Marketing, planning and strategy

CHAPTER ONE Three women and a goose make a marketplace ITALIAN PROVERB Marketing and the Concept of Planning and Strategy O ver the years marketers have been presented with a series of philosophical approaches to marketing decision making One widely used approach is the marketing concept approach, which directs the marketer to develop the product offering, and indeed the entire marketing program, to meet the needs of the customer base A key element in this approach is the need for information flow from the market to the decision maker Another approach is the systems approach, which instructs the marketer to view the product not as an individual entity but as just one aspect of the customer’s total need-satisfaction system A third approach, the environmental approach, portrays the marketing decision maker as the focal point of numerous environments within which the firm operates and that affect the success of the firm’s marketing program These environments frequently bear such labels as legal-political, economic, competitive, consumer, market structure, social, technological, and international Indeed, these and other philosophical approaches to marketing decision making are merely descriptive frameworks that stress certain aspects of the firm’s role vis-à-vis the strategic planning process No matter what approach a firm follows, it needs a reference point for its decisions that is provided by the strategy and the planning process involved in designing the strategy Thus, the strategic planning process is the guiding force behind decision making, regardless of the approach one adopts This relationship between the strategic planning process and approaches to marketing decision making is depicted in Exhibit 1-1 Planning perspectives develop in response to needs that arise internally or that impinge on the organization from outside During the 1950s and 1960s, growth was the dominant fact of the economic environment, and the planning processes developed during that time were typically geared to the discovery and exploitation of entrepreneurial opportunities Decentralized planning was the order of the day Top management focused on reviewing major investment proposals and approving annual operating budgets Long-range corporate plans 2 Marketing and the Concept of Planning and Strategy CHAPTER Marketing and the Concept of Planning and Strategy EXHIBIT 1-1 Relationship between the Strategic Planning Process and Approaches to Marketing Decision Making were occasionally put together, but they were primarily extrapolations and were rarely used for strategic decision making Planning perspectives changed in the 1970s With the quadrupling of energy costs and the emergence of competition from new quarters, followed by a recession and reports of an impending capital crisis, companies found themselves surrounded by new needs Reflecting these new management needs and concerns, a process aimed at more centralized control over resources soon pervaded planning efforts Sorting out winners and losers, setting priorities, and conserving capital became the name of the game A new era of strategic planning dawned over corporate America The value of effective strategic planning is virtually unchallenged in today’s business world A majority of the Fortune 1000 firms in the United States, for instance, now have senior executives responsible for spearheading strategic planning efforts Strategic planning requires that company assets (i.e., resources) be managed to maximize financial return through the selection of a viable business in accordance with the changing environment One very important component of strategic planning is the establishment of the product/market scope of a business It is within this scope that strategic planning becomes relevant for marketers.1 Thus, Marketing and the Concept of Planning and Strategy PART Introduction as companies adopted and made progress in their strategic planning capabilities, a new strategic role for marketing emerged In this strategic role, marketing concentrates on the markets to serve, the competition to be tackled, and the timing of market entry/exit CONCEPT OF PLANNING Throughout human history, people have tried to achieve specific purposes, and in this effort some sort of planning has always found a place In modern times, the former Soviet Union was the first nation to devise an economic plan for growth and development After World War II, national economic planning became a popular activity, particularly among developing countries, with the goal of systematic and organized action designed to achieve stated objectives within a given period Among market economies, France has gone the furthest in planning its economic affairs In the business world, Henri Fayol, the French industrialist, is credited with the first successful attempts at formal planning Accomplishments attributed to planning can be summarized as follows: Planning leads to a better position, or standing, for the organization Planning helps the organization progress in ways that its management considers most suitable Planning helps every manager think, decide, and act more effectively and progress in the desired direction Planning helps keep the organization flexible Planning stimulates a cooperative, integrated, enthusiastic approach to organizational problems Planning indicates to management how to evaluate and check up on progress toward planned objectives Planning leads to socially and economically useful results Planning in corporations emerged as an important activity in the 1960s Several studies undertaken during that time showed that companies attached significant importance to planning A Conference Board survey of 420 firms, for example, revealed that 85 percent had formalized corporate planning activity.2 A 1983 survey by Coopers & Lybrand and Yankelovich, Skelly, and White confirmed the central role played by the planning function and the planner in running most large businesses.3 Although the importance of planning had been acknowledged for some time, the executives interviewed in 1983 indicated that planning was becoming more important and was receiving greater attention A 1991 study by McDonald’s noted that marketing planning is commonly practiced by companies of all sizes, and there is wide agreement on the benefits to be gained from such planning.4 A 1996 survey by the Association of Management Consulting Firms found that business persons, academics, and consultants expect business planning to be their most pressing management issue as they prepare to enter the next century.5 Some companies that use formal planning believe that it improves profits and growth, finding it particularly useful in explicit objective setting and in monitoring results.6 Certainly, the current business climate is generating a new posture Marketing and the Concept of Planning and Strategy CHAPTER Marketing and the Concept of Planning and Strategy among executives, with the planning process being identified by eight out of ten respondents as a key to implementing the chief executive officer’s (CEO) chosen strategy.7 Today most companies insist on some sort of planning exercise to meet the rapidly changing environment For many, however, the exercise is cathartic rather than creative Growth is an accepted expectation of a firm; however, growth does not happen by itself Growth must be carefully planned: questions such as how much, when, in which areas, where to grow, and who will be responsible for different tasks must be answered Unplanned growth will be haphazard and may fail to provide desired levels of profit Therefore, for a company to realize orderly growth, to maintain a high level of operating efficiency, and to achieve its goals fully, it must plan for the future systematically Products, markets, facilities, personnel, and financial resources must be evaluated and selected wisely Today’s business environment is more complex than ever In addition to the keen competition that firms face from both domestic and overseas companies, a variety of other concerns, including environmental protection, employee welfare, consumerism, and antitrust action, impinge on business moves Thus, it is desirable for a firm to be cautious in undertaking risks, which again calls for a planned effort Many firms pursue growth internally through research and development This route to growth is not only time-consuming but also requires a heavy commitment of resources with a high degree of risk In such a context, planning is needed to choose the right type of risk Since World War II, technology has had a major impact on markets and marketers Presumably, the trend of accelerating technological change will continue in the future The impact of technological innovations may be felt in any industry or in any firm Therefore, such changes need to be anticipated as far in advance as possible in order for a firm to take advantage of new opportunities and to avoid the harmful consequences of not anticipating major new developments Here again, planning is significant Finally, planning is required in making a choice among the many equally attractive alternative investment opportunities a firm may have No firm can afford to invest in each and every “good’’ opportunity Planning, thus, is essential in making the right selection Planning for future action has been called by many different names: long-range planning, corporate planning, comprehensive planning, and formal planning Whatever its name, the reference is obviously to the future Definition of Planning Planning is essentially a process directed toward making today’s decisions with tomorrow in mind and a means of preparing for future decisions so that they may be made rapidly, economically, and with as little disruption to the business as possible Though there are as many definitions of planning as there are writers on the subject, the emphasis on the future is the common thread underlying all planning theory In practice, however, different meanings are attached to planning A distinction is often made between a budget (a yearly program of operations) and a long-range plan Some people consider planning as something done by Marketing and the Concept of Planning and Strategy PART Introduction staff specialists, whereas budgeting is seen to fall within the purview of line managers It is necessary for a company to be clear about the nature and scope of the planning that it intends to adopt A definition of planning should then be based on what planning is supposed to be in an organization It is not necessary for every company to engage in the same style of comprehensive planning The basis of all planning should be to design courses of action to be pursued for achieving stated objectives such that opportunities are seized and threats are guarded against, but the exact planning posture must be custom-made (i.e., based on the decision-making needs of the organization) Operations management, which emphasizes the current programs of an organization, and planning, which essentially deals with the future, are two intimately related activities Operations management or budgeted programs should emerge as the result of planning In the outline of a five-year plan, for example, years two through five may be described in general terms, but the activities of the first year should be budgeted and accompanied by detailed operational programs A distinction should also be made between planning and forecasting Forecasting considers future changes in areas of importance to a company and tries to assess the impact of these changes on company operations Planning takes over from there to set objectives and goals and develop strategy Briefly, no business, however small or poorly managed, can without planning Although planning per se may be nothing new for an organization, the current emphasis on it is indeed different No longer just one of several important functions of the organization, planning’s new role demands linkage of various parts of an organization into an integrated system The emphasis has shifted from planning as an aspect of the organization to planning as the basis of all efforts and decisions, the building of an entire organization toward the achievement of designated objectives There is little doubt about the importance of planning Planning departments are key in critiquing strategies, crystallizing goals, setting priorities, and maintaining control;8 but to be useful, planning should be done properly Planning just for the sake of it can be injurious; half-hearted planning can cause more problems than it solves In practice, however, many business executives simply pay lip service to planning, partly because they find it difficult to incorporate planning into the decision-making process and partly because they are uncertain how to adopt it Requisites for Successful Planning If planning is to succeed, proper arrangements must be made to put it into operation The Boston Consulting Group suggests the following concerns for effective planning: • There is the matter of outlook, which can affect the degree to which functional and professional viewpoints, versus corporate needs, dominate the work of planning • There is the question of the extent of involvement for members of the management Who should participate, and to what extent? Marketing and the Concept of Planning and Strategy CHAPTER Marketing and the Concept of Planning and Strategy • There is the problem of determining what part of the work of planning should be accomplished through joint effort and how to achieve effective collaboration among participants in the planning process • There is the matter of incentive, of making planning an appropriately emphasized and rewarded kind of managerial work • There is the question of how to provide staff coordination for planning, which raises the issue of how a planning unit should be used in the organization • And there is the role of the chief executive in the planning process What should it be?9 Though planning is conceptually rather simple, implementing it is far from easy Successful planning requires a blend of many forces in different areas, not the least of which are behavioral, intellectual, structural, philosophical, and managerial Achieving the proper blend of these forces requires making difficult decisions, as the Boston Consulting Group has suggested Although planning is indeed complex, successful planning systems have common fundamental characteristics despite differing operational details First, it is essential that the CEO be completely supportive Second, planning must be kept simple, in agreement with the managerial style, and unencumbered by detailed numbers and fancy equations Third, planning is a shared responsibility, and it would be wrong to assume that the president or vice president of planning, staff specialists, or line managers can it single-handedly Fourth, the managerial incentive system should give due recognition to the fact that decisions made with long-term implications may not appear good in the short run Fifth, the goals of planning should be achievable without excessive frustration and work load and with widespread understanding and acceptance of the process Sixth, overall flexibility should be encouraged to accommodate changing conditions Initiating Planning Activities There is no one best time for initiating planning activities in an organization; however, before developing a formal planning system, the organization should be prepared to establish a strong planning foundation The CEO should be a central participant, spearheading the planning job A planning framework should be developed to match the company’s perspective and should be generally accepted by its executives A manual outlining the work flow, information links, format of various documents, and schedules for completing various activities should be prepared by the planner Once these foundations are completed, the company can initiate the planning process anytime Planning should not be put off until bad times prevail; it is not just a cure for poor performance Although planning is probably the best way to avoid bad times, planning efforts that are begun when operational performance is at an ebb (i.e., at low or no profitability) will only make things worse, since planning efforts tend initially to create an upheaval by challenging the traditional patterns of decision making The company facing the question of survival should concentrate on alleviating the current crisis Planning should evolve gradually It is wishful thinking to expect full-scale planning to be instituted in a few weeks or months Initial planning may be Marketing and the Concept of Planning and Strategy PART Introduction formalized in one or more functional areas; then, as experience is gained, a company-wide planning system may be designed IBM, a pioneer in formalized planning, followed this pattern First, financial planning and product planning were attempted in the post-World War II period Gradual changes toward increased formality were made over the years In the later half of 1960s, increased attention was given to planning contents, and a compatible network of planning data systems was initiated Corporate-wide planning, which was introduced in the 1970s, forms the backbone of IBM’s current global planning endeavors Beginning in 1986, the company made several changes in its planning perspectives in response to the contingencies created by deteriorating performance In the 1990s, planning at IBM became more centralized to fully seek resource control and coordination Philosophies of Planning In an analysis of three different philosophies of planning, Ackoff established the labels satisfying, optimizing, and adaptivizing.10 Planning on the basis of the satisfying philosophy aims at easily achievable goals and molds planning efforts accordingly This type of planning requires setting objectives and goals that are “high enough’’ but not as “high as possible.’’ The satisfying planner, therefore, devises only one feasible and acceptable way of achieving goals, which may not necessarily be the best possible way Under a satisfying philosophy, confrontations that might be caused by conflicts in programs are diffused through politicking, underplaying change, and accepting a fall in performance as unavoidable The philosophy of optimizing planning has its foundation in operations research The optimizing planner seeks to model various aspects of the organization and define them as objective functions Efforts are then directed so that an objective function is maximized (or minimized), subject to the constraints imposed by management or forced by the environment For example, an objective may be to obtain the highest feasible market share; planning then amounts to searching for different variables that affect market share: price elasticity, plant capacity, competitive behavior, the product’s stage in the life cycle, and so on The effect of each variable is reduced to constraints on the market share Then an analysis is undertaken to find out the optimum market share to target Unlike the satisfying planner, the optimizer endeavors, with the use of mathematical models, to find the best available course to realize objectives and goals The success of an optimizing planner depends on how completely and accurately the model depicts the underlying situation and how well the planner can figure out solutions from the model once it has been built The philosophy of adaptivizing planning is an innovative approach not yet popular in practice To understand the nature of this type of planning, let us compare it to optimizing planning In optimization, the significant variables and their effects are taken for granted Given these, an effort is made to achieve the optimal result With an adaptivizing approach, on the other hand, planning may be undertaken to produce changes in the underlying relationships themselves and thereby create a desired future Underlying relationships refer to an organization’s internal and external environment and the dynamics of the values of the actors in these environments (i.e., how values relate to needs and Marketing and the Concept of Planning and Strategy CHAPTER Marketing and the Concept of Planning and Strategy to the satisfaction of needs, how changes in needs produce changes in values, and how changes in needs are produced) CONCEPT OF STRATEGY Strategy in a firm is the pattern of major objectives, purposes, or goals and essential policies and plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be Any organization needs strategy (a) when resources are finite, (b) when there is uncertainty about competitive strengths and behavior, (c) when commitment of resources is irreversible, (d) when decisions must be coordinated between far-flung places and over time, and (e) when there is uncertainty about control of the initiative An explicit statement of strategy is the key to success in a changing business environment Strategy provides a unified sense of direction to which all members of the organization can relate Where there is no clear concept of strategy, decisions rest on either subjective or intuitive assessment and are made without regard to other decisions Such decisions become increasingly unreliable as the pace of change accelerates or decelerates rapidly Without a strategy, an organization is like a ship without a rudder going around in circles Strategy is concerned with the deployment of potential for results and the development of a reaction capability to adapt to environmental changes Quite naturally, we find that there are hierarchies of strategies: corporate strategy and business strategy At the corporate level, strategy is mainly concerned with defining the set of businesses that should form the company’s overall profile Corporate strategy seeks to unify all the business lines of a company and point them toward an overall goal At the business level, strategy focuses on defining the manner of competition in a given industry or product/market segment A business strategy usually covers a plan for a single product or a group of related products Today, most strategic action takes place at the business unit level, where sophisticated tools and techniques permit the analysis of a business; the forecasting of such variables as market growth, pricing, and the impact of government regulation; and the establishment of a plan that can sidestep threats in an erratic environment from competitors, economic cycles, and social, political, and consumer changes Each functional area of a business (e.g., marketing) makes its own unique contribution to strategy formulation at different levels In many firms, the marketing function represents the greatest degree of contact with the external environment, the environment least controllable by the firm In such firms, marketing plays a pivotal role in strategy development In its strategic role, marketing consists of establishing a match between the firm and its environment It seeks solutions to problems of deciding (a) what business the firm is in and what kinds of business it may enter in the future and (b) how the Marketing and the Concept of Planning and Strategy 10 PART Introduction chosen field(s) of endeavor may be successfully run in a competitive environment by pursuing product, price, promotion, and distribution perspectives to serve target markets In the context of strategy formulation, marketing has two dimensions: present and future The present dimension deals with the existing relationships of the firm to its environments The future dimension encompasses intended future relationships (in the form of a set of objectives) and the action programs necessary to reach those objectives The following example illustrates the point McDonald’s, the hamburger chain, has among its corporate objectives the goal of increasing the productivity of its operating units Given the high proportion of costs in fixed facilities, McDonald’s decided to increase facility utilization during off-peak hours, particularly during the morning hours The program developed to accomplish these goals, the Egg McMuffin, was followed by a breakfast menu consistent with the limited product line strategy of McDonald’s regular fare In this example, the corporate goal of increased productivity led to the marketing perspective of breakfast fare (intended relationship), which was built over favorable customer attitudes toward the chain (existing relationship) Similarly, a new marketing strategy in the form of McDonald’s Chicken Fajita (intended relationship) was pursued over the company’s ability to serve food fast (existing relationship) to meet the corporate goal of growth Generally, organizations have identifiable existing strategic perspectives; however, not many organizations have an explicit strategy for the intended future The absence of an explicit strategy is frequently the result of a lack of top management involvement and commitment required for the development of proper perspectives of the future within the scope of current corporate activities Marketing provides the core element for future relationships between the firm and its environment It specifies inputs for defining objectives and helps formulate plans to achieve them CONCEPT OF STRATEGIC PLANNING Strategy specifies direction Its intent is to influence the behavior of competitors and the evolution of the market to the advantage of the strategist It seeks to change the competitive environment Thus, a strategy statement includes a description of the new competitive equilibrium to be created, the cause-and-effect relationships that will bring it about, and the logic to support the course of action Planning articulates the means of implementing strategy A strategic plan specifies the sequence and the timing of steps that will alter competitive relationships The strategy and the strategic plan are quite different things The strategy may be brilliant in content and logic; but the sequence and timing of the plan, inadequate The plan may be the laudable implementation of a worthless strategy Put together, strategic planning concerns the relationship of an organization to its environment Conceptually, the organization monitors its environment, incorporates the effects of environmental changes into corporate decision making, and formulates new strategies Exhibit 1-2 provides a scorecard to evaluate the viability of a company’s strategic planning effort 916 Procter & Gamble-Scope 898 CASE 26 Procter & Gamble—Scope EXHIBIT Scope Historical Financials Year 1988 1989 1990 Total Market Size (units) (000) 1,197 1,294 1,358 Scope Market Share 33.0% 33.0% 32.4% Scope Volume (units) (000) 395 427 440 $(000) $/Unit $(000) $(Unit) $(000) $(Unit) Sales 16,767 42.45 17,847 41.80 18,150 41.25 COGS 10,738 27.18 11,316 26.50 11,409 25.93 6,029 15.27 7,299 15.30 6,741 15.32 Gross Margin Scope Marketing Plan Inputs Scope “Going” Marketing Spending Year 1990 1989 1988 Advertising (000) $1,700 – – Promotion (000) 1,460 – – Total (000) 3,160 3,733 2,697 Marketing Input Costs Advertising: Promotion: (See above.) Samples (Including Distribution): $0.45/piece Mailed Couponing $10.00 per 1,000 for printing distribution $0.17 handling per redeemed coupon (beyond face value) redemption rates: 10% to 15% In-store Promotion $200/store (fixed) $0.17 handling per redeemed coupon (beyond face value) redemption rates: 85% + Source: Company records felt that as long as the product did encourage better oral hygiene, it did provide a benefit As further support, they noted that many professionals did recommend Plax Overall, PDD’s preference was to not launch a new product but, instead, to add plaque reduction claims to Scope The basic argument was that it was better to protect the business that P&G was already in than to launch a completely new entity If a line extension was pursued, a product test costing $20,000 would be required SALES The sales people, who had seen the inroads Plax had been making in the marketplace, believed that Scope should respond quickly They had one key concern—as stock-keeping units (SKUs) had begun to proliferate in many categories, the retail industry had become much more stringent regarding what it would accept Now, to be listed on store shelves, a brand must be seen as unique enough from the competition to build incremental 917 Procter & Gamble-Scope CASE 26 Procter & Gamble—Scope purchases—otherwise retailers argued that category sales volume would simply be spread over more units When this happened, a retail outlet’s profitability was reduced because inventory costs were higher, but no additional sales revenue was generated When a new brand was viewed as not generating more sales, retailers might still list the brand by replacing units within the existing line (e.g., drop shelf facings of Scope), or the manufacturer would pay approximately $50,000 per SKU in listing fees to add the new brand This fee of $50,000 per SKU would enable a manufacturer to get national distribution with a retail chain such as Shopper’s Drug Mart or Loblaws MARKET RESEARCH (MR) Market research had worked extensively with Hearst to test the options with consumers Their work to date had shown: A plaque reassurance on current Scope (i.e., “Now Scope fights plaque”) did not seem to increase competitive users’ desire to purchase Scope This meant that it was unlikely to generate additional volume but it could prevent current users from switching MR also cautioned that in adding “reassurances” to a product, it often takes time before the consumer accepts the idea and then acts on it The issue in Hearst’s mind was whether the reassurance would ever be enough At best it might stabilize the business, she thought, but would it grow behind such a claim? A “Better Tasting Prebrushing Dental Rinse” product did research well among Plax users, but did not increase purchase intent among people not currently using a dental rinse MR’s estimate was that a brand launched on this positioning, using the Scope name, would likely result in approximately a 6.5 percent share of the total mouthwash and “rinse” market on an ongoing basis Historically, it has taken approximately two years to get to the ongoing level However, there was no way for MR to accurately assess potential Scope cannibalization “Use your judgment,” MR had said However, MR cautioned that although it was a product for a different usage occasion, it was unlikely to be 100 percent incremental business Hearst’s best rough guess was that this product might cannibalize somewhere between 899 to percent of Scope’s sales An unresolved issue was the product’s name—if it were launched, should it be under the Scope name or not? One fear was that if the Scope name was used it would either “turn off” loyal users who saw Scope as a breath refreshment product or confuse them MR had questioned Hearst as to whether she had really looked at all angles to meet her objective Because much of this work had been done quickly, they wondered whether there weren’t some other benefits Scope could talk about that would interest consumers and hence achieve the same objective They suggested that Hearst look at other alternatives beyond just “a plaque reassurance on Scope” or a “line extension positioned as a ‘Better Tasting Prebrushing Dental Rinse’.” FINANCE The point of view from finance was mixed On the one hand, Plax commanded a higher price/litre and so it made sense that a new rinse might be a profitable option On the other hand, they were concerned about the capital costs and the marketing costs that might be involved to launch a line extension One option would be to source the product from a U.S plant where the necessary equipment already existed If the product was obtained from the U.S., delivery costs would increase by $1.00 per unit Scope’s current financial picture and an estimate of Plax’s financial picture are provided in Exhibits and PURCHASING The purchasing manager had received the formula for the line extension and estimated that the ingredients cost would increase by $2.55 per unit due to the addition of new ingredients However, because one of the ingredients was very new, finance felt that the actual ingredient change might vary by ± 50 percent Packaging costs would be $0.30 per unit higher owing to the fact that the set-up charges would be spread over a smaller base 918 Procter & Gamble-Scope 900 CASE 26 Procter & Gamble—Scope EXHIBIT Scope 1990 Financials EXHIBIT Plax Financial Estimates (per unit) $(000) $/Units 18,150 41.25 Ingredients 3,590 8.16 Ingredients 6.50 Packaging 2,244 5.10 Packaging 8.30 Net sales Net sales 65.09 COGS Manufacturing 3,080 7.00 Manufacturing 6.50 Delivery 1,373 3.12 Delivery 3.00 Miscellaneous 1,122 2.55 Miscellaneous 1.06 11,409 25.93 Total 15.32 Source: P&G estimates Notes: General overhead costs estimated at $5.88/unit Cost of Goods Sold Gross Margin 6,741 Source: Company records • Notes: • Net Sales = P&G revenues • Manufacturing: 50% of manufacturing cost is fixed, of which $200M is depreciation 20% of manufacturing cost is labor • Miscellaneous: 75% of miscellaneous cost is fixed • General office overheads are $1,366M • Taxes are 40% • Currently the plant operates on a five-day, one-shift operation • P&G’s weighted average cost of capital is 12% • Total units sold in 1990 were 440,000 ADVERTISING AGENCY The advertising agency felt that making any new claims for Scope was a huge strategic shift for the brand They favored a line extension Scope’s strategy had always been “breath refreshment and good tasting” focused, and they saw the plaque claims as very different, with potentially significant strategic implications The one time they had focused advertising only on taste and didn’t reinforce breath efficacy, market share fell They were concerned that the current Scope consumer could be confused if plaque or any “nonbreath” claims were added and that Scope could actually lose market share if this occurred They also pointed 25.36 out that trying to communicate two different ideas in one commercial was very difficult They believed the line extension was a completely different product than Scope with a different benefit and use occasion In their minds, a line extension would need to be supported on an ongoing basis separately from Scope WHAT TO RECOMMEND? Hearst knew the business team had thought long and hard about the issue She knew that management was depending on the Scope business team to come up with the right long-term plan for P&G— even if that meant not introducing the new product However, she felt there was too much risk associated with P&G’s long-term position in oral rinses if nothing was done There was no easy answer—and compounding the exigencies of the situation was the fact that the business team had differing points of view She was faced with the dilemma of providing recommendations about Scope, but also needed to ensure that there was alignment and commitment from the business team, or senior management would be unlikely to agree to the proposal 919 Procter & Gamble-Scope CASE 26 Procter & Gamble—Scope 901 APPENDIX A Plaque Plaque is a soft, sticky film that coats teeth within hours of brushing and may eventually harden into tartar To curb gum disease—from which over 90 percent of Canadians suffer at some time—plaque must be curbed Research has shown that, without brushing, within 24 hours a film (plaque) starts to spread over teeth and gums and, over days, becomes a sticky, gelatinous mat, which the plaque bacteria spin from sugars and starches As the plaque grows, it becomes a home to yet more bacteria—dozens of strains A mature plaque is about 75 percent bacteria; the remainder consists of organic solids from saliva, water, and other cells shed from soft oral tissues As plaque bacteria digest food, they also manufacture irritating malodorous by-products, all of which can harm a tooth’s supporting tissues as they seep into the crevice below the gum line Within 10 to 21 days, depending on the person, signs of gingivitis—the mildest gum disease—first appear; gums deepen in color, swell, and lose their normally tight, arching contour around teeth Such gingivitis is entirely reversible It can disappear within a week after regular brushing and flossing are resumed When plaque isn’t kept under control, gingivitis can be the first step down toward periodontitis, the more advanced gum disease in which bone and other structures that support the teeth become damaged Teeth can loosen and fall out, or require extraction The traditional and still best approach to plaque control is careful and thorough brushing and flossing to scrub teeth clean of plaque Indeed, the anti-plaque claims that toothpastes carry are usually based on the product’s ability to clean teeth mechanically, with brushing Toothpastes contain abrasives, detergent, and foaming agents, all of which help the brush its work Source: “The Plaque Debate,” Canadian Consumer, 1990 No 9, pp 17–23 C A S E FedEx and UPS in China— Competing with Contrasting Strategies J ust how “American” should you be when doing business many cultures away from home? Rarely have two rivals offering similar services answered that question so differently as Federal Express Corp and United Parcel Service of America, Inc FedEx was trying to paint China red, white and blue, following the same frontal-assault strategy it employed in the U.S in the 1970s and in Europe in the 1980s While promoting itself with jarring, Western-style advertising, FedEx was pouring out money to acquire its own air routes, fly its own aircraft into and out of China and, in partnership with an aggressive local company, built a huge network of purple and orange trucks and distribution centers “We’re the largest all-cargo carrier in the world and, as a result, we’ve got a pretty good formula for attacking any market,” noted T Michael Glenn, executive vice president for marketing at FedEx’s parent, FDX Corp “Whether it’s China or Japan or Germany, it really doesn’t make any difference.” UPS, by contrast, hopes that Chinese customers won’t even notice that it was made in America Its advertising was understated and old-fashioned even by Chinese standards Its freight lands in China packed into leased space in the underbellies of planes operated by a Hong Kong airline, Dragonair, or other regional carriers To deliver packages on the ground, UPS followed the traditional approach for foreign freight companies in China, piggybacking on the operations of Sinotrans, a vast, labyrinthine, government-owned transportation company 45 “We’re a quiet company,” remarked Charles Adams, UPS’s top executive in Asia “Sometimes we’re the student, and sometimes we’re the teacher.” How the giants of the U.S delivery business were forging ahead in China was more than a case study on differing corporate styles Their strategies, which tracked what they did all across Asia, vividly illustrated two radically different approaches to questions faced by almost any U.S company striving to expand overseas Do we partner with entrenched competitors or tackle them head-on? Do we risk the capital to build our own manufacturing and distribution systems or lease someone else’s? Who are our customers, the locals or our multinational accounts? How much we risk to build future market share? IS THERE A WINNING STRATEGY? The jury was still out for both FedEx and UPS Neither was discussing market share or disclosing specific financial results in China However, each said its operations were growing and profitable, and each contended that its approach was better In the Spring of 1998, UPS executives, buffered by their lower spending from much of the turmoil in Asia, had been quietly congratulating themselves on the apparent wisdom of their low-risk approach As freight traffic slowed in the region, UPS had simply reduced the space it leased on other companies’ planes “Because of the investment (FedEx) made, they’re almost stuck in that market,” remarked This case was prepared as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation 902 921 922 FedEx and UPS in China-Competing with Contrasting Strategies CASE 27 FedEx and UPS in China—Competing with Contrasting Strategies Joseph M Pyne, UPS’s vice president for marketing “That’s the plan they have to live with We’re looking at the market and moving with it in China.” Meanwhile, at FedEx, currency devaluations elsewhere in Asia had cut profits by more than $20 million during the first six months of 1998 On March 25, 1998, the company posted its first quarterly loss on international operations since 1996, largely because of the high costs attributable to its extensive air network in Asia, coupled with declining cargo volume and revenue in the region Nevertheless, FedEx noted China remained “a bright spot.” Air-freight volumes from troubled Asian nations to China declined, but China’s exports were still strong, remarked Michael L Drucker, FedEx’s top executive in Asia FedEx added that, despite the expense, its “build it and they will come” strategy was paying off in the market share Estimates vary, but according to Air Cargo Management Group, a Seattle consultancy, FedEx had captured 13 percent of the express market in China, excluding Hong Kong, while UPS trailed with less than percent “We knew it was risky when we built so much capacity, but we’re staying And that has just got to have a long-term payoff,” noted the FDX’s chief financial officer The payoff was critical for both companies Although both were still small players in China, each with less than half the express-freight market share of at least 30 percent held by DHL International Ltd., a long-established Brussels-based company, both viewed China as the industry’s most important emerging market China’s demand for time-definite express freight—the high-profit sector they crave— was projected to grow as much as 20 percent a year through 2002, far faster than the world-wide airfreight market Currently, China’s air-cargo market was the world’s fifth largest, and its embryonic express sector was valued at $400 million a year “It’s hard to be unmindful of a 1.2 billion-person country that arguably has the most entrepreneurial, merchant-oriented people in the world,” said Frederick W Smith, FDX’s founder, chairman and chief executive officer 903 FEDEX’S CULTURE FedEx’s approach to that market reflected its personality at home The company, and Mr Smith, liked sizzle With $12 billion in annual revenue, FedEx prided itself on having blitzkrieged the U.S freight business by inventing overnight delivery in the 1970s It called itself a “global evangelist” for high-tech, just-in-time deliveries Its U.S ad campaigns had long poked fun at competitors and warned business executives of certain humiliation if they used any other delivery company FedEx pursued that strategy in China, even at the risk of seeming cheeky Last year, it ran a ubiquitous print ad in Asia showing the tail of a FedEx plane parked in front of the Forbidden City— a cherished array of imperial buildings that was off limits to the public for 500 years “Call FedEx,” the ad said “It’s almost forbidden not to.” “I don’t know that I agree that there’s a sort of Chinese way and an American way,” Mr Smith noted “I think there is an establishment way and China at the moment is a country that is very entrepreneurial in nature We are more consonant with the new China.” Nonetheless, the FedEx style seemed to annoy some companies that expected a certain tone in the formal face-to-face sales pitches traditional in China “I know they’re one of the biggest companies in the U.S.A., but that doesn’t matter here,” said Li Ping, an executive at Chinatex Cotton Yarns & Fabrics Import & Export Corp in Beijing “The personal relationship matters most here You have to talk to customers and make them feel good They haven’t sent anyone here; so we don’t business with them.” FedEx was not worried Instead of chasing the established Chinese business clique, it was focusing first on multinational corporations with Chinese operations that already used FedEx elsewhere It also was targeting expanding Chinese entrepreneurs whom FedEx believed would readily adopt its mantra about cutting-edge manufacturing and delivery techniques For those customers, who valued a highly controlled distribution system and constant FedEx and UPS in China-Competing with Contrasting Strategies 904 CASE 27 FedEx and UPS in China—Competing with Contrasting Strategies information about the status of shipments, FedEx’s philosophy was appealing Wang Fazhang, a manager at Siemens Technology Development Corp of Beijing, a unit of Siemens AG of Germany, noted using FedEx cut the delivery time for medicalequipment spare parts from Europe to three days from 28 To achieve such results, FedEx was trying to leapfrog rivals in China and all across Asia by spending millions to build a network much like the one it operated in the U.S That investment started in 1988 with its $880 million acquisition of Flying Tiger Line Inc.; FedEx mostly wanted the cargo carrier’s Asian routes, including a coveted but longunused link between Japan and China In 1995, FedEx paid Evergreen International Aviation Inc $67.5 million according to Evergreens’ regulatory filings, to buy the only operating authority currently permitting a U.S cargo carrier to fly directly into China MUCH CHEAP CARGO Using that authority, FedEx flew an MD-11, laden with up to 170,000 pounds of freight, into Beijing and Shanghai four times a week For now, FedEx filled much of the plane with cheap air cargo, for which it charged as little as $2 a pound and made, at best, a slim profit As more manufacturing operations in China adopted just-in-time manufacturing systems, however, FedEx believed that the bulk freight would shift to highly profitable smallpackage services, for which the company charged up to $30 a pound FedEx promised delivery of packages from the U.S to China in three days, but often they arrived in just two days Deliveries from China to the U.S frequently arrived overnight In more than a dozen major cities in China, FedEx’s operations, trucks and employees looked identical to those in the U.S In scores of other cities, FedEx packages were delivered in aqua-blue trucks and painted with the logos of both FedEx and its Chinese affiliate UPS STYLE The 91-year-old UPS, with its giant, mostly groundbased U.S delivery network and annual revenue of about $22.46 billion, was adhering to its long history of keeping a low profile Until recent years, the company, owned mostly by its managers and retirees, eschewed any marketing at all, even at home Its boldest advertising moves had been sponsorship of the Olympic games in 1996 and 1998 Therefore, in China, UPS was doing as the Chinese Its marketing sought to build relationships discreetly, on Chinese terms—even though it, too felt multinationals were the core of its initial customer base here Monica Yan, an ad executive at China Guoxin Information Corp., switched to UPS from the staterun express-mail service after a UPS account executive came calling at her office in Beijing “She came here and explained to me how UPS could be more convenient and not cost so much money, so I decided to use her company,” Ms Yan noted In promoting itself, UPS emphasized its global network and stability, virtues that ring true for many Chinese It also nurtured a Chinese customer base outside China, sponsoring Chinese New Year celebrations in Toronto and Vancouver, where many recent immigrants lived A six-week UPS television campaign in China showed a motorized three-wheeler moving down a runway, followed by a larger van, a truck, and then a 747 “Their ads show lots of planes and trucks, with a very big world-wide network,” said Chen Bin, a manager of a state-owned logistics company in Beijing “The image is not American” but “more world-wide.” Investing just a fraction of what FedEx had put into Asia, UPS had gradually expanded with demand, trading some market share for morelimited risk Meanwhile, it felt it could catch up whenever the market was ripe Thus, Big Brown operated without a single aircraft in China It offered “total brown” service— 923 924 FedEx and UPS in China-Competing with Contrasting Strategies CASE 27 FedEx and UPS in China—Competing with Contrasting Strategies packages were picked up by workers in brown UPS uniforms, driving brown trucks—in Beijing, Shanghai, and only one other Chinese city, Guangzhou Lacking its own air service, UPS could not offer customers in China the range of logistical services that FedEx could However, UPS, while avoiding the cheap air cargo that FedEx depended upon to fill out its aircraft, could still skim from the cream 905 of the business, the lucrative document and smallpackage sector The upshot: UPS could deliver a one-pound package or document from the U.S to major Chinese cities in the same time FedEx promised, three days, at a price of about $47 For now, UPS executives felt that was plenty “If the situation changes in five to 10 years, then maybe we’ll want our own planes in China,” UPS’s Mr Adams noted “But that’s not a priority now.” C A S E Playboy Enterprises,Inc.(A) I n early 1986, Christie Hefner, president and chief operating officer, Playboy Enterprises, Inc., had been reviewing the company’s strategies to face the changing world Once considered a trendsetter for urban sophisticates, the adult leisure company in recent years has increasingly found its offerings out of step with the times As a writer on social issues put it, “The image of the playboy in a smoking jacket is obsolete People today are more interested in their cars and their careers than they are in sex.” Although that claim may be open to dispute, Playboy has reason to be alarmed The circulation of its flagship magazine has dwindled to just over four million a month from more than seven million in 1972 The number of Playboy Club key holders has fallen steadily The cable television Playboy Channel, once seen as crucial to the company’s future, loses money and has yet to prove that it can survive in its highly competitive field Between 1983 and 1985, Playboy’s revenue fell by nearly 50 percent It earned a profit on operations in only one of four years between 1982 and 1985, when it was forced by old legal problems to give up its lucrative casinos The company was in the black (by $6.7 million) in its 1985 fiscal year only because of returns on $60 million in investments Its auditors qualified their opinion on the financial statement for that year because of uncertainty over whether Playboy could collect all it is owed on one casino sale COMPANY HISTORY Initially, Playboy Enterprises, Inc was established as HMH Publishing Company in 1953 to publish Playboy The present name was adopted in 1971 Today, the company’s businesses, in addition to Playboy and Games magazines, include the 46 development and production of programming principally for pay television and videocassettes and products for direct sale and licensing that feature the Playboy name and trademarks for worldwide distribution In addition, the company owns and franchises Playboy Clubs In the 1970s, the company entered the resort hotel and casino business in different places, including London, Miami, the Bahamas, and Atlantic City However, in 1982 the company discontinued its resort hotel and casino operations ENVIRONMENTAL CHANGES Playboy is a victim of the social changes it helped promote Attitudes toward sex have evolved rapidly since the days when the magazine could shock millions by publishing two photographs of an undraped Marilyn Monroe Today, Playboy must compete, not only with countless far more lurid “skin books,” but also against the popular media Rock songs may have X-rated lyrics and an episode of “Dynasty” may be nearly as titillating as a centerfold As Ms Hefner puts it, “We no longer can contrast ourselves to a gray-flannel Eisenhower society It’s now a lot more difficult for us to offer something unique.” Yet Playboy also finds itself considerably vexed these days by those who consider its business immoral or sexist or both Although its cable television fare isn’t hard-core, for instance, it has repeatedly been challenged in court (so far unsuccessfully) by communities that want it banned After ABC recently broadcast a film based on Gloria Steinem’s critical account of her 1963 stint as a bunny, Playboy President Christie Hefner fired off a memo asking her staff to “ponder what it is Playboy and all of its resources can and should be This case was prepared as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation 906 925 926 Playboy Enterprises, Inc (A) CASE 28 Playboy Enterprises, Inc (A) doing to counter the misimpression out there that we are not good guys.” Perhaps a tougher problem for Hefner, though, is finding a clear mission for Playboy in the 1990s, one as potent as her father’s former vision for the company In an era of aggressive careerism among both sexes, the company no longer gets much mileage out of the so-called Playboy philosophy, Mr Hefner’s concept of the lifestyle of a man of leisure THE REAL PROBLEM Some company officials believe that one of Playboy’s biggest handicaps may be its association with the public image of its founder, now 59 years old As a Playboy executive put it, “Pajamas just aren’t as fashionable as they used to be.” Though still the best-selling magazine for men, Playboy has fallen far behind arch-rival Penthouse in lucrative newsstand sales According to Penthouse publisher Bob Guccione, “Playboy’s market is older and its readers are passing into oblivion.” Playboy executives say that the readership age difference is minimal However, there are other worrisome signs A Chicago newsstand operator who has sold many copies of Playboy speaks of the typical buyer as “a guy who thinks he’s up-to-date but isn’t.” One woman who posed for a pictorial was surprised when she saw the letters the feature generated: “A whole bunch of them were from guys in prison.” A former public relations executive for Playboy contends that the company “doesn’t want to face reality—that time has passed it by.” NEW STRATEGY Against this background, Playboy Enterprises is undertaking what Hefner calls a “repositioning.” The strategy, she says, is to go after a more upscale audience by being more in tune with current tastes and values “I think we should be on the cutting edge of how people who have changed their behavior to reflect a more liberal lifestyle are going to live.” 907 The October 1985 issue of Playboy, marked “Collector’s Edition,” began what the company calls the magazine’s next generation This included greater coverage of such “life style” subjects as personal finance and home electronics An ad in that issue asked, “What sort of man reads Playboy?” and offered as an example race car driver Danny Sullivan Posing in a black silk evening jacket, he explained that he “grew with the magazine,” learning, for instance, to care about clothes Curiously, elsewhere in the issue was a piece satirizing the consumer society Sensitive to criticism that it portrays women as sex objects, Playboy intends to feature some who are more mature or more accomplished The lead feature in the November 1985 issue was a nod in this direction, but it hardly seemed likely to defuse the moral issue Picturing members of Mensa, the club people can join only if they have high IQs, the feature was entitled “America’s Smartest Girls Pose Nude.” Nevertheless, Hefner says Playboy’s effort to move upscale is working As evidence, she notes that the October 1985 issue carried advertising for Campbell Soup’s Le Menu frozen dinners Covers of the new generation Playboy are to have a glitzier look They are planned in long meetings by a committee of fashion and art experts who try to base their designs as much on the latest fashions as on erotic content The graphics also are slicker and a different printing process binds pages with glue instead of staples, giving a more finished look According to Playboy’s art director, “The magazine is supposed to look a lot more like the kind of thing you’d put on a coffee table.” That goal may be a bit optimistic, however; newsstands say that half of the buyers of Playboy still ask for a paper bag to carry it home The new magazine retains many standard features, like the Playboy Advisor, which intersperses advice about sex with answers to questions about stereos or turbochargers Some editors complain about the uneven quality and occasionally questionable taste of color cartoons Mr Hefner himself Playboy Enterprises, Inc (A) 908 CASE 28 Playboy Enterprises, Inc (A) is said to have rejected an editor’s plea to eliminate the Party Jokes feature, which in the October 1985 issue regaled readers with one-liners like, “What’s boffo box office among milkmaids? Pail Rider.” The “repositioning” also applies to the Playboy Clubs, which haven’t had a major updating since they were started a quarter-century ago Even with a recent redecorating, the club in Chicago, with its plush red carpeting and black leather bar stools, looks a little like a museum for the jazz age A gift shop upfront peddling Playboy T-shirts, cigarette lighters, and golf putters lends a touristy atmosphere to the place Rather than confront the deteriorating image of its big-city clubs, Playboy several years ago headed for the hinterlands, franchising clubs in places like Lansing, Michigan, and Des Moines, Iowa, where they might still have novelty value However, without a strong big-city base, the whole chain lost its urban gleam The Lansing club began resorting to such decidedly unglamorous promotions as lipsync contests and valet parking for farm tractors THE NEW YORK EXPERIMENT In the fall of 1985, the company reopened its newly done New York club It was a bold experiment The cottontailed bunnies were replaced by hostesses greeting guests wearing long, glittering Jean Harlow-style gowns Some of the waiters were men Absent were the traditional pool table, party balloons, and Leroy Neiman paintings Instead, video effects, stage acts, and music by a 10-piece house orchestra were offered The New York club’s new look was sculpted by Richard Melman, who is noted for elaborate concept restaurants that are as much show-biz productions as eateries He selected bunnies with talent as bodybuilders, astrologists, and jugglers Costumes ranged from a sequined one called the Michael Jackson outfit, to sweater dresses, to a take-off of the current cottontail suit The idea of male waiters (called rabbits) was to help women feel more comfortable in the club It remains to be seen if the company will convert other clubs to the New York style The company has 12 other Playboy Clubs, 10 of which are franchised rather than company owned A section of the club called Cafe Playboy may be tested as a prototype for a chain of franchised bars open to the public (A Playboy key still is needed for admittance to the clubs, though temporary memberships are readily available.) STRATEGY FOR OTHER BUSINESSES Playboy’s products division, too, is working to bolster the company’s image—or at least to stop endangering it The division has sold countless key chains, air fresheners, and the like, even though doing so risked cheapening the company’s trademark Now Playboy is moving away from novelty items and into fashion apparel and branded consumer products One success is Playboy’s men’s underwear, the second-best-selling brand Playboy still has some hard thinking to about its video operation The division, which launched the first sex-oriented cable channel for a mass audience five years ago, had identity problems from the start Unable to decide how racy to be, the channel wound up alienating viewers at both ends of the spectrum Earlier in 1985, for instance, the channel stopped offering erotic programming during prime time and switched to mainstream movies and quasijournalistic specials such as “Omar Sharif Hosts the Prostitutes of Paris.” Viewership dropped and Playboy soon reverted to prime-time prurience Partly because of its turnabouts, the Playboy Channel has had the highest disconnect rate in the industry, 13 percent of viewers each month Its current level of about 762,000 subscribers isn’t enough to pay for the quality programming that might attract a larger audience At $20 million, the channel’s yearly budget is less than a network might spend during a season on a single series As a result, Playboy is de-emphasizing the channel as its main outlet for programming and will 927 928 Playboy Enterprises, Inc (A) CASE 28 Playboy Enterprises, Inc (A) focus more on cassette sales and a recently launched pay-per-view service It is also weighing a return to producing a late-night variety show or hour-long specials, either of which it would try to sell to one of the networks 909 Still, Playboy’s video operations, like the rest of its empire, is continuing to grope for the right formula for today’s audience As Ms Hefner sums up, “We have to reflect a modern, sophisticated image.” CASE 29 Playboy Enterprises, Inc (B) I n Fall 1998, Christie Hefner, chairman and chief executive officer of Playboy Enterprises was contemplating a new strategy for the company that would most likely put the company on a growth path The strategy called for offering a range of products and services to lure female customers CURRENT SITUATION Back in the 1980s, Playboy Enterprises faces such severe financial problems that it considered going private Ms Hefner, who was named CEO in 1988, has put the company back on solid ground She shuttered Playboy’s faded nightclubs, with their scantily-clad Playboy bunny hostesses, and she got the company out of the profitable, but troublesome, casino business following scrutiny by U.K and U.S regulators over licensing requirements 1997 was Playboy’s most profitable fiscal year in a decade The company reported net income (including a sizable tax benefit) of $21.4 million, or $1.05 a share, on revenue of about $300 million The price of the company’s Class-B nonvoting shares had climbed to around $16 a share from about $4 a share in 1990 However, Playboy still desperately needs a younger and bigger audience, and now the search is on for ways to create new cachet for the brand Ms Hefner would like to reorient the company toward the 18–34-year-old females According to her, these consumers are “pro-sex feminists,” and their age mirrors that of their target male demographic They grew up with the sexual revolution and the womens’ movement behind them They are pro-sex and pro-responsible sex, which is what Playboy stands for in a unique way 47 THE NEW STRATEGY In 1999, the company planned to launch an apparel line for women and men, produced by California Sunshine Activewear Inc., which also manufactured for GUESS? Inc The Line would be sold via the Playboy catalog, Web site, and in collegecampus and specialty gift stores It included dainty, spaghetti-strap tank tops and shorts with the rabbit-head logo Future plans called for sleepwear, sunglasses, and even home furnishings that evoke “Hef’s” Los Angeles mansion Recently, Playboy began handing out rabbithead stickers in nightclubs The famed mansion was seeing a resurgence of young celebrity guests, including heartthrob Leonardo DiCaprio and singer Fiona Apple Playboy believed its timing was ripe The last two years had brought kitsch back in style, from dark denim Sergio Valente jeans to Kiss to “Austin Powers,” the hit movie about a groovy womanizer The craze wasn’t over yet The new movie “Velvet Goldmine” was dredging up David Bowie’s 1970 rock look Given all that, a comeback for the Playboy logo might not be far-fetched The clothes seemed “fun, and sort of antifashion fashion.” An industry observer notes, “They’ve got world-wide recognition with the bunny head There will be some women who find it degrading, but it’s not like 20 years ago I think it’s going to fly on the 18-year old girls.” The resurgence depended in part on Playboy’s assumptions that young men and women today were more open about sexuality, whether discussing Monica Lewinsky at work or sharing unisex fragrances “It’s true that there just aren’t as This case was prepared as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation 910 929 930 Playboy Enterprises, Inc (B) CASE 29 Playboy Enterprises, Inc (B) many boundaries anymore,” says Heidi Willis, a 26 year-old freelance publicist in New York She says she’d wear the Playboy tops jogging or to clubs, “probably with black cigarette pants.” However, retailers may be a tougher sell Some may question the viability of targeting something that was so blatantly sexist historically to the modern woman Making the magazine appeal more to women might be even trickier Playboy opined it can be done Just look at he success of the October issue, which featured fashion model Cindy Crawford on the cover and in the nude pictorial inside reminiscent of an artsy fashion spread Playboy says the issue was one of its best-sellers, and female readers were a big reason Over the long haul, Playboy was banking on its entertainment division—including cable and pay- 911 per-view channels—and its online operations to tap the female market The company noted couples make up about 70 percent of the audience for its videos and TV programs, including such fare as “Erotic Escapades,” about couples acting out fantasies Several ads for the Playboy TV channel featured women confiding, “I watch it too.” The entertainment unit made twice the profits on half of the revenues of the publishing division last year The company believed the pitch to women might work best online Already on its Web site, Playboy had celebrity chat sessions and personalads, and sold products like martini shakers and jazz guides According to company sources, it was in talks with some women’s Web sites and print publications about possible partnerships, including sites for chatting and perhaps dating ... investment proposals and approving annual operating budgets Long-range corporate plans 2 Marketing and the Concept of Planning and Strategy CHAPTER Marketing and the Concept of Planning and Strategy EXHIBIT... generating a new posture Marketing and the Concept of Planning and Strategy CHAPTER Marketing and the Concept of Planning and Strategy among executives, with the planning process being identified... extent? Marketing and the Concept of Planning and Strategy CHAPTER Marketing and the Concept of Planning and Strategy • There is the problem of determining what part of the work of planning should