MARKETING STRATEGY AND SEVENTH EDITION COMPETITIVE POSITIONING GRAHAM HOOLEY BRIGITTE NICOULAUD JOHN M. RUDD NICK LEE MARKETING STRATEGY AND COMPETITIVE POSITIONING At Pearson, we have a simple mission: to help people make more of their lives through learning. We combine innovative learning technology with trusted content and educational expertise to provide engaging and effective learning experiences that serve people wherever and whenever they are learning. From classroom to boardroom, our curriculum materials, digital learning tools and testing programmes help to educate millions of people worldwide – more than any other private enterprise.
Every day our work helps learning flourish, and wherever learning flourishes, so do people. To learn more, please visit us at www.com/uk Seventh edition MARKETING STRATEGY AND COMPETITIVE POSITIONING Graham Hooley • Brigitte Nicoulaud • John M. Rudd • Nick Lee Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Dubai • Singapore • Hong Kong Tokyo • Seoul • Taipei • New Delhi • Cape Town • São Paulo • Mexico City • Madrid • Amsterdam • Munich • Paris • Milan PEARSON EDUCATION LIMITED KAO Two KAO Park Harlow CM17 9SR United Kingdom Tel: +44 (0)1279 623623 Web: www.com/uk First published in 1993 as Competitive Positioning: The key to market success (print) Second edition published 1998 by Prentice Hall Europe (print) Third edition published 2004 (print) Fourth edition published 2008 (print) Fifth edition published 2012 (print) Sixth edition published 2017 (print and electronic) Seventh edition published 2020 (print and electronic) © Prentice Hall International (UK) Ltd 1993, 1998 (print) © Pearson Education Limited 2004, 2008, 2012 (print) © Pearson Education Limited 2017, 2020 (print and electronic) The rights of Graham Hooley, Brigitte Nicoulaud, John M. Rudd and Nick Lee to be identified as authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
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| Nicoulaud, Brigitte, author. Title: Marketing strategy & competitive positioning / Graham Hooley, Brigitte Nicoulaud, John M. Rudd, Nick Lee. Other titles: Marketing strategy and competitive positioning Description: Seventh edition.
| Harlow ; New York : Pearson, 2020. | Includes bibliographical references and index. | Summary: “Since the sixth edition of this book, published in 2017, many economies around the world have continued to feel the aftershocks of the deepest recession since the Great Depression of the 1930s, which started with the well-publicised ‘credit crunch’. Despite continuing academic debate about the causes and extent, there is now little doubt that climate change and global warming is beginning to have a significant impact on our physical environment.
Identifiers: LCCN 2019050392 (print) | LCCN 2019050393 (ebook) | ISBN 9781292276540 (print) | ISBN 9781292276557 (epub) | ISBN 9781292276571 (PDF) Subjects: LCSH: Target marketing. Classification: LCC HF5415.8/02—dc23 LC record available at https://lccn.gov/2019050392 LC ebook record available at https://lccn.gov/2019050393 10 9 8 7 6 5 4 3 2 1 24 23 22 21 20 Cover: © echo3005/Shutterstock Print edition typeset in 10/12pt Sabon MT Pro by SPi Gobal Print edition printed in Slovakia by Neografia NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION BRIEF CONTENTS Preface xi Acknowledgements xiv Publisher’s acknowledgements xv PART 1 MARKETING STRATEGY 3 1 MARKET-LED STRATEGIC MANAGEMENT 4 2 STRATEGIC MARKETING PLANNING 28 PART 2 COMPETITIVE MARKET ANALYSIS 55 3 THE CHANGING MARKET ENVIRONMENT 56 4 CUSTOMER ANALYSIS 94 5 COMPETITOR ANALYSIS 114 6 UNDERSTANDING THE ORGANISATIONAL RESOURCE BASE 140 PART 3 IDENTIFYING CURRENT AND FUTURE COMPETITIVE POSITIONS 169 7 SEGMENTATION AND POSITIONING PRINCIPLES 170 8 SEGMENTATION AND POSITIONING RESEARCH 202 9 SELECTING MARKET TARGETS 230 PART 4 COMPETITIVE POSITIONING STRATEGIES 255 10 CREATING SUSTAINABLE COMPETITIVE ADVANTAGE 256 11 COMPETING THROUGH THE EVOLVING MARKETING MIX 287 12 COMPETING THROUGH INNOVATION 320 13 COMPETING THROUGH SUPERIOR SERVICE AND CUSTOMER RELATIONSHIPS 354 PART 5 IMPLEMENTING THE STRATEGY 385 14 STRATEGIC CUSTOMER MANAGEMENT AND THE STRATEGIC SALES ORGANISATION 387 15 STRATEGIC ALLIANCES AND NETWORKS 423 vi BRIEF CONTENTS 16 STRATEGY IMPLEMENTATION AND INTERNAL MARKETING 452 17 CORPORATE SOCIAL RESPONSIBILITY AND ETHICS 485 PART 6 CONCLUSIONS 521 18 MARKETING IN THE TWENTY-FIRST CENTURY 522 References 544 Index 569 CONTENTS Preface Acknowledgements xi xiv PART 2 Publisher’s acknowledgements xv COMPETITIVE MARKET ANALYSIS CHAPTER 3 PART 1 THE CHANGING MARKET ENVIRONMENT 56 MARKETING STRATEGY Introduction 57 3.1 A framework for macro-environmental CHAPTER 1 analysis 58 MARKET-LED STRATEGIC MANAGEMENT 4 3.2 The economic and political environment 59 Introduction 5 3.3 The social and cultural environment 61 1.1 The marketing concept and market 3.4 The technological environment 65 orientation 6 3.5 Changes in marketing infrastructure and 1.2 The resource-based view of marketing 12 practices 68 1.6 New strategies for changing 1.4 Marketing fundamentals 19 macro-environments 70 1.5 The role of marketing in leading strategic 3.7 The Five Forces model of industry management 23 competition 72 Summary 25 3.8 The product life cycle 76 Case study: LEGO builds new dimension with 3.9 Strategic groups 78 digital vision 25 3.10 Industry evolution and forecasting 81 3.12 SPACE analysis 85 CHAPTER 2 3.13 The Advantage Matrix 87 STRATEGIC MARKETING PLANNING 28 Summary 89 Introduction 29 Case study: Dyson: A British inventor 2.1 Defining the business purpose or mission 30 pivots to Asia 90 2.2 The marketing strategy process 33 2.3 Establishing the core strategy 34 CHAPTER 4 2.4 Creation of the competitive positioning 44 CUSTOMER ANALYSIS 94 2.5 Implementation 47 Summary 50 Introduction 95 Case study: Amazon eyes online sales boost 4.1 What we need to know about customers 95 through ‘Fire’ smartphone 51 4.3 The marketing research process 106 4.4 Organising customer information 107 Summary 111 Case study: Amazon and Google lead way on virtual assistant dealmaking at CES 111 viii CONTENTS CHAPTER 5 Summary 198 COMPETITOR ANALYSIS 114 Case study: Turning right: First-class air travel is in decline 199 Introduction 115 5.2 The dimensions of competitor analysis 118 CHAPTER 8 5.3 Choosing good competitors 131 SEGMENTATION AND POSITIONING 5.4 Obtaining and disseminating RESEARCH 202 competitive information 133 Introduction 203 Summary 136 8.1 A priori segmentation approaches 205 Case study: Adidas kicks off US drive to 8.2 Post hoc/cluster-based segmentation close in on Nike 137 approaches 208 8.3 Qualitative approaches to positioning CHAPTER 6 research 215 UNDERSTANDING THE ORGANISATIONAL 8.4 Quantitative approaches to positioning RESOURCE BASE 140 research 217 Summary 225 Introduction 141 Case study: How millennials became the 6.1 Marketing resources as the foundation world’s most powerful consumers 226 for differentiation 142 6.2 Value-creating disciplines 143 6.3 The resource-based view of the firm 145 CHAPTER 9 6.4 Creating and exploiting marketing assets 149 SELECTING MARKET TARGETS 230 6.5 Developing marketing capabilities 158 Introduction 231 6.6 Dynamic marketing capabilities 159 9.1 The process of market definition 233 6.2 Defining how the market is segmented 235 6.8 Developing and exploiting resources 163 9.3 Determining market segment attractiveness 236 Summary 164 9.4 Determining current and potential strengths 244 Case study: Why Ford is stalling in China 9.5 Making market and segment choices 246 while Toyota succeeds 164 9.6 Alternative targeting strategies 248 Summary 250 Case study: No-frills Ryanair faces test with Business Plus 251 PART 3 IDENTIFYING CURRENT AND FUTURE COMPETITIVE PART 4 POSITIONS COMPETITIVE POSITIONING CHAPTER 7 STRATEGIES SEGMENTATION AND POSITIONING PRINCIPLES 170 CHAPTER 10 CREATING SUSTAINABLE COMPETITIVE Introduction 171 ADVANTAGE 256 7.1 Principles of competitive positioning 173 7.2 Principles of market segmentation 175 Introduction 257 7.3 The underlying premises of market 10.1 Using organisational resources to create segmentation 175 sustainable competitive advantage 257 7.4 Bases for segmenting markets 177 10.2 Generic routes to competitive advantage 259 7.5 Segmenting consumer markets 177 10.3 Achieving cost leadership 260 7.6 Segmenting business markets 189 10.7 Identifying and describing market segments 193 10.5 Sustaining competitive advantage 272 7.8 The benefits of segmenting markets 194 10.6 Offensive and defensive competitive 7.9 Implementing market segmentation 195 strategies 274 CONTENTS ix Summary Case study: Volvo’s heart will ‘remain in 285 PART 5 Sweden’ 286 IMPLEMENTING THE STRATEGY CHAPTER 11 COMPETING THROUGH THE EVOLVING CHAPTER 14 MARKETING MIX 287 STRATEGIC CUSTOMER MANAGEMENT Introduction 288 AND THE STRATEGIC SALES 11.1 The market offer 288 ORGANISATION 387 11.2 Pricing strategies 300 Introduction 388 11.1 Priorities for identifying strategic sales 11.4 Distribution strategies 311 capabilities 391 11.5 The extended marketing mix – people, 14.2 The new and emerging competitive role processes and physical evidence 314 for sales 394 11.6 New businesses and business models 315 14.3 The strategic sales organisation 397 11.7 The connected marketing mix 317 14.4 Strategic customer management tasks 404 Summary 317 14.5 Managing the customer portfolio 406 Case study: How ABB FIA Formula E 14.6 Dealing with dominant customers 408 championship built a fan base from scratch 318 Summary 419 Case study: Power of the ‘mummies’ key to Nestlé’s strategy in DR Congo 420 CHAPTER 12 COMPETING THROUGH INNOVATION 320 Introduction 321 CHAPTER 15 STRATEGIC ALLIANCES AND NETWORKS 423 12.2 New products 337 Introduction 424 12.3 Planning for new products 340 15.1 Pressures to partner 425 12.4 The new product development process 342 15.2 The era of strategic collaboration 429 12.5 Speeding new product development 348 15.3 The drivers of collaboration strategies 430 12.6 Organising for new product development 349 15.4 Network forms 434 Summary 351 15.5 Alliances and partnerships 436 Case study: Apple moves into fashion 15.6 Strategic alliances as a competitive force 440 business with Watch launch 352 15.7 The risks in strategic alliances 442 15.8 Managing strategic alliances 443 Summary 448 CHAPTER 13 Case study: UPS and FedEx turn focus to COMPETING THROUGH SUPERIOR consumer behaviour 449 SERVICE AND CUSTOMER RELATIONSHIPS 354 CHAPTER 16 Introduction 355 STRATEGY IMPLEMENTATION AND 13.1 The goods and services spectrum 359 INTERNAL MARKETING 452 13.2 Service and competitive positioning 361 13.3 Relationship marketing 364 Introduction 453 13.1 The strategy implementation challenge 13.5 Providing superior service 370 in marketing 457 13.6 Customer relationship management 373 16.2 The development of internal marketing 460 13.3 The scope of internal marketing 461 13.8 Measuring and monitoring customer 16.4 Planning for internal marketing 471 satisfaction 377 16.5 Cross-functional partnership as internal Summary 380 marketing 473 Case study: Property portals hand control to 16.