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EIGHTH EDITION
Marketing
Strategy
TEXT AND CASES
O.C. Ferrell
Auburn University
Michael D. Hartline
Florida State University
Bryan W. Hochstein
University of Alabama
Australia ● Brazil ● Canada ● Mexico ● Singapore ● United Kingdom ● United States
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Bryan W. Hochstein
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Printed in the United States of America

Print Number: 01 Print Year: 2021
To my wife, Linda
O.C. Ferrell
To the amazing women in my life, Marsha, Meghan, Madison, and Mallory

Michael D. Hartline
To my family who support and encourage me: Susan, Rachel, and Matthias
Bryan W. Hochstein
Brief Contents
PART 1 Setting the Stage for Marketing Strategy

CHAPTER 1 Marketing in Today’s Economy 1
CHAPTER 2 Strategic Marketing Planning 27
PART 2 Discovering Market Opportunities

CHAPTER 3 Collecting and Analyzing Marketing Information 53
CHAPTER 4 Developing Competitive Advantage and Strategic Focus 83
PART 3 Developing Marketing Strategy

CHAPTER 5 Customers, Segmentation, and Target Marketing 113
CHAPTER 6 The Marketing Program 145
CHAPTER 7 Branding and Positioning 187
PART 4 Putting Strategy into Action

CHAPTER 8 Ethics and Social Responsibility in Marketing Strategy 211
CHAPTER 9 Marketing Implementation and Control 237
CHAPTER 10 Developing and Maintaining Long-Term Customer Relationships 263
PART 5 Cases
CASE 1 Tesla Races Ahead With Nontraditional Marketing Strategy 291
CASE 2 Businesses Sink or Swim in the Face of COVID-19 Crisis 301
CASE Gainsight Provides a Data-Driven Customer Relationship Platform to
3
Retain Subscription Customers 311
CASE 4 Apple Bites Back 319
CASE 5 Uber: The Opportunities and Challenges of Market Disruption 333
CASE Social Responsibility Is the Key Ingredient at New Belgium Brewing
6 345
CASE 7 Bayer Grows With Monsanto Acquisition 355
CASE 8 Netflix Fights to Stay Ahead of a Rapidly Changing Market 367
CASE From the Outside In: Corporate Social Responsibility at Patagonia
9 375
CASE 10 Google Searches for Solution to Privacy Issues 381
CASE 11 IndyCar: Seeking a Return to Motorsports’ Fast Lane 399
CASE 12 Mattel Gives Its Marketing Strategy a Makeover 409
CASE 13 Starbucks Perfects Its Blend 419
vii
viii Brief Contents
CASE 14 Zappos Finds the Perfect Fit 431

CASE 15 Gillette’s Razor-Sharp Innovation May Not Be Enough 441
CASE 16 TOMS Kicks the One for One Model to the Curb 451
CASE 17 Herbalife Manages Risks for Long-Term Success 461
CASE 18 Walmart Dominates With World-Class Supply Chain 477
CASE 19 E-commerce Soars With Shopify 487
CASE 20 Mini Case: Cutting Edge Quality at Cutco 497
CASE Mini Case: The Cocoa Exchange Finds a Sweet Spot in the Supply
21
Chain 503
Appendix Marketing Plan Worksheets 507

Glossary 517
Index 525
Contents
PART 1 Setting the Stage for Marketing Strategy

CHAPTER 1
Marketing in Today’s Economy 1
Introduction 1
Beyond the Pages 1.1 The Future of Marketing 2
The Challenges and Opportunities of Marketing in Today’s Economy 3
Power Shift to Customers 3
Changes in Products and Selection 4
Audience and Media Fragmentation 5
Changing Value Propositions 6
Shifting Demand Patterns 6
Privacy, Security, and Ethical Concerns 7
Unclear Legal Jurisdiction 8
Basic Marketing Concepts 8
What Is a Market? 9
What Is Exchange? 10
What Is a Product? 11
Beyond the Pages 1.2 The A-to-z of Amazon’s Marketing Strategy 14
Major Marketing Activities and Decisions 14
Strategic Planning 14
Research and Analysis 15
Developing Competitive Advantage 16
Marketing Strategy Decisions 16
Social Responsibility and Ethics 18
Implementation and Control 19
Developing and Maintaining Customer Relationships 20
Beyond the Pages 1.3 A Perfect Fit: Strategy at Zappos 21
Taking on the Challenges of Marketing Strategy 21
Lessons from Chapter 1 23
CHAPTER 2
Strategic Marketing Planning 27
Introduction 27
Beyond the Pages 2.1 Escaping the Commodity Trap 28
The Strategic Planning Process 29
Organizational Mission Versus Organizational Vision 30
Corporate or Business-Unit Strategy 33
Beyond the Pages 2.2 Johnson & Johnson Strengthens Its Credo 34
Functional Goals and Objectives 35
Functional Strategy 35
Implementation 35
Evaluation and Control 36
The Marketing Plan 36
Marketing Plan Structure 37
Using the Marketing Plan Structure 42
Purposes and Significance of the Marketing Plan 44
Organizational Aspects of the Marketing Plan 44
ix
x Contents
Maintaining Customer Focus and Balance in Strategic Planning 45

Customer-Focused Planning 45
Balanced Strategic Planning 47
Beyond the Pages 2.3 Spotify Eyes the Next Generation 47
PART 2 Discovering Market Opportunities

CHAPTER 3
Collecting and Analyzing Marketing Information 53
Introduction 53
Beyond the Pages 3.1 Big Data, Big Marketing Analytics 54
Conducting a Situation Analysis 55
The Human Element 55
Data, Analytics, and Insights Are Not the Same 56
Situation Analysis Should Be Used Strategically 56
The Internal Environment 58
Review of Current Objectives, Strategy, and Performance 59
Availability of Resources 59
Organizational Culture and Structure 60
The Customer Environment 61
Who Are Our Current and Potential Customers? 61
What Do Customers Do With Our Products? 61
Where Do Customers Purchase Our Products? 63
When Do Customers Purchase Our Products? 64
Why (and How) Do Customers Select Our Products? 64
Beyond the Pages 3.2 Cleaning Up E-waste 65
Why Do Potential Customers Not Purchase Our Products? 66
The External Environment 66
Competition 68
Economic Growth and Stability 69
Political Trends 70
Legal and Regulatory Issues 70
Technological Advancements 71
Sociocultural Trends 72
Collecting Marketing Data and Information 75
Secondary Information Sources 75
Beyond the Pages 3.3 Instagram Uses Big Data to Discover Trends 76
Primary Data Collection 78
Overcoming Problems in Data Collection 79
CHAPTER 4
Developing Competitive Advantage and Strategic Focus 83
Introduction 83
Beyond the Pages 4.1 Why Innovative Companies Succeed 84
Modern Relevance of SWOT Analysis 86
Making SWOT Analysis Productive 86
Stay Focused 87
Search Extensively for Competitors 87
Collaborate With Other Functional Areas 87
Examine Issues From the Customers’ Perspective 88
Look for Causes, Not Characteristics 89
Separate Internal Issues From External Issues 90
Adopt a Disruptive Mindset 91
Contents xi
SWOT-Driven Strategic Planning 92

Strengths and Weaknesses 93
Opportunities and Threats 94
The SWOT Matrix 95
Developing and Leveraging Competitive Advantages 98
Establishing a Strategic Focus 102
Beyond the Pages 4.2 Kroger Goes Digital for Grocery Growth 102
Developing Marketing Goals and Objectives 105
Beyond the Pages 4.3 Diving Into Blue Ocean Strategy 105
Developing Marketing Goals 106
Developing Marketing Objectives 108
Moving Beyond Goals and Objectives 110
PART 3 Developing Marketing Strategy

CHAPTER 5
Customers, Segmentation, and Target Marketing 113
Introduction 113
Beyond the Pages 5.1 How Social Media Segmentation Impacts Strategy 114
Buyer Behavior in Consumer Markets 115
The Consumer Decision Journey 115
Factors That Affect the Consumer Purchase Decision Journey 122
Buyer Behavior in Business Markets 124
Unique Characteristics of Business Markets 125
The Business Buying Process 126
Market Segmentation 128
Traditional Market Segmentation Approaches 128
Beyond the Pages 5.2 The Opportunities in Multicultural Marketing 129
Individualized Segmentation Approaches 130
Criteria for Successful Segmentation 132
Identifying Market Segments 133
Beyond the Pages 5.3 Strategies Pop in the Beverage Industry 133
Segmenting Consumer Markets 134
Segmenting Business Markets 138
Target Marketing Strategies 139
CHAPTER 6
The Marketing Program 145
Introduction 145
Beyond the Pages 6.1 Tesla Veers Away From Traditional Marketing Strategy 146
Product Strategy 147
Strategic Issues in the Product Portfolio 147
The Challenges of Service Products 149
Developing New Products 151
Pricing Strategy 152
Key Issues in Pricing Strategy 153
Beyond the Pages 6.2 Clearance Pricing Is Unclear 153
Base Pricing Strategies 160
Adjusting the Base Price 161
Supply Chain Strategy 162
Strategic Supply Chain Issues 164
Trends in Supply Chain Strategy 167
xii Contents
Beyond the Pages 6.3 Walmart Dominates Supply Chain Management 169
Integrated Marketing Communications 171
Strategic Issues in Integrated Marketing Communications 172
Advertising 173
Public Relations 175
Personal Selling and Sales Management 176
Sales Promotion 179
CHAPTER 7
Branding and Positioning 187
Introduction 187
Beyond the Pages 7.1 Is It Really Made in USA? 188
Strategic Issues in Branding 189
Basic Branding Decisions 190
Strategic Brand Alliances 193
Brand Value 193
Packaging and Labeling 195
Beyond the Pages 7.2 Barbie Gets a Makeover 196
Differentiation and Positioning 196
Bases for Differentiation 198
Positioning Strategies 200
Mananging Brands Over Time 201
Development Stage 202
Introduction Stage 203
Growth Stage 204
Maturity Stage 205
Decline Stage 205
Beyond the Pages 7.3 Nintendo Bets Big on the Switch 206
PART 4 Putting Strategy into Action

CHAPTER 8
Ethics and Social Responsibility in Marketing Strategy 211
Introduction 211
Beyond the Pages 8.1 Salesforce Adopts a Stakeholder Orientation 212
Ethics and Social Responsibility in Marketing Strategy 213
Dimensions of Social Responsibility 213
Sustainability 216
Beyond the Pages 8.2 It’s Not Easy Being Green 217
Marketing Ethics and Strategy 218
Ethics and Social Responsibility Challenges 219
Ethical Issues in the Marketing Program 221
Product-Related Ethical Issues 222
Pricing-Related Ethical Issues 222
Supply Chain-Related Ethical Issues 224
Promotion-Related Ethical Issues 225
Managing and Controlling Ethical Issues 226
Regulating Marketing Ethics 226
Beyond the Pages 8.3 Evrnu Changes Fashion 226
Ethics Dilemmas Related to Technology 227
Codes of Conduct 227
Ethical Leadership 228
Contents xiii
Relationship to Marketing and Financial Performance 229

Stakeholder Orientation 230
Marketing Financial Performance 230
Incorporating Ethics and Social Responsibility into Strategic Planning 231
CHAPTER 9
Marketing Implementation and Control 237
Introduction 237
Beyond the Pages 9.1 Managing Risk Through Culture 238
Strategic Issues in Marketing Implementation 239
The Link Between Planning and Implementation 239
The Elements of Marketing Implementation 241
Approaches to Marketing Implementation 245
Implementation by Command 245
Beyond the Pages 9.2 Microsoft: Embracing the Competition 246
Implementation Through Change 246
Implementation Through Consensus 247
Implementation as Organizational Culture 248
Internal Marketing and Marketing Implementation 250
The Internal Marketing Approach 250
The Internal Marketing Process 250
Evaluating and Controlling Marketing Activities 252
Formal Marketing Controls 253
Informal Marketing Controls 257
Scheduling Marketing Activities 258
Beyond the Pages 9.3 Harnessing the Power of AI for Marketing Success 258
CHAPTER 10
Developing and Maintaining Long-Term Customer Relationships 263
Introduction 263
Beyond the Pages 10.1 1-800-Flowers Focuses on Customers 264
Managing Customer Relationships 265
Developing Relationships in Consumer Markets 266
Developing Relationships in Business Markets 269
Quality and Value: The Keys to Developing Customer Relationships 270
Understanding the Role of Quality 270
Delivering Superior Quality 273
Understanding the Role of Value 274
Beyond the Pages 10.2 Using AI to Enhance Customer Service 274
Competing on Value 277
Customer Satisfaction: The Key to Customer Retention 278
Understanding Customer Expectations 278
Satisfaction Versus Quality Versus Value 281
Beyond the Pages 10.3 Dealing With Declining Customer Loyalty 282
Customer Satisfaction and Customer Retention 283
Customer Satisfaction Measurement 284
xiv Contents
PART 5 Cases
CASE 1 Tesla Races Ahead With Nontraditional Marketing Strategy 291

CASE 2 Businesses Sink or Swim in the Face of COVID-19 Crisis 301
CASE 3 ainsight Provides a Data-Driven Customer Relationship Platform to Retain
G
Subscription Customers 311
CASE 4 Apple Bites Back 319
CASE 5 Uber: The Opportunities and Challenges of Market Disruption 333
CASE 6 Social Responsibility Is the Key Ingredient at New Belgium Brewing 345
CASE 7 Bayer Grows With Monsanto Acquisition 355
CASE 8 Netflix Fights to Stay Ahead of a Rapidly Changing Market 367
CASE 9 From the Outside In: Corporate Social Responsibility at Patagonia 375
CASE 10 Google Searches for Solution to Privacy Issues 381
CASE 11 IndyCar: Seeking a Return to Motorsports’ Fast Lane 399
CASE 12 Mattel Gives Its Marketing Strategy a Makeover 409
CASE 13 Starbucks Perfects Its Blend 419
CASE 14 Zappos Finds the Perfect Fit 431
CASE 15 Gillette’s Razor-Sharp Innovation May Not Be Enough 441
CASE 16 TOMS Kicks the One for One Model to the Curb 451
CASE 17 Herbalife Manages Risks for Long-Term Success 461
CASE 18 Walmart Dominates With World-Class Supply Chain 477
CASE 19 E-commerce Soars With Shopify 487
CASE 20 Mini Case: Cutting Edge Quality at Cutco 497
CASE 21 Mini Case: The Cocoa Exchange Finds a Sweet Spot in the Supply Chain 503
Appendix Marketing Plan Worksheets 507

Glossary 517
Index 525
Preface
Marketing strategy is interesting, challenging, and important because (1) it is inherently people-
driven, and (2) it is never stagnant. A distinct blend of art and science, marketing strategy is
about people (inside an organization) finding ways to deliver exceptional value by fulfilling the
needs and wants of other people (customers, shareholders, business partners, society at large) as
well as the needs of the organization itself. Marketing strategy draws from psychology, sociology,
and economics to better understand the basic needs and motivations of these people—whether
they are the organization’s customers (typically considered the most critical), its employees, or its
stakeholders. In short, marketing strategy is about people serving people.
Marketing strategy is interesting because it is never stagnant. The simple fact is that people
change. A strategy that works today might not work tomorrow. Products that are popular today
are forgotten next week. These truisms are important because truly understanding marketing
strategy means accepting the fact that there are few concrete rules for developing and implement-
ing marketing activities. Given the constant state of change in the marketing environment, it is
virtually impossible to say that any given marketing mix (product, price, promotion, and distribu-
tion) will produce the best results. Marketing simply doesn’t work that way. The lack of concrete
rules and the ever-changing economic, sociocultural, competitive, technological, and political/
legal landscapes make marketing strategy a terribly fascinating subject.
This also means that marketing strategy is incredibly challenging. A perfect marketing strat-
egy that is executed flawlessly can still fail. Sometimes, organizations are lucky and have success
despite having a terrible strategy and/or execution. The nature of marketing can make marketing
planning quite frustrating.
Finally, the importance of marketing strategy is undeniable. No other business function focus-
es on developing relationships with customers—the lifeblood of all organizations (even nonprof-
its). This statement does not diminish the importance of other business functions, as they all are
necessary for an organization to be successful. In fact, coordination with other functions is critical
to marketing success. However, without customers, and marketing programs in place to cultivate
customer relationships, no organization can survive.
Our Focus
Marketing Strategy: Text and Cases, 8th Edition teaches students to think and act like marketers and
disruptors in a dynamic and fast-paced environment. Strategic marketing management is presented
in the context of the social, economic, and technological arenas in which businesses function today.
The contents of this book are integrated with current events and examples that illustrate the need
for marketers to think proactively and anticipate change. Students learn a systematic process for
developing long-term, customer-oriented marketing strategies and marketing plans. This practical
approach to analyzing, planning, and implementing effective marketing strategies is based on
applying marketing concepts to the development and implementation of marketing strategy.
Our approach in Marketing Strategy: Text and Cases, 8th Edition is also grounded in the devel-
opment and execution of the marketing plan. Throughout the text, we provide a comprehensive
planning framework based on conducting sound background research, developing market ca-
pabilities and competitive advantages, designing integrated marketing programs, and managing
customer relationships for the long term. We also emphasize the need for integrity in the strategic
planning process as well as the design of marketing programs that are both ethical and socially
responsible. We also stress the integration and coordination of marketing decisions with other
functional business decisions as the key to achieving an organization’s overall mission and vision.
Throughout the text, we offer examples of successful planning and implementation to illustrate
how firms face the challenges of marketing strategy in today’s economy. We also provide market-
ing plan worksheets to assist students in writing a formal marketing plan.
xv
xvi Preface
Purpose
We view strategic marketing planning not only as a process for achieving organizational goals
but also as a means of building long-term relationships with customers. Creating a customer
orientation takes imagination, vision, and courage, especially in today’s rapidly changing
economic and technological environments. To help meet these challenges, our text approaches
marketing strategy from both traditional and disruptive practices. We cover topics such as
segmentation, creating a competitive advantage, marketing program development, and the
implementation process with a solid grounding in traditional marketing, but also with an eye
toward new practices. Lessons learned from emerging technology, new business models, and
the COVID-19 pandemic illustrate the importance of balancing the traditional and emerging
practices of marketing strategy. Our text never loses sight of this balance.
Although our approach allows for the use of sophisticated research and decision-making pro-
cesses, we have employed a practical perspective that permits marketing managers in any sized
organization to develop and implement a marketing plan. We have avoided esoteric, abstract,
and highly academic material that does not relate to typical marketing strategy decisions in most
organizations. The marketing plan framework that we utilize throughout the text has been used
by a number of organizations to successfully plan their marketing strategies. Many companies
report great success in using our approach partially due to the ease of communicating the plan to
all functional areas of the business.
Target Audience
Our text is relevant for a number of educational environments, including undergraduate, graduate,
and corporate training courses. At the undergraduate level, our text is appropriate for the capstone
course or any upper-level integrating course such as “Marketing Management,” “Marketing
Strategy,” or “Marketing Policy.” At this level, the text provides an excellent framework to use
with our included text-based cases, live-client cases, or a computer simulation. At the graduate
level, our text is appropriate for MBA core marketing courses, strategic planning, competitive
marketing strategies, or as a supplement for any simulation-based course. The text is effective
in a core MBA marketing course with students that have not had an undergraduate course in
marketing. The text provides enough background on marketing, but it is placed in a strategy
planning framework. The cases and marketing planning project are also useful in online courses.
Each of the 21 cases included in our text describes the strategic situations of real-world, iden-
tifiable organizations. Because these cases feature real situations, instructors have the option of
using the case material as published, or they may give students the opportunity to update the
cases by conducting research to find the latest information. Additional instructor resources for
this product are available online. Instructor assets include an Instructor’s Manual, Case Notes,
PowerPoint® slides, and a test bank powered by Cognero®. Sign up or sign in at www.cengage.com
to search for and access this product and its online resources.
Acknowledgments
Throughout the development of this text, several extraordinary individuals provided their talent
and expertise to make important contributions. A number of individuals have made many useful
comments and recommendations as reviewers of this text.
We also deeply appreciate the assistance of several individuals who played a major role in de-
veloping cases or other materials. Specifically, we thank the following individuals:
Noushin Laila Ansari, University of New Mexico
Harper Baird, University of New Mexico
Jordan Burkes, Auburn University
Linda Ferrell, Auburn University
John Fraedrich, Southern Illinois University–Carbondale
Preface xvii
Bernadette Gallegos, University of New Mexico

Sederick Hood, University of New Mexico
Danielle Jolley, University of New Mexico
Callie Kyzar, Auburn University
Tri Nix, Auburn University
Christian Otto, University of New Mexico
Don Roy, Middle Tennessee State University
Crawford Rummel, Auburn University
Jennifer Sawayda, University of New Mexico
Beau Shelton, University of New Mexico
Debbie Thorne, Texas State University
Jacqueline Trent, University of New Mexico
Lecia Weber, University of New Mexico
Caleb Yarbrough, Auburn University
Zachary Youngstrom, Auburn University
We greatly appreciate the efforts of Kelsey Reddick for managing the chapter revisions, sup-
porting in the revision of textbook supplements, and coordinating much of the new case develop-
ment in this edition. The editorial, production, and marketing staff at Cengage cannot be thanked
enough. With a deep sense of appreciation, we thank Anubhav Kaushal, Jennifer Zeigler, and
Sheila Moran. Finally, we express appreciation for the support and encouragement of our families
and friends, and our colleagues at Auburn University, Florida State University, and the University
of Alabama.
About the Authors
O.C. Ferrell, Ph.D.

Auburn University
O.C. Ferrell (Ph.D., Louisiana State University) is the James T. Pursell Sr. Eminent Scholar
Chair in Ethics and Director of the Center for Ethical Organizational Cultures in the Raymond
J. Harbert College of Business, Auburn University. He was formerly Distinguished Professor of
Leadership and Business Ethics at Belmont University and University Distinguished Professor
at the University of New Mexico. He has also taught at University of Wyoming, Colorado State
University, University of Memphis, Texas A&M University, Illinois State University, and Southern
Illinois University.
He is past president of the Academic Council of the American Marketing Association and
chaired the American Marketing Association Ethics Committee that developed the AMA Code
of Ethics and the AMA Code of Ethics for Marketing on the Internet. Dr. Ferrell is immediate
past president of the Academy of Marketing Science. He is also a member of the Academy of
Marketing Science Board of Governors and is a Society of Marketing Advances and Southwestern
Marketing Association Fellow and an Academy of Marketing Science Distinguished Fellow. He
served for nine years as the vice president of publications for the Academy of Marketing Science.
In 2010, he received a Lifetime Achievement Award from the Macromarketing Society and a
special award for service to doctoral students from the Southeast Marketing Doctoral Consor-
tium. He received the Harold Berkman Lifetime Service Award from the Academy of Marketing
Science and, more recently, the Cutco Vector Distinguished Marketing Educator Award from the
Academy of Marketing Science.
Dr. Ferrell has coauthored 20 books and more than 100 articles and papers in journals such as
Journal of Marketing Research, Journal of Marketing, Journal of Business Ethics, Journal of Business
Research, Journal of the Academy of Marketing Science, and Journal of Public Policy & Marketing.
Michael D. Hartline, Ph.D.

Florida State University
Michael D. Hartline (Ph.D., University of Memphis) is Dean and Charles A. Bruning Professor of
Business Administration in the College of Business at Florida State University. Prior to becoming
dean in 2015, Dr. Hartline served the FSU College of Business as associate dean from 2011 to 2015
and chair of the Department of Marketing from 2006 to 2011.
Dr. Hartline has authored or coauthored numerous books and articles, including several pub-
lications in premier journals. He has served on the editorial review boards of several academic
journals, made numerous presentations to industry and academic audiences, and co-chaired two
international conferences for the American Marketing Association. He is the former vice presi-
dent of development for the Academy of Marketing Science.
He has won numerous teaching and research awards, taught MBA courses in marketing
strategy and corporate reputation management, and taught undergraduate courses in services
marketing and retailing. He also has served as a consultant to several for-profit and nonprofit
organizations in the areas of marketing plan development, market feasibility analysis, customer
satisfaction measurement, customer service training, and pricing policy. His research interests
include customer-contact issues in service delivery, service quality and productivity, new service
development, and non-ownership consumption.
xviii
About the Authors xix
Bryan W. Hochstein, Ph.D.

University of Alabama
Bryan W. Hochstein (Ph.D., Florida State University) is an Assistant Professor of Marketing in
the Culverhouse College of Business, University of Alabama. Prior to his role at the University
of Alabama, Dr. Hochstein worked in industry as a sales executive at Time Warner Media. In
his current role, he conducts research on sales topics and the emerging area of customer success
management.
Dr. Hochstein specializes in advancing academic research on emerging topics and regularly
facilitates academic/industry discussions via thought leadership forums, industry conferences,
and through more than 500 interviews of salespeople and executives. This research appears in
the Journal of Marketing, Journal of the Academy of Marketing Science, Journal of Service Research,
Industrial Marketing Management, Journal of Retailing, Journal of Personal Selling and Sales
Management, Journal of Business Research, Marketing Letters, and other leading outlets.
Dr. Hochstein teaches master-level courses designed to bring real-world topics to the class-
room. Students of his courses engage with industry partners that help develop job-relevant
skills and professional networks that lead to quality employment opportunities. In his free time,
Dr. Hochstein applies his knowledge of sales and marketing to mentor and help various nonprofit
organizations.
CHAPTER 1
Marketing in Today’s
Economy
1.1 INTRODUCTION
As noted in the opening Beyond the Pages 1.1 story, changes in marketing are dynamic
and fast-paced, requiring companies to think outside the box in an effort to anticipate
disruptions and new technology-enabled competition. To remain relevant and respon-
sive, organizations—both for-profit and nonprofit—require effective planning and a
sound marketing strategy. Without these efforts, organizations would not be able to plan
for changes that allow them to satisfy customers or meet the needs of other stakeholders.
For example, having an effective marketing strategy allows Apple to develop popular
products, such as the iPhone, iPad, Apple Watch, and its MacBook line of computers,
and stay ahead of the competition. Further, effective planning and strategy allows Coca-
Cola to continue its leadership in soft drinks, make key acquisitions, and continue its
expansion into the lucrative sparkling water and energy drink markets. These and other
organizations use sound marketing strategy to leverage their strengths and capitalize
on opportunities that exist in the market. Every organization—from your favorite local
restaurant to giant multinational corporations; from city, state, and federal governments;
to charities such as Habitat for Humanity and the American Red Cross—develops and
implements marketing strategies.
How organizations plan, develop, and implement marketing strategies is the focus
of this book. To achieve this focus, we provide a systematic process for developing cus-
tomer-oriented marketing strategies and marketing plans that match an organization to
its internal and external environments with a focus on adaptation to market, technology,
and consumer changes. Our approach focuses on real-world applications and practical
methods of marketing planning, including the process of developing a marketing plan.
The chapters of this book focus on the steps of this process. Our goal is to give the reader
2 Part 1: Setting the Stage for Marketing Strategy
a deeper understanding of marketing planning, the ability to organize the vast amount
of information needed to complete the planning process, and an actual feel for the devel-
opment of marketing plans.
In this first chapter, we review some of the major challenges and opportunities that
exist in planning marketing strategy in today’s economy. We also review the nature and
scope of major marketing activities and decisions that occur throughout the planning
process. Finally, we look at some of the major challenges involved in developing market-
ing strategy.
BEYOND THE PAGES 1.1
The Future of Marketing 1

Are you aware of the dynamic changes in marketing to- Supply chain management—the coordination of all ac-
day? Most businesses are developing plans and adjusting tivities related to the flow of goods and services to the
to technology disruptions because new technology and consumer—is becoming more important to create a spider-
innovation are altering the way consumers and business- web of interorganizational relationships to direct products to
es make decisions. Recent disruptive technologies include consumers. Marketing consists of both supply and demand,
Internet marketing (Amazon), ride-sharing apps (Uber), and the supply chain plays an important role for retailers
blockchain (IBM), and artificial intelligence (Microsoft). such as Home Depot, Walmart, and Amazon. Omnichannel,
According to the Technology Visions Consumer survey, which embraces the integration of all the places and ways
52 percent of consumers feel that these new technologies consumers and retail firms manage the flow of communica-
play a key role in or strongly impact their daily lives. Globally, tions and products, is disrupting traditional thinking about
consumers spend an average of six hours a day online as what is a marketing channel. This approach permits con-
smartphones have become an extension of one’s existence sumers to have multiple touchpoints to purchase via apps,
and self-concept. Going forward marketers will be required from a computer, smartphone, or tablet, as well as in-store
to rethink core assumptions and theories about how to purchases and return of products. The integrated consumer
interact, serve, and satisfy consumers. This next genera- experience across all retail platforms is empowering con-
tion of marketing strategies and implementations is based sumers and retailers to change how products are purchased.
on adapting to the dynamic changes in the environment Consumer-centric technology augmentation can increase
of marketing. cognitive and physical experiences. The Internet of Things
Looking at top trends that will shape the future of market- (IoT) provides a system of interrelated computing devices
ing provides a guide to addressing innovations. According that connects smartphones, computers, and almost every
to Gartner, Inc., trends are centered around “people-centric thing to the Internet. This makes applications and ser-
smart spaces.” Artificial intelligence (AI) in the form of vices more accessible to consumers. For example, Amazon
machine learning is driving the innovation that will impact Alexa allows users to easily adjust and monitor IoT devices
consumers and marketers the most. AI is changing all touch- in their home such as smart plugs and smart lights. Finally,
points with consumers, including organizational interfaces blockchain—a ledger that stores immutable records of data
and interactions. AI-enabled robotics and drones are pro- “blocks” over time—is changing marketing. An important
viding services that make marketing more efficient. AI ana- aspect of blockchain technology is that the data is locked
lyzes and interprets large amount of data using algorithms into the system without central control, making it secure and
to make decisions, often exceeding the ability of frontline accurate. Walmart uses blockchain systems to trace produce
employees. AI is used by McDonald’s to dynamically change and livestock from the field to the store shelf to provide an
its drive-thru menu board, by Starbucks throughout its audit trail to manage supply chains and improve food safety.
supply chain including inventory management and schedul- These advances in technology are changing how con-
ing of baristas, and by Domino’s Pizza, which has created a sumers buy and pay for things. Streaming services deliver
multi-touchpoint platform to include smart speaker commu- content via Internet connection to the subscriber’s device.
nications, driverless vehicle delivery, and robots that deliver This content is often priced on a subscription basis, which
food. All of this makes it easy, low cost, and low effort for is a pricing strategy increasingly common to both consumer
consumers to obtain products. continued
Chapter 1: Marketing in Today’s Economy 3
and business markets. Streaming services have disrupted shifts power to consumers, enabling them to access prod-
traditional music and entertainment delivery. For example, ucts and have more knowledge about product selection.
Netflix, Disney+, Amazon Prime, and Hulu rival traditional Media fragmentation has put consumers in greater control
television networks with their streamed, on-demand con- of what they watch or listen to at their convenience. The om-
tent. The use of the Internet to provide any form of content nichannel approach provides multiple touchpoints, making
to any device—when and where consumers want it—has shopping and product purchase an ongoing journey that
fundamentally changed the way businesses and consumers permeates daily life and activities. Given these changes,
access and consume a growing number of products that are marketing must deal with new paradigms and social risks
now digitally delivered. related to privacy, security, and ethical concerns. All of this
These technology advances are reshaping the environ- is changing value propositions to consumers and shifting de-
ment for marketing strategy and enabling marketers to mand patterns. These trends are discussed throughout the
better serve consumers. However, these changes also cre- remainder of this chapter and book.
ate challenges and opportunities for marketing. Technology
1.2 THE CHALLENGES AND OPPORTUNITIES OF

MARKETING IN TODAY’S ECONOMY
The advent of the Internet in the mid-1990s changed traditional ideas about marketing strategy.
As the Internet became more useful, companies emerged to serve new demands, many of which
failed in the dot-com recession in the late 1990s and the historic collapse of the worldwide econo-
my in 2008 known as the Great Recession. The powerhouse companies of the past have weakened
and lost relevance in an economy marked by constant change and consumer skepticism. In their
place, new and disruptive companies have utilized new technologies and strategies to change how
we travel (Airbnb, Uber, and Kayak), shop for daily needs (Instacart), and even how we get food
(Uber Eats, HelloFresh, and Grubhub). Consider the examples in Exhibit 1.1 and the changes they
have introduced into how marketers and businesses operate.
1.2a Power Shift to Customers

Changes in how consumers access information and how marketers gather and utilize data affect
the buyer-seller power dynamic. Perhaps the single most important change during the last two
decades is the shift in power from marketers to consumers. Individual consumers and business
customers have gained power via technology that allows easy comparison shopping and broader
choices of where to purchase products. Using a smartphone and the Amazon app, customers
can walk Target’s aisles, scan bar codes to check prices on Amazon, and order items for two-day
delivery while in the store, or even same-day delivery in select markets. In fact, 71 percent of
consumers report using a mobile device in stores.2 This is the reason that retailers such as Tar-
get and Best Buy price match Amazon and other online competitors. However, most consumers
now begin product searches online, often keeping them from even entering a retail store.3 Thus,
in many cases consumers have more power, yet marketers are regaining power via increasingly
sophisticated data analytics. In the past, understanding consumer needs and preferences was a
difficult and costly task for marketers. Today, every click, swipe, and geolocation tag provides data
points that can be used to better anticipate and serve customer needs. The topics of big data and
analytics permeate marketing—and this book—because marketers now have growing insight into
what is driving customers to purchase (or not). Advances in how marketers can process and un-
derstand consumer patterns has returned some power to the seller, yet the customer is still king in
most marketing situations, driving pricing, promotional, and experience strategies of marketers.
Marketers must ensure that their products and the experience they offer are unique and of high
quality, thereby giving customers a reason to purchase their products, provide positive reviews,
and remain loyal to them.
EXHIBIT 1.1 Fundamental Changes to Marketing
Change Category Market Change Implications

Power Shift to Online consumer Marketers need to be concerned with delivering a high-
Customers reviews quality experience with limited problems or they risk imme-
diate, damaging consumer reviews. Good experiences also
lead to better reviews and better sales, so marketers have
become very responsive to online consumer content.
Changes in Products Digitization of One problem for retailers is lack of products to sell. The dig-
and Selection products itization of books, music, maps, and calendars, plus the ad-
dition of flashlights, cameras, video, and alarm clocks into
smartphones (among thousands of other things), leaves re-
tail giants such as Walmart with fewer products to sell.
Audience and Media Online content For decades advertisers relied on spreading their messages
Fragmentation streaming through mass media outlets such as television. Today, audi-
ences are spread across platforms, making it difficult to deliver
marketing messages to potential customers.
Changing Value Subscription- Changes to payment via monthly subscription requires mar-
Propositions based services keters to continually provide and ensure the consumer is
getting value. An example is the difference of purchasing a
movie digitally (you own it) versus subscribing to Netflix (you
pay to access it). If no new content is added to Netflix, you
will quickly change to a different service, but, once you own a
movie, you cannot swap it for a different one.
Shifting Demand Sharing services The advent of Uber and Airbnb has greatly altered the way
Patterns that travelers move around and where they stay. This change
has reduced the need for taxis and created an oversupply of
hotel rooms.
Privacy, Security, and Listening The introduction of smart speakers such as Amazon’s Echo
Ethical Concerns technology and Apple’s HomePod has allowed companies to gain ac-
cess to our most personal and private space, our home. This
change introduces many questions of what these companies
should be listening to and how they should use the informa-
tion they gather.
Unclear Legal Online ordering As companies have tried to compete with Amazon, many have
Jurisdiction been able to avoid charging state sales tax in states where
they do not have a physical presence. This practice caus-
es a disadvantage for local retailers and questions of legal
jurisdiction for problems, warranties, and tax authorities.
1.2b Changes in Products and Selection

The variety and assortment of goods and services offered for sale on the Internet and in tradi
tional stores is staggering. Companies that have followed a digital-first strategy, such as Colour-
Pop Cosmetics, are often able to undercut prices of established retail brands and introduce new
products more quickly.4 Increased transaction efficiency allows customers to fulfill their needs
more easily and conveniently than ever before. Furthermore, the vast amounts of information
available online has changed the way we communicate, read the news, and entertain ourselves.
Customers have the news delivered to them automatically via smartphone apps that pull from
hundreds of sources. According to Pew Research Center, 20 percent of U.S. adults read the news
via social media.5 This radical increase in product selection and availability has exposed market-
ers to inroads by competitors from every corner of the globe. In addition, the ways that prod-
ucts are delivered have eliminated the need for thousands of products, changing how marketers
create a mix for retail and online stores. The smartphone and mobile technology have reduced
or replaced entire sections of retail stores (e.g., CDs/DVDs, books, maps, audio components,
magazines, cameras), making the focus of most marketing efforts on consumable and household
goods not easily replaced by digital and technology-enabled products. Thus, changes to products,
availability of them, and increases to varieties available provide challenges to marketers.
1.2c Audience and Media Fragmentation

Changes in media usage and the availability of new media outlets have forced marketers to re-
think the way they communicate with potential customers. Television audiences have also been
a favorite for marketing messages on broadcast networks such as ABC, CBS, and NBC and ca-
ble networks such as ESPN, HGTV, Nickelodeon, and the Discovery Channel. However, today
most visual content is delivered via these traditional means and also through online streaming.
In addition to visual content, traditional radio audiences have transitioned to streaming services,
such as Spotify, Pandora, or YouTube, greatly reducing large audience concentrations based on
geographic locations and demographic listenership. These changes make it increasingly difficult
for marketers to reach a true mass audience. Media audiences have become fragmented due to
(1) the sheer number of media choices we have available today and (2) the limited time we have
to devote to any one medium. As shown in Exhibit 1.2, consumers spent significantly more time
with digital media (e.g., podcasts, streaming, websites) than traditional media, such as newspa-
pers and magazines. However, despite the challenge of reaching mass audiences today, media
fragmentation does have a big advantage: It is easier to reach small, highly targeted audiences
who are more receptive to specific marketing messages. Thus, for some marketing situations,
opportunities exist with small audiences (e.g., products focused on specific customers, such as
wind surfers or rock climbers), but for others it has become increasingly difficult to spread mes-
sages to a large audience (e.g., political campaigns desiring to reach the entire U.S. population).
EXHIBIT 1.2 Time Spent with Media
Digital TV* Radio*
Newspapers* Magazines*
1%
2%
11%
30% 56%
*Excludes digital
Note: Adults age 18+; time spent with each medium includes all
time spent with that medium, regardless of multitasking.
Source: Mark Dolliver, “US Time Spent With Media 2019,” eMarketer, May 30, 2019, https://www.emarketer
.com/content/us-time-spent-with-media-2019 (accessed February 25, 2020).
1.2d Changing Value Propositions

Even before the Great Recession, consumers and business buyers were already facing increasing
costs associated with energy, food, building materials, and other essentials. Then, as the economy
weakened, buyers were forced to tighten their belts and look for other ways to lower expenses.
For example, instead of using travel agents, consumers can use Expedia, and instead of hiring a
real estate agent, they can sell their own house on Redfin. Consequently, many marketers learned
a tough lesson: In situations where customers see goods and services as commodities, they will
turn to the most convenient, least-expensive alternative.
Though the economy recovered from the recession, this and other economic hardships, such
as the recession caused by the COVID-19 pandemic, have forced consumer and business buyers
to rethink value propositions and focus on the importance of frugality and value. The effects on
business have been dramatic. Long-established retailers such as Pier 1 Imports and Forever 21
have filed for bankruptcy protection in the face of a highly commoditized market and stiff com-
petition from online retailers such as Amazon. A similar shakeout happened in the book retailing
segment. Barnes & Noble, formerly the dominant book retailer in the United States, was sold to
a hedge fund amid declining book sales as online retailers lured its shoppers away.6 Likewise, the
prevalence of e-books and digital downloads have had a profound impact on traditional book
publishing. Because books have become highly commoditized, consumers typically search for
the lowest prices, convenience, and selection found online versus the static inventories offered by
traditional bookstores. This same trend is common across other entertainment categories, such as
movie theaters, sporting events, and even music concerts, with many opting for in-home, digital
delivery at lower costs in the convenience of their homes.
1.2e Shifting Demand Patterns

In some cases, changes in technology have shifted customer demand for certain product cate-
gories. News is one well-known example, where traditional newspapers are slowly disappear-
ing while online and mobile news continues to grow. Now, many newspaper companies have
failed, some are on the brink of closing, while others have cut publication to only a few days per
Manuel Esteban/Shutterstock.com
Hollywood film studios have consolidated as streaming platforms such as Netflix and Amazon Prime Video
release an increasing amount of original content.
week. Another example is the explosive growth in the digital distribution of music and video.
The success of Apple Music, YouTube, Spotify, Netflix, and Disney+, along with the continu-
ing integration of television and computers, has dramatically shifted demand for the music and
movie industries. The direct-to-consumer streaming model has irreversibly altered the entertain-
ment industry on a global scale.7 Recently, pharmacies have fallen prey to changes in demand.
The increasingly competitive pharmaceutical business has led to delivery of prescriptions and a
few major pharmacy chains dominating the market. Local, independent, and even grocery store
pharmacies are closing at a rapid pace as insurance providers and consumer preferences drive
new supply pressures and demand changes.8 This trend is not expected to reverse as banks, gro-
cery stores, malls, and specialty stores all struggle to address changing consumer demands for
how and where they buy products.
1.2f Privacy, Security, and Ethical Concerns

Changes in technology have made our society much more open than in the past. As a result,
these changes have forced marketers to address real concerns about security and privacy, both
online and offline. Further, businesses have always collected routine information about their
customers. Now, customers are much more attuned to these efforts and the purposes for which
the information will be used. Though customers appreciate the convenience of e-commerce and
mobile access to information, they want assurances that their information is safe and confidential.
Concerns over privacy and security are especially acute with respect to online businesses such as
Facebook, Google, Amazon, mobile banking, and mobile devices that can track every move we
make, literally. In an in-home example, Amazon has responded to concerns over the information
collected by its Echo devices that monitor sounds in the home, waiting to hear voice commands.
In response to consumer privacy concerns, Amazon has improved the ability of consumers to
discover what is monitored and limit what is recorded. New features include easy viewing and
deletion of audio transcripts.9 These same concerns are also critical with respect to children.
For example, many well-known and respected companies such as YouTube have been fined for
violating the standards of the Children’s Online Privacy Protection Act (COPPA), which can be
reviewed in Exhibit 1.3. Overall, privacy, security, and ethical concerns are of great importance to
not only consumers but also marketers.
EXHIBIT 1.3 Six Steps to Children’s Online Privacy Protection Act (COPPA) Compliance
The Children’s Online Privacy Protection Act applies to operators of commercial websites and online
services that attempt to collect personal information from children under the age of 13. The law
explains what must be included in the firm’s privacy policy, when and how to seek verifiable consent
from a parent or guardian, and the firm’s responsibilities to protect children’s privacy and safety.
Firms cannot evade the law’s provisions by claiming that children under 13 cannot visit their sites,
nor can they make information optional or ask the visitor’s age.
In implementing the provisions of COPPA, the FTC issued the Children’s Online Privacy Protection
Rule, which is designed to give parents control over the information that is collected from their
children. The rule requires website operators to:
1. Determine if their company is a website or online service that collects personal information from
kids under 13.
2. Post a privacy policy that complies with COPPA.
3. Notify parents directly before collecting personal information from their kids.
4. Get parents’ verifiable consent before collecting information from their kids.
5. Honor parents’ ongoing rights with respect to information collected from their kids.
6. Implement reasonable procedures to protect the security of kids’ personal information.
Source: Adapted from United States Federal Trade Commission, “Children’s Online Privacy Protection Rule: A Six-Step Compliance Plan for Your
Business,” https://www.ftc.gov/tips-advice/business-center/guidance/childrens-online-privacy-protection-rule-six-step-compliance (accessed
February 27, 2020).
1.2g Unclear Legal Jurisdiction

When a company does business in more than one country (as many Internet-based firms do), that
company often faces a dilemma with respect to differing legal systems. Today, this difference is
especially important for firms that do business in both the United States and China. Google, for
example, faces a difficult situation in dealing with the Chinese government’s censorship demands.
The company worked with the Chinese government on a secret project called Dragonfly to censor
aspects of some of their sites to enter the market. Though Dragonfly was ultimately terminated,
Google’s vice president of public policy would not commit to the U.S. Senate to not engage in
censorship in China in the future.10 Doing business in China is also an issue with respect to
protection of intellectual property rights, where Chinese laws do not offer the same protec-
tions found in the United States. For example, Chinese piracy costs the U.S. economy $225 to
$600 billion each year. Most of this is in the information sector, with high-tech and manufacturing
also showing sizable losses due to infringements of intellectual property rights by Chinese firms.11
Another important legal issue involves the collection of sales tax for online transactions.
In the early days of e-commerce, most online merchants did not collect sales taxes for online
transactions—giving them a big advantage against store-based merchants. A 1992 U.S. Supreme
Court decision exempted out-of-state retailers from collecting sales taxes in states where they had
no physical presence. A 2018 decision took a different stance, ruling that states have the ability to
require online retailers to collect sales tax.12 Although the full effect of these challenges will not
be recognized for some time, circumstances have forced businesses to move ahead by adjusting
their marketing activities at both the strategic and tactical levels. As we review the major mar-
keting concepts and activities in this chapter, we will look at how today’s challenges have affected
strategic planning in these areas.
1.3 BASIC MARKETING CONCEPTS

Marketing is many different things. Many people, especially those not employed in marketing,
see marketing as a function of business. From this perspective, marketing parallels other business
functions such as production/operations, research, management, human resources, and account-
ing. As a business function, the goal of marketing is to connect the organization to its customers
by promoting a customer-centric view that places the customer at the heart of all strategy and
decision making. Other individuals, particularly those working in marketing jobs, tend to see
marketing as a process of managing the flow of products from the point of conception to the
point of consumption. The field’s major trade organization, the American Marketing Association
(AMA), has changed the definition of marketing over time to reflect changes in the economic and
business environments. From 1985 until 2005, the AMA defined marketing this way:
Marketing is the process of planning and executing the conception, pricing, promotion, and distri-
bution of ideas, goods, and services to create exchanges that satisfy individual and organizational
objectives.13
Note how this definition focuses on the four Ps, or the marketing mix (product, price, place, and
promotion). In 2005, the AMA changed the definition to better reflect the realities of competing
in the marketplace:
Marketing is an organizational function and a set of processes for creating, communicating, and
delivering value to customers and for managing customer relationships in ways that benefit the
organization and its stakeholders.14
This definition shifts the focus away from the marketing mix and toward value creation for cus-
tomers. In 2007, the AMA changed the definition of marketing again:
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering,
and exchanging offerings that have value for customers, clients, partners, and society at large.15
Notice that the changes in the definition are not merely cosmetic in nature. The older definitions
focused on the process of marketing to deliver value and manage customer relationships. The
most recent definition shifts from “value” to “offerings that have value.” Also, the notion of stake-
holders is made more explicit. Why would the AMA make these changes? First, breaking free
from commodity status means finding ways to differentiate the offering. The new definition rec-
ognizes that differentiation can come from any part of the offering, whereas older conceptualiza-
tions of marketing placed the burden of differentiation on the product itself. The second reason
has to do with marketing’s broader role in today’s corporation. Firms don’t just sell products; they
sell the firm as a whole. Corporate relationships with partners, media, government, investors,
employees, and society are every bit as important as relationships with customers. These types
of relationships—which grow and thrive on exceptional value—are an absolute necessity in the
commodity-driven status of many product markets. While the older definitions of marketing
had a decidedly transactional focus, the new definition emphasizes long-term relationships that
provide value for both the firm and its stakeholders.
A final way to think about marketing relates to meeting human and social needs. This broad
view links marketing with our standard of living, not only in terms of enhanced consumption and
prosperity but also in terms of society’s well-being. Through marketing activities, consumers can
buy cars from South Korea and wines from South Africa; organizations can earn a viable profit,
making both employees and shareholders happy. However, marketing must also bear responsibil-
ity for any negative effects it may generate. This view demands that marketers consider the social
and ethical implications of their actions, and whether they practice good citizenship by giving
back to their communities. Firms can successfully meet human and social needs through socially
responsible marketing and business practices. This view is becoming increasingly accepted, as
illustrated by a recent statement issued by the Business Roundtable, a nonprofit association of
nearly 200 top executives, that states the purpose of a corporation should be more than the in-
terests of its shareholders. The group adds that corporations must also invest in their employees,
protect the environment, and deal fairly and ethically with their suppliers.16
Let’s take a closer look at several basic marketing concepts. As we will see, ongoing changes
in today’s economy have forever altered our way of thinking about these foundational aspects
of marketing.
1.3a What Is a Market?

At its most basic level, a market is a collection of buyers and sellers. We tend to think of a market
as a group of individuals or institutions that have similar needs that can be met by a particular
product. For example, the housing market is a collection of buyers and sellers of residential real
estate, while the automobile market includes buyers and sellers of automotive transportation.
Marketers or sellers tend to use the word market to describe only the buyers. This basic under-
standing of a market has not changed in a very long time. What has changed, however, is not so
much the “what” but the “where” of a market, that is, the location of the buyers and sellers. In
both consumer markets (like housing and automobiles) and business markets (like replacement
parts and raw materials), the answer to the “where” question is quickly becoming “anywhere” as
markets become less defined by geography. Increasingly, the market is a virtual market, spanning
borders and boundaries via online platforms. Online markets such as Etsy and those created
by pictures and experiences (often linked through sites such as Pinterest or Instagram) provide
places where like-minded consumers can congregate, compare, exchange, and promote products
and ideas—the essence of a market.
Until recently, marketers have considered a marketplace to be a physical location where buy-
ers and sellers meet to conduct transactions. Although those venues (e.g., grocery stores, malls,
flea markets) still exist, technology mediates some of the fastest growing markets. Early in the
beginning of the dot-com era, the term marketspace was coined to describe these electronic mar-
ketplaces unbound by time or space.17 Today, we refer to these electronic marketplaces as online
markets or e-commerce. In e-commerce, physical goods, services, and information are exchanged
through the Internet. Amazon has become the e-commerce equivalent of a shopping mall as
the company sells virtually all products, including groceries, shoes, apparel, jewelry, beauty aids,
and sporting goods in addition to its traditional offerings of books and electronics. E-commerce
also exists in the business-to-business realm. The shift from physical to electronic marketplaces
has significant ramifications for marketers. The fact that customers can shop, place orders, and
exchange information 24/7 means that these businesses must be capable of operating in that
same time frame. In effect, online markets never take a break at closing time because they never
close. It also means that firms lose some control over the information that is disseminated about
their company or products. Through blogs, discussion forums, or even Twitter, customers can
exchange information about an online merchant outside the merchant’s website. Furthermore,
the substitution of technology for human interaction can be both a blessing and a curse. Some
sites, such as CarsDirect, are successful because they eliminate the hassle of dealing with another
human in the buying process. Many customers, however, are less interested in online markets
because they lack the human element. In these cases, the design and implementation of the on-
line experience is a serious challenge for online firms. Finally, the wealth of information available
through e-commerce not only makes customers more educated than ever before, but it also gives
customers increased power through comparison shopping and price negotiation.
1.3b What Is Exchange?

Closely related to the concept of a market, our ideas about exchange have changed in recent years.
Exchange is traditionally defined as the process of obtaining something of value from someone
by offering something in return; this usually entails obtaining products for money. For exchange
to occur, five conditions must be met:
1. There must be at least two parties to the exchange. Although this has always been the case,
the exchange process today can potentially include an unlimited number of participants. On-
line travel sites such as Expedia provide a good example. Customers who browse for flights
may see messages that there are only so many tickets available at a displayed price. Ticket
prices update dynamically based on how many people are actively viewing and booking.
2. Each party has something of value to the other party. Exchange would be possible, but
not very likely, without this basic requirement. The Internet has exposed us to a vast array
of goods and services that we did not know existed previously. Today, not only can we buy a
television or stereo receiver from a local merchant, we also have access to hundreds of online
merchants. Furthermore, the ability to comparison shop products and their prices allows cus-
tomers to seek out the best value.
3. Each party must be capable of communication and delivery. The advantages of today’s
communication and distribution infrastructure are amazing. We can find and communi-
cate with potential exchange partners anywhere and anytime via telephone, computers,
interactive television, and smartphones. We can also conduct arm’s-length transactions
in real time, with delivery of exchanged items occurring in a matter of hours if necessary.
For example, in many markets, Amazon Prime Now delivers a wide selection of products
within two hours of when the order is placed, bringing the store to your door when and
where you need products.
4. Each party must be free to accept or reject the exchange. In the online world, this condition
of exchange becomes a bit more complicated. Customers have grown accustomed to the ease
with which they can return items to local merchants. Easy return policies are among the major
strengths of traditional offline merchants; however, online retailers are becoming more com-
petitive. For example, UPS stores accept returns for Amazon with a simple scan of a QR code,
and FedEx is a drop-off and return center for Walmart.
5. Each party believes it is desirable to exchange with the other party. Customers typically
have a great deal of information about, or even a history with, offline merchants. In online
exchange, customers often know nothing about the other party. To help resolve this issue, a
number of third-party firms have stepped in to provide ratings and opinions about online
merchants. Services such as Trustpilot not only provide these ratings but also provide prod-
uct ratings and serve as shopping portals. eBay and Amazon go one step further by allowing
buyers and sellers to rate each other. This gives both parties to the exchange process some
assurance that reputable individuals or organizations exist on the other side of the transaction.
The bottom line is that exchange has become all too easy in today’s economy. Opportunities
for exchange bombard us virtually everywhere we go. Customers don’t even have to trouble
themselves with giving credit cards or completing forms for shipping information. Most online
merchants will remember this information for us if we let them. For example, Amazon’s “Buy
Now” single-click ordering feature allows customers to purchase products with a single click
or tap.18 The ease with which exchange can occur today presents a problem in that individuals
who do not have the authority to exchange can still complete transactions. This is especially
true for underage customers.
1.3c What Is a Product?

It should come as no surprise that the primary focus of marketing is the customer and how the
organization can design and deliver products that meet customers’ needs. Organizations create
essentially all marketing activities as a means toward this end; this includes product design, pric-
ing, promotion, and distribution. In short, an organization would have no reason to exist without
customers and a product to offer to them.
But what exactly is a product? A simple definition is that a product is something that can be
acquired via exchange to satisfy a need or a want. This definition permits us to classify a broad
number of “things” as products:
●● Goods. Goods are tangible items ranging from canned food to fighter jets, from sports
memorabilia to used clothing. The marketing of tangible goods is arguably one of the most
widely recognizable business activities in the world.
●● Services. Services are intangible products consisting of acts or deeds directed toward people
or their possessions. Banks, hospitals, lawyers, package delivery companies, airlines, hotels,
repair technicians, nannies, housekeepers, consultants, and taxi drivers all offer services.
Services, rather than tangible goods, dominate modern economies like the U.S. economy.
Today, most services involve some digital component, such as Uber’s use of the consumer’s
smartphone to connect with a driver and identify their intended route.
●● Ideas. Ideas include issues aimed at promoting a benefit for the customer. Examples include
cause-related or charitable organizations such as the Red Cross, the American Cancer
Society, and Mothers Against Drunk Drivers.
●● Information. Marketers of information include websites, magazine and book publishers,
schools and universities, research firms, churches, and charitable organizations. Examples
include Wikipedia, YouTube, and the popular TED Talks. In the digital age, the production
and distribution of information has become a vital part of our economy.
●● Digital Products. Digital products such as software, music, and movies are among the most
profitable in our economy. Advancements in technology have also wreaked havoc in these
industries because pirates can easily copy and redistribute digital products in violation of
copyright law. Digital products are interesting because content producers grant customers a
license to use them, rather than outright ownership.19
●● People. The individual promotion of people, such as athletes or celebrities, is a huge business
around the world. The exchange and trading of professional athletes takes place in a complex
system of drafts, contracts, and free agency. Other professions, such as politicians, actors,
professional speakers, and news reporters, also engage in people marketing.
●● Places. When we think of the marketing of a place, we usually think of vacation destinations
such as Rome or Orlando. However, the marketing of places is quite diverse. Cities, states,
and nations all market themselves to tourists, businesses, and potential residents.
●● Experiences and Events. Marketers can bring together a combination of goods, services,
ideas, information, or people to create one-of-a-kind experiences or single events. Examples
include theme parks such as The Wizarding World of Harry Potter, sporting events like
the Daytona 500 or the Super Bowl, or stage and musical performances like Hamilton or a
concert by Billie Eilish.
●● Real or Financial Property. The exchange of stocks, bonds, and real estate, once marketed
completely offline via real estate agents and investment companies, now occurs increasingly
online. For example, Realtor.com is one of the largest real estate listing service in the United
States.
●● Organizations. Virtually all organizations strive to create favorable images with the public—
not only to increase sales or inquiries but also to generate customer goodwill. In this sense,
General Electric is no different than the United Way: Both seek to enhance their images in
order to attract more people (customers, volunteers, and clients) and money (sales, profit,
and donations).
We should note that the products in this list are not mutually exclusive. For example, firms that
sell tangible goods almost always sell services to supplement their offerings, and vice versa. Char-
itable organizations simultaneously market themselves, their ideas, and the information that they
provide.
To effectively meet the needs of their customers and fulfill organizational objectives, marketers
must be astute in creating products and combining them in ways that make them unique from
other offerings. A customer’s decision to purchase one product or group of products over anoth-
er is primarily a function of how well that choice will fulfill their needs and satisfy their wants.
Economists use the term utility to describe the ability of a product to satisfy a customer’s desires.
Customers usually seek out exchanges with marketers who offer products that are high in one or
more of these five types of utility:
●● Form Utility. Products high in form utility have attributes or features that set them apart
from the competition. Often these differences result from the use of high-quality raw
materials, ingredients, or components, or from the use of highly efficient production
processes. For example, Ruth’s Chris Steakhouse, considered by many to be one of the nation’s
top chain restaurants, provides higher form utility than other national chains because of the
quality of beef they use. Chipotle even stresses form utility in its slogan “Food with Integrity.”
Action Sports Photography/Shutterstock.com
Special events like the Daytona 500 combine people (drivers), a place (Daytona), an event (the race), organiza-
tions (sponsors), and goods (souvenirs) to create a memorable and unique experience for race fans.
In many product categories, higher priced product lines offer more form utility because they
have more features or bells and whistles. Luxury cars are a good example.
●● Time Utility. Products high in time utility are available when customers want them.
Typically, this means that products are available now rather than later. Grocery stores,
restaurants, and other retailers that are open around the clock provide exceptional time
utility. Often the most successful restaurants around college campuses are those that are
open 24/7. Many customers are also willing to pay more for products available in a shorter
time frame (such as overnight delivery via FedEx) or for products available at the most
convenient times (such as midmorning airline flights).
●● Place Utility. Products high in place utility are available where customers want them,
which is typically wherever the customer happens to be at that moment (such as grocery
delivery to a home) or where the product needs to be at that moment (such as florist
delivery to a workplace). Home delivery of any product, convenience stores, vending
machines, and e-commerce are examples of good place utility. Products that are high in
both time and place utility are exceptionally valuable to customers because they provide
the utmost in convenience.
●● Possession Utility. Possession utility deals with the transfer of ownership or title from
marketer to customer. Products higher in possession utility are more satisfying because
marketers make them easier to acquire. Marketers often combine supplemental services
with tangible goods to increase possession utility. For example, furniture stores that offer
easy credit terms and home delivery enhance the possession utility of their goods. In fact,
any merchant that accepts credit cards enhances possession utility for customers that
do not carry cash or checks. Expensive products, like a home or a new factory, require
acceptable financing arrangements to complete the exchange process.
●● Psychological Utility. Products high in psychological utility deliver positive experiential or
psychological attributes that customers find satisfying. Sporting events often fall into this
category, especially when the competition is based on an intense rivalry. The atmosphere,
energy, and excitement associated with being at the game can all create psychological
benefits for customers. Conversely, a product might offer exceptional psychological utility
because it lacks negative experiential or psychological attributes. For example, a vacation
to the beach or the mountains might offer more psychological utility to some customers
because it is seen as less stressful than a vacation to Disney World.
The strategic and tactical planning of marketing activities involves the important basic con-
cepts we have explored in this section. Marketers often struggle with finding and reaching the
appropriate markets for their products. In other cases, the market is easily accessible, but the
product is wrong or does not offer customers a compelling reason to purchase it. The ability to
match markets and products in a way that satisfies both customer and organizational objectives
is truly an art and a science. Doing so in an environment of never-ending change creates both
opportunities and challenges for even the strongest and most respected organizations.
The process of planning marketing activities to achieve these ends is the focus of this book.
As we turn our attention to an overview of major marketing activities and decisions, we also
want to lay out the structure of the text. The chapters roughly coincide with the major activ-
ities involved in developing marketing strategy and writing a marketing plan. Although our
approach is orderly and straightforward, it provides a holistic representation of the marketing
planning process from one period to the next. As we will see, marketing planning is an evolving
process that has no definite beginning or ending point.
THE A-TO-Z of Amazon’s Marketing Strategy 20

Jeff Bezos came up with the idea for an online bookstore cashierless supermarket that uses cameras and sensors to
nearly 30 years ago. In 1994, before Google or eBay rose to automatically charge customers for their purchases via an
popularity, Bezos quit his job in finance and created Amazon. app. The company sells its technology, called “Just Walk Out,”
When books proved to be a successful product, he asked to other businesses such as convenience stores, airport ki-
some of his customers what else he should sell on the site. osks, and sports arenas. The company has also integrated
The response was overwhelming. Bezos realized Amazon various aspects of Whole Foods, Prime Now two-hour deliv-
met a customer need that was greater than books: He dis- ery, and AmazonFresh grocery delivery to explore new ways
covered that Amazon’s product was convenience. to meet customer needs.
As consumer behavior continues to evolve, Amazon’s Amazon always has its eye on the future. For example,
products and services have evolved as well. The site is now with its sights on securing loyal Generation Z shoppers,
the source of original, award-winning shows and movies the company introduced a feature that allows users to cre-
as part of its Amazon Prime offering. Groceries, household ate supervised accounts for their teenagers so they can
goods, and even pet food can now be easily purchased on- make parent-approved purchases. In another move to be-
line or via Amazon’s Echo device. Amazon also highlights come an indispensable part of every household, Amazon has
“Amazon Choice” products, allowing customers an easy way continued to evolve the Amazon Echo, a voice-controlled dig-
to identify quality good products across categories. Bezos ital assistant. Through the Echo, users can check the weath-
attributes Amazon’s success to its focus on the customer in- er, get news alerts, play games, control connected smart
stead of the competition. For example, to maintain and build home devices, order household goods, and more. Prime
an exchange relationship with its customers, Amazon offers users, roughly two-thirds of U.S. households, can also order
an “A-to-z Guarantee” that protects against damaged goods prime-eligible items that ship at no extra charge with quick
and late deliveries. and convenient delivery. With a focus on growth and new
In addition to online shopping, Amazon is now moving market opportunities, Amazon continues to be one of the
brick-and-mortar innovation forward with Amazon Go Gro- world’s most innovative companies.
cery. This untraditional, traditional store is a checkout-free,
1.4 MA JOR MARKETING ACTIVITIES AND DECISIONS

Organizations must deal with a number of activities and decisions in marketing their products to
customers. These activities vary in both complexity and scope. Whether the issue is a local restau-
rant’s change in copy for a newspaper ad or a large multinational firm launching a new product in
a foreign market, all marketing activities have one thing in common: They aim to give customers
a reason to buy the organization’s product. In this section, we briefly introduce the activities and
decisions that will be the focus of the remaining chapters of this book.
1.4a Strategic Planning

If an organization is to have any chance of reaching its goals and objectives, it must have a game
plan or road map for getting there. A strategy, in effect, outlines the organization’s game plan for
success. Effective marketing requires sound strategic planning at a number of levels in an organi-
zation. At the top levels of the organization, planners concern themselves with macro issues such
as the corporate mission, management of the mix of strategic business units, resource acquisi-
tion and assignments, and policy decisions. Planners at the middle levels, typically a division or
strategic business unit, concern themselves with similar issues but focus on those that pertain to
their particular product/market. Strategic planning at the lower levels of an organization is much
more tactical in nature. Here, planners concern themselves with the development of marketing
plans—more specific game plans for connecting products and markets in ways that satisfy both
organizational and customer objectives.
Although this book is essentially about strategic planning, it focuses on tactical planning and
the development of the marketing plan. Tactical planning addresses specific markets or market
segments and the development of marketing programs that will fulfill the needs of customers in
those markets. The marketing plan provides the outline for how the organization will combine
product, pricing, distribution, and promotion decisions to create an offering that customers will
find attractive. The marketing plan also addresses the implementation, control, and refinement
of these decisions.
To stand a reasonable chance for success, marketing plans should be developed with a keen
appreciation of how they fit into the strategic plans of the middle and upper levels of the firm. In
Chapter 2, we discuss the connection among corporate, business-unit, and marketing planning as
well as how marketing plans must be integrated with the plans of other functions in the organiza-
tion (financial plans, production plans, etc.). We also discuss the structure of the marketing plan
and some of the challenges involved in creating one.
1.4b Research and Analysis

Strategic planning depends heavily on the availability and interpretation of information. Without
this lifeblood, strategic planning would be a mindless exercise and a waste of time. Thankfully,
today’s planners are blessed with an abundance of information due to improving technology and
the Internet. However, the challenge of finding and analyzing the right information remains. As
many marketing planners have found, having the right information is just as important as having
the right product.
Marketers are accustomed to conducting and analyzing research, particularly with respect to
the needs, opinions, and attitudes of their customers. Although customer analysis is vital to the
success of the marketing plan, the organization must also have access to three other types of infor-
mation and analysis: internal analysis, competitive analysis, and environmental analysis. Internal
analysis involves the objective review of internal information pertaining to the firm’s current
strategy and performance, as well as the current and future availability of resources. Analysis
of the competitive environment, increasingly known as competitive intelligence, involves an-
alyzing the capabilities, vulnerabilities, and intentions of competing businesses. Analysis of the
external environment, also known as environmental scanning, involves the analysis of economic,
political, legal, technological, and cultural events and trends that may affect the future of the
organization and its marketing efforts. Some marketing planners use the term situation analysis
to refer to the overall process of collecting and interpreting internal, competitive, and environ-
mental information.
Across all aspects of the situation analysis, data analytics plays an increasingly prominent role
in firm strategic planning. Throughout the chapters of this book, the importance of data and
the ability to interpret it will become clear, as it is central to successful marketing programs. For
strategic purposes, large amounts of data are compiled across diverse sources to drive higher-level
metrics and dashboards that help managers to assess markets and opportunities. Internal analysis
focuses on sales, production, logistic, and other data points that identify the firm’s ability to oper-
ate and compete effectively. Competitive intelligence can include a variety of inputs, including AI
scanning of customer reviews of competitors, detailed investigation of competitor products, and
even feedback from current customers that use products of other firms. Environmental scanning
also includes inputs from social media, news sources, and commissioned research. These diverse
data points are then analyzed via human, machine, and AI systems to provide data-driven insights
that offer a view of short-, medium-, and long-term situations facing the firm and its products.
The development of a sound marketing plan requires the analysis of information on all fronts.
In Chapter 3, we address the collection and analysis of internal, customer, competitive, and envi-
ronmental information. We also discuss the challenges involved in finding the right information
from an overwhelming supply of available information. The uncertainty and continual change
in the external environment also create challenges for marketers (as the Internet boom and bust
have shown us). As we will see, this type of research and analysis is perhaps the most difficult
aspect of developing a marketing plan.
1.4c Developing Competitive Advantage

To be successful, a firm must possess one or more competitive advantages that it can leverage in the
market in order to meet its objectives. A competitive advantage is something that the firm does
better than its competitors that gives it an edge in serving customers’ needs and/or maintaining
mutually satisfying relationships with important stakeholders. Competitive advantages are crit-
ical because they set the tone, or strategic focus, of the entire marketing program. When these
advantages are tied to market opportunities, the firm can offer customers a compelling reason to
buy their products. Without a competitive advantage, the firm and its products are likely to be
just one more offering among a sea of commoditized products. For example, Tesla’s investments
in the development and production of its batteries have given it a sizeable competitive advantage
over other electric vehicle (EV) automakers.21
In Chapter 4, we discuss the process of developing competitive advantages and establishing a
strategic focus for the marketing program. Competitive advantage typically comes from one or
more sources, including relationships, legal, organization capabilities, human resources (people),
product, and/or pricing. Somewhat intertwined in these sources of competitive advantage is
the ability of an organization to adapt to change, utilize technology in new ways, and effectively
analyze and interpret data inputs. We also address the role of SWOT analysis (strengths and
weaknesses, opportunities and threats) as a means of tying the firm’s strengths or internal ca-
pabilities to market opportunities. Further, we discuss the importance of developing goals and
objectives. Having good goals and objectives is vital because these become the basis for measuring
the success of the entire marketing program. For example, Hampton Inn has a goal of 100 percent
customer satisfaction. Customers do not have to pay for their stay if they are not completely sat-
isfied.22 Goals like these are not only useful in setting milestones for evaluating marketing perfor-
mance; they also motivate managers and employees. This can be especially true when marketing
goals or objectives help to drive employee evaluation and compensation programs.
1.4d Marketing Strategy Decisions

An organization’s marketing strategy describes how the firm will fulfill the needs and wants of its
customers. It can also include activities associated with maintaining relationships with other stake-
holders, such as employees, shareholders, or supply chain partners. Stated another way, marketing
strategy is a plan for how the organization will use its strengths and capabilities to match the needs
and requirements of the market. A marketing strategy can be composed of one or more marketing
programs; each program consists of two elements—a target market or markets and a marketing mix
(sometimes known as the four Ps: product, price, place, and promotion). To develop a marketing
strategy, an organization must select the right combination of target market(s) and marketing mix(es)
to create distinct competitive advantages over its rivals.
Market Segmentation and Target Marketing The identification and selection of one or
more target markets is the result of the market segmentation process. Marketers engage in market
segmentation when they divide the total market into smaller, relatively homogeneous groups or
segments that share similar needs, wants, or characteristics. When a marketer selects one or more
target markets, they identify one or more segments of individuals, businesses, or institutions to-
ward which the firm’s marketing efforts will be directed. Marketers increasingly use online social
networking as a way to target specific markets.
Advances in technology have created some interesting changes in the ways that organizations
segment and target markets. Marketers can now analyze customer-buying patterns in real time
via point-of-purchase data collected from sales transactions and credit card usage, as well as by
analyzing clickstream data in online transactions. This allows organizations to target specif-
ic segments with product offers or promotional messages. Furthermore, technology now gives
marketers the ability to target individual customers through direct mail and e-mail campaigns.
This saves considerable time and expense by not wasting efforts on potential customers who may
not be interested in the organization’s product offering. However, these new opportunities for
marketers come at a price: Many potential buyers resent the ability of marketers to reach them
individually. Consequently, customers and governmental authorities have raised major concerns
over privacy and confidentiality.
Chapter 5 discusses the issues and strategies associated with market segmentation and target
marketing. In that discussion, we will examine different approaches to market segmentation and
look at target marketing in both consumer and business markets. Effective segmentation and
target marketing set the stage for the development of the product offering and the design of a
marketing program that can effectively deliver the offering to targeted customers.
Marketing Program Decisions As we will address in Chapter 6, successful marketing pro-

grams depend on a carefully crafted blend of the four major marketing mix elements (i.e., prod-
uct, price, distribution, and promotion). Earlier in the chapter, we discussed the many different
types of products that can be offered to customers. Since the product and its attributes fulfill the
basic needs and wants of the customer, it is no surprise that the product and the decisions that
surround it are among the most important parts of the marketing program. This importance
hinges on the connection between the product and the customers’ needs. Even large corporations
fail to make this connection at times. McDonald’s, for example, spent more than $100 million
in 1996 to launch the Arch Deluxe—a hamburger designed for adult tastes. Considered one of
the worst product failures in history, the Arch Deluxe failed miserably because it was designed
for older customers (who are not McDonald’s core market), was expensive, and had a very high
calorie content. McDonald’s customers avoided the Arch Deluxe and the sandwich was eventually
discontinued.23 As this example illustrates, marketing is unlikely to be effective unless there is a
solid linkage between a product’s benefits and customers’ needs.
Pricing decisions are important for several reasons. First, price is the only element of the mar-
keting mix that leads to revenue and profit. All other elements of the marketing mix, such as
product development and promotion, represent expenses. Second, price typically has a direct
connection with customer demand. This connection makes pricing the most overmanipulated
element of the marketing mix. Marketers routinely adjust the price of their products in an effort
to stimulate or curb demand. Third, pricing is the easiest element of the marketing program to
change. There are few other aspects of marketing that can be altered in real time. This is a huge
plus for marketers who need to adjust prices to reflect local market conditions, or for online
merchants who want to charge different prices for different customers based on total sales or
customer loyalty. Finally, pricing is a major quality cue for customers. In the absence of other
information, customers tend to equate higher prices with higher quality.
Supply chain issues have typically been among the least apparent decisions made in marketing,
particularly with customers. However, today the supply chain is critical to marketers as they pro-
duce, sell, and deliver products in new and innovative ways. The goal of distribution and supply
chain management is essentially to get the product to the right place, at the right time, in the right
quantities, at the lowest possible cost. Supply chain decisions involve a long line of activities—from
the sourcing of raw materials, through the production of finished products, to ultimate delivery to
final customers. Most of these activities, which customers take for granted, take place behind the
scenes. Traditionally, few customers would contemplate how their favorite cereal ends up on their
grocer’s shelf or how Dell can have a made-to-order computer at your door in days. Customers just
expect these things to happen. In fact, most customers never consider these issues until something
goes wrong. Suddenly, when the grocer is out of an item or an assembly line runs low on component
parts, distribution and supply chain factors become quite noticeable. Today, in many settings, the
supply chain is becoming more obvious to consumers, as companies such as Amazon capitalize on
faster and more innovative ways to deliver products directly to the customer. Same-day delivery of
products via drones, driverless cars, drop-off points, and traditional means have become topics of
interest to many and are possible for Amazon because of the revolutionary approach to managing
the supply chain.24 One key example of how Amazon has transformed supply chain management
is their approach to locating distribution facilities near large population centers to allow more effi-
cient delivery from a larger set of distribution points (instead of a large number of retail stores, like
Walmart). Thus, the supply chain is becoming more obvious to customers as it becomes integral to
product availability and swift delivery to our doors.
Modern marketing has replaced the term promotion with the concept of integrated marketing
communication (IMC), or the coordination of all promotional activities (media advertising,
social media, direct mail, personal selling, sales promotion, public relations, packaging, store
displays, website design, personnel) to produce a unified, customer-focused message. Here, the
term customers not only refers to customers in the traditional sense but also includes employees,
business partners, shareholders, the government, the media, and society in general. IMC rose to
prominence in the 1990s as businesses realized that traditional audiences for promotional efforts
had become more diverse and fragmented. IMC can also reduce promotional expenses by elimi-
nating the duplication of effort among separate departments (marketing, sales, advertising, public
affairs, and information technology) and by increasing efficiencies and economies of scale.
Branding and Positioning When you think about a company such as Southwest Airlines,
what comes to mind? Most people will likely say low fares and “bags fly free.” Others may think of
limited routes and destinations. As we will see in Chapter 7, what customers think about a com-
pany and its offerings is the focus of branding and positioning strategy. To understand branding,
the marketer must have a clear understanding of how the elements of the marketing program
work together to create the brand. While product decisions (such as design, style, and features)
play a prominent role in branding, so do other program elements such as price/value, availability/
exclusivity, and image/reputation of both the firm and its offerings. Marketers must also
make decisions regarding package design, trademarks, and warranties or guarantees. Product
positioning involves establishing a mental image, or position, of the product offering relative to
competing offerings in the minds of target buyers. The goal of positioning is to distinguish or dif-
ferentiate the firm’s product offering from those of competitors by making the offering stand out
among the crowd. As Southwest has shown us, even something as simple as “no bag fees” can be
successful in setting the firm apart from the competition. Another example is the battle between
Walmart and Target. The mental image that most customers have of Walmart is associated with
everyday low prices. Target has a slightly different position, one that emphasizes value with a
stronger sense of style and quality.
1.4e Social Responsibility and Ethics

The role of social responsibility and ethics in marketing strategy has come to the fore-
front of important business issues in today’s economy. Our society still reverberates from
the effects of corporate scandals at Enron, Volkswagen, and Wells Fargo, among others.
Although these scandals make for interesting reading, many innocent individuals have suffered
the consequences from these companies’ unethical behavior. Social responsibility refers to an
organization’s obligation to maximize its positive impact on society, while minimizing its negative
impact. In terms of marketing strategy, social responsibility addresses the total effect of an orga-
nization’s marketing activities on society. A major part of this responsibility is marketing ethics,
or the principles and standards that define acceptable conduct in marketing activities. Ethical
marketing can build trust and commitment and is a crucial ingredient in building long-term
relationships with all stakeholders. Another major component of any firm’s impact on society is
the degree to which it engages in philanthropic activities. Many firms now make philanthropy a
key strategic activity.
In Chapter 8, we discuss the economic, legal, ethical, and philanthropic dimensions of social
responsibility, along with the strategic management of corporate integrity in the marketing plan-
ning process. Although there are occasional lapses, most firms understand their economic and
legal responsibilities. However, social and ethical responsibilities, by their nature, are not so clearly
understood. Many firms see social responsibility not only as a way to be a good corporate citizen
but also as a good way to build their brands. For example, the (RED) brand—created by Bono
in 2006—has been marketed successfully by firms such as Dannon, Durex, and Beats by Dre.
These and other companies market (RED) versions of their products with the aim to donate up to
50 percent of their profits to the Global Fund to fight AIDS in Africa.25
1.4f Implementation and Control

Once a marketing strategy has been selected and the elements of the marketing mix are in
place, the marketer must put the plan into action. Marketing implementation, the process of
executing the marketing strategy, is the “how” of marketing planning. Rather than being an
add-on at the end of the marketing strategy and marketing plan, implementation is actually
a part of planning itself. That is, when planning a marketing strategy, the organization must
always consider how the strategy will be executed. Sometimes, the organization must revisit
the strategy or plan to make revisions during the strategy’s execution. This is where market-
ing control comes into play. Adequate control of marketing activities is essential to ensure
that the strategy stays on course and focused on achieving its goals and objectives. In the
past, assessment of marketing activities was a “backward-looking” activity that assessed what
happened with relation to what we expected to happen. Today, with the advent of increasing
customer-generated data and sophisticated data analytics initiatives, marketers are able not
only monitor and measure “real-time” results of marketing activities but also assess “forward-
looking” results through accurate predictive measures of expected performance. Thus, mar-
keters can now assess, adjust, and implement as product launches and campaigns are in
progress, not after they are completed.
The implementation phase of marketing strategy calls into play the fifth P of the marketing
program: people. As we will learn in Chapter 9, many of the problems that occur in implement-
ing marketing activities are “people problems” associated with the managers and employees on
the frontline of the organization who have responsibility for executing the marketing strategy.
Many organizations understand the vital link between people and implementation by treating
their employees as indispensable assets. Hyatt, for example, has been named seven consecutive
years by Fortune magazine to its list of the “100 Best Companies to Work for in America.” The
company has developed a corporate culture that focuses on caring for employees and provid-
ing for their needs.26 Exhibit 1.4 highlights the top 10 best companies to work for, according to
Fortune. Increasingly, to aid their people with implementation, marketers are utilizing AI systems
and machine learning to use past experience to improve current implementation. In one example,
a call-center employee talking to a customer is also joined by an AI bot that listens, learns, and
applies knowledge from past interactions to prompt potential solutions and new products that
might help the customer.27 Thus, the people implementing marketing activities now have addi-
tional help to do their jobs more effectively.
EXHIBIT 1.4 Fortune’s 10 Best Companies to Work For
Rank Company
1 Hilton
2 Ultimate Software
3 Wegmans Food Markets
4 Cisco
5 Workday
6 Salesforce
7 Edward Jones
8 Stryker
9 American Express
10 Kimpton Hotels & Restaurants
Source: “100 Best Companies to Work For,” Fortune, 2020, https://fortune.com/best-companies/ (accessed February 28, 2020).
1.4g Developing and Maintaining Customer Relationships

Over the last two decades, marketers have come to the realization that they can learn more about
their customers, and earn higher profits, if they develop long-term relationships with them.
This requires that marketers shift away from transactional marketing and embrace a relation-
ship marketing approach. The goal of transactional marketing is to complete a large number of
discrete exchanges with individual customers. The focus is on acquiring customers and making
the sale, not necessarily on attending to customers’ needs and wants. In relationship marketing,
the goal is to develop and maintain long-term, mutually satisfying arrangements where both
buyer and seller focus on the value obtained from the relationship. As long as this value stays the
same or increases, the relationship is likely to deepen and grow stronger over time. Exhibit 1.5
illustrates the basic characteristics of transactional versus relationship marketing. Relationship
marketing promotes customer trust and confidence in the marketer, who can then develop a
deeper understanding of customers’ needs and wants. This puts the marketer in a position to
respond more effectively to customers’ needs, thereby increasing the value of the relationship
for both parties.
The principles and advantages of relationship marketing are the same in both business-
to-business and consumer markets. Relationship marketing activities also extend beyond
customers to include relationships with employees and supply chain partners. The newest
relationship-building activities include a focus on helping customers to use products more
effectively, making sure they receive the value that is available in the product. This process,
called customer success management, is illustrated at a consumer level via Netflix’s ability to
utilize data and offer suggestions, special programming, and easier-to-use categories to help its
customers have a better experience. In Chapter 10, we discuss these and other aspects of rela-
tionship marketing in greater depth. Long-term relationships with important stakeholders will
not materialize unless these relationships create value for each participant. This is especially
true for customers faced with many different alternatives among firms competing for their busi-
ness. Since the quality and value of a marketer’s product offering typically determine customer
value and satisfaction, Chapter 10 will also discuss the role of quality, value, and satisfaction
in developing and maintaining customer relationships. Issues associated with quality, value,
and satisfaction cut across all elements of the marketing program. Hence, we discuss these
issues in our final chapter as a means of tying all of the marketing program elements together.
EXHIBIT 1.5 Major Characteristics of Transactional and Relationship Marketing
Transactional Marketing Relationship Marketing

Marketing Focus Customer Acquisition Customer Retention
Time Orientation Short-Term Long-Term
Marketing Goal Make the Sale Mutual Satisfaction
Relationship Focus Create Exchanges Create Value
Customer Service Low High
Priority
Customer Contact Low to Moderate Frequent
Commitment to Low High
Customers
Characteristics of the Adversarial, Manipulation, Cooperation, Trust,
Interaction Conflict Resolution Mutual Respect,
Confidence
Source of Competitive Production, Marketing Relationship
Advantage Commitment
A Perfect Fit: Strategy at Zappos 28

In 2000 Tony Hsieh became the CEO of the Zappos online instead giving customers added value with loyalty programs
shoe retailer at age 26. Hsieh saw opportunity to create val- and other customer service perks. The company has disrupt-
ue for customers by using its resources to provide a stellar ed the way consumers traditionally purchased shoes from
customer service experience to shoppers. Zappos strives to department and specialty shoe stores.
make the shopping experience easy and enjoyable, provid- Zappos’s customer-centric strategy focuses on building
ing a 100 percent Satisfaction Guaranteed Return Policy to customer relationships through human interaction. For ex-
build and maintain strong customer relationships. ample, if a customer experiences a problem with an order or
Recognizing the hesitancy of many shoppers to purchase has a question about a product, Zappos responds honestly,
shoes online, Zappos encourages customers to order several authentically, and in a timely manner. In the past, the com-
styles and return items if needed. This strategy may seem pany has used customer success stories in its ads to high-
expensive but tends to work in Zappos’s favor and satisfies light Zappos’s ability to satisfy its customers. Thus, Zappos’s
a customer’s needs in ways that many retailers do not. It competitive advantage comes from being an expert at rela-
also allows customers to feel confident when shopping with tionship marketing. The company builds satisfying, long-term
the company as they are able to return unwanted products customer relationships and increases customer lifetime
easily. Additionally, the company tends to avoid promotions, value as happy customers make repeat purchases.
1.5 TAKING ON THE CHALLENGES OF MARKETING

STRATEGY
One of the greatest frustrations and opportunities in marketing is change—customers change,
competitors change, technology changes, and even the marketing organization changes. Strate-
gies that are highly successful today will not work tomorrow. Customers will buy products today
that they will have no interest in tomorrow. These are truisms in marketing. Although frustrating,
challenges like these also make marketing extremely interesting and rewarding. Today, more than
ever, life as a marketer is never dull.
Another fact about marketing strategy is that it is inherently people-driven. Marketing strat-
egy is about people (inside an organization) trying to find ways to deliver exceptional value
by fulfilling the needs and wants of other people (customers, shareholders, business partners,
society at large), as well as the needs of the organization itself. Marketing strategy draws from
psychology, sociology, and economics to better understand the basic needs and motivations
of these people—whether they are the organization’s customers (typically considered the most
critical), its employees, or its stakeholders. Marketing also draws from data on people to better
understand how its products are used, viewed, and experienced to continually improve value
and experience offerings. In short, marketing strategy is about people understanding and serv-
ing people.
The combination of continual change and the people-driven nature of marketing makes
developing and implementing marketing strategy a challenging task. A perfect strategy that is
executed perfectly can still fail. This happens because there are few rules for how to do marketing
in specific situations. In other words, it is impossible to say that given “this customer need” and
these “competitors” and this “level of government regulation,” Product A, Price B, Promotion C,
and Distribution D should be used. Even with excellent data, and resources to analyze and inter-
pret the data, the “formula” approach doesn’t always work. Sometimes, an organization can get
lucky and be successful despite having a terrible strategy and/or execution, and sometimes a great
strategy and product can fail. The lack of rules and the ever-changing and disruptive economic,
sociocultural, competitive, technological, and political/legal landscapes make marketing strategy
a terribly fascinating subject that is new every day.
Most of the changes that marketers have faced in the twenty-first century deal with the
basic evolution of marketing and business practice in our society. One of the most basic shifts
involves the increasing demands of customers. Today, customers have high expectations
about basic issues such as quality, performance, price, and availability. This expectation of
better and more useful things is an outcome of successful marketing. In essence, marketers
have trained customers to expect more and quickly. American customers in particular have
a passion for instant gratification that marketers struggle to fulfill. The American Customer
Satisfaction Index, computed by the National Quality Research Center at the University of
Michigan, indicates that customer satisfaction has recovered since the Center first computed
the index in 1994. As shown in Exhibit 1.6, the airline and personal computer industries have
experienced an overall upward trend in customer satisfaction.
Customers have become much less brand loyal than in previous generations. Today’s custom-
ers are price sensitive, especially in commoditized markets where products lack any real means
of differentiation (such as airlines). Consequently, customers constantly seek the best value and
thrive on their ability to compare prices among competing alternatives. Customers are also quite
cynical about business in general and are not that trusting of marketers. In short, today’s cus-
tomers not only have more power; they also have more attitude. This combination makes them a
formidable force in the development of contemporary marketing strategy.
Marketers have also been forced to adapt to shifts in markets and competition. In terms of
their life cycles, most products compete today in mature markets. Many firms also compete in
markets where product offerings have become commoditized by a lack of differentiation (e.g.,
customers perceive competing offerings as essentially the same). Some examples include air-
lines, wireless phone service, department stores, laundry supplies, and household appliances.
Product commoditization pushes margins lower and reduces brand loyalty even further. To meet
EXHIBIT 1.6 American Customer Satisfaction Index
90
85
80
75
70
65
60
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Overall Airlines Personal Computers
Internet Retail Automobiles Health Insurance
Source: American Customer Satisfaction Index, http://www.theacsi.org (accessed February 27, 2020).
this challenge, U.S. firms have moved aggressively into foreign markets in an effort to increase
sales and find new growth opportunities. At the same time, however, foreign firms have moved
into U.S. markets to meet the challenges of maturing markets in their own countries. Finally,
many industries have fallen to competition they didn’t even see coming. For example, the taxi
industry has lost considerable market share to Uber and Lyft, both products that were never
anticipated until it was too late. In addition, these car-sharing services threaten demand for oth-
er products such as public transportation, automotive, and even insurance as consumers forgo
inconvenient transportation or costly ownership by just calling an Uber or Lyft.
In the face of increasing competition and maturing markets, businesses have been forced to
cut expenses to remain competitive. Some businesses do this by eliminating products or product
lines. Honda, for example, discontinued its Honda Clarity Electric due to low demand.29 Others
have maintained their product mix but have aggressively sought ways to lower their distribution
costs. The growth in direct distribution (manufacturer to end user) is a result of these efforts. Still
other firms have been forced to take drastic measures, such as downsizing and laying off employ-
ees to trim expenses.
Needless to say, developing a viable and effective marketing strategy has become extremely
challenging. Even the most admired marketers in the world like McDonald’s, Procter & Gamble,
Anheuser-Busch, and Toyota occasionally have problems meeting the demands of the strategic
planning process and developing the “right” marketing strategy. Our goal in this book is not to
teach you to develop the “right” strategy. Rather, our approach will give you a framework for or-
ganizing the planning process and the ability to see how all of the pieces fit together. Think of it
as a mindset or way to think about marketing strategy. The remainder of this text dedicates itself
to these goals.
LESSONS FROM CHAPTER 1 ●● is defined as the activity, set of institutions, and processes
for creating, communicating, delivering, and exchanging
The challenges and opportunities of marketing in today’s offerings that have value for customers, clients, partners,
economy include: and society at large
has changed in focus over time; today, marketing stresses
in many cases consumers have more power, yet marketers
●●
●●
value and customer relationships, including relationships
are regaining power via increasingly sophisticated data
with all potential stakeholders
analytics
is linked with our standard of living, not only in terms of
changes to products, availability of them, and in-
●●
●●
enhanced consumption and prosperity but also in terms
creases to varieties available provide challenges to
of society’s well-being
marketers
●● greater audience and media fragmentation as customers Basic marketing concepts include:
spend more time with new media outlets and less time
with traditional media
●● market—a collection of buyers and sellers
●● changing customer perceptions of value and frugality
●● marketplace—a physical location where buyers and sell-
●● shifting demand patterns for certain product catego- ers meet to conduct transactions
ries, especially those delivered digitally and direct-to-
●● marketspace—an electronic marketplace not bound by
consumer time or space
●● increasing concerns over privacy, security, and ethics
●● exchange—the process of obtaining something of value
●● unclear legal jurisdictions, especially in global markets from someone by offering something in return, which
usually involves obtaining products for money; there are
Marketing: five conditions of exchange:
●● is parallel to other business functions such as production, 1. There must be at least two parties to the exchange.
research, management, human resources, and account- 2. Each party has something of value to the other party.
ing; the goal of marketing is to connect the organization 3. Each party must be capable of communication and delivery.
to its customers by promoting a customer-centric view 4. Each party must be free to accept or reject the exchange.
that places the customer at the heart of all strategy and 5. Each party believes it is desirable to exchange with the
other party.
decision making
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Akto V.
Sceno 1.—Antaŭ la grotĉambro de Prospero.
(Venas Prospero magie vestita, kaj Arielo).
Prospero.
Nun mia plano venas al finiĝo.
Spiritoj magipove min obeis
Oportunege. Horo nun kioma?
Arielo.
La sesa proksimiĝas. Vi promesis
Ke tiam ĉesos nia laborado.
Prospero.
Promeson mian certe mi plenumos,
Ĉar bone vi min servis. Diru kien
La Reĝon kaj sekvantojn vi kondukis.
Arielo.
Sub l’ ombrodona via tiliaro,
Malliberuloj, kune ili staras
Terure timigitaj; en la stato
Por ilin puni de vi preparita,
Ne povas ili ŝanĝi ĝis vi volos.
La Reĝo, lia frato, kaj la via
Triope staras strange konsternitaj,
Dum la ceteraj ploras apud ili,—
Precipe l’ bona maljunul’ Gonzalo,
Sur kies blankan barbon larmoj falas
Simile al malvarmaj vintraj gutoj
De kana tegmentrando. Via povo
Ĉagrenas ilin nun interne tiel
Ke ilin vidi tuŝus vian koron.
Prospero.
Ĉu vi, spirito, tion vere pensas?
Arielo.
Min tuŝus tio se mi estus homa.
Prospero.
Min tuŝu ĝi do, ĉar mi homo estas.
Ĉu vi, aero nur, kompatas homojn,
Dum, similul’ ilia, mi ne sentos
Pli ol vi kompatema?—Kiel ili
Ĉu ĝojon, ĉu ĉagrenon mi ne havas?
Malbone kvankam ili kun mi agis,
Kaj vundis min profunde, mi forpelos
Koleron mian propran: grandanimo
Ol venĝo estas virto pli laŭdinda.
Pentantajn ilin povas mi pardoni,
Eĉ sen sulkiĝo. Iru, Arielo,
Kaj ilin liberigu. Magiaĵon
Tuj rompos mi, al ĉiu por redoni
Sentemon ĝustan.
Arielo.
Tuj mi iros, Mastro. (Foriras).
Prospero.
Koboldoj riveretaj kaj montetaj,
Lagamistetoj, arbarvizitistoj;
Vi, sur la sablo kiuj l’ ondon sekvas,
Kaj ride antaŭkuras for l’ alfluon;
Duonestaĵoj, kiuj sub la luno,
Elfaras la maldolĉajn herbrondaĵojn
Maĉeblajn tute ne de la ŝafino;
Vi, fungfaristoj, kiuj nokte ludas,
Kaj ĝoje aŭdas vespersonoradon—
Per vi, malfortaj kvankam estaĵetoj,
Tagmezan povis mi nubigi sunon,
Eĉ leviĝigi ventojn ribelantajn,
Eĉ verdan maron kun ĉielo blua
Interbatigi muĝe; mi fulmigis
Tra laŭtkrakanta tondro; fajre fendis
La Jupiteran kverkon per difulmo.
Mi skuis promontoran fundamenton,
Elradikigis cedron kaj pinarbon;
Eĉ tomboj vekis siajn endormantojn
Kaj malfermiĝis ilin por forsendi,
Per mira povo mia.—Sed nun ĉesu
La magiarto, de mi forĵurita;
Ĉar, poste iom da muziko dolĉa,
(Tuj de mi dezirata por ke baldaŭ
Pentuloj sentojn siajn ree havu)
Korege rompos mi bastonon mian
Kaj teren ĝin enfosos multajn futojn,
Kaj, pli profunde eĉ ol ajn sondilon,
La libron mi dronigos!
(Solena Muziko).
(Revenas Arielo; lin sekvas Alonzo kun freneza mieno, kune
kun Gonzalo; Sebastiano kaj Antonio, sammaniere, kune
kun Adriano kaj Francisko.—Ili ĉiuj enpaŝis la rondon, kiun
Prospero estis antaŭpretiginta: tie ili staras magie senmovaj;
tion vidante, Prospero parolas:)
Ari’ solena, taŭga kuracado,
Nun senutilan vian tutan cerbon
Rekonsciigu, en kranio via:
Cetere vi en magipovo staras.—
Gonzalo! virta, honorinda viro,
Okuloj miaj simpatie ploras
Kun viaj; falas de mi frataj larmoj . . .
—Magio nun rapide malaperos,
Kaj, kiel la maten’ svenigas nokton,
Iliaj sentoj la nebulan staton
Forigos tuj, kaj ree sin ekvekos.—
Gonzalo! bona vir’, savinto mia,
Subul’ al via Reĝo tre fidela,
Noblanimulo, estos viaj servoj
Pagitaj hejme, voĉe, kaj per agoj!
Alonzo, tre kruele vi agadis
Kun mi kaj kara infanino mia,
Kaj tiu via frato krime helpis,—
—Sebastian’ interne tion sentas—
Eĉ vi, ho frato! karno, sango mia,
Mortigis, ambicie, natursentojn,
Sebastianon puŝis al perfido . . .
—Duoble li pro tio nun suferas!—
La Reĝon ambaŭ vi mortigi volus . . .
Sed al vi mi pardonas, Antonio.
—Ilia komprenado ekrevenas:
Idealfluo sane replenigos
Pensrandon magiŝlime nun kovritan.
El ili tamen min neniu konus,
Eĉ se min ili vidus.—Arielo,
Alportu mian glavon kaj ĉapelon.
(Foriras Arielo).
Nun tute magiveston mi deprenu,
Kaj kiel dukon de Milan’ min montru.
(Al Arielo kiu revenas kaj helpas vesti lin).
Spirit’, rapidu! Vi tuj liberiĝos!
Arielo kantas:
Ĉe l’ abel’ kunsuĉos mi,
En primolo kuŝos ni,
Tie ni ripozos, dum
La strigo vokos en mallum’.
Sur vesperto rajdos mi
Post la somer’, gaje, ho!
Gaje tre! gaje, ho! vivos mi nun,
Sub arba flor’ varmigata de l’ sun’.
Gaje, ho! vivos mi, gaje tre, nun,
Varmigos min la brila sun’,
Sub arba floro mi vivos nun!
Prospero.
Ĉarmege! Al mi, Ariel’, vi mankos;
Sed vi libera estos aerido.
Ĉi tien de la Reĝa ŝip’ venigu
Ŝipestron kaj subestron ĉiam viglajn,
Maristojn ankaŭ sub ferdek’ dormantajn.
Tuj iru.
Arielo.
Mastro, mi l’ aeron glutos:
Eĉ antaŭ du pulsbatoj mi revenos.
(Foriras Arielo).
Gonzalo.
Turmento, peno, miro kaj mirego
Ĉi tie loĝas: ke ĉiela povo
Konduku nin el la insul’ terura!
Prospero.
La suferintan dukon de Milano,
Prosperon, nun rigardu, moŝta Reĝo!
Por pli ĉertigi ke vivanto princa
Al vi parolas, mi vin ĉirkaŭprenas:
Ĉar al vi kaj sekvantoj mi deziras
Bonvenon, kore!
Alonzo.
Ĉu Prosper’ vi estas,
Aŭ sorĉapero por min malinformi,
Ne povus nun mi diri: via pulso
Tre home batas certe: mi ekpensas
Ke, de l’ intervidiĝo nia lasta
Ĝis nun, posedas min frenezo ia. . . .
Ĉu ne postulas ĉio ĉi klarigon,
Rakonton strangan?—La dukecon vian
Forlasas mi, de vi nun peteganto!
Pardonu mian kulpon!—Sed, Prospero!
Ĉi tie kiel staras li—kaj vivas?
Prospero.
Unue, nobla maljunul’ Gonzalo,
Ke mi vin respektege ĉirkaŭprenu:
Honoro via estas netaksebla,
Eĉ senegala.
Gonzalo.
Ĉu ĉi tio estas?
Ĉu ne? Mi ne komprenas. . . .
Prospero.
Strangaĵecon
Insulnaskitan, vi ankoraŭ sentas;
Ĝi ne permesas al vi veron vidi.
Bonvenon koran al amikoj miaj!—
(Flanken al Sebastiano kaj Antonio).
Se tamen volus mi, kortega paro,
Malkaŝi perfidaĵon vian, vere
Sur vin sulkiĝus tuj la Reĝa brovo;
Sed mi silentos.
Sebastiano (flanken).
Li diable prava!
Prospero (al Antonio).
Vi, malbonulo, kiun frato’ nomi
Eĉ buŝon malpurigus, mi pardonas
Kulpegojn viajn tute, postulante
Ke al mi tuj duklandon vi redonu—
Sed tion nepre vi devige faros—
Alonzo.
Se estas vi Prosper’, al ni rakontu
Detale vian ĝis nun konserviĝon;
Klarigu tiun ĉi interrenkonton—
Ĉar de tri horoj nur, ni marirante
Suferis ŝippereon sur ŝtonbordo,
Kaj tie mi (kruela penso!) perdis
Karegan filon!
Prospero.
Tre mi vin kompatas!
Alonzo.
Neriparebla perdo! Pacienco
Kuraci ĝin ne povas.
Prospero.
Sed mi pensas
Ke vi ne tute petas ĝian helpon:
Al mi, por sama perdo, pacienco
Fariĝas kontenteco konsolanta.
Alonzo.
Ĉu vi ĵus dirus, “sama perdo”?
Prospero.
Sama,
Kaj ankaŭ tute nova. Elportebla
Por fari ĝin mi havas nur rimedojn
Ol viaj pli malfortajn, ĉar filinon
Ne antaŭ longe perdis mi.
Alonzo.
Filinon?
Ĉielo! kial, Reĝo kaj Reĝino,
En Neapolo nun ne estas ili?
Por okazigi tion, tre volonte,
Anstataŭ filo mia, sur marfundo
Mi kore enŝlimiĝus. Nu, filinon,
Ŝin kiam perdis vi?
Prospero.
En la Ventego,
Samtempe kiam vi la filon perdis.
Mi vidas ke tre miras vi, sinjoroj,
Pri tiu ĉi okaz’; vi preskaŭ dubas
L’ ateston de okuloj kaj oreloj;
Sed, kiel ajn vi provizore perdis
De l’ sentoj uzon, sciu nun ke certe
Prosper’ mi estas, mi la rajta duko,
Mi, kiu, forpelita el Milano
Atingis poste la insulon kies
Ĉefviro estas mi, sur kies bordo
Okazis via propra ŝippereo.
Sed tian ĉiutagan historion
Nek povus mi rakonti en kunsido,
Nek dum tagmanĝo. Nu! bonvenon, Reĝo,
Al la grotĉambro nur kortego mia.
Interne sekvantar’ nenia staras,
Ekstere ne subuloj: nun, rigardu!
Tuj, pro duklando kiun vi redonas,
Mi pagos vin per multa plibonaĵo:
Almenaŭ kontentigos vin la vido
Eĉ pli ol min duklando.
(La grotĉambro malfermiĝas kaj montras Ferdinandon kaj
Mirandon ŝakludantajn).
Mirando.
Vi friponas,
Karulo—
Ferdinando.
Ne, amata koro mia,
Por tuta mond’ ne volus mi falsludi.
Mirando.
Falsludi povus vi, por dudek regnoj,
Eĉ tiam dirus mi ke vi bonludas.
Alonzo.
Se estas tio nur insulapero
Karegan filon mi dufoje perdos.
Sebastiano.
Mirakl’ altega!
Ferdinando.
Kvankam muĝas l’ ondoj,
Kompaton havis ili: mi neprave
Malbenis ilin.
(Genufleksas al Alonzo).
Alonzo.
Ke plenkoraj benoj
De ĝoja patro vin ĉirkaŭu tute:
Leviĝu. Kiel vi ĉi tien venis?
Mirando.
Ho! miro! kiom da kreitoj belaj
Nun staras tie ĉi! homaro nobla!
Belega, nova!
Prospero.
Nova por vi, kara.
Alonzo (al Ferdinando).
Ŝin, kiu kun vi ĵus interŝakludis,
Al mi konigu—kvankam reciproke
Nur estas vi trihoraj gekonatoj—
Ĉu estas ŝi diin’ nin disiginta
Por nin reunuigi?
Ferdinando.
Ne, sinjoro;
Mortema ŝi; sed, per nemorta Povo,
Ŝi mia estas, de mi elektita
En tempo, kiam nek de vi permeson
Mi peti povis, nek vin pensis viva;
Filino de Milana fama duko—
—Tre ofte jam lin aŭdis mi laŭdatan,
De mi, ĝis nun, lin tamen nekonatan—
De kiu novan vivon mi ricevis:
Per kara fianĉino li fariĝas
Nun dua patro mia.
Alonzo.
Patro ŝia
Fariĝas mi.—Sed kiel strange ŝajnas
Pardonon peti de l’ infano mia!
Prospero.
Sinjoro, haltu tie: ni ne ŝarĝu
Memoron nian per la malbonaĵo
Feliĉe nun pasinta.
Gonzalo.
Mi interne
Ĵus tiel ĝoje ploris, ke pli frue
Ne povis mi paroli . . . Dioj povaj!
Rigardu, benu per duobla krono
Geprincojn niajn! Ĉar vi markis vojon
Por la interrenkonto!
Alonzo.
Amen! Estu!
Gonzalo.
Ĉu el Milan’ Prospero forpeliĝis
Por ke l’ idaro lia reĝe sidu
Sur Neapola trono? Estu ĝojaj!
Plej ĝojaj kiel eble! Tion skribu
En orleteroj sur kolonoj daŭraj.
Vojaĝo mira! edzon en Tuniso
Akiris Klaribel’; per ŝippereo
Edzinon ŝia frato Ferdinando
Feliĉe trovis; eĉ Prosper’ duklandon,
Kaj ĉiu el ni sin mem—jam perditan—
En insulet’ retrovas.
Alonzo (al Ferdinando kaj Mirando).
Viajn manojn
Al mi nun donu: doloriĝu koro
Ne deziranta al vi ĝojon.
Gonzalo.
Amen!
(Revenas Arielo kun ŝipestro kaj subestro tute miregante
sekvantaj lin).
Sinjoro! nun rigardu, el ni vivas
Pli multaj ol eĉ povus ni esperi!
Ĉu en la ŝipo mi ne antaŭdiris
Ke tia maltaŭgulo ne droniĝos
Se estas pendigilo apud bordo?
Marblasfemulo, tute vi silentas:
Ĉu landnovaĵon vi ne povas ĵuri?
Subestro.
Ke ni revidas Reĝon kaj sekvantojn,
Novaĵo la plej bona certe estas:
Nur tri sabloŝutiloj malpleniĝis
De l’ ŝipfendiĝo ĝis la nunminuto,
Sed, tute ŝnurarmita, nia ŝipo
Nun estas bele taŭga por mariri,
Kaj tia kia ĝi antaŭe estis.
Arielo (flanken al Prospero).
Sinjoro, mi plenumis tiun servon
Dum forestado mia.
Prospero (flanken al Arielo).
Mirestaĵo!
Alonzo.
Okazoj tiaj ne naturaj estas:
Eĉ ili pli kaj pli strangiĝas. Diru,
Ĉi tien kiel ambaŭ el vi venis?
Subestro.
Sinjoro, se mi nun ne malspritiĝos
Volonte al Vi mi sciigos tion . . .
Ni ĉiuj morte sentis nin dormemaj,
Kaj sub ferdek’ kuŝantaj . . . Bruegaĵo
Katena, bleka, muĝa, kaj kriega
El tiu loko nin terure vekis . . .
Liberaj tiam, ni mirege vidis
La reĝan, bonan, bravan ŝipon nian,
Ŝnuraĵigita kaj de nove taŭga.
Ŝipestro nia vigle, gaje kuris
Por ĝin rigardi—Sed, dum palpebrumo,
Nubiĝaj, sonĝe, ĉiujn ni forlasis . . .
Kaj tien ĉi veniĝis . . .
Arielo (flanken al Prospero).
Ĉu mi bone
Elfaris vian volon?
Prospero (flanken al Arielo).
Diligente!
Tuj estos vi libera!
Alonzo.
Labirinton
Similan viro ajn neniam paŝis;
Gvidil’ mirega, ol natur’ pli alta,
La tuton antaŭplanis. Orakolo
Nur povus ĝin klarigi.
Prospero.
Reĝa Moŝto,
Plu ne turmentu nun spiriton vian
Pri tiuj ĉi strangaĵoj . . . Libertempe.
Ne longe de nun, poste mi klarigos
Okazojn, kiujn eble vi aprobos:
Ĝis tiam, estu ĝoja, mi petegas.
(Flanken al Arielo) Spirito, venu: tuj nun liberigu
Eĉ Kalibanon kaj kunulojn liajn.
(Foriras Arielo).
Mi petas vin, ho Reĝo, kontentiĝu.
Ankoraŭ mankas kelke da sekvantoj,
Sed ilin vi kredeble ne memoras.
(Revenas Arielo enpuŝanta Kalibanon, Stefanon, kaj
Trinkulon, kiuj portas la ŝtelitan vestaĵon).
Stefano.
Ĉiu homo elturniĝu por la ceteraj, kaj neniu estu singardema, ĉar ĉio
estas nur ŝanco. Kuraĝe! monstregulo! kuraĝe!
Trinkulo.
Se kredindaj estas la spioniloj kiujn mi portas vizaĝe, jen estas bela
vidaĵo!
Kalibano.
Setebos! estas jen spiritoj gloraj!
Kaj kiel bela estas mia mastro!
Mi timas ke li min severe punos.
Sebastiano.
Ha, ha! sinjoro mia, Antonio,
Objektoj tiaj, diru, kiaj estas?
Ĉu aĉeteblaj?
Antonio.
Ili? Kompreneble,
Ĉar unu estas fiŝo, kaj vendebla.
Prospero.
La montron de la trio bone notu,
Sinjoroj. Ĉu honestaj ili ŝajnas?
De tiu malbelulo la patrino
Potenca sorĉistino tiel estis,
Ke ŝi la lunon povis eĉ kontroli,
Alfluon kaj forfluon vole fari,
Eĉ kontraŭ la lunpovo—Nun, triope,
Vestaĵon tiun ili de mi ŝtelis—
La duondiablido min mortigi,
Per helpo de kunuloj, jam intencis;
Du el maltaŭganaro vi mem konas:
Ĉi tiu mallumaĵo estas mia.
Kalibano.
Min morte pinĉos li!
Alonzo.
Kelisto mia,
Ĉu li drinkema estas ne Stefano?
Sebastiano.
Ebria nun, li kie ŝtelis vinon?
Alonzo.
Trinkulo mem de vino ŝanceliĝas:
El kie prenis ili la likvoron
Maturiĝantan en la maltaŭguloj?
Peklaĵon tian kio kaŭzis? Diru!
Trinkulo.
De l’ tempo de mia lasta renkonto kun Vi, mi troviĝis en tia peklaĵo,
ke kredeble ĝi neniam foriros el miaj ostoj: mi ne timos
muŝovĝermiĝon!
Sebastiano.
Nu! kion vi diras, Stefano?
Stefano.
Ne tuŝu min! Mi jam ne estas Stefano, sed nur streĉego!
Prospero.
Vi volus esti Reĝo de l’ insulo?
Stefano.
Doloran Reĝon havus do l’ insulo.
Alonzo (montrante Kalibanon).
Strangaĵon tian mi ĝis nun ne vidis!
Prospero.
Malbonkonduta estas li, Sinjoro,
Eĉ tiel kiel estas li malbela—
Vi tri, tuj iru en grotĉambron mian
Kaj bele ĝin balau kaj ornamu,
Pardonon mian se vi gajni volas.
Kalibano.
Mi certe volas. En la estonteco
Pli saĝa tute estos mi, kaj penos
Pardonon de la mastro por ricevi.
Ho triobleduobla mi azeno!
Por dio mi trinkulon tian prenis
Kaj malspritulon mi adoris!
Prospero.
Iru!
Alonzo.
For de ĉi tie kaj pakaĵon portu
Al ĝia loko—
Sebastiano.
Kie ĝin vi ŝtelis.
(Foriras Kalibano, Stefano, kaj Trinkulo).
Prospero.
Nun, Via Reĝa Moŝto, kaj sekvantoj,
Bonvolu tuj akcepti la gastamon
De simpla groto, kie vi ripozos
Ĉi tiun noktodaŭron. Tre rapide
La tempon ni pasigos: mi rakontos
Al vi la mian vivon, de l’ momento
En kiu la insulon mi atingis.
Matene morgaŭ vin mi kunkondukos
En vian ŝipon, poste Neapolon,
Ĉefurbon kie mi esperas vidi
De niaj gekaruloj la edziĝon,
Kaj fine, en Milano mia, vivos
Min pretiĝante por la tombo.
Alonzo.
Vere,
Mi tre deziras aŭdi la rakonton
De viaj aventuroj en l’ insulo:
Tre stranga devus esti.
Prospero.
Vi ĝin aŭdos:
Mi ĉion diros; mi al vi promesas
Kvietajn ondojn, tre facilajn ventojn,
Eĉ tian marveturon ke vi trafos
Ŝiparon vian kvankam malproksiman—
(Al Arielo) Vi, Arielo, tion tuj elfaros,
Birdeto kara, tiam, liberiĝu!
Adiaŭ, Ariel’!—(Al Alonzo kaj aliaj) Kun mi nun venu!
(Ĉiuj foriras).
Epilogo
parolata de Prospero
Nun magio plu ne estas:
Sola mi malforta restas.
Dum tri horoj, estas vere
Ke vi agis ne severe
Kun mi, duko de Milano
Kiun timis Kalibano.
Kiam ĉiujn mi pardonis,
Al mi vi aprobon donis:
Spite je la uzurpulo
Me ne restos en l’ insulo.
Neapolon tuj nin sendu;
Ne prokrastu, ne atendu.
Kun remmanoj de aplaŭdo,
Ankaŭ kun voĉventa laŭdo,
Brave helpu nin elfari
Nian celon sen erari.
Se petanta mi eĉ pekos,
Mi pardonon en vi vekos.
Preĝu por ni, ho popolo!
Ke ĉi tie eĉ ne colo
De malamo sin vidigu,
Nin, gefratoj, liberigu.
1623-1903
Nubkronaj Turoj
Sesparta Kanto de R.J. Stevens
El “La Ventego”
Adagio ne troa.
Nub-kronaj turoj, kaj luksaj pa-lacoj solen-aj sankte-joj Eĉ la
granda terglobo kaj ĝi-a tuten-havo
kaj luksaj pa-lac-oj solen-aj sanktejoj Eĉ la granda ter-globo kaj
ĝi-a tuten-havo
Nub-kronaj turoj, kaj luksaj pa-lac-oj solen-aj sanktejoj Eĉ la
granda terglobo kaj ĝi-a tuten-havo
mala-peros, si-mile al lud-sceno ne substanca, Ne lasos ili

strekon, ian strekon lasos ne!
mala-peros, si-mile al lud-sceno ne substanca, ian strekon lasos
ne!
mala-peros, si-mile al lud-sceno ne substanca, ian strekon lasos
ne!

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Australia ● Brazil ● Canada ● Mexico ● Singapore ● United Kingdom ● United States

Product Director: Joe Sabatino

Sr. Director, Marketing: Kristen Hurd

To learn more about Cengage platforms and services, register or access

Printed in the United States of America

To the amazing women in my life, Marsha, Meghan, Madison, and Mallory

PART 1 Setting the Stage for Marketing Strategy

PART 2 Discovering Market Opportunities

PART 3 Developing Marketing Strategy

PART 4 Putting Strategy into Action

CASE 14 Zappos Finds the Perfect Fit 431

Appendix Marketing Plan Worksheets 507

PART 1 Setting the Stage for Marketing Strategy

Maintaining Customer Focus and Balance in Strategic Planning 45

PART 2 Discovering Market Opportunities

SWOT-Driven Strategic Planning 92

PART 3 Developing Marketing Strategy

PART 4 Putting Strategy into Action

Relationship to Marketing and Financial Performance 229

CASE 1 Tesla Races Ahead With Nontraditional Marketing Strategy 291

Appendix Marketing Plan Worksheets 507

Bernadette Gallegos, University of New Mexico

O.C. Ferrell, Ph.D.

Michael D. Hartline, Ph.D.

Bryan W. Hochstein, Ph.D.

BEYOND THE PAGES 1.1

The Future of Marketing 1

1.2 THE CHALLENGES AND OPPORTUNITIES OF

1.2a Power Shift to Customers

EXHIBIT 1.1 Fundamental Changes to Marketing

Change Category Market Change Implications

1.2b Changes in Products and Selection

1.2c Audience and Media Fragmentation

EXHIBIT 1.2 Time Spent with Media

Digital TV* Radio*

1.2d Changing Value Propositions

1.2e Shifting Demand Patterns

1.2f Privacy, Security, and Ethical Concerns

1.2g Unclear Legal Jurisdiction

1.3 BASIC MARKETING CONCEPTS

1.3a What Is a Market?

1.3b What Is Exchange?

1.3c What Is a Product?

Action Sports Photography/Shutterstock.com

BEYOND THE PAGES 1.2

THE A-TO-Z of Amazon’s Marketing Strategy 20

1.4 MA JOR MARKETING ACTIVITIES AND DECISIONS

1.4a Strategic Planning

1.4b Research and Analysis

1.4c Developing Competitive Advantage

1.4d Marketing Strategy Decisions

Marketing Program Decisions As we will address in Chapter 6, successful marketing pro-

1.4e Social Responsibility and Ethics

1.4f Implementation and Control

EXHIBIT 1.4 Fortune’s 10 Best Companies to Work For

1.4g Developing and Maintaining Customer Relationships