Copyrighted matrial – 978–1–137–02582–1 © Michael J. Baker 2014 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2014 by PALGRAVE Palgrave in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of 4 Crinan Street, London N1 9XW. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave is a global imprint of the above companies and is represented throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978–1–137–02582–1 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Baker, Michael John. Marketing strategy and management / Michael J. Baker, Emeritus Professor of Marketing,University of Strathclyde, Visiting Professor of Marketing at Monash University, Australia and Special Professor of Marketing at Nottingham University Business School, UK.—Fifth edition. pages cm Summary: “The fifth edition of Marketing Strategy and Management builds upon Michael Baker’s reputation for academic rigor. It retains the traditional, functional (4Ps) approach to marketing but incorporates current research, topical examples and case studies, encouraging students to apply theoretical principles and frameworks to real-world situations”—Provided by publisher. ISBN 978–1–137–02582–1 (paperback) 1. Marketing—Management. 2. Marketing. I. Title. HF5415.13.B353 2014 658.8—dc23 2014029675 Typeset by MPS Limited, Chennai, India. Copyrighted matrial – 978–1–137–02582–1 Copyrighted matrial – 978–1–137–02582–1 BRIEF CONTENTS BRIEF CONTENTS vi PART III LIST OF FIGURES vii MANAGING THE LIST OF TABLES ix MARKETING MIX 293 PREFACE TO THE FIFTH EDITION x ACKNOWLEDGEMENTS xi 13 THE MARKETING MIX 295 ACRONYMS xii 14 PRODUCT/SERVICE POLICY 1 OVERVIEW AND EXECUTIVE AND MANAGEMENT 309 SUMMARY 1 15 PACKAGING AND DESIGN 343 PART I 16 PRICING POLICY AND MANAGEMENT 352 STRATEGY ISSUES 23 17 DISTRIBUTION AND SALES 2 MARKETING AND CORPORATE POLICY 379 STRATEGY 25 18 INTEGRATED MARKETING 3 MARKETING AND COMMUNICATIONS 399 COMPETITION 60 19 BRANDING 421 4 PRINCIPLES OF STRATEGIC MARKETING PLANNING 87 20 MARKETING IN A FOREIGN ENVIRONMENT AND 5 ANALYTICAL FRAMEWORKS GLOBALISATION 441 FOR STRATEGIC MARKETING PLANNING 112 PART IV 6 MARKETING INTELLIGENCE – IMPLEMENTING MARKETING 457 RESEARCH FOR MARKETING 146 21 CUSTOMER CARE AND PART II SERVICE 459 THE MARKETING 22 DEVELOPING A MARKETING APPRECIATION 167 CULTURE 485 7 MACRO-ENVIRONMENTAL 23 THE (SHORT-TERM) ANALYSIS 169 MARKETING PLAN 496 8 CUSTOMER ANALYSIS 194 24 IMPLEMENTATION AND CONTROL 504 9 INDUSTRY AND COMPETITOR ANALYSIS 212 25 TRANSFORMATIONAL MARKETING – THE WAY 10 INTERNAL (SELF-) ANALYSIS 239 AHEAD 524 11 MATCHING – PUTTING IT ALL TOGETHER 248 INDEX 535 12 MARKET SEGMENTATION 257 A List of Full Contents is available on www.palgrave.com/companion/ baker-marketing-strategy5 vi BRIEF CONTENTS Copyrighted matrial – 978–1–137–02582–1 Copyrighted matrial – 978–1–137–02582–1 1 OVERVIEW AND EXECUTIVE SUMMARY INTRODUCTION their success and the lessons to be learned from them. By the end of the chapter a convincing case has been In general, textbooks conform to a structure and for- made, but it raises a number of specific questions each mat designed to facilitate a formal study of the subject. of which then becomes the subject of a separate chapter Introductory textbooks are largely descriptive and pro- which examines them in detail. vide an overview of what is known and accepted about In addition, one of the several reviewers commis- the subject. More advanced textbooks are usually analyt- sioned by the publisher to advise on the preparation of ical and acknowledge alternative points of view that may a new edition of this book offered the opinion that the challenge the normative theory. Few textbooks adopt the summary of lessons to be learned presented in each chap- format of ‘bestsellers’ in which the opening chapter sum- ter would have made a good introduction to the book as marises the key features of the book as a whole, with the a whole and might be more effective than leaving it to remaining chapters containing the information and evi- the end of the book. In light of this example and advice dence that illuminate and support the statement of these I have decided to adopt a similar approach in prepar- distinguishing characteristics. ing this fifth edition of my own attempt to capture and This point was brought home to me in an article by explain what marketing strategy and management are Mark Uncles (1997) in which he argued for an alternative all about. By adopting this approach I hope that the first to the conventional doctoral thesis that follows a widely chapter will provide a synoptic overview of the scope accepted format in which discussion of the findings is and coverage of the book as a whole that will be useful to reserved for the last chapter, making it more like a mur- those seeking a general survey of the subject as either an der mystery than a report of original research. In Mark’s introduction or a reminder. And, for those with interest in view there is much to be said for presenting the findings a specific topic it will indicate where this ‘sits’ in relation first and then describing the evidence and procedures to other aspects of marketing strategy and management underpinning them. In support of his argument he cites and where to go for explicit treatment of it. Sobel’s book Longitude in which there is a complete As well as providing an overview of the content of summary of the work in the first chapter but ‘the results the book as a whole, the new structure suggests that the are so captivating and compelling that most readers will content can be fairly readily adapted to the needs of the be more than willing to read on’ (1995). reader. Reviews of the manuscript indicated that the com- While few, if any, textbooks attempt this, it is nota- prehensive nature of the text was seen as an important ble that the most widely read management ‘bestsellers’ strength. However, the result is a large book that may be follow this approach. For example, Hermann Simon’s potentially offputting for students, especially where their ‘Hidden Champions’ chronicles the successful strategies curriculum does not call for coverage of all the topics of companies that are world market leaders but largely that have been included, as well as practitioners accus- unknown to others outside of their industry (2009). In tomed to more concise written documents. the opening chapter he introduces 46 such companies, As the title of the chapter indicates, this is both and describes their defining characteristics, the basis of an overview and an executive summary in which a OVERVIEW AND EXECUTIVE SUMMARY 1 Copyrighted matrial – 978–1–137–02582–1 Copyrighted matrial – 978–1–137–02582–1 synopsis of each chapter/topic is clearly identified. So, MARKETING’S DOMAIN if you read all of this chapter, you will be introduced to each of the topics and given a summary of what are seen Given the ever increasing availability of information it as the most important issues associated with it, together has become commonplace to summarise the content of with specific advice on their application in practice. You a communication so that one can decide whether it is of can then decide which of the more detailed accounts to potential interest or not. To facilitate this most written consult for additional and supporting information and reports and texts are introduced by means of a Foreword, analysis. The presentation is also sequential and sub- Preface, Abstract or, in the case of management informa- divided into four parts each of which deals with a group tion, an Executive Summary. Accordingly, in this new of closely related themes – Part I, Strategy Issues; edition it has been decided to attempt to summarise the Part II, Research and Analysis; Part III, Managing the key issues/conclusions associated with specific topics Marketing Mix and Part IV, Implementing Marketing. that are the subject of chapters dedicated to them. Accordingly, each Part may be considered as a separate To begin with it is important to attempt to define the module suitable for study in its own right. Similarly, nature, scope and (current) boundaries of the field of if topics like Branding, International Marketing, study – what academics often refer to as its ‘domain’ – Innovation and New Product Development are available as a basis for establishing what may be learned from as separate subjects for study in a course, then these reading about it. In doing so, however, authors will make chapters can be skipped over. assumptions about the information needs of prospective Some reviewers of the manuscript observed that it readers that will depend upon their existing knowledge, would be helpful to include more recent, that is, post- experience and the reason that they are considering 2000 references.