Page 344 - Marketing Management

COMPETITIVE DYNAMICS | CHAPTER 11 321

growth slows and profits stabilize. Finally, the product 9. In a recession, marketers must explore the upside of
enters a decline stage. The company’s task is to identify possibly increasing investments, get closer to cus-
the truly weak products, develop a strategy for each, tomers, review budget allocations, put forth the most
and phase them out in a way that minimizes impact on compelling value proposition, and fine-tune brand and
company profits, employees, and customers. product offerings.
8. Like products, markets evolve through four stages:
emergence, growth, maturity, and decline.

Applications

Marketing Debate Marketing Discussion

Do Brands Have Finite Lives? Industry Roles
Often, after a brand begins to slip in the marketplace or Pick an industry. Classify firms according to the four different
disappears altogether, commentators observe, “All brands roles they might play: leader, challenger, follower, and nicher.
have their day,” implying brands have a finite life and cannot How would you characterize the nature of competition? Do
be expected to be leaders forever. Other experts contend the firms follow the principles described in this chapter?
brands can live forever, and that their long-term success
depends on marketers’ skill and insight.
Take a position: Brands cannot be expected to last
forever versus There is no reason for a brand to ever be-
come obsolete.

Marketing Excellence a steady stream of innovations, popularizing the PDA
phone, the first cell phone with an MP3 player, and the
first Blu-ray disc player.
>>Samsung Samsung initially focused on volume and market
domination rather than profitability. However, during the
Asian financial crisis of the late 1990s, when other Korean
chaebols collapsed beneath a mountain of debt, Samsung
took a different approach. It cut costs and reemphasized
product quality and manufacturing flexibility, which allowed
its consumer electronics to go from project phase to store
shelves within six months. Samsung invested heavily in
innovation and focused intently on its memory-chip busi-
ness, which established an important cash cow and rap-
idly made the company the largest chip maker in the
world. The company continued to pour money into R&D
during the 2000s, budgeting $40 billion for 2005–2010. Its
focus on R&D and increasing digital convergence have let
Samsung introduce a wide range of electronic products
Korean consumer electronics giant Samsung has made under its strong brand umbrella. The firm also partnered
a remarkable transformation, from a provider of value- with longtime market leader Sony to create a $2 billion
priced commodity products that original equipment man- state-of-the-art LCD factory in South Korea and signed a
ufacturers (OEMs) sold under their own brands, to a milestone agreement to share 24,000 basic patents for
global marketer of premium-priced Samsung-branded components and production processes.
consumer electronics such as flat-screen TVs, digital Samsung’s success has been driven not only by suc-
cameras, digital appliances, semiconductors, and cell cessful product innovation, but also by aggressive brand
phones. Samsung’s high-end cell phones have been a building over the last decade. From 1998 to 2009, the
growth engine for the company, which has also released company spent over $7 billion in marketing, sponsored