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 ABOUT THE ORIGINAL AUTHORS

ORVILLE C. WALKER, JR
Orville C. Walker, Jr is Professor Emeritus in the University of Minnesota’s 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 Master’s degree in social psychology from the Ohio State University and a PhD in
marketing from the University of Wisconsin–Madison.
Orville is the co-author of three books and has published more than 50 research articles in scholarly and business journals. He has won several awards for his
research, including the O’Dell award from the Journal of Marketing Research , the Maynard award from the Journal of Marketing and a lifetime achievement
award from the Sales Management Interest Group of the American Marketing Association.
Orville has been a consultant to a number of business firms and not-for-profit organisations, and he has taught in executive development programs around the
world, including 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. MULLINS
John Mullins 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 University of Minnesota. An award-winning teacher, John
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 40 articles in a variety of outlets, including Harvard Business Review,
Sloan Management Review, The Wall Street Journal , the Journal of Product Innovation Management and the Journal of Business Venturing . His research has
won national and international awards from the Marketing Science Institute, the American Marketing Association and the Richard D. Irwin Foundation. John is co-
author of Marketing Strategy: A Strategy Decision-Making Approach , 8th edition.
John’s consulting, executive education and case-writing regularly take him to destinations in Africa, India and Latin America. John’s best-selling trade book,
The New Business Road Test: What Entrepreneurs and Executives Should Do Before Writing a Business Plan , is the definitive work on the assessment and
shaping of market opportunities. John’s newest trade book co-authored with noted venture capital investor Randy Komisar and also a bestseller, Getting to Plan
B: Breaking Through to a Better Business Model , has won widespread critical acclaim. It is reshaping the approach entrepreneurs and other innovators take to
starting their new ventures.
 ABOUT THE AUSTRALIAN AUTHORS

JOHN I. GOUNTAS
John Gountas is an Associate Professor of Marketing at the Murdoch Business School, Murdoch University in Perth. John holds a PhD in consumer behaviour
from the University of Reading, a Master of Sciences in psychometrics from the University of London, a Master of Sciences in Tourism from the University of
Strathclyde, a Postgraduate Certificate in Education, and a Higher National Diploma in Hotel Management. He is a trained hotel manager and has worked in
marketing positions with a number of hotels and tourism companies in the United Kingdom and Spain.
John has co-authored the textbook Services Marketing and the research report the ‘Characteristics of Touring Holiday-makers in Australia’ . His research
papers have appeared in the Journal of Business Research, Journal of Services Marketing, Tourism Management, Vacation Marketing, Advances in Consumer
Research and Tourism Analysis .
John has taught at all levels of higher education in Australia, the United Kingdom, Sweden, Greece and China. His current research focus is on the personality
characteristics of market mavens and psychological drivers of preferences in the real estate industry. John is interested in the emerging research area of
neuromarketing and is currently testing the validity of his personality orientations model using neuromarketing research methods and research tools such as
electroencephalograms (EEG) and functional magnetic resonance imaging (fMRI) machines.

FELIX T. MAVONDO
Felix Mavondo is Professor of Marketing in the Department of Marketing at Monash University in Melbourne. He also holds the position of Associate Dean
responsible for higher degrees by research. Felix did his PhD in strategic marketing at Monash University. He holds a Masters and a Bachelor degree from the
University of Zimbabwe (formerly College of London University). His main teaching areas are strategic marketing, marketing research and survey data analysis.
Felix has a distinguished record of supervising doctoral students. He has published extensively in the area of market orientation, internal marketing,
relationship marketing, resources and capabilities, and tourism. He has been invited to universities in Australia, New Zealand, the United Kingdom and southern
Africa to run seminars in research methods and supervision of doctoral students. Felix works extensively with Australian businesses and government agencies as
part of his research and consulting.

ANTON KRIZ
Anton has been a CEO, a management consultant and has secured international joint ventures as well as conducted major R&D projects. He has a PhD in
international marketing, had over 20 years of strategic marketing management experience particularly in Australian and Asian markets, and has published
extensively since joining the University of Newcastle in 2001. Anton is a member of the International Society for Professional Innovation Management (ISPIM)
and is supervising and participating in key projects concerning regional innovation management (RIM) and engagement, smart work hubs and anywhere working,
innovation champions, high-growth entrepreneurs and hidden champions, open innovation alliances (cultural intelligence), strategic management, Sino-Australian
tourism and regional cluster development.
Anton focuses specifically on strategic and high-performance innovation management for key corporations and regions in Australia. He has chaired and led a
major project (Innov8Central) to transform the innovative capacity of the Central Coast NSW. He is currently working with various stakeholders on a
follow-up research and development activity to improve Tasmania’s innovative outcomes. He is keen on building network clusters of innovation (NCOI) between
Germany, Australia and China. He worked on the 10-year strategy for China for Tourism Australia and regularly advises strategic bodies like HunterNet (he
attended Prime Minister’s Mission to China in 2014) and various other corporations in NSW. He has been the recipient of a Churchill Fellowship and a China
Fellowship.

CAROL OSBORNE
Carol is a lecturer in Marketing at Murdoch University in Perth. She holds a PhD in Marketing from the University of Western Australia, where she also completed
a Masters Degree in Electronic Marketing and Information Management, and a Bachelor of Arts from Flinders University in South Australia. Carol has taught at
several universities, including the University of South Australia, the University of Western Australia and the University of Southern Queensland.
Carol has extensive experience in marketing management, having worked in the wine and dairy industries, property development and at the Lotteries
Commission. She has also acted as a consultant to a wide range of businesses, including real estate and manufacturing. Her area of specialisation is high-volume
consumer goods and she has developed many market-leading products. Her commercial experience has included working on a number of research projects, such
as export marketing strategies for the viticulture industry, the development of small-lot housing for the property development industry and low-alcohol products
for the wine industry. Carol’s current research interests are in the areas of consumer socialisation, consumer choice processes and reference group influence.
 DIGITAL RESOURCES

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 HIGHLIGHTS OF THIS EDITION

CASE VIGNETTES
These vignettes provide a real-world introduction to the material covered in the chapter.

STRATEGIC ISSUES
These margin notes highlight important topics and information throughout each chapter.

DISCUSSION QUESTIONS
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CASES FOR APPLIED STUDY
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 CASE STUDY MATRIX

CHAPTER 1 2 3 4 5 6 7 8 9 10 11 12 13
The BMW Group is facing a changing market landscape •
Dr Ralf Wilden, The University of Newcastle
AirAsia’s Strategic Decisions – short-haul versus long-haul services •
Dr Sujana Adapa, University of New England
The Voice is a business success for channel 9 •
Peter Ling, RMIT University
H&M opens first Australian store in Melbourne •
Peter Ling, RMIT University
Lighting Limousines finds it’s all uber-good in Perth •
Stephen Klomp, Murdoch University
Targeting attractive market segments: GoPro •
Dr Nicole Hartley, The University of Queensland
Differentiation and brand positions: National Australia Bank (NAB) •
Dr Nicole Hartley, The University of Queensland
Marketing strategies for new market entries: Airbnb •
Dr Nicole Hartley, The University of Queensland
Singapore taps growth market in Australia •
Peter Ling, RMIT University
‘Ahh-llianz’ branding in a competitive market •
Peter Ling, RMIT University
Money Vault: marketing strategies for the digital economy •
Sonia Lipski, Money Vault & Dr Ranjit Voola, The University of Sydney
Capital Radio’s 61X dances up a winner with Jukebox Saturday Night •
Stephen Klomp, Murdoch University
Royal Aero Club spreads its wings in 2011 •
Stephen Klomp, Murdoch University
 PART 1
INTRODUCTION TO STRATEGY

Outline

1. Market-oriented perspectives underlie successful corporate, business and marketing strategies

2. Corporate strategy decisions and their marketing implications

3. Business strategies and their marketing implications

 CHAPTER 1
MARKET-ORIENTED PERSPECTIVES UNDERLIE SUCCESSFUL CORPORATE,
BUSINESS AND MARKETING STRATEGIES

LEARNING OBJECTIVES
1.1 Identify the three different levels of strategy.
1.2 Describe marketing’s role in formulating and implementing strategies.
1.3 Explain how to formulate and implement marketing strategies.
1.4 Describe the marketing plan.

SAMSUNG:
CHANGING STRATEGIES TO BUILD A GLOBAL BRAND 1

SAMSUNG ELECTRONICS IS THE LARGEST COMPONENT of South Korea’s largest chaebol—one of the giant family-controlled conglomerates that have
been instrumental in building the country’s economy over the last half century. Samsung’s electronics unit started out in 1970 making cheap TV sets for
the Sanyo label. Over time it morphed into a technically innovative company that was one of the pioneers in developing flat-screen displays, plasma TVs,
multifunction mobile phones and other digital devices. But until the mid-1990s, the unit competed primarily by: (1) producing technical components or low-
cost manufactured products for companies with better known brands, such as Dell, Hewlett-Packard and General Electric; and (2) selling ‘me-too’
consumer products—such as TVs and microwave ovens—under the Samsung brand through discount chains, such as Walmart, at very low prices.
Samsung’s cost-driven competitive strategy worked well until 1996, but then several shocks in its market and competitive environments forced a major
re-evaluation. Firstly, the global market for memory chips and other components Samsung supplied for other electronics brands softened due to
increased competition and excess capacity. At about the same time, sales of Samsung’s own branded products were also declining. As Yun Jong-yog—a
company veteran who was brought in as chief executive officer (CEO) of the electronics unit—complained, Samsung could build a TV that was technically
as good as a Sony, but because of the down-market image of the Samsung brand, its TVs sat at the back of the store or piled up in discount chains.
Finally, the Asian financial crisis of 1997 made a major strategic shift essential for the unit’s survival.

NEW COMPETITIVE AND MARKETING STRATEGIES

Mr Yun initiated an ambitious new competitive strategy aimed at developing and marketing technically superior products while building an image of
Samsung as a stylish, high-quality brand commanding a
premium price. The objective was to establish a unique competitive position using technical innovation and design to appeal to younger and relatively
upscale customers around the world. ‘If we were to continue competing only on price’, Mr Yun argued, ‘the Chinese would slaughter us’.

TECHNICAL INNOVATION AND R&D

In order to implement its new competitive strategy, Samsung had to become a pioneer in developing new digital technologies. While Sony and other rivals
had a substantial lead in consumer electronics, that lead was rooted in the analogue world. The digital world required new technical innovations.
Consequently, the company shifted substantial resources into research and development (R&D) focused on technologies such as large-area LCD
screens, display drivers and chip sets, and mobile telephony. In the 2007 fiscal year, it spent 5.9 trillion won (about US$6 billion)—more than 6 per cent of
the unit’s revenue—on R&D. One-quarter of the company’s workforce—some100 000 people—are engaged in R&D activities in more than 20 research
centres around the world.

NEW PRODUCT DEVELOPMENT AND DESIGN

But cutting-edge technology does not guarantee market success. It must be incorporated into products that deliver benefits that at least some segment of
consumers will consider to be worth the price. Some of those benefits may be subjective—attractive styling or a cool image. Therefore, new product
development at Samsung usually involves a team of designers who collaborate closely with the company’s engineers, manufacturing people and
marketers. To ensure they stay in touch with consumer tastes in different countries, the company’s 450 designers are assigned to seven design centres
in cities such as London, Tokyo, Shanghai and San Francisco, and the company’s market researchers run focus groups and user surveys in many
markets around the world.

MARKETING PROGRAMS TO BUILD THE SAMSUNG BRAND

Revamping Samsung’s marketing efforts was also critical to the success of its new competitive strategy because even the most technically sophisticated
and well-designed products are likely to fail unless potential customers know they exist, can acquire them easily, and think they are worth the money.
Therefore, Eric Kim was recruited from outside the company to head a global marketing effort for Samsung Electronics. One of his first moves was to
reorganise the company’s distribution channels. Consistent with the strategic objective of establishing Samsung as a high-quality brand worthy of a
premium price, many of the company’s products were pulled out of low-priced discount chains and distributed through service-oriented electronics
specialty stores and internet retailers—such as Best Buy and Amazon.com —instead.
To ensure consistency in Samsung’s marketing communications across world markets, Mr Kim consolidated the company’s roster of advertising
agencies from 55 down to a single global advertising group—British-based WPP. He then launched the company’s first brand-building campaign with
fashion-forward TV commercials showing off the company’s cool sense of style, as well as the technical sophistication of its products.
The company also makes extensive use of more contemporary promotional tools, such as product placements, sponsorships and internet advertising,
to strengthen its brand. For instance, Samsung provides both financial and technical support for a variety of sporting and cultural events in every major
region of the world. It is a sponsor of the Olympics, Asian Games and other international events, but it also supports regional and local events—such as
the Montreal Jazz Festival, and the Chelsea Football Club in the United Kingdom—as a means of staying close to local customers.

THE RESULTS
 Samsung Electronics’ revamped competitive strategy and the marketing programs designed to implement it have been a smashing success. According
to studies by Interbrand (a brand consultancy), the global value of Samsung’s brand increased by more than 200 per cent from 2000 through 2008, and it
overtook Sony
as the most valuable consumer electronics brand. As a result, the unit’s sales grew to 98 trillion won (about US$100 billion) in the 2007 fiscal year, and
operating profit reached nearly 9 trillion won. Of course, the financial crisis and economic recession that shook the world in 2008 did shrink the unit’s
sales and profits, but its stellar brand image, technical expertise, and stylish product line provided a solid foundation for a quick recovery. The latest data
available from the Samsung website (February 2014) note that despite the global recession and rapidly changing business environment, Samsung
Electronics recorded historic sales (net sale US$288.8 billion) and net profit (US$26.2 billion) with total stock holders’ equity of US$209.5 billion.
Samsung is strengthening its competitiveness in its core business, bolstering its No. 1 status in mobile phones, TV and memory products.

STRATEGIC CHALLENGES ADDRESSED IN CHAPTER 1

Samsung’s experiences in its various industries illustrate some important points about the nature of business strategy and the interrelationships among different
levels of strategy in an organisation, points that will recur as major themes throughout this book. They also demonstrate the importance of timely and accurate
insights into customer desires, environmental trends and competitors’ actions in formulating successful strategies at every level.
Most businesses, particularly larger corporations with multiple divisions or business units like Samsung, pursue a hierarchy of interdependent strategies. Each
strategy is formulated at different levels in the organisation and deals with different sets of issues. For example, Samsung’s goals of becoming a technological
leader and seeking future growth primarily through the development of new technologically sophisticated products reflect its new corporate strategy . This level
of strategy provides direction on the business’s mission, the kinds of businesses it should be in and its growth policies.
On the other hand, attempts to differentiate its offerings by providing superior quality based on the expertise, experience and customer knowledge of its huge
contingent of consultants while avoiding cutthroat price competition reflect Samsung’s business-level strategy in its global competition. This level of strategy
primarily addresses how a business will compete in its industry.
Finally, interrelated functional decisions about how to divide the market into segments, which segments to target, what goods and services to offer each
segment, what promotional tools and appeals to employ and what prices to charge all reflect the marketing strategies for each of Samsung’s various product-
market entries.
Because a major part of the marketing manager’s job is to monitor and analyse the needs and desires of potential customers, emerging challenges posed by
competitors and opportunities and threats related to trends in the external environment, they often play a crucial role in influencing strategies formulated at higher
levels in the business. While the need for new corporate and competitive strategies at Samsung became obvious because of declining sales of its own low-value
products and components supplied to other manufacturers and, hence, lower profitability in some of the company’s businesses, decisions about the content of
those new strategies were influenced by information and analyses supplied by the company’s marketing and sales personnel. Mr Yun initiated an ambitious new
competitive strategy aimed at developing and marketing technologically superior products while building a new image for Samsung. This involved understanding
the company’s strengths and weaknesses and developing new directions for growth and profitability. Some businesses systematically incorporate such market
and competitive analyses into their planning processes. They also coordinate their activities around the primary goal of satisfying unmet customer needs. Such
businesses are market-oriented and follow a business philosophy commonly called the marketing concept . Market-oriented businesses have been shown to be
among the more profitable and successful at maintaining strong competitive positions in their industries over time. As we shall see later in this chapter, however,
businesses do not always embrace a market orientation—nor rely as heavily on inputs from their marketing and sales personnel—in developing their strategies.
Some businesses’ strategies are driven more by technology, production or cost concerns.
Regardless of their participation or influence in formulating corporate and business-level strategies, marketing managers’ freedom of action is ultimately
constrained by those higher level strategies. The objectives, strategies and action plans for a specific product market are but one part of a hierarchy of strategies
within the business. Each level of strategy must be consistent with—and therefore influenced and constrained by—higher levels within the hierarchy. For
example, the shift in corporate strategy towards a strong brand image as the primary avenue for future growth shaped not only the new technologically superior
products and services developed by Samsung, but also their advertising appeals, prices, distribution and other aspects of their marketing plans.

Strategic issue
The marketing objectives and strategy for a particular product-market entry must be achievable with the business’s available resources and capabilities
and consistent with the direction and allocation of resources inherent in the business’s corporate and business-level strategies.

These interrelationships among the various levels of strategy raise several questions of importance to marketing managers, as well as managers in other
functional areas and top executives. What do strategies consist of, and do they have similar or different components at the corporate, business and functional
levels? While marketing managers clearly bear the primary responsibility for developing strategic marketing plans for individual product service offerings, what
role do they play in formulating strategies at the corporate and divisional or business unit level? Why do some organisations pay much more attention to
customers and competitors when formulating their strategies (i.e. why are some businesses more market-oriented) than others, and does it make any difference in
their performance? What specific decisions and analytical processes underlie the formulation and implementation of effective marketing strategies? These are the
questions tackled in the rest of this chapter.

LO 1.1
THREE LEVELS OF STRATEGY: SIMILAR COMPONENTS BUT DIFFERENT ISSUES
What is a strategy?
Although strategy first became a popular business buzzword during the 1960s, it continues to be the subject of widely differing definitions and interpretations.
The following definition, however, captures the essence of the term.
A strategy is a fundamental pattern of present and planned objectives, resource deployments, and interactions of an organisation with markets,
competitors, and other environmental factors. 2
Our definition suggests that a strategy should specify: (1) what (objectives to be accomplished); (2) where (on which industries and product markets to
focus); and (3) how (which resources and activities to allocate to each product market to meet environmental opportunities and threats and to gain a competitive
advantage).

The components of strategy

A well-developed strategy contains the following five components, or sets of issues.
1. Scope. The scope of an organisation refers to the breadth of its strategic domain—the number and types of industries, product lines and market segments
it competes in or plans to enter. Decisions about an organisation’s strategic scope should reflect management’s view of the business’s purpose or mission.
This common thread among its various activities and product markets defines the essential nature of what its business is and what it should be.
2. Goals and objectives. Strategies also should detail desired levels of accomplishment on one or more dimensions of performance—such as volume growth,
profit contribution or return on investment—over specified time periods for each of those businesses and product markets and for the organisation as a whole.
3. Resource deployments. Every organisation has limited financial and human resources. Formulating a strategy also involves deciding how those resources
are to be obtained and allocated, across businesses, product markets, functional departments and activities within each business or product market.
4. Identification of a sustainable competitive advantage. One important part of any strategy is a specification of how the organisation will compete in each
business and product market within its domain. How can it position itself to develop and sustain a differential advantage over current and potential
competitors? To answer such questions, managers must examine the market opportunities in each business and product market and the business’s distinctive
competencies or strengths relative to its competitors.
5. Synergy. Synergy exists when the business’s businesses, product markets, resource deployments and competencies complement and reinforce one
another. Synergy enables the total performance of the related businesses to be greater than it would otherwise be: the whole becomes greater than the sum of
its parts.

The hierarchy of strategies

Explicitly or implicitly, these five basic dimensions are part of all strategies. However, rather than a single comprehensive strategy, most organisations have a
hierarchy of interrelated strategies, each formulated at a different level of the business. The three major levels of strategy in most large, multiproduct organisations
are: (1) corporate strategy ; (2) business-level strategy ; and (3) functional strategies focused on a particular product-market entry. These three levels of
strategy are illustrated in Exhibit 1.1 . In small single-product-line businesses or entrepreneurial start-ups, however, corporate and business-level strategic issues
merge.
Our primary focus is on the development of marketing strategies and programs for individual product-market entries, but other functional departments—such
as R&D and operations—also have strategies and plans for each of the business’s product markets. Throughout this book, therefore, we examine the
interfunctional implications of product-market strategies, conflicts across functional areas, and the mechanisms that businesses use to resolve those conflicts.
Strategies at all three levels contain the five components mentioned earlier, but because each strategy serves a different purpose within the organisation, each
emphasises a different set of issues. Exhibit 1.2 summarises the specific focus and issues dealt with at each level of strategy; we discuss them in the next sections.

Corporate strategy
At the corporate level, managers must coordinate the activities of multiple business units and, in the case of conglomerates, even separate legal business entities.
Decisions about the organisation’s scope and resource deployments across its divisions or businesses are the primary focus of corporate strategy. The essential
questions at this level include: What business(es) are we in? What business(es) should we be in? What portion of our total resources should we devote to each
of these businesses to achieve the organisation’s overall goals and objectives? Thus, top-level managers at Samsung decided to pursue future growth primarily
through the development of technologically advanced products and stronger brand building, rather than their previous single-minded focus on being a low-cost
manufacturer. They injected substantial corporate resources into the business, such as into R&D expenditure, marketing and advertising budgets, to support the
new strategic direction.
Attempts to develop and maintain distinctive competencies at the corporate level focus on generating superior human, financial and technological resources;
designing effective organisational structures and processes; and seeking synergy among the company’s various businesses. Synergy can provide a major
competitive advantage for business where related businesses share R&D investments, product or production technologies, distribution channels, a common sales
force and/or promotional themes—as in the case of Samsung. 3

Business-level strategy
How a business unit competes within its industry is the critical focus of business-level strategy. A major issue in a business strategy is that of sustainable
competitive advantage. What distinctive competencies can give the business unit a competitive advantage? And which of those competencies best match the
needs and wants of the customers in the business’s target segment(s)? For example, a business with low-cost sources of supply and efficient, modern plants
might adopt a low-cost competitive strategy. One with a strong marketing department and a competent sales force may compete by offering superior customer
service. 4

EXHIBIT 1.1 The hierarchy of strategies

 Another important issue that a business-level strategy must address is appropriate scope: how many and which market segments to compete in, and the
overall breadth of product offerings and marketing programs to appeal to these segments. Finally, synergy should be sought across product markets and across
functional departments within the business.

Marketing strategy
The primary focus of marketing strategy is to effectively allocate and coordinate marketing resources and activities to accomplish the business’s objectives within
a specific product market. Therefore, the critical issue concerning the scope of a marketing strategy is specifying the target market(s) for a particular product or
product line. Next, businesses seek competitive advantage and synergy through a well-integrated program of marketing mix elements (primarily the 4Ps of product
, price , place and promotion ) tailored to the needs and wants of potential customers in that target market.

EXHIBIT 1.2 Key components of corporate, business and marketing strategies

STRATEGY COMPONENTS CORPORATE STRATEGY
Scope • Corporate domain—’Which businesses • Business domain—’Which product
should we be in?’
• Corporate development strategy
• Conglomerate diversification (expansion • Business development strategy
into unrelated businesses)
• Vertical integration
• Acquisition and divestiture policies
Goals and objectives • Overall corporate objectives aggregated • Constrained by corporate goals
across businesses
• Revenue growth
• Profitability
• ROI (return on investment)
• Earnings per share
• Contributions to other stakeholders
Allocation of resources • Allocation among businesses in the
corporate portfolio
• Allocation across functions shared
bymultiple businesses (corporate R&D,
MIS)
Sources of competitive advantage • Primarily through superior corporate
financial or human resources; more
corporate R&D; better organisational
processes or synergies relative to
competitors across all industries in
BUSINESS STRATEGY
markets should we be in within this
business or industry?’
• Concentric diversification (new
products for existing customers or new
customers for existing products)
• Objectives aggregated across product-
market entries in the business unit
• Sales growth
• New product or market growth
• Profitability
• ROI
• Cash flow
• Strengthening bases of competitive
advantage
• Allocation across functional
departments within the business unit
• Allocation among product-market entries
in the business unit
• Primarily through competitive strategy;
business unit’s competencies relative to
competitors in its industry
MARKETING STRATEGY
• Target market definition
• Product-line depth and breadth
• Branding policies
• Product-market development plan
• Line extension and product elimination
plans
• Constrained by corporate and business
goals
• Objectives for a specific product-market
entry
• Sales
• Market share
• Contribution margin
• Customer satisfaction
• Allocation across components of the
marketing plan (elements of the
marketing mix) for a specific product-
market entry
• Primarily through effective product
positioning; superiority on one or more
components of the marketing-mix
relative to competitors within a specific
product market
 STRATEGY COMPONENTS which the firm operates
CORPORATE STRATEGY BUSINESS STRATEGY MARKETING STRATEGY
Sources of synergy • Shared resources, technologies or • Shared resources (including favourable • Shared marketing resources,
functional competencies across customer image) or functional competencies or activities across
businesses within the firm competencies across product markets product-market entries
within an industry

LO 1.2
WHAT IS MARKETING’S ROLE IN FORMULATING AND IMPLEMENTING STRATEGIES?
The essence of strategic planning at all levels is identifying threats to avoid and opportunities to pursue. The primary strategic responsibility of any manager is to
look outwards continuously to keep the business or businesses in step with changes in the environment. Because they occupy positions at the boundary
between the business and its customers, distributors and competitors, marketing managers are usually most familiar with conditions and trends in the market
environment. Consequently, they not only are responsible for developing strategic plans for their own product-market entries, but also are often primary
participants and contributors to the planning process at the business and corporate levels as well.
The wide-ranging influence of marketing managers on higher level strategic decisions is clearly shown in a survey of managers in 280 US and 234 German
business units of businesses in the electrical equipment, mechanical machinery and consumer package goods industries. 5 The study examined perceptions of
marketing managers’ influence relative to managers from sales, R&D, operations and finance on a variety of strategic and tactical decisions within their
businesses. Exhibit 1.3 summarises the results.

EXHIBIT 1.3 Influence of functional units over various business decisions

DECISIONS MARKETING SALES R&D OPERATIONS FINANCE
Business strategy decisions
Strategic direction of the business 38 29** 11** 9** 14**
Expansion into new geographic markets 39 45** 3** 3** 10**
Choices of strategic partners 33 38* 7** 9** 12**
New product development 32 23** 29** 9** 7**
Major capital expenditures 13 11** 13 29** 35**
Marketing strategy decisions
Advertising messages 65 29** 3** 1** 2**
Customer satisfaction measurement 48 35** 5** 8** 4**
Customer satisfaction improvement 40 37* 7** 10** 6**
Distribution strategy 34 52** 1** 6** 6**
Customer service and support 31 47** 5** 10** 7**
Pricing 30 41** 4** 9** 16**
The number in each cell is the mean of the number of points given by responding managers to each function, using a constant-sum scale of 100. A t-test was performed to
compare column 2 (mean of relative influence of marketing) with columns 3 to 6 (relative influence of sales, R&D, operations and finance). Statistically significant differences with
marketing are indicated by asterisks, where: * P < 0.05; ** P < 0.01.
Source: Christian Homburg, John P. Workman Jr and Harley Krohmer, ‘Marketing’s Influence within the Firm’, Journal of Marketing, 63 (April 1999), p. 9.

The study found that, on average, marketing and sales executives exerted significantly more influence than managers from other functions on strategic
decisions concerning traditional marketing activities, such as advertising messages, pricing, distribution, customer service and support, and measurement and
improvement of customer satisfaction. Interestingly, though, the influence of sales executives was perceived to be even greater than that of marketing managers
on some of these decisions. One reason—particularly in the industrial goods businesses selling electronic equipment and machinery—may be that sales managers
have more detailed information about customer needs and desires because they have direct and continuing contact with existing and potential buyers.
More surprisingly, marketing managers also were perceived to wield significantly more influence than managers from other functional areas on cross-
functional, business-level strategic decisions. While the views of finance and operations executives carry more weight in approving major capital expenditures,
marketing and sales managers exert more influence on decisions concerning the strategic direction of the business unit, expansion into new geographic markets,
the selection of strategic business partners and new product development.
Could the relative influence of the different functions become more similar as businesses adopt more integrative organisational forms, such as cross-functional
work teams? The study’s results suggest not. Marketing’s influence was not significantly reduced in businesses that had instituted cross-functional structures
and processes.
But marketing managers may not play as pervasive a strategic role in other cultures as they do in the United States. The study found that marketers’ influence
on both tactical and strategic issues was significantly lower in German businesses. As one of the study’s authors points out, ‘Germany has traditionally stressed
technology and operations more than the softer, customer-oriented aspects central to marketing. So even when the environment changes, a signal to top-level
German managers that marketing should be playing a greater role, they are reluctant to give it that role’. 6

Market-oriented management
No matter where businesses are located, however, marketing managers do not play an equally extensive strategic role in every business because not all
businesses are equally market-oriented. Not surprisingly, marketers tend to have a greater influence on all levels of strategy in organisations that embrace a
market-oriented philosophy of business. More critically, managers in other functional areas of market-oriented businesses incorporate more customer and
competitor information into their decision-making processes as well.
Market-oriented organisations tend to operate according to the business philosophy known as the marketing concept . As originally stated by General
Electric (GE) seven decades ago, the marketing concept holds that the planning and coordination of all business activities around the primary goal of satisfying
customer needs is the most effective means to attain and sustain a competitive advantage and achieve business objectives over time.

EXHIBIT 1.4 Guidelines for market-oriented management

1. Create customer focus throughout the business.
2. Listen to the customer.
3. Define and nurture your distinctive competence.
4. Define marketing as market intelligence.
5. Target customers precisely.
 6. Manage for profitability, not sales volume.
7. Make customer value the guiding star.
8. Let the customer define quality.
9. Measure and manage customer expectations.
10. Build customer relationships and loyalty.
11. Define the business as a service business.
12. Commit to continuous improvement and innovation.
13. Manage culture along with strategy and structure.
14. Grow with partners and alliances.
15. Destroy marketing bureaucracy.
Source: Frederick E. Webster Jr, ‘Executing the New Marketing Concept’, Marketing Management , 3 (1, 1994), p. 10.

Thus, market-oriented businesses are characterised by a consistent focus by personnel in all departments and at all levels on customers’ needs and
competitive circumstances in the market environment. They are also willing and able to quickly adapt products and functional programs to fit changes in that
environment. Such businesses pay a great deal of attention to customer research before products are designed and produced. They embrace the concept of
market segmentation by adapting product offerings and marketing programs to the special needs of different target markets.
Market-oriented businesses also adopt a variety of organisational procedures and structures to improve the responsiveness of their decision making,
including using more detailed environmental scanning and continuous, real-time information systems; seeking frequent feedback from and coordinating plans with
key customers and major suppliers; decentralising strategic decisions; encouraging entrepreneurial thinking among lower level managers; and using
interfunctional management teams to analyse issues and initiate strategic actions outside the formal planning process. 7 For example, Samsung formed a high-level
cross-functional task force to re-evaluate its market environment, develop a new strategic focus and map new avenues towards future growth. These and other
actions recommended to make an organisation more market-driven and responsive to environmental changes are summarised in Exhibit 1.4 .

Do customers always know what they want?

Some managers—particularly in high-technology companies—question whether a strong focus on customer needs and wants is always a good thing. They argue
that customers cannot always articulate their needs and wants, in part because they do not know what kinds of products or services are technically possible. As
Akio Morita, the late visionary CEO of Sony, once said:
Our plan is to lead the public with new products rather than ask them what kind of products they want. The public does not know what is
possible, but we do. So instead of doing a lot of marketing research, we refine our thinking on a product and its use and try to create a market for
it by educating and communicating with the public. 8
Others have pointed out that some very successful new products, such as the Chrysler minivan and Compaq’s pioneering personal computer network server,
were developed with little or no market research. On the other hand, some famous duds, such as Ford’s Edsel, New Coke and McDonald’s McLean low-fat
hamburger, were developed with a great deal of customer input. 9
The laws of probability dictate that some new products will succeed and more will fail regardless of how much is spent on marketing research. But the critics of
a strong customer focus argue that paying too much attention to customer needs and wants can stifle innovation and lead businesses to produce nothing but
marginal improvements or line extensions of products and services that already exist. How do marketers respond to this charge?
While many consumers may lack the technical sophistication necessary to articulate their needs or wants for cutting-edge technical innovations, the same is
not true for industrial purchasers. About half of all manufactured goods in most countries are sold to other organisations rather than individual consumers. Many
high-technology industrial products are initiated at the urging of one or more major customers, developed with their cooperation (perhaps in the form of an alliance
or partnership), and refined with additional customer input.
As for consumer markets, one way to resolve the conflict between the views of technologists and marketers is to consider the two components of R&D.
Firstly, there is basic research and then there is development—the conversion of technical concepts into actual saleable products or services. Most consumers
have little knowledge of scientific advancements and emerging technologies. Therefore, they usually don’t—and probably shouldn’t—play a role in influencing
how businesses allocate their basic research dollars.
However, a customer focus is critical to development. Someone within the organisation must have either the insight and market experience or the substantial
customer input necessary to decide what product to develop from a new technology, what benefits it will offer to customers, and whether customers will value
those benefits sufficiently to make the product a commercial success. Cochlear’s experiences in developing the hearing implants into commercially successful
products—as described in Exhibit 1.5 —illustrate this point.

EXHIBIT 1.5 Cochlear: world leader in hearing aids and implants

COMPANY PROFILE
Cochlear Pty Limited is an innovative Australian company at the cutting edge of technology and recognised globally as a leader in hearing aids and
implants. The company has delivered more than three decades of implant innovation to hundreds of thousands of people worldwide and believes it has
achieved its business success by setting customer-focused corporate goals and encouraging strategic thinking.

CUSTOMER FOCUS
Despite being a technology- and innovation-driven organisation, Cochlear has always emphasised the importance of the customer and bringing quality
service. This is achieved through innovative, high-quality products and services that help implant recipients interact more efficiently in their world. The
company aims for a continuous service-oriented experience at all stages of the process so that every customer interaction and experience is seamless,
consistent and positive.

ORGANISATIONAL PERFORMANCE
The company is seen by management as a dynamic, performance-focused organisation, poised to achieve its full potential with a corporate culture and
core values that attract the best employees and ensure a lasting, compelling future.

SHAREHOLDER VALUE
Cochlear has a well-managed dividend policy to underwrite the company’s future, and the company’s effective management of working capital and other
assets ensures maximum returns for shareholders.
Innovation is at the heart of Cochlear’s product development, where the company is encouraged to think of ways to deliver capabilities that their
competitors have not considered as well as improve those that already exist. This strategy has resulted in the highest-performing, feature-packed cochlear
implant systems that are at the heart of Cochlear Pty Limited. This has meant revolutionary sound technology designed to mirror the intricacies of natural
 hearing, resulting in better hearing in different listening environments, including noisy, crowded places. The company also invests in future sound
processing capabilities to deliver
sound to the hearing nerve with ultra-fine timing accuracy. With more than 1000 times the timing accuracy, Nucleus ® Freedom® is designed to offer
performance improvements as these advancements emerge. Cochlear has developed the award-winning Contour Advance™ 22-channel electrode
designed to deliver clear sound to the hearing nerve and to protect the delicate cochlear structures during insertion. Cochlear offers the industry’s
broadest range of coding and customisation options to meet the individual’s unique needs.

THE FUNDAMENTALS OF COCHLEAR’S SUCCESS

DELIVER WORLD-CLASS DESIGN
World-class design exists at every aspect of its product development, delivering an unrivalled listening experience. The designs are innovative, made from
quality material, flexible so that they fit easily into the lifestyle of adults and children, and have undergone significant testing. There is also an extensive
range of audio connection accessories to enjoy tunes on an iPod or watch movies. Cochlear also provides industry-first, push-button controls that allow
processor adjustments without cumbersome dials and switches.

LIFETIME COMMITMENT—ASSURING LIFELONG SERVICE

When the customer chooses Cochlear, they are choosing a lifelong partner dedicated to the quality of their hearing today, tomorrow and always. This
lifetime service includes technology upgrades without additional surgery or implant replacement, and collaboration with a worldwide community of leading
scientists in 70 countries, with global research and development conducted at their facilities in Australia, Belgium and the United States. The company
seeks to provide long-lasting reliability thanks to implants that are built to the highest standards and service centres around the world.
Source: Adapted from website: Cochlear Pty Limited www.cochlear.com .

Often, as was the case with the Zip drive, a new technology must be developed into a concrete product concept before consumers can react to it and its
commercial potential can be assessed. In other cases, consumers can express their needs or wants for specific benefits even though they do not know what is
technically feasible. They can tell you what problems they are having with current products and services and what additional benefits they would like from new
ones. For instance, before Sony introduced the Walkman, few consumers would have asked for such a product because they were unfamiliar with the possibilities
of miniaturisation in the electronics industry. But if they had been asked whether they would buy a battery-driven product small enough to hook on their belt that
could produce sound nearly as good as the full-sized stereo system in their home, many probably would have said, ‘Sure!’
A strong customer focus is not inconsistent with the development of technically innovative products, nor does it condemn a business to concentrate on
satisfying only current, articulated customer wants. More importantly, while businesses can sometimes succeed in the short run even though they ignore
customer desires, a strong customer focus usually pays big dividends in terms of market share and profit over the long haul. As Iomega’s CEO pointed out, ‘I
don’t know how else you can sell in a consumer marketplace without understanding product design and usage. You have to know what the end user wants’. 10

Does being market-oriented pay?

Since an organisation’s success over time hinges on its ability to provide benefits of value to its customers—and to do that better than its competitors—it seems
likely that market-oriented businesses should perform better than others. By paying careful attention to customer needs and competitive threats—and by focusing
activities across all functional departments on meeting those needs and threats effectively—organisations should be able to enhance, accelerate and reduce the
volatility and vulnerability of their cash flows. 11 And that should enhance their economic performance and shareholder value. Indeed, profitability is the third leg,
together with a customer focus and cross-functional coordination , of the three-legged stool known as the marketing concept.
Sometimes the marketing concept is interpreted as a philosophy of trying to satisfy all customers’ needs regardless of the cost. That would be a prescription
for financial disaster. Instead, the marketing concept is consistent with the notion of focusing on only those segments of the customer population that the
business can satisfy both effectively and profitably. Businesses might offer less extensive or costly goods and services to unprofitable segments or avoid them.
For example, the online wine deliverer Get Wines Direct (www.getwinesdirect.com ) does not accept orders of less than a dozen because they are too costly to
process and ship.
Substantial evidence supports the idea that being market-oriented pays dividends, at least in developed economies such as the United States, Australia and
New Zealand. A number of studies involving more than 500 businesses or business units across a variety of industries indicate that a market orientation has a
significant positive effect on various dimensions of performance, including return on assets, sales growth and new product success. 12 Even entrepreneurial start-
ups appear to benefit from a strong customer orientation. One study of start-ups in Japan and the United States found that new businesses that focused on
marketing first, rather than lowering costs or advancing technology, were less likely to be brought down by competitors as their product markets developed. 13

Strategic issue
A market orientation has a significant positive effect on various dimensions of performance, including return on assets, sales growth and new product
success.

Factors that mediate marketing’s strategic role

Despite the evidence that a market orientation boosts performance, many businesses around the world are not very focused on their customers or competitors.
Some of the reasons why businesses are not always in close touch with their market environments are listed below:
• Competitive conditions may enable a business to be successful in the short run without being particularly sensitive to customer desires.
• Different levels of economic development across industries or countries may favour different business philosophies.
• Businesses can suffer from strategic inertia—the automatic continuation of strategies successful in the past, even though current market conditions are
changing.

Competitive factors affecting a business’s market orientation

The competitive conditions some businesses face enable them to be successful in the short term without paying much attention to their customers, suppliers,
distributors or other organisations in their market environment. Early entrants into newly emerging industries, particularly industries based on new technologies,
are especially likely to be internally focused and not very market-oriented. This is because there are likely to be relatively few strong competitors during the
formative years of a new industry, customer demand for the new product is likely to grow rapidly and outstrip available supply, and production problems and
resource constraints tend to represent more immediate threats to the survival of such new businesses.
Businesses facing such market and competitive conditions are often product-oriented o r production-oriented . They focus most of their attention and
resources on such functions as product and process engineering, production and finance in order to acquire and manage the resources necessary to keep pace
with growing demand. The business is primarily concerned with producing more of what it wants to make, and marketing generally plays a secondary role in
formulating and implementing strategy. Other functional differences between production-oriented and market-oriented businesses are summarised in Exhibit 1.6 .
 As industries grow, they become more competitive. New entrants are attracted and existing producers attempt to differentiate themselves through improved
products and more efficient production processes. As a result, industry capacity often grows faster than demand and the environment shifts from a seller’s market
to a buyer’s market. Businesses often respond to such changes with aggressive promotional activities—such as hiring more salespeople, increasing advertising
budgets or offering frequent price promotions—to maintain market share and hold down unit costs.

EXHIBIT 1.6 Differences between production-oriented and market-oriented organisations

BUSINESS ACTIVITY OR
FUNCTION PRODUCTION ORIENTATION MARKETING ORIENTATION
Product offering Business sells what it can make; primary focus on functional Business makes what it can sell; primary focus on customers’ needs and
performance and cost. market opportunities.
Product line Narrow. Broad.
Pricing Based on production and distribution costs. Based on perceived benefits provided.
Research Technical research; focus on product improvement and cost Market research; focus on identifying new opportunities and applying new
cutting in the production process. technology to satisfy customer needs.
Packaging Protection for the product; minimise costs. Designed for customer convenience; a promotional tool.
Credit A necessary evil; minimise bad debt losses. A customer service; a tool to attract customers.
Promotion Emphasis on product features, quality and price. Emphasis on product benefits and ability to satisfy customers’ needs or solve
problems.

Unfortunately, this kind of sales-oriented response to increasing competition still focuses on selling what the business wants to make rather than on
customer needs. Worse, competitors can easily match such aggressive sales tactics. Simply spending more on selling efforts usually does not create a sustainable
competitive advantage.
As industries mature, sales volume levels off and technological differences among brands tend to disappear as manufacturers copy the best features of each
other’s products. Consequently, a business must seek new market segments or steal share from competitors by offering lower prices, superior services or
intangible benefits other businesses cannot match. At this stage, managers can most readily appreciate the benefits of a market orientation, and marketers are
often given a bigger role in developing competitive strategies. 14 It is not surprising, then, that many of the most market-oriented businesses—and those working
hardest to become market-oriented—are well-established competitors in relatively mature industries. Of course, a given industry’s characteristics may make some
components of a market orientation more critical for good performance than others. For example, in an industry dominated by large, dynamic competitors—as in
the global car industry (e.g. Toyota, DaimlerChrysler, BMW, Ford)—being responsive to competitor actions may be even more important than a strong customer
focus. 15 But the bottom line is that an orientation towards the market—competitors, customers and potential customers—is usually crucial for continued success
in global markets.

The influence of different stages of development across industries and global markets
The previous discussion suggests that the degree of adoption of a market orientation varies not only across businesses but also across entire industries.
Industries that are in earlier stages of their life cycles, or that benefit from barriers to entry or other factors reducing the intensity of competition, are likely to have
relatively fewer market-oriented businesses. For instance, in part because of governmental regulations that restricted competition, many service industries—
including banks, airlines, doctors, lawyers, accountants and insurance businesses—were slow to adopt the marketing concept. But with the trend towards
deregulation and the increasingly intense global competition in such industries, many service organisations are working much harder to understand and satisfy
their customers.
Given that entire economies are in different stages of development around the world, the popularity—and even the appropriateness—of different business
philosophies also may vary across countries. A production orientation was the dominant business philosophy in the United States, for instance, during the
industrialisation that occurred from the mid-1800s through to World War I. 16 Similarly, a primary focus on developing product and production technology may
still be appropriate in developing nations that are in the midst of industrialisation.
International differences in business philosophies can cause some problems for the globalisation of a business’s strategic marketing programs, but it can
create some opportunities as well, especially for alliances or joint ventures. Consider, for example, General Electric’s joint venture with the Mexican appliance
manufacturer Organisation Mabe. The arrangement benefits GE by providing direct access to Mexico’s rapidly growing market for household appliances and its
low-cost supply of labour. But it also benefits Mabe—and the Mexican economy—by giving the business access to cutting-edge R&D and production
technology and the capital necessary to take advantage of its newfound know-how. 17

Strategic inertia
In some cases, a business that achieved success by being in tune with its environment loses touch with its market because managers become reluctant to tamper
with strategies and marketing programs that worked in the past. They begin to believe there is one best way to satisfy their customers. Such strategic inertia is
dangerous because customers’ needs and competitive offerings change over time. Samsung’s original focus on being a supplier to top brand manufacturers, for
instance, resulted in the company devoting too little effort to advanced R&D and building its own brand, leading to declines in profitability. And its emphasis on
low-cost production made it slow to respond to emerging customer needs. Thus, in environments where such changes happen frequently, the strategic planning
process needs to be ongoing and adaptive. All the participants, whether from marketing or other functional departments, need to pay constant attention to what is
happening with their customers and competitors.

Recent developments affecting the strategic role of marketing

In the future, strategic inertia will be even more dangerous in many industries because they are facing increasing magnitudes and rates of change in their
environments. These changes are rapidly altering the context in which marketing strategies are planned and carried out and the information and tools that
marketers have at their disposal. These developments include: (1) the increased globalisation of markets and competition; (2) the growth of the service sector of
the economy and the importance of service in maintaining customer satisfaction and loyalty; (3) the rapid development of new information and communications
technologies; and (4) the growing importance of relationships for improved coordination and increased efficiency of marketing programs and for capturing a larger
portion of customers’ lifetime value. Some recent impacts of these four developments on marketing management are briefly summarised below and will be
continuing themes throughout this book. We will also speculate from time to time about how these ongoing trends may reshape the tasks, tools and techniques of
marketing in the future. It is impossible to predict exactly how these trends will play out. Consequently, new business school graduates who both understand the
marketing management process and are savvy with respect to one or more of these ongoing developments can play an important role—and gain a potential
competitive advantage—within even the largest businesses. Such newly minted managers can bring fresh perspectives and valuable insights concerning how
these emerging trends are likely to impact on their organisations’ customers, competitors and marketing strategies.

Globalisation
International markets account for a large and growing portion of the sales of many organisations. But while global markets represent promising opportunities for
additional sales growth and profits, differences in market and competitive conditions across country boundaries can require businesses to adapt their competitive
strategies and marketing programs to be successful. Even when similar marketing strategies are appropriate for multiple countries, international differences in
infrastructure, culture, legal systems and the like often mean that one or more elements of the marketing program—such as product features, promotional appeals
or distribution channels—must be tailored to local conditions for the strategy to be effective.

Increased importance of service

A service can be defined as ‘any activity or benefit that one party can offer another that is essentially intangible and that does not result in the ownership of
anything. Its production may or may not be tied to a physical product’. 18 Service businesses such as airlines, hotels, restaurants and consulting businesses
account for roughly two-thirds of all economic activity in the United States, and services are the fastest-growing sector of most other developed economies
around the world. While many of the decisions and activities involved
in marketing services are essentially the same as those for marketing physical goods, the intangible nature of many services can create unique challenges for
marketers. We will discuss these challenges—and the tools and techniques businesses have developed to deal with them—throughout this book.
As the definition suggests, services such as financing, delivery, installation, user training and assistance and maintenance are often provided in conjunction
with a physical product. Such ancillary services have become more critical to businesses’ continued sales and financial success in many product markets. As
markets have become crowded with global competitors offering similar products at ever-lower prices, the creative design and effective delivery of supplemental
services have become crucial means by which a business may differentiate its offering and generate additional benefits and value for customers. Those additional
benefits, in turn, can justify higher prices and margins in the short term and help improve customer satisfaction, retention and loyalty over the long term. 19
Of course, lousy customer service can have the opposite effect. This is especially a danger when intense price competition pushes a business to cut costs by
reducing customer service and support. For instance, in recent years Dell attempted to maintain its long-standing low-cost position in the personal computer
industry by—among other things—reducing the number of technicians in its customer call centres and limiting each technician’s training to only a few specialised
problem areas. As a result, increasing numbers of customers spent 30 minutes or more on hold when they called Dell for help, and 45 per cent were transferred at
least once before they found a technician with the expertise to solve their problem. Consequently, Dell’s customer satisfaction rating in the United States fell by
more than 6 percentage points in 2005, its sales and profit growth stagnated and the business’s market share fell from 31 per cent down to 28 per cent in the first
quarter of 2006 alone. 20

Information technology
The computer revolution and related technological developments are changing the nature of marketing management in two important ways. Firstly, new
technologies are making it possible for businesses to collect and analyse more detailed information about potential customers and their needs, preferences and
buying habits. Thus, information technology is making it possible for many businesses to identify and target smaller and more precisely defined market segments
—sometimes segments consisting of only one or a few customers—and to customise product features, promotional appeals, prices and financing arrangements to
fit such segments. 21
A second impact of information technology has been to open new channels for communications and transactions between suppliers and customers. As Exhibit
1.7 suggests, one simple way of categorising these new channels is based on whether the suppliers and customers involved are organisations or individual
consumers.
Global sales over the internet are growing so fast that solid estimates of their volume are hard to come by. However, internet revenues of manufacturers,
wholesalers, retailers and selected service businesses amounted to nearly US$3 trillion in the United States in 2006 (the most recent census data available at the
time of writing) and worldwide volume of US$5.5 to US$6 trillion seems a reasonable guess for 2009. 22 Growth in both the global and US markets has averaged
between 18 and 25 per cent annually for much of the 21st century, but that growth rate slowed down significantly with the onset of the global financial crisis in
2008 and seems to have picked up again by 2010.

EXHIBIT 1.7 Categories of e-commerce

BUSINESS CONSUMER
BUSINESS Business-to-Business (b2b) Business-to-Consumer (b2c)
Examples: Examples:
• Purchasing sites of Ford, Oracle, Cisco • E-tailers, such as E*TRADE, Amazon, iTunes
• Supply chain networks linking producers and distribution channel members, such as 3M • Producers’ direct sales sites, such as Dell, Ryanair, Sofitel Hotels
and Woolworths • Websites of traditional retailers, such as Sears, Country Road,
Marks & Spencer
CONSUMER Consumer-to-Business (c2b) Consumer-to-Consumer (c2c)
Examples: Examples:
• Sites that enable consumers to bid on unsold airline tickets and other goods and • Auction sites, such as eBay, QXL
services, such as Priceline • Blogs praising/criticising businesses or brands
Source: Adapted from ‘A Survey of E-Commerce: Shopping Around the Web’, The Economist , 26 February 2000, p. 11.

Roughly 80 per cent of those sales were business-to-business transactions, such as those in the upper-left quadrant of Exhibit 1.7 . Many high-technology
businesses, such as Oracle Corporation and Cisco Systems, and even some more traditional businesses such as DaimlerChrysler, conduct all or a large portion of
their purchasing activities over the internet. And many businesses rely on their websites to communicate product information to potential customers, make sales
and deal with customer problems.
Perhaps even more importantly, though, new information and communications technologies are enabling businesses to forge more cooperative and efficient
relationships with their suppliers and distribution channel partners. For example, in the United States, Procter & Gamble and 3M have formed alliances with major
retailers—such as Kroger and Walmart—to develop automatic restocking systems. Sales information from the retailer’s checkout scanners is sent directly to the
supplier’s computers, which automatically work out when to replenish each product and schedule deliveries direct to each of the retailer’s stores. Such paperless
exchanges reduce mistakes and billbacks, minimise inventory levels, improve cash flow and increase customer satisfaction and loyalty.
In contrast, internet sales from businesses to consumers (the upper-right quadrant in Exhibit 1.7 ) accounted for less than US$110 billion in the US market in
2006. 23 However, sales volumes of businesses such as Amazon and iTunes are expanding rapidly, and many traditional retailers are expanding their marketing
efforts on the internet as well. Information available over the internet is affecting consumer purchase patterns even when the purchases are made in traditional
retail outlets. For instance, while only a small percentage of new car purchases are made over the internet, a majority of buyers in developed nations now go online
to compare prices or gather information about brands.
Clearly, the internet is presenting marketers with new strategic options—as well as new competitive threats and opportunities—regardless of what or to whom
they are selling. Therefore, we will devote all of Chapter 11 to marketing strategies for e-commerce, and discuss specific examples and their implications in every
chapter.

Relationships across functions and businesses

New information technologies and the ongoing search for greater marketing efficiency and customer value in the face of increasing competition are changing the
nature of exchange between businesses. Instead of engaging in a discrete series of arm’s length, adversarial exchanges with customers, channel members and
suppliers on the open market, more businesses are trying to develop and nurture long-term relationships and alliances, such as the one between 3M and Walmart.
Such cooperative relationships are thought to improve each partner’s ability to adapt quickly to environmental changes or threats, to gain greater benefits at lower
costs from its exchanges, and to increase the lifetime value of its customers. 24
Similar kinds of cooperative relationships are emerging inside businesses as businesses seek mechanisms for more effectively and efficiently coordinating
across functional departments the various activities necessary to identify, attract, service and satisfy customers. In many businesses, the planning and execution
that used to be the responsibility of a product or marketing manager are now coordinated and carried out by cross-functional teams.

The future role of marketing

In the light of such changes, it is apparent that businesses in most, if not all, industries will have to be market-oriented, tightly focused on customer needs and
desires, and highly adaptive to succeed and prosper in the future. In turn, this suggests that the effective performance of marketing activities—particularly those
associated with tracking, analysing and satisfying customers’ needs—will become even more critical for the successful formulation and implementation of
strategies at all organisational levels.
It is important to note, however, that such marketing activities may not always be carried out by marketing managers located in separate functional
departments. 25 As more businesses embrace the use of multifunctional teams or network structures, the boundaries between functions are likely to blur and the
performance of marketing tasks will become everybody’s business. Similarly, as organisations become more focused and specialised in developing unique core
competencies, they will rely more heavily on suppliers, distributors, dealers and other partners to perform activities—including marketing and sales tasks—that fall
outside those areas of competence. All of this suggests that the ability to create, manage and sustain exchange relationships with customers, vendors, distributors
and others will become a key strategic competence for businesses in the future—and that is what marketing is all about.

LO 1.3
FORMULATING AND IMPLEMENTING MARKETING STRATEGY—AN OVERVIEW OF THE
PROCESS
This book examines the development and implementation of marketing strategies for individual product-market entries, whether goods or services. Exhibit 1.8
briefly outlines the activities and decisions involved in this process, and it also serves as the organisational framework for the rest of this book. For that reason, it
is important to note the basic focus of this framework and the sequence of events within it.

A decision-making focus
EXHIBIT 1.8 The process of formulating and implementing marketing strategy

The framework has a distinct decision-making focus. Planning and executing a marketing strategy involves many interrelated decisions about what to do, when to
do it and how. Those decisions are the primary focus of this book. Every chapter details either the decisions to be made and actions taken when designing and
implementing strategies for various market situations, or the analytical tools and frameworks you will need to make those decisions intelligently.

Analysis comes first: the ‘4Cs’

Exhibit 1.8 suggests that a substantial amount of analysis of customers, competitors and the business itself should occur before designing a marketing strategy.
This reflects our view that successful strategic decisions usually rest on an objective, detailed and evidence-based understanding of the market and the
environmental context. Of course, most marketing strategies never get implemented in quite the same way as they were drawn on paper. Adjustments are made and
new activities undertaken in response to rapid changes in customer demands, competitive actions and shifting economic conditions. But a thorough and ongoing
analysis of the market and the broader environment enables managers to make such adjustments in a well-reasoned and consistent way rather than by the seat of
their pants.
The analysis necessary to provide the foundation for a good strategic marketing plan should focus on four elements of the overall environment that may
influence its appropriateness and ultimate success: (1) the company’s internal resources, capabilities and strategies; (2) the environmental context —such as
broad social, economic and technology trends—in which the company will compete; (3) the relative strengths and weaknesses of competitors and trends in the
competitive environment; and (4) the needs, wants and characteristics of current and potential customers . Marketers refer to these elements as the 4Cs . They
are the focus of a market opportunity analysis and are discussed in more detail below.

Integrating marketing strategy with the company’s other strategies and resources
A major part of the marketing manager’s job is to monitor and analyse customers’ needs and wants and the emerging opportunities and threats posed by
competitors and trends in the external environment. Therefore, because all levels of strategy must consider such factors, marketers often play a major role in
providing inputs to—and influencing the development of—corporate and business strategies. Conversely, general managers and senior managers in other
functions need a solid understanding of marketing in order to craft effective organisational strategies.
Marketing managers also bear the primary responsibility for formulating and implementing strategic marketing plans for individual product-market entries or
product lines. But as we have seen, such strategic marketing programs are not created in a vacuum. Instead, the marketing objectives and strategy for a particular
product-market entry must be achievable with the business’s available resources and capabilities and consistent with the direction and allocation of resources
inherent in the business’s corporate and business-level strategies. In other words, there should be a good fit—or internal consistency—among the elements of all
three levels of strategy. Chapters 2 and 3 describe in more detail the components of corporate and business strategies and the roles marketers and other functional
managers play in shaping the strategic direction of their organisations and business units.

Market opportunity analysis

A major factor in the success or failure of strategies at all three levels is whether the strategy elements are consistent with the realities of the business’s external
environment and its own capabilities and resources. Thus, the first step in developing a strategic marketing plan—for a new venture, a new product or an existing
product or product line—is to undertake an analysis of the 4Cs, so that the nature and attractiveness of the market opportunity is well understood. Marketing
managers in various line or staff positions—or entrepreneurs, themselves, in start-up settings—typically carry out this responsibility.

Understanding market opportunities

Understanding the nature and attractiveness of any opportunity requires conducting an examination of the external environment, including the markets served and
the industry of which the business is a
part. In turn, this examination involves a look at broad macro issues, such as environmental trends that are driving or constraining market demand and the
structural characteristics of the industry as a whole, as well as specific aspects of the target customers and their needs and of the particular business and what it
brings to the party. It is also necessary to examine the management team that will be charged with implementing whatever strategy is developed in order to
determine if the team has what it takes to get the job done. Chapter 4 provides a framework for examining these issues, and dramatises how different the
attractiveness of one’s market and one’s industry can be, an insight that is easily (and often!) overlooked.

Measuring market opportunities

Understanding the overall attractiveness of a market opportunity is one thing. Preparing an evidence-based forecast of the sales that can be achieved over the
short and intermediate term is quite another, and is a particularly difficult task for new products, especially those of the new-to-the-world variety. In Chapter 5 , we
outline several approaches to evidence-based forecasting, and we examine the factors that drive the pace at which innovations are adopted over time. We also
briefly explore where to obtain the market knowledge required—the data to fill in the holes in one’s understanding of any market opportunity—including sources
both inside and outside the business.

Market segmentation, targeting and positioning decisions

Not all customers with similar needs seek the same products or services to satisfy those needs. Their purchase decisions may be influenced by individual
preferences, personal characteristics, social circumstances and so forth. On the other hand, customers who do purchase the same product may be motivated by
different needs, seek different benefits from the product, rely on different sources of information about products and obtain the product from different distribution
channels. Thus, one of the manager’s most crucial tasks is to divide customers into market segments —distinct subsets of people with similar needs,
circumstances and characteristics that lead them to respond in a similar way to a particular product or service offering or to a particular strategic marketing
program. Chapter 6 examines dimensions for measurement and analytical techniques that can help managers identify and define market segments in both consumer
and organisational markets.
After defining market segments and exploring customer needs and the business’s competitive strengths and weaknesses within segments, the manager must
decide which segments represent attractive and viable opportunities for the business, that is, on which segments to focus a strategic marketing program. Chapter 6
discusses some of the considerations in selecting a target segment .
Finally, the manager must decide how to position the product or service offering within a target segment; that is, to design the product and its marketing
program so as to emphasise attributes and benefits that appeal to customers in the target segment and at once distinguish the business’s offering from those of
competitors. Issues and analytical techniques involved in marketing positioning decisions are discussed in Chapter 7 .

Formulating marketing strategies for specific situations

The strategic marketing program for a product should reflect market demand and the competitive situation within the target market. But demand and competitive
conditions change over time as a product moves through its life cycle. Therefore, different strategies are typically more appropriate and successful for different
market conditions and at different life cycle stages. Chapter 8 examines some marketing strategies for introducing new goods or services to the market. Chapter 9
discusses strategies appropriate for building or maintaining a product’s share of a growing market in the face of increasing competition. Chapter 10 considers
strategies a manager might adopt in mature or declining markets. And Chapter 11 explores how all of the above strategies might be influenced or modified by the
rapidly evolving conditions being created by e-commerce and the digital economy.

Implementation and control of the marketing strategy

A final critical determinant of a strategy’s success is the business’s ability to implement it effectively. And this depends on whether the strategy is consistent with
the resources, the organisational structure, the coordination and control systems and the skills and experience of business personnel. 26 Managers must design a
strategy to fit the business’s existing resources, competencies and procedures—or try to construct new structures and systems to fit the chosen strategy. For
example, Samsung’s efforts to increase its revenues from technologically advanced consumer products and strong branding initiatives would not be producing
such positive results without the business’s substantial investments in R&D and the advertising, market research and engineering efforts necessary for product
development and launch. Chapter 12 discusses the structural variables, planning and coordination processes, and personnel and corporate culture characteristics
related to the successful implementation of various marketing strategies.
The final tasks in the marketing management process are determining whether the strategic marketing program is meeting objectives and adjusting the program
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pieces far more evident than it is in the ‘Well-Tempered Clavichord’
or even the ‘Inventions’ of Bach. He undoubtedly offers the player
enormous opportunity to exercise his arms and his fingers in the
production of brilliant, astonishing effects.

Of these effects two will always be associated with his name: the
one obtained by the crossing of the hands, the other by the rapid
repetition of one note. Both devices will be found freely used in the
works of his father, and it is absurd to suppose that the son invented
them. Yet it is hardly an exaggeration to say that he made more use
of them than any man down to the time of Liszt. The crossing of the
hands is not employed to interweave two qualities of sound, as it
oftenest is in music for the organ or for the German and French
harpsichords which have two or more manuals that work
independently of each other. The Italian harpsichords had but one
bank of keys, and Scarlatti’s crossing of the hands, if it be not
intended merely for display, succeeds in making notes wide apart
sound relatively simultaneous, and thus produces qualities of
resonance which hitherto had rested silent in the instrument.

It has been suggested that the device of repeated notes was

borrowed from the mandolin, on which, as is well known, a cantabile
is approximated by rapid repetition of the notes of the melody.
Scarlatti, however, rarely employs it to sustain the various notes of
his tune. In his sonatas it is usually, if not intentionally, effective
rhythmically; as it is, unfailingly, in more modern pianoforte music.
On the harpsichord, moreover, as on the pianoforte, it can make a
string twang with a sort of barbaric sound that still has the power to
stir us as shrieking pipes and whistles stirred our savage ancestors.

Still another mannerism of his technique or style is the wide leap of

many of his figures. A plunge from high to low notes was much
practised in contemporary violin music and was considered very
effective, and probably suggested a similar effect upon the
harpsichord. Into this matter again Scarlatti may well have been
initiated by his father, by whom it was not left untried. In the son’s
sonatas it succeeds in extending the range of sonority of the
harpsichord, and thus points unmistakably to developments in the
true pianoforte style.

It is, in fact, by this extension of figures, by sudden leaps, by

crossing of hands, that Scarlatti frees harpsichord music from all
trace of slavery to the conjunct style of organ music; and he may
therefore be judged the founder of the brilliant free style which
reached its extreme development in the music of Liszt. Though we
may not fail to mention occasionally his indebtedness to his father
and to instrumental music of his time, we cannot deny that he is a
great inventor, the creator of a new art. He was admitted by
composers of his day to have not only wonderful hands, but a
wonderful fecundity of invention.

What guided him was chiefly instinct. He had, no doubt, considerable

strict training in the science of counterpoint and composition. He
wrote, as we know, not only harpsichord pieces, but operas and
sacred music as well. In the sonatas there is a great deal of neat
two-part writing, and an occasional flash of skill in imitations; but
musical science is almost the last thing we should think of in
connection with them. Rules are not exemplified therein. Burney
relates, through L’Augier, that Scarlatti knew he had broken
established rules of composition, but reasoned that ‘there was
scarce any other rule worth the attention of a man of genius than that
of not displeasing the only sense of which music is the object.’ And,
further, that he complained of the music of Alberti and other ‘modern’
composers because it did not in execution demand a harpsichord,
but might be equally well or perhaps better expressed by other
instruments. But, ‘as Nature had given him [Scarlatti] ten fingers,
and, as his instrument had employment for them all, he saw no
reason why he should not use them.’ He might have included his two
arms among his natural gifts. Certainly the free use he made of them
in most of his sonatas marks a new and extraordinary advance in the
history of keyboard music.

In the matter of form Scarlatti is not so strikingly an innovator as he

is in that of style. He is in the main content to cast his pieces in the
binary mold common to most short instrumental pieces of his day.
Yet, as has already been suggested, the harmonic freedom which he
enjoys within these relatively narrow limits is significant in the
development of the sonata form; and even more significant is his
distribution of musical material within them.

The binary form, such as we find it in the suites of Froberger and

even in those of J. S. Bach, is essentially a harmonic structure. The
balance and contrast which is the effect of any serviceable shape of
music is here one of harmony, principally of tonic and dominant and
dominant and tonic, with only a few measures of modulation for
variety. There is, in addition, some contrast between that musical
material which is presented first in the tonic key and that which
appears later in the dominant. But, while we may speak of these
materials as first and second themes or subjects, their individuality is
hardly distinct and is, in effect, obliterated by the regularity and
smoothness of style in which these short pieces are conventionally
written. The composer makes no attempt to set them off clearly, one
against the other. The entrance into the dominant key is almost
never devised in such a way as to prepare the listener for a new
musical thought, quite separate and different from that which he has
already heard. The transitional passage from tonic to dominant
emerges from the one and merges into the other, without break or
distinctions.

In the matter of setting his themes in their frame, Scarlatti hardly

differs from his contemporaries. His style, though free and varied, is
in constant motion. But his genius was especially fertile in clean-cut
figures; and when, as he often does, he combines two or three
distinct types of these in one short piece, the music is full of thematic
variety and sparkles with an animation which at times is almost
dramatic.

Scarlatti is, indeed, hovering close to the sonata form in a great

many of his pieces, and in one actually strikes it.[14] We shall,
however, postpone a more detailed discussion of Scarlatti’s pieces in
relation to the sonata form to the next chapter. The distribution of his
musical material is quite whimsical and irregular, always more
instinctive than experimental. It is chiefly by the quality of this
material that he stands apart from his contemporaries, and as the
founder of the free and brilliant pianoforte style.

There remains little to be said of the æsthetic worth of his music.

During the years of his most vigorous manhood he was almost
invariably a virtuoso. Sheer delight in tonal effects rather than more
sober need of self-expression stimulated him. The prevalence of
trumpet figures such as those which constitute the opening phrases
of the eleventh and fourteenth sonatas in the Breitkopf and Härtel
edition already referred to, suggests that he took a good deal of
material ready-made from the operas of the day. Burney says there
are many passages in which he imitated the melody of tunes sung
by carriers, muleteers, and common people. But what he added to
these was his own. A number of pieces are conspicuous by
especially free modulation and expansion of form; and in these,
technical effects are not predominant, but rather a more serious
interest in composition. It has therefore been suggested that these
pieces are the work of later years.[15] Though it is said that while in
Spain he grew too fat to cross his hands at the harpsichord as was
his wont in his youth, this physical restriction is not alone responsible
for the mellowness and warmth of such pieces as the so-called
Pastoral in D minor, familiar to audiences in Tausig’s elaborated
transcription. A great number of his pieces are rich in pure musical
beauty; and the freshness which exhales from all true musical
utterance is and probably always will be theirs.

None of his contemporaries in Italy approached him in the peculiar

skill which has made him conspicuous in the history of pianoforte
music. Francesco Durante (1684-1755) and Nicolo Porpora (1686-
1767), the great singing master, both wrote pieces for the
harpsichord; the one, ‘sonatas’ in several movements, the other
fugues; but their music lacks charm and can hardly be considered at
all influential in the development of the art of writing for keyboard
instruments. Domenico Alberti and P. D. Paradies will be considered
in the following chapter.
 II
The art of Couperin is flawless, the charm of his music not to be
described. It has that quality of perfection with which Nature marks
her smallest flowers. It is the miniature counterpart in music of a
perfected system of living, of the court life of France under Louis XIV.

Scarlatti was a rover. He tried his fortune in Italy, in England, in

Portugal and Spain. He won it by the exhibition of his extraordinary
and startling powers. He was on the alert to startle, his tribute the
bravas and mad applause of his excited hearers. He was the
virtuoso in an old sense of the word, the man with his powers
consciously developed to the uttermost. Bach, on the other hand,
was an introspective, mighty man, immeasurably greater than his
surroundings, fathomless, personal, suggestive. Between them
stands Couperin, for the greater part of his life in the intimate service
of the most brilliant court the world has ever seen, delicate in health,
perfect in etiquette, wise and tender.

Of his life little need be said. He was born in Paris on November 10,
1668, the son of Charles Couperin, himself a musician and brother to
Louis and François Couperin, disciples of the great Chambonnières.
The father died about a year after his son was born, and the musical
education of the young François seems to have been undertaken by
his uncle, François, and later by Jacques Thomelin, organist in the
king’s private chapel in Versailles. Practically nothing is known of his
youth, and, though it is certain that he was for many years organist
at the church of St. Gervais in Paris, as his uncle and even his
grandfather had been before him, the time at which he took up his
duties there has not been exactly determined. There is on record,
however, the account of a meeting held on the twenty-sixth of
December, 1693, at Versailles, at which Louis XIV heard Couperin
play and chose him from other competitors to succeed Thomelin as
his private organist. Thenceforth he passed his life in service of the
king and later of the regent. He died in Paris in 1733, after several
years of ill health.
The great François was, no doubt, an unusually skillful organist, but
his fame rests upon his work for the clavecin, the French
harpsichord, and his book of instruction for that instrument. His
duties at court were various. He says himself that for twenty years he
had the honor to be with the king, and to teach, almost at the same
time, Monseigneur le Dauphin, the Duke of Burgundy, and six
princes or princesses of the royal house.

In his preface to the Concerts royaux he informs us that chamber

concerts were given in the king’s presence on Sunday afternoons at
Versailles, and that he was commanded to write music for them and
that he himself played the clavecin at them. His book on the art of
playing the clavecin, written in 1716, was dedicated to the king. By
all accounts he was a beloved and highly prized teacher and
performer. And neither his pupils nor his fame were confined solely
to the court.

There is no doubt that he was a public favorite and that he published

his pieces for the clavecin to satisfy a general demand. Also in a
measure to safeguard his music. For at that time instrumental pieces
were not often published, but were circulated in manuscript copies in
which gross errors grew rapidly as weeds; and which, moreover,
were common booty to piratical publishers, especially in the
Netherlands. So Couperin took minute care in preparing his music
for his public. Each set of pieces was furnished with a long preface,
nothing in the engraving was left to chance, the books were
beautifully bound so that all might be in keeping with the dainty and
exquisite art of the music itself. Since his day his pieces were never
published again until Madame Farrenc included the four great sets in
her famous Trésor des Pianistes (1861-72). This edition was,
according to Chrysander,[16] very carelessly prepared and is full of
inaccuracies. Chrysander planned a new, accurate and complete
edition, to be edited by Brahms, of which unhappily only one volume,
containing Couperin’s first two books, ever came to print.

The original editions being now rare and priceless, and hardly
serviceable to the average student on account of the confusing
obsolete clef signs, it is to be hoped that before long Chrysander’s
plan will be carried out and the almost forgotten treasures of
Couperin’s clavecin music be revealed in their great beauty to the
lover of music.

Couperin published in all five books of pièces de clavecin. Of these

the first appeared early in the century and is not commonly reckoned
among his best works. The other four sets appeared respectively in
1713, 1716, 1722, and 1730.

Each book contains several sets of pieces grouped together in

ordres, according to key.[17] The canon of the suite is wholly
disregarded and there is very little of the spirit of it. The first ordre, it
is true, has as the first six pieces an allemande, two courantes, a
sarabande, a gavotte, and a gigue; but there are twelve pieces in
addition, of which only three are named dances. The second ordre,
too, has an allemande, two courantes, and a sarabande at the
beginning; but there follow eighteen more pieces of which only four
are strictly dances. The fourth ordre is without true dance forms; so
are the sixth, the seventh, the tenth, and others. Even the orthodox
dances are given secondary titles, or the dance name is itself
secondary. In fact, not only by including within one ordre many more
pieces than ever found place within the suite, but by the very
character of the pieces themselves, Couperin is dissociated from the
suite writers.

He wrote in the preface to his first book of pieces,[18] that in

composing he always had a particular subject before his eyes. This
accounts for the titles affixed to most of his pieces. We have already
referred to ‘battle’ pieces of earlier composers, and to Kuhnau’s
narratives in music. Couperin’s music is not of the same sort. The
majority of his titled pieces are pure music, admirable and charming
in themselves. They are seldom copies. They make their appeal, or
they are intelligible, not by what they delineate, but by what they
express or suggest. The piece as a whole gives an impression, not
the special figures or traits of which it is composed.
Let us consider a few of many types. Take what have been often
called the portraits of court ladies. In these we cannot by any effort of
the imagination find likenesses. It would be ludicrous to try. As ladies
may differ in temperament from each other, so do these little pieces
differ. There is the allemande L’Auguste, which is a dignified,
somewhat austere dance piece in G minor; another, La Laborieuse,
in a complicated contrapuntal style unusual with him. There are three
sarabandes called La Majesteuse, La Prude, and La Lugubre,
impressive, meagre, and profound in turn. These pieces are hardly
personal, nor have they peculiar characteristics apart from the spirit
which is clear in each of them.

Another type of portrait fits its title a little more tangibly. There is La
Mylordine, in the style of an English jig; La Diane, which is built up
on the fanfare figure always associated with the hunt; La Diligente,
full of bustling finger work. Les Nonnettes are blonde and dark, the
blondes, oddly enough, in minor, the dark in major.

Many others are so purely music, delicate and tender, that the titles
seem more to be a gallant tribute to so and so, rather than the
names of prototypes in the flesh. La Manon, La Babet, La fleurie, ou
la tendre Nanette, L’Enchanteresse, La tendre Fanchon, and many
others are in no way program music; nor can they ever be
interpreted as such, since no man can say what charming girl, two
centuries dead, may have suggested their illusive features.

It is these ‘portraits’ particularly which are Couperin’s own new

contribution to the art of music. So individual is the musical life in
each one, so special and complete its character, so full of sentiment
and poetry, that, small as it is, it may stand alone as a perfect and
enduring work of art. It has nothing to do with the suite or with any of
the cyclic forms. Here are the first flowers from that branch of music
from which later were to grow the nocturnes of Field, the Moments
musicals of Schubert, the preludes of Chopin.

Between these and the few pieces which are frankly almost wholly
dependent upon a program are a great number of others lightly
suggestive of their titles. Sometimes it is only in general character.
Les vendangeuses and Les moissoneurs do not seem so particularly
related to wine-gathering or harvesting that the titles might not be
interchanged; but both have something of a peasant character. In
Les abeilles and in Le moucheron the characterization is finer. The
pleasant humming of the bees is reproduced in one, the monotonous
whirring of the gnat in the other. Les bergeries is simply pastoral, Les
matelots Provençales is a lively march, followed by a horn-pipe. Les
papillons is not unlike the little piece so named in the Schumann
Carnaval, though here it means but butterflies. There are some
imitative pieces which are in themselves charming music, such as
Les petits moulins à vent, Le réveille-matin, Le carillon de Cythère,
and Les ondes, with its undulating figures and fluid ornamentation.

Finally the program music is in various degrees programmistic. A

little group of pieces called Les Pèlerines (Pilgrims) begins with a
march, to be played gaily. Then comes a little movement to
represent the spirit of alms-giving, in a minor key, to be played
tenderly; and this is followed by a cheerful little movement of thanks,
to which is added a lively coda. The whole is rather an expression of
moods than a picture of actions. Les petits ages is in some respects
more literal. The first movement, La muse naissante, is written in a
syncopated style, the right hand always following the left, which may
well express weakness and hesitation. L’adolescente, the third
movement, is a lively rondo in vigorous gavotte rhythm.

Two sets are entirely program music. One of these, Les

Bacchanales, has a march (pésament, sans lenteur) of the gray-clad
ones; then three movements expressive of the delights of wine, the
tenderness to which it warms and the madness to which it enflames.
The music is not of itself interesting. More remarkable, though
devoid of musical worth save a good bit of the comical, is Les fastes
de la grande et ancienne Mxnxstrxndxsx. These records or tales are
divided into five acts, which represent the notables and judges of the
kingdom, the old men and the beggars (over a drone bass), the
jugglers, tumblers and mountebanks, with their bears and monkeys,
the cripples (those with one arm or leg played by the right hand,
those who limp played by the left), and, finally, the confusion and
flight of all, brought about by the drunkards and the bears and
monkeys.

III
The last of these compositions are in no way representative of
Couperin the artist. They might have been written by any one who
had a love for nonsense, and they are not meant to be taken
seriously. The quality of Couperin’s contribution to music must be
tested in such pieces as Le bavolet-flottant, La fleurie, Les
moissoneurs, Le carillon de Cythère, and La lugubre. His harmony is
delicate, suggesting that of Mozart and even Chopin, to whom he is
in many ways akin. He does not, like Scarlatti, wander far in the
harmonic field; but in a relatively small compass glides about by
semi-tones. There is, of course, a great deal of tonic and dominant,
such as will always be associated with a certain clear-cut style of
French dance music; but the grace of his melody and his style is too
subtle to permit monotony. The harmonies of the sarabande La
lugubre are profound.

In form he is precise. His use of the rondo deserves special

attention. In this form he cast many of his loveliest pieces, and it is
one which never found a place in the suite. It is very simple, yet in
his hands full of charm. The groundwork of one main theme
recurring regularly after several episodes or contrasting themes was
analyzed in the previous chapter. Couperin called his episodes
couplets, and his rondos are usually composed of the principal
theme and three couplets. He does not invariably repeat the whole
theme after each couplet, but sometimes, as in Les bergeries, only a
characteristic phrase of it. The couplets are generally closely related
to the main theme, from which they differ not in nature, but chiefly in
ornamentation and harmony. Much of the charm of his music is due
to the neat proportions of this hitherto neglected form. It was native
to him as a son of France, where, from the early days of the singers
of Provence, the song in stanzas with its dancing refrain had been
beloved of the people. Through him it found a place in the great
instrumental music of the world.

Couperin’s style is too delicate to be caught in words. To call it the

style galant merely catalogues it as a free style, highly adorned with
agrémens. The freedom is of course the freedom from all trace of
polyphony in the old sense, of strict leading of voices from beginning
to end. Couperin adds notes to his harmonic background when and
where he will; so that it is impossible to say whether a piece is in
two, or three, or four parts, because it is in no fixed number of parts
at all.

The countless agrémens are more than an external feature of his

music, and of other music of his time. The analogies which have
often been drawn between them and the formal superficialities of
court life under the great Louis are in the main false. Both Couperin
and Emanuel Bach, a man of perhaps less sensitive, certainly of less
elegant, taste, regarded them as of vital importance. Even the
learned Kuhnau, who can hardly be called a stylist at all, considered
them the sugar of his fruit. It would seem as if only by means of
these flourishes harpsichord music could take on some grace of line
and warmth of color. Whatever subtlety of expression the dry-toned
instrument was capable of found life only in the agrémens. We
cannot judge of the need of them nor of their peculiar beauties by the
sound of them on the modern pianoforte, even under the lightest
fingers. It is open to question whether any but a few of them should
be retained in the performance of Couperin’s works, now that the
instrument, the shortcomings of which they were intended to
supplement, has been banished in general from the concert stage.

This is not only because the peculiarities of the pianoforte call for a
different kind of ornamentation, but also because the playing of
harpsichord flourishes is practically a lost art. Couperin and Emanuel
Bach left minute directions and explanations in regard to them; but in
their treatises we have only the letter of the law, not the spirit which
inspired it. Even in their day, in spite of all laws, the agrémens were
subject to the caprice of the player; and they remained so down to
the time of Chopin.

Neither the freedom from polyphonic strictness nor the profusion of

ornaments are the special peculiarities of Couperin’s style. They
were more or less common to a great deal of the harpsichord music
of his day. But he had a way, all his own at that time, of
accompanying his melodies with a sort of singing bass or a
melodious inner voice that moved with the melody in thirds or sixths,
or in smooth contrary motion. This may be studied in such pieces as
La fleurie, Le bavolet-flottant, Les moissoneurs, Les abeilles, and
many others. It has little to do with polyphony. The accompanying
voices are only suggested. They never claim attention by their own
movement. They seem a sort of spirit or tinted shadow of the
melody, hardly more than whispering.

This accounts in part for what we may call the tenderness of

Couperin’s music, a quality which makes itself felt no matter how
elusive it may be. He marked most of his pieces to be played with a
special expressiveness, and frequently used the word tendrement.
This, he admitted in one of his prefaces, was likely to surprise those
who were aware of the limitations of the clavecin. He knew that the
‘clavecin was perfect as regards scope and brilliance, but that one
could not increase or diminish the tone on it.’ His thanks would be
forthcoming to one who through taste and skill would be able to
improve its expression in this respect. He was not above all else a
virtuoso. 'J’ayme beaucoup mieux ce qui me touche que ce qui me
surprend,’ he wrote in 1713. There is no doubt that he desired the
greatest refinement of touch and shading in the expression of his
music, and that he suffered under the limitations of the instrument for
which he wrote. For the texture of his music is soft and delicate, its
loveliness has a secret quality, hardly more than suggested by the
shadowy inner voices. We cannot but be reminded of Chopin, in
whose music alone the spirits of music whispered again so softly
together.
Among the contemporaries of Couperin, Marchand, Claude Daquin
(1694-1772), and J. P. Rameau (1683-1764) are best known, at least
by name, today. Marchand is remembered chiefly by reason of the
episode with Bach in Dresden. Daquin enjoyed a brilliant reputation
as an organist in his day. One of his pieces for clavecin—‘The
Cuckoo’—is still heard today. J. B. Weckerlin quoted an amusing
bird-story[19] about Daquin, the burden of which is that one
Christmas eve Daquin imitated the song of a nightingale so perfectly
on the organ in church that the treasurer of the parish dispatched
beadles throughout the edifice in search of a live songster.

Rameau is a greater figure in the general history of music than

Couperin himself; yet, though his harpsichord pieces are, perhaps
therefore, better known than those of the somewhat earlier man,
they lack the most unusual charm and perfection of Couperin’s.
There are fifty-three of these in all. Ten were published in 1706, of
which a gavotte in rondo form in A minor is best known. A second
set of twenty-one pieces appeared in 1724, containing the still
famous Rappel des oiseaux, the Tambourin, Les niais de Sologne,
La poule, the Gavotte with variations, in A minor, and many others.
Sixteen more followed, written between 1727 and 1731. In 1747 a
single piece—La Dauphine—was published. Besides these, all
written originally for harpsichord, he published five arrangements of
his Pièces de concert, written in the first place for a group of three or
more instruments.

Rameau’s style is less delicate than Couperin’s. It is not only that

there are fewer agrémens. The workmanship is more vigorous, more
dramatic; the music itself less intimate. The first gavotte in A minor,
the doubles in the Rigaudon and in Les niais de Sologne, the
variations in the second gavotte in A minor, and La Dauphine, all
speak of a technical enlargement. Yet a certain fineness is lacking. It
will be noticed that he showed hardly more allegiance to the canon
of the suite than Couperin had shown; and there is a large portion of
titles such as Les tendres plaintes, Les soupirs, L’entretien des
muses, and there are also many portraits: La joyeuse, La
triomphante, L’Egyptienne, L’agaçante, and others.
In the preface to the new edition of his works published under the
supervision of Camille Saint-Saëns, there is the following quotation
from Amadée Mereaux’s Les clavecinistes de 1637-1790, which
summarizes his position in the history of harpsichord music. ‘If there
is lacking in his melodies the smoothness of Couperin, the
distinction, the delicacy, the purity of style which give to the music of
that clavecin composer to Louis XIV its so precious quality of charm,
Rameau has at least a boldness of spirit, an animation, a power of
harmony and a richness of modulation. The reflection of his operatic
style, lively, expressive, always precise and strongly rhythmical, is to
be found in his instrumental style. In treatment of the keyboard
Rameau went far ahead of his predecessors. His technical forms, his
instrumental designs, his variety and brilliance in executive
resources, and his new runs and figures are all conquests which he
won to the domain of the harpsichord.’ Rameau is primarily a
dramatic composer. It may be added that several of his harpsichord
pieces later found a place in his operas, usually as ballet music.

IV
A glance over the many pieces of Scarlatti and Couperin discovers a
vast field of unfamiliar music. If one looks deep enough to perceive
the charm, the beauty, the perfection of these forgotten
masterpieces, one cannot but wonder what more than a trick of time
has condemned them to oblivion. For no astonished enthusiasm of
student or amateur whose eye can hear, renders back glory to music
that lies year after year silent on dusty shelves. The general ear has
not heard it. The general eye cannot hear it as it can scan the
ancient picture, the drama, the poetry of a time a thousand or two
thousand years ago. Music that is silent is music quite forgotten if not
dead.

And, what is more, the few pieces of Couperin which are still heard
seem almost to live on sufferance, as if the life they have were not of
their own, but lent them by the listener disposed to imagine a
courtier’s life long ago washed out in blood. ‘Sweet and delicate,’
one hears of the music of Couperin, as one hears of some bit of old
lace or old brocade, that has lain long in a chest of lavender. Yet the
music of Couperin is far more than a matter of fashion. It is by all
tokens great art. The lack is in the race of musicians and of men who
have lost the art of playing it and the simplicity of attentive listening.

To a certain extent the music of Sebastian Bach suffers from the

same lack. On the other hand, the spirit of his music is perennial and
it holds a rank in the modern ear far above that held by any other
harpsichord music. Apart from indefinable reasons of æsthetic worth
there are other reasons why Bach’s music, at any rate a
considerable part of it, is still with us.

In the first place, the style of its texture is solid. Instead of being
crushed, as Couperin’s music is, by the heavy, rich tone of the
modern pianoforte, it seems to grow stronger by speaking through
the stronger instrument. Bach’s style is nearly always an organ style,
whether he is writing for clavichord, for chorus, for bands or strings.
It is very possible that a certain mystical, intimate sentiment which is
innate in most of his clavichord music cannot find expression through
the heavy strings of the pianoforte. This may be far dearer than the
added depth and richness which the pianoforte has, as it were,
hauled up from the great reservoirs of music he has left us. But it is
none the less true that the high-tensioned heavy strings on their
gaunt frame of cast iron need not call in vain on the music of Bach to
set the heart of them vibrating.

In the second place, the two-and three-part ‘Inventions,’ and the

preludes and fugues in the ‘Well-Tempered Clavichord’ have proved
themselves to be, as Bach himself hoped, the very best of teaching
or practice pieces. It is not that your conventional Mr. Dry-as-dust
teacher has power to inflict Bach upon every tender, rebellious
generation. It is rather that the pieces themselves cannot be excelled
as exercises, not only for the fingers but for the brain. One need not
delve here into the matter of their musical beauty, but one must
pause in amazement before their sturdiness, which can stand up,
still resilient, under the ceaseless hammering of ten million sets of
fingers. Clementi and Czerny are being pounded into insensibility;
Cramer, despite the recommendations of Beethoven, is breathing his
last; Moscheles, Dohler, Kalkbrenner, and a host of others are laid to
rest. But here comes Bach bobbing up in our midst seeming to say:
‘Hit me! Hit me as hard as you like and still I’ll sing. And when you
know me as well as I know you, you’ll know how to play the piano.’
So Bach has been, is, and will be introduced to young people. He
inspires love, or hate, or fear—a triple claim to remembrance.

In the third place, there is an intellectual complexity in his music

which, as a triumph of human skill over the masses of sound,
deserves and has won an altar with perpetual flame. And the marvel
is that this skill is rarely used as an end in itself, but as a means of
expressing very genuine and frank emotion. Here we come upon
perhaps the great reason of Bach’s immortality—the warmth of his
music. It is almost uniquely personal and subjective. In it he poured
forth his whole soul with a lack of self-consciousness and a complete
concentration. His was a powerful soul, always afire with
enthusiasm; and his emotion seems to have clarified and crystallized
his music as heat and pressure have made diamonds out of carbon.

Bach was a lovable man, but a stern and somewhat bellicose one as
well. He was shrewd enough to respect social rank quite in the
manner of his day, as the dedication of the Brandenburg concertos
plainly shows; but the records of his various quarrels with the
municipal authorities of Leipzig prove how quick he was to
unrestrained wrath whenever his rights either as man or artist were
infringed upon. A great deal of independence marked him. The same
can hardly be said either of Scarlatti or of Couperin, the one of whom
was lazy and good-natured, the other gently romantic and extremely
polite. Scarlatti rather enjoyed his indifference to accepted rules of
composition; and there was nothing either of self-abasement or of
self-depreciation in Couperin; but both lacked the stalwart vigor of
Bach. Scarlatti aimed, confessedly, to startle and to amuse by his
harpsichord pieces. He cautioned his friends not to look for anything
particularly serious in them. It is hard to dissociate an ideal of pure
and only faintly colored beauty from Couperin. But in the music of
Bach one seldom misses the ring of a strong and even an impetuous
need of self-expression. In the mighty organ works, and in the vocal
works, one may believe with him that he sang his soul out to the
glory of his Maker; but in the smaller keyboard pieces sheer delight
in expressing himself is unmistakable.

It is this that makes Bach a romanticist, while Couperin, with all his
fanciful titles, is classic. It is this that made Bach write in nearly the
same style for all instruments, drawing upon his personal inspiration
without consideration of the instrument for which he wrote; while
Couperin, exquisitely sensitive to all external impressions, forced his
fine art to conformity with the special and limited qualities of the
instrument for which he wrote the great part of his music. And, finally,
it is this which produced utterance of so many varied moods and
emotions in the music of Bach; while in the music of Couperin we
find all moods and emotions tempered to one distinctly normal cast
of thought.

Bach has been the subject of so much profound and special study
that there is little to be added to the explanation of his character or of
his works. In considering him as a composer for the harpsichord or
clavichord, one has to bear two facts in mind: that he was a great
player and a great teacher.

There is much evidence from his son and from prominent musicians
who knew him, that the technical dexterity of his fingers was
amazing. He played with great spirit and, when the music called for
it, at a great speed. Perhaps the oft-repeated story of his triumph
over the famous French player, Marchand, who, it will be
remembered, defaulted at the appointed hour of contest, has been
given undue significance. As we have had occasion to remark, in
speaking of the contest between Handel and D. Scarlatti, such
tourneys at the harpsichord were tests of wits, not of fingers. Bach
was first of all an organist and it may be suggested, with no
disloyalty to the great man among musicians, that he played the
harpsichord with more warmth than glitter. We find little evidence in
his harpsichord music of the sort of virtuosity which makes D.
Scarlatti’s music astonish even today; or, it may be added, of the
special flexible charm which gives Couperin’s its inimitable grace.

Bach is overwhelming as a virtuoso in his organ music, especially in

passages for the pedals. In his harpsichord music he achieves a
rushing, vigorous style. It must not be overlooked that Bach wrote
also for the clavichord, quite explicitly, too. Most of the Forty-eight
Preludes and Fugues are distinctly clavichord, not harpsichord,
music. That is to say, they require a fine shading which is impossible
on the harpsichord. When he wrote for the harpsichord he had other
effects in mind. The prelude of the English suite in G minor or the
last movement of the Italian concerto may be taken as
representative of his most vigorous and effective harpsichord style.
They are different not only in range and breadth, but in spirit as well,
from practically all of the ‘Well-Tempered Clavichord.’ Nevertheless,
though these may be taken fairly as examples of his harpsichord
style at its best and strongest, they are not especially effective as
virtuoso music. There is sheer virtuosity only in the Goldberg
Variations.

To Bach as a teacher we owe the Inventions and the ‘Well-Tempered

Clavichord,’ both written expressly for the use and practice of young
people who wished to learn about music and to acquire a taste for
the best music. Volumes might well be filled with praise of them. It
will suffice us only to note, however, that to master the technical
difficulties of the keyboard was always for Bach only a step toward
the art of playing, which is the art of expressing emotion in music.
These two sets of pieces are all-powerful evidence of this—his creed
—in accordance with which he always nobly lived and worked. They
have but one parallel in pianoforte music: the Études of Chopin. The
‘Well-Tempered Clavichord’ is, and always will be, essentially a study
in expression.

His system of tempering or tuning the clavichord, by reason of which

he has often been granted a historical immortality, was the relatively
simple one of dividing the octave into twelve equal intervals. Only the
octave itself was strictly in tune, but the imperfections of the other
intervals were so slight as to escape detection by the most practised
ear. By paying the nominal toll of theoretical inaccuracy, Bach
opened the roads of harmonic modulation on every hand. It must not
be forgotten, however, that most of the pieces of Couperin or
Scarlatti, not to mention many an outlandish chromatic tour de force
in the works of the early English composers, would have been
intolerable on a harpsichord strictly in tune. Other men than Bach
had their systems of temperament. We may take Bach’s only to be
the simplest.

Furthermore, that he created a new development of pianoforte

technique by certain innovations in the manner of fingering
passages, is open to question. It is well known that up to the
beginning of the eighteenth century the use of the thumb on the
keyboard was generally discountenanced. Bach himself had seen
organists play who avoided using the thumb even in playing wide
stretches. Scales were regularly played by the fingers, which, without
the complement of the thumb, passed sideways over each other in a
crawling motion which is said to have been inherited from the
lutenists. Couperin advocated the use of the thumb in scales, but
over, and not under, the fingers. Bach seems the first to have openly
advised and practised passing the thumb under the fingers in the
manner of today. Yet even he did not give up entirely the older
method of gliding the fingers over each other in passages up and
down the keyboard.

His system passed on through the facile hands of his son Emanuel,
the greatest teacher of the next generation; and if it is not the crest of
the wave of new styles of playing which was to break over Europe
and flood a new and special pianoforte literature, is at any rate a
considerable part of its force. Yet it must be borne in mind that
Scarlatti founded by his own peculiar gifts a tradition of playing the
piano and composing for it, in which Clementi was to grow up; and
that, influential as Emanuel Bach was, Clementi was the teacher of
the great virtuosi who paved the way to Chopin, the composer for the
piano par excellence.
The foundation of all Bach’s music is the organ. Even in his works for
violin alone, or in those for double chorus and instruments, the
conjunct, contrapuntal style of organ music is unmistakable. His
general technique was acquired by study of the organ works of his
great predecessors, Frescobaldi, Sweelinck, Pachelbel, Buxtehude,
Bohm, and others. He was first and always an organist. So it is not
surprising to find by far the greater part of his harpsichord and
clavichord music shaped to a polyphonic ideal; and, what is more,
written in the close, smooth style which is primarily fitting to the
organ.

His intelligence, however, was no less alert than it was acute. There
is evidence in abundance that he not only knew well the work of
most of his contemporaries, but that he appropriated what he found
best in their style. He seems to have found the violin concertos of
Vivaldi particularly worthy of study. He was indebted to him for the
form of his own concertos; and, furthermore, he adapted certain
features of Vivaldi’s technique of writing for the violin to the
harpsichord. Of the influence of Couperin there is far less than was
once supposed. The ‘French Suites’ were not so named by Bach
and are, moreover, far more in his own contrapuntal style than in the
tender style of Couperin. Kuhnau’s Bible sonatas are always cited as
the model for Bach’s little Capriccio on the departure of his brother;
but elsewhere it is hard to find evidence of indebtedness to Kuhnau.

But he even profited by an acquaintance with the trivial though

enormously successful Italian opera of his day, and used the da
capo aria as frankly as A. Scarlatti or J. A. Hasse. Still, whatever he
acquired from his contemporaries was but imposed upon the great
groundwork of his art, his organ technique. He never let himself go
upon the stream of music of his day, but held steadfast to the ideal
he had inherited from a century of great German organists, of whom
he was to be the last and the greatest.

So, for the most part, the forms which had evolved during the
seventeenth century were the forms in which he chose to express
himself. Of these, two will be for ever associated with him, because