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STRATEGIC
M AR ET IN G
CREATING CO MP ETI TIV E
ADVANTAGE
Dougla s West, John Ford, and Essam Ibrahim
THIRD EDITI ON
OXFO RD
Preface
This third edition of the book has been completely O\'erhauled and updated. Nevertheless, its stra·
tegic approach remains with Porter's tried-and -tested c.o st-differentiation framework. As an
approach, it remains second to none in capturing the essence of marketing strategy.
The book continues to utilize the popular ' WVfHIY framework consisting of the four questions:
As with the first and second editions, we conduded that choosing a differe nt framework would only
be c.o unterproductive. It works, and in our view it does not need a 'fix~ The application of strategy to
the marketing mix at the 'how will you get there' stage continues to be a featu re of the book.
As before, each chapter contains mini cases and one longer end of chapter case with questions for
dass discussion or assignment work. There are also four longer end of book cases with questions that
integrate the central themes placed within th e c.o ntext of marketing strategy 'blueprint' offered by the
book. Please note though that the examples and cases cited are for illustrative purposes only and are
not in any way tied to any judgements about marketing strategy.
A feature new to each chapter is a short introduction to the topic either in the form of a news item
or viewpoint from a well-respected and expe rienced practitioner. Each chapter has been revised to
incorporate advan ces in the field, to reflect changes in technology as well as plug some gaps identified
by readers and reviewers of the first and second editions.
The changes are too numerous to mention in their entirety, but the main one I would point out is that
the international perspective has been extended to include more insights from developing economies.
Furthermore, whereas we had previously decided against having an 'international marketing strategy'
chapter, we listened to the feedback and were persuaded that a dedicated chapter would be a great addi·
tion. This coincided neatly with a debate that \\"e had been having 0\rer whether a dedicated ·e ·marketing
strategies' chapter made any sense. Let's face it, e-marketing is an integral part of pretty m uch every aspect
of marketing strategy and marketing today, so a stand-alone chapter made increasingly less sense. Thus
the • · marketing chapter has been removed and replaced by a new chapter on 'international marketing
strnteg)~ which explores theory and practice within Porter's framework with numerous examples.
In addition, all the mini cases and end of chapter cases are new. A couple of the end of book cases
have been extensively revised and one new one added. Each of these changes, and many others, will
hopefully assist in gaining a thorough understanding of the theory and application of marketing strategy
and the underlying issues involved The online resource centre continues to provide a wealth of addi·
tiona) materials for anyone interested in marketing strategy and provides links to additional resourc.es.
Turning to our readers> this third edition is not intended as an introduction to marketing; the
book is designed fo r postgraduate students and undergraduates in their final years of studies.
This is the third updated edition of our account of strategic marketing. We recognize that th ere
are many great books on marketing s trateg)r to choose from; we hope that you- along with learning
from it- will enjoy reading it. From our s ide of things we too have learnt much from the update an d
enjoyed writing it (and of course seeing it finally off to print!).
DCW
Outline contents
Acknowledgements VI
Preface V II
PART 1: Introduction
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PART I Introduction
Discussion questions 98
Online Resource Centre 98
References and further reading 98
End of Chapter 3 case study. Fage Yogurt: sustaining competitive
advantage in a crowded market 100
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lntro uct1on
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•. I . Introduction ••
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• 1 Overview and strategy blueprint •
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•• 2 Marketing strategy: analysis and •
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perspectives •
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THE BAMBOO.
When the Portuguese first arrived in the Moluccas, this region was
tributary to the prince of Ternate. All the natives were heathen then,
and many of them yet retain the superstitious belief of their
ancestors. Mohammedanism had not gained a foothold among them,
nor has it since, and the only Mohammedans now in the land are the
immigrants at Menado, who have come from other parts of the
archipelago, and a few natives banished from Java. Even as late as
1833, but little more than thirty years ago, Pietermaat, who was then
Resident, in his official report, says of these people: “They are wholly
ignorant of reading, writing, and arithmetic. They reckon by means of
notches in a piece of bamboo, or by knots made in a cord.” Formerly
they were guilty of practising the bloody custom of cutting off human
heads at every great celebration, and the missionary at Langowan
showed me a rude drawing of one of their principal feasts, made for
him by one of the natives themselves. In front of a house where the
chief was supposed to reside, was a short, circular paling of
bamboos placed upright, the upper ends of all were sharpened, and
on each was stuck a human head. Between thirty and forty of these
heads were represented as having been taken off for this single
festive occasion, and the missionary regarded the drawing as no
exaggeration, from what he knew of their bloody rites.
The remarkable quantities of coffee, cocoa-nuts, and other articles
yearly exported from the Minahassa show that a wonderful change
has come over this land, even since 1833; and the question at once
arises, What is it that has transferred these people from barbarism to
civilization? The answer and the only answer is, Christianity and
education. The Bible, in the hands of the missionaries, has been the
chief cause that has induced these people to lay aside their bloody
rites. As soon as a few natives had been taught to read and write,
they were employed as teachers, and schools were established from
place to place, and from these centres a spirit of industry and self-
respect has diffused itself among the people and supplanted in a
great measure their previous predisposition to idleness and self-
neglect. In 1840, seven years after Pietermaat gave the description
of these people mentioned above, the number of Christians
compared to that of heathen was as one to sixteen, now it is about
as two to five; and exactly as this ratio continues to increase, in the
same degree will the prosperity of this land become greater.
The rocks seen on this journey through the Minahassa, as noted
above, are trachytic lavas, volcanic sand and ashes, pumice-stone,
and conglomerates composed of these materials and clay formed by
their decomposition. They all appear to be of a late formation, and,
as Dr. Bleeker remarks, the Minahassa seems to be only a recent
prolongation of the older sedimentary rocks in the residency of
Gorontalo. In this small part of the peninsula, there are no less than
eleven volcanoes. North of Menado is a chain of volcanic islands,
which form a prolongation of this peninsula. On the island Siao there
is an active volcano. North of it is the large island of Sangir.
According to Valentyn, the highest mountain on the island underwent
an eruption in December, 1711. A great quantity of ashes and lava
was ejected, and the air was so heated for some distance around,
that many of the natives lost their lives. North of the Sangir islands
are the Talaut group. These are the most northern islands under the
Dutch, and the boundary of their possessions in this part of the
archipelago.
The steamer Menado, on which I had previously taken passage
from Batavia all the way to Amboina, now arrived at Kema. She had
brought my collection from Amboina, Buru, and Ternate, and I was
ready to return to Java, for some months had passed since I
accomplished the object of my journey to the Spice Islands, and
during that time I had travelled many hundred miles and had reached
several regions which I had not dared to expect to see, even when I
left Batavia. A whale-ship from New Bedford was also in the road,
and when I visited her and heard every one, even the cabin-boy,
speaking English, it seemed almost as strange as it did to hear
nothing but Malay and Dutch when I first arrived in Java. Many
whales are usually found east of the Sangir Islands, and north of
Gilolo and New Guinea.
January 10th.—At noon steamed out of the bay of Kema and
down the eastern coast of Celebes for Macassar. When the sun was
setting, we were just off Tanjong Flasco, which forms the northern
limit of the bay of Gorontalo or Tomini. As the sun sank behind the
end of this high promontory, its jagged outline received a broad
margin of gold. Bands of strati stretched across the sky from north to
south and successively changed from gold to a bright crimson, and
then to a deep, dark red as the sunlight faded. All this bright coloring
of the sky was repeated in the sea, and the air between them
assumed a rich, scintillating appearance, as if filled with millions of
minute crystals of gold.
The controleur, on board, who travelled with me from Langowan,
has been farther into the interior, south of Gorontalo, than any
foreigner previously. He found the whole country divided up among
many petty tribes, who are waging a continual warfare with each
other; and the immediate object of his dangerous journey was to
conciliate two powerful tribes near the borders of the territory which
the Dutch claim as being under their command. He found that all
these people are excessively addicted to the use of opium, which is
brought from Singapore to the western coast, near Palos, by
Mandharese and Macassars.
The dress of the people consists of a sarong, made from the inner
layers of the bark of a tree. They have large parangs, and value
them in proportion to the number and minuteness of the damascene
lines on their blades. Twenty guilders is a common price for them.
The controleur gave me a very fine one, which was remarkably well
tempered. The most valuable export from this bay is gold, which is
found in great quantities, at least over the whole northern peninsula,
from the Minahassa south to the isthmus of Palos. The amount
exported is not known, for, though the Dutch Government has a
contract with the princes to deliver all the gold obtained in their
territory to it at a certain rate, they are offered a much higher price by
the Bugis, and consequently sell it to them. No extensive survey has
yet been made in this territory, by the mining engineers employed by
the government, and the extent and richness of these mines are
therefore wholly matters of the most uncertain speculation. The fact,
however, that gold was carried from this region before the arrival of
Europeans, more than three hundred and forty years ago, and that
the amount now exported appears to be larger than it was then,
indicates that the supply must be very great. The government has
not yet granted to private individuals the privilege of importing
machinery and laborers, and proving whether or not mining can be
carried on profitably on a large scale. A fragment of rock from this
region was shown me at Kema by a gentleman, who said he knew
where there were large quantities of it; and that specimen certainly
was very rich in the precious metal. Gold is also found in the
southwestern peninsula of Celebes, south of Macassar. The
geological age of these auriferous rocks is not known, but I was
assured that, back of Gorontalo, an outcropping of granite had been
seen. Buffaloes and horses are plenty and cheap at Gorontalo, and
many are sent by sea to the Minahassa. The horses are very fine,
and from the earliest times the Bugis have been accustomed to buy
and kill them to eat, having learned that such flesh is a most
delectable food, centuries before this was ascertained by the
enlightened Parisians.
January 11th.—Last night and to-day the sea has been smooth,
almost as smooth as glass, while we know that on the opposite or
western side of Celebes there has been one continuous storm. This
is why we have come down the eastern side of the island. Here the
seasons on the east and west coasts alternate, as we have already
noticed in Ceram and Buru, though those islands extend east and
west, while Celebes extends north and south. To-day we passed
through the Bangai group, lying between the Sula Islands and
Celebes. From the appearance of the water, and from such
soundings as are given, there appears to be only a depth of some
thirty fathoms in the straits. These islands, therefore, not only have
formed a part of the adjacent peninsula of Celebes, but do at the
present day.
A remarkable similarity has been noticed between the fauna of
Bachian, near the southern end of Gilolo, and that of Celebes, and in
the Bangai and the Sula Islands we probably behold the remnants of
an old peninsula that once completely joined those two lands. When
we compare Celebes and Gilolo, we notice that the Bangai and Sula
groups, stretching off to the east and southeast from one of the
eastern peninsulas of Celebes, are analogous in position to Gebi,
Waigiu, and Battanta, and the adjacent islands which are but the
remnants of a peninsula that in former times connected Gilolo to the
old continent of New Guinea and Australia.
Now, at sunset, we were approaching the Buton Passage, which
separates the large island of Buton from Wangi-wangi, “The Sweet-
scented Island.” This is a great highway for ships bound from
Singapore to China in the west monsoon, and several are now here,
drifting over the calm sea.
Buton is a hilly island, but no mountains appear. Its geological
formation is said to consist of “recent limestone, containing
madrepores and shells.” Here, again, we find indications of the wide
upheaval that appears to be occurring in the whole archipelago, but
especially in its eastern part. It is quite famous for the valuable
cotton it produces, which, in the fineness and length of its fibres, is
said to excel that raised in any other part of the archipelago, and is
therefore highly valued by the Bugis and Macassars.
January 13th.—This morning we passed a large American man-of-
war coming down grandly from the west, under steam and a full
press of canvas. It is a most agreeable and unexpected pleasure to
see such a representation of our powerful navy in these remote
seas.[51]
The next day we passed through Salayar Strait, which separates
the southern end of the peninsula of Celebes from the Salayar
Islands, and may be regarded as the boundary between the
alternating wet and dry seasons on the opposite sides of Celebes.
January 15th.—Arrived back at Macassar. There is nothing but
one continuous series of heavy, pouring showers, with sharp
lightning and heavy thunder.
January 16th.—Sailed for Surabaya in Java. This morning there is
only such a wind as sailors would call a fresh, but not a heavy gale.
In all the wide area between Java and the line of islands east to
Timur on the south, and the tenth degree of north latitude, none of
those frightful gales known in the Bay of Bengal as cyclones, and in
the China Sea as “typhoons,” have ever been experienced. The chief
sources of solicitude to the navigator of the Java and the Banda
Seas are the strong currents and many reefs of coral.
Our large steamer is little else than a great floating menagerie. We
have, as usual, many native soldiers on board, and each has with
him two or three pet parrots or cockatoos. Several of our passengers
have dozens of large cages, containing crested pigeons from New
Guinea, and representatives of nearly every species of parrot in that
part of the archipelago. We have also more than a dozen different
kinds of odd-looking monkeys, two or three of which are continually
getting loose and upsetting the parrot-cages, and, before the
sluggish Malays can approach them with a “rope’s end” unawares,
they spring up the shrouds, and escape the punishment which they
know their mischief deserves. These birds and monkeys are mostly
purchased in the Spice Islands; and if all now on board this ship
could be safely transported to New York or London, they would far
excel the collection on exhibition in the Zoological Gardens of the
latter city.
Besides the Chinese, Arabs, Malays, and other passengers
forward, there is a Buginese woman, a raving maniac. She is
securely shackled by an iron band around the ankle to a ring-bolt in
the deck. One moment she is swaying to and fro, and moaning as if
in the greatest mental agony and despair, and, the next moment,
stamping and screeching in a perfect rage, her long hair streaming in
the wind, her eyes bloodshot, and flashing fire like a tigress which
has been robbed of her young. It would be difficult to fancy a more
frightful picture. They are taking her to the mad-house near
Samarang, where all such unfortunates are kindly cared for by the
government. Her nation, the Bugis or Buginese, are famous for
“running a muck.” Amuk, which was written by the early navigators “a
muck,” is a common term in all parts of the archipelago for any
reckless, bloody onset, whether made by one or more. It is, however,
generally used by foreigners for those insane attacks which the
Malays sometimes make on any one, generally to satisfy a feeling of
revenge. When they have decided to commit a murder of this kind,
they usually take opium, and, when partially under its influence, rush
out into the street with a large knife and try to butcher the first person
they may chance to meet. Many years ago such émeutes were of
frequent occurrence, and even at the present time most of the
natives who stand guard in the city of Batavia are each armed with a
long staff, on the end of which is a Y-shaped fork, provided on the
inner side with barbs pointing backward. This is thrust against the
neck of the murderer, and he is thus secured without danger to the
policeman.
CHAPTER XII.
SUMATRA.
ISLAND of SUMATRA
The dress of the men here is not very different from that of the
Malays of Java, but the costume of the women is remarkable. On the
head is worn a long scarf, wound round like a turban, one end being
allowed to hang down, sometimes over the forehead, and sometimes
on one side, or on the back of the head. The upper part of the body
is clothed in a baju of the common pattern, and passing over one
shoulder, across the breast, and under the opposite arm is a long,
bright-colored scarf. The ends of this, as well as that worn on the
head, are ornamented with imitations of leaves and fruit, very
tastefully wrought with gold thread. At the waist is fastened the
sarong, which is not sewn up at the ends as in other parts of the
archipelago. It is therefore nothing but a piece of calico, about a yard
long, wound round the body, and the two ends gathered on the right
hip, where they are twisted together, and tucked under, so as to form
a rude knot. As the sarong is thus open on the right side, it is thrown
apart higher than the knee at every step, like the statues
representing the goddess Diana in hunting-costume. Their most
remarkable custom, however, is distending the lobe of the ear, as
seen in the accompanying cut from a photograph of one of the
women at the kampong here at Fort de Kock. When young, an
incision is made in the lobe, and a stiff leaf is rolled up, and thrust
into it, in such a way that the tendency of the leaf to unroll will stretch
the incision. When one leaf has lost its elasticity it is exchanged for
another, and, in this way, the opening increases until it is an inch in
diameter. This must be a very painful process, judging from the
degree to which the ears of the young girls are inflamed and swollen.
A saucer-shaped ornament, with a groove in its rim, is then put into
the ear, exactly as a stud is put into a gentleman’s shirt-bosom. It is
generally made of gold, and the central part consists of a very fine
open work, so that it is very light, yet the opening in the ear
continues to increase until it is frequently an inch and a half in
diameter, and almost large enough for the wearer to pass one of her
hands through. The front part of the loop is then only attached to the
head by a round bundle of muscles, smaller than a pipe-stem, and
the individual is obliged to lay aside her ornaments or have the lower
part of her ears changed into long, dangling strings. While these
ornaments (for it is not proper to call such a saucer-shaped article a
ring) can be worn in the ear, the appearance of the native women, as
seen in the cut, is like that of the other Malay women; but as soon as
these ornaments are taken out, and the lobes of their ears are seen
to be nothing but long loops, their appearance then becomes very
repulsive. The men are never guilty of this loathsome practice. A
similar habit of distending the lobe of the ear prevails in Borneo,
among the Dyak women. It is also seen in all the Chinese and
Japanese images of Buddha, The native women of India are
accustomed to wear several small rings, not only all round in the
edge of the ear, but in the nostrils. A large number of rings are
shown in the ear of the cut of a Dyak or head-hunter of Borneo. Even
in the most civilized lands this same barbaric idea—that a lady is