2 STRATEGIC MARKETING PLANNING 27 THE STRATEGIC PLANNING PROCESS 29
Organizational Mission versus Organizational Vision 30
Corporate or Business-Unit Strategy 34
Functional Goals and Objectives 35
Functional Strategy 36
Implementation 36
Evaluation and Control 36
THE MARKETING PLAN 37
Marketing Plan Structure 37
Using the Marketing Plan Structure 43
Purposes and Significance of the Marketing Plan 44
Organizational Aspects of the Marketing Plan 45
MAINTAINING CUSTOMER FOCUS AND BALANCE IN STRATEGIC PLANNING 46
Customer-Focused Planning 46
Balanced Strategic Planning 49
LESSONS FROM CHAPTER 2 51
NOTES 53
3 COLLECTING AND ANALYZING MARKETING INFORMATION 56 CONDUCTING A SITUATION ANALYSIS 58
Analysis Alone Is Not a Solution 58
Data Are Not the Same as Information 59
The Benefits of Analysis Must Outweigh the Costs 59
Conducting a Situation Analysis Is a Challenging Exercise 59
THE INTERNAL ENVIRONMENT 61
Review of Current Objectives, Strategy, and Performance 61
Availability of Resources 62
Organizational Culture and Structure 63
THE CUSTOMER ENVIRONMENT 63
Who Are Our Current and Potential Customers? 65
What Do Customers Do with Our Products? 65
Where Do Customers Purchase Our Products? 66
When Do Customers Purchase Our Products? 66
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Why (and How) Do Customers Select Our Products? 68
Why Do Potential Customers Not Purchase Our Products? 68
THE EXTERNAL ENVIRONMENT 69
Competition 71
Economic Growth and Stability 73
Political Trends 74
Legal and Regulatory Issues 74
Technological Advancements 75
Sociocultural Trends 76
COLLECTING MARKETING DATA AND INFORMATION 79
Secondary Information Sources 79
Primary Data Collection 82
Overcoming Problems in Data Collection 83
LESSONS FROM CHAPTER 3 84
NOTES 85
4 DEVELOPING COMPETITIVE ADVANTAGE AND STRATEGIC FOCUS 89 MAKING SWOT ANALYSIS PRODUCTIVE 91
Stay Focused 91
Search Extensively for Competitors 93
Collaborate with Other Functional Areas 93
Examine Issues from the Customers’ Perspective 93
Look for Causes, Not Characteristics 95
Separate Internal Issues from External Issues 96
SWOT-DRIVEN STRATEGIC PLANNING 97
Strengths and Weaknesses 97
Opportunities and Threats 97
The SWOT Matrix 99
DEVELOPING AND LEVERAGING COMPETITIVE ADVANTAGES 102
ESTABLISHING A STRATEGIC FOCUS 104
DEVELOPING MARKETING GOALS AND OBJECTIVES 109
Developing Marketing Goals 111
Developing Marketing Objectives 112
Moving beyond Goals and Objectives 115
LESSONS FROM CHAPTER 4 115
NOTES 117
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5 CUSTOMERS, SEGMENTATION, AND TARGET MARKETING 119 BUYER BEHAVIOR IN CONSUMER MARKETS 121
The Consumer Buying Process 121
Factors that Affect the Consumer Buying Process 127
BUYER BEHAVIOR IN BUSINESS MARKETS 129
Unique Characteristics of Business Markets 130
The Business Buying Process 132
MARKET SEGMENTATION 133
Traditional Market Segmentation Approaches 133
Individualized Segmentation Approaches 136
Criteria for Successful Segmentation 138
IDENTIFYING MARKET SEGMENTS 139
Segmenting Consumer Markets 139
Segmenting Business Markets 144
TARGET MARKETING STRATEGIES 145
LESSONS FROM CHAPTER 5 147
NOTES 151
6 THE MARKETING PROGRAM 153 PRODUCT STRATEGY 155
Strategic Issues in the Product Portfolio 155
The Challenges of Service Products 158
Developing New Products 160
PRICING STRATEGY 162
Key Issues in Pricing Strategy 162
Pricing Service Products 168
Base Pricing Strategies 170
Adjusting the Base Price 171
SUPPLY CHAIN STRATEGY 172
Strategic Supply Chain Issues 173
Trends in Supply Chain Strategy 178
INTEGRATED MARKETING COMMUNICATIONS 182
Strategic Issues in Integrated Marketing Communications 183
Advertising 185
Public Relations 187
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Personal Selling and Sales Management 189
Sales Promotion 191
LESSONS FROM CHAPTER 6 195
NOTES 200
7 BRANDING AND POSITIONING 203 STRATEGIC ISSUES IN BRANDING 206
Basic Branding Decisions 206
Strategic Brand Alliances 209
Brand Value 209
Packaging and Labeling 212
DIFFERENTIATION AND POSITIONING 213
Bases for Differentiation 215
Positioning Strategies 217
MANANGING BRANDS OVER TIME 218
Development Stage 220
Introduction Stage 221
Growth Stage 221
Maturity Stage 223
Decline Stage 224
LESSONS FROM CHAPTER 7 226
NOTES 228
8 ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING STRATEGY 230 ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING STRATEGY 231
Dimensions of Social Responsibility 232
Sustainability 235
Marketing Ethics and Strategy 237
The Challenges of Being Ethical and Socially Responsible 239
ETHICAL ISSUES IN THE MARKETING PROGRAM 241
Product-Related Ethical Issues 241
Pricing-Related Ethical Issues 243
Supply Chain–Related Ethical Issues 244
Promotion-Related Ethical Issues 245
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MANAGING AND CONTROLLING ETHICAL ISSUES 246
Regulating Marketing Ethics 246
Codes of Conduct 248
Ethical Leadership 249
RELATIONSHIP TO MARKETING AND FINANCIAL PERFORMANCE 250
Stakeholder Orientation 250
Marketing Financial Performance 251
INCORPORATING ETHICS AND SOCIAL RESPONSIBILITY INTO STRATEGIC PLANNING 251
LESSONS FROM CHAPTER 8 252
NOTES 255
9 MARKETING IMPLEMENTATION AND CONTROL 260 STRATEGIC ISSUES IN MARKETING IMPLEMENTATION 262
The Link Between Planning and Implementation 262
The Elements of Marketing Implementation 264
APPROACHES TO MARKETING IMPLEMENTATION 268
Implementation by Command 268
Implementation through Change 270
Implementation through Consensus 271
Implementation as Organizational Culture 271
INTERNAL MARKETING AND MARKETING IMPLEMENTATION 272
The Internal Marketing Approach 272
The Internal Marketing Process 274
EVALUATING AND CONTROLLING MARKETING ACTIVITIES 275
Formal Marketing Controls 276
Informal Marketing Controls 279
Scheduling Marketing Activities 281
LESSONS FROM CHAPTER 9 283
NOTES 286
10 DEVELOPING AND MAINTAINING LONG-TERM CUSTOMER RELATIONSHIPS 289 MANAGING CUSTOMER RELATIONSHIPS 290
Developing Relationships in Consumer Markets 292
Developing Relationships in Business Markets 294
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QUALITY AND VALUE: THE KEYS TO DEVELOPING CUSTOMER RELATIONSHIPS 296
Understanding the Role of Quality 296
Delivering Superior Quality 298
Understanding the Role of Value 299
Competing on Value 303
CUSTOMER SATISFACTION: THE KEY TO CUSTOMER RETENTION 304
Understanding Customer Expectations 304
Satisfaction versus Quality versus Value 307
Customer Satisfaction and Customer Retention 310
Customer Satisfaction Measurement 312
LESSONS FROM CHAPTER 10 313
NOTES 317
CASES CASE 1 USA TODAY : INNOVATION IN AN EVOLVING INDUSTRY 318
CASE 2 CONSUMERS TAKE A SHINE TO APPLE, INC. 331
CASE 3 MONSANTO BALANCES THE INTERESTS OF MULTIPLE STAKEHOLDERS 342
CASE 4 NEW BELGIUM BREWING (A): SOCIAL RESPONSIBILITY AS COMPETITIVE ADVANTAGE 355
CASE 5 NEW BELGIUM BREWING (B): DEVELOPING A BRAND PERSONALITY 364
CASE 6 MATTEL CONFRONTS ITS MARKETING CHALLENGES 373
CASE 7 MISTINE: DIRECT SELLING IN THE THAI COSMETICS MARKET 384
CASE 8 BP STRUGGLES TO REPAIR ITS TARNISHED REPUTATION 396
CASE 9 CHEVROLET: A CENTURY OF PRODUCT INNOVATION 407
CASE 10 WYNDHAM WORLDWIDE ADOPTS A STAKEHOLDER ORIENTATION MARKETING STRATEGY 422
CASE 11 NASCAR: CAN’T KEEP A GOOD BRAND DOWN 431
CASE 12 INDYCAR: SEEKING A RETURN TO MOTORSPORTS’ FAST LANE 443
CASE 13 ZAPPOS: DELIVERING HAPPINESS 454
CASE 14 NETFLIX FIGHTS TO STAY AHEAD OF A RAPIDLY CHANGING MARKET 465
CASE 15 GILLETTE: WHY INNOVATION MAY NOT BE ENOUGH 475
CASE 16 IKEA SLOWLY EXPANDS ITS U.S. MARKET PRESENCE 487
CASE 17 UBER: THE OPPORTUNITIES AND CHALLENGES OF MARKET DISRUPTION 496
CASE 18 SCENTSY, INC.: A SUCCESSFUL DIRECT SELLING BUSINESS MODEL 507
CASE 19 SIGMA MARKETING: STRATEGIC MARKETING ADAPTATION 515
CASE 20 BELLE MEADE PLANTATION: A SOCIAL ENTREPRENEURSHIP MARKETING STRATEGY 525
CASE 21 COCA-COLA: INTEGRATED MARKETING COMMUNICATIONS 534
Index 544
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Preface Welcome to one of the most interesting, challenging, and important topics in your business education. What makes marketing strategy so interesting, challenging, and important you ask? To begin, marketing strategy is interesting because (1) it is inher- ently people-driven and (2) it is never stagnant. A distinct blend of both art and sci- ence, marketing strategy is about people (inside an organization) finding ways to deliver exceptional value by fulfilling the needs and wants of other people (custo- mers, shareholders, business partners, society at large), as well as the needs of the organization itself. Marketing strategy draws from psychology, sociology, and economics to better understand the basic needs and motivations of these people— whether they are the organization’s customers (typically considered the most critical), its employees, or its stakeholders. In short, marketing strategy is about peo- ple serving people.
For this reason, marketing strategy is interesting because it is never stagnant. The simple fact is that people change. A strategy that works today might not work tomorrow. Products that are popular today are forgotten next week. These truisms are important because truly understanding marketing strategy means accepting the fact that there are few concrete rules for developing and implementing marketing activities. Given the constant state of change in the marketing environment, it is vir- tually impossible to say that given “this customer need” and “these competitors” and “this level of government regulation” that Product A, Price B, Promotion C, and Distribution D will produce the best results. Marketing simply doesn’t work that way. The lack of concrete rules and the ever changing economic, sociocultural, competi- tive, technological, and political/legal landscapes make marketing strategy a terribly fascinating subject.
Now that you know why marketing strategy is so interesting, it should be easy to see why it is also challenging. A perfect marketing strategy that is executed flawlessly can still fail. Sometimes, organizations are lucky and have success despite having a terrible strategy and/or execution. The nature of marketing can make mar- keting planning quite frustrating.
Finally, the importance of marketing strategy is undeniable. No other business function focuses on developing relationships with customers—the lifeblood of all organizations (even non-profits). This statement does not diminish the importance of other business functions, as they all are necessary for an organization to be suc- cessful. In fact, coordination with other functions is critical to marketing success. However, without customers, and marketing programs in place to cultivate customer relationships, no organization can survive.
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OUR FOCUS Given this marketing landscape, Marketing Strategy: Text and Cases, 7th Edition provides a practical, straightforward approach to analyzing, planning, and imple- menting marketing strategies. Our focus is based on the creative process involved in applying the knowledge and concepts of marketing to the development and imple- mentation of marketing strategy. Our goal is to encourage students of marketing to think and act like a marketer. By discussing the key concepts and tools of marketing strategy, our emphasis on critical thinking, both analytical and creative, allows stu- dents to understand the essence of how marketing decisions fit together to create a coherent strategy.
Our approach in Marketing Strategy: Text and Cases, 7th Edition is also grounded in the development and execution of the marketing plan. Throughout the text, we provide a comprehensive planning framework based on conducting sound background research, developing market capabilities and competitive advantages, designing integrated marketing programs, and managing customer relationships for the long term. We also emphasize the need for integrity in the strategic planning pro- cess as well as the design of marketing programs that are both ethical and socially responsible. We also stress the integration and coordination of marketing decisions with other functional business decisions as the key to achieving an organization’s overall mission and vision. Throughout the text, we offer examples of successful planning and implementation to illustrate how firms face the challenges of marketing strategy in today’s economy.
PURPOSE We view strategic marketing planning not only as a process for achieving organiza- tional goals, but also as a means of building long-term relationships with customers. Creating a customer orientation takes imagination, vision, and courage, especially in today’s rapidly changing economic and technological environments. To help meet these challenges, our text approaches marketing strategy from both “traditional” and “cutting-edge” practices. We cover topics such as segmentation, creating a competi- tive advantage, marketing program development, and the implementation process with a solid grounding in traditional marketing, but also with an eye toward emerging practices. Lessons learned from the rise, fall, and reemergence of the dotcom sector, recent corporate scandals, and the most recent economic recession illustrate the importance of balancing the traditional and emerging practices of marketing strat- egy. Our text never loses sight of this balance.
Although our approach allows for the use of sophisticated research and decision-making processes, we have employed a practical perspective that permits marketing managers in any sized organization to develop and implement a marketing plan. We have avoided esoteric, abstract, and highly academic material that does not relate to typical marketing strategy decisions in most organizations. The marketing plan framework that we utilize throughout the text has been used by a number of organizations to successfully plan their marketing strategies. Many companies report great success in using our approach partially due to the ease of communicating the plan to all functional areas of the business.