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CHAPTER 2
MARKETING STRATEGY PLANNING
When you finish this chapter, you should be able to:
1.
Understand what a marketing manager does.
2.
Know what marketing strategy planning is--and why it will be the
focus of this book.
3.
Understand target marketing.
4.
Be familiar with the four Ps in a marketing mix.
5.
Know the difference between a marketing strategy, a marketing
plan, and a marketing program.
6.
Understand what customer equity is and why marketing strategy
planners seek to increase it.
7.
Be familiar with the text’s framework for marketing strategy
planning--and why it involves a narrowing down from broad
opportunities to the most attractive marketing strategy.
8.
Know four broad types of marketing opportunities that help in
identifying new strategies.
9.
Understand why strategies for opportunities in international
markets should be considered.
10. Understand the important new terms (shown below).
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marketing management
process
sales promotion
marketing plan
strategic (management)
planning
implementation
operational decisions
marketing strategy
marketing program
target market
customer equity
marketing mix
breakthrough opportunities
target marketing
competitive advantage
mass marketing
differentiation
channel of distribution
S.W.O.T. analysis
personal selling
market penetration
customer service
market development
mass selling
product development
advertising
diversification
publicity
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Outline of Chapter 2: MARKETING STRATEGY PLANNING
THE MANAGEMENT JOB IN MARKETING
MARKETING MANAGEMENT PROCESS--the process of (1)
planning marketing activities, (2) directing the implementation of
the plans, and (3) controlling these plans.
(Exhibit 2-1) "The Marketing Management Process"
 Managers should seek new opportunities
 Strategic management planning concerns the whole firm
STRATEGIC (MANAGEMENT) PLANNING--the managerial
process of developing and maintaining a match between an
organization's resources and its market opportunities.
WHAT IS A MARKETING STRATEGY?
MARKETING STRATEGY--specifies a target market and a
related marketing mix.
TARGET MARKET--a fairly homogeneous (similar) group of
customers to whom a company wishes to appeal.
MARKETING MIX--the controllable variables that the company
puts together to satisfy a target group.
(Exhibit 2-2) "A Marketing Strategy"
SELECTING A MARKET-ORIENTED STRATEGY IS TARGET
MARKETING
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 Target marketing is not mass marketing
TARGET MARKETING--a marketing mix is tailored to fit some
specific target customers.
MASS MARKETING--the typical production-oriented approach
that vaguely aims at "everyone" with the same marketing mix.
"Target Marketing vs. Mass Marketing"
(Exhibit 2-3) Production-Oriented and Marketing-Oriented
Managers Have Different Views of the Market"
 Mass marketers may do target marketing
 Target marketing can mean big markets and profits
DEVELOPING MARKETING MIXES FOR TARGET MARKETS
 There are many marketing mix decisions
 The four "Ps" make up a marketing mix
(Exhibit 2-4) "A Marketing Strategy--Showing the 4 Ps of a
Marketing Mix"
"The Four Ps and Marketing Mix Planning"
-Customer is not part of the marketing mix
(Exhibit 2-5) "Strategy Decision Areas Organized by the
Four Ps"
 Product--the good or service for the target's needs
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 Place--reaching the target
CHANNEL OF DISTRIBUTION--any series of firms (or
individuals) who participate in the flow of products from producer
to final user or consumer.
(Exhibit 2-6) "Four Examples of Basic Channels of
Distribution for Consumer Products"
 Promotion--telling and selling the customer
PERSONAL SELLING--direct spoken communication between
sellers and potential customers.
CUSTOMER SERVICE—a personal communication between a
seller and a customer who wants the seller to resolve a problem
with a purchase.
MASS SELLING--communicating with large numbers of
customers at the same time.
ADVERTISING--any paid form of nonpersonal presentation of
ideas, goods, or services by an identified sponsor.
PUBLICITY--any unpaid form of nonpersonal presentation of
ideas, goods, or services.
SALES PROMOTION--those promotion activities--other than
advertising, publicity, and personal selling--that stimulate interest,
trial, or purchase by final customers or others in the channel.
 Price--making it right
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 Each of the four Ps contributes to the whole
 Strategy jobs must be done together
 Understanding target markets leads to good strategies
 Market-oriented strategy planning at Toddler University
THE MARKETING PLAN IS A GUIDE TO IMPLEMENTATION
AND CONTROL
 Marketing plan fills out marketing strategy
MARKETING PLAN--a written statement of a marketing strategy
and the time-related details for carrying out the strategy.
"The Marketing Plan"
 Implementation puts plans into operation
IMPLEMENTATION--putting marketing plans into operation.
OPERATIONAL DECISIONS--short-run decisions to help
implement strategies.
(Exhibit 2-7) "Relation of Strategy Policies to Operational
Decisions for Baby Shoe Company"
 Several plans make a whole marketing program
MARKETING PROGRAM--blends all of the firm's marketing
plans into one "big" plan.
"Marketing Program"
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(Exhibit 2-8) "Elements of a Firm's Marketing Program"
"Marketing Manager's Framework"
THE MARKETING PROGRAM SHOULD BUILD CUSTOMER
EQUITY
 Expected profits depend on customer equity
CUSTOMER EQUITY—the expected earnings stream
(profitability) of a firm’s current and prospective customers over
some period of time.
 Owners expect financial returns
 Profit growth comes from customers
"Customer Equity Increases as Firm Attracts Customers,
Retains Them, and Increases Earnings from Business with
Them "
 The parts of the marketing program must work as a whole
 Planning for each strategy requires care
THE IMPORTANCE OF MARKETING STRATEGY PLANNING
 Time for new strategies in the watch industry
"Distribution of Different Firms Based on Their Marketing
Performance"
WHAT ARE ATTRACTIVE OPPORTUNITIES?
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 Breakthrough opportunities are best
BREAKTHROUGH OPPORTUNITIES--opportunities that help
innovators develop hard-to-copy marketing strategies that will be
very profitable for a long time.
 Competitive advantage is needed--at least
COMPETITIVE ADVANTAGE--a firm has a marketing mix that
the target market sees as better than a competitor's mix.
"Competitive Advantage"
 Avoid hit-or-miss marketing with a logical process
"Focusing Marketing Strategy and Evaluating Market
Opportunities"
"Marketing Strategy Planning Process"
(Exhibit 2-9) "Overview of Marketing Strategy Planning
Process"
MARKETING STRATEGY PLANNING PROCESS HIGHLIGHTS
OPPORTUNITIES
 Process narrows down from broad opportunities to specific
strategy
 Screening criteria make it clear why you select a strategy
 Segmentation helps pinpoint the target
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 Narrow down to a superior marketing mix
DIFFERENTIATION--the marketing mix is distinct from and
better than what is available from a competitor.
 S.W.O.T. analysis highlights advantages and disadvantages
S.W.O.T. ANALYSIS--identifies and lists the firm’s strengths and
weaknesses and its opportunities and threats.
TYPES OF OPPORTUNITIES TO PURSUE
"Examples of Different Types of Opportunities"
(Exhibit 2-10) "Four Basic Types of Opportunities"
 Market penetration
MARKET PENETRATION--trying to increase sales of a firm's
present products in its present markets--probably through a more
aggressive marketing mix.
 Market development
MARKET DEVELOPMENT--trying to increase sales by selling
present products in new markets.
 Product development
PRODUCT DEVELOPMENT--offering new or improved products
for present markets.
 Diversification
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DIVERSIFICATION--moving into totally different lines of
business--perhaps entirely unfamiliar products, markets, or even
levels in the production-marketing system.
 Which opportunities come first?
INTERNATIONAL OPPORTUNITIES SHOULD BE CONSIDERED
 The world is getting smaller
 Develop a competitive advantage at home and abroad
 Get an early start in a new market
 Find better trends in variables
 Weigh the risks of going abroad
NOTES ON THE INTERACTIVE EXERCISE
Overview of the Exercise on Marketing Strategy (Growth Opportunities)
The purpose of this exercise is to help students extend their conceptual knowledge of the broad
types of growth that a firm might choose to pursue with one or more strategies.
For each of the four types of growth opportunities, students are shown statements describing
marketing actions undertaken in the context of specific brands. Students are expected to select
the statement description that best illustrates the particular type of strategic opportunity that is
under consideration.
Concept Review
The overarching purpose of strategic marketing planning is to match a firm’s capabilities,
resources, and objectives to attractive opportunities that the firm is in a position to do something
about. SWOT analysis is the preferred method of identifying and evaluating opportunities in
light of the strengths and weaknesses of the firm, and the environmental forces that may
influence the success or failure of the venture. While many firms will pursue more than one type
of strategic opportunity concurrently, it is useful to distinguish the four basic types of
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opportunities in terms of their similarities and differences. The strategic opportunities discussed
below represent the four combinations of A) present vs. new products, and B) present vs. new
markets. It may be worth reminding students that “market” in this context refers to groups of
consumers / businesses with a basic shared need, or new and untapped geographic locations.
“New” products are those that are new to the company and are not restricted to first time product
innovations that essentially create a new product category within an industry.
Market Penetration (present product; present market) occurs when a company undertakes
various actions designed to encourage current customers to buy, consume, or in the case of
charities – contribute more.
Market Development (present product, new market) occurs when a firm attempts to expand sales
by targeting a new user market with an existing product. Two key methods of implementing this
strategy include 1) selling an existing product to a new geographic market in which the firm
currently does not conduct business, and 2) marketing new uses of existing products to new
users.
Product Development (new product, present market) occurs when new or improved products are
developed for present markets. Restaurants frequently undertake product development when
they introduce new menu items or menu lines.
Diversification (new product, new market) is typically considered to be the riskiest opportunity
of the four, as it requires a company to move into a totally new line of business while marketing
to a new market. Risk is greater as the company’s lack of expertise and experience in both the
product (industry, competition, production process, perhaps distribution channels, etc.) and
market (targeted consumers, needs, buying habits, perhaps methods of reaching consumers)
leaves greater potential for error.
Using the Exercise
Initial Screen
1. Slide one uses a replication of Exhibit 2-10 to introduce the four types of opportunities.
A. The interactive exercises are meant to be involving and fun for students. As you
begin the exercise, you might lighten the mood and grab students’ attention by
means of phrases such as: “{student name}, come on down! You’re the first
contestant to play our game today!”
B. The professor then asks the student volunteer to choose any one of the four
opportunities.
C. The professor clicks the portion of the strategic opportunity matrix that represents
the student’s selection.
Next Screen
2. The screen pertaining to the selected strategic opportunity appears.
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A. The professor reads the descriptions to the class.
B. The professor then asks students to select the statement that exemplifies the
strategic opportunity being investigated, and clicks on the letter that corresponds
to the student’s response.
C. If the wrong response is given, a buzzer will sound, and the letter designating the
incorrect answer will turn red. For details related to right and wrong answers,
refer to the ANSWERS AND EXPLANATION section below.
D. The selection process is repeated until the correct answer is chosen, and a cash
register “Ch-ching!” sound is heard. The slide automatically transitions back to
the expanded initial screen as described below in step 3.
Expanded Initial Screen with Correct Example
3. The four strategic opportunities are shown, with modifications.
A. Exhibit 2-10 is updated.
i. The opportunity that was previously chosen is displayed in a different
color to indicate that it has already been investigated and cannot be
reselected.
ii. The appropriate product/market grid cell is updated to show the answer
that correctly illustrates an application of that strategic opportunity.
B. The remaining strategic opportunities transition briefly.
C. The professor asks for a student volunteer to select from the three remaining types
of opportunity, and clicks on the table cell corresponding to that student’s choice.
Next Several Screens
4. The procedures described in steps 2 and 3 are repeated until all strategic marketing
opportunity types have been examined.
Final Screen
5. The final screen displays each form of strategic opportunity accompanied by the correct
statement describing marketing actions that provide that opportunity.
6. The professor clicks the indicated icon to end the exercise.
NOTE: Clicking the “X” at any time will end the exercise.
Answers and Explanations
MARKET PENETRATION
Answer A: INCORRECT, BUT DEBATABLE
This one is rather tricky. While the majority of people who purchase TV Guide do so for its
functional value, there has always existed a small group who collects TV Guide for the sake
of collecting. TV Guide’s strategy of publishing multiple covers is probably best described
as an attempt to develop and grow a market that has existed, but has traditionally been
ignored. Students may argue that A) TV Guide is actually following a market penetration
strategy since collectors existed prior to its implementation and offering multiple covers
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encourages this group to buy more, or B) that it is actually an example of product
development, since the cover is different. As a counterpoint, the instructor can point out that
the new covers are simply a means by which a new use (collecting) is being satisfied, and
that promoting new uses for existing products is a means of market development. The
product itself (contents within the TV Guide) do not change, only the cover. Useful
discussion can be generated as a result of differing points of view.
Answer B: CORRECT
Promotions have always been an excellent means of penetrating the market. Until the recent
scandal, McDonald’s “Monopoly” promotion was the most successful of the company’s
games.
Answer C: INCORRECT
The development of a new product by a company known as an ice cream manufacturer does
not qualify as market penetration. Firms pursuing a market penetration strategy do not alter
the product being sold, or the market to which it is targeted.
Answer D: INCORRECT
This is an example of product development by Dr. Pepper.
MARKET DEVELOPMENT
Answer A: INCORRECT
Developing a new product outside current areas of expertise for a new market (mechanics,
do-it-yourselfers) is an example of diversification.
Answer B: INCORRECT
This example features a new, rather than existing product, and thus does not qualify as
market development.
Answer C: CORRECT
Offering existing products to a new geographic market never before served is an example of
market development. International expansion, or domestically expanding distribution to new
regions of the U.S. qualifies as market development. As previously noted, developing new
uses for existing products that satisfy different needs is a second form of market
development.
Answer D: INCORRECT
A local bank that develops its own Internet service division is not only serving a new national
market, it is also venturing into a new line of business outside its area of expertise. Pursuing
this opportunity would be an example of a bank engaging in diversification.
PRODUCT DEVELOPMENT
Answer A: INCORRECT
The Lean Cuisine example is best classified as diversification, as it would require new
suppliers, production facilities, channels of distribution, advertising, etc., in order to service
what is essentially a new market via products new to the company.
Answer B: INCORRECT
Frito-Lay has decided to take advantage of a market development opportunity by introducing
snack food to the Russian market.
Answer C: CORRECT
RC is developing a line of fruit-flavored ice tea beverages for their existing market of
beverage consumers. Perhaps RC is attempting to better satisfy the needs of caffeine
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drinkers who don’t care for carbonated beverages, and prefer the taste of fruit to cola. The
drinks will be made available through traditional distribution channels (grocery, convenience,
mass-merchandise) and can be produced through existing production processes; beverage
production and marketing represents a core competency of the firm rather than a new
business, so capitalizing upon this opportunity would NOT be considered an example of
diversification.
Answer D: INCORRECT
The product has not changed, just the suggested usage – an example of market development.
DIVERSIFICATION
Answer A: INCORRECT
Increasing the amount or rate of giving among current donors is an example of market
penetration.
Answer B: INCORRECT
This example best corresponds with the strategy of product development.
Answer C: INCORRECT
This example best corresponds with the strategy of product development.
Answer D: CORRECT
Saudi Arabia would clearly be a new market for Coors, as strongly held religious convictions
typically forbid the consumption of fermented beverages such as beer among the Saudi;
hand-held power tools represent a business far removed from Coors current brewing
operations.
IDEAS ON USING COLOR ADS WITH CHAPTER 2
Color Ad 1
(Tylenol Rapid Release Gels) We spent years perfecting what goes into our medicine. Now
we’ve perfected the way it comes out.
Tylenol pursues growth in a variety of ways including new product development efforts.
Its newest entry into the pain relief category is its Rapid Release Gels product. The gels are
produced with laser-drilled holes that are designed to provide faster relief. It gives customers
one more reason to buy the Tylenol brand instead of some other brand of pain reliever.
Color Ad 3
(Dell) Dell is committed to operating in a responsible and sustainable manner around the globe.
Making marketing decisions is never easy and strategies need to change over time, but
Dell is committed to providing value to its customers, its employees, its shareholders, and
communities around the world.
Color Ad 11
(La-Z-Boy) His, Hers
La-Z-Boy is pursuing both market development and product development opportunities
with its new chairs that are designed to be more fashionable and appeal to both genders.
Color Ad 13
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(Pringles 100 Calorie Packs) Count yourself lucky.
Procter & Gamble is pursuing market development opportunities when it repackages its
popular Pringles product into boxes containing smaller individual-serve, 100-calorie cylinders.
Its target, of course, is diet-conscious consumers seeking healthier foods.
Color Ad 16
(Timex) Carrots, Spinach, Indiglo. Improve your night game.
Timex has revised its strategy over the years and continues to find new ways to meet
consumer needs. Its Indiglo Sport watch (shown here) lets its wearer continue to exercise into
the night.
Color Ad 19
(Symantec) You can get almost anything online. But not these.
Symantec’s marketing mix for its Norton Internet Security software focuses on online
safety, and that positioning and differentiation has been reinforced with its creative advertising
shown here. Some consumers may be more interested in low price, but interest in safety is a
need that applies to most consumers and businesses.
Color Ad 23
(Starbucks) Show your appreciation with a gift they’ll enjoy.
Starbucks counts on loyal customers to build its customer equity. A customer buying a $4 latte,
5 days a week is a $1,000 per year customer. When current customers stay loyal for many years,
their value to the company is significant.
Color Ad 24
(New SudaCare Nighttime Vapor-Plug Mini Waterless Vaporizer) Comfort your cold and
allergies all night.
Pfizer pursues both market development and product development opportunities. It aims
for market development opportunities when it tries to increase sales of its present products in
new target markets (both in the adult and children’s market) and when it sells in new areas
(overseas). It also pursues product development opportunities and its new SudaCare Nighttime
Vapor-Plug product is just one example of the many improved products it develops to satisfy
customers.
Color Ad 27
(Panasonic Toughbook) It’s not just a laptop. It’s knowing each pilot’s aircraft is fit to fly
before an urgent mission.
Panasonic’s Toughbook 29 laptops are so sturdy that you can work anywhere and risk
nothing. In this ad, the product and the promotion work together to reinforce that differentiation.
Color Ad 34
(Non-Drowsy Claritin) Allergies hold you back? Get focused. Get Claritin clear.
Claritin wants to differentiate its allergy relief product from other competing brands and
zero in on the needs of a specific target market—those who need to stay focused and clear
(whether at play or on the job). As shown in this ad, the product and the promotion work
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together in the marketing mix—so target customers can see and feel the benefit that is designed
to satisfy their needs.
Color Ad 35
(Rubbermaid) Save food. Save space.
A marketing innovation that meets customers’ needs, like Rubbermaid’s collapsible
container, contributes to the better marketing mix that Rubbermaid is able to offer customers.
It’s important for a firm to differentiate to customers what’s different (and better) about its
product.
Color Ad 36
(mymms.com) Custom Printed M&M’s make any occasion sweeter.
Even though the characteristic brown-pouch packaging has been around since 1948,
M&M’s continually pursues product development opportunities by introducing new colors, new
flavors, and now custom printed personalized M&M’s.
Color Ad 40
(CoolSavings) One of these consumers is your brand’s loyal user. One is your competitor’s. Can
your coupon tell the difference?
CoolSavings uses Internet technologies to help its client firms manage coupon programs
more effectively, target specific customers, and earn a greater return on their promotion
investment.
Color Ad 41
(R&D Ranch) If it’s not the right product, a coupon has no hope.
The Product area of the 4Ps is concerned with developing the right product for the target
market. Beef’s R&D Ranch helps beef producers develop the right product.
Color Ad 46
(Snapfish) Prints for pennies 12 cents
Part of the marketing job is to figure out the right price to charge for a product—
considering both the costs of offering the product and the nature of consumer demand for it.
Snapfish emphasizes its 12 cents per digital camera print pricing in a very competitive market
and promotes the idea that customers get a lot for what they pay.
Color Ad 48
(Cummings) You need your print job when? No problem.
Cummings’ competitive advantage is a marketing mix that emphasizes an ability to do
shorter print runs on short notice.
Color Ad 59
(LU Cerales) LU Petit Dejeuner: 58% cereals. Honey and chocolate pieces.
LU wants to differentiate its cookies from other competing brands and zero in on the
needs of a specific target market (health-conscious European consumers). As shown here, the
product and the promotion work together—so target customers know LU’s cookies are made
with 58% cereals.
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PERSPECTIVES ON TEACHING CHAPTER 2—MARKETING
STRATEGY PLANNING
This is a very important chapter because it overviews the key ideas and decision areas that shape
marketing strategy planning. The point is clearly made in the text that the frameworks set out in
this chapter provide a structure--a foundation--on which the rest of the course builds.
It is worth reemphasizing this point to students in class. At this early point in the first marketing
course, most students have little idea about the broad array of important issues and decision areas
that fall into the marketing domain. This, of course, is not unique to introductory marketing; at
the beginning of most survey courses students do not have a clear vision of where they are
headed. However, what is different about Essentials of Marketing is that it offers explicit
frameworks to help students organize their thinking about the broad array of topics and issues
they will encounter in the course and later in their careers. The target marketing and four Ps
concepts (introduced early in this chapter) lead up to a broader model (Exhibit 2-9) of the
marketing strategy planning process. Thus, from the outset these frameworks start with a focus
on the integrative nature of marketing strategy planning and give students a structure for and
overview of where the course is headed. Subsequent chapters in the text develop the elements of
these basic frameworks in more depth, and refine them by adding additional frameworks and
"conceptual organizers" within specific topical areas. These frameworks are the basic tools that
marketing managers use to analyze marketing situations and solve marketing problems.
Emphasizing this in class reinforces to students the importance of thinking carefully about the
marketing strategy framework that is introduced in Chapter 2, and from the outset it helps them
to realize that marketing thinking isn't just a loosely connected set of topics and facts.
In the last couple of editions, we have added a new discussion that introduces the customer
equity concept. The strategy planning approach developed in the text focuses on developing one
strategy at a time, to be certain that each strategy is carefully thought through and the marketing
mix elements carefully integrated. However, when introducing the idea of the whole marketing
program it is useful to emphasize that each strategy must not only work with each of the others
but that in combination they should contribute to growth in customer equity. Customer
satisfaction takes the customer’s point of view, and customer equity takes the point of view of
the individuals who own the company. Customer equity focuses on profit, but takes a longer
term point of view and explicitly recognizes that customers are the source of profit. Customer
equity is enhanced by acquiring new customers, retaining them, and increasing the firm’s profitbuilding relationships with them.
The chapter-opener example reviews some of the key decisions faced by Cirque du Soleil in
developing its target markets and marketing mixes. A useful approach here is to ask the class to
analyze Cirque du Soleil's approach in detail. Specifically, organize the particulars of Cirque du
Soleil's strategy using the framework shown in Exhibit 2-4 (page 36) and the topics covered in
Exhibit 2-5 (page 36). There is an opportunity to “forward integrate” by asking questions that
prompt students to think about how Cirque du Soleil’s situation is different now as competitors
are coming onboard—which helps to emphasize the need to constantly look for new
opportunities.
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The highlighted teaching case for this chapter (on page 39) focuses on the lifetime value of
customers. Discussion of this case is a good way to reiterate some points that may not
instinctively "sink in" with students who are new to marketing. Throughout the text we
emphasize that firms need to consciously think about acquiring new customers and keeping the
ones they already have (and perhaps expanding the business/revenue/profit from those
customers). While the focus of the introductory marketing course is usually on “one strategy at a
time,” from the outset it’s crucial that students see that a firm may have a number of different
strategies and related plans that it is implementing at the same time. As P&G implements
strategies (and plans) for its different detergents (Tide, Cheer, Gain, etc.), it is also implementing
strategies (and plans) for many other products (Bounty, Olay, Charmin, etc.) Which product
contributes the most in terms of the lifetime value of a particular customer?
The Toddler University example (on pp. 39-40) serves as a good basis for discussion. Its focus
is a company that carefully selected a target market and developed a creative marketing mix
based on a line of children's shoes. One useful approach is to ask students what key factors
explain the company's success. Their responses are likely to pinpoint the innovation in the
shoe’s design. That is certainly central to the company's competitive advantages. However, it's
very useful to draw on the information in the text to broaden the discussion. The company's
overall success is due not only to its product, but to a well integrated marketing strategy. The
target market is clearly defined and the whole marketing mix is responsive to the target market's
needs. The marketing mix helps to overcome problems related to physical distribution that have
typically existed in these channel systems. Intermediaries are attracted by demand for the
product itself, but also by the fact that they can reduce costs and carry smaller inventories and
still provide a high level of availability and selection (i.e., a good level of physical distribution
service). TU's promotion planning considers both final customers and channel members. And
all of these elements come together so that consumers are satisfied and willing to pay a price that
is profitable for the producer and other channel members. As you review these points, link the
ideas to later chapters where the issues will be developed in more detail.
The Timex example (pp. 44-45) in particular allows for some class discussion on the longer-term
competitive dynamics and market shifts that can--and often do--result as one or more firms in an
industry come up with innovative new elements in their marketing strategy. Students may think
that the innovations were "obvious" ones--but hindsight is always clearer than foresight. To
drive home that point, ask students to predict what the next big change in this ongoing wave of
strategy innovations is likely to be. Some students will have some opinions, but the fact is that it
is harder to come up with great ideas than it is to recognize and copy them after the fact.
The objective isn't just to come up with "some" combination of the four Ps-- which is what too
many marketing managers do--but rather to learn about the best practices for marketing strategy
planning that lead to breakthroughs and exceptional marketing performance. Students need to
realize that the average marketing program isn't particularly successful and that each student will
have the opportunity to do better than that if he or she really understands the concepts,
frameworks, and tools developed in this text and your course. On average, too many new
products fail, too many customers are unsatisfied, too many ad campaigns are ineffective, too
many decisions are made based on poor marketing research, and too many brands fail to attract
loyal customers. From their perspectives as consumers, students have some good insights about
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why these failures occur. Logically, you can pose these questions: "So, if these problems are so
obvious to us, why do so many firms fall into these traps? What can you do to avoid such
traps?" You can offer the answer: “The way to get exceptional marketing results is to use a well
thought out and integrated marketing strategy planning process.” That is the idea overviewed in
Exhibit 2-9--so once it is introduced it can effectively serve as an integrating device for the rest
of the course.
A key challenge of marketing strategy planning--and in fact of all strategy decisions in business-is to figure out what the focus and priorities should be. Thus, Exhibit 2-9 introduces a model of
the overall marketing strategy planning process that helps students see what types of thinking
and analysis are involved in narrowing down from "all possible opportunities" to a specific
“best” strategy (target market and marketing mix). And this specific strategy should offer the
target market superior customer value--and yield for the firm a real competitive advantage and
superior marketing results. Instructors who have taught from earlier editions of Essentials of
Marketing will realize that this exhibit is simply a visual tool for organizing the topics covered in
the text. However, by presenting the ideas in this fashion it makes it clearer that a marketing
manager needs to have a logical and clear process for analyzing each marketing situation and for
narrowing down to the specific strategy that the firm will pursue.
It makes sense to devote some time to this idea and to an overview of the topics in this exhibit-relating them to the structure of your course and reading assignments in the text. Emphasize that
at this point in the course this exhibit just provides a broad overview--a "quick summary" of a
way of thinking--but that as the course evolves, they will become more expert on the many
decisions and factors that are involved in understanding each of the individual elements in the
framework and how they relate to each other. If you return to this exhibit in subsequent classes
as new topics are introduced, students will more clearly see their progress on the road toward
developing effective marketing skills.
The Learning Co. example of target marketing on page 34 is an interesting one in its own right.
However, it also affords an opportunity to forward integrate by asking students to comment on
how the development of products like Microsoft’s X-box game console will impact The
Learning Co. and its current competitors. Over time, firms may find new ways to meet
customers’ needs better, in some cases with quite different product types. This issue is discussed
in more detail in Chapter 4 when the distinction between generic markets and product-markets is
developed in more detail, but it can be useful to set the stage for that topic at this point.
The Whole Foods case (page 35) is an interesting example for a variety of reasons. First, it is
certainly a good example of a firm that has done an effective job of matching its marketing mix
to its target market. As a result, it has enjoyed excellent growth and profits during a period when
most supermarket chains have been clobbered by the entry of Wal-Mart and other superstore
competitors. It is also useful to have some examples at this early point in the course that do not
focus on the production (whether goods or services) sector. Retailers and wholesalers need their
own marketing strategies, and sometimes they are key members of their channels. In fact, Whole
Foods often serves as a channel captain, helping its suppliers (many of which are smaller
companies) by providing a coherent strategy that serves the target market at the end of the
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channel. This firm also is a very good example of differentiation. It is not just trying to copy
other supermarket chains or the marketing mixes they develop.
Other examples focus on Purafil (page 51) and JLG (page 52). One interesting aspect of these
examples is that they are both smaller firms rather than the big multinational corporations which
often get the attention. A good way to discuss the Purafil and JLG cases is to point out that--in
hindsight--the moves by Purafil and JLG into international markets have proven to be good
ideas. But, that "hindsight" really doesn't explain why a marketing manager for a firm,
especially a smaller one like Purafil or JLG, should be thinking about international market
opportunities in the first place. This leads to a question: What motivates a marketing manager
for a small firm to bother with international markets? Various answers to this question are
provided in a section at the end of this chapter. As students offer ideas stimulated by that text,
they can be linked to Purafil and JLG. This serves as an effective way to integrate the case with
other topics in the chapter and at the same time encourage students to think again about why it is
important to study strategy planning for international markets.
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