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THE DISCIPLINE OF MARKETING: THE FOUNDATION FOR BUSINESS STRATEGY

Has it ever seemed to you that some market leaders must have a crystal ball?

They just seem to know how the market will react to a new product or service, how to effectively communicate with people to persuade them to purchase their products, or what to do next in order to remain the leaders in their industry. They don’t have one, of course. What they do have is something that is just as powerful.

They have a culture of curiosity about their customer that provides them with a continual stream of feedback, combined with an intense focus on a defined market or market segment, and an executive team that is deeply committed to addressing the market’s needs. This combination provides them with what I call the Crystal Ball Effect, the vague impression that somehow they have more information than their competitors do. (See box 2-1 for more explanation.)

And they do.

They have more information because they are constantly gathering it, listening carefully to what they hear and tweaking their model to make it even more effectively aligned. It affects every aspect of their business, especially the function of marketing. Every decision, from what products and services to offer, to what the company’s technology priorities are, to whom the company hires, is affected by this deep understanding of who they serve and what they need.

This intense focus on the discipline of marketing, listening to the market and aligning everything they do with the market’s needs, at a strategic level, is the key to their success. Because it is led by the executive team and it affects every aspect of what they do, the discipline of marketing forms the market leader’s business strategy.

Box 2-1: The Crystal Ball Effect

WHY THE DISCIPLINE OF MARKETING PRODUCES THE CRYSTAL BALL EFFECT

The management teams within companies that are market leaders have their eyes open and are listening carefully to the market at all times. Although this may sound like a natural thing to do, and many executives and managers believe they are listening to the market, it is actually relatively unusual.

Instead, most managers hear what they want to hear from the market and ignore the rest. For example, many years ago, I worked with a company that was considering expanding into a new retail venture. The board and executive team were extremely enthusiastic, except for a small band of individuals who were worried. They weren’t convinced that there was sufficient foot traffic to support the business.

They hired my company to help them evaluate the size and potential interest within the market. Our finding supported the concerns of the naysayers, and we advised them not to move forward with their plans. However, this wasn’t what the executive team or the majority of the board wanted to hear. So, they moved forward anyway. Two years and several hundreds of thousands of dollars later, they shuttered the retail operations. As we had predicted from our conversations with the market, there wasn’t enough business to support it.

Smaller companies aren’t the only ones who make these types of mistakes. Even market leaders are susceptible. Consider Coca-Cola’s efforts to change the recipe for its classic Coke product. Like my client, they tested the market before they launched the new product. They conducted blind taste tests, surveyed people on results and conducted focus groups. In general, on a blind basis, people preferred the new, sweeter formula. However, when they asked focus group participants how they would react to a change in Coke’s flavour, about 10% of the population became fiercely opposed to the idea. They, in turn, affected the opinions of those around them.

Coca-Cola had an indication of how the market would react, but they chose to ignore what they’d heard. They decided that the lone voice of a participant in a focus group was swaying the opinions or drowning out the voices of the others in the group. Unfortunately, in a broad consumer market in which consumers do talk to one another and influence the opinions of their friends, the focus group was a good proxy for the market environment. However, the real launch, unlike the focus group, didn’t end after an hour or two. It continued, and those voices of dissent gathered others behind them. Coca-Cola was eventually forced to reintroduce the old product.

By listening to the market, companies generate some important benefits. First, they reduce the risk that their business and marketing plans will fail by turning assumptions about market needs into facts. Because this reduces the number of mistakes they make in their marketing or business strategy, it can dramatically improve their profitability.

Second, they are more likely to see new opportunities before their competitors do. For example, consider Sam Walton, who founded Wal-Mart. Walton didn’t start the discounting concept. There were already several chains that were thriving by 1962, the year he founded Wal-Mart. In fact, Kmart and Target were both founded that same year. But because Walton was particularly good at listening to the market and responding to its needs, he saw an opportunity that the rest of the market did not.

Sam Walton and his wife, Helen, didn’t particularly like cities. They liked the people and the atmosphere in smaller towns. So when Walton saw the rise in the discounting business in other cities, and the price advantages it brought to local residents, he wanted to bring that to his friends and neighbours as well.

He tried to persuade the Ben Franklin store where he worked to try out the discounting approach, but they weren’t interested. It wouldn’t work, they told him. The market just wasn’t big enough, and people wouldn’t buy from a discounter. But he didn’t believe them. So he continued to mull it over.

Eventually, he started his own discounting company, and, for the first few years, competitors wrote him off as crazy. They assumed that a discounting operation could not be successful in a small town environment. None of Walton’s competitors, including Kmart and Target, would go into towns of less than 50,000 people. Even the smaller chains wouldn’t touch a town with a population below 10,000 or 12,000 people. Walton was putting discounting operations in towns with 5,000 people. And he did that because he made a different assumption about the market.

Sam Walton made a different assumption about the potential demand, and he based his assumption on a deep understanding of his market and the opportunity it presented. And, as a result, he stayed out of the competitive fray. While the big players battled for market share in big cities, Wal-Mart gained loyalty and secured 100% of the discount store market share in smaller locations. Within 20 years, they were the largest discount retailer in the United States. Now Wal-Mart is the world’s largest non-military employer.

The thing about Walton’s assumption is that it wasn’t truly an assumption. It was a fact that he knew because he knew the market inside and out. He spent time talking to his customers, learning about who they were, what they valued and the type of merchant they preferred, and he tailored his business to match. He knew what influenced their decision to purchase from him or from a competitor, and he based his marketing strategy on those facts. By contrast, his competitors stuck to another assumption: the assumption that the best opportunities were in major markets. In the end, this assumption and their failure to recognise the opportunity first cost them their competitive leadership.

LEVERAGING MARKET INSIGHT

The insight market leaders generate from their version of a crystal ball, the marketing discipline, gives them three critical pieces of information:

• Information about opportunities that exist in the market in the form of unmet needs or opportunities to improve existing solutions

• Information about the solutions that exist, including the competitive threat posed both by others in the industry and by alternative solutions

• Information about the reputation of the company, also called its brand, which can represent opportunities, threats or both to an organisation

Almost any executive who has been through business school will recognise these factors as the key components of the ‘opportunities’ and ‘threats’ elements of a SWOT analysis. Often used as the basis of strategic planning, the SWOT analysis process facilitates the identification of the internal strengths and weaknesses of an organisation, the external opportunities in the market place, and the threats to success posed by competitors, customer perceptions and other issues. Many companies still use this process, or a variation of it, when they update or frame a strategic plan. Although some organisations make assumptions about the opportunities and threats the market presents, the market leaders’ assessments are more likely to be based on a deeper and more accurate understanding of the market. This reduces the risk associated with assumptions, increases the likelihood they will spot opportunities before their competitors and makes them more adept at both defensive and offensive competitive strategies.

Opportunities: Identifying Unmet, Untapped or Underserved Market Needs

The first benefit of the discipline of marketing is that it gives the astute listener an opportunity to recognise opportunities, or the untapped potential in existing solutions, before the competition does.

For example, the story of Starbucks is, in many ways, similar to that of Wal-Mart. Starbucks was not the first coffeehouse chain, but it was the result of the identification of an underserved need in the market. Starbucks was conceived after Howard Schultz, who, at the time, was the director of retail operations and marketing for a roaster and retailer of whole beans and coffee-making equipment, took a trip to Italy. While he was there, he became intrigued with the Italian café, a community gathering spot, between home and work, where the barista knows everyone’s name, and people can stop in for a quick cup of coffee or linger for a longer chat. The Italian café filled a need within the community—a need for a place to connect with others and build relationships. And Schultz realised that this was a need he saw in Seattle and in other places he visited.

When he returned from Italy, he tried unsuccessfully to persuade his employers to pursue it. Undaunted, he left the company to start a successful chain of coffee houses called Il Giornale. In 1988, he bought the assets of his former employer’s roasting chain, Starbucks, and renamed his own coffee houses using that name. Then, he began expanding in other urban areas across the United States.

Of course, if Schultz had not already been steeped in the coffee drinkers’ world, first as a salesman of coffeemaking equipment and then as the head of marketing for the early coffee-roasting version of Starbucks, watching trends and studying the industry around the world, it is unlikely he would have recognised the need as readily. He was successful because he understood the market and saw an unmet need.¹

Similarly, Guy Laliberte, CEO and founder of Cirque de Soleil, already knew the entertainment business. But for him, the concept of a reinvented, upscale circus without the expensive and controversial use of animals that encompassed dance, drama and daring wasn’t the result of a single brainstorm. It evolved based on input from the market.

Laliberte was passionate about the type of performances he and his fellow performers enjoyed doing, including acrobatics, fire breathing, dancing, acting and many of the other forms of entertainment that had, for so many years before Cirque du Soleil was founded, been the core offerings of street performers. He was passionate, and he listened to the feedback he got as a street performer himself. As he added people, and as his troop grew, he continued to listen and tailor his product to match what he heard. The concept wasn’t always the upscale product that we know today. It was the result of constant tailoring.² Laliberte’s efforts created a new market for the circus industry, an art form that was long considered to be a dying industry. Now, almost 30 years later, the organisation is considered a market leader, not only within the circus industry, but within the entertainment industry overall, and performs around the world.

Although many concepts are born from a founder’s ability to spot a need, market leaders gain their prominence in the market by continuing to listen and using what they hear to constantly innovate the ways in which they serve their market’s needs.

Cirque du Soleil would not have been the success it has become if Laliberte had not listened continuously to feedback. Although other organisations have imitated the model, creating similar circus performances in cities around the world, Cirque de Soleil remains the market leader within the genre because it has continued to identify opportunities for growth in response to needs within the market.

Similarly, Starbucks has used market input derived from feedback from such sources as front-line employees (eg, baristas), from customers directly, from market research and from the intuition and deep understanding of the market at the leadership level to refine and innovate its product lines. Schultz developed those feedback mechanisms from the organisation’s infancy, creating structures to solicit input. However, at some point, the company stopped listening as carefully. When Schultz returned to Starbucks as its CEO in 2008, feedback coming from the market was that the Starbucks experience was no longer a ‘comfortable community coffeehouse.’

Push-button technology replaced hand-pulled espressos, similarly-styled interiors made all Starbucks stores feel like clones of one another, and long lines gave baristas little time to chat with their customers. The third place between home and work that Schultz envisioned had disappeared. Instead, Starbucks had become an impersonal, fast food, coffee-on-the-run experience. Fast-food industry king McDonald’s probably made the comparison even more evident when it introduced the ‘McCafe’ concept, offering higher-end coffee and espresso-based coffee beverages in its stores at about the same time.³ And the feedback Schultz and his team were hearing was that the market didn’t like it.

Market feedback about returning to the local coffeehouse feel and the threat from fast-food competitors prompted a new innovation in Starbucks’ approach to gaining and incorporating market feedback. Schultz gathered a group of employees and asked them to tell him how they would design a coffeehouse that would compete with Starbucks. He gave them a modest budget, and they created 15th Ave. Coffee & Tea, inspired by Starbucks. With hand-pull coffee makers, locally baked food, coffee and tea tastings in the mornings and poetry readings and open-mic music, accompanied by wine and beer at night, his employees proposed a return to the community concept. Schultz agreed and funded their vision. On July 24, 2009, the first ‘de-branded’ Starbucks opened in Seattle.⁴

This new Starbucks was located in the same space a branded Starbucks had been, and it still served Starbucks coffee, but the furniture and décor were local and secondhand. The concept provided a means of experimenting with ways to improve the customer experience and was successful enough that Schultz made over two other Starbucks stores shortly thereafter.

Although the initial concept store has since been rebranded with Starbucks name and logo, the feedback the company received about the facility, the service, the products they served and the environment helped guide decisions about other changes that were required to return the chain to its community gathering spot roots. For example, Starbucks stores around the world are being given a facelift. Instead of the same standard décor to which customers have become accustomed, stores will be tailored to suit the personality of the neighbourhoods in which they are situated.⁵

Threats: Understanding the Competition

Market leaders also leverage their understanding of the market and its needs to assess their competitors’ strengths and weaknesses, representing threats or opportunities, respectively, within the market place. Sometimes, great insights come from listening to what customers are saying about competitors vying for the same market share.

Consider, for example, the U.S. market for household cleaning products. At the beginning of the 21st century, the market was relatively flat and dominated by a few players, like Proctor & Gamble and Unilever. New product innovations were seen by most as the key to expanding market share, but the related market share acquisition was typically modest.

In 2004, Clorox Company marketing executive Jessica Buttimer was talking with mothers of newborns and young children in Marin County, California, where she lived. A new mother herself, she heard and understood their concern for safer, more environmentally friendly cleaning products. At the time, the market for green solutions was still relatively small. The Clorox Co. executive team was reluctant to move forward without more information. In this case, they supplemented their executive team’s listening skills with market research.

The market segmentation research further defined the characteristics of these parents. They were consumers who wanted greener products but were not necessarily strongly committed to addressing environmental issues. They might, for example, want to purchase a chemical-free product to protect their families’ health but might still own and drive SUVs or make other purchasing decisions without regard to environmental impact. Although they were interested in green products, they were sceptical about the efficacy of products offered by competitors, were more price-sensitive than the more environmentally-focused segment of the market, would not travel extra distance in search of a green solution and wanted solutions from brands they trusted. Clorox called this segment ‘chemical avoiding naturalists.’

More importantly, the research indicated that the existing competitors had weaknesses against which Clorox could compete: They were relatively unknown brands, not widely available and offered at a higher price. Clorox had the advantage of existing shelf space in almost every common market and the buying power to drive down prices. In addition, none of Clorox’s major competitors had decided to pursue this segment.

When Donald Knauss joined Clorox in 2006, he recognised the value in the trend Buttimer had identified. Despite the small percentage of market share currently held by existing ‘green’ brands like Method, Knauss agreed that there was larger potential. Forty-four per cent of consumers said they would be interested in purchasing ‘green’ cleaning products if they were effective, reasonably priced and convenient. Knauss updated the company’s strategic plan, adding a new strategy to ‘leverage environmental sustainability for top line growth.’ He also gave Buttimer the go ahead to develop and launch a new product line, Clorox Green Works, which was available beginning in January 2008.

Growth in the product line exceeded expectations. During the first year, Green Works captured 40% of the market for green cleaning products. In fact, the launch was so successful that the promotions and credibility that Clorox brought to the market inadvertently boosted sales for other makers of green cleaning products. In addition, the green market experienced such a boost from Clorox’s success that the competition also enjoyed overall sales growth.⁶

In 2008 and 2009, Clorox benefited from its understanding of market needs, existing competitors’ weaknesses and its major competitors’ reluctance to enter into the green market.

Opportunities and Threats: Your Company’s Reputation

Clorox’s leadership understood something else that was critical to its success when pursuing the growing chemical avoiding naturalist market. It knew how the company was perceived in the market. It had a tremendous opportunity because, as the makers of Clorox bleach products and other chemical-based cleaners, it was known for producing extremely efficient cleaning solutions. However, these same chemicals were the products its target market was trying to avoid. Its reputation, the Clorox brand, was both an asset and a liability in this pursuit. (See box 2-2 for the relationship between reputation and brand.)

Clorox needed to retain the brand association because it had the trust and recognition that were key competitive advantages over Method, Seventh Generation (a Vermont-based company) and other new players in the market. However, they needed to convince a sceptical market that they could produce an environmentally friendly product.

Box 2-2: Reputation = Brand

With a lesser understanding of the market, Clorox’s leaders may have missed either the benefit the Clorox brand would bring to chemical avoiding naturalists, who trusted Clorox to bring products to market that were effective or the liability that the brand’s connection with chemicals could pose if left unaddressed. Fortunately, Clorox recognised both and worked proactively to build Clorox’s green image.

At the recommendation of Joel Makower, founder and executive editor of GreenBiz.com, Clorox mitigated the liability associated with its chemical-heavy history by partnering with another organisation long associated with environmental protection and widely respected among its customer base: The Sierra Club. In exchange for an undisclosed contribution to the United States’ largest environmental non-profit organisation, The Sierra Club allowed Clorox to use its logos as a seal of approval on its new Green Works products.

In an interview with Anya Kamenetz, of Fast Company magazine, Knauss described the decision. ‘We looked around, and no one had greater credibility than the Sierra Club,’ she explained. ‘They were the Good Housekeeping Seal of environmental groups.’⁷ While the move was controversial in the environmental community, it was successful with the chemical avoiding naturalists. The Sierra Club’s seal of approval mitigated the risk posed by Clorox’s long history of producing chemical-based solutions.

THE OTHER HALF OF MARKETING: MEETING MARKET NEEDS

So far, this chapter has focused on the first portion of the market leaders’ definition of marketing: its external focus. Understanding the market and its needs is critical, but it is only half of the marketing equation. The other half is tapping what your company does well in order to meet those needs and identifying where you can make money doing so.

Most average performers begin with this. It’s the easy part, relatively speaking. It’s the internally reflective aspect of marketing, when the CEO marketer identifies her or his company’s strengths and weaknesses as an organisation and looks at the markets the company should pursue in order to make money. It’s where your company envisions the future and what the company will achieve.

It is also when the company’s executive team, and sometimes the marketing team, answers basic questions about how you will achieve that vision, including

• what market or markets you serve;

• how you can best leverage your strengths to serve them;

• what your organisation needs to do to provide those solutions; and

• what financial outcomes are possible.

Most executive teams analyse their own passions, strengths and weaknesses at some point in the process of deciding what they are going to do. They might decide they like serving a particular type of client or delivering a particular product better than another or that they are better at it. Or, the decision might be based on where they currently make the most money.

The difference between average performers and market leaders is that average performers often begin and end with that internal perspective. Market leaders tie their analysis of strengths and weaknesses and their decisions about the markets they will serve and the businesses they will be in to the customers they choose to serve and their understanding of those customers’ needs.

CHOOSING A MARKET: THE CHALLENGE OF SERVING MANY MASTERS

In our research, we identified five key behavioural differences between market leaders and average market performers, the first of which is an unwavering focus on the market (see chapter 1, ‘A Market Leader’s Definition of Marketing,’ for an overview of these behaviours).

Market leaders begin with an exceptional focus on a single market or set of markets (sometimes called market segments). Decision-makers in the chosen market or markets share common needs and common purchase decision criteria. Sometimes these markets are defined by geography, profession, a demographic characteristic, and sometimes by other factors. Just as importantly, market leaders can easily define who isn’t a part of their market.

Market leaders don’t disregard a market segment or consider it to be outside their market because they don’t believe there is profit potential in that market. Those segments might, in fact, be quite lucrative. They are eliminated as target markets because the executive team isn’t passionately concerned about the market’s needs, doesn’t know or understand that market’s needs as well or believes the segment’s needs are adequately addressed by other competitors or existing solutions.

When they expand, market leaders take one of two approaches, and often both. They look for new needs within the markets they already serve, broadening their product or service offering in ways that are consistent with their company’s reputation, or they expand into new markets whose needs and decision criteria are quite similar to those of their existing market. Market leaders identify new opportunities based on their understanding of their market.

Average performers often take a different approach. Their companies are frequently driven by an internal, sales-centric perspective. They consider what they want to sell, and then look for purchasers who could buy that product or service. Their initial markets tend to be broad, and when they expand, they follow common industry approaches or try to mirror the product or service offerings of larger competitors, regardless of whether these approaches serve the needs of their most natural customer base.

This lack of focus is particularly common in small and mid-sized companies. This may be the result of trying to compete with larger players, whose target markets have diversified as they have grown, or it may be because they believe they need to generate sales wherever they can find them. Either way, they fail to recognise the financial cost of this approach.

Serving many markets simultaneously, especially as a small or mid-sized organisation, can be both inefficient and costly and is one of the most significant causes of diminished returns on marketing investments. Different market segments have, by definition, different needs and different decision-making criteria. To serve a specific market, an organisation must tailor the products, pricing, promotions and distribution choices to address that customer’s needs. When an organisation tries to serve multiple markets, it incurs added costs as it tailors its products, pricing, promotions and distribution choices in response. Expanding the markets served can be an important way to grow, but the market leader CEO makes those choices carefully, staying as close as possible to the original market, and expanding through avenues that do not force the organisation to drive costs up in unsustainable ways.

Let me illustrate these issues with a few examples.

The Cost of Market Diversity

This first example, like most in this book, is not based on a single client. Instead, it is a composite based on the types of issues frequently seen when consulting with executives looking for improved marketing outcomes.

In this case, let’s assume the client organisation is a custom technology application development company called Tailored Solutions, Inc., or TSI. TSI has been reasonably successful. It is a mid-sized player in a crowded industry, and it has grown because of strong customer retention and referrals. Although the company has experienced solid returns consistent with those of its middle-market competitors, the CEO wants TSI to be a market leader.

When asked to define his market, the CEO responds that almost every company has some technology pain. He provides solutions to alleviate that pain, so the potential market is huge. Virtually any company could be a client. With some prompting, he concedes that small companies are unlikely to be good targets because his fee structure would not be within their budget, and extremely large companies are unlikely to use his company because they generally have in-house resources. However, he insists that the remaining companies—all middle-market companies—are his target market. And, in fact, that is how he has been pursuing business.

In the company’s early years, this worked, not because the market was so large, of course, but because the company was so small, and each incremental project represented significant growth. During the first few years, most of TSI’s business came from referrals through the CEO’s former employer and by virtue of being in the right place at the right time, performing well and providing excellent customer service. Now that the company had grown, its growth rates had slowed, and the company needed to add business more quickly than it had historically if it wanted to continue to grow aggressively. Unfortunately, relying on existing relationships, referrals and the occasional client who found them via their website was no longer producing enough new business to sustain the growth rates the CEO wanted to achieve.

To address this sales need, TSI’s CEO decided to invest in ‘marketing.’ He looked at what his competitors were doing and invested in many of the same activities: social media, newsletters and the occasional technology trade show. Unfortunately, he has seen very limited returns. He’s frustrated, and he doesn’t know how to fix his marketing problem.

The problem this CEO is facing isn’t with marketing, the function. It is with marketing, the discipline, the portion that he is leading as CEO. His problem is a lack of market focus, which is limiting his ability to connect with and understand his market. His market is simply too broad.

When I work with clients who have this problem, I recommend that the executive team walk through their most recent client or customer acquisitions and describe how they got the business. In most cases, they are soon able to see the issue. In this example, each customer engaged the business to address very different types of problems, and each customer approached his or her search for a solution in a different way. Each customer consulted different resources, from peer organisations to trade publications to blogs that covered similar concerns. Sometimes, the decision maker was a CEO, whereas other times the selection was made entirely by a CFO, COO or a programme manager. There were few common needs other than the pain around a data issue.

However, there were some patterns in TSI’s problems. There were industries for which the company had addressed the same type of pain multiple times, and the decision makers and processes were consistent across all clients of a particular industry. There were also common pain points, like inventory controls, for which the decision maker and the criteria were the same across all industries that the company had served. TSI and its executive team understood these customers’ needs and could demonstrate the cost benefit of their solution. And by identifying these industries, the company’s markets were now well-defined. The executive team could count the number of companies that could be clients and estimate the number that might require TSI’s solutions.

With a more refined focus, the company could pursue those markets more effectively. Instead of a scattershot outreach approach, it could communicate more directly, in ways that reflected its understanding of the targeted segment’s specific needs, and greatly increase its odds of winning any particular client. When the CEO estimated the potential returns with focus on specific markets, the impact of narrowing the company’s focus was significant.

If this seems like a natural decision, you may wonder why more companies don’t do this. Why don’t more companies narrow their focus to improve their returns? The answer is that narrowing means placing some customers on the back burner. Other times, it means turning down a type of business that isn’t lucrative in favour of another that is. Turning down business or ignoring a potential source of revenue can be difficult when you are in the midst of the bloody battle between average performing competitors. Narrowing your focus requires a deep understanding of the market and its needs and a strong faith that you can provide a superior solution. In average performers, the executive team often lacks understanding, faith or both.

The Benefits of Market Focus

Consider, by contrast, one of the market leaders in our study: the School Employees’ Credit Union of Washington and its related companies. During the Great Depression, Robert Handy, a high school teacher in Washington State, supplemented his income by selling insurance to his fellow teachers. As he sat with his clients, talking through their needs, he found that they had a common challenge. As teachers, they had a difficult time securing loans to purchase homes and fund other needs. Banks were leery of a profession they considered to be unstable and were not convinced that lending to teachers would be safe, particularly in the wake of the market’s recent collapse. Handy knew that the banks were wrong.

In 1936, just three years after the Washington State legislature had authorised the formation of credit unions, Handy set out to form the Seattle Teachers’ Credit Union. For the next ten years, Handy continued to teach while working on the side to promote the credit union to and for teachers. He knew the market well because he was a teacher himself. He knew what they needed, and he knew how to communicate with them. Although he was certainly in business to make money, he wasn’t in business to build a credit union. He was in business to serve teachers’ needs.

By 1946, the bank was big enough that it required a full-time executive, and Handy left teaching to become its first full-time CEO. In 1949, the bank extended its market. While Handy could have chosen to serve people other than teachers and remain in its current geography, Handy chose instead to grow the bank’s capabilities to allow it to serve teachers across the state of Washington. He stayed true to the market: teachers and their needs. By 1960, Handy’s organisation was serving teachers across the State and had become the state’s second largest credit union.

Then, in 1972, it expanded its market again, offering its services to a group of customers with similar needs and a similar decision-making process: all school employees. In 2002, the organisation changed its name to more accurately reflect its scope: the School Employees’ Credit Union of Washington.

Handy was focused. Not only did he remain focused on his market, school teachers and eventually school employees, but he continued to be passionately interested in their needs. From that passion was born a second set of companies, the PEMCO insurance companies. As Handy talked through the financial needs of his customers, he found another challenge shared by teachers throughout Seattle: access to reasonably priced fire insurance for their homes.

As a former insurance agent, he knew that teachers were relatively low risk and that the prices they were being charged didn’t reflect their cautious nature. So, in 1948, just two years after assuming full-time leadership of the Seattle Teachers’ Credit Union, Handy founded the Public Employees Mutual Insurance Company (PEMIC) to offer home fire insurance. Two years later, he founded the Public Employees Mutual Casualty Company (PEMCO) to offer liability insurance.

By 2001, when current PEMCO CEO Stan McNaughton participated in my company’s research study, Handy’s legacy included the credit union, a bank and three insurance companies, all focused on the same market: school employees in Washington State. In addition, PEMCO Corporation, another affiliate, provided centralised accounting and technical support services to other credit unions and remains a regional leader in financial automation and clearinghouse services.⁸

Robert Handy, and the executives who followed in his steps within these organisations, had a passionate understanding of their market. They certainly could have served other markets, but they maintained their focus. As a result, nearly 80 years later, the organisations he founded remain market leaders and enjoy stronger-than-average returns.

Focus Made the Difference

Look at the first 20 years of each of these two organisations, Tailored Solutions, Inc. (TSI) and Robert Handy’s family of companies. Within the first 20 years, growth had levelled off for TSI. Handy’s companies, on the other hand, were booming. By 1956, the School Employees Credit Union of Washington was the third largest credit union in Washington, well on its way to becoming the largest, and PEMCO and PEMIC were growing steadily. Focus and market understanding made a significant difference in the success each organisation enjoyed.

Because TSI’s leadership team’s target market was so broad and their decision-making processes were so diverse, the few promotional activities that the CEO conducted were not enough to catch the attention of the majority of the market. When they did attract a prospective client’s attention, through social media or newsletters, for example, the message was often not a good fit. The reader did not share that particular pain, was not the decision maker or simply found the issue irrelevant. For every dollar spent on these broad-based tactics, the company received almost no return.

Handy, on the other hand, was exceptionally focused and he, too, enjoyed early growth because of personal relationships, referrals and services teachers couldn’t find at traditional banks. For the first ten years, he spent his days teaching, meeting his customers in their work environment. Of course, he only interacted with a small number of them. All the same, he knew the issues—and he knew how to reach them.

Handy tailored his products and his message to the market in ways that would particularly appeal to them. The first credit union office was a small desk in the Education Department at the Seattle Public Library. His first promotional pieces were mimeographed flyers, printed on the same mimeograph presses used by teachers, and distributed through the principal’s boxes at the central office.⁹ To this day, the School Employees Credit Union website assures teachers that the organisation understands their unique needs, explaining that ‘unlike many credit unions across Washington, School Employees Credit Union has not opened membership to the general public. We’ve chosen to buck the trend so we can stay focused on our unique and responsible membership base, offering them exclusive benefits that they’ve earned and deserve.’

By focusing, Handy was better able to spot new opportunities for growth, both through new services and through geographical expansion, minimise promotional expenses and tailor his distribution channels to meet his customers’ unique needs. Although there were undoubtedly many other reasons Handy succeeded, market focus played a significant role in his financial success.

Choosing a Market

What do you do if you recognise yourself in these contrasting pictures, and your company is more like TSI than the School Employees Credit Union of Washington? How do you go about narrowing your focus? Begin by understanding how your most lucrative market (or markets) perceives you and your competition, and compare that to your company’s passions and strengths.

Several years ago, I worked with one of our clients to help their executive team reassess where they should focus. For the purposes of this example, let’s call them Widget Manufacturing, Inc. We began by assembling a list of their best customers. These customers were profitable, referred them business, used them nearly exclusively for the business they had and paid promptly. Next, we assembled a list of the customers that met this description who were no longer customers of the company and prospective customers whose business my client had not succeeded in winning and who were working with competitors.

I scheduled interviews with customers and prospective customers in a broad range of industries and for whom Widget Manufacturing had delivered a broad range of services. During the interviews, I focused my questions on the value these organisations believed Widget Manufacturing delivered to the market, why they did or did not choose to use them as a supplier and what they perceived to be their competitors’ strengths and weaknesses. I also asked them about their decision-making process and selection criteria. After the interviews were completed, I used the input to create a map of how my client and each of its competitors were perceived relative to the competition.

The results were quite clear. From the market’s perspective, Widget Manufacturing delivered a specific type of value: an ability to handle particularly complex customer needs promptly without unneeded costs or operational interruption. It excelled in this and was the market’s first choice with work of this type.

Several weeks later, at a strategic planning retreat, we discussed the management teams’ favourite customers and the factors, other than profitability and prompt payment, which made those customers stand out in their minds. We also talked about the company’s own strengths. Not surprisingly, these matched. The management team liked challenging projects. They were more interesting, and they were particularly proud of their ability to deliver cost-effectively without client disruption.

They had discovered their value proposition.

A company’s value proposition is the unique set of skills and abilities it brings to the market. It’s the company’s source of value from the customer’s perspective. In this case, its value proposition was that it could address incredibly complex situations, delivering cost-effective, innovative solutions quickly and without significant operational interruption.

When we returned to its customer list, we found that a majority of its most profitable and satisfied customers had a large number of these types of needs. More importantly, certain industries shared those needs quite consistently. By contrast, its least profitable customers tended to be companies whose requirements were more routine.

As a result of this research, and the internal comparison of the market perception with internal strengths and passions, Widget Manufacturing was able to narrow its focus to a finite set of markets. Each of these target markets shares the needs Widget Manufacturing is best able to address, values the innovation and creativity the company brings to the table and will pay accordingly, and shares the company’s own core values. Equally importantly, these markets are big enough to support growth and provide opportunity for expansion.

TRANSLATING VALUE PROPOSITION INTO PRODUCTS AND SERVICES

Your company’s value proposition represents the value your company brings to addressing market needs. Your value proposition won’t appeal to every market. That’s why it is important to understand it. It gives you guidance about which markets are the best fits for your company, what it can deliver and which ones are unlikely to deliver a healthy margin. It also helps you stand out against your competition, particularly those average performers who don’t understand what makes them different.

Your value proposition is based on your company’s core competencies—that set of knowledge, skills and experience your organisation brings to delivering value to the market. Your core competencies generally mirror your company’s values and its culture. A company that delivers innovation is skilled in thinking outside the defined lines of traditional procedure, is creative in how it approaches problems and employs people who like a challenge. A company that delivers low cost products to a thrifty market is excellent at process and operational efficiency and has a team that operates with precision on standardised procedures.

Sidebar 2-1: Tesco’s Focus: Pile It High and Sell It Cheap

The CEO at the helm of a market leading company understands the value the company delivers to the market and how its core competencies affect what types of businesses the company will engage in to address customer needs. By contrast, average performers sometimes wander to wherever they see opportunity, regardless of whether the new business venture leverages the company’s core competencies.

To illustrate, let’s return to the Robert Handy example. School teachers clearly have other needs beyond access to credit and insurance. Some of these are shared by the population as a whole, like groceries or clothing. Others are more likely to be shared by more limited markets, such as access to textbooks and teaching supplies. Although Handy could have served his market in those ways, he didn’t. The former insurance agent-turned-CEO stayed focused on delivering the products and services his market had trouble accessing. He also stuck to his company’s areas of expertise: finance and insurance.

But knowledge of a particular type of service or product isn’t the only form of core competency. In some cases, it’s a focus on a particular population’s interrelated needs. Many social service organisations provide diverse but complementary services to address the related needs of a particular population. For other organisations, their core competency is a distribution mechanism or some other operational asset. Amazon.com, for example, launched its business as a book retailer, using an exclusively online sales approach. Its core competencies are its ability to build and sustain the online infrastructure, technology and partnerships that allowed its original business to thrive. Now, it has leveraged those resources and that knowledge to offer a full range of goods, including groceries, to consumers around the world.

Being market-focused works because it provides market leading executives with an understanding of who the market is, how the company’s core competencies can be leveraged to serve them and when either the market or the company’s core competencies are not a good fit for a particular opportunity. Walking away from business opportunities is hard, even for companies who are market leaders.

Consider one of the world’s leading retailers, UK-based Tesco. According to Deloitte’s Global Powers of Retailing report,¹⁰ issued in January 2012, hypermarket/superstore Tesco PLC is the world’s third largest retailer. It has a strong track record of success, and with retail sales growing at an impressive 9.3% compound annual growth rate between 2005 and 2010, the company is slowly gaining ground on the two industry leaders ahead of it, Wal-Mart Stores, Inc. and Carrefour S.A.

Tesco has focused, for most of the last 90 years, on what it does well: buying in bulk goods that people need every day and closely managing operations in order to sell them at a discount relative to its competitors.¹¹ However, even market leaders make mistakes and venture outside their core competencies, value proposition and market.

One of the more recent divergences from Tesco’s core competencies happened in 2010, when Tesco acquired online automobile retailer Carsite to sell cars to the consumer market. Tesco certainly understood some parts of the business. It entered the petrol sales market in the 1970s, and it understood its consumer: the price-sensitive shopper. And it was working within the bounds of its equation for success: Tesco negotiated purchases on fleet cars, purchasing in bulk at a discount and passing along a 15% to 20% savings to customers. However, although it was a product its cost-sensitive customer needed every day, it wasn’t something they purchased routinely. On April 3, 2012, they closed Tesco Cars.¹²

Although the company publicly claimed that the closure was due to its inability to generate sufficient stock to sell, CarDealer magazine’s autopsy of the failure cited an unnamed company executive who said the real issue was volume. ‘There clearly was not enough customers,’ the source explained in the article. ‘The original goal was a five-year plan and within three years they wanted to be as big as Car Craft, selling 40,000 cars a year. Well, look at the numbers they were doing and it was clear they weren’t going to get anywhere near that.’ When Tesco Cars closed its doors, it was selling 150 cars per month.¹³

When an organisation strays from its core competencies, it weakens its ability to serve the market, either because it diverts key resources to build new competencies or because it does not know the market and the competitive environment, relative to this new need, well enough to serve it. Product or service choices should be made based on the executive and marketing teams’ understanding of the market they serve, the value they deliver, and the core competencies they bring to developing and delivering solutions.

ALIGNING YOUR BUSINESS ACTIVITIES

For the market leader, understanding the market and looking for opportunities that match the company’s core competencies is just part of the equation. Next, the management team must work continually to adjust operations to align with the market’s expectations and the value proposition the company wants to deliver. Their job—your job—is to ensure that every aspect of the business supports that alignment. As examples, the way the receptionist answers the phone, the products the company sells, the way accounting bills clients, the company’s policy on returns and the way the company communicates the culture that reinforces behaviour must all align with market needs and the company’s value proposition.

The Point C Principle

Market leader executives understand that if everything the company does, including the function of marketing, is aligned with the market’s needs and the company’s value proposition, the result will be superior financial performance.

Market Leaders Follow the Point C Principle

Market leaders understand that the most effective way to drive superior financial performance is to continually align their marketing and other operations with the market’s needs in ways that reflect the company’s unique value proposition. Their focus on more effectively meeting customer needs drives the superior financial outcomes that are the hallmark of their leadership.

By contrast, average performers tend to view many aspects of operations, including marketing, as a simple means to an end. By ‘doing’ marketing and other operations, the company makes sales.

Average Performers Use Marketing to Drive Sales

In contrast to market leaders, most average performers see marketing as a means to an end. If revenues are lagging, average performers look to the function of marketing to drive sales. Their internal focus may drive improved performance, but rarely propels them into leadership positions.

By focusing on aligning their operations with Point B, the discipline of marketing, market leaders prioritise and manage operational changes differently. The Point C Principle sometimes leads market leaders to make less traditional choices relative to operations, and those innovations often lead to the company’s ability to outperform competitors.

For example, consider how Starbucks’ recruiting and human resources policies are influenced by the Point C Principle. Starbucks understands the value baristas bring to the management team’s ability to understand the market. They are an extension of the leadership team, a way to gather critical information and innovate in ways that will keep the company at the forefront of its industry. They are also a key component of the company’s distribution strategy, acting as a sales force, and they are a part of the product they sell, the experience.

In this ‘third place’ between work and home, customers want community. Community means familiar faces, greeting them by name and knowing what they typically order. If the person pouring their steaming coffee beverage changes with the weather, he or she can’t build a relationship with that individual, and the experience, for which they will pay a premium over the cost of a traditional cup of coffee, is lost. When baristas turn over, Starbucks loses the sense of community it sells and a key source of feedback and information about the market.

For these reasons, Starbucks’ employee retention strategies are critical to its success in serving the market. So, the company spends more money than the average fast food company on recruiting and training the right people and offers unusually generous employee benefits to make sure they stay on board. The results indicate these innovations are working. Whereas the rate of employee turnover in a fast food restaurant chain can reach 400% or more, Starbucks’ rate is 65%. The company’s cost to hire and train a barista is about $3,000, which adds up to more than the cost of the employee benefits that make Starbucks such an attractive place to work. But it’s the other potential costs associated with turnover that represent real money to Starbucks: the cost of customers who will no longer see Starbucks as their local coffeehouse, and the cost of the market intelligence lost with the departure of a member of the company’s primary market research team, its baristas.¹⁴

The Point C Principle also affected PEMCO Insurance Company’s information technology priorities. PEMCO, one of Robert Handy’s family of companies, understands that the experience a customer has during a transaction with an insurance company, particularly during a time of strain, is important. In 2007, in order to improve the experience, PEMCO bucked the trend toward automation, replacing automated phone respondents with live customer service personnel. ‘When we asked our members what we could do to serve them better, we heard—loud and clear—answer the phone instead of dropping callers into a phone tree,’ said PEMCO spokesperson Jon Osterberg in a PEMCO press release. ‘Connecting with our members in real time allows us to build stronger relationships with them while separating ourselves from our competitors.’¹⁵

For executives at the helm of a market leading company, this is marketing strategy—and business strategy. Before any significant decision is made, whether about the markets they serve, the solutions they offer or how they operate the business, the executive team spends time envisioning what the business will look like, assessing what critical elements are needed to succeed and ensuring alignment with their understanding of the market and the value proposition they plan to deliver.

The Importance of Vision

We all have heard about how great athletes envision their success, running a race or making a successful play in their minds. It’s a mental rehearsal for the real thing. Executives at the head of a business race do it, too. They envision success and take careful stock of what is required to make it happen and what will occur when it happens.

When I am interviewing a prospective client whose CEO is trying to grow business, I often ask what success looks like. Where do they want to be in five years? I’m always surprised by the number of executives whose descriptions are tentative, filled with words like ‘hope’ and ‘if.’ When there is sufficient vision to justify it, my next question is what do they believe they need to do differently in order to get there. Generally, their response is ‘marketing,’ often in the sales and promotions sense. My third question is about how they will handle an increase in business if it arrives. If they shrug off the question, I know that they have not visualised what success looks like.

Yet, without this vision of where you want to be, it is very difficult to plot strategies to get there. To paraphrase the author Lewis Carroll, ‘If you don’t know where you are going, any road will take you there.’ The more clearly you see the goal, the easier it will be to identify the specific activities that will be needed in order to achieve it.

If you find yourself within an organisation that has no clear vision, creating one may be one of your most important marketing tasks. Based on your understanding of the market and its needs, and your capabilities as an organisation, what mutually beneficial future will you create for yourself and your market?

Developing Vision

Many approaches can be taken to developing such a vision, and the one you select will depend on your team, the size and complexity of your organisation and your culture. A strong vision builds on your understanding of the market and its needs, your core competencies and the value you deliver to the market, and predicts what that understanding could deliver, with focus, in some defined timeframe.

The timeframe you use will depend on your industry and your company. For technology companies, whose horizons change more rapidly, a three-year window might be perfectly appropriate. For a law firm or accounting firm competing in more established markets, a five- to seven-year window might be more appropriate. In some industries, such as commercial construction, in which the sales cycle is long, competition is established, and economic cycles make a significant impact, creating an even longer vision might be appropriate.

Regardless of the timeline, a good vision should be easy to describe to others within the company and be a realistic stretch, building on your strengths as an organisation. Executives should be able to articulate how this vision will benefit the customer, company employees and shareholders or owners in both financial and non-financial terms. The vision should also anticipate how competitors have reacted to specific initiatives and what the organisation has done to maintain its advantage. Most importantly, the vision should be detailed enough that it is easy to identify the differences between where you are currently and where you want to be.

Gap Analysis

Identifying the gaps between your vision and your current reality is the next step. In order to achieve the vision you have identified and meet the market’s needs in ways supported by your core competencies and values, the market leader’s executive team looks at those aspects of operations that need to change and creates a roadmap to do so. There are many approaches to doing this, and they are well covered by strategic planning texts.

This is where marketing strategy and business strategy meld together. This hazy line is the reason that the CEOs of market-leading companies consider themselves the head of their companies’ marketing efforts—they equate marketing strategy to business strategy. It is also why so many elements of a company’s management, including human resources, finance, the marketing function, operations, manufacturing, distribution, quality assurance and customer support fall into a market leader’s definition of marketing.

Marketing, the discipline, defines the direction of the company, the markets it serves, the ways it addresses customer needs and the operations required to support those activities. As the company’s marketing leaders, the executive team is responsible for understanding the market and its needs, establishing the vision for the company, defining how the company will address market need, communicating the vision to the entire company and holding the entire team responsible for progress toward the vision.

SETTING BUSINESS AND FINANCIAL OBJECTIVES

The executive team is also responsible for ensuring the financial viability of the company’s marketing strategies. This is the final component of the market leader’s definition of marketing: Marketing is the profitable management of the interface between the market and its needs, and an organisation’s ability to meet those needs, for the purpose of producing mutual benefit.

The strategies involved in the market leaders’ definition of marketing are virtually all-encompassing. As the company anticipates the ways it will address weaknesses identified in the gap analysis, improve on existing strengths and pursue new opportunities in the market, it will be important to ensure that the financial outcomes justify the expenditures.

To do this, we return to the beginning of this chapter, to our understanding of the market, its needs, current solutions and the competitors providing them. We also return to the markets we identified as those most likely to value the solutions delivered.

Many times, the marketing planning process skips lightly over the competitive realities of the market. Business and financial objectives are set, even within carefully selected markets, without regard to current market share, potential competitor response and whether the anticipated growth is feasible.

To wrap up the planning process, market leaders include a careful analysis of the financial feasibility of the company’s marketing strategies and projected outcomes, both from a revenue perspective and an expense perspective. Then, based on their understanding of the market, they adjust those expected outcomes for potential risk and evaluate the anticipated returns against those that could be achieved elsewhere. The process at this level of marketing planning is very similar to the financial evaluation that exists at the functional level, which will be covered more closely in chapter 11, ‘Evaluating Returns on Marketing Investments.’

The outcome of this financial evaluation at the conclusion of the marketing planning process is the development of business and financial objectives created in the context of the vision and based on an understanding of the market, which provide the foundation for the more functional aspects of marketing. These business and financial objectives should be clearly defined, measurable, realistic and achievable in the timeline identified.

QUESTIONS FOR NON-MARKETING MANAGERS TO ASK ABOUT THE DISCIPLINE OF MARKETING

As a non-marketing manager within your company, you have a responsibility to maximise your company’s profitability and performance. If your company wants to move from the bloody war in the middle of the competitive pack to the superior performance of market leadership, your organisation must embrace the discipline of marketing. To help your organisation get there, consider asking the following questions of yourself and your fellow managers:

• How can we become more effective at listening to our market?

• How do we use the information we already receive? Are we responding to trends we see in the feedback we get?

• When we do business planning, are we making assumptions about what our market wants and needs, or are we basing our plans on facts?

• What market or markets do we serve? Are they distinct, with common purchasing decision criteria, or broad-based, with few common influencing criteria?

• What are our organisation’s strengths that set us apart from our competitors? Do we know what they are, measure them and talk about them? Or are we mostly repeating what our competitors say?

• What is our company’s value proposition?

• How well are our operations aligned with the value we deliver to the market? If there are aspects of our business that are out of alignment, are we proactively addressing them?

• Is our executive team committed to the discipline of marketing? If not, what can I do to help change that?

• Regardless of whether the executive team is committed to the discipline of marketing, do I practice it personally? How do I listen to the market? What do I do with the information I hear? How do I use it to continually improve our company’s ability to serve their needs?

CHAPTER 2 SUMMARY

Many average competitors marvel at the market leader’s ability to understand where the market is going and get there first. After all, who knew so many people would be willing to pay $3 for a cup of coffee? It’s almost as if the market leader has a crystal ball.

Of course, this Crystal Ball Effect does not come from a crystal orb. Instead, it comes from another very powerful source: the discipline of marketing. The discipline of marketing leverages information generated through the market leader’s carefully cultivated curiosity about the market, hones it through intense focus on a single market or set of related markets and matches it to the company’s own passions and core competencies. The management team then works to align every aspect of company operations with this vision of how the company delivers value to the market, resulting in a smoothly-operating, market-driven machine.

The reason that market leaders appear to make decisions that beat the normal odds in business planning is because those decisions are more likely to be based on facts about the market than assumptions. Because assumptions represent risk, market leaders reduce risk—and improve profitability—by basing their business plans on the feedback they generate from the discipline of marketing.

By listening carefully and focusing on understanding the markets they serve, they are more likely to identify unmet or underserved needs, competitor weaknesses or strengths and potential issues with their own brand reputation. This marketing activity provides market leaders with the ability to spot opportunities before many of their competitors do simply because they are paying attention. It also makes them more adept at both defensive and offensive competitive strategy.

The other half of the marketing equation is the company’s internal reflection about how they can best serve the needs they see within their target market. Effective management of the discipline of marketing provides clarity around the markets the company is best able to serve, allowing it to successfully focus on a finite set of markets. It matches the company’s core competencies to the needs in the market, allowing the company to serve the market’s needs in ways other organisations cannot or do not.

The discipline of marketing also guides the company’s prioritisation of activities, as market leaders align all of a company’s activities and operations with the target market and the core competencies their company brings to addressing market needs. Finally, the discipline of marketing helps companies identify the possible outcomes of doing so, facilitating the process of setting realistic business and financial objectives that are the basis of the company’s business strategies. This alignment between the company’s operational activities, the market’s needs and the company’s value proposition leads to superior financial results. The understanding that this alignment drives better returns is what I call the Point C Principle, and it is one of the important differences between market leaders and their less successful competitors.

It is at this point that the distinction between marketing strategy and business strategy becomes blurry. It is probably this haziness that prompted many of the executives included in my study of market leaders to argue that marketing strategy is business strategy, and that it is, and should be, led by the CEO.

Endnotes

1 Sources for information about Starbucks included the following:

The Starbucks Corporation website (www.starbucks.com)

Presentation to UCLA students by Howard Schultz, available on YouTube.com: www.youtube.com/vatch?v=_kAiEO6jP48&feature=related ‘Starbucks at 40: Java juggernaut branches out,’ USA Today (online edition), March 10, 2011. www.usatoday.com/noney/industries/food/2011-03-07-starbucks07_CV_N.htm

‘Forty years young: A history of Starbucks,’ The Telegraph, May 11, 2011. www.telegraph.co.uk/finance/newsbysector/Tetailandconsumer/8505866/Forty-years-young-A-history-of-Starbucks.html Schofeld, Jack. ‘Starbucks lets customers have their say,’ The Guardian, March 24, 2010. www.guardian.co.uk/technology/2008/mar/24/netbytes.starbucks

Seattle Wikia: http://seattle.wikia.com/wiki/Coffeehouses

2 For more information about Cirque du Soleil, see

The Cirque du Soleil website: www.cirquedusoleil.com; http://static01.cirquedusoleil.com/en/~/media/press/PDF/cds/cirque-du-soleil-at-glance.pdf History of Cirque, http://vegascirquedusoleil.com/home/history-of-cirque

3 Milletto, Matt. ‘McDonalds $100M ad campaign and McCafe roll out,’ Barista Exchange.com, May 6, 2009. www.baristaexchange.com/forum/topics/mcdonalds-100m-ad-campaign

4 Berfield, Susan. ‘Starbucks: Howard Schultz vs. Howard Schultz,’ Bloomberg Businessweek, August 6, 2009. www.businessweek.com/magazine/content/09_33/b4143028813542.htm?chan=magazine+channel_top+stories Weston, Nicole. ‘Debranding Starbucks?,’ Brewed Daily Blog, July 30, 2009.

5 ‘Starbucks returns: The 15th Ave Coffee & Tea Experiment is over,’ The Capitol Hill Blog, January 7, 2011. www.capitolhillseattle.com/2011/01/starbucks-returns-the-15th-ave-coffee-tea-experiment-is-over/

6 Information for the Clorox case study came from:

Neff, Jack. ‘Green Works from Clorox: A Marketing 50 Case Study,’ Advertising Age, November 17, 2008. http://adage.com/article/news/green-works-clorox-a-marketing-50-case-study/132403/

Cammarata, Craig; Gough, Jennifer; Moss, Brian; Nowygrod, Ashley; Springer, Nathan; under the supervision of Hoffman, Andrew & Jongejan, Arie. ‘The Clorox Company Goes Green,’ The William Davidson Institute at The University of Michigan, Case # 1-428-989, May 12, 2010. Schwartz, Ariel. ‘Method: Only Inauthentic “Green” Cleaning Products Are Failing,’ Fast Company, May 13, 2011. www.fastcompany.com/1753171/method-only-inauthentic-green-cleaning-products-are-failing

Kamentz, Anya. ‘Clorox Goes Green,’ Fast Company, September 1, 2008. www.fastcompany.com/958579/clorox-goes-green

7 Kamentz, Anya. ‘Clorox Goes Green,’ Fast Company, September 1, 2008. www.fastcompany.com/958579/clorox-goes-green

8 In addition to the PEMCO Corporation website, www.pemco.com, sources for this case study included the following:

Virgin, Bill. ‘Nimble Pemco looks to grow,’ Seattle Post-Intelligencer, June 23, 2005. www.seattlepi.com/default/article/Nimble-Pemco-looks-to-grow-1176756.php

Crowley, Walt, Creative Commons and HistoryLink.org, ‘HistoryLink File # 2162.

PEMCO Financial Services,’ September 25, 2003.

www.historylink.org/_content/printer_friendly/pf_output.cfm?file_id=2162

9 From the School Employees Credit Union Website: www.secuwa.org/home/about

10 www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Consumer%20Business/dtt_CBT_GPRetailing2012.pdf

11 Sources for information about Tesco include the following:

Wikipedia: http://en.wikipedia.org/wiki/Tesco Clark, Tim. ‘A history of Tesco. The rise of Br itain’s biggest supermarket,’ The Telegraph, April 15, 2008. www.telegraph.co.uk/finance/markets/2788089/A-history-of-Tesco-The-rise-of-Britains-biggest-supermarket.html

Tesco’s website: www.tescoplc.com

World Retail Hall of Fame website: www.worldretailcongress.com., article on Jack Cohen & Tesco PLC: www.worldretailcongress.com/hall-of-fame-member-detail.cfm?id=203

Funding Universe website: www.fundinguniverse.com, article on Tesco PLC history. www.fundinguniverse.com/company-histories/tesco-plc-history/

Kaplan, Robert S. ‘Tesco’s Approach to Strategy Communications,’ HBR Blog Network, September 2, 2008. http://blogs.hbr.org/hbr/kaplan-norton/2008/09/tescos-approach-to-strategy-co.html

Liptrot, Hannah. ‘Tesco: Supermarket Superpower,’ BBC Money Programme, June 3, 2005. http://news.bbc.co.uk/2/hi/business/4605115.stm

12 Sources of information about Tesco Cars include the following:

The Tesco Cars website: www.tesco.com/cars/ Center for Retail Research list of ‘Who’s gone bust in retailing 2010-2012?’ www.retailresearch.org/whosegonebust.php

Wikipedia profile of Carsite: http://en.wikipedia.org/wiki/Carsite

Peacock, Louisa. ‘Tesco closes second-hand car website after just a year,’ The Telegraph, April 3, 2012. www.telegraph.co.uk/finance/iewsbysector/retailandconsumer/9184616/Tesco-closes-second-hand-car-website-after-just-a-year.html

13 Baggott, James. ‘The inside story on why Tesco Cars closed,’ CarDealer. Magazine, April 3, 2012. www.cardealermagazine.co.uk/publish/exclusive-the-inside-story-on-why-tesco-cars-had-to-close-its-doors/63420

14 Flintoff, John-Paul. ‘How One Brand Changed the World,’ CNBC Magazine, January 2011. www.cnbcmagazine.com/story/how-one-brand-changed-the-world/1297/1/

15 PEMCO Insurance Company press release: ‘PEMCO Insurance Acts to Improve Customer Service,’ April 20, 2008. www.pemco.com/about_us/Pages/Live_operators_now_answer_calls.aspx