Summary
Strategic Marketing
(EBM081C05)
Articles
Lecture 1: Basics of Strategic Marketing & Strategic Market Orientation
Article 1: Montgomery, D. B., Moore, M. C., & Urbany, J. E. (2005). Reasoning about
competitive reactions: Evidence from executives. Marketing Science, 24(1), 138-149
Article 2: Rust, R. T., Moorman, C., & Dickson, P. R. (2002). Getting return on quality:
revenue expansion, cost reduction, or both? Journal of Marketing, 66(4), 7-24
Case Study (Tesla) - Tesla Looks to Open Its EV-Charging Network
Lecture 2: STP (Segmentation, Targeting, & Positioning)
Article 3: Wedel, M. (2011). Is segmentation history? In Wieringa, J.E. et al. (eds). Liber
Amicorum in honor of Peter S.H. Leeflang, University of Groningen, 99-110
Case Study - Behind 'Tarjay:' Target’s Strategy Combines Bargain and ‘Elevated’
Products / Video (Target)
Lecture 3: Marketing Mix
Article 4: Ataman, M. B., Van Heerde, H. J., & Mela, C. F. (2010). The long-term effect of
marketing strategy on brand sales. Journal of Marketing Research, 47(5), 866-882.
Article 5: Heskett, J. L., & Schlesinger, L. A. (1994). Putting the service-profit chain to
work. Harvard business review, 72(2), 164-174.
Case Study: Costco
Lecture 4: Omnichannel & Metrics
Article 6: Leone, R. P., Rao, V. R., Keller, K. L., Luo, A. M., McAlister, L., & Srivastava, R.
(2006). Linking brand equity to customer equity. Journal of Service Research, 9(2),
125-138
Article 7: Morgan, N.A. & Rego, L.L. (2009). Brand Portfolio Strategy and Firm
Performance. Journal of Marketing, 73(1), 59-74.
Article 8: Srinivasan, S., & Hanssens, D. M. (2009). Marketing and Firm Value: Metrics,
Methods, Findings, and Future Directions. Journal of marketing research, 46(3), 293-312
Case Study (Nike)
Lecture 5: Marketing-Interfaces & Future of Marketing
Article 9: Rust, R. T. (2020). The future of marketing. International Journal of Research in
Marketing, 37(1), 15-26.
Article 10: Verhoef, P. C., & Leeflang, P. S. (2009). Understanding the marketing
department's influence within the firm. Journal of Marketing, 73(2), 14-37
, 1
Articles
Lecture 1: Basics of Strategic Marketing & Strategic Market Orientation
Article 1: Montgomery, D. B., Moore, M. C., & Urbany, J. E. (2005). Reasoning
about competitive reactions: Evidence from executives. Marketing Science,
24(1), 138-149
How or why rivals react to a firm’s past actions, but stops short of examining whether managers
attempt to predict such reactions, which we call strategic competitive reasoning.
Competitive intelligence experts and other experienced managers’: relatively low incidence of
strategic competitor reasoning is due to:
- Perceptions of low returns from anticipating competitor reactions more than to the
high cost of doing so
- The difficulty of obtaining competitive information and
- The uncertainty associated with predicting competitor behavior contribute to
these perceptions
Introduction
Two strategic errors companies often fall prey to in the face of a dynamic business setting:
1. Strategic interdependence → the failure to anticipate competitors’ moves (actions)
2. The failure to recognize potential interactions over time. (reactions)
Competitive Reasoning
Competitive reasoning: the assessment and consideration of competitors that serves as an
input into the firm’s decision making. (a manager might simply ignore the competition, behaving
strictly as a monopolist - not taking into account the actions of other firms).
Competitive reasoning, if it happens, can take three forms
1. Managers may study their competitors in a manner that results in a description of the
competitor (say, the competitor’s goals, strengths and weaknesses, assumptions,
strategy, past and current behavior, and so forth, Porter 1980), but stop short of making
predictions about the competitor’s future actions.
2. Managers may make predictions about competitors’ behavior, but only about actions,
not reactions
3. Managers may specifically consider how their competitors are likely to react to their
firm’s own decisions = strategic competitive reasoning (goes beyond both describing
competitors and predicting competitors’ future moves. It involves stepping into the shoes
of the competitor and predicting the competitor’s reactions to one’s own moves)
, 2
Purpose of This Paper
Characterizes the likelihood of competitive reactions to a firm’s action as a function of
a. The characteristics of the firm taking the action
b. The characteristics of the action
c. The characteristics of the rival
d. Environmental characteristics
Ex ante is likely to lead to poorer decisions and poorer outcomes.
The Studies
Goal of the first and second studies: find out whether managers who were asked to describe
factors that were important in past and prospective decisions would spontaneously mention
considering any type of competitor behavior
third study addresses the perceived plausibility of the results of Studies 1 and 2 by soliciting the
reactions of a different group of practicing managers to the results observed in the earlier
studies and their explanations of these results
Study 1
Pricing decisions, contrasted with other strategic decisions, are more visible, occur more
frequently, and can more easily be linked to sales and profit outcomes - pricing decisions are
more likely than non pricing actions to evoke competitive reactions.
Results
Competitive factors receive a greater emphasis in pricing than in new product decisions. → This
was true for both retrospective and prospective decisions.
Expected future competitor reactions are mentioned more often in the prospective decision
accounts than the retrospective ones for both pricing and new product decisions, although the
difference between retrospective and prospective decisions is not significant for new product
decisions.
Study 2
Managers attend far less to future competitive reactions in their decision making than might be
expected based upon traditional economic theory.
Study 3
Results
Factors Influencing the Value of Competitive Reasoning
Factors Raising the Perceived Costs of Competitive Reasoning
● Difficulty of obtaining competitive information
- Accessibility of information about competitor behavior
- Difficulty of competitive analysis even if competitive information was available
- Limited opportunity to actually learn about competitors
- Risk aversion
