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CEO Peter Walsh faces a classic innovator's dilemma. His company, Crescordia, produces high-quality metal plates, pins, and screws that orthopedic surgeons use to repair broken bones. In fact, because of the company's long-standing commitment to quality, some orthopedic surgeons use nothing but Crescordia hardware. And now these customers have begun to clamor for the next-generation technology: resorbable hardware. Resorbables offer clear advantages over the traditional hardware. Like dissolving sutures, resorbable plates and screws are made of biodegradable polymers. They hold up long enough to support a healing bone, then gradually and harmlessly disintegrate in the patient's body. The new products, however, are not yet reliable; they fail about 8% of the time. That's why Crescordia has delayed launching a line using the new technology. But time is running out. A few competitors have begun to sell resorbables, despite their imperfections, and these companies are picking up market share. Should Crescordia join the fray and risk tarnishing its brand? Or should the company sit tight until it can offer a perfect product? Commenting on this fictional case study in R0506A and R0506Z are Robert A. Lutz, vice-chairman of product development at General Motors; Clayton M. Christensen, the Robert and Jane Cizik Professor of Business Administration at Harvard Business School; Jason Wittes, a senior equity analyst covering medical supplies and devices at Leerink Swann; and Nick Galakatos, a general partner of MPM Capital.

CEO Peter Walsh faces a classic innovator's dilemma. His company, Crescordia, produces high-quality metal plates, pins, and screws that orthopedic surgeons use to repair broken bones. In fact, because of the company's long-standing commitment to quality, some orthopedic surgeons use nothing but Crescordia hardware. And now these customers have begun to clamor for the next-generation technology: resorbable hardware. Resorbables offer clear advantages over the traditional hardware. Like dissolving sutures, resorbable plates and screws are made of biodegradable polymers. They hold up long enough to support a healing bone, then gradually and harmlessly disintegrate in the patient's body. The new products, however, are not yet reliable; they fail about 8% of the time. That's why Crescordia has delayed launching a line using the new technology. But time is running out. A few competitors have begun to sell resorbables, despite their imperfections, and these companies are picking up market share. Should Crescordia join the fray and risk tarnishing its brand? Or should the company sit tight until it can offer a perfect product? Commenting on this fictional case study in R0506A and R0506Z are Robert A. Lutz, vice-chairman of product development at General Motors; Clayton M. Christensen, the Robert and Jane Cizik Professor of Business Administration at Harvard Business School; Jason Wittes, a senior equity analyst covering medical supplies and devices at Leerink Swann; and Nick Galakatos, a general partner of MPM Capital.

The theories of market segmentation and brand building in Chapter 3, What Products Will Customers Want to Buy? in The Innovator's Solution by Clayton Christensen and Michael Raynor suggest that when companies segment markets and build brands in ways that match how the customer sees the market--customers hire products to get jobs done--their success rate in innovation increases. Gallardo's is a privately held firm whose products--salsas, sauces, and seasonings for Latin American dishes--were sold primarily in the southwestern United States. When the company had saturated that geographical market, its CEO decided to invade Mexico. Describes how Gallardo's marketers learned what jobs Mexican housewives hired these products to do. Shows how the company used these market insights to segment the market along different lines than its competitors. Gallardo's products and advertisements ended up spurring significant growth in the market, but most of the growth was captured by its primary competitor. What went wrong? Were Gallardo's branding and segmentation strategies consistent with the jobs-to-be-done model? Does the company have the chance to relaunch its products more successfully?

In early 2002, Levi Strauss was considering rekindling its Wal-Mart relationship with a new value brand. How should the brand be developed to preserve sales with existing customers in other channels? Was it possible to leverage the iconic Levi's name while remaining competitive and not affecting consumers' propensity to purchase other Levi's product lines at higher price points?

Reviews Everett Rogers' Five Factors of product adoption. These factors help explain why some products diffuse rapidly and some slowly or not at all.

Most firms build their marketing strategies around the concept of the product life cycle--the idea that after introduction, products inevitably follow a course of growth, maturity, and decline. It doesn't have to be that way, says Harvard Business School marketing professor Youngme Moon. By positioning their products in unexpected ways, companies can change how customers mentally categorize them. In doing so, they can shift products lodged in the maturity phase back--and catapult new products forward--into the growth phase. The author describes three positioning strategies that marketers use to shift consumers' thinking. Reverse positioning strips away "sacred" product attributes while adding new ones (JetBlue, for example, withheld the expected first-class seating and in-flight meals on its planes while offering surprising perks like leather seats and extra legroom). Breakaway positioning associates the product with a radically different category (Swatch chose not to associate itself with fine jewelry and instead entered the fashion accessory category). And stealth positioning acclimates leery consumers to a new offering by cloaking the product's true nature (Sony positioned its less-than-perfect household robot as a quirky pet). Clayton Christensen described how new, simple technologies can upend a market. In an analogous way, these positioning strategies can exploit the vulnerability of established categories to new positioning. A company can use these techniques to go on the offensive and transform a category by demolishing its traditional boundaries. Companies that disrupt a category through positioning create a lucrative place to ply their wares--and can leave category incumbents scrambling.

The online universe is ripe for product placements, suggests Edward Castronova of Indiana University.

Faberge perfected the concept of the artisan brand, says author John Butman.

Software that "understands" psychology is helping fast-food restaurants capture customers' spare change, explains GE edgelab's Terri C. Albert and marketing professor Russell S. Winer.

Dexit is a new electronic payment system that offers a convenient alternative to cash for small-value retail transactions. The chief executive officer is faced with some critical target market and marketing mix decisions as she prepares for launch. The situation is complicated by the fact that action is needed on two fronts: Dexit must not only recruit end consumers for the service, it also must convince merchants to install the payment terminals. Because paying with cash is free, the company needs to persuade both groups that the added convenience of Dexit justifies a transaction fee. Although the concept appears to have good potential, recent test market failures of two similar offerings suggest that success is far from guaranteed. Reinforces the importance of solid consumer analysis when selecting a target market, demonstrates the concept of value to the customer, and provides a basis for discussing push vs. pull marketing strategies.

Unilever applies the principles of feature film directing and editing to turn so-so commercials into winners.

Consumers make clear and consistent distinctions among sizes.

Your choice of typeface tells customers whether your brand is attractive, innovative, dishonest, or unpleasant.

Jim Hargrove, the marketing director of $820 million Neptune Gourmet Seafood, is having a bad week. Neptune is the most upmarket player in the $20 billion industry, and the company is doing everything it can to preserve its premium image among customers. But Neptune's recent investment in state-of-the-art freezer trawlers, along with new fishing regulations, is resulting in catches that are bigger than ever. Though demand is at an all-time high, the company is saddled with excess inventory--and there's no relief in sight. Neptune's sales head, Rita Sanchez, has come up with two strategies that Hargrove feels would destroy the company's premium image: cut prices or launch a new mass-market brand. Not many executives in the company are in favor of cutting prices, but it's clear that Sanchez is gaining ground in her bid to launch a low-priced brand. Reputation worries aside, Hargrove fears that an inexpensive brand would cannibalize the company's premium line and antagonize the powerful association of seafood processors. How can he get others to see the danger, too? Commenting on this fictional case study in R0504A and R0504Z are Dan Schulman, the CEO of Virgin Mobile USA, a wireless voice and data services provider; Dipak C. Jain, a professor of marketing and the dean of the Kellogg School of Management at Northwestern University; Oscar de la Renta, chairman, and Alexander L. Bolen, CEO, of Oscar de la Renta Ltd., the New York-based luxury goods manufacturer; and Thomas T. Nagle, the chairman of the Strategic Pricing Group, a Massachusetts-based management consultancy that specializes in pricing.

Companies have poured enormous amounts of money into customer relationship management, but in many cases the investment hasn't really paid off. That's because getting closer to customers isn't about building an information technology system. It's a learning journey that begins with the creation of a companywide repository containing every customer interaction with the company, organized by customer. Communal coordination is what's called for at this stage, as each group contributes its information to the data pool separately from the others and then taps into it as needed. In the second stage, one-way serial coordination from centralized IT through analytical units and out to the operating units allows companies to go beyond just assembling data to drawing inferences. In stage three, companies shift their focus from past relationships to future behavior. Through symbiotic coordination, information flows back and forth between central analytic units and various organizational units like marketing, sales, and operations, as together they seek answers to questions like "How can we prevent customers from switching to a competitor?" and "Who would be most likely to buy a new product in the future?" In stage four, firms begin to move past discrete, formal initiatives and, through integral coordination, bring an increasingly sophisticated understanding of their customers to bear in all day-to-day operations.

Jim Hargrove, the marketing director of $820 million Neptune Gourmet Seafood, is having a bad week. Neptune is the most upmarket player in the $20 billion industry, and the company is doing everything it can to preserve its premium image among customers. But Neptune's recent investment in state-of-the-art freezer trawlers, along with new fishing regulations, is resulting in catches that are bigger than ever. Though demand is at an all-time high, the company is saddled with excess inventory--and there's no relief in sight. Neptune's sales head, Rita Sanchez, has come up with two strategies that Hargrove feels would destroy the company's premium image: cut prices or launch a new mass-market brand. Not many executives in the company are in favor of cutting prices, but it's clear that Sanchez is gaining ground in her bid to launch a low-priced brand. Reputation worries aside, Hargrove fears that an inexpensive brand would cannibalize the company's premium line and antagonize the powerful association of seafood processors. How can he get others to see the danger, too? Commenting on this fictional case study in R0504A and R0504Z are Dan Schulman, the CEO of Virgin Mobile USA, a wireless voice and data services provider; Dipak C. Jain, a professor of marketing and the dean of the Kellogg School of Management at Northwestern University; Oscar de la Renta, chairman, and Alexander L. Bolen, CEO, of Oscar de la Renta Ltd., the New York-based luxury goods manufacturer; and Thomas T. Nagle, the chairman of the Strategic Pricing Group, a Massachusetts-based management consultancy that specializes in pricing.

Jim Hargrove, the marketing director of $820 million Neptune Gourmet Seafood, is having a bad week. Neptune is the most upmarket player in the $20 billion industry, and the company is doing everything it can to preserve its premium image among customers. But Neptune's recent investment in state-of-the-art freezer trawlers, along with new fishing regulations, is resulting in catches that are bigger than ever. Though demand is at an all-time high, the company is saddled with excess inventory--and there's no relief in sight. Neptune's sales head, Rita Sanchez, has come up with two strategies that Hargrove feels would destroy the company's premium image: cut prices or launch a new mass-market brand. Not many executives in the company are in favor of cutting prices, but it's clear that Sanchez is gaining ground in her bid to launch a low-priced brand. Reputation worries aside, Hargrove fears that an inexpensive brand would cannibalize the company's premium line and antagonize the powerful association of seafood processors. How can he get others to see the danger, too? Commenting on this fictional case study in R0504A and R0504Z are Dan Schulman, the CEO of Virgin Mobile USA, a wireless voice and data services provider; Dipak C. Jain, a professor of marketing and the dean of the Kellogg School of Management at Northwestern University; Oscar de la Renta, chairman, and Alexander L. Bolen, CEO, of Oscar de la Renta Ltd., the New York-based luxury goods manufacturer; and Thomas T. Nagle, the chairman of the Strategic Pricing Group, a Massachusetts-based management consultancy that specializes in pricing.

Discusses the issues facing firms in the seventh generation of home video game platforms. In particular, Sony and Microsoft plan to launch new game consoles in the 2005 to 2006 time frame. Each firm seems to be following a different strategy. Microsoft wants to launch before Sony. Sony for its part is trying to develop a superior processor for its Playstation 3. Forces students to grapple with the issue of digital convergence in content and in hardware functionality.

Coming out of the 2001 high-tech industry recession, this venture capital start-up has to come up with a marketing plan to break even and grow. Its innovative e-commerce software provides unique customer relationship management solutions, but it has to convince customers to adopt its solution. Includes color exhibits.

With the collapse of the dot-com market and related shrinkage in the high-tech industry, Cisco took a dip in its sales and profits in 2001. Coming back from the recession, Cisco had to manage and evolve its go-to-market strategy and design in keeping with its new business strategy. Describes those changes and poses new channel management challenges in light of Cisco's entry into new markets and technologies.