Marketing Management: The Big Picture

chapter four

SOURCE OF VOLUME

Competitive Focus

“With that fine tempered steel whose edge o'erthrows, hacks, hews, confounds, and routs opposing foes.”

“Unheard-of prowess! and unheard-of verse!”

“But art new strains invents, new glories to rehearse.”

—Cervantes, Don Quixote, page 397

After studying this chapter you should be able to:

1. Identify the source of volume in performing competitive analysis
2. Develop a benefit-based definition of the business category
3. Define a stimulate demand strategy
4. Define an earn share strategy
5. Discuss the difference between earning share and stimulating demand
6. Explain how to choose a strategic focus
7. Use the 4 Bs as the basis of strategic forecasting
8. Integrate the source of volume decision within the Big Picture framework

Competitive Dynamics in the Coronary Stent Market

In April 2003 the U.S. Food & Drug Administration (FDA) approved a revolutionary implantable cardiac device developed by Johnson & Johnson's Cordis division. A cardiac stent is a cylinder of flexible wire-mesh implanted by cardiologists to treat the coronary artery narrowing that can cause fatal cardiac events. Cypher, Cordis's new stent, was revolutionary because it was coated with sirolimus, a drug shown to dramatically improve postoperative blood clogging. Cypher delivered very superior patient outcomes over bare-metal stents. It had an initial average selling price of approximately $3,500, while bare-metal stents at the time sold for approximately $1,000.

With the introduction ...