Marketing Strategy
Text and Cases
SIXTH EDITION
O . C . FERRELL
The University of New Mexico
MICHAEL D. HARTLINE
The Florida State University
Brief Contents
PART 1 Setting the Stage for Marketing Strategy
CHAPTER 1 Marketing in Today’s Economy 1
CHAPTER 2 Strategic Marketing Planning 27
PART 2 Discovering Market Opportunities
CHAPTER 3 Collecting and Analyzing Marketing Information 53
CHAPTER 4 Developing Competitive Advantage and Strategic Focus 85
PART 3 Developing Marketing Strategy
CHAPTER 5 Customers, Segmentation, and Target Marketing 115
CHAPTER 6 The Marketing Program 149
CHAPTER 7 Branding and Positioning 199
PART 4 Putting Strategy into Action
CHAPTER 8 Ethics and Social Responsibility in Marketing Strategy 227
CHAPTER 9 Marketing Implementation and Control 255
CHAPTER 10 Developing and Maintaining Long-Term Customer
Relationships 283
PART 5 Cases
CASE 1 USA Today: Innovation in an Evolving Industry 313
CASE 2 Apple’s Winning Marketing Strategy 327
CASE 3 Monsanto Balances the Interests of Multiple Stakeholders 339
CASE 4 New Belgium Brewing (A): Gaining Competitive Advantage Through
Socially Responsible Marketing 351
CASE 5 New Belgium Brewing (B): Developing a Brand Personality 361
CASE 6 Mattel Confronts Its Marketing Challenges 371
CASE 7 Mistine: Direct Selling in the Thai Cosmetics Market 381
CASE 8 BP Struggles to Repair Its Tarnished Reputation 393
CASE 9 Chevrolet: 100 Years of Product Innovation 405
v i i
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
CASE 10 Wyndham Worldwide Adopts a Stakeholder Orientation Marketing
Strategy 419
CASE 11 NASCAR: Can’t Keep a Good Brand Down 429
CASE 12 IndyCar: Seeking a Return to Motorsports’ Fast Lane 441
CASE 13 Zappos: Delivering Happiness 451
CASE 14 Sigma Marketing: Strategic Marketing Adaptation 461
CASE 15 Netflix Fights to Stay Ahead of a Rapidly Changing Market 471
CASE 16 Gillette: Why Innovation May Not Be Enough 481
CASE 17 IKEA Slowly Expands Its U.S. Market Presence 493
CASE 18 Sushilicious: Standing Out In A Crowded Field 501
CASE 19 Trouble Brews at Starbucks 517
CASE 20 Groupon 533
Appendix Marketing Plan Worksheets 547
Brands and Companies Index 557
Name Index 571
Subject Index 575
viii Brief Contents
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Contents
PART 1 Setting the Stage for Marketing Strategy
CHAPT ER 1
Marketing in Today’s Economy 1
Introduction 1
Beyond the Pages 1.1 Thriving in Commodity Hell 2
The Challenges and Opportunities of Marketing in Today’s Economy 3
Basic Marketing Concepts 7
What Is a Market? 8
What Is Exchange? 9
What Is a Product? 11
Major Marketing Activities and Decisions 14
Strategic Planning 14
Beyond the Pages 1.2 Innovative Marketing Strategies for a Tough Economy 15
Research and Analysis 16
Developing Competitive Advantage 16
Marketing Strategy Decisions 17
Beyond the Pages 1.3 Targeting Consumers via Online Social Networking 18
Social Responsibility and Ethics 20
Implementation and Control 20
Developing and Maintaining Customer Relationships 21
Taking On the Challenges of Marketing Strategy 22
Lessons from Chapter 1 24
Questions for Discussion 25
Exercises 25
CHAPT ER 2
Strategic Marketing Planning 27
Introduction 27
Beyond the Pages 2.1 Redbox’s Success Story 28
The Strategic Planning Process 29
Organizational Mission versus Organizational Vision 30
Corporate or Business-Unit Strategy 34
Functional Goals and Objectives 35
Functional Strategy 35
Implementation 36
Evaluation and Control 36
The Marketing Plan 36
Marketing Plan Structure 37
Beyond the Pages 2.2 Sell Below Cost, They Will Come 41
Using the Marketing Plan Structure 42
ix
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Purposes and Significance of the Marketing Plan 44
Organizational Aspects of the Marketing Plan 44
Maintaining Customer Focus and Balance in Strategic Planning 45
Customer-Focused Planning 46
Beyond the Pages 2.3 Amazon Is on Fire 47
Balanced Strategic Planning 48
Lessons from Chapter 2 50
Questions for Discussion 51
Exercises 51
PART 2 Discovering Market Opportunities
CHAPT ER 3
Collecting and Analyzing Marketing Information 53
Introduction 53
Beyond the Pages 3.1 Baby Boomers Deserve Careful Analysis 54
Conducting a Situation Analysis 55
Analysis Alone Is Not a Solution 55
Data Is Not the Same as Information 56
The Benefits of Analysis Must Outweigh the Costs 56
Conducting a Situation Analysis Is a Challenging Exercise 56
The Internal Environment 58
Review of Current Objectives, Strategy, and Performance 59
Availability of Resources 59
Organizational Culture and Structure 60
The Customer Environment 60
Who Are Our Current and Potential Customers? 62
What Do Customers Do with Our Products? 62
Where Do Customers Purchase Our Products? 63
When Do Customers Purchase Our Products? 63
Beyond the Pages 3.2 The Ongoing Challenge of E-Waste 64
Why (and How) Do Customers Select Our Products? 65
Why Do Potential Customers Not Purchase Our Products? 65
The External Environment 66
Competition 66
Economic Growth and Stability 70
Political Trends 71
Legal and Regulatory Issues 71
Technological Advancements 72
Sociocultural Trends 73
Collecting Marketing Data and Information 76
Secondary Information Sources 76
Beyond the Pages 3.3 A Corporate Affairs Primer 77
Primary Data Collection 80
Overcoming Problems in Data Collection 81
Lessons from Chapter 3 82
Questions for Discussion 82
Exercises 83
x Contents
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
CHAPT ER 4
Developing Competitive Advantage and Strategic Focus 85
Introduction 85
Beyond the Pages 4.1 Innovation: A Major Key to Success 86
Making SWOT Analysis Productive 87
Stay Focused 88
Search Extensively for Competitors 89
Collaborate with Other Functional Areas 89
Examine Issues from the Customers’ Perspective 90
Look for Causes, Not Characteristics 92
Separate Internal Issues from External Issues 92
SWOT-Driven Strategic Planning 93
Strengths and Weaknesses 93
Opportunities and Threats 95
The SWOT Matrix 96
Developing and Leveraging Competitive Advantages 98
Establishing a Strategic Focus 100
Beyond the Pages 4.2 Successful Product Leadership at 3M 101
Developing Marketing Goals and Objectives 105
Beyond the Pages 4.3 A Closer Look at Blue Ocean Strategy 106
Developing Marketing Goals 107
Developing Marketing Objectives 108
Moving Beyond Goals and Objectives 111
Lessons from Chapter 4 111
Questions for Discussion 112
Exercises 112
PART 3 Developing Marketing Strategy
CHAPT ER 5
Customers, Segmentation, and Target Marketing 115
Introduction 115
Beyond the Pages 5.1 Data Mining Allows Companies to Know Our Secrets 116
Buyer Behavior in Consumer Markets 117
The Consumer Buying Process 117
Factors That Affect the Consumer Buying Process 123
Buyer Behavior in Business Markets 125
Unique Characteristics of Business Markets 126
The Business Buying Process 128
Market Segmentation 129
Traditional Market Segmentation Approaches 129
Beyond the Pages 5.2 The Challenges and Opportunities of Population Diversity 130
Individualized Segmentation Approaches 132
Criteria for Successful Segmentation 134
Beyond the Pages 5.3 Shifting Strategies in the Cereal Market 135
Identifying Market Segments 135
Segmenting Consumer Markets 136
Segmenting Business Markets 141
Contents xi
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Target Marketing Strategies 142
Lessons from Chapter 5 143
Questions for Discussion 146
Exercises 146
CHAPT ER 6
The Marketing Program 149
Introduction 149
Beyond the Pages 6.1 Can Good Marketing Save Barnes & Noble? 150
Product Strategy 151
Strategic Issues in the Product Portfolio 151
The Challenges of Service Products 154
Developing New Products 156
Pricing Strategy 158
Key Issues in Pricing Strategy 159
Beyond the Pages 6.2 Pricing Around the World 160
Pricing Service Products 165
Base Pricing Strategies 166
Adjusting the Base Price 167
Supply Chain Strategy 169
Strategic Supply Chain Issues 170
Trends in Supply Chain Strategy 175
Beyond the Pages 6.3 Walmart’s Supply Chain Advantages 176
Integrated Marketing Communications 179
Beyond the Pages 6.4 Fragmentation Forever Changes Media Advertising 180
Strategic Issues in Integrated Marketing Communications 181
Advertising 182
Public Relations 184
Personal Selling and Sales Management 186
Sales Promotion 188
Lessons from Chapter 6 192
Questions for Discussion 195
Exercises 195
CHAPT ER 7
Branding and Positioning 199
Introduction 199
Beyond the Pages 7.1 Steinway: More Than a Piano 200
Strategic Issues in Branding 202
Basic Branding Decisions 204
Strategic Brand Alliances 206
Brand Value 206
Packaging and Labeling 209
Beyond the Pages 7.2 Tropicana’s Packaging Debacle 210
Differentiation and Positioning 210
Bases for Differentiation 212
Positioning Strategies 214
xii Contents
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Mananging Brands over Time 215
Development Stage 217
Introduction Stage 218
Growth Stage 219
Maturity Stage 220
Beyond the Pages 7.3 Nintendo’s Rebranding Strategy 222
Decline Stage 223
Lessons from Chapter 7 224
Questions for Discussion 225
Exercises 225
PART 4 Putting Strategy into Action
CHAPT ER 8
Ethics and Social Responsibility in Marketing Strategy 227
Introduction 227
Beyond the Pages 8.1 Salesforce.com Adopts a Stakeholder Orientation 228
Ethics and Social Responsibility in Marketing Strategy 229
Dimensions of Social Responsibility 229
Sustainability 232
Marketing Ethics and Strategy 233
Beyond the Pages 8.2 Finding the Real Green Products 234
The Challenges of Being Ethical and Socially Responsible 236
Ethical Issues in the Marketing Program 237
Product-Related Ethical Issues 238
Pricing-Related Ethical Issues 239
Supply Chain-Related Ethical Issues 240
Promotion-Related Ethical Issues 241
Managing and Controlling Ethical Issues 242
Regulating Marketing Ethics 242
Codes of Conduct 243
Beyond the Pages 8.3 The Consumer Financial Protection Bureau Aims to Build Trust in the
Banking System 244
Ethical Leadership 245
Relationship to Marketing and Financial Performance 246
Stakeholder Orientation 247
Marketing Financial Performance 247
Incorporating Ethics and Social Responsibility into Strategic Planning 249
Lessons from Chapter 8 250
Questions for Discussion 251
Exercises 251
CHAPT ER 9
Marketing Implementation and Control 255
Introduction 255
Beyond the Pages 9.1 Green Mountain Coffee Gets It Done 256
Strategic Issues in Marketing Implementation 257
The Link Between Planning and Implementation 257
The Elements of Marketing Implementation 259
Contents xiii
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Approaches to Marketing Implementation 263
Implementation by Command 263
Implementation Through Change 263
Beyond the Pages 9.2 The New Rules of CEO Leadership 264
Implementation Through Consensus 265
Implementation as Organizational Culture 266
Internal Marketing and Marketing Implementation 268
The Internal Marketing Approach 268
The Internal Marketing Process 269
Evaluating and Controlling Marketing Activities 270
Formal Marketing Controls 271
Informal Marketing Controls 275
Scheduling Marketing Activities 276
Beyond the Pages 9.3 Managing Risk Through Culture 277
Lessons from Chapter 9 279
Questions for Discussion 280
Exercises 280
CHAPT ER 1 0
Developing and Maintaining Long-Term Customer Relationships 283
Introduction 283
Beyond the Pages 10.1 1-800-Flowers.com Focuses on Customers 284
Managing Customer Relationships 284
Developing Relationships in Consumer Markets 286
Developing Relationships in Business Markets 288
Quality and Value: The Keys to Developing Customer Relationships 290
Understanding the Role of Quality 290
Delivering Superior Quality 293
Beyond the Pages 10.2 Customer Service versus Efficiency 294
Understanding the Role of Value 295
Competing on Value 298
Customer Satisfaction: The Key to Customer Retention 299
Understanding Customer Expectations 299
Beyond the Pages 10.3 Satisfied, But Not Loyal 302
Satisfaction versus Quality versus Value 303
Customer Satisfaction and Customer Retention 304
Customer Satisfaction Measurement 306
Lessons from Chapter 10 308
Questions for Discussion 310
Exercises 310
PART 5 Cases
CASE 1 USA Today: Innovation in an Evolving Industry 313
CASE 2 Apple’s Winning Marketing Strategy 327
CASE 3 Monsanto Balances the Interests of Multiple Stakeholders 339
xiv Contents
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
CASE 4 New Belgium Brewing (A): Gaining Competitive Advantage Through
Socially Responsible Marketing 351
CASE 5 New Belgium Brewing (B): Developing a Brand Personality 361
CASE 6 Mattel Confronts Its Marketing Challenges 371
CASE 7 Mistine: Direct Selling in the Thai Cosmetics Market 381
CASE 8 BP Struggles to Repair Its Tarnished Reputation 393
CASE 9 Chevrolet: 100 Years of Product Innovation 405
CASE 10 Wyndham Worldwide Adopts a Stakeholder Orientation Marketing
Strategy 419
CASE 11 NASCAR: Can’t Keep a Good Brand Down 429
CASE 12 IndyCar: Seeking a Return to Motorsports’ Fast Lane 441
CASE 13 Zappos: Delivering Happiness 451
CASE 14 Sigma Marketing: Strategic Marketing Adaptation 461
CASE 15 Netflix Fights to Stay Ahead of a Rapidly Changing Market 471
CASE 16 Gillette: Why Innovation May Not Be Enough 481
CASE 17 IKEA Slowly Expands Its U.S. Market Presence 493
CASE 18 Sushilicious: Standing Out In A Crowded Field 501
CASE 19 Trouble Brews at Starbucks 517
CASE 20 Groupon 533
Appendix Marketing Plan Worksheets 547
Brands and Companies Index 557
Name Index 571
Subject Index 575
