122 PART2 I Understandinglhe Markel¡llaceand CuSlomerValue
Company Case Sony: Battling the Marketing Environment's "Perfect Storm"
With all Lhe hype thesedays about companies likeApple, Google,
Amazon, and Samsung, It's hard to remember that companies
like Sony once ruled. ln fact, not all that long ago, Sony was a
high-tech rock star. a veritable merchant of cool. Not only was
il the world's largest consumer electronics company, Its history
of Innovative products-such as TrinilronlVs, Walkman portable
music players, Handycam video recorders, and PlayStation video
game consoles-had revolutionized entlre lndust:r1es. Sony's In-
novations drovepop cullure, earned theadorationof the masses,
and mademoney forthecompany: The Sony brand was revered
as asymbolof Innovation, style, and high quality.
Today, however,Sony Is more a relic than a rock star. lost in
the shadows of today's hlgh-ßiers. While Sony Is still an enor-
mous company with extensive global reach. Samsung overtook
the former market leader as the world's largest consumer elec-
tronics company a decade ago and has been pulling away ever
since. Likewise, Apple has pounded Sony with one new product
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Pearson
after another.·when I was young, I had tohavea Sony product,"
summarizes one analyst. "but for the younger generation today
It's Apple." All of this has turned Sony'scurrent "Make. Believe."
brand promise Into one that is more "make-believe."
Sony's declining popularity among consumers Is reflected ln
Its financial situation. For Lhe most recent year, Samsung and
Apple each tallied revenues exceeding $170 billion-more than
double Sony's top line. Samsung's profits have surged ln re-
cent years while Sony's losses reached catastrophiclevels. And
whereas stock prices and brand values have skyrocketed for
competitors. Sony's have reached new lows. Adding Insult to
Injury, Moody's Investors Service recently cut Sony's credit rat-
ing to "junk" status.
How did Sony fall so hard so fast? The answer is a com-
plex one. Sony never lost the capabilities that made lt great. tn
fact, throughout the past decade. Sony was poised to sweep
the markets for MP3 players, smartphones, online digllal stores,
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 CHAPTER 3 I Analyzing the Marietlng Environment 123
and many other hit products that other companies have mar-
keted suocessfully. But Sony was caughl in the middle of a per-
fect storm of environmental forces that Inhibited Its growth and
success. Some factors were beyond Sony's control. However,
al the coreof lt all, Sony look Its eye off the market,losing sight
of Lhe future by failing to adapt to Important changesoocurrlng
allaroundil.
Hit on all Sides
For starters,Sony fell behind in technology.Sony buill Its once-
mightyempirebasedon the innovativeengineering and designof
standaloneelectronics-lVs,CD players,and video game con-
soles. However,as Internetand digital technologies surged,cre-
ating a moreconnected and mobile world, standalone hardware
was rapidly replaced by new connecting technologies, media,
and content.As theworld of consumerentertainmentgave way
to digital downloadsand shared contentaocessed through PCs,
IPods, smartphones,tablets, and Internet-readylVs,Sonywas
late to adapt.
Behavingas though Itsmarketleadershipcould neverbe chal-
lenged, an arrogantSony clung to successfulold technologies
ramerthan embracingnewones. Forexample,priortothe launch
ofApple'sfirst fPodln 200t , Sonyhad forlhreeyearsbeenselling
devices tnat would download and play digital music flies. Sony
had everything il needed to create an IPod/lTunes-lypeworld,
Including ils own recording company. Bui lt passed up that idea
ln favorof oontlnued emphasison Ils then-highlysuccessfulCD
business. "[Apple's)Sieve Jobs figured il out, we figured lt oui,
we didn't execute,"said Sir Howard Stringer. formerSony CEO.
"The music guysdidn'twantto seethe CD go away."
Similarly,as the world's largestlV producer,Sony clung to
ils cherishedTr1nltroncathode-ray-tubetechnology.Meanwhile,
Samsung, LG, and other competitors were moving rapidly
aheadwith flat screens.Sony eventually responded.But today,
both Samsung and LGsell morelVs thanSony.Sony'slV busi-
ness, once ils main profit center,has lost nearly $8 billion over
the Las! t O years. Recently, in an effort to gel back on Its feet,
Sonyspunoff ItslV division Into a standaloneunit. But lt faces
a dauntinguphillbattleln acompelillve landscape that is far dif-
ferentfromthe one ln Sony's heyday. Not only does Sonycon-
tinue to lose marketshare to Samsung and LG,but ChineselV
makerssuch as Haler, Hlsense, and TCLare producing cutting
edge flatpanel offeringswilh a cost advantagethat slgnlficanlly
undercuts Sony.
IL was a similar story for Sony's PlayStatlonconsoles, once
the undisputed market leader and aocountlng for one-third of
Sony's profüs. Sony yawned when Nintendo Introduced Its in-
novativemotion-sensingNintendoWU, dismissing lt as a "niche
game device." Instead, Sony engineers loaded up the PS3 with
priceytechnologythatproduceda loss of$300per unii sold. Wli
became a smash hll and the besi-sellinggame console;the PS3
lost billions forSony,dropping lt from ñrst place to lhlrd.
Even as a money Loser, lhe PlayStatlon system, with ils
elegant blending of hardwareand software, had all lhe right
Ingredients to make Sony a leader ln lhe new world of digi-
tal entertainment distribution and social networking. Execu-
tives Inside Sony even recognized the Playstation platform
as the "epitome ofconvergence,"with Lhe potentialto create
"a fusion of computers and entertainment." ln other words,
Sony could have had a strong competlllve response to Ap-
ple's !Tunes. But thatvision never materialized,and Sony has
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Philip Kotler – Gary Armstrong
Pearson
lagged ln lhe burgeoning business of connecting people to
digital entertainment.
There are plentyofotherexamplesofSony'sfailure 10 capilal-
tzeon market trends despitethe fact that Il hadthe productsto
do so. Considerthe Sony MYLO(or MY LifeOnline). a clever de-
vice releasedayear beforethe first !Phone that hadthe essence
of everything that would eventually define the smartphone-a
touchscreen,Skype, a built-ln camera.evenapps. Or howabout
the long line of Sony Readerdevices, the ñrst of which was re-
leased a year beforeAmazon look the wor1d by storm wilh Its
flrstKindle.
TheTurnaround
As Sonyawoketo Lhe realily of flattening revenuesand plummet-
ing profüs,effortswere made to turnthingsaround. ln 2005, lhen-
CEO Stringermoved ln to put Sony back on track.Tohis creen,
Stringermadea credibleefforttoreignitelhe company,develop-
ing a turnaroundplanaimed at changingthe Sony mind-set and
moving Lhe company Into the new connectedand mobiledigital
age. Slringer'seffortswere slow to take root, meeling resistance
by Sony'shardware-worshippingcullure. ·whenever I menlioned
content," he says,"people would roll their eyes because, 'This
is an electronicscompany, and contentIs secondary.'" But even
with Ils rigid structureand inflexible cullure working against il,
Sony'sstrengths kept il ln the game. ln fact. Just a few years into
Stringer's reoure,the once greatconsumerelectronicsgiantbe-
gan toshow signsof life,asSony'sprofltsJumped 200percent to
$3.3billion on rising revenue.
Bui W Sony didn't have enough challenges, !his uplick oc-
curred Just as the Great Recessionhil. A year later, Sony was
right back wherelt started with a billion dollar loss. Slringer was
quick Lo point out !hat W notforthe global flnancialcollapse and
theyentradingnearapost-warhigh,il wouldhavebeencomfort-
ably profìtable.
After a few more years of negativeprofits, 2011 was to be
Sony's comebackyear. Its best batch of new products ln over
a decade was heading for store shelVes, including a portabe
PlayStatlonplayer,a compact 24-megaplxelcarnera.oneof the
most advanced smarlphoneson lhe market, a personal three-
dimensional video viewer, and lhe company'sfirst tablets. Per-
haps more Important. the company was ready to launch Lhe
Sony Entertainmenl Network-an !Tunes-like global network
that would ílnally combine Sony's strenglhs ln movies, music,
and video games to all ils televisions,PCs, phones,and lablels.
Analystsforecasteda profìtof $2 billion.
Bui on March 11, 20t t, Slringer recelVed a text message
al 4:30 a.m., alter having Just arrived ln New York City. Eastern
Japan had been devastated by an earthquake and tsunami.
Nobocly al Sony was hurl. ln fact, Sony'semployeesdove into
rescueefforts. fashioning rescue boats from foam shipping con-
tainers to assist ln savingvlclims and ferryingsupplies. But ln Lhe
aftermathoflhe destruction,Sonyshuttered 1 O plants,disrupting
the flow of Blu-raydiscs, batteries,and manyotherSony Hems.
ln the wakeof the extreme naturaldisasters,Sony'smiseries
hadonly Just begun. A month later,a hacking attack Invadedthe
company's Internet entertainment services. ln what was deter-
minedtobethe second-largesI onlinedatabreach ln U.S. history,
Sonywas forcedto shut down lhe PlayStatlonNetwork. A short
fourmonthslater,firesset by riotersln Londondestroyeda Sony
warehouseand an estimated 25 million CDs and DVDs,gultfng
the lnvenlory of t50 independent labels. And to round out Lhe
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 124 PART 2 I Understanding the Marketplaceand CuS1omerValue
year, floods in Thailand shut down component plants, disrupting
production and distribution of Sonycameras.
Sony's 2011 comebackyearturned out to be big all right, but
for all the wrong reasons. The projected$2 billion profit ended
up as a $3.1 billion loss, marking a three-year losing streak. As
S1ringer prepared to fade away into retirement, Kazuo Hirai,
of crisis." Indeed, Sony entered the record books the following
Sony'semerging CEO, began speaking publicly of Sony's "sense
yearwith a net loss in excess of $6 billion-its biggest ever.
Assessing the Damage
So in the end, just what is it that has caused Sony's fall from
grace? Was it an addictionto hardware,an uncompetitive cost
structure, the global financial crisis, natural disasters,computer
hacking, or riots? ln retrospect, all these elements of the mar-
keting environment combined to deliver blow after blow. Sony's
encounter with a perfect storm of environmental forces illus-
trates the havoc such forces can wreak-whether unforesee-
able natural and economic events or morepredictable turns in
technology.
ThroughoutSony's turbulent existence overthe past decade,
a few things remain Clear. Sony is a companywith a long history
and strong legacy that refuses to give up. Even now, Hirai and
others at Sony are firmly resolved to save the company.And with
engineering and design at the core, they still have all the ingredi-
ents needed to become a totalentertainment provider in today's
market. Sony is agaming console maker,aTV producer,a mobile
company, a home device company, a movie studio, and a ma-
jor recorded-music label. Wtth renewed efforts toward cost-cut-
ting and breaking down divisional walls, Sony's portfolioof new
Global Edition
Principles of Marketing – Sisxteenth Edition
Philip Kotler – Gary Armstrong
Pearson
state-ot-the-art products and the unifying umbrellaof the Sony
Entertainment Networkshow promise. Now, tt Sony can just get
the economy and Mother Nature to cooperate....
Questions for Discussion
3-18 What microenvironmental factors have affected Sony's
performancesince 20007
3-19 What macroenvironmentalfactors have affected Sony's
performanceduring that period?
3-20 What stands in the way of Sony's success today?
3-21 Given Sony's current situation, what recommendations
would you make to Hirai forthe futureof thecompany?
Sources: JamesMcQulVey,"SonyShould Have Beena Digital Contender,"
Forbes. February6, 2014, www.forbes.com/sltes/forrester/2014/021061
sony-should-have-been-a-olgltal-contender/; Kana lnaga, "Sony
Slashes Forecto $1.1 Bllllon Annual Loss," WaifStreet Jwrna,
Febr6,2014, \nllne.wsj.oom/newsrtlcles/8810042405270
23034579365813295026;DalsukeWakabi,'SonyPosts
Loss, g Sock's Rally," February 7, 2013, http://onllne.wsj.com/
news/artlcles/SB10001424127887324590904578289103990967 408;
ClfEwrsdMu,yschforColhOld-
FaindW"BombBu,Feu4,03,
pp.2021;KInk,"o'tsyBondRatngtoJunk',•W
SttJ,Ja7,204,www.onllne.ws).oom/news/artlcles/
SB1001424027023040457128176972; Al Leis. "It's
Sony!'Soat?"WaStr,Fear9,2014.www.onllne.wsj.com/
news/rtlcles/SB10001424052702304609045793672122048738;
and Informationfromwww.sony.net/Sonylnfo/lR/,accessedJune2014.
Página 3 de 14
 250 PART 3 I Designing a Customer Value-Driven Strategy and Mlx
Company Case Bentley Motors: Differentiation and Positioning in International Markets
The mission of Bentley Motors, the definitive British luxury car
company, to produce best cars in their class, has remained un-
changed since it was expressed eloquently by its founderWalter
Owen Bentley in London in 1919. Located in Crewe, England,
since 1946 and owned since 1998 by VolkswagenAG, Bentley
Motors is an international companydeveloping and crafting one
of the world's most desirable luxury cars.
There are many unmistakable characteristics that define a
Bentley-distinctivedesign, handcraftedluxury, supreme comfort,
ultimate performance, and a refined and exhilaratingdriving experi-
ence. Yet it is the company's brand imagingthroughdifferentiation
and positioning that makes thequintessentiallyBritish brandunique
today.Tomany, owning a Bentley is not about gettingfrom A to B
but moreaboutcruisingwith flairinfusedwithadvancedtechnology
and breathtakingpoweraswell as time-hallowedtraditionand Clas-
sic hand craftsmanship at the pinnacle of British luxury motoring.
Based largelyonthe conceptof "Britishness"in image and design,
Bentley has succeeded in differentiating its position in the global
luxury car marketthroug.ha market-drivenstrategy based on re-
sponsivecross-marketsegmentation.
Cross-Market Segmentation
The traditional markets of Bentley Motors are the United States,
the United Kingdom, and Europe, which were identified by the
company using two of the traditional internationalmarket segmen-
tationvariables: the level of a nation'seconomicdevelopmentand
per capita gross domestic product (GDP). Bentley had enjoyed
high sales in these economicallydeveloped markets,especially in
the boom of the 1980s. ln the 1990s, lt struggledto reach asimilar
level of sales, which led to a major investment in the facility, new-
productdevelopment, and brand repositioning in 1999. The brand
reachedthe height of Its heyday in the 1920s and 1930s, and the
BentleyBoys winningthe 24-hour race in LeMans in 2003 seemed
to emulatevictories of the past. ns newArnageT luxurysportsse-
dan won critical acclaim from the motoringpress worldwide soon
after,and the Continental GT, launched in 2004, was seen as one
of the most successfullaunchesofany car in Bentley'shistory.
However,sales in Its traditionalmarkets slumped in 2008 due to
the global financial crisis triggeredby the collapseof LehmanBroth-
ers in September 2008. Some orders for its cars were cancelled
immediately,and salesdropped by 24 percentthatyear compared
to2007. IMlenthecompanywasforced to stagea seven-weekpro-
duction shutdown in the spring of2009 due to the slump, it started
Global Edition
Principles of Marketing – Sisxteenth Edition
Philip Kotler – Gary Armstrong
Pearson
to search for new marketsto increase sales. lt realizedthatthe use
ofthe more traditional market segmentationvariables such as age,
gender, education, and level of economic development does not
seem to reflect the real aspects of market behavior,especially the
burgeoning purchasing powerof thewell-to-do in the big emerging
marketssuch as Brazil, Russia, India, and China. The result of the
search was the identificationof a thriving consumer segmentthat
transcendsthe nationalboundaries of these nations. Despite being
located in nationsfeaturing low per capita income, this segmentof
consumershas the greatest global consumptiongrowthand repre-
sents rapidly growing buying power for luxury goods ranging from
ultra-luxurycars todesig.nerhandbags.
Targeting
Operating in marketsof both developed and emerging economies
presents challengesfor Bentley. lt was clear from day one that it
targetedmembersof high-income groupswho want to buy into the
symbolism and history of the Bentleybrand, even though the pros-
pect customers would inherently know thattheycould purchasea
vehicle with similarperformanceand specificationsfor lessthanha~
the price. Bentley is aware that the needs and preferencesof its
targetgroups intheemergingeconomiesmaydiffer fromthoseof its
prospectsin developedeconomies,whoare typicallyolderor retired
males, highly educated, and high earners. ln comparison, Bentley's
targetconsumers in emergingmarketsareoftentheyoung, lessed-
ucatedentrepreneurswho sharea numberof importantcommonal-
ties. Theyhavea strong appetite forWestern-brandedluxury goods,
from which they expectsuperiorquality as a fundamentalattribute
associated with these goods-quality may meandesign, materials
used, technology, performance, and craftsmanship,but also attri-
butessuch as the traditionand the heritageof the countryoforigin,
uniquetraits, and perceivedsuperiority and exclusivity. Recognizing
the differencesandthe opportunityto be had from differentiatingits
targeting efforts, Bentley launched its value proposition based on
"Britishness" in its newly found marketsWhile refreshing its original
value propositionof luxury,performance, and exdusivity in its tradi-
tional markets.
Differentiation and Positioning
The Bentley brand concept is based on the premise that a con-
sumerwho regards luxury car brand characteristicsas important
ordesirable, and is in the market forsuch a luxury product,should
be attracted to the brand. Bentley is aware that for its brand to
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CHAPTER 7 I Customer-Driven Marketing Strateg,: Creating Value for Target Customers
be unique, it musthaveimagery and symbolicmeaningto a con-
suner.lnotherwords, it muststand fora lifestyleoranattitudeand
commuricatethis to its cross-marketconsumerbases.
Althougha,,ned by the GermanlkllkswagenAG group,which
enjoys a perceptionof creditabilityand originality, Bentleybrands
itself as a quintessentially distinctive luxury brand origi'latîng in
Crewe,England, wifha fusion ofherifageand cutti1g-edge tech·
nology.lidefroesifs cars by theimportantattributes oftraditionand
hand craftsmanship,relative to those of speed and performance
used by its competitors.lt focuseson the emotionalbenefitsof its
cars and has stayed true to thisproposrtionthroughan integrated,
high-touch differentiationand posifioning program tailored to the
carefu!I}'definedwea-to-oogroups in each of its markets.
Bentleyoffersan exclusivecollectionof limited non-motoring
productsproducedunderlicense from its equallyexclusivepart-
ners. Ettinger for Bentley offers luxury leather travel products in
vibrant colors from the Bentley color palette, hand-stitched in
Englandfrom Bentley'sownhides.ThroughEslede,Bentleyoffers
a limited edition, high-end range of sunglasses and ophthalmic
ofluxury skìequipment
frames featuringthe knov,•n
famous for its Bcraftandexclusi\~tY,Bentley
v,•înged emblem andpresentedin
ottersinnovativeski productshandmade
a Bentley leather presentationbox. i1S•.vitzerlandwithsup-
ThroughZai, a Swiss maker
portfrom the Bentley Styling Studio in England.
Bentley has also teamed up with luxury hospitalitybrands to
reinforce ñs vau, propositionthroughBentleyPlaces thai embody
thevalues and lhe spirit of Bentleyaroundlhe world. The Bentley
Roomat London'sMosîmann'sis an inimitablyBritishblendofstyle
and traditionwith a dashof Bentleydéoorand detailing. The din·
ing room was designedby CaulderMoore,\Vhoalso designed the
BentleyLivingRoomatthecompany'sheadquartersinCrewe. The
BentleySuite at the exclusiveSt. Regis Hotel in Ne\,l York-built
by JohnJacob Astor !Vil 1904-providesguestswrth theuxury,
craftsmanship,and~~eassociated~viththe Bentley brand.
ln its traditional marketsof the United States, the United
Kingdom,and Europe,Bentley;through its dealerships,regularly
invites customersto take part in nationalgolf tournamentsthat
locations; the \Vinner is crowned vvîth the Bentley "Continental
Cup." These events bring together golfers from differentconti-
nents v,ithina a common
culminate interestevent
cross-national in golfheld
andi1 Bentley
differingand help to
\VOrlctv..~de
refreshand reinforceits image ofluxuryandexclusivity.
ln its ne-Nlyfoundmarkets in the emergi"IQeconomies,Bentley
increasespublicityto raise awarenessofits brand throughmotor
sho1NS, exhibitions,openi"lgsofgrandshowrooms,and signingof
exdusive dealerships lo highlight lhe craftsmanship,quality,and
luxury of a Bentleycar and the authenticityofthe Bentle~,name.
AJl these events take place in the most economicallydeveloped
and fashionablemetropolitanareas, StJChas Sao Paulo in Brazil;
Shanghai,Shenzhen,and Beijingin Chi"la; and Murrt>aiin India.
Bentleystaystrue to its Englishheritageand makessurethat
its targetedmarketingprograms are steepedin its "Britishness."
ln the biggest BentleybrandexhibitioneNer held outsideCrewe,
theWorld of Bentleyexhibitionheld in Shanghaiin 2009 featured
a myriadof exhibitsdevoted to telling the Bentleystory ofcrafts·
rnanship,style, luxury,and herrtageoriginatedin England.Bentley
haslongstood aloneas the1NOl1d'spremiermakerofhandcrafted
cars,and itdid notdisappointi1Shanghai
lhe Bentley Design Studo gave the aov,tdsa rare chance to
glancento rts celebratedtradilicoof designinglhe"grand tour•au-
tcrnobile:a Bentleys!\1istat well<, sl<etchingrts future, inspiredby
rtspast. Bentleywoodwork and trim experts demcnstratedBentley's
unrivatedcraftsmanshJ)inan interactive and fur.fired displayofh::r,N
the companybrought the English'•'"'¥ oflifentodynamicdesignsal
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Principles of Marketing – Sisxteenth Edition
Philip Kotler – Gary Armstrong
251
luxuriousrrotor cars. ln the •.verosof Geoff ():)\,,Oing, Bentteys Re-
gionalManager for EastAsia,'TheO,inesejust lovalheBritismess."
Bent;,y's high-touch posrtioning through talored rnarl<eting ¡:ro-
i1 rts re.v rnarl<ertsplayeda key roleinthe corrpany's recovery
gr¡¥TlS
sœe the salesslll"fl=S in 2008. Chim is ro,v seooo::t to the Unijed
States as Bentiey's largest m"1<et. ln 2014, the comp"">' dei\..red
2, 191 cars to Crinesecustomersi1the firs!tm,equarter.;allheyear.
The prominerrt presenceof rts dealersrips, 38 by December 2014,
is set to furtha- expand in lhe next 12 mcnths as lhe latest high-
perlonrnnœ coupern:J oc,wertibleContinenl2l modás,re ntrcdJced
to Chnesecustomers. ln 2013, Bent;,y exceededlhe 10,000 sales
figurewifh 10, 120. By2018,rthopestoreach 15,000 sdes per year.
The Road Ahead
ln surrmary,Bentley targets high-income segments,and bulds rts
brand by serung a luxury segmentof the car masfœl lt prodJces
superior-qualrtyprcdJcls distrbuled through exclusive dealershps
and is neva- shyabrul charging a ty¡::ica/lyhigh poce. lt is strcngly
pœitionadasacµntessentialyBritish brandsteepedwithtradtionand
gccds and hospétaltysectors.
heritage,and rtcomm.nicates lndoingso,itdraws rts existingandpro-
lhs proposiliorlthroughconsistaitand
belevr:ble assodatiors Vo'Îth high-end brands in theltxuryconsuma-
spectiverustomers tos!)Ae, luxuf\\ prestg,,herrtage, <rdexctJm,rty.
Through these 1Nell-tuned competitive advantages, it had
sold ~veliin its traditionalmarketsuntilthe economicdownturn in
2008, when buyers became more cautious in their spending. lt
has since recoveredfollov,ing expansion into high-consumption
grovlth segments in the emergingeconomiesby carryingout ef-
fectivecross-marketsegmentation,targeting,and positioning.
The pent-up demand for luxury cars in the ema-gîrgeconomies
remainsstrorg, withBentieyandctherEuopeanspcrtscarbrandsall
repcrli1gstrorg salesand orders. However,therearealreadysignsal
asbNd0','111insorre of Brot!eysœNmarkets,su::h asO,ina,v.tich
repcrtedlhe slowestecommic growthin lhe past decade. Further·
more,ncreasingsalesaggressivelyin thesere.v maikets may imply
lessdistinctiveness<rdexdusolifyfer lheBentleybrand.
However,as Song as Bentleyremainstrue to itspinnacleposi-
tioning of buildingthe bestcar in its class with heñtage,tradition,
and cutting-edge technology,~ can look forward to ampleop-
portunities in the years to come,especiallyin theexistingemerg-
ing economiesas v,ellas those in the ma.krlg, suchas Vtetnam,
Cambodia, Kazakhstan,and the Philippines,\•\!here the nouveau
rich havejuststarted to appreciatethequintessentiallyBritish tra-
ditionand heritagethat isembodiedin Bentley.
Questions for Discussion
7-18 \Nhat is internationalmarketsegmentation?VVhat chal-
lengesdoes if poseto Bentley?
7-19 Using lhe full spectrum of segmentationvariables, de·
scribe how Bentley segments and targets the rlterna-
tional luxurycar market.
7-21 Given the economic oowrmrm in developed economies
7-20 Has
and Bentleydifferentiatedand posrtioned
the síowcowo in emerging its brand
economies effec·
such as
tivel1t?Explain.
Source&: B€Ged co iníCr'l'l"Qlx)O !rom Anct'S!t 1-bWS, "ASt\Jd¡intOAspÌ'8tÙ'l
Mdëano~inth9LuxuryCer r,Ae,i<aL, • MS::: h eus·l"'aSS~L
Chiîa,\Vill Bentleycontinueto grow'? VlJhy or \Vhynot?
P.E'dlXlOO Tl'.iittb'Scotch/R1arloa'T.rms,oecoe 2, 2012, tt1p:/Av,vv1.ft.ctrn/
cmSoll;'0-11"2-a730-14•fealXJCOl11m#axZz2fUJcg139 lll'd
thesis,2003;l<A~lär ~JIMlJrivG<slyaf'd Lù..íooteces, ''Sol\001\t'l
VN1'N.bér'lt»¡rrtelOIS.OOm, 9.00éS9QCt N::Jvoo'lbf;r2014.
Pearson Página 5 de 14
 CHAPlIR
Company Case Cath Kidston: Nostalgic Fantasy That CreatesValuefor Consumers
This case study examines the pricing strategy of Cath Kìdston,
a UK-based company that sells furnishings, home and personal
accessories, and clothes, operating mainly in the UK, Europe,
and Asia regions.
How much are you ~vîlling to pay for a keyring? The market
price charges just a bit more than $1. But would you pay $2 for
a comparable product? How about S7? A low-price strategy is
often used by companies if their products are not vval differenti-
ated. Although a low-price strategy might seem attractive, espe-
cially in an economic downturn, some companies are focusing
on creating value for customers and adopting customer-value-
added pricing strategy. Cath Kìdston Ltd is one UK-based com-
pany which understands that sometimes it pays to charge more.
Cath Kidston's key rings sell for roughly $7 to $10, whereas
the market price charges less than a third of that. To understand
how Cath Kidston has succeeded with this pricing strategy, let's
value-added pricing strategy. lt is important for a brand to create
look at what makes the brand so special. The cheery colors and
fun patterns Cath K"tdstoncreated allows it not to focus on price-
sensitive market segments but Slstead lure customers wñh a
something that people respond to v,•ith their hearts, v1•hich is a
sure-fire way to breed success for a brand. Cath K"tdston is a
brand that isconfident in its design styie and fun in its character.
From Humble
product range, Beginnings
everything from furnishings, crockery, cutlery,
Cath Kidston Ud was founded in 1993 when designer Cath
Kidston opened a tiny shop in London's Holland Park with a
$23,800 investment in her business, selling toweis, vintage
fabrics and wallpaper, and brightly painted "junk" furniture she
remembered fondly from her childhood. Cath Kidston'scleverre-
working of traditional Engfish country style made her tiny shop
soon become a cu.lt success. Today, the brand carries a v\lÎde
10 I Pricing: Undmtanding and Capturing Customer Value 343
cloths, toys, china, bed linen, and bags, to women's and chil-
dren's wear and accessories, charging price premiums that fans
are gladly paying.
ln 2012, Cath Kìdston had 57 shops and concessions in the
UK, 2 in Ireland, 27 inJapan, 7 in South Korea, 3 inThailand, and 1
in Taiv,,an.The business is also driven by sucœssful web, mail-or-
der, and wholesale divisioos, ,•,îth
UK, Euro, and U.S. transactional
Web sites. Cath Kìdston has become a powerhouse ofBritish de-
sign and retail, up there with the likes ofBurberry and Pringle.
Design iscorepart of Cath Kidston's brand. Ho\•rever, it ismore
than the vintage-inspired patterns and the stuïning shop interîocs.
Walk into any Cath Kidston shop and you are able to "experíeoœ"
the brand that other retail shops do not offer. And this "experience"
permeates Cath Kìdston's Web sites and all of üs printed commu-
ofnications.
color and vintage charm to a routine day.
If you are a fan, you can feel the essence of the brand
in every aspect. ln color psychology terms, Cath Kìdston is pure
spring-fun, creative,warm, inspirrlQ, and young, adding a splash
Cath Kìdston notonly offersa wide product range but is actually
aifestylestore. Youcan buy almost everything for your home, chl-
dren, or yourselt, The broad product range maxinizes the brand's
appeal and means that it works for both gift and personal pur-
chases. Cath Kìdston allows üs brand personalfy (fun and bright-
ness) to shire through its brand identity (colora and typography),
hence becoming a brand consumers can fai in love with.
Value Versus Prìce
ln certain respects, cross-comparing personal products such as
key rings can be problematic, because there is so much varia-
tion in both features and price. But consider some popular Cath
Kidston products. Its SCar\"'5 sell for roughly $77, whereas com-
parable products from apparel retailers such as Marks & Spen-
cer or Monsoon range from roughly $20 to $55. Cath Kidston's
Global Edition
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Pearson
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344 PART 3 I Designing a Custome, ValJJ•·D1i,en Strat<gy and Mix
plastic-coated fabric bags sell from roughly $56 to$104, whereas
other apparel retailers only charge similar prices for their leather
bags. The fantasy of the English country childhood that Cath
Kidston creates for customers enables the brandto charge price
premiums as compared to competitors, such as John Lewis,
Marks & Spencer. and Monsoon. For the fans of Cath Kidston,
her products excite them in a v,,ay that IKEA and other competi-
torscannot hope to grasp.
ln terms of competition, in the product category of home ac-
cessories, Cath Kidston competes directly with UK retailers like
John Lewis and Marks & Spencer. ln the clothing category, ap-
parel retailers such as Monsoon and Marks & Spencer are the key
competitorsof Cath Kìdston, W'hile it competes 1ivith retailers like
IKEA in the furniturecategory.Compared to its main competitors,
the weakness of Cath Kidston is that its product offerings are
still relativelylimited and narrow. However,Cath Kìdston's unique
strength is its product design offers its customers a strong per-
sonal statement and identity that other competitors find hard to
achieve. The biggest challenge for the Cath Kidston brand is to
conti'lue itssuccess with the traditional English country styie and
fun brand character,vmile satisfying its loyal customers with in-
Retro Brands
novative productindesign
Hard limes
and product line extension.
Given the harsh economic climate, you might expect to see the
sion veryvvell,selling the retrostyling and a rose-tinted antidoteto
cheerlul floral prints that made Cath Kìdston a household name
~vitheñng a little. However, Cath Kidston has survived the reces-
is now a seemingly recesson-proof "global lifestyle brand.' ln
an
60 uncertain work:1
percent, and in the
sales uncertain
rose economic
from roughly climate.
$30 to The brand
$49 million. The
reasonfor this phenomenon is that in these uncertain times, con-
2009, ,•,hile other brands were chalking up serious losses due
to the economic downturn, Cath Kidston saw profits leap by
meaning, because they are inspired by a comforting and familiar
sumers, although cash-conscious, have an appetite for nostalgia.
The products ofCath Kìdston fulfil consumer needs forvalue and
1950s aesthetic.
For Cath Kidston, its premium pricing strateg}' coincided v,ith
atrend of consumer preference toward nostalgia,which seemed
to provide comfort in the time of recession. Thus, the value de-
rived fromCath Kidston products was enough to justify the high
prices for many of its products. ln an economic dovmtum, con-
sumers 1.Na.111: a bit of security and comfort, and this trend shows
in the recession of the 1990s and today. UK retailers such as
Asda reported a surge in sales of nostalgic brands, as people
seem to look backto theirchildhood Slanattempt to cheer them-
selves up. Consumers want the comfort and security that retro
brands can give them, reminding them of their childhoods and
even their parents' childhoods.
ln times of economic downturn, people are worried about the
credit crunch and losing jobs, and thus brands that act as an
antidote to anxiety will do well.A lot of people áxJn't see the most
recent ecooornic crisis corning, and that makes them nervous
about lool<ing forward. The reflex is to seek comfort in things that
referto the past Also, as people stay at home more in a reces-
sion time to reduce consumption, stylish home comforts become
more important, ~vhich also helps explain v,•hy Cath Kìdston has
done 1N·e!lSl hard times.
Cath Kidston is conquering the world v•th her floral and polka
dot designs, and it is not surprising to see how such a powerful
brand can árvide people. Consumera either love ü or hate it. For
those who hate it, the products ofCath Kìdston look like the junk
from a late granny's attic. However, as the key target audiences of
Cath Kìdston are 30- to 40-year-old middle-class working women,
their strong purchasing power sustains the growth ofthe brand.
Spotting the brand's potential to expand in all directions, Cath
Kidston embarked on aseries of collaborations, including a range
of mobile phones for Nokia, eco-bags for the UK supermarket
chain Tesco,a ñower-covereo Sk}' TV box, tents for Millets, and
radios for the retro-styled Roberts range. To the fans of Cath
Kidston, the brand offers them a dream of a simpler and nicer
world that make them think of happy childhoods, homemade
cakes, picnics, and the seaside.
ln 201 O, Cath Kìdston became the subjecl of a high-profile
buyout, when a $159 million deal saw the sale of Cath Kìdston
Ltd to a newly inoorporated company owned by the U.S. pri-
vate equity firm TA Associates. Cath Kidston ltd had an equal·
ity sale valuing it at $119 mil6on, while the funder and designer
Cath Kidston retained her remaining 30 percent share, valued at
839.75 million, and continued her design role for the brand.
Pressingon with Price Premiums
The core idea of the Cath K"K1ston brand is a product-centric
ship. The product-centric concept ofa brand isa business model
strategy.The control and expansion of the brandto a 1.Mderprod-
that embodies perhaps the most essential brand ingredient for
uct range is still the focus after the shifting of company owner-
business success: simplicity. By 2014, there 1,vere 59 shops in
on wüh its nostalgic designs that create value for its customers,
justifying the premium price of its products.
the UK and Ireland, v,ith a further 54 in Spain and the Far East,
including Japan, South Korea,and China. The brand is pressing
Questions for Discussion
10-18 DoesCath Kidston's pricing strategy truly differentiate ü
fromthe competition?
10-19 Has Cath Kìdston executed value-based pricing, cost·
based pricing, or competition-based pricing? Explain.
10-20 Could Cath Kìdston have been successful as a design·
focused product marketer had it employed a low-price
strategy? Explain.
10-21 ls Cath Kidston's pricing strategy sustainable? Explain.
Sources, Beth Halo, 'Gath Kldston to Pocket £50m from Salo of Brond
20 Yoors After Shop AsslstBflt Created Famous Nostalgic Oêsgls,"
Dtl,Yy.1A;JN,FGbrua,y23, 201 O,Vfl.•r.v.dal¥'1aD.co.ul<Jf0maitlaltldé-1252954/
Cätl).Kk:fston-pock&t-30m-sa!e-brand-20-yoors-shop-.a.ssfstantcr&atêd-
famous-nootalglc-doolgns.html; Kath,;,n Hopkins, "DaGlgner Gath
Kldston in Déal to Sell off Her Retall Emplm,• GuardlB!I, l>Aarch 7,2010,
ww,v.guardlan.co.uklbuslnoos/2010/mar/07/cath-kldston-prtvat0equlty-
buyout; Rachel Porter,"The REAL Domestic Goddess: How GathKldston
Is Conc,.,Gring tho Wollcf with Her Floral and Polka Dot Designs, "D<lily
Mail,August 11, 2009, •N'IM•1.dailymaU.<:o.lA(l(emall/arttcle-12056651Thê-
REAL-domestic-godd0ss-Ho,v-Cath-Kldston-conquQflng-\VOrldfloral-
polka-dot-designs.html; and otha"' lnfonnatlon from \'AVIN
.cethkkfston.co.ukl, ecœseed Novembêr, 2014.
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Pearson
Página 7 de 14
404 PART3 I Designing a CustomerVawe·D1iven St,ategy,nd Mix
Company Case Corning: Feeding Innovation through the Supply Chain
Sometimearound 1960, scientistsat Corningmadea significant
advancev,•hileexperimentingVlith \'lays to strengthenglass. Us-
ing a recentlydeveloped method that involved dipping glass in
a hot potassium salt bath, they discovered that adding al1.mi-
num oxide to theglass beforedipping produced a productv1ith
never-before-seenstrength and durabî1it~r.The scientistshurtled
everything they could thi"lk of at this new super glass, including
frozenchickensat highspeeds,andevendropped it from the top
of theirns-e-stœybuilding. They found that the rY!:N•'glass could
~vithstand 100,000 pounds of pressure per square inch (normal
glass canonly handle about7,000).
Thissuperglass,Comingassumed, wculd surelybeembraced
by manufacturersof productsrangingfrom eyeglassesto phone
booths, plisan VlindoVlS, and automobile Vlindshields. Corning
named the glass Chemoorand pul it on themarket.Butmostpo-
tentialcustomercompaniesdid not deem the strengthbenefitsof
Chemcorv.10rth the premiumprice mandatedby its high cost of
production.Making mattersworse,when it did break, Chemcor
had thepotentialto explode,leadingthe few companiesthathad
placed ordersto recalltheirproducts.WhenCorningrealizedthat
it had createdan expensiveupgradenobody wanted, it shelved
Chemcorin 1971.
Global Edition
Principles of Marketing – Sisxteenth Edition
Philip Kotler – Gary Armstrong
Pearson
GettingBy with a Little HelpfromSuppliers ...
\'llllen AmoryHoughton,Sr., founded Comingin 1851, naitevenhe
could haveforeseenthevastarrayofproducts hiscompany~vou!d
develop-productsthatwouldliterallyre,,olutionizethe ~,venty-first
century.Most people in the 1850s thoughtol glassas,well,just
glass. But Corrw,g thought differently.lt went on to develop inno-
vative products thatvrould dlange the V.13}'people tive, including
lîf:1,tbulbs,televisiontubes,cookware,ceramicsubstrates,optical
fiber, active·li(J.DCIcrystal displays,and even missie nose cones.
Coming achievedthese feats becauseHoughtonestablished re-
seard'l and developmentas the company'sfoundation.
From its origins,Coming has relied upon sound relationships
with suppliers and customers to keep the innovationmachine
churning. On the supply side, producing the quantities of glass
that pour off the Corning production lines requires massive
amounts of sand (siicon dioxide).But becausesand has sucha
highmelting point,otherchemicals-suchas sodium oxide-are
used to lov,•erthe melting point, making glass easierand cheaper
to produce.Corningalso refieson manyelementsand chemicals
to givedifferenttypes ofglass theirusefulqualities.Forexample,
Chemcor contains not only silicon dioxide, but also aluminum,
magnesium,and sodium.
Página 8 de 14

To keep the right kinds of chemicals and other raw materials
flO\Vîng, price and quality are onl}' baseline criteria at Coming. To
maximize long-term success for itself and for its suppliers, Corn-
ing has also established a Supplier Code of Conduct. The Code
ensures that al supplier operations are conducted Vlithin the
~N'S, customs, and cultural norms of the regions where Coming
does business. lt also ensures that they compty v1ith the compa-
concerns. On the surface, such aiteña seem to have little to do
ny'sown corporatevalues. Corning invests considerable energy
in selecting suppliers. The Codeof Conduct includes specific ai-
teria regardingethics, labor,healthand safety,and environmental
\AIÎth making glass. But Coming krows thatsuch factors can ulti-
matelyaffect the quality, price, and availability of the raiNmaterials
the company needs for making its products.
... and fromthe Supplied
Some of Corning's products are consumer products. For exam-
ple, take Corning~vare. Corning scientist Don Stookeyfound that
product by accident when a faulty temperaturecontroller allowed
a sample of photosensitive glass to reach 1,600 degrees rather
than the iitended 1, 100 degrees. He thought the resultwculd be
a blob ofmelted glass and a ruined furnace. Oncloser inspection,
however,Stookeydiscovered that he had a milky white pf.ate that
was lighter than aluminum, harder than high-carbon steel,and far
strongerthan regularsoda-lime glass. When he dropped it: on the
floor, insteadof shattering,itbounced. \fl/hen Corningware hitthe
ever,
market Corning
in 1959,is itthe supplier.
wasa Atit.rayson
space-age the lookout for \Arays to
wonder.
But most of Coming's products are supplied to manufactur-
ers as components or raw materials .-i other products such as
televisions and automobiles. That's vvhere successful outcomes
depend most on good supplier relationships. ln this case, bow-
forge new relationshipswith manufacturing customers, Corning
came up 1Nith an idea in 2005 1Nhen Motorola released the Razr
V3, a mobile flip phone that featured a glass screen ilstead ofthe
usual high-impact plastic. Maybe Cherncor-the super strong
glass that Corning had shelved in 1971-would make a good
glass for mobile phones. lñe company quickly formed a team to
explore thepossibilitiesand codenamed theprojectGorilla Glass.
Its team's mai"I goal was to reduce the thickness of the glass
phones. Jobs said the idea vias dumb and that he was v,•ork·
from its current 4 millimeters to something that could be used in
a phooe.
As the team was making progress on the thickness issue,
Coming CEO Wendell Weeks received a phone call that would
give Gorilla Glass ñs big chance. The call came from late Apple
founderSteveJobs. JobsandWeekshadcollaboratedpreviously.
ln fact, Weeks had pitched to Jobs the idea ol using laser-based
rnicroprojectiontechnologies-something Corning scientists\'/ere
toying \J\IÎth-to provide larger screens for increasingly smaller
ing on somettwlg better-a de\iK::e •.vhose entire surface was a
display.The workí v,•owdsoon know that product as the iPhone.
Jobs was relentless in getting the iPhone's design just right
A plastic face just wasn't good enough, he insisted. The iPhone
would need a "silky, tough, smooth piece of glass." The prob·
lern was that no such glass product was commercially available.
Hov,•ever, Jobs had heard about Coming's Gorilla Glass and
thought rt had potential. So he pul in lhe call to WendellWeeks.
Jobs explained that he needed a piece of smooth, clear glass
that vrol.dd resist scratchesand breaking and act as a conductor
for touch-screen technology. lt also needed to be 1.3 millimeters
CHAPTER 12 I Marketing Channels: DeUvering Customer Value 405
Gori11a Glass, make it: ultrathin, and have it read}' .-i six months,
because the iPhone would be on store shelves in seven months.
The mandate posed many uokoowns for Gorilla Glass. The
product had never been mass-produced,and it wasUïclear that
a process could be developed to produce the quantity of glass
that Apple needed. \fl/eeks was also uncertain v,•hether Gorilla
Glass could be made so thin and still retain its strength. Even if
these issues could be ironed out, now long •.vould it take? So .-i
responding to Jobs, Weeks did what any risk-laking CEO would
do. He said, "res."lñen heformed a team to make it happen.
With such a tight deadline, Coming had no tine to develop a
newmanufacturing process. Instead, the team adapted a process
the company was already using called fusion dra~v. lns process
could produce thilnerglass ~'Alilealso speeding up the process. To
maîntaii the desired toughness dlaracteristics, the team tweaked
lhe existing Gorilla Glass recipe. li changed lhe levels ol se\...-al
of the glass's seven indîviduaJcomponents and added one new
secret ingredient. But there was still one hitch. Coming only had
one lactory-in Harrodsbug. Kentucky-capable of produ::ing
glass by means of fusion drcMr. That plant's seven production lines
werealready going full blast to meet thedemand forsold-oui LCD
glass for TV panels. Ho•.vever,the factory was sorreoow able to
squeezeApple's initialGorilla Gess order into one of itsproduction
lines. lncred1bly, and aheadol schedule, Corring producedenough
1 .3 millimeter Goltl. Glass lo cCJVer seven lootballfields.
nie rest, as they say, is history. Every îPhone and iPad that
Apple has eversold featuresGorilla Glass. Beyond thai, thestate-
ot-the-art Corning material is featured on nearly 3 billion devîœs
worldwideacross2,450 different productmodels,including srnart-
phones, tablets, notebooks, and TVs. ln all, Coming supplies the
glass lor devices lo 33 different companies. If you regularly touch
or swipe a gadget. you have likely touched Gonna Glass. ln 2007,
Corning sold $20 million worth of Gorilla Gass. Today, it accounts
for aver$1 billion of the company's $8 bîltion totalannual revenues.
ln fact, dîspla}' techïo!ogies as a Vlhole contribute 37 percent to
Corning'stotalrevenuesand 78 percentto ît:s bottom line.
But quantity doesn't begin to characterize the impact of
Coming·'srelationships with manufacturers. ln only a handful of
The OngoingNeedfor
years, a simple thing likeGoodSupplierRelationships
a glass display has gone froma com-
ponent to an aesthetic. When a user touches the outer layer of
Gorilla Glass, the body closes the circuit between an electrode
beneaththe screenand theglass itself, transformingmotion into
data. It's a seamless partition that connects people's phvsical
selves with the infinite digital v,•or1d-so seamless, in fact, that
most people have a hard time determining exactly where that
partition exists.
lñe Corning Harrodsburg factory continues to churn out Gorilla
Glass in frve-square-foot panels. Robotic arms put the panels
in wooden crates that are trucked to Louisville, KentuckY, and
lœded onto a westbound train. \!\'henthey reach the coo.st, they
are loaded onto freighters and shipped off to a Coming facility
in China, \Aihere they receive a finishing bath and are cut into
gadget-sized rectangles.
But Corning's parblershipswith customers likeAppleare more
important today than ever: Forstarters, Gorilla Glass isn't entirely
unbreakable. Manufacturersround up brokendevices thatget re-
turned and send them back to Comingwhere a team tries to rep-
licatethe activities that caused thebreaks. The research provides
vital infonnation for developing nevi glass. If Corning lea.ms hOVl
 thick. VI/eeksexplained thatGorilla Glassmight meetJobs' needs Gorilla Glass typically breaks, rtcan try to prevent thosebreaks in
but was nov,•here near that thin. Undaunted, Jobs gave \!Veeks a future productsby altering the composition oftheglass or tweak-
seemingly impossible mandate- make millions of squarefeetof ing the chemicalsthat strengthenit

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Philip Kotler – Gary Armstrong
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Página 9 de 14
406 PART3 I Designing a Customer Value-0,iven Strategy,nd Mi,

And Corni"lg needscustomer help in developingnr,w vetSions
of Gorila Glass. Newdesigns recµre e...--more-Sb"lngent specifi·
calions. A few yœrs after the first iPhone lit lhe ma-kot.Coming
released Goria Glass 2-20 percent tlwTier and strenger than
the origò,al-in response to the demands of Apple, Samsmg,
Google, and others woo desired to make thimer d1MOOs. Just
over a year later, Gorilla Glass 3 was introduced-40 percent
more scratch resistant than lh,,sion 2. "Today,glass still breaks,
and glass still scratches," says Dave Velasquez,director of mar-
keting and commercial operations fo< Gorilla Glass. ·until those
things go to zero. the customer is not going tobe happy.''
OLED displays-displays used by Samsung and sold to other
companies. tf partnerships like this are anyindication. itdoesn't
take a looking glass to see thai the future looks very briglt fo<
Coning.
Questions for Discussion
12·18 As completely as possible, sketch the value chain for
Coming from rawmaterialsto 1ìnished consumer goods.
12-19 Is Corning a producer, a consumer.or an lntetmediary?
Explain.

i"lg Future
oow hasdesigns
an antimicrobial even more
will call for version radical
of Gorilla glass.
Glass. AndCom-
then 12·20 Discuss Corning'schannel managementprocedures. Do
there's Wdlow,a product born out of Gorilla Glass. Wilowis du- Apple andSamsung have similar procedures in place?

rable and ii¡;,1-a 1QO,micrm-tt.ck sheet of glass lhat bends 12·21 Identify all the reasons why Corn"1Q's partnerships are
and llexes lll<etranspamnt paper.lbs is glass. not ¡:jastic. Com- essential to its success.
"'9iswamg with rnarOJfacb.rersfor poss,bleproduci plallorms 12·22 With respect to maòœti1g chameis, IMlal are some
suchas ftesiblo smartphones, roll-i.Ip OLEDdisplays (organic LED Mats to Corning's future?
displays), and oven ftesible solar cells. And 1orapplications that Sourc•s: Alex Berlnka, ·Corning Ah'ls to llrpov& Its Gorilla Glass
requirea thre<H:tlmensionalshape,Corning now has the capabi- Scroons,• BusN'loosvlaék, January 16, 2014www.bustnBSSV\'éék
ity
ikeato gimmick,
form Gorilla
experts into any 3Dshape.
Glass predictthat While
the market 1or lhls may sound
flexibleand3D .001n/arllcloo/2014..-01- 16/cornlng-aims-10-lmprovo-lls-gorHla-glass-
displays will reach $41 billion by 2020. For Corning, thai repre- scmens: s1opMnle ~1101, '"Anlimk::robkll Gormo Gtoaa Kllls Touch-
Scroon Gonns.~ PCMag, January 3, 2014, vl'M/1.pcl'nl'lQ.Con'll
articie2!0,2817,2429145,00.asp; "30-Shaped GOl1lll Glass May Boost
It's these customer partnerships that have kepi Corning on
Coming'a R9'\19'lue; Forbes, JMuary 13, 2014, YJ\VW.rabes.con'I/
sents Í'lerementaJrevenuesof S.S billion.
silas/groe11pec:0Jlatklns/2014I01/13/3<1-shaped·goru1a-g1ass-may-
b00St-airmgs......-œ/; 8r)'ln Gan:hl,, "Glaos- Ha.VCorriì1g
the cutting edge of innovation. Corning has had a success·
tul partnerstip with Samsungil the television display industry
clatilg
Materials, the early days
backa lojo,nt·vonture television itself.
thatof oombines That partner·
Samsung'S
ship conlirues today in the form ofSamsmgComing Precision
display gms/el/; U.----
bl>' 2•. 2012, www.""9d.corMwedsdenc&'212,W/ll·~
lh o lho_..-·
nlormallon trom wv.w.c,ormg.oom/ObOU\...ustlndox.aspx
Oœted andUI-Oll*,, Ol Sept,rn-

technology and Coming's glass expertise in the production of www.comlnggo,ttaglass.com,acœsoodJi.jy 2014.

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Company Case Snickers: Achieving Promotional Integration with a Universal Appeal-Hunger
Over the years, man}' Super 80\'/I ads have scored Vlell \A~lh
vie-1Ners and provided a big boost to their brands. Snickersaired
one such ad during the 201 O Super Bowl. ln the ad, during a
neighborhood pickup football game, Golden Gi~ Betty White
appeared as a player who was "playing like Betty White." After
biting into a Snickers, hov,•ever,the football player turned back
into himself and the play ensued. The ad ended v,ith the now
famous slogan, "You're not youwhenyou'rehungryt follo1Nedby
the tagline, "Snickers satisfies.'
This ad proved to be a turning point forSnickers. lt generated
tremendous
score on USA buzz for theAdbrand.
Today's MeterAccording to Nielsen,
and received itwasfrom
top honors
"best-li
many kother
ed spot" lt •.ventviral,
ot that
sources. year's Super Bowt.
racking up lt millions
had theofhighest
views
online. lt sparked endless free media for the candy bar brand.
lt even marked a comeback for Betty White, whc> went on to
host Saturday /llight LJveand score numerous ro)es on television
snows, iïcluding that of octogenarian Bka Ostrovskyon the lV
Land series Hotin Cleveland.
But this from
promotional eventwas far more than just a singte hit
Satisfying the Start
ad. lt became the cornerstone for a long-term integrated cam-
paign that 1,vould eventuall}' see Snickers becomethebest-selling
confectionon the pf.a.net.
Not only is Snickers now the biggest candy bar brand, it'soneof
the oldest. ln the late 1920s, a young Mars Inc. started develop-
ing a candy bar to complement its O'M'l Milky V•,lay.Combining
common candy bar ingredients like chocolate, nougat, caramel,
and 1.Nhole peanuts, it came up 1Mtha ~Vinning formula. Heartier
than most candy bars, Snickers acted more like a meal than a
snack. The brand was an instantsuccess, even selling i"litiallyat
four times the price of the Milky \f\'Gf'{bar. \IVithin a decade, the
company was mass-marketi'lg the Snickers in global markets.
ln 1979, Ted Bates Worldwide coined the tagline, "Sróckers
reallysatisfies," a direct reterenœ to the bar's stomach filw1g prop-
erties. Otten pitched as a meal alternativa,Snickers targeted you,g
athletic males. One classic print ad showed an approving mother
sending her son off to footballpracticewith a Snickers bar.
Snickers enjoyed years of gro\Vth beforesaturating that mar-
ket and WY'lding up in a rut characterized by flatsales gro•.vthand
a loss of marketshare. Mars decided to take the brand in a new
strategic direction. lt set out to create an integrated marketing
campaign that ~vould retaintheessence of the brand butachieve
greater growthbyappealing to new markets.
Ho1,vever,developing aneffectivei"ltegratedcampaign is easier
said than done. These days,companies every,Mlere areshooting
for one and agenciesdaim to offerone. But in reality.true integra-
tion of marketing communications is rarely achieved. Integration
requiresmore than merefyusing thesame language or symbols in
everyelementofthecampaign. At aminimum,an integrated cam-
paign mustv,•ork equallywell across T\f, online, print, and outdoor
CHAPTER 14 I Engaging Customers and CommunicatingCustomer Value 469
media Beyond that, the campaign's message must take a unique
aspect of the brand and present it in a Vlay that is both pov,•ertul
andengaging, thus motivating consumers to act.
But Mars founda 1Nînningcampaigncreated byagenC}'BBOO.
The agency started \AIÎth the unique attribute that had been as-
sociated 1Nith Snickers for decades-·satisfying." Although the
famous tagline "Snickers satisfies" had been used to primarily
targetyoung men, BBDO tound that the line was far more robust.
By appending •Snickers satisfies" 'Aiith "You're not you when
you're hungry," the brand tapped into a povrerful and universal
the emotional appeal-hunger-relevant to a much brooder audi-
ence. Afterall. who can't relateto hunger? MNov,•,Snickers istalk-
ing to the factory worker; the office worker,the college stuoent,"
AsaysGlobal Campaign expert. It'sas pov,•erfulforwomen as it is for
one marketing
men. And it works across \AIOr1d cuttures.
lñe Snickers"You're not you when you're hungry" campaign has
spavined plentyof traditional mass-mediaads-dozensof differ-
ent television ads have run in more than 80 different countries.
lñe campaigndraws heavilyon v,•ell-kno•.vn local cetebrities. One
memorable ad features Robin Williams as a football coach rl-
structîng his team to Mkill them- wìth kindness," by making bal·
loon animals and tea cosies. ln another, lumberjack Roseanne
Barrcomplains •My back hurtsl"just beforeshe isflattened by an
enonnous log being moved by a crane. ln a more recent ad intro·
ducing the new Snickers Bites, a poker-playingKenny G is pro-
nounced "a buzzkîll 1Nhen you're hungry" by one of his buddies
at the table. The Snickers team lets local markets p!ug their O\Vn
and other social
ce!ebñties. ln thenetworks. ln theturns
UK·, hunger œiebrities intweeted
UK,footballers a lockerthings
room
into Jœ.n Collins and Stephanie Bea.diam. ln Latin America, its
men on BMX bikes turning into MexicansingerAnahí.
But such traditional media advertising serves as only one pi-
lar of this integrated campaign. The '"You're notyou wren you're
hungry" message has also rolled out across Facebook, Tv,•îtter,
thatwere, for them, completely out ofcharacter. Supermodel Ka·
tie Price posted about quantitativeeasing, liquidity in the bond
market, and the political economy. Footballer Rio Ferdinand
posted about the joys of knitting. Cricketer Ian Botham waxed
eloquent about learning to play the cello. And boxer Amir Khan
tweeted about stampcollecting. lñese celebrity tweets •.verefol·
lowed by anadditionaltweetshOWY'IQ them eatinga Snickersac-
companied by the "You're not you" tagtîne. lñe out-of-character
tweets created lots of buzz, including a mention in Par1iament.
"It's come to something," exclaimed the UK·'sChief Secretaryto
the Treasury, DannyAlexander,"When Katie Price'stweetsmake
moresense on the economythan the Labour front bench."
Other elements illustrate the Snickers campaîgff's flexibility
across media platforms, such as print and outdoor, \Vith or v,ith-
out celebrities. One ad shows three sprinters in start position on
a track, one of them facing the ~vrong direction. Another shows
Global Edition
Principles of Marketing – Sisxteenth Edition
Philip Kotler – Gary Armstrong
Pearson
Página 11 de 14
 470 PART3 I Designing a CustomerVawe·D1iven St,ategy,nd Mix
four soccer playersin position to block a direct kick,all covering
their crotchessave one v."10 is gazingoff into the distance. One
print ad gets the point across v,ithout using humans at all. ln an
extremereversalofroles, it shows a zebrai"I hotpursuitof a fion.
Each simple visual is accented by a cross section of the inside
of a Snickers bar and the phrase, "You're not you when you're
hungry.Snickerssatisfies."
The campaign not only àlstrates integration across different
media types, it also accomplishesoneof the most in-portantfeats
of a modern prcmoticnal campaign-integration throufll content
sharing. For example,ads like tl1e Betty White Super Bm•Aspot
tnem;elves get thingsrolling.But otherads,tweets,and social me-
cfa posts by the brand also spur sharing. For example,Srickeis'
11 millionFaœbookfans receive frequentmessages suchas MSlo•.v
afternoon? Mightbe tine lor your secret SNICKERS slash," ac-
companiedby a pictureofa Snickersbar il an officedesk dra,ver.
On average,thousandsoffans "like"each message and oftenplace
themin ne,Nsfeeds~,Alefe theyareseen by tensofthousandsmore.
A morecomplexexampleis a tivestuntcapturedand edited into
a short YouTubefilm for the Australianmarket. Actorsposing as
workers at a cowntownMelbourne constructionsite shoutedout
tofemalepassersby.But rather thansexistcatcallsandsuggestive
comments,in line v.~th the "You're not you" theme, the v,•orkers
shouted outempov,•eringstatements.\!\fornen1,veredearly caught
off guard by statementssuch as Ml'd li<e to show you the respect
you deserver and •A womans place is whereshechooses."One
workergetsawoman's attentionby shoutingout,"Youknov,v."1at
I'd like to see?" She is noticeably amused when he continues,
"A society in which the objectificationof women makes V.13}' for
gender-neutrali"lteraction free from assumptions and expecta-
tions:~The cip endsv,•ith oneofthe v,•orkersleading the others.-i
aMîsagony!"Wittinweeks,the œp had rackedup more than want?
rousilgcall. 6'/IJhat do v.iewant?Equality!Whatdon'twe 3 mil-
lions viev,son theSnickersAustraliabrand channel.
Year after Year, lt Keeps on Satisfying
Aftermore thanfou'years,Mars Inc.continuesto infuse thevarious
elements of its globalpromotionalcampaignswiththe "Snickers
satisfies"and 6You'renot you 1M1en you're hungry"tagli'les. How
has it kepithiscampaigngoingon sucha broad andglobalscale?
"You'renotyou"strikesat thecore ofa universalhumanemotion-
that a person gets a bit cranky and out of sorts when he or she
hasn'teatenfora v,•hîle. "Peanut power vias al•.vaysatthe he.:wtof
the brand," explains Debra Sandler,presidentol Mars Chocolate
NorthAmerica By retainingthe keyword"sañsñes," Mars retained
all the brand famœrity it earned ttvough years of promoting the
Global Edition
Principles of Marketing – Sisxteenth Edition
Philip Kotler – Gary Armstrong
Pearson
old slogan. But by taking a stOl)1elingapproach and ilustrating
the effect that rn.ngerhas on people,Mars gave the brand a more
emotionaland po1Nerful appeal. The rnessaqe toda}' is that Snick-
ers is "the barofsubstance thatsorts youout," says Sandler.
It'ssometimesdifficultto measurethesuccessofan integrated
marketingcampaign. Thefact that Mars has kept this campaign
runningsuggeststhat the effort is succeedingin spades.And in
the case of "You're not you when you're hungry," the numbers
seem to say it all. Prior to the start of the campaignin 2010, the
iconic chocolatebar was losing share in a Ver')'competitivemar-
ket. But noi long after Betty White made her Super Bm•Adebut,
Snickerssurpassedboth Tridentgum and Mars'sown M&M's to
become the bestsellingconfectionon Earth.Wrtha portfoiothat
nov, includes SnickersDark,SnickersAlmond,SnickersPeanut
Butter Squared, Snickers Bites, and Snickers Ice Cream bars,
the Snickersfranchise OO\'/ contributesmore than $3.5 billion to
Mars Inc.'s $33 billion revenues.AJIthis justgoes to shov,•that an
integrated message combining a salient brand attributewith a
compellingemotionalappealcan liveon indefinitely.
Questions for Discussion
14-18 \!Vhichpromotionalmix elementsdoes Snickersuse?
14-19 Hov,• does this Snickers campaign demonstrate the
characteristicsof integration'?
14-20 \!Vhat grade v.10uld )IOU give Snickerson integration
effectiveness?
14-21 \!Vhat chaDenges does Mars Inc. face in maintaining
the success it has achievedwith the "You'renot you"
campaign?
14-22 \!Vhat recommendationsv.1ould)IOU maketo Mars Inc.
forfutureSnickerspromotionalefforts?
or Empo,....e,msnt to \;\lomoo ti Snickers Stunt,~ Ad WBék, r<Aarch 26,
Sources: DawJ Gianatasio, "Construction Vl/ori<ars Yéß ti.1éSSQQéS
l•2014, \•r.\ll/1.a.d•1a'éék.oon\/pônt1156541;
Aost Famous Rôbérl Klam,
Tag LÌ"léS,·· AtJ ~~, February27, 2014,·'Hov, Snickars
vr.w,.a.d•fl'éék
Amd a Quarterback, Hi!'Sd a Zabra, and TvtéakédOne of Advértising's
.com/print/155873;E. J. Schullz, ·eéhi!ld thé Snickers Cémpa!gn that
Launct'léda Global Comeback,-AOV&'tiS{r}g A.ge,October4,2013, http://
adQQé.OôfYll'Pft'it/244593;Oa\fíd Benady, "Nikê, Snickers and Fosters
HaveCroo!GdPO\verl\JI lntégratedCêmpa~ns-So \!'/hat'sTheirSecret?"
Th9 Goarditul,August 19, 2013, vr.\llN.theguatdian.com1boot-a·.vards/
pO\V'Grlu1-Ì'ltéQratéd-camp8igns-sGCl"ét; "Snickars UK Cé«llQign: Clé\lär
Usé of 1\•Att9r,- Bllältllllura,\Y, July 22, 2012, 'A'Vr.v.bhalnall.1'8lly.com/
feab.Jr&d/soickérs-uk-cam~n-clENE!r~sé-of-t'.viUsr/.
Página 12 de 14

Company Case Pinterest: Revolutionizing the Web-Again
Ben Silbermann runs ragged. And it isn't because the 31-year-
o&d husband is up beforedai,vneJYery morningwith his infantson.
lt has a lot more to do with the fact that he is the founder and
CEO of Pinterest, the latest "hottest Web site on the planet." ln
less than two years, Pînterest reached the milestone of 10 million
unique monthly visitors-faster than any other online site in his-
tory.At that time, it was driving more traffic than Google+, You-
Tube,and Linkedln combined. A year later, it reached 50 million
unique monttfy visitors. So far, 70 million members have created
750 million Prlterest boards and have pimed 30 billion items.
Pinterestis grovlÎngso fast thattrying to quantify its success 'Aiith
such numbers seems pointless.
Rather, the impact of this brash young start-up can be ab-
sented in more substantialv.rays. ln fact,Pinterestseems to have
accomplished the unlikely achievement of revolutionizing the
\IVeb-something that seems to happen only every f01Ar years.
LikeAmazon, Google, Facebook, and others before it, Pinterest
has put businesses and other online sites everywhereon notice
that they'd better orient themselves around its p1atfonn or be left
behind. And like other Internet revolutionists beforeit. Pinterest's
impact has caused even the on1Wle giants to stop and take no-
tice. Indeed, Pinterestis changing Web design. lt isalso changing
e-commerce. And it boks as though Pinterest has solved one of
the Internet's biggest problems-discovery.
The Discovery Problem
At first blush, Pinterestmay seem likeanyothersocial media site,
that.As a boy,he
full of people had a images
sharing particularfascination
and commenting,,,;u,collecting
on them. bugs. ·1
Sîlber-
mann's big idea for Pinterest came as he and college buddyPaul
Sciarra struggled to make a buS8iess out of their first product,
a,,¡n pivate museum
a shopping app calledof Tote.Although
natural history. So 1Mlef1 Siberrnann
Totefailed auit
to take off,
revealed a pent-up need among Internet users. Toteusers didn't
buy things (kindof a necessity for a shopping app). But they did
e-mail themselves pictures of products to vieiN later.
Silbermann-a lfetirne collector al "stuff'-oould identify with
reallyfiked insects," he says. "Al kinds: flies, grasshoppers,weevils."
He spent hisyouth oolecting, pirlni"q, drying, tagging-creating his
Sciarramet Pinteresfäthirdoo-founder, Evan Sharp, the idea ofdigi·
tal collections-of books, dothes, or even insects-as a pc11Nerlul
medium forself-expression began to take shape.
As the three began 1NOrk.ing on developing Pinterest, some-
thing about all-things-Internet bothered Silbermann. Despite the
seemingly infinite possibilities for exploration, expression, and
creation, he felt that the Internet was organized .-i a way that
boxed people in. For starters, the natureof "search"in any online
context may seem to promote discovery,but it actually stunts it
For example, Google depends on finely tuned queries in orderto
yield useful results. Try to find something \•\!hen you're not quite
sore whatyou want-say, "nice Father'sDay gift" or even -Very
special Father'sDay gift' - and Google isn't reallymuch help. The
bottom line is, if you try talking to Google as you •.vou1d talk to a
friend or a department store clerk, it won't know where to begin.
The belief that discovery is a problem on the Internet isn't
original to Silbermann. ln fact, it's an issue that many digital de·
CHAPTER 17 I Direct Online, Social Media, and Mobile Marke1ing 561
while at the same time being pulled in dozens of differentdirec-
tions by suggested items and oompeting products.
"You spend three hOU1S buyr,g a $20 toaster;" says Barry
Schwartz, psychology professor and author of tre Paradox of
croce. "Amazon and Google pretty much stink at browsing,•
echoes Leland Rechîs, directorofproduct experience at Etsy.But
Amazon and Google
as a series are not alone. lñe
of ever-more-specific entre inconsistentwith
menus, now
Internetisstructured
the human mind \•\forks. Such structure il'Tlibits the types of tree-
associative leaps that happen naturally as people walk through
shopping malls, meander through a museum, <:xeven drive do•.vn
the street.
characteristic of online
As Si:tbermann design. Other social
and hisco-founders workednetworss are orga-
to sketchout Pin-
terest, the three were also intent on eliminating another limiting
nized around "feeds"-lines of text or images organized by time.
lñis setup lets users browsemultiple images atonce. lñe Pinter-
est team wanted to change this. "We were really excited about
bringing something that wasn't immediate and real time, some-
thing that wasn't a chronological feed; says Sharp. They pic-
tured
in yet aanother
grid of Vlay
images,
was rather than the ability
Silbennann's directories,
to looktime stamps,
outside the
and paginationcommonly imposed by theWeb. The goal for Pin-
terestwas to create an intertacethatwould feel more like visiting
a store or a museum.
As Pinterest took shape, its creators neverquestioned that it
'Na.S to be a social network at its core. What set Pinterest apart
tunnel-vision of other social media entrepreneurship. Although
the current social \!\feb is frequented by millions, most users are
observers, not creators. Thus, they take part on only coe level.
Not everyone is a photographer, a filmmaker, or a broadcaster.
"Most people don't have anything •.vitty to say on Tv,•îtteror any-
thing gripping to puton Faœbook, buta lot of them are really in-
terestingpeople," Silbermann says. "They have awesome taste.-i
books or furniture or design,butthere was no \Aray to sharethat:"
Something Completely Different
Tbe Pinterest team's focuson solving some of the most limiting
characteristicsof the Internet bore fruit. When Pinterestlaunched
in March 2010, it was v,idely hailed as one of the most visually
stunning onlinesitesever. Sîlbennann, Sciarra,andSharpworked
through 50 versions of the site, painstakingly tv,eaking and per-
fecti'lg column vvîdths, layouts, and ~vaysof presenting pictures.
''From the beginning, we wereaware that if we were going to get
somebody to spend all this time puttiïg together a collection,
at the very least, the coUection had to be beautiful,•· Sitbermann
says. Pinterest'sgrid is a key element of its design-interlocking
images of flXedwidth and varying heights that rearrange every
tine a new image is pinned, meaning usersrarelysee the same
home page twice.
Pinterest also bucked conventional onlile design in other
•.vays. At a time when ·gamifîcation" was hot, Pînterest displayed
no elements ofcompetition. There is no leaderboard or anyother
means of identifying the most popular pinners. Pinterest also did
signers have struggled v,ith since the launch of the Web but no
 one has been able to solve fully. TakeAmazon, for example. As
successful as Amazon is, its entire structure mirrors every other
e-commerce site-a detailed system of menus and categories.
To browse for something, users must work within this structure
Global Edition
Principles of Marketing – Sisxteenth Edition
Philip Kotler – Gary Armstrong
Pearson
a~vay v,ith page views-ethe predominate metric fol illustrating
grovlth and momentum. Rather,Prlterest's ''infinite scroll"auto-
matically loads more images as the user expands the browseror
scrolls do\'/lìlNa.rd. With almost no time spent clicking or ~vaiting
for pages to load, this feature has proven addictive for many.
6'/IJhen you open up Pinterest," Silbermann says, "you should
feel like you've waìked ilto a building full of stuff that onl}r you
Página 13 de 14
 562 PART3 I Designing a Customer Vawe·D1iven S11ategy,nd Mix
are interested in. Everythingshould feel handpickedfor you." Si-
bermannand his cohorts have obviouslysucceeded.Page after
page,Pinterestgives the tee ofa collectiondesignedby an indi·
vidual to reflect her or his needs, ambitions,and desires. It's as
if eachperson is saying, "Hereare the beautiful thingsthat make
me wno I am-or Vlho I want to be:" There is no singletheme to
a pinboard. Pinterest is a place •.vhere young women plan their
Vleddings,individualscreatethe ultimatev,ish listoffood dishes,
and couples assemble furniture sets for their nev,•homes. Un-
ikeothersocialnetiNOrks,<Wery Prlteresthome page is an &11er-
changîngcollage that reflectsthe sum of each user'schoices.
Because Pinterest's design has departed from Internet con-
vention in so many ~vays,it'sonlynaturalthat its gro1Nthdynamics
wculd also break from previous trends. Most successful social
services spread through early adopters on the nation's coasts,
lhen break through to the masses. But Pinterest'sgrowth has
beenscatteredthroughoutthe heartl:and,drivenby such unlikely
cohorts as the •bloggernacle"of tech-savvy young Mormons.
Additionally,nearly 83 percent of Pinterest'susers are women,
most betweenthe ages of 25 and 54-anotherdemographicnot
normallyassociatedwìth fast-gro•.vingsocialmedia sites.
Hope for Monetization
But pelhaps thebiggestsplashthat Pintereslhasmadein lheon-
line pool is its huge influenceon consumerpurchasing.Although
many dot-corns have made profits by onliïe sales, the digital
~vorld in generalstill struggles with tumi"lg eyeballs iito dollars.
Even Facebook,although it turns a profit, promptsrelative!}'few
of its ooe-biltîon-ptusmembers to open their ~vallets.
But somethingabout the combinationofPinterest'selegantde-
sign and smart social dynamicshas users shopping like mad. A
Pinterestuserfollov\~nganimage back toitssourceand thenbuying
an item spendsan averageof$180. For Faœbookusers, it's only
$80. And for Twitter,it'sonly$70. But Pinterestis having a much
greaterinpact than thoserunbefSindicate.AlthoughPiïterestis
still far from the top in tennsofmembersalci unique \fÎsrts,\•/hen
it cornes to e-oommerœ referrals,Piïterest is the marketleader,
driving 40 percent of trafficand edgirg out social meóa.damna.-
tor Facebookby 1 percent.Even more irrpressîve,Pinteresttraffic
convertsto a sale 22 percentmore oftenthan Facebooktraffic.
Companies are jumping on this opportunity. Initially, brands
could drive traffic to their own Pinterestor externalsites by pay-
ing opinion leadersto pin imagesof their products.For example,
companiespay 31-year-oldSatsukiShibuya,adesigner,Mthmore
than a million fo!J01Ners, bet.veen$150 and $1,200 per image.
lbs method works ~veli because,1MthPinterest'sauthentic tee,
it's almostimpossibleto tell the differencebeti.veenpaid pins and
unpaid pins-somethingthatcan't besaid of otheronlinesites.
ButrecentlY,Pinteresthas entered the vroridofadvertisingvâth
promotedpinsand is poisedtomakea bigonlineadvertisingpush.
Global Edition
Principles of Marketing – Sisxteenth Edition
Philip Kotler – Gary Armstrong
Pearson
More than a dozenmarketershavesigned up with a $1 millionto
$2 millioncommitment,rdudingKraft,GeneralMills,Nestle,Gap,
and Expedia "Ourtarget is 25-to 54-year-o!dwomen,and Pinter-
est is a perfect fit," says OeanieBsner,chiefmarketingofficerfor
KraftFoods.ForKraft, Pi1teiest hasalreadybeen an effectivewey
lo connectv.;ththeyoungerhalfofthaidemog1aphicthat is typi·
cally halder to reach."lt lets them belhe hero,"shesaid,relening
to Kraft'spracticeofpubishingrecipes on its Pinterestsite.
It's little wonoer then that so many other social media sites
have taken note of Pinterest. Numerous copycatsites (suchas
Fancy and Pofy\rore) have mimicked Pinterest's look and feel,
rightdov.'11tothe font selections.nie influenceofPinterest'sde·
sign is also notable on sites such as LadyGaga'ssocialnetwork
littleMonsters.com and the qeesfon-and-answer site Quera.
Even Facebook's move to its currentTimelîne format is notabty
Pinterest-like.
Despiteallthe w,x;s thai Pinleresthas departed fromthe typi·
cal palh of social media development,it has largely stayed lhe
coursein terms of making money. That is, it spent the first lev,•
yearsbuilding its netv,•orkand honing its site.Thisyear,thecom-
pany •.vilibegin generatingrevenue. Silbermannand friends are
stiltossingother ideas around. ln additionto advertising,Pinter-
est could also adopta referral fee model.retaininga percentage
of the sale of every item sold as the result of a pin. Pinterest
has been valued at $5 billion and has had no trouble raising all
the venturecapitalthat it needs, despite havingyet to earn any
money. "There was never a doubt in our minds that vie could
make a sA'tloadof money." says a tonner Pinterestemployee.
Apparently,investorsfeel the same 1Nay.
Questions for Discussion
17-18 Analyze the forces in the malketing environment that
havecontributedto Pinterest'sexplosionin poptdañty.
17-19 Why has Pinterestdemonstratedsuch a high influence
on consumers'decisionsto purchaseproducts?
17-20 Discuss ways that companiescan use Pinterest to build
theirownbrandsand generate sales.
17-21 Whatthreats does Pinterestlaoein the future?Giverec-
ommendationsfor dealingv,•ith those threats.
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v.Delo,
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"Pinh=J'eS! Launches Rrst PaKJ Ads V.t11\ Kraft, Gap and Olhsrs, -
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AdVSrlisifJg Age, l<Aay 12, 2014, \•rA'l.'t.edagé.com/prinl/293142;
Ct'lalkin, "Can Ben SlbGrr'l'läf'n Tum Pînlê!'EISI Into thé Vl/ôrld's üœetsst
l•Aruc
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SI. C/)9(JJ $/')QG!l, April 9, 2014, h.ttp://•la'ällstchéatshéel.OOflVlEIChnobgy/
pÌ'llEll'OOl-béals-facaboci<-tvAtter -in-onliné-shopping.h.tmV?~1í1:1wal.
Página 14 de 14