

Dwyer & TarmerBusiness MarketingThird Edition

EisenmannInternet Business Models: Text and CasesFirst Edition

Etzel, Walker & StantonMarketingThirteenth Edition

ForrestInteract Marketing IntelligenceFirst Edition

FutrellABCs of Relationship SellingEighth Edition

FutrellFundamentals of SellingNinth Edition

Gourville, Quelch & RanganCases in Health Care MarketingFirst Edition

Hair, Bush & OrtinauMarketing ResearchThird Edition

Hawkins, Best & ConeyConsumer BehaviorNinth Edition

JohanssonGlobal MarketingFototh Edition

Johnston & MarshallChmchill/FordP&lkers Sales ForceManagementEighth Edition

Johnston & MarshallRelationship Selling and SalesManagementFirst Edition

Kerin, Hartley & RudeliusMarketing: The CoreFirst Edition

Kerin, Berkowitz, Hartley & RudeliusMarketingEighth Edition

Lehmann &WinerAnalysis for Marketing PlanningSixth Edition

Lehnamm &WinerProduct ManagementFoorth Edition

Levy & WeitzRetailing ManagementF(/lh Edition

Mason & PerreaultThe Marketing Game!Third Edition

McDonaldDirect Marketing: An Integrated ApproachFirst Edition

Mohammeck Fisher, Jaworski & Paddisonlnternet Marketing: Building Advantage in aNetworked EconomySecond Edition

MolinariMarketing Research Project ManualFirst Edition

MonroePricingThird Edition

Mullins, Walker, Boyd & Larrdch~Marketing Management: A StrategicDecision-Making ApproachF(fth Edition

Nentl & MillerSimSeries Simulations:SimSellSimSales ManagementSimMarketingSimMarketing ResearchSImCRMFirst Edition

Perreault &/VlcCarthyBasic Marketing: A Global ManagerialApproachF(/?eenth Edition

Perreanlt & McCarthyEssentials of Marketing: A GlobalManagerial ApproachTenth Edition

Peter & DonnellyA Preface to Marketing ManagementTenth Edition

Peter & DonnellyMarketing Management: Knmvledgeand SkillsSeventh Edition

Peter & OlsonConsumer BehaviorSeventh Edition

Pnrvis & BurtonWhicb Ad Pulled Best?Ninth Edition

Quelch, Rangan & LalMarketing Management Text and CasesFirst Edition

Rayport & JaworskiIntroduction to e-CommerceSecond Edition

Rayport & Jaworskie-CommerceFirst Edition

Rayport & JaworskiCases in e-CommerceFirst Edition

RichardsonInternet MarketingFirst Edition

RobertsInternet Marketing: Integrating Onlineand Offline StrategiesFirst Edition

Spiro, Stanton & RichManagement of a Sales ForceEleventh Edition

Stock & LambertStrategic Logistics ManagementFourth Edition

Ulrich & EppingerProduct Design and DevelopmentThird Edition

Walker, Mullins, Boyd & Larr~ch~Marketing Strategy: A Decision-FocusedApproachFfth Edition

Weitz, Castleberry & TannerSelling: Building PartnershipsF!fth Edition

Zeithaml & BitnerServices MarketingFourth Edition

Marketing Strategy

A Decision-Focused Approach Fifth Edition

Orville C. Walker, Jr.James D. Watkins Professor of Marketing,Emeritus

University of Minnesota

John W. MullinsAssociate Professor of Management Practice

London Business School

Harper W. Boyd, Jr.Donaghey Distinguished Professorof Marketing

University of Arkansas--Little Rock

Jean-Claude Larr~ch~Alfred H. Heineken Professor of Marketing

European Institute of Business Administration

INSEAD

McGraw-HillIrwin

Boston Burr Ridge, IL Dubuque, IA Madison, Wl New York San Francisco St, LouisBangkok Bogotg~ Caracas Kuala Lumpur Lisbon London Madrid Mexico CityMilan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto

About the Authors

McGraw-HillIrwin

MARKETING STRATEGY: A DECISION-FOCUSED APPROACH

Published by McGraw-Hill/frwin, a business unit of The McGraxv-Hill Companies, Inc., 1221 Avenue of the

Americas, New York, NY, 10020. Copyright 2006, 2003, 1999, 1996, 1992 by The McGraw-Hill Companies,

Inc. All rights reserved. No part of this publication may be reproduced o1" distributed in any form or by any

means, or stored in a database or retrieval system, without the prior writteu consent of The McGraw-Hill Coln-

panies, Inc., inclnding, but not limited to, in any network or other electronic storage or transmission, or broad-

cast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the

United States.

This book is printed on acid-free paper.

34567890DOW/DOW0987

ISBN- 13:978-0-07-111674-9

ISBN-10:0-07-111674-5

Orville C. Walker, Jr.Orville C. Walker, Jr. is Professor Emeritus in the University of Minnesotas Carlson

School of Management, where he served until recently as the James D. Watkins Professor

of Marketing and Director of the PhD Program. He holds a Masters degree in social psy-

chology from the Ohio State University and a PhD in marketing from the University of

Wisconsin-Madison.Orville is the co-author of tinco books and has published more than 50 research articles

in scholarly and business journals. He has won several awards for his research, including

the ODell award from the Journal qfiMarketing Research, the Maynard award from the

Journal of Marketing, and a lifetime achievement award from the Sales Management Inter-

est Group of the American Marketing Association.

Orville has been a consultant to a number of business firms and not-for-profit organi-

zations, and he has taught in executive development programs around the world, including

programs in Poland, Switzerland, Scotland, and Hong Kong. Perhaps his biggest business

challenge, however, is attempting to turn a profit as the owner-manager of a small vineyard

in western Wisconsin.

John W. MullinsJohn M,llins is Associate Professor of Management Practice at London Business School,

where he heads the entrepreneurship group. He earned his MBA at the Stanford Graduate

School of Business and, considerably later in life, his PhD in marketing from the Univer-

sity of Minnesota. An award-winning teacher, Jotm brings to his teaching and research 20

years of executive experience in high-growth firms, including two ventures he founded,

one of which he took public. Since becoming a business school professor in 1992, John

has published more than 30 articles in a variety of outlets, including Ha~a,ard Business

Review, the Journal of Product hmovation Management, and the Journal of Business Ven-

turing. His research has won national and international awards fiom the Marketing Science

Institute, the American Marketing Association, and the Richard D. Irwin Foundation. He

is also co-author of Marketing Management: A Strategic Decision-Making Approach, 5th

edition. His recent trade book, The New Business Road Test: What Entrepreneurs and

Executives Should Do Before Writing a Business Plan, is the definitive work on the assess-

ment and shaping of market opportunities.

wwxv.mhhe.com

Harper W. Boyd Jr.The late Harper W. Beyd Jr. was the Donaghey Distinguished Professor Emeritus of Mar-

keting at the University of Arkansas at Little Rock. He was internationally known in the

areas of marketing strategy and marketing research. He authored, co-authored, or edited

more than 50 books and monographs and 100 articles, cases, and other teaching materials,

and served as editor of the Journal of Marketing Research. He taught on the faculties of

several prominent business schools around the world, including Stanford, Northwestern,

Tulane, and 1NSEAD; and he received an honorary Doctorate of Letters from the Edin-

burgh Business School in Scotland. He also consulted extensively with both consumer and

industrial products companies around the world.

About the Authors

McGraw-HillIrwin

MARKETING STRATEGY: A DECISION-FOCUSED APPROACH

Published by McGraw-Hill/frwin, a business unit of The McGraxv-Hill Companies, Inc., 1221 Avenue of the

Americas, New York, NY, 10020. Copyright 2006, 2003, 1999, 1996, 1992 by The McGraw-Hill Companies,

Inc. All rights reserved. No part of this publication may be reproduced o1" distributed in any form or by any

means, or stored in a database or retrieval system, without the prior writteu consent of The McGraw-Hill Coln-

panies, Inc., inclnding, but not limited to, in any network or other electronic storage or transmission, or broad-

cast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the

United States.

This book is printed on acid-free paper.

34567890DOW/DOW0987

ISBN- 13:978-0-07-111674-9

ISBN-10:0-07-111674-5

Orville C. Walker, Jr.Orville C. Walker, Jr. is Professor Emeritus in the University of Minnesotas Carlson

School of Management, where he served until recently as the James D. Watkins Professor

of Marketing and Director of the PhD Program. He holds a Masters degree in social psy-

chology from the Ohio State University and a PhD in marketing from the University of

Wisconsin-Madison.Orville is the co-author of tinco books and has published more than 50 research articles

in scholarly and business journals. He has won several awards for his research, including

the ODell award from the Journal qfiMarketing Research, the Maynard award from the

Journal of Marketing, and a lifetime achievement award from the Sales Management Inter-

est Group of the American Marketing Association.

Orville has been a consultant to a number of business firms and not-for-profit organi-

zations, and he has taught in executive development programs around the world, including

programs in Poland, Switzerland, Scotland, and Hong Kong. Perhaps his biggest business

challenge, however, is attempting to turn a profit as the owner-manager of a small vineyard

in western Wisconsin.

John W. MullinsJohn M,llins is Associate Professor of Management Practice at London Business School,

where he heads the entrepreneurship group. He earned his MBA at the Stanford Graduate

School of Business and, considerably later in life, his PhD in marketing from the Univer-

sity of Minnesota. An award-winning teacher, Jotm brings to his teaching and research 20

years of executive experience in high-growth firms, including two ventures he founded,

one of which he took public. Since becoming a business school professor in 1992, John

has published more than 30 articles in a variety of outlets, including Ha~a,ard Business

Review, the Journal of Product hmovation Management, and the Journal of Business Ven-

turing. His research has won national and international awards fiom the Marketing Science

Institute, the American Marketing Association, and the Richard D. Irwin Foundation. He

is also co-author of Marketing Management: A Strategic Decision-Making Approach, 5th

edition. His recent trade book, The New Business Road Test: What Entrepreneurs and

Executives Should Do Before Writing a Business Plan, is the definitive work on the assess-

ment and shaping of market opportunities.

wwxv.mhhe.com

Harper W. Boyd Jr.The late Harper W. Beyd Jr. was the Donaghey Distinguished Professor Emeritus of Mar-

keting at the University of Arkansas at Little Rock. He was internationally known in the

areas of marketing strategy and marketing research. He authored, co-authored, or edited

more than 50 books and monographs and 100 articles, cases, and other teaching materials,

and served as editor of the Journal of Marketing Research. He taught on the faculties of

several prominent business schools around the world, including Stanford, Northwestern,

Tulane, and 1NSEAD; and he received an honorary Doctorate of Letters from the Edin-

burgh Business School in Scotland. He also consulted extensively with both consumer and

industrial products companies around the world.

vi About the Authors

Jean-Claude Larr6ch6Jean-Claude Larr~ch~ is Alfred H. Heineken Professor of Marketing and Director of the

Competitiveness Fitness of Global Firms Initiative at the European Institute of Business

Administration, INSEAD, in Fontainebleau, France. He holds an MBA from 1NSEAD

and a PhD in marketing from the Stanford University Graduate School of Business. A

consultant to several major international firms, Jean-Claude has worked with top manage-ment teams in Europe, North America, and Asia. He is chairman and founder of StratX, apublisher of marketing simulations and other tools for strategic marketing. An award-winning teacher, Jean-Claude is also a two-time winner of the overall case competition ofthe European Case Clearing House. He is co-author of Marketing Management: A SOate-gic Decision-Making Approach, 5th edition.

Brie( Contents

Preface xiii

SECTION ONEIntroduction to Strategy 1

1 Market-Oriented Perspectives UnderlieSuccessful Corporate, Business, and

Marketing Strategies 1

2 Corporate Strategy Decisions and TheirMarketing Implications 31

Business Strategies and Their MarketingImplications 57

SECTION TWOOpportunity Analysis

4

5

6

7

83

Understanding Market Opportunities

Measuring Market Opportunities:Forecasting and Market Knowledge

Targeting Attractive Market

Segments 133

Differentiation and Positioning 153

85

111

9

10

11

SECTION THREEFormulating Marketing Strategies 173

8 Marketing Strategies for New MarketEntries 175

Strategies for Growth Markets 203

Strategies for Mature and DecliningMarkets 227

Marketing Strategies for the NewEconomy 257

13

SECTION FOUR

Implementation and Control

12 Organizing and Planning for EffectiveImplementation 287

Marketing Metrics for MarketingPerformance 313

285

Name Index 337

Subject Index 341

vii

vi About the Authors

Jean-Claude Larr6ch6Jean-Claude Larr~ch~ is Alfred H. Heineken Professor of Marketing and Director of the

Competitiveness Fitness of Global Firms Initiative at the European Institute of Business

Administration, INSEAD, in Fontainebleau, France. He holds an MBA from 1NSEAD

and a PhD in marketing from the Stanford University Graduate School of Business. A

consultant to several major international firms, Jean-Claude has worked with top manage-ment teams in Europe, North America, and Asia. He is chairman and founder of StratX, apublisher of marketing simulations and other tools for strategic marketing. An award-winning teacher, Jean-Claude is also a two-time winner of the overall case competition ofthe European Case Clearing House. He is co-author of Marketing Management: A SOate-gic Decision-Making Approach, 5th edition.

Brie( Contents

Preface xiii

SECTION ONEIntroduction to Strategy 1

1 Market-Oriented Perspectives UnderlieSuccessful Corporate, Business, and

Marketing Strategies 1

2 Corporate Strategy Decisions and TheirMarketing Implications 31

Business Strategies and Their MarketingImplications 57

SECTION TWOOpportunity Analysis

4

5

6

7

83

Understanding Market Opportunities

Measuring Market Opportunities:Forecasting and Market Knowledge

Targeting Attractive Market

Segments 133

Differentiation and Positioning 153

85

111

9

10

11

SECTION THREEFormulating Marketing Strategies 173

8 Marketing Strategies for New MarketEntries 175

Strategies for Growth Markets 203

Strategies for Mature and DecliningMarkets 227

Marketing Strategies for the NewEconomy 257

13

SECTION FOUR

Implementation and Control

12 Organizing and Planning for EffectiveImplementation 287

Marketing Metrics for MarketingPerformance 313

285

Name Index 337

Subject Index 341

vii

Preface xiii

SECTION ONEINTRODUCTION TO STRATEGY 1

Chapter 1Market-Oriented Perspectives UnderlieSuccessful Corporate, Business, and

Marketing Strategies 3

Strategic Challenges Addressed in Chapter 1 6Three Levels of Strategy: Similar Components but

Different Issues 71. What Is a Strategy? 7

2. The Components qf Strategy 8

3. The Hierarchy of Strategies 8

4. Corporate Strategy 8

5. Business-Level Strategy 11

6. Marketing Strategy 11

What Is Marketings Role in Formulating and

Implementing Strategies? 11

1. Market-Oriented Management 12

2. Do Customers Always Know What They ~l{mt? 13

3. Does Being Market-Oriented Pay? 14

4. Factors That Mediate Marketings Strategic

Role 16

5. Recent Developments Affecting the Strategic Role

of Marketing 18

6. The Future Role qf Marketing 21

Formulating and Implementing Marketing Strategy--

An Overview of the Process 21

1. A Decision-Making Focus 21

2. Analysis Comes First 21

3. hltegrating Marketing Strategy with the Firms Other

Strategies and Resotoces 22

4. Market OpportuniO~ Analysis 23

5. Formulati,g Marketing Strategies for Spec!fic

Situations 24

6. hnplementation and Control qf the Marketing

Strategy 24

7. The Marketing Plan--A Blueprint

for Action 25

viii

Chapter 2

Corporate Strategy Decisions and Their

Marketing Implications 31

Strategic Challenges Addressed in Chapter 2 33

Corporate Scope Defining the Firms Mission 351. Market h!fluences on the Corporate Mission 35

2. Criteria for De.fi, ing the Corporate

Mission 35

3. Social Values and Ethical Principles 36

4. Wto, Are Ethics Important? The Marketing

hltplications of Ethical Standards 3 7

Corporate Objectives 37

1. Enhancing Shareholder 14thte: The Ultimate

Ob.jective 38

2. The Marketing hnplications of Corporate

Objectives 40

Gaining a Competitive Advantage 41

Corporate Growth Strategies 42

1. Expansion by hwreasing Penetration qfl Current

Product-Markets 42

2. EaT)ansion by Developing New Productsfor Cmrent

Cttstomers 43

3. Expansion by Selling Existing Products to New

Segments o1" Countries 43

4. Expansion by Divers{~,ing 43

5. Expansio~t by Diversi~,ing through Organizational

Relationships or Networks 44

Allocating Corporate Resources 44

1. Portfolio Models 45

2. Vahte-Based Planning 48

Sources of Synergy 511. Knowledge-Based Synergies 51

2. Corporate IdentiO, and the Corporate Brand as a

Source of Synergy 51

3. Corporate Branding Strategy--When Does a Strong

Corporate Brand Make Sense? 52

4. Synergyfiom Shared Resources 53

Chapter 3

Business Strategies and Their MarketingImplications 57Strategic Challenges Addressed in Chapter 3 58

Strategic Decisions at the Business-Unit Level 59

1. How Should Strategic Business Units Be

Designed? 60

2. Business-Unit Objectives 61

3. Allocating Resources within the Business Unit 61

How Do Businesses Compete? 62

1. Generic Business-Level Competitive Strategies 63

2. Do the Same Competitive Strategies Work for Single-

Business Firms and Start-ups? 64

3. Do the Same Competitive Strategies Work for Service

Busi,esses? 65

4. Do the Same Competitive Strategies Work for Global

Competitors? 66

5. Will the htternet Change Evem.,thing? 67

How Do Competitive Strategies Differ from One

Another? 68

1. Differences in Scope 68

2. Diffbrences in Goals and Objectives 69

3. D!fferences in Resource Deployment 70

4. D!fferences in Sources qf Synergy 70

Deciding When a Strategy Is Appropriate:

The Fit between Business Strategies and the

Environment 71

1. Appropriate Conditions.for a Prospector Strategy 71

2. Appropriate Comtitions for an Analyzer Strategy 71

3. Appropriate Conditions.for a Dgfender

Strateg~ 73

How Different Business Strategies Influence

Marketing Decisions 74

1. Prodact Policies 75

2. Pricing Policies 76

3. Distribution Policies 76

4. Promotion Policies 77

What If the Best Marketing Program for a

Product Does Not Fit the Businesss Competitive

Strategy? 77

SECTION TWOOPPORTUNITY ANALYSIS 83

Chapter 4Understanding Market Opportunities 85Strategic Challenges Addressed in Chapter 4 86

Markets and Industries: Whats the Difference? 87Assessing Market and Industry Attractiveness 88

Macro Trend Analysis: A Framework for Assessing

Market Attractiveness, Macro Level 881. The Demographic Em,iromnent 88

2. The Sociocultural Em,iromnent 91

Contents ix

3. The Economic Em,ironment 92

4. The Regulator3, Em&omnent 92

5. The Technological Em~iromnent 93

6. The Natural Em,ironment 94

Your Market Is A~ractive: What About Your

Industry? 951. Porter ~ Five Competitive Forces 95

2. A Five Forces Analysis qf the Celhdar Phone

Sere,ice bMustW 98

Challenges in Macro-Level Market and Industry

Analysis 99

1. b(ormation Sources for Macro-Level Analysis 99

Understanding Markets at the Micro-Level 100

Understanding Industries at the Micro-Level 102

The Team Domains: The Key to the Pursuit of

A~ractive Opportunities 103

1. Mission, Aspirations, and Risk Propensity 103

2. Abili~ to Execute on the Industrys Critical

Success Factors 103

3. Its ~to You ~ow, Not What You ~ow 104

Putting the Seven Domains to Work 104

Anticipating and Responding to Enviro~ental

Change 105

Swiping Upstream or Downstream: An Important

Strategic Choice 106

Chapter 5

Measuring Market Opportunities:Forecasting and Market Knowledge 111

Strategic Challenges Addressed in Chapter 5 113Every Forecast Is Wrong! 113

A Forecasters Toolkit: A Tool for Every Forecasting

Setting 113

1. Statistical and Other Qaantitative Methods 114

2. Obsem,ation 115

3. Smweys or Focus Groups 116

4. Analogy 116

5. Judgment l l 7

6. Market Tests 118

7. Mathematics Entailed in Forecasting 118

Rate of Diffusion of Innovations: Another Perspective

on Forecasting 1181. The Adoption Process 119

2. The Rate of Adoption 120

3. Adopter Categories 120

4. bnplications qf D{ffitsion qf bmovation Theow

for Forecasting Sales qf New Products and New

Firms 121

Preface xiii

SECTION ONEINTRODUCTION TO STRATEGY 1

Chapter 1Market-Oriented Perspectives UnderlieSuccessful Corporate, Business, and

Marketing Strategies 3

Strategic Challenges Addressed in Chapter 1 6Three Levels of Strategy: Similar Components but

Different Issues 71. What Is a Strategy? 7

2. The Components qf Strategy 8

3. The Hierarchy of Strategies 8

4. Corporate Strategy 8

5. Business-Level Strategy 11

6. Marketing Strategy 11

What Is Marketings Role in Formulating and

Implementing Strategies? 11

1. Market-Oriented Management 12

2. Do Customers Always Know What They ~l{mt? 13

3. Does Being Market-Oriented Pay? 14

4. Factors That Mediate Marketings Strategic

Role 16

5. Recent Developments Affecting the Strategic Role

of Marketing 18

6. The Future Role qf Marketing 21

Formulating and Implementing Marketing Strategy--

An Overview of the Process 21

1. A Decision-Making Focus 21

2. Analysis Comes First 21

3. hltegrating Marketing Strategy with the Firms Other

Strategies and Resotoces 22

4. Market OpportuniO~ Analysis 23

5. Formulati,g Marketing Strategies for Spec!fic

Situations 24

6. hnplementation and Control qf the Marketing

Strategy 24

7. The Marketing Plan--A Blueprint

for Action 25

viii

Chapter 2

Corporate Strategy Decisions and Their

Marketing Implications 31

Strategic Challenges Addressed in Chapter 2 33

Corporate Scope Defining the Firms Mission 351. Market h!fluences on the Corporate Mission 35

2. Criteria for De.fi, ing the Corporate

Mission 35

3. Social Values and Ethical Principles 36

4. Wto, Are Ethics Important? The Marketing

hltplications of Ethical Standards 3 7

Corporate Objectives 37

1. Enhancing Shareholder 14thte: The Ultimate

Ob.jective 38

2. The Marketing hnplications of Corporate

Objectives 40

Gaining a Competitive Advantage 41

Corporate Growth Strategies 42

1. Expansion by hwreasing Penetration qfl Current

Product-Markets 42

2. EaT)ansion by Developing New Productsfor Cmrent

Cttstomers 43

3. Expansion by Selling Existing Products to New

Segments o1" Countries 43

4. Expansion by Divers{~,ing 43

5. Expansio~t by Diversi~,ing through Organizational

Relationships or Networks 44

Allocating Corporate Resources 44

1. Portfolio Models 45

2. Vahte-Based Planning 48

Sources of Synergy 511. Knowledge-Based Synergies 51

2. Corporate IdentiO, and the Corporate Brand as a

Source of Synergy 51

3. Corporate Branding Strategy--When Does a Strong

Corporate Brand Make Sense? 52

4. Synergyfiom Shared Resources 53

Chapter 3

Business Strategies and Their MarketingImplications 57Strategic Challenges Addressed in Chapter 3 58

Strategic Decisions at the Business-Unit Level 59

1. How Should Strategic Business Units Be

Designed? 60

2. Business-Unit Objectives 61

3. Allocating Resources within the Business Unit 61

How Do Businesses Compete? 62

1. Generic Business-Level Competitive Strategies 63

2. Do the Same Competitive Strategies Work for Single-

Business Firms and Start-ups? 64

3. Do the Same Competitive Strategies Work for Service

Busi,esses? 65

4. Do the Same Competitive Strategies Work for Global

Competitors? 66

5. Will the htternet Change Evem.,thing? 67

How Do Competitive Strategies Differ from One

Another? 68

1. Differences in Scope 68

2. Diffbrences in Goals and Objectives 69

3. D!fferences in Resource Deployment 70

4. D!fferences in Sources qf Synergy 70

Deciding When a Strategy Is Appropriate:

The Fit between Business Strategies and the

Environment 71

1. Appropriate Conditions.for a Prospector Strategy 71

2. Appropriate Comtitions for an Analyzer Strategy 71

3. Appropriate Conditions.for a Dgfender

Strateg~ 73

How Different Business Strategies Influence

Marketing Decisions 74

1. Prodact Policies 75

2. Pricing Policies 76

3. Distribution Policies 76

4. Promotion Policies 77

What If the Best Marketing Program for a

Product Does Not Fit the Businesss Competitive

Strategy? 77

SECTION TWOOPPORTUNITY ANALYSIS 83

Chapter 4Understanding Market Opportunities 85Strategic Challenges Addressed in Chapter 4 86

Markets and Industries: Whats the Difference? 87Assessing Market and Industry Attractiveness 88

Macro Trend Analysis: A Framework for Assessing

Market Attractiveness, Macro Level 881. The Demographic Em,iromnent 88

2. The Sociocultural Em,iromnent 91

Contents ix

3. The Economic Em,ironment 92

4. The Regulator3, Em&omnent 92

5. The Technological Em~iromnent 93

6. The Natural Em,ironment 94

Your Market Is A~ractive: What About Your

Industry? 951. Porter ~ Five Competitive Forces 95

2. A Five Forces Analysis qf the Celhdar Phone

Sere,ice bMustW 98

Challenges in Macro-Level Market and Industry

Analysis 99

1. b(ormation Sources for Macro-Level Analysis 99

Understanding Markets at the Micro-Level 100

Understanding Industries at the Micro-Level 102

The Team Domains: The Key to the Pursuit of

A~ractive Opportunities 103

1. Mission, Aspirations, and Risk Propensity 103

2. Abili~ to Execute on the Industrys Critical

Success Factors 103

3. Its ~to You ~ow, Not What You ~ow 104

Putting the Seven Domains to Work 104

Anticipating and Responding to Enviro~ental

Change 105

Swiping Upstream or Downstream: An Important

Strategic Choice 106

Chapter 5

Measuring Market Opportunities:Forecasting and Market Knowledge 111

Strategic Challenges Addressed in Chapter 5 113Every Forecast Is Wrong! 113

A Forecasters Toolkit: A Tool for Every Forecasting

Setting 113

1. Statistical and Other Qaantitative Methods 114

2. Obsem,ation 115

3. Smweys or Focus Groups 116

4. Analogy 116

5. Judgment l l 7

6. Market Tests 118

7. Mathematics Entailed in Forecasting 118

Rate of Diffusion of Innovations: Another Perspective

on Forecasting 1181. The Adoption Process 119

2. The Rate of Adoption 120

3. Adopter Categories 120

4. bnplications qf D{ffitsion qf bmovation Theow

for Forecasting Sales qf New Products and New

Firms 121

x Contents

Cautions and Caveats in Forecasting 1221. Keys to Good Forecasting 122

2. Common Sources of Error in Forecasting 123

Why Data? Why Marketing Knowledge? 123

Market Knowledge Systems: Charting a Path

toward Competitive Advantage 124

1. Internal Records ~stems 1242. Marketing Databases 125

3. Competitive Intelligence Systems 127

4. Client Contact and SalesJbrce Automation

Systems 127

Marketing Research: A Foundation for Strategic

Decision Making 129

What Users of Marketing Research Should

Ask 129

Chapter 6

Targeting Attractive Market Segments 133

Strategic Challenges Addressed in Chapter 6 134

Why Do Market Segmentation and Target Marketing

Make Sense? 135

1. Most Markets Are Heterogeneous 135

2. Today "s Market Realities Qften Make

Segmentation hnperative 136

How Are Market Segments Best

Defined? 137

1. Who They Are." Demographic Descriptors 137

2. Where The), Are. Geographic Descriptors 138

3. Geodemographic Descriptors 139

4. How They Behave: Behavioral Descriptors 140

5. hmovative Segmentation: A Key to Marketing

Breakthroagks 142

Choosing Attractive Market Segments:

A Five-Step Process 143

1. Step 1." Select Market-Attractiveness

and Competitive-Position Factors 144

2. Step 2. Weight Each Factor 146

3. Step 3: Rate Segments on Eack Factor; Plot Results

on Matrices 146

4. Step 4: Project Futare Position for Each

Segment 147

5. Step 5. Choose Segments to Target, Allocate

Resources 148

Different Targeting Strategies Suit Different

Opportunities 148

1. Niche-Market Strategy 149

2. Mass-Market Strategy 149

3. Growth-Market Strategy 150

Global Market Segmentation 150

Chapter 7

Differentiation and Positioning 153Strategic Challenges Addressed in Chapter 7 154

Differentiation: One Key to Customer Preference

and Competitive Advantage 154

1. D(fferentiation in Business Strategies 155

2. Diffbrentiation among Goods" and Se~a,ices 155

Physical Positioning 156

1. Limitations qf Ph),sical Positioning 156

Perceptual Positioning 157

Levers Marketers Can Use to Establish

Positioning 157

Preparing the Foundation for Marketing Strategies:

The Positioning Process 158

1. Step 1: Ident(]j, a Relevant Set qf Competitive

Products 159

2. Step 2: ldent([j, Determinant Attributes 160

3. Step 3: Collect Data about Customers Perceptions

for Products in the Competitive Set 161

4. Step 4: Analyze the Current Positions qf Products

in the Competitive Set 161

5. Step 5: Determine Customers Most Preferred

Combination of Attributes 164

6. Step 6. Consider Fit of Possible Positions

witk Custonwr Needs and Segment Attractiveness 165

Z Step 7." Write Positioning Statement of Valae

Proposition to Guide Development of Marketing

Strategy 166

Some Caveats in Positioning Decision Making 169Analytical Tools for Positioning Decision

Making 169

SECTION THREEFORMULATING MARKETING

STRATEGIES 173

Chapter 8Marketing Strategies for New MarketEntries 175Strategic Challenges Addressed in Chapter 8 176

Sustaining Competitive Advantage over the Product

Life Cycle 1771. Market and Competitive hnplications of Product Life

Cycle Stages 178

2. Strategic Implications of the Product Life Cycle 1823. Limitations of the Product Life Cycle

Framework 183

New Market Entries--How New Is New? 183

Objectives of New Product and Market

Development 184

Market Entry Strategies: Is It Better to Be a Pioneer

or a Follower? 186

1. Pioneer Strategy 186

2. Not All Pioneers Capitalize on Their Potential

Advantages 188

3. Follower Strategy 189

4. Determinants of Success for Pioneers and

Followers 190

Strategic Marketing Programs for Pioneers 192

1. Mass-Market Penetration 192

2. Niche Penetration 192

3. Ski"mining and Early Withdrawal 194

4. Marketing Program Components.for a Mass-Market

Penetration Strategy 194

5. Marketing Program Components for a Niche

Penetration Strategy 199

6. Marketing Program Conlponents for a Skinuning

Strategy 199

Chapter 9Strategies for Growth Markets 203Strategic Challenges Addressed in Chapter 9 204

Opportunities and Risks in Growth Markets 2051. Gaining Sllare Is Easier 205

2. Share Gains Are Worth More 207

3. Price Competition Is Likely to Be

Less Intense 207

4. Early Ento, Is Necessaiy to Maintain

Technical Expertise 208

Growth-Market Strategies for Market Leaders 209

1. Marketing Objectives for Share Leaders 209

2. Marketing Actions and Strategies to Achieve Share-

Maintenance Objectives 209

3. Fortress, or Position Defense, Strategy 211

4. Flanker Strategy 214

5. Col!fiontation Strategy 214

6. Market Expansion Strategy 215

7. Contraction, or Strategic Withdrawal, Strategy 216

Share-Growth Strategies for Followers 216

1. Marketing Objectives for Followers 216

2. ivIarketing Actions and Strategies to Achieve Share

Growth 216

3. Deciding Wkom to Attack 218

4. Frontal Attack SOategy 220

5. Leapfrog Strategy 221

6. Flanking and Encirclement Strategies 222

7. Guerilla Attack 223

8. Supporting Evidence 223

Contents xi

Chapter 10Strategies for Mature and DecliningMarkets 227Strategic Challenges Addressed in Chapter 10 228

1. Challenges in Mature Markets 228

2. Challenges #1 Declining Markets 229

Shakeout: The Transition from Market Growth

to Maturity 229

1. Characteristics of the Transition Period 229

2. Strategic Traps during the Transition 229

Strategic Choices in Mature Markets 230

1. Strategies for Maintaining Competitive

Advantage 231

2. Methods of D~ferentiation 232

3. Methods of Maintaining a Low-Cost

Position 237

4. CustomersSatisfaction and LoyalO~ Are Crucial

for Maximizing Their Lifetinle Value 238

Marketing Strategies for Mature Markets 241

1. Strategies for Maintaining Cttrrent Market

Share 241

2. Strategies for Extending Volume Growth 242

Strategies for Declining Markets 2481. Relative Attractiveness of Declining Markets 248

2. Divestment or Liquidation 251

3. Marketing Strategies for Remaining

Competitors 251

Chapter 11

Marketing Strategies for the New

Economy 257Strategic Challenges Addressed in Chapter 11 258

Does Every Company Need a New-Economy

Strategy? 258

Threats or Opportunities? The Inherent Advantages

and Disadvantages of the New Economy

for Marketers 261

1. The Syndication of h!formation 261

2. Increasing Returns to Scale o~f Network

Products 262

3. The Ability to Efficiently Personalize and Customize

Market Offerings 262

4. Disintermediation and Restructlwing of Distribution

Channels 263

5. Global Reach, 24X7 Access, and hlstantaneous

Delively 264

6. Are These New-Economy Attributes Opportunities o1"

Threats? 264

7. First-MoverAdvantage: Fact or Fiction? 266

x Contents

Cautions and Caveats in Forecasting 1221. Keys to Good Forecasting 122

2. Common Sources of Error in Forecasting 123

Why Data? Why Marketing Knowledge? 123

Market Knowledge Systems: Charting a Path

toward Competitive Advantage 124

1. Internal Records ~stems 1242. Marketing Databases 125

3. Competitive Intelligence Systems 127

4. Client Contact and SalesJbrce Automation

Systems 127

Marketing Research: A Foundation for Strategic

Decision Making 129

What Users of Marketing Research Should

Ask 129

Chapter 6

Targeting Attractive Market Segments 133

Strategic Challenges Addressed in Chapter 6 134

Why Do Market Segmentation and Target Marketing

Make Sense? 135

1. Most Markets Are Heterogeneous 135

2. Today "s Market Realities Qften Make

Segmentation hnperative 136

How Are Market Segments Best

Defined? 137

1. Who They Are." Demographic Descriptors 137

2. Where The), Are. Geographic Descriptors 138

3. Geodemographic Descriptors 139

4. How They Behave: Behavioral Descriptors 140

5. hmovative Segmentation: A Key to Marketing

Breakthroagks 142

Choosing Attractive Market Segments:

A Five-Step Process 143

1. Step 1." Select Market-Attractiveness

and Competitive-Position Factors 144

2. Step 2. Weight Each Factor 146

3. Step 3: Rate Segments on Eack Factor; Plot Results

on Matrices 146

4. Step 4: Project Futare Position for Each

Segment 147

5. Step 5. Choose Segments to Target, Allocate

Resources 148

Different Targeting Strategies Suit Different

Opportunities 148

1. Niche-Market Strategy 149

2. Mass-Market Strategy 149

3. Growth-Market Strategy 150

Global Market Segmentation 150

Chapter 7

Differentiation and Positioning 153Strategic Challenges Addressed in Chapter 7 154

Differentiation: One Key to Customer Preference

and Competitive Advantage 154

1. D(fferentiation in Business Strategies 155

2. Diffbrentiation among Goods" and Se~a,ices 155

Physical Positioning 156

1. Limitations qf Ph),sical Positioning 156

Perceptual Positioning 157

Levers Marketers Can Use to Establish

Positioning 157

Preparing the Foundation for Marketing Strategies:

The Positioning Process 158

1. Step 1: Ident(]j, a Relevant Set qf Competitive

Products 159

2. Step 2: ldent([j, Determinant Attributes 160

3. Step 3: Collect Data about Customers Perceptions

for Products in the Competitive Set 161

4. Step 4: Analyze the Current Positions qf Products

in the Competitive Set 161

5. Step 5: Determine Customers Most Preferred

Combination of Attributes 164

6. Step 6. Consider Fit of Possible Positions

witk Custonwr Needs and Segment Attractiveness 165

Z Step 7." Write Positioning Statement of Valae

Proposition to Guide Development of Marketing

Strategy 166

Some Caveats in Positioning Decision Making 169Analytical Tools for Positioning Decision

Making 169

SECTION THREEFORMULATING MARKETING

STRATEGIES 173

Chapter 8Marketing Strategies for New MarketEntries 175Strategic Challenges Addressed in Chapter 8 176

Sustaining Competitive Advantage over the Product

Life Cycle 1771. Market and Competitive hnplications of Product Life

Cycle Stages 178

2. Strategic Implications of the Product Life Cycle 1823. Limitations of the Product Life Cycle

Framework 183

New Market Entries--How New Is New? 183

Objectives of New Product and Market

Development 184

Market Entry Strategies: Is It Better to Be a Pioneer

or a Follower? 186

1. Pioneer Strategy 186

2. Not All Pioneers Capitalize on Their Potential

Advantages 188

3. Follower Strategy 189

4. Determinants of Success for Pioneers and

Followers 190

Strategic Marketing Programs for Pioneers 192

1. Mass-Market Penetration 192

2. Niche Penetration 192

3. Ski"mining and Early Withdrawal 194

4. Marketing Program Components.for a Mass-Market

Penetration Strategy 194

5. Marketing Program Components for a Niche

Penetration Strategy 199

6. Marketing Program Conlponents for a Skinuning

Strategy 199

Chapter 9Strategies for Growth Markets 203Strategic Challenges Addressed in Chapter 9 204

Opportunities and Risks in Growth Markets 2051. Gaining Sllare Is Easier 205

2. Share Gains Are Worth More 207

3. Price Competition Is Likely to Be

Less Intense 207

4. Early Ento, Is Necessaiy to Maintain

Technical Expertise 208

Growth-Market Strategies for Market Leaders 209

1. Marketing Objectives for Share Leaders 209

2. Marketing Actions and Strategies to Achieve Share-

Maintenance Objectives 209

3. Fortress, or Position Defense, Strategy 211

4. Flanker Strategy 214

5. Col!fiontation Strategy 214

6. Market Expansion Strategy 215

7. Contraction, or Strategic Withdrawal, Strategy 216

Share-Growth Strategies for Followers 216

1. Marketing Objectives for Followers 216

2. ivIarketing Actions and Strategies to Achieve Share

Growth 216

3. Deciding Wkom to Attack 218

4. Frontal Attack SOategy 220

5. Leapfrog Strategy 221

6. Flanking and Encirclement Strategies 222

7. Guerilla Attack 223

8. Supporting Evidence 223

Contents xi

Chapter 10Strategies for Mature and DecliningMarkets 227Strategic Challenges Addressed in Chapter 10 228

1. Challenges in Mature Markets 228

2. Challenges #1 Declining Markets 229

Shakeout: The Transition from Market Growth

to Maturity 229

1. Characteristics of the Transition Period 229

2. Strategic Traps during the Transition 229

Strategic Choices in Mature Markets 230

1. Strategies for Maintaining Competitive

Advantage 231

2. Methods of D~ferentiation 232

3. Methods of Maintaining a Low-Cost

Position 237

4. CustomersSatisfaction and LoyalO~ Are Crucial

for Maximizing Their Lifetinle Value 238

Marketing Strategies for Mature Markets 241

1. Strategies for Maintaining Cttrrent Market

Share 241

2. Strategies for Extending Volume Growth 242

Strategies for Declining Markets 2481. Relative Attractiveness of Declining Markets 248

2. Divestment or Liquidation 251

3. Marketing Strategies for Remaining

Competitors 251

Chapter 11

Marketing Strategies for the New

Economy 257Strategic Challenges Addressed in Chapter 11 258

Does Every Company Need a New-Economy

Strategy? 258

Threats or Opportunities? The Inherent Advantages

and Disadvantages of the New Economy

for Marketers 261

1. The Syndication of h!formation 261

2. Increasing Returns to Scale o~f Network

Products 262

3. The Ability to Efficiently Personalize and Customize

Market Offerings 262

4. Disintermediation and Restructlwing of Distribution

Channels 263

5. Global Reach, 24X7 Access, and hlstantaneous

Delively 264

6. Are These New-Economy Attributes Opportunities o1"

Threats? 264

7. First-MoverAdvantage: Fact or Fiction? 266

xii Contents

Developing a New-Economy Strategy: A Decision

Framework 267

1. Marketing Applications for New-EcononO, Tools 267

2. Developing New-Econono, Marketing Strategies: The

Critical Questions 275

Developing Strategies to Serve New-Economy

Markets 279

1. What Lessons Can We Learn from the Dot-Corn

Crash? 279

2. What htdustries Will Be Next to Get the Dot-Corn

Treatment? 279

3. What Are the Key Success Factors in Serving the Dot-

Corn Markets of Tomorrow? 280

SECTION FOURIMPLEMENTATION AND CONTROL 285

Chapter 12Organizing and Planning for Effective

Implementation 287

Strategic Challenges Addressed in Chapter 12 289

Designing Appropriate Administrative Relationships

for the Implementation of Different Competitive

Strategies 2901. Business- Unit Autonomy 291

2. Shared Programs and Facilities 2923. Evaluation and Reward Systems 293

Designing Appropriate Organizational

Structures and Processes for Implementing

Different Strategies 2931. Functional Competencies and Resource

Allocation 293

2. Additional Considerations for Se~a,ice

Organizations 295

3. Organizational Structures 295

4. Recent Trends in Organizational Design 300

5. Organizational Adjustments as Firms Grow

and Markets Change 300

6. Organizational Designs for Selling in Global

Markets 301

Marketing Plans: The Foundation for Implementing

Marketing Actions 303

1. The Situation Analysis 306

2. Key Issues 308

3. Objectives 308

4. Marketing Strategy 308

5. Action Platts 308

6. Projected Profit-and-Loss Statement 309

7. Contingency Plans 309

Chapter 13

Marketing Metrics for Marketing

Performance 313

Strategic Challenges Addressed in Chapter 13 314

Designing Marketing Metrics Step by Step 3151. Setting Standards of Performance 316

2. Speci~4ng and Obtaining Feedback Data 320

3. Evaluating Feedback Data 321

4. Taking Corrective Action 322

Design Decisions for Strategic MonitoringSystems 322

1. Ident!/j~ing Key Variables 323

2. Tracking and Monitoring 3233. Strategy Reassessment 323

Design Decisions for Marketing Metrics 3241. Who Needs What It!formation? 3242. ~lqwn and How Often Is the InformationNeeded? 328

3. In What Media and in What Format(s)or Levels qfiAggregation Should the InformationBe Provided? 3294. Does Your System of Marketing MeOicsMeasure Up? 3295. What Contingencies Should Be Plamwd for? 3306. Global Marketing ConOol 332

A Tool for Periodic Assessment of Marketing

Performance: The Marketing Audit 3331. ~,pes qflAudits 333

Name Index 337

Subject Index 341

WHY THIS COURSE?The best of the leading business schools and other executive education programs offer cap-stone or other elective courses in marketing whose strategic perspective challenges stu-

dents to "pull it all together" and integrate what they have learned in earlier courses--including those in marketing and other disciplines--in making strategic marketing

decisions. Whether called Marketing Strategy, Strategic Market Planning, Strategic BrandManagement, Marketing in the New Economy, or something else, such courses typicallyask students to apply what they learn to decision making in cases that bring alive real mar-keting situations. Many also ask students to complete a term-long project of some kind,such as the development of a marketing plan for a new or existing product or a new ven-ture. We have written this text to serve exactly these kinds of capstone and advanced elec-tive courses.

WHY THIS BOOK?Why did your instructor choose this book? Chances are, it was for one or more of the fol-lowing reasons:

Among your instructors objectives is to give you the necessary tools and frameworks

to enable you to be an effective contributor to marketing decision making, whether asan entrepreneur or in an established firm. This books focus on decision making sets it

apart from other texts that place greater emphasis on description of marketing phe-nomena than on the strategic and tactical marketing decisions that marketing managers

and entrepreneurs must make each and every day. Your instructor prefers a tightly written text whose strategic perspectives serve as a con-

cise fonndafion around which a broader set of materials, such as case studies or sup-plementary readings that fit the specific theme of the course, are assembled. This textassumes student familiarity with--and thus does not repeat--the basics of buyer behav-ior, the four Ps, and other marketing fundamentals typically covered in earlier courses.

Your instructor wants to use the most current and Web-savvy book available. We inte-grate the latest new-economy developments into each chapter, and we devote an entirechapter~hapter 11--to the development of marketing strategies for the new econ-omy. In addition, we supplement the book with an interactive Web site to help you learnand to help your instructor choose the best case and other materials and in-class activ-

ities. Our goal--and probably that of your instructor, as well--is to make both the lat-est Web-based tools as well as time-tested marketing principles relevant to those of youwho will work in either old- or new-economy companies.

Your instructor appreciates and believes you ~vill benefit from the real-world, globalperspectives offered by the authors of this book. Our combined entrepreneurial, mar-

keting management, and consulting experience spans a broad variety of manufacturing,service, software, and distribution industries and has taken us--and thereby you, thereader--around the world many times over.

As the reader will see from the outset in Chapter 1, marketing decision making is a criti-cal activity in every firm, including start-ups--not just in big companies with traditionalmarketing departments. Further, it is not just marketing managers who make marketingdecisions. People in nearly every role in every company can have a powerful influence on

how happy its customers are--or are not~with the goods and services the company

xii Contents

Developing a New-Economy Strategy: A Decision

Framework 267

1. Marketing Applications for New-EcononO, Tools 267

2. Developing New-Econono, Marketing Strategies: The

Critical Questions 275

Developing Strategies to Serve New-Economy

Markets 279

1. What Lessons Can We Learn from the Dot-Corn

Crash? 279

2. What htdustries Will Be Next to Get the Dot-Corn

Treatment? 279

3. What Are the Key Success Factors in Serving the Dot-

Corn Markets of Tomorrow? 280

SECTION FOURIMPLEMENTATION AND CONTROL 285

Chapter 12Organizing and Planning for Effective

Implementation 287

Strategic Challenges Addressed in Chapter 12 289

Designing Appropriate Administrative Relationships

for the Implementation of Different Competitive

Strategies 2901. Business- Unit Autonomy 291

2. Shared Programs and Facilities 2923. Evaluation and Reward Systems 293

Designing Appropriate Organizational

Structures and Processes for Implementing

Different Strategies 2931. Functional Competencies and Resource

Allocation 293

2. Additional Considerations for Se~a,ice

Organizations 295

3. Organizational Structures 295

4. Recent Trends in Organizational Design 300

5. Organizational Adjustments as Firms Grow

and Markets Change 300

6. Organizational Designs for Selling in Global

Markets 301

Marketing Plans: The Foundation for Implementing

Marketing Actions 303

1. The Situation Analysis 306

2. Key Issues 308

3. Objectives 308

4. Marketing Strategy 308

5. Action Platts 308

6. Projected Profit-and-Loss Statement 309

7. Contingency Plans 309

Chapter 13

Marketing Metrics for Marketing

Performance 313

Strategic Challenges Addressed in Chapter 13 314

Designing Marketing Metrics Step by Step 3151. Setting Standards of Performance 316

2. Speci~4ng and Obtaining Feedback Data 320

3. Evaluating Feedback Data 321

4. Taking Corrective Action 322

Design Decisions for Strategic MonitoringSystems 322

1. Ident!/j~ing Key Variables 323

2. Tracking and Monitoring 3233. Strategy Reassessment 323

Design Decisions for Marketing Metrics 3241. Who Needs What It!formation? 3242. ~lqwn and How Often Is the InformationNeeded? 328

3. In What Media and in What Format(s)or Levels qfiAggregation Should the InformationBe Provided? 3294. Does Your System of Marketing MeOicsMeasure Up? 3295. What Contingencies Should Be Plamwd for? 3306. Global Marketing ConOol 332

A Tool for Periodic Assessment of Marketing

Performance: The Marketing Audit 3331. ~,pes qflAudits 333

Name Index 337

Subject Index 341

WHY THIS COURSE?The best of the leading business schools and other executive education programs offer cap-stone or other elective courses in marketing whose strategic perspective challenges stu-

dents to "pull it all together" and integrate what they have learned in earlier courses--including those in marketing and other disciplines--in making strategic marketing

decisions. Whether called Marketing Strategy, Strategic Market Planning, Strategic BrandManagement, Marketing in the New Economy, or something else, such courses typicallyask students to apply what they learn to decision making in cases that bring alive real mar-keting situations. Many also ask students to complete a term-long project of some kind,such as the development of a marketing plan for a new or existing product or a new ven-ture. We have written this text to serve exactly these kinds of capstone and advanced elec-tive courses.

WHY THIS BOOK?Why did your instructor choose this book? Chances are, it was for one or more of the fol-lowing reasons:

Among your instructors objectives is to give you the necessary tools and frameworks

to enable you to be an effective contributor to marketing decision making, whether asan entrepreneur or in an established firm. This books focus on decision making sets it

apart from other texts that place greater emphasis on description of marketing phe-nomena than on the strategic and tactical marketing decisions that marketing managers

and entrepreneurs must make each and every day. Your instructor prefers a tightly written text whose strategic perspectives serve as a con-

cise fonndafion around which a broader set of materials, such as case studies or sup-plementary readings that fit the specific theme of the course, are assembled. This textassumes student familiarity with--and thus does not repeat--the basics of buyer behav-ior, the four Ps, and other marketing fundamentals typically covered in earlier courses.

Your instructor wants to use the most current and Web-savvy book available. We inte-grate the latest new-economy developments into each chapter, and we devote an entirechapter~hapter 11--to the development of marketing strategies for the new econ-omy. In addition, we supplement the book with an interactive Web site to help you learnand to help your instructor choose the best case and other materials and in-class activ-

ities. Our goal--and probably that of your instructor, as well--is to make both the lat-est Web-based tools as well as time-tested marketing principles relevant to those of youwho will work in either old- or new-economy companies.

Your instructor appreciates and believes you ~vill benefit from the real-world, globalperspectives offered by the authors of this book. Our combined entrepreneurial, mar-

keting management, and consulting experience spans a broad variety of manufacturing,service, software, and distribution industries and has taken us--and thereby you, thereader--around the world many times over.

As the reader will see from the outset in Chapter 1, marketing decision making is a criti-cal activity in every firm, including start-ups--not just in big companies with traditionalmarketing departments. Further, it is not just marketing managers who make marketingdecisions. People in nearly every role in every company can have a powerful influence on

how happy its customers are--or are not~with the goods and services the company

xiv Preface

provides. Stockbrokers must attract new customers. Acconnting and consulting firms mustfind ways to differentiate their services from other providers so their customers have rea-sons to give them their business. Software engineers developing the next great Internet orother technology must understand how their technology can benefit the intended customer,for without such benefits, customers will not buy. Thus, we have written this book to meetthe marketing needs of readers ~vho hope to make a difference in the long-term strategicsuccess of their organizations--whether their principal roles are in marketing or otherwise.

In this brief preface, we want to say a bit more about each of the four distinctive bene-fits--bulleted above--that this book offers its readers. We also point out the key changesin this edition compared to previous ones; and we thank our many students, colleagues, and

others from whom we have learned so much, without whom this book would not have beenpossible.

A FOCUS ON DECISION MAKINGThis fifth edition of Marketing Strategy.A Decision-FocusedApproach retains the strate-gic perspectives that have marked the earlier editions, while providing, in each chapter,

specific tools and frameworks for making marketing decisions that take best advantage

of the conditions in which the firm finds itself--both internally, in terms of the firms ntis-

sion and competencies, and externally, in terms of the market and competitive context inwhich it operates.

This decision-focused approach is important to students and executives who are our read-

ers, because, in most advanced marketing management classes and executive courses, the

students or participants will be asked to make numerous decisions~ecisions in case stud-

ies about what the protagonist in the case should do; decisions in a course project, such as

those entailed in developing a marketing plan; or decisions in a marketing simulation game.

Our decision-focused approach is also important to employers, who tell us they want

todays graduates to be prepared to "hit the ground running" and contribute to the firms

decision making from day one. The ability to bring thoughtful and disciplined tools and

frameworks--as opposed to seat-of-the-pants hunches or blind intuition--to marketing

decision making is one of the key assets todays business school graduates offer their

employers. This book puts the tools in the toolbox to make this happen. In the end, employ-

ers want to know what their new hires can do, not just what they

A CONCISE STRATEGIC FOUNDATIONThis fifth edition serves as a concise foundation for a capstone or advanced elective

course in marketing whose focus is on strategic issues. By combining this book with sup-

plemental readings and!or cases, instructors can design a rich and varied course in which

students learn experientially, as they focus on the various strategic decisions that define

contemporary marketing theory and practice.

Because the book is concise, students learn the key strategic principles quickly, so they

can devote most of their reading and prep time to the application of those principles to cases

or a course project. The books concise strategic focus also helps instructors build special-

ized elective courses--in Strategic Brand Management or in Marketing in the New Econ-

omy, for example--that draw on supplemental readings to complete the thematic picture.

WEB-SAVVY INSIGHTSBecause this book has been written by authors who teach at Web-savvy institutions and

~vork with Web-savvy companies, it brings a realistic, informed, and Web-savvy perspec-

tive to an important question many students are asking: "Has the advent of the Internet

changed all the rules?" Our ans~ver is, "Well, yes and no." On one hand, the Internet has

Preface xv

made available a host of new marketing tools--from banner ads to e-mail marketing todelivery of digital goods and services over the Internet--many of which are available tocompanies in the so-called old and new economies alike. On the other hand, time-testedmarketing fundamentals--such as understanding ones customers and competitors and meet-

ing customer needs in ways that are differentiated from the offerings of those competitorshave become even more important in the fast-moving, dot-corn world, as the many dot-comfailures a few years ago attest.

Thus, throughout the book, we integrate examples of new-economy companies--bothsuccessful and otherwise--to show how both yesterdays and todays marketing tools anddecision frameworks can most effectively be applied. Because the advent of the Internet,mobile telephony, and other new-economy technologies is so important in its own right,however, we also devote Chapter 11 to new-economy strategies, in order to provide formarketers in all kinds of companies a roadmap for decisions about where, when, and howto deploy new-economy tools.

A REAL-WORLD, GLOBAL PERSPECTIVETheory is important, becanse it enhances our understanding of business phenomena andhelps managers think about what they should do. It is in the application of theory--theworld of marketing practice--where we believe this book excels. Our decision focus is allabout application. But we dont just bring an academic perspective to the party, importantas that perspective is.

Two of us on the author team, Jean-Claude Larr~chd and John Mullins, have started suc-cessful entrepreneurial companies. One of these firms has "gone public." Two of us,Orville Walker and John, worked for many years in the United States, at the University of

Minnesota and University of Denver, respectively. Two, Jean-Claude and John, work inEurope, Jean-Claude at 1NSEAD and John at the London Business School. All of us,including Harper Boyd, who passed away in 1999 but whose legacy lives on in this edition,have contributed the fruits of our research to the growing body of knowledge in the mar-keting management, marketing strategy, new products, and entrepreneurship arenas. Theresult of our collective and varied experience and expertise is a book marked by its reapworld, global perspective. The books many examples of real people from around theworld making real strategic marketing decisions include examples of startups and high-growth companies as well as examples of larger, more established firms.

WHATS NEW IN THIS EDITION?Weve also made a few important changes in this edition worth noting to those familiarwith previous editions.

In the fourth edition of this book we brought forward, to Chapter 1, the material that

outlines what a marketing plan is and does, to better support students who are asked, aspart of the capstone or elective course in which this book is used, to develop marketing

plans for either real or hypothetical products, whether existing ones or new. In this edi-tion we go one step further and suggest a set of marketing plan!consulting project exer-cises at the end of each chapter. Your instructor may assign, modify, or supplement theseexercises as a means of providing detailed direction for a course project, and of tying

elements of that project directly to each chapters concepts and tools. We have combined chapters dealing with the market environment and industry and

competitive analysis into a single chapter called "Understanding Market Opportuni-ties." By integrating material dealing with various aspects of the external environment,this new chapter provides a more comprehensive framework for evaluating the attrac-tiveness of industries and markets at both the macro and micro levels.

xiv Preface

provides. Stockbrokers must attract new customers. Acconnting and consulting firms mustfind ways to differentiate their services from other providers so their customers have rea-sons to give them their business. Software engineers developing the next great Internet orother technology must understand how their technology can benefit the intended customer,for without such benefits, customers will not buy. Thus, we have written this book to meetthe marketing needs of readers ~vho hope to make a difference in the long-term strategicsuccess of their organizations--whether their principal roles are in marketing or otherwise.

In this brief preface, we want to say a bit more about each of the four distinctive bene-fits--bulleted above--that this book offers its readers. We also point out the key changesin this edition compared to previous ones; and we thank our many students, colleagues, and

others from whom we have learned so much, without whom this book would not have beenpossible.

A FOCUS ON DECISION MAKINGThis fifth edition of Marketing Strategy.A Decision-FocusedApproach retains the strate-gic perspectives that have marked the earlier editions, while providing, in each chapter,

specific tools and frameworks for making marketing decisions that take best advantage

of the conditions in which the firm finds itself--both internally, in terms of the firms ntis-

sion and competencies, and externally, in terms of the market and competitive context inwhich it operates.

This decision-focused approach is important to students and executives who are our read-

ers, because, in most advanced marketing management classes and executive courses, the

students or participants will be asked to make numerous decisions~ecisions in case stud-

ies about what the protagonist in the case should do; decisions in a course project, such as

those entailed in developing a marketing plan; or decisions in a marketing simulation game.

Our decision-focused approach is also important to employers, who tell us they want

todays graduates to be prepared to "hit the ground running" and contribute to the firms

decision making from day one. The ability to bring thoughtful and disciplined tools and

frameworks--as opposed to seat-of-the-pants hunches or blind intuition--to marketing

decision making is one of the key assets todays business school graduates offer their

employers. This book puts the tools in the toolbox to make this happen. In the end, employ-

ers want to know what their new hires can do, not just what they

A CONCISE STRATEGIC FOUNDATIONThis fifth edition serves as a concise foundation for a capstone or advanced elective

course in marketing whose focus is on strategic issues. By combining this book with sup-

plemental readings and!or cases, instructors can design a rich and varied course in which

students learn experientially, as they focus on the various strategic decisions that define

contemporary marketing theory and practice.

Because the book is concise, students learn the key strategic principles quickly, so they

can devote most of their reading and prep time to the application of those principles to cases

or a course project. The books concise strategic focus also helps instructors build special-

ized elective courses--in Strategic Brand Management or in Marketing in the New Econ-

omy, for example--that draw on supplemental readings to complete the thematic picture.

WEB-SAVVY INSIGHTSBecause this book has been written by authors who teach at Web-savvy institutions and

~vork with Web-savvy companies, it brings a realistic, informed, and Web-savvy perspec-

tive to an important question many students are asking: "Has the advent of the Internet

changed all the rules?" Our ans~ver is, "Well, yes and no." On one hand, the Internet has

Preface xv

made available a host of new marketing tools--from banner ads to e-mail marketing todelivery of digital goods and services over the Internet--many of which are available tocompanies in the so-called old and new economies alike. On the other hand, time-testedmarketing fundamentals--such as understanding ones customers and competitors and meet-

ing customer needs in ways that are differentiated from the offerings of those competitorshave become even more important in the fast-moving, dot-corn world, as the many dot-comfailures a few years ago attest.

Thus, throughout the book, we integrate examples of new-economy companies--bothsuccessful and otherwise--to show how both yesterdays and todays marketing tools anddecision frameworks can most effectively be applied. Because the advent of the Internet,mobile telephony, and other new-economy technologies is so important in its own right,however, we also devote Chapter 11 to new-economy strategies, in order to provide formarketers in all kinds of companies a roadmap for decisions about where, when, and howto deploy new-economy tools.

A REAL-WORLD, GLOBAL PERSPECTIVETheory is important, becanse it enhances our understanding of business phenomena andhelps managers think about what they should do. It is in the application of theory--theworld of marketing practice--where we believe this book excels. Our decision focus is allabout application. But we dont just bring an academic perspective to the party, importantas that perspective is.

Two of us on the author team, Jean-Claude Larr~chd and John Mullins, have started suc-cessful entrepreneurial companies. One of these firms has "gone public." Two of us,Orville Walker and John, worked for many years in the United States, at the University of

Minnesota and University of Denver, respectively. Two, Jean-Claude and John, work inEurope, Jean-Claude at 1NSEAD and John at the London Business School. All of us,including Harper Boyd, who passed away in 1999 but whose legacy lives on in this edition,have contributed the fruits of our research to the growing body of knowledge in the mar-keting management, marketing strategy, new products, and entrepreneurship arenas. Theresult of our collective and varied experience and expertise is a book marked by its reapworld, global perspective. The books many examples of real people from around theworld making real strategic marketing decisions include examples of startups and high-growth companies as well as examples of larger, more established firms.

WHATS NEW IN THIS EDITION?Weve also made a few important changes in this edition worth noting to those familiarwith previous editions.

In the fourth edition of this book we brought forward, to Chapter 1, the material that

outlines what a marketing plan is and does, to better support students who are asked, aspart of the capstone or elective course in which this book is used, to develop marketing

plans for either real or hypothetical products, whether existing ones or new. In this edi-tion we go one step further and suggest a set of marketing plan!consulting project exer-cises at the end of each chapter. Your instructor may assign, modify, or supplement theseexercises as a means of providing detailed direction for a course project, and of tying

elements of that project directly to each chapters concepts and tools. We have combined chapters dealing with the market environment and industry and

competitive analysis into a single chapter called "Understanding Market Opportuni-ties." By integrating material dealing with various aspects of the external environment,this new chapter provides a more comprehensive framework for evaluating the attrac-tiveness of industries and markets at both the macro and micro levels.

xvi Preface

THANKS!

Weve moved our overview of the product life cycle and its strategic implications tothe begilming of Section Three, where it serves as the foundation for Chapters 8, 9,

and 10, which discuss marketing strategies for product-markets in different stages ofdevelopment.

Weve added several Discussion Questions at the end of each chapter to facilitate yourreview of the material and provide a possible focus for class discussion. However, thebooks interactive Web site at www.mhhe.eom/walker06 continues to provide addi-tional self-diagnostic questions for students--as well as answers for the discussionquestions~o enable you to test your understanding of the tools and decision frame-works covered in each chapter. For instructors, the Web site offers suggested activitiesand assignments for each chapter, in order to aid instructors who seek to build interac-tive classroom environments. The Web site also suggests the "best of the best" decision-focused cases including international ones, dot-corns, and companies in services andmanufacturing industries--and other supplemental readings to help instructors findthe best teaching materials to train graduates for the local economies in which they arelikely to work and to most effectively nail down the learning in each chapter.

In reality, though, no chapter has escaped untouched. All have been updated, although thebasic flow, sequence, and strategic focus of the book have remained unchanged.

Simply put, this book is not solely our work--far from it. Many of our students, colleagues,

and those with whom we work in industry have made contributions that have significantlyshaped our perspectives on marketing decision making. We are grateful to all of them.

We wish to give special thanks, though, to Barbara Jamieson of Edinburgh BusinessSchool in Scotland and to Abi Murthy. Barbaras instructional expertise is reflected in theInstructors Manual and the other teaching materials, which together comprise a standout

package of instructor support. Abis research skills, together with her extensive businessexperience on three continents, have been instrumental in identifying many of the globalexamples that bring the books real-world perspective to life.

We also thank a small army of talented people at McGraw-Hill/Irwin for their work thathas turned our rough manuscript into an attractive and readable book. In particular, oureditors, Barrett Koger and Jill OMalley, have been instrumental in giving birth to this edi-tion. Without them, wed probably still be writing!

Finally, we thank Harper Boyd, without whom this book would not exist, and our par-ents, ~vithout whom, of course, none of us would be here. To all of you we extend our love,our respect, and our gratitude for passing on to us your curiosity and your passion forlearning. We therefore dedicate this book to Harper Boyd, to Jeannette and Orville Walker

Sr., to Jack and Alice Mullins, and to Odette and Pierre Larrdch&

01a,ille C. Walker J~:

Jean-Claude Larr6ch6

Minneapolis, London, and Fontainebleau."

Spring 2005

xvi Preface

THANKS!

Weve moved our overview of the product life cycle and its strategic implications tothe begilming of Section Three, where it serves as the foundation for Chapters 8, 9,

and 10, which discuss marketing strategies for product-markets in different stages ofdevelopment.

Weve added several Discussion Questions at the end of each chapter to facilitate yourreview of the material and provide a possible focus for class discussion. However, thebooks interactive Web site at www.mhhe.eom/walker06 continues to provide addi-tional self-diagnostic questions for students--as well as answers for the discussionquestions~o enable you to test your understanding of the tools and decision frame-works covered in each chapter. For instructors, the Web site offers suggested activitiesand assignments for each chapter, in order to aid instructors who seek to build interac-tive classroom environments. The Web site also suggests the "best of the best" decision-focused cases including international ones, dot-corns, and companies in services andmanufacturing industries--and other supplemental readings to help instructors findthe best teaching materials to train graduates for the local economies in which they arelikely to work and to most effectively nail down the learning in each chapter.

In reality, though, no chapter has escaped untouched. All have been updated, although thebasic flow, sequence, and strategic focus of the book have remained unchanged.

Simply put, this book is not solely our work--far from it. Many of our students, colleagues,

and those with whom we work in industry have made contributions that have significantlyshaped our perspectives on marketing decision making. We are grateful to all of them.

We wish to give special thanks, though, to Barbara Jamieson of Edinburgh BusinessSchool in Scotland and to Abi Murthy. Barbaras instructional expertise is reflected in theInstructors Manual and the other teaching materials, which together comprise a standout

package of instructor support. Abis research skills, together with her extensive businessexperience on three continents, have been instrumental in identifying many of the globalexamples that bring the books real-world perspective to life.

We also thank a small army of talented people at McGraw-Hill/Irwin for their work thathas turned our rough manuscript into an attractive and readable book. In particular, oureditors, Barrett Koger and Jill OMalley, have been instrumental in giving birth to this edi-tion. Without them, wed probably still be writing!

Finally, we thank Harper Boyd, without whom this book would not exist, and our par-ents, ~vithout whom, of course, none of us would be here. To all of you we extend our love,our respect, and our gratitude for passing on to us your curiosity and your passion forlearning. We therefore dedicate this book to Harper Boyd, to Jeannette and Orville Walker

Sr., to Jack and Alice Mullins, and to Odette and Pierre Larrdch&

01a,ille C. Walker J~:

Jean-Claude Larr6ch6

Minneapolis, London, and Fontainebleau."

Spring 2005

Case Vignette

These vignettes have been chosen to increase

the books global focus and international

perspective.

Strategic Issues

Highlight critical information and crucial

questions throughout each chapter.

xviii

Marketing Strategies for theNew EconomyChocolate Company Sweetens the Web"

Yhorntons Goes Online

How Sweet Are the Rewards?

Strategic IssueThe marketing objec-tives and st,ategy for aparticular product-market entry nlust beachievable with thecolnpanys available re-sources and capabilitiesand consistent with thedirection and allocationof resources inherent inthe firms corporate andbusiness-level slaategies.

stead, the

achievabl

dhection

strategies

elementsponents ~managee

MarkeA major

egy elem

Expansion by Increasin,Product-Markets

One way for a company to expm

ically requires actions such as m

prices, or outspending competit(

combination of all these actions

Global PerspectiveInterneE IconsIdentify global examples as well aseffective Internee marketing for both

new and economic marketers.

and

Latin America.:

While developing nations retinfrastructure goods and service:

making them attractive potentialEven developed nations can repr

on newly elnerging teclmologies

of e-retailers such as Amazon.cc

Marketing Plan

Exercises

End-of-chapter exercises putimportant concepts from eachchapter into action.

Marketing Identil-y an appropriate marketing strategy consistent with the products stage in its 1)roduct life cycleand the market and competitive conditions it laces, drawing on Chapters 8, 9, and/or 10 as appro-priate. Identify the strategies key eolnpetitors are using, and develop a rationale for the strategy youhave chosen.

xix

Case Vignette

These vignettes have been chosen to increase

the books global focus and international

perspective.

Strategic Issues

Highlight critical information and crucial

questions throughout each chapter.

xviii

Marketing Strategies for theNew EconomyChocolate Company Sweetens the Web"

Yhorntons Goes Online

How Sweet Are the Rewards?

Strategic IssueThe marketing objec-tives and st,ategy for aparticular product-market entry nlust beachievable with thecolnpanys available re-sources and capabilitiesand consistent with thedirection and allocationof resources inherent inthe firms corporate andbusiness-level slaategies.

stead, the

achievabl

dhection

strategies

elementsponents ~managee

MarkeA major

egy elem

Expansion by Increasin,Product-Markets

One way for a company to expm

ically requires actions such as m

prices, or outspending competit(

combination of all these actions

Global PerspectiveInterneE IconsIdentify global examples as well aseffective Internee marketing for both

new and economic marketers.

and

Latin America.:

While developing nations retinfrastructure goods and service:

making them attractive potentialEven developed nations can repr

on newly elnerging teclmologies

of e-retailers such as Amazon.cc

Marketing Plan

Exercises

End-of-chapter exercises putimportant concepts from eachchapter into action.

Marketing Identil-y an appropriate marketing strategy consistent with the products stage in its 1)roduct life cycleand the market and competitive conditions it laces, drawing on Chapters 8, 9, and/or 10 as appro-priate. Identify the strategies key eolnpetitors are using, and develop a rationale for the strategy youhave chosen.

xix

Online LearningCenter

Favorite cases and supplementaryreadings selected by the authors can befound at www.mhhe.corrdwalker06.

Instructors ResourceCD-ROM

The instructor package provides everything anew or experienced marketing strategyinstructor needs to hit the ground running.

Instructors Manual

Contents include PowerPoint slides and Web-based instructor supp