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CHAPTER 8 • IMPLEMENTING STRATEGIES: MARKETING, FINANCE/ACCOUNTING, R&D, AND MIS ISSUES 257

other enticements on their sites. Editorial content and advertising content are increasingly
being mixed on blogs.
In 2009–2011, consumers will act rationally. JC Penney CEO Mike Ullman says,
“Consumers now shop for what they ‘need’ and less for what they ‘want.’ And they don’t
need much.” Essentials, such as food, health-care products, and beauty aids are selling,
but even in those industries, consumers are shifting to less costly brands and stores.
There is a need for marketers to convince consumers that their brand will make life eas-
ier or better. Consumers now often wait until prices are slashed 75 percent or more to
buy. Consumers today are very cautious about how they spend their money. Gone are the
days when retailers could convince consumers to buy something they do not need.
JC Penney is among many firms that today have revamped their marketing to be more
digital related. Penney’s is segmenting its e-mail databases according to customers’ shop-
ping behaviors and then sending out relevant messages. Penney’s corporate director of
brand communications recently said, “Tailoring the e-mail insures that our customers are
receiving timely, relevant information.”
Expectations for total U.S. advertising spending in 2009 may decline anywhere from 6.2
percent to 3 percent to about $160 billion as the fallout from global financial crises continues
8
to cut into ad spending. Global ad spending is expected to decline about 0.5 percent. One
bright spot, however, is online advertising expenditures that are expected to increase 5 percent
in 2009 following a 16 percent increase in 2008. Companies are shifting ad dollars from
newspaper, magazine, and radio to online media.
Purpose-Based Marketing
The global marketing chief at Procter & Gamble, Jim Stengel, recently started his own
LLC business to try to persuade companies that the best way to sell in a weak economy is
to “show customers how they can improve their lives” with your product or service.
Stengel calls this “purpose-based marketing,” and hundreds of firms have now adopted
this approach successfully. He says there is need in an ad to build trust and an emotional
connection to the customer in order to differentiate your product or service. 9
In a weak economy when consumers are more interested in buying cheaper brands,
Stengel acknowledges that ads must promote price, but he says ads must also show the
intrinsic value of the product or service to be cost effective. Stengel contends that ads
should do both: promote low price and build emotional equity through “purpose-based
appeal.”
The Coca-Cola Company is leading the way to another new kind of selling in a
weak economy. CEO Muhtar Kent at Coke says marketing today must “employ opti-
mism.” That is why Coca-Cola launched a new global ad campaign in 2009 appealing to
consumers’ longing for comfort and optimism. The new campaign features the new slo-
gan “Open Happiness,” which replaced Coke’s prior popular slogan of three years, “The
Coke Side of Life.” The Coke CEO says marketers must use feel-good messages to
counter the fallout from the economic crisis. Firms must today project to customers that
their products or services offer a beacon of comfort and optimism. Coke’s cola volume
declined 4.0 percent in the United States in 2008. Coke Classic’s U.S. volume fell about
16 percent from 1998 through 2007 as customers switched to bottled water, enhanced
teas, and other alternative drinks. 10

Market Segmentation
Two variables are of central importance to strategy implementation: market segmentation
and product positioning. Market segmentation and product positioning rank as marketing’s
most important contributions to strategic management.
Market segmentation is widely used in implementing strategies, especially for small
and specialized firms. Market segmentation can be defined as the subdividing of a market
into distinct subsets of customers according to needs and buying habits.