Market-Based Management

by Best, Roger J.

• ISBN13: 9780130082183
• ISBN10: 013008218X
• Edition: 3rd
• Format: Paperback
• Copyright: 2004-01-01
• Publisher: PRENTICE HALL

Summary

New third edition takes a strategic approach to value/profitability in marketing management and helps readers work through financial analysis. Focuses on the fundamental need for businesses to attract, satisfy, and retain customers. Previous ed. c2000. Softcover.

Table of Contents

Preface	xxi
Acknowledgments	xxv
PART I MARKET ORIENTATION	3	(52)
Market Orientation and Performance	5	(25)
Long-Run and Short-Run Benefits	5	(13)
How to Underwhelm Customers and Shareholders	6	(1)
Market Orientation and Customer Satisfaction	7	(1)
Customer Satisfaction: A Key Market Performance Metric	8	(1)
A Wide-Angle View of Customer Satisfaction	9	(1)
Customer Dissatisfaction and Customer Exit	9	(2)
Customer Satisfaction and Profitability	11	(1)
Profit Impact of Customer Dissatisfaction	12	(2)
Profit Impact of Customer Retention	14	(1)
Customer Satisfaction and Customer Retention	15	(1)
Customer Retention and Customer Life Expectancy	15	(1)
The Lifetime Value of a Customer	16	(2)
Customer Relationship Management	18	(3)
Managing Customer Retention	19	(1)
Managing New Customer Acquisition	19	(1)
Managing New Customers	20	(1)
Managing Customer Exit	20	(1)
Building a Market Orientation	21	(3)
Market Orientation and Marketing Knowledge	21	(2)
Market Orientation and Marketing Leadership	23	(1)
Market Orientation and Employee Satisfaction	23	(1)
Summary	24	(1)
Market-Based Logic and Strategic Thinking	25	(1)
Application Problem: Aircomm	26	(1)
Notes	27	(2)
Appendix 1.1---Present Value Table	29	(1)
Market-Based Performance	30	(25)
Market versus Financial Performance	30	(3)
A Market-Based Strategy	32	(1)
Market-Based Performance	32	(1)
Market-Based Performance Metrics	33	(2)
Internal versus External Performance Metrics	33	(1)
In-Process versus End-Result Performance Metrics	34	(1)
Marketing Profitability	35	(2)
Measuring Marketing Profitability	35	(2)
Net Marketing Contribution	37	(3)
Net Marketing Contribution and Business Unit Profitability	39	(1)
Market-Based Marketing Profitability	40	(1)
Market-Based Strategies and Profitable Growth	41	(4)
Strategies to Grow Market Demand	42	(1)
Strategies to Increase Market Share	43	(1)
Strategies to Increase Revenue per Customer	43	(1)
Strategies to Lower Variable Cost	44	(1)
Strategies to Increase Market Efficiency	44	(1)
Marketing Productivity	45	(1)
Market Orientation	46	(3)
Customer Orientation	47	(1)
Competitor Orientation	47	(1)
Team Approach	48	(1)
Summary	49	(1)
Application Problem: Dell Computer	50	(1)
Market-Based Logic and Strategic Thinking	50	(1)
Notes	51	(4)
PART II MARKET ANALYSIS	55	(110)
Market Potential, Demand, and Market Share	57	(25)
Market Definition	57	(4)
Market Vision	58	(1)
Strategic Market Definition	59	(1)
Vertical Versus Horizontal Market Opportunities	59	(1)
Served Market Definition	60	(1)
Market Potential	61	(7)
Untapped Market Opportunities	61	(3)
Market Development Index	64	(1)
Market Potential and Market Growth	64	(1)
Rate of Market Development	65	(1)
Accelerating Market Growth	66	(2)
Market Demand	68	(2)
Product Life Cycle	70	(2)
Market Share and Share Potential	72	(6)
Share Development Tree	73	(3)
Market Share Index	76	(1)
Share Potential and Market Share Management	76	(1)
Market Share Potential	77	(1)
Share Development Index	77	(1)
Summary	78	(1)
Market-Based Logic and Strategic Thinking	79	(1)
Application Problem: Personal Computer Industry	80	(1)
Notes	81	(1)
Customer Analysis and Value Creation	82	(30)
Discovering Customer Benefits	82	(6)
A Day in the Life of a Customer	82	(1)
Empathic Design Process	83	(2)
Lead User Solutions	85	(1)
Staple Yourself to an Order	86	(1)
Customer Benefits and Customer Value	87	(1)
Economic Benefits and Value Creation	88	(3)
Low Price	88	(1)
Acquisition Costs	89	(1)
Usage Costs	89	(1)
Maintenance Costs	90	(1)
Ownership Costs	91	(1)
Disposal Costs	91	(1)
Price-Performance and Value Creation	91	(4)
Relative Performance	91	(1)
Relative Price	92	(1)
Customer Value	93	(1)
Value Map	94	(1)
Perceived Benefits and Value Creation	95	(4)
Product Benefits	95	(1)
Service Benefits	96	(1)
Company or Brand Benefits	97	(1)
Overall Customer Benefits	97	(1)
Perceived Cost of Purchase	98	(1)
Perceived Customer Value	98	(1)
Emotional Benefits and Value Creation	99	(2)
Emotional Benefits and Psychological Value	99	(1)
Brand Personality and Value Creation	100	(1)
Transaction Value	101	(3)
Space Value	101	(1)
Transaction Value	102	(1)
Value Creation Across the Supply Chain	103	(1)
Identifying Value Drivers	104	(3)
Summary	107	(1)
Market-Based Logic and Strategic Thinking	108	(1)
Application Problem: Advan-Tech Software	109	(1)
Notes	110	(1)
Appendix 4.1---Trade-Off Analysis Computations	111	(1)
Market Segmentation and Segmentation Strategies	112	(26)
Customer Needs	113	(1)
Forces That Shape Consumer Market Needs	113	(1)
Forces That Shape Business Market Needs	114	(2)
Needs-Based Market Segmentation	116	(8)
The Demographic Trap	116	(1)
Needs-Based Market Segments	117	(1)
Segment Identification	118	(1)
Segment Attractiveness	119	(1)
Segment Profitability	120	(1)
Segment Positioning	121	(2)
Segment Strategy Acid Test	123	(1)
Segment Marketing Mix Strategy	123	(1)
Segmentation Strategies	124	(7)
Mass Market Strategy	124	(1)
Large Segment Strategy	125	(1)
Adjacent Segment Strategies	125	(1)
Multisegment Strategies	126	(2)
Small Segment Strategy	128	(1)
Niche Segment Strategies	129	(1)
Mass Customization	129	(2)
Customer Relationship Management	131	(2)
Building a Customer Relationship Management Program	131	(2)
Summary	133	(1)
Market-Based Logic and Strategic Thinking	133	(1)
Application Problem: US Fiber Siding	134	(3)
Notes	137	(1)
Competitor Analysis and Sources of Advantage	138	(27)
Competition and Competitive Position	138	(2)
Industry Analysis	140	(3)
Barriers to Entry	140	(1)
Barriers to Exit	141	(1)
Customer Buying Power	141	(1)
Supplier Selling Power	142	(1)
Product Substitutes	142	(1)
Competitive Rivalry	142	(1)
Prisoner's Dilemma	143	(1)
Competitive Position	143	(6)
Benchmark Competitors	144	(1)
Competitor Analysis	144	(2)
Competitor Intelligence	146	(1)
A Sample Competitor Analysis	147	(1)
Competitive Benchmarking	148	(1)
Sources of Competitive Advantage	149	(1)
Cost Advantage	150	(4)
Variable Cost Advantage	150	(2)
Marketing Cost Advantage	152	(1)
Operating Cost Advantage	153	(1)
Differentiation Advantage	154	(2)
Product Advantage	154	(1)
Service Advantage	154	(1)
Reputation Advantage	155	(1)
Marketing Advantage	156	(1)
Channel Advantage	156	(1)
Sales Force Advantage	156	(1)
Brand Awareness	157	(1)
Summary	157	(1)
Application Problem: New-Vector	158	(3)
Market-Based Logic and Strategic Thinking	161	(1)
Notes	161	(4)
PART III MARKETING MIX STRATEGIES	165	(104)
Product Positioning and Brand Strategies	167	(28)
Product Positioning	168	(3)
Product Positioning and Market Share	169	(1)
Product Positioning Strategies	170	(1)
Product Positioning and Differentiation	171	(5)
Product Differentiation	172	(2)
Service Differentiation	174	(1)
Brand Differentiation	174	(1)
Low Cost of Purchase	175	(1)
Low-Price Position	175	(1)
Lower Transaction Costs	176	(1)
Branding and Brand Management Strategies	176	(7)
Brand Identity	176	(1)
Brand Encoding	176	(4)
Brand Assets and Liabilities	180	(2)
Brand Equity	182	(1)
Brand and Product Line Strategies	183	(7)
Product-Line Development	183	(1)
Umbrella and Flanker Brands	184	(2)
Product-Line Extensions	186	(2)
Bundling and Unbundling Strategies	188	(1)
Product Elimination	189	(1)
Summary	190	(1)
Application Problem: Silicone Sealants	191	(2)
Market-Based Logic and Strategic Thinking	193	(1)
Notes	193	(2)
Market-Based Pricing and Pricing Strategies	195	(27)
Market-Based Pricing	197	(5)
Skim Pricing	197	(2)
Value-In-Use Pricing	199	(1)
Perceived Value Pricing	199	(1)
Segment Pricing	200	(1)
Strategic-Account Pricing	201	(1)
Plus-One Pricing	201	(1)
Cost-Based Pricing Strategies	202	(5)
Floor Pricing	202	(1)
Cost-Plus Pricing	203	(1)
Penetration Pricing	203	(1)
Low-Cost Lender Pricing	204	(1)
Competitive Bid Pricing	205	(1)
Harvest Pricing	206	(1)
Pricing and Profitability	207	(2)
Total Contributions	208	(1)
Price-Volume Break-Even Analysis	209	(1)
Price Elasticity and Performance	209	(7)
Inelastic Price Performance	211	(1)
Elastic Price Performance	212	(1)
Ease of Switching	213	(1)
Supply/Demand Conditions	214	(1)
Competitor Price Response	215	(1)
Product Line Pricing	216	(1)
Pricing Substitute Products	216	(1)
Pricing Complementary Products	217	(1)
Promotion Pricing	217	(2)
Price Promotion Bundling Strategies	217	(2)
Summary	219	(1)
Application Problem: Microsoft Windows 95	220	(1)
Market-Based Logic and Strategic Thinking	220	(1)
Notes	221	(1)
Marketing Channels and E-Marketing	222	(24)
Marketing Channels and Channel Management	224	(1)
Marketing Channel Performance	225	(2)
Customer Reach	225	(1)
Operating Efficiency	226	(1)
Service Quality	227	(1)
Alternative Channel Systems	227	(7)
Direct Channel Systems	228	(1)
Indirect Channel Systems	229	(1)
Mixed Channel Systems	230	(1)
B2C Channels	230	(1)
B2B Channels	231	(3)
Channel Systems That Build Customer Value	234	(4)
Delivering Product Benefits	234	(1)
Delivering Service Benefits	235	(1)
Building Brand Image	235	(1)
Building Company Benefits	236	(1)
Improving Cost Efficiency	236	(2)
Channel Systems and Competitive Advantage	238	(2)
Sales Force Advantage	238	(1)
Sales Productivity	238	(1)
Distribution Advantage	239	(1)
Profit Impact of Alternative Channel Systems	240	(1)
Summary	241	(1)
Application Problem: WWW.MESURVEY.COM	242	(2)
Market-Based Logic and Strategic Thinking	244	(1)
Notes	244	(2)
Marketing Communications and Customer Response	246	(23)
Marketing Communication	246	(2)
Strategies to Increase Customer Response	248	(2)
Building Customer Awareness and Comprehension	250	(3)
Media Selection and Customer Awareness	250	(1)
Message Frequency and Customer Awareness	250	(3)
Ad Copy and Customer Response	253	(1)
Message Reinforcement	253	(2)
Message Reinforcement and Pulsing	253	(1)
Heavy-Up Message Frequency	254	(1)
Stimulating Customer Action	255	(1)
Push versus Pull Communications Strategies	255	(1)
Pull Communications and Customer Response	256	(4)
Advertising Elasticity	257	(1)
Advertising Carryover Effects	257	(1)
Direct Marketing Promotions	258	(1)
Promotional Price Elasticity	259	(1)
Push Communications and Customer Response	260	(3)
Trade Promotions and Customer Response	260	(1)
Forward Buying and Customer Response	261	(1)
Market Infrastructure and Push Communications	262	(1)
Summary	263	(1)
Application Problem: Gardenburger	264	(1)
Market-Based Logic and Strategic Thinking	265	(1)
Notes	266	(3)
PART IV STRATEGIC MARKETING	269	(58)
Strategic Market Planning	271	(19)
Product-Market Diversification	272	(1)
Strategic Market Planning Process	273	(1)
Business Performance	274	(1)
Market Attractiveness	275	(2)
Competitive Advantage	277	(1)
Portfolio Analysis and Strategic Market Plans	278	(4)
Offensive Strategic Market Plans and Performance Impact	279	(1)
Defensive Strategic Market Plans and Performance Impact	280	(2)
Tactical Marketing Strategy and Performance Plan	282	(3)
Tactical Marketing Strategy	282	(1)
Performance Plan	282	(3)
Summary	285	(1)
Application Problem: Small Biz Solutions	286	(2)
Market-Based Logic and Strategic Thinking	288	(1)
Notes	289	(1)
Offensive Strategic Market Plans	290	(16)
Offensive Strategic Market Plans	291	(1)
Market Penetration Strategies	292	(5)
Strategies to Grow Market Share	292	(3)
Strategies to Grow Customer Purchase	295	(1)
Strategies to Enter New Customer Segments	295	(1)
Strategies to Grow Market Demand	296	(1)
New Market Entry Strategies	297	(4)
Related New Market Entry Strategies	298	(1)
Diversified New Market Entry Growth Strategies	298	(1)
Strategies to Enter New Emerging Markets	299	(1)
Strategies to Develop New Market Potential	300	(1)
Evaluating Offensive Strategic Market Plans	301	(1)
Summary	301	(1)
Application Problem: Blockbuster	302	(1)
Market-Based Logic and Strategic Thinking	303	(1)
Notes	304	(2)
Defensive Strategic Market Plans	306	(21)
Defensive Strategic Market Plans	307	(1)
Protect Market Strategies	308	(8)
Protect Market Share	308	(1)
Protecting Share in Growth Markets	309	(1)
Protecting a High-Share Position	310	(1)
Protecting a Follower Share Position	311	(2)
Protecting a Niche Share Position	313	(1)
Building Customer Retention	314	(1)
Reduced Market Focus	315	(1)
Exit Market Strategies	316	(4)
Harvest Price Strategy	316	(2)
Harvest Resource Strategy	318	(1)
Divest Market Strategies	319	(1)
Selecting a Defensive Strategic Market Plan	320	(1)
Summary	321	(1)
Application Problem: Amazon.com	322	(1)
Market-Based Logic and Strategic Thinking	323	(1)
Notes	324	(3)
PART V MARKET PLANS AND PERFORMANCE	327	(60)
Building a Marketing Plan	329	(24)
Creativity versus Structure	330	(1)
Benefits of Building a Marketing Plan	330	(2)
Identifying Opportunities	331	(1)
Leveraging Core Capabilities	331	(1)
Focused Marketing Strategy	331	(1)
Resource Allocation	331	(1)
Performance Roadmap	332	(1)
Building A Marketing Plan: Process and Logic	332	(9)
Step I: Situation Analysis	332	(3)
Step II: SWOT Analysis and Key Performance Issues	335	(1)
Step III: Strategic Market Plan	336	(1)
Step IV: Marketing Mix Strategy	337	(1)
Step V: Marketing Budget	338	(2)
Step VI: Performance Timeline	340	(1)
Step VII: Performance Evaluation	340	(1)
Sample Marketing Plan	341	(4)
Step I: Situation Analysis	342	(1)
Step II: SWOT Analysis	342	(1)
Step III: Strategic Market Plan	343	(1)
Step IV: Marketing Mix Strategy	343	(1)
Step V: Marketing Budget	344	(1)
Step VI: Performance Timeline	344	(1)
Step VII: Performance Evaluation	344	(1)
Summary	345	(1)
Market-Based Logic and Strategic Thinking	345	(1)
Application Problem: Stericycle, Inc.	346	(1)
Notes	347	(1)
Stericycle Marketing Plan	348	(5)
Performance Metrics and Strategy Implementation	353	(15)
Market Performance Metrics	354	(2)
Process versus End-Result Market Metrics	356	(3)
Process Market Metrics	356	(1)
End-Result Market Metrics	357	(2)
Successful Strategy Implementation	359	(6)
Owning the Marketing Plan	359	(2)
Supporting the Marketing Plan	361	(1)
Adapting the Marketing Plan	362	(2)
Assessing Marketing Plan Implementation	364	(1)
Summary	365	(1)
Application Problem: Stericycle, Inc.	366	(1)
Market-Based Logic and Strategic Thinking	366	(1)
Notes	367	(1)
Profit Impact of Market-Based Management	368	(19)
Customer Satisfaction and Profitability	369	(2)
How Marketing Strategies Affect Profitability	371	(4)
Customer Volume	372	(1)
Margin per Customer	373	(1)
Total Contribution	374	(1)
Net Marketing Contribution	374	(1)
Net Profit (before Taxes)	374	(1)
How Marketing Strategies Affect Assets	375	(2)
Investment in Accounts Receivable	375	(1)
Investment in Inventory	376	(1)
Investment in Fixed Assets	377	(1)
Return Measures of Profitability	377	(3)
Measures of Shareholder Value	380	(3)
Market-Based Management	383	(1)
Summary	384	(1)
Application Problem: Stericycle, Inc.	385	(1)
Market-Based Logic and Strategic Thinking	386	(1)
Notes	386	(1)
Glossary	387	(6)
Photo Credits	393	(2)
Index	395