Page 64 - Marketing Management

DEVELOPING MARKETING STRATEGIES AND PLANS | CHAPTER 2 41

The Kate Spade brand allows Liz
Claiborne to attract a more youth-
ful customer.

studios, such as infrared or ultraviolet lighting or perhaps environmentally friendly “green”
fluorescent bulbs.
Large companies normally manage quite different businesses, each requiring its own strategy.
At one time, General Electric classified its businesses into 49 strategic business units (SBUs).An
SBU has three characteristics:
1. It is a single business, or a collection of related businesses, that can be planned separately from
the rest of the company.
2. It has its own set of competitors.
3. It has a manager responsible for strategic planning and profit performance, who controls most
of the factors affecting profit.

The purpose of identifying the company’s strategic business units is to develop separate strate-
gies and assign appropriate funding. Senior management knows its portfolio of businesses usually
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includes a number of “yesterday’s has-beens”as well as “tomorrow’s breadwinners.” Liz Claiborne
has put more emphasis on some of its younger businesses such as Juicy Couture, Lucky Brand
Jeans, Mexx, and Kate Spade while selling businesses without the same buzz (Ellen Tracy, Sigrid
Olsen, and Laundry). Campbell Soup has out-paced the stock market for close to a decade by
developing or keeping only products that ranked number one or number two in the categories of
simple meals, baked snacks, and veggie-based drinks and that had a strong emphasis on value,
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nutrition, and convenience.

News Corp. News Corp. Media conglomerate News Corp.’s vast empire encompasses virtu-
ally all aspects of print and broadcast media (see
Table 2.4). The economic recession of
2008–2009 had different effects on each. Hit hard were its broadcast television business.
Even though the Fox network retained popular shows like American Idol, lower ratings and
advertising sales took their toll. The cable network business, whose revenue is more stable
due to lower ad rates and monthly provider fees, was a bright spot; profits actually grew. A continued
slump in the newspaper and magazine business led the firm to start charging reader fees for all its news
Web sites. News Corp.’s $650 million investment in MySpace in 2005 continued to falter as the social
network site struggled to attract advertisers. At the same time, free online video service Hulu began to hit
its stride, and News Corp. remained committed to a strong online presence. The goal? To develop hit TV
shows and movies that would drive DVD sales and lead to streaming shows over the Internet, and eventu-
ally to products downloadable to mobile phones. 20