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Market-Based Management
Strategies for Growing Customer Value and Profitability
Sixth Edition
Instructor’s Manual
Overview
Book Objectives and Teaching Intent
Market-Based Management: Strategies for Growing Customer Value and Profitability has three primary
objectives:
 First, the book maintains a focus on customer value and profitability throughout. It is my hope that students
using this book will develop a good understanding of customer value and the ways that market strategies
contribute to profitability and growth.
 The second objective is that the book expand students’ understanding of important marketing concepts and
tools by means of meaningful examples and applications. With this approach, instructors can use the book
as support for lectures, case studies, marketing simulations, and class projects.
 The third objective is that the book be comprehensive, yet short enough (16 chapters) to allow for the use of
marketing case studies, marketing simulations, and marketing projects. In this manner the book is intended
to support discussions and applied assignments.
Chapter Support Materials
Each chapter in the Instructor’s Manual includes:
 An introductory application to facilitate chapter discussion;
 Three key teaching objectives;
 Recommended Harvard Business School Case Studies related to the chapter’s content;
 Answers to the Market-Based Strategic Thinking questions near the end of the book’s chapters; and
 Screen printouts of the online interactive marketing performance tools described at the end of each chapter
of the book, along with discussion and the answers to the questions posed in the book.
PowerPoint slides for the chapters are available upon request.
Marketing Performance Tools
Marketing education without application is a missed learning opportunity.
One of the distinguishing features of Market-Based Management is its performance orientation. How-to-use
marketing concepts and mechanisms are a continuing theme throughout the book, and each chapter’s
marketing performance tools help students to solidify their learning with application exercises based on the
chapter’s content. For many of the marketing performance tools, the Instructor’s Manual has suggestions for
creating additional assignments or extending the analysis of the data provided for the examples used.
The marketing performance tools are part of an interactive Web site where students can create their own user
accounts. After applying the marketing performance tools, students can save the results. They can also
experiment with the tools by entering their own data, and the can save those results also.
To access the marketing performance tools, go to RogerJBest.com. The tools listed on the next page are
described in the book, appear on the Web site, an are illustrated and discussed in the Instructor’s Manual.
Market-Based Management
Sixth Edition
Instructor’s Manual – Chapter 16
– i–
Copyright © 2012
Pearson Education, Inc.
Publishing as Prentice Hall
Full file at http://testbank360.eu/solution-manual-market-based-management-6th-edition-roger-best
Marketing Performance Tools
Chapter 1
1.1
1.2
1.3
1.4
Chapter 9
Customer Satisfaction and Profitability
Customer Retention
Customer Lifetime Value
Customer Loyalty and Profitability
9.1 Channel Mapping and Pocket Price
9.2 Marketing Channel Profitability
9.3 Alternative Channel Profitability
Chapter 10
Chapter 2
10.1 Marketing Communications and Customer
Response
10.2 Estimating Advertising Elasticity
10.3 Estimating the Advertising Carryover Effect
2.1 Company-Level Net Marketing Contribution
2.2 Market-Level NMC, Marketing ROS, and
Marketing ROI
2.3 Company Net Marketing Contribution
and Marketing ROI
2.4 Benchmarking Marketing ROI versus
Operating Income as a Percentage of Sales
Chapter 11
11.1 Product Life-Cycle Portfolio
11.2 Market Growth Rate–Share Development
Portfolio
11.3 GE/McKinsey Portfolio
Chapter 3
3.1
3.2
3.3
3.4
3.5
Market Potential and Market
Development Index
Market Share Management
Product Life-Cycle Sales and Gross Profit
Sales Forecasting
Chapter 12
12.1 Offensive Strategies – Core Strategy I:
Grow in Existing Markets
12.2 Offensive Strategies – Core Strategy II:
Improve Margins
12.3 Offensive Strategies – Core Strategy III:
Diversified Growth
Chapter 4
4.1
4.2
4.3
4.4
Economic Value Analysis
Price-Performance Value Mapping
Customer Value Analysis
Price-Performance Trade-Offs and
Customer Value
Chapter 13
13.1 Defensive Strategies – Core Strategy I:
Protect Position
13.2 Defensive Strategies – Core Strategy II:
Optimize Position
13.3 Defensive Strategies – Core Strategy III:
Monetize, Harvest, or Divest
Chapter 5
5.1
5.2
5.3
5.4
5.5
Needs-Based Segmentation
Segmentation Identification
Segment Profitability
The “Acid Test” for Segment Strategies
Customer Relationship Marketing
Chapter 14
14.1 Market Demand and Market Share
14.2 Customer Revenue and Percent Margin
14.3 Marketing and Sales Expenses
Chapter 6
6.1
6.2
6.3
6.4
Cost Advantage
Differentiation Advantage
Marketing Advantage
Industry Analysis
Chapter 15
15.1 Variance Analysis – Market Demand and
Market Share
15.2 Variance Analysis – Revenue and Cost
per Customer
15.3 Variance Analysis – Marketing and Sales
Expenses
Chapter 7
7.1 Product Positioning
7.2 Brand Name Development
7.3 Brand Equity
Chapter 8
8.1
8.2
8.3
8.4
Chapter 16
Value-in-Use Pricing
Perceived-Value Pricing
Performance-Based Value Pricing
Price-Volume Pricing
Market-Based Management
Sixth Edition
Instructor’s Manual – Chapter 16
16.1 Market Demand and Market Share
16.2 Percent Margin and Marketing Expenses
16.2 Asset Management and Invested Capital
– ii–
Copyright © 2012
Pearson Education, Inc.
Publishing as Prentice Hall
Full file at http://testbank360.eu/solution-manual-market-based-management-6th-edition-roger-best
Course Application and Design
The information that follows can be of help to instructors in deciding when and how to use Market-Based
Management. A set of guidelines for using the book is presented for each of the following courses:
 Undergraduate Marketing Strategy Course;
 First-Year MBA Market-Based Management Course;
 MBA Capstone Marketing Strategy Course;
 Executive MBA Market-Based Management Course; and
 MBA Marketing Strategy Course – With a Focus on Building a Marketing Plan.
Any of these courses could be built around the process of building a strategic market plan.
Undergraduate Market Strategy Course
Objective
To present a comprehensive application of marketing concepts and tools
within the framework of developing a strategic market plan and marketing
mix strategy.
Approach
Marketing case studies or marketing simulations, or both, serve as the
means for applying the marketing concepts and tools used in developing
a strategic market plan.
Book
For a course built around case studies (see specific chapters in the
Instructor’s Manual for recommended case studies) or a marketing
simulation, the book may be used in the following way:
 Chapters 1 and 2 lay the foundation for market orientation, customer satisfaction, marketing performance
metrics, and marketing profitability. Students need to master the connection between customer satisfaction
and profitability, and understand the mechanics of marketing profitability (net marketing contribution).
 Chapters 3 to 6 focus on market analyses and the input needed for developing a market strategy.
 Chapters 7 to 10 discuss marketing mix strategies. These chapters cover the concepts and tools needed to
build strategies for product positioning, pricing, marketing channels, and marketing communications.
 Chapters 11 to 16 are likely to include new material for undergraduates. As a result, more time might be
spent talking about the strategic nature of marketing (Chapters 11-13), building and implementing a
marketing plan (Chapters 14-15), and the impact market-based management has on the financial
performance of a business (Chapter 16).
First-Year MBM Market-Based Management Course
Objective
For most new MBAs, this will be their first marketing course. The
objective should be to cover the marketing fundamentals and present a
comprehensive view of the impact marketing strategies have on
marketing performance and business profitability.
Approach
Many MBA marketing instructors prefer to use marketing case studies in
this course. The instructor’s approach could include a case book, along
with Market-Based Management, or using the marketing case studies
recommended in the Instructor’s Manual for each chapter.
Book
For those preferring a heavy case approach with minimum lecture, the
book should be used for outside reading to help students understand key
marketing concepts and tools. For those using a combination of lecture
and case studies, I recommend more time be spent in class discussing
the concepts presented in each of the book’s chapters. In either case, I
believe the first ten chapters are the most important for this course in
delivering the following benefits:
Market-Based Management
Sixth Edition
Instructor’s Manual – Chapter 16
– iii–
Copyright © 2012
Pearson Education, Inc.
Publishing as Prentice Hall
Full file at http://testbank360.eu/solution-manual-market-based-management-6th-edition-roger-best
 Chapters 1 and 2 provide a sound basis for marketing and the importance of market orientation, customer
satisfaction, marketing performance metrics, and marketing profitability.
 Chapters 3 to 6 focus on market analyses and the input needed to develop a market strategy.
 Chapters 7 to 10 discuss the marketing mix strategy. These chapters provide the basic marketing concepts
and tools needed to build a strategy with product positioning, pricing, marketing channels, and marketing
communications.
 Instructors at schools on the quarter system may want to limit coverage to Chapters 1 to 10 as outlined
above (about one chapter per week). At schools on the semester system (14 to 16 weeks), instructors may
want to continue with strategic marketing (Chapters 11 to 13).
 Chapter 14 (building a marketing plan) and Chapter 15 (implementing a marketing plan) may be beyond the
scope of an introductory MBA marketing course
 Depending on the instructor’s preferences and orientation, Chapter 16 could be used to illustrate the ways
that the various marketing concepts and tools presented in the book can impact both marketing performance
(such market share, market growth, and sales) and financial performance (such as net income, return on
capital, and earnings per share).
MBA Capstone Market Strategy Course
Approach
A heavy use of marketing case studies and a marketing simulation is
common. This course, besides its focus on applying students’ marketing
knowledge acquired in previous courses, introduces more advanced
concepts and serves to integrate market strategies and performance with
the overall success of a business.
Objective
Present and apply advanced marketing concepts and tools. This is
generally a second-year MBA or MBA capstone marketing course, which
focuses on applying marketing knowledge in the development of market
strategies.
Book
The book plays a supporting role in Chapters 1 to 10 and, depending on
previous marketing courses, would be used to present new content in
Chapters 11 to 16.
 Chapters 3 to 6 (market analysis) and Chapters 7 to 10 (tactical marketing strategies) could be assigned as
needed to support specific marketing cases and lectures.
 Even if covered in a previous course, I strongly believe the concepts and core messages presented in
Chapters 1 and 2 need to be reinforced. Of particular importance is the impact of market orientation and
customer satisfaction levels on profitability (Chapter 1), as well as the marketing metrics in both chapters
and the mechanics of the net marketing contribution in Chapter 2.
 Chapters 11, 12, and 13 (portfolio analysis and offensive and defensive strategic marketing plans) deserve
extensive attention and class discussion in this course.
 Chapter 14 (developing a marketing plan) and Chapter 15 (implementing a marketing plan) are also
important topics for this course. In many instances, they may be coordinated with a marketing simulation or
major case study in building a marketing plan.
 Chapter 16 is included in the book specifically for this course. It goes beyond the impact of marketing
strategies on sales, market share, and the net marketing contribution to show how market strategies also
affect net profit, assets, return on assets and, ultimately, shareholder value. The chapter integrates
marketing with accounting and finance.
Market-Based Management
Sixth Edition
Instructor’s Manual – Chapter 16
– iv–
Copyright © 2012
Pearson Education, Inc.
Publishing as Prentice Hall
Full file at http://testbank360.eu/solution-manual-market-based-management-6th-edition-roger-best
Executive MBA Market-Based Management Course
Objective
Introduce a complete picture of marketing and market strategies in a
relatively short time frame (7 to 10 weeks).
Approach
Marketing case studies are used to present the realism of marketing,
while the book plays an important role in laying the foundation for
marketing concepts and tools.
Book
Because time is limited and these students are usually working full time,
the book ‘s role is to bring students up to speed on the marketing
concepts and tools that they will apply in marketing case studies.
 Chapters 1 and 2 are critical. Students can use these chapters to develop a good understanding of the
importance of market orientation and customer satisfaction (Chapter 1) and the role of marketing metrics and
the net marketing contribution (Chapter 2) in evaluating the success of a market strategy.
 Chapters 3 to 6 need to be covered in detail since they are the bedrock from which market strategies are
created. I suggest two chapters per week in covering market analysis.
 Chapters 7 and 8 can be presented as a product-price positioning session in one week, and Chapters 9 and
10, the delivery of the positioning strategy, in a second session. Thus, over two sessions, an instructor would
fully cover the tactical marketing strategies.
 Chapters 11 to 13 (portfolio analysis and offensive and defensive strategic market plans) go together and
could easily be covered in one session.
 Chapter 14 (developing a marketing plan) requires its own full session. The sample marketing plan at the
end of the chapter will greatly facilitate the session.
 Chapter 15 (strategy implementation) describes the roadblocks to a successful implementation of a market
strategy, and Chapter 16 (the profit impact of market-based management) covers marketing’s impacts on
sales, costs, assets, cash flow, profitability, and, ultimately, shareholder value. The material these chapters
contain is particularly appropriate for the concluding portion of the Executive MBA Marketing Course.
MBA Market Strategy Course —
With a Focus on Building a Marketing Plan
Objective
To present a comprehensive application of market strategy concepts and
tools within the context of creating a marketing plan.
Approach
Using marketing case studies, a marketing simulation, or a field project,
the approach is to apply marketing concepts and tools in the
development of a comprehensive marketing plan.
Book
For a course with a marketing plan as an important part of the course,
with or without a marketing simulation or case studies, the book could be
used in the following way:
 Start with Chapters 1 and 2 to reinforce the importance of market orientation, customer satisfaction, and
market-based management, particularly the concept of the net marketing contribution in Chapter 2.
 Cover Chapter 14 (developing a marketing plan), perhaps with a case study, to lay out the process of
creating a strategic marketing plan.
 Next cover the material on strategic market planning in Chapters 11 to 13 and set the strategic direction for
the marketing plan.
 Then use Chapters 3 to 6 (as needed) to build the situation analysis for the marketing plan. For example, if
you feel students need more work on market analysis, Chapter 3 could be assigned.
 Chapters 7 to 10 would be assigned to help students with the development of specific marketing tactics
needed to accomplish the objectives of the strategic market plan.
 Chapters 14 and 15 (marketing planning and implementation) could be covered near the end of the term,
depending on the instructor’s individual preference for presenting this topic. The same is true for Chapter 16
(profit impact of marketing strategies).
Market-Based Management
Sixth Edition
Instructor’s Manual – Chapter 16
– v–
Copyright © 2012
Pearson Education, Inc.
Publishing as Prentice Hall