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 Contents

List of Figures vii

Preface xi

Chapter 1: An Introduction to Competitive Business Strategies 1

Historical Concepts of Business and Competitive Strategy 2
The Transaction Premium 4
Terms 6
Review/Discussion Questions 6
Suggested Readings 7

Chapter 2: The Value Frontier 9

Dimensions of the Value Frontier 9
Competitive Strategy on the Value Frontier 15
Terms 17
Review/Discussion Questions 17
Suggested Readings 17

Chapter 3: Thinking Strategically 19

The Strategic Planning Process 19
The Elements of Effective Strategies 24
Terms 26
Review/Discussion Questions 26
Suggested Readings 26

Chapter 4: Product and Brand Strategies 27

Customer Economic Rationality on the Value Frontier 27
Competitive Behavior and the Value Frontier 30
Terms 32
Review/Discussion Questions 32
Suggested Readings 33

Chapter 5: The Firm’s Alternative Market Entry Strategies 35

Required Level of Investment 37
Barriers to Competitor Entry 38

iii
iv Contents

Opportunities for Product Line Extension 39

Initial Market Risk 40
Customer Brand Identification 40
Relative Length of Remaining Market Life 41
Terms 42
Review/Discussion Questions 42
Suggested Readings 42

Chapter 6: Competitive Differentiation and Competitive Advantage 43

Pioneering Strategies 43
Penetration Strategies 45
Skimming Strategies 48
Alternative Customer Responses to Price 50
Challenger Strategies 50
Flanking Strategies 50
Leapfrog Strategies 52
Price and Performance-based Leapfrog Strategies 55
Challengers versus Followers 56
Lock-in Strategies 57
Sunk Cost Lock-in 57
Network Lock-in 58
Bundling Strategies 60
Terms 60
Review/Discussion Questions 61
Suggested Readings 61

Chapter 7: Competitive Response 63

Counter-flanking Strategies 63
Counter-leapfrog Strategies 69
Temporary Price-based Leapfrog (Price Promotions) Strategies 70
Contingent Price-based Leapfrog (Price Matching) Strategies 71
Countering Lock-in and Bundling Strategies 72
Terms 73
Review/Discussion Questions 73
Suggested Readings 73

Chapter 8: Mature Markets and Irrational Competitors 75

Irrational Competitors: Loss Leaders and Predators 76
Signaling Strategies 80
Terms 81
Review/Discussion Questions 82
Suggested Readings 82
 Contents v

Chapter 9: Cooperative Strategies 83

The Basis for Cooperation 83
The Intended Effects of Cooperation 84
Terms 86
Review/Discussion Questions 87
Suggested Readings 87

Chapter 10: The Product Life Cycle on the Value Frontier 89

Stages in the Product Life Cycle 89
Strategic Decision-making and the PLC 91
Terms 95
Review/Discussion Questions 95
Suggested Readings 95

Chapter 11: Strategic Business Unit and Divisional Strategies 97

Strategic Business Unit (SBU) Level 97
Division Level 99
The Company’s SBU Portfolio 99
Contribution Margin versus Full Cost Coverage 101
Sunk Costs versus Recoverable Costs 103
Terms 105
Review/Discussion Questions 105
Suggested Readings 106

Chapter 12: Growth, Integration, and Diversification 107

Relative Competitive Position (RCP) and the Mid-life Extension 107
Forward Integration Strategies and Vertical Marketing Systems (VMS) 109
Diversifying to Internalize Economic Externalities 112
Terms 115
Review/Discussion Questions 115
Suggested Readings 115

Chapter 13: The Art and Science of Competitive Strategy 117

Tools for Evaluating Brand Positions 117
Image Development (Social Cause Marketing) 119
Co-branding and Brand Licensing 120
Customer Relationship Management (CRM) 122
Customer Life-Cycle (CLC) Planning 123
Putting It All Together: The Integrated Competitive Strategy 125
Terms 126
Review/Discussion Questions 127
Suggested Readings 127
vi Contents

Chapter 14: Competitive Strategy in the Age of Technology 129

Enhanced Information Input, Storage, and Retrieval 130
Inputs 130
Storage 131
Retrieval 132
Information Processing 132
Information dissemination 134
Applying Digital Technologies to Enhance Competitiveness on the Value Frontier 135
Competitive Response 136
New Technologies for Developing and Maintaining Customer Relationships 137
Short Message Service 138
Multimedia Message Services 139
Push Notifications 139
App-based Marketing 140
In-game Mobile Marketing 141
Quick Response Codes 142
Bluetooth 142
Proximity Systems 143
Location-based Services 143
Ringless Voicemail 144
The Evolving Digital Marketplace 145
Terms 145
Review/Discussion Questions 145
Suggested Readings 146

Chapter 15: Competitive Strategy in Increasingly Competitive Markets 147

The Competitive Planning Hierarchy 148
The Macroenvironmental Context for Competitive Strategy 151
Why Products Fail 153
The Importance of Continual Environmental Scanning 154
Isolating New Business Initiatives 155
Sustainable Competitive Advantage through Brand Positioning 156
Brand Excellence 156
Customer Relationship Development 157
Reliability and Advanced Design 157
Price Leadership 158
High Style and Fashion 159
Social Status 160
The Future of Competitive Strategy 161
Terms 161
Review/Discussion Questions 161
Suggested Readings 162

Glossary 163
 List of Figures

Figure 1.1 The Firm’s Operational and Competitive Strategies 2

Figure 1.2 A Transaction: The Hypothetical Purchase of a Cup of Coffee (1) 5
Figure 1.3 A Transaction: The Hypothetical Purchase of a Cup of Coffee (2) 5
Figure 2.1 Customer Decision-Making Variables: Initial Salient Variables 10
Figure 2.2 Customer Decision-Making Variables: Quantification of
Surviving Variables 10
Figure 2.3 One Customer’s Ideal Point on the Value Frontier 11
Figure 2.4 Multiple Customers’ Ideal Points of the Value Frontier 11
Figure 2.5 Customers’ Ideal Points and Suppliers’ Value Propositions on
the Value Frontier 12
Figure 2.6 Projective Customer Preference Mapping (1). Hypothetical
Example: Automobile Tires 13
Figure 2.7 Projective Customer Preference Mapping (2). Hypothetical
Example: Automobile Tires 13
Figure 2.8 Customer Preferences Reflected on the Value Frontier 14
Figure 2.9 Market Segments on the Value Frontier: Identification of
Key Market Segments 14
Figure 2.10 Market Segment Migration on the Value Frontier 15
Figure 2.11 Repositioning Existing Value Propositions to Reach New
Market Segments 16
Figure 2.12 Developing New Value Propositions to Reach New Market Segments 16
Figure 3.1 Strategic Planning Process 20
Figure 3.2 Organizational Objectives 25
Figure 4.1 Customer Ideal Points on the Value Frontier 28
Figure 4.2 Customer Ideal Points on the Value Frontier: Ideal Point Migration 29
Figure 4.3 Customer Ideal Points on the Value Frontier: Off-curve Ideal Points 29
Figure 4.4 Customer Ideal Points on the Value Frontier: Producer Quality/Price
Improvement 30
Figure 4.5 Customer Ideal Points on the Value Frontier: Value Frontier Shift 31
Figure 5.1 Alternative Market Entry Strategies 38
Figure 6.1 Pioneer Firm’s Initial Market Position 44

vii
viii List of Figures

Figure 6.2 Pioneer Firm’s Initial Market Position: Higher and Lower Range Value
Propositions 45
Figure 6.3 Pioneer Firm’s Initial Market Position: The Range of Customer Value 46
Figure 6.4 Pioneer Firm’s Initial Market Position: Market Penetration Pricing 46
Figure 6.5 Pioneer and Challenger Firms’ Market Positions: Price and Quality/
Performance-based Penetration Strategy 48
Figure 6.6 Pioneer Firm’s Initial Market Position: Skim Pricing 49
Figure 6.7 Pioneer and Challenger Firms’ Market Positions: Competitor Flanking
Strategy 51
Figure 6.8 Pioneer and Challenger Firms’ Market Positions: Price-based Leapfrog
Strategy 52
Figure 6.9 Pioneer and Challenger Firms’ Market Positions: Performance-based
Leapfrog Strategy 54
Figure 6.10 Pioneer and Challenger Firms’ Market Positions: Price and
Performance-based Leapfrog Strategy 55
Figure 6.11 The Firm’s Lock-in Strategy 59
Figure 7.1 Pioneer Firm’s Market Position: Optional-Pricing Strategy 64
Figure 7.2 Pioneer Firm’s Market Position: Product Lining Strategy 65
Figure 7.3 Pioneer Firm’s Market Position: Market Cannibalization with
Self-flanking 66
Figure 7.4 Pioneer and Challenger Firms’ Market Positions: Pioneer
Counter-flanking Strategy 67
Figure 7.5 Pioneer and Challenger Firms’ Market Positions: Fighting
Brand Strategy 68
Figure 7.6 Pioneer and Challenger Firms’ Market Positions: Price- and
Performance-based Counter-leapfrog Strategy 69
Figure 8.1 Pioneer and Follower Firms’ Market Positions: Crowding on the
Value Frontier 75
Figure 8.2 Game Theory Model: Initial Stasis 78
Figure 8.3 Game Theory Model: Initial Competitive Action 79
Figure 8.4 Game Theory Model: Competitive Response 79
Figure 8.5 Game Theory Model: Preemptive Action 80
Figure 9.1 Value Frontier Shift Following Cooperative Marketing Program
Implementation 85
Figure 9.2 Value Frontier Coverage Following Cooperative Market Program
Implementation 86
Figure 10.1 The Product Life Cycle (PLC): PLC Stages and Customer
Description 90
Figure 10.2 The Product Life Cycle (PLC): PLC Stages and Customer
Classification 92
 List of Figures ix

Figure 11.1 The Levels of Organizational Competitive Decision-making 98

Figure 11.2 The SBU Portfolio: The SBU Development Process 100
Figure 11.3 The SBU Portfolio: Cash Sources and Uses 101
Figure 11.4 The Break-even Model: The Full-cost Model 102
Figure 11.5 The Break-even Model: The Variable-cost Model 103
Figure 11.6 The Product Life Cycle (PLC): PLC Stages and Profit Curve 104
Figure 12.1 The Product Life Cycle (PLC): PLC Stages and the Mid-Life
Extension 108
Figure 12.2 Vertical Marketing Systems (VMS): Three Primary Forms 109
Figure 13.1 Customers’ Ideal Points and Supplier Value Propositions on the
Value Frontier 118
Figure 13.2 The Elements of Integrated CRM Solutions 123
Figure 13.3 The Customer Life-Cycle (CLC): CLC Stages and Consumption
Patterns 124
Figure 13.4 The Elements of Competitive Advantage 126
Figure 15.1 The Competitive Planning Hierarchy 148
Figure 15.2 Core Competency Improvement: Cost Leadership and Differentiation
Strategies 149
Figure 15.3 Competitive Position on the Value Frontier: Creating Competitive
Advantage through Penetration/Leapfrog Strategy 150
Figure 15.4 Competitive Position on the Value Frontier: Creating Competitive
Advantage through Price and Performance-based Repositioning
Strategy 151
 Preface

The first edition of The Value Frontier broke new ground in presenting a high-level and com-
prehensive overview of the alternative market strategies available to the firm. Our purpose
was to educate current and future managers in the broad options available to their firms as
market pioneers, challengers, and followers. An understanding of the dynamics of the market-
place is even more important today; when product life cycles have grown increasingly shorter,
competitors have more alternatives for entering and exiting new and growing markets, and
there is generally less room for error in strategy development and program implementation.
On-going developments in distribution and communications technologies to meet con-
sumers’ rapidly changing preferences highlight the imperative for firms in a broad range of
industries to implement evermore responsive and flexible strategies. Gone are the days when
organizations could be readily classified as “industrial,” “commercial,” or “retail,” with their
standard strategies and operations. Changing communications and distribution channels,
along with new and innovative business models, necessitate that inside-out strategies become
outside-in strategies. Such strategies apply the firm’s core competencies in creative ways to
overcome the obstacles posed by an evermore rapidly changing set of macroenvironments. An
example can be seen in the case of online retailer Amazon’s response to the competitive threat
posed by resurgent brick-and-mortar retailer Walmart. During the time when we published
the first edition of The Value Frontier, it was tacitly assumed that each competitor occupied
a distinct space in the retail marketplace and that competitive overlaps would be limited to
venue-driven pricing based on convenience and the customer experience.
Since then, these two retailing behemoths have collided in a battle for the hearts, minds,
and wallets of consumers. While each retailer still emphasizes price and cost leadership, they
increasingly appeal to consumers who do not view Walmart and Amazon as operating in
distinct market spaces. Evolving consumer needs emphasize convenience, mobility, and trans-
parency. The advent of mobile technologies has bridged the gap between online and brick-
and-mortar, and a continually evolving sense of customer empowerment drives increasingly
overlapping opportunities for Amazon, Walmart, and a host of other firms.
These developments have led Amazon to explore opportunities in the brick-and-mortar
space (witness Amazon’s acquisition of Whole Foods) and Walmart’s changing approach to
online retail (including free shipping on $25 minimum orders to compete with Amazon’s
Prime service). In the meantime, apparently complacent retailers such as Sears-Kmart, Macy’s,

xi
xii Preface

and Nordstrom are finding that customer market segment drift has put them on a collision
course with a host of brick-and-mortar and online retailers they had not previously viewed
as competitors. Clearly, consumer brand constellations are ever-evolving, and, in combination
with consumers’ changing buying patterns, it is never safe to simply assume that any firm’s
market position is secure.
This newest edition of The Value Frontier will identify and examine how to best prepare
managers for dealing with change. The new and updated examples presented in the text
highlight key developments since the publication of the first edition, and new materials cover
important information for dealing with disruptive innovations that challenge the firm’s mar-
ket position. Our emphasis is still on the market developments that are changing the role of
management but with a renewed focus on the evermore rapid pace of change.
Please feel free to comment on this book and to recommend changes that might improve
the quality of our material and keep it relevant to today’s business environment. We are eager
to make this an essential text for managers who wish to comprehend the larger dynamics of
competitive markets. Enjoy the second edition of The Value Frontier, and good luck with your
business and career endeavors.
 CHAPTER 1

An Introduction to
Competitive Business
Strategies

O rganizational strategy is a set of concepts and processes designed to directly or indirectly

contribute to the creation of value propositions for the firm’s customers while, at the
same time, helping the firm to gain advantages over its competitors. The activities associated
with these concepts, known as the value creation process, include inbound logistics (materi-
als/labor procurement, inbound transportation, warehousing, and inventory management),
manufacturing/production, outbound logistics (warehousing, inventory management, and
outbound transportation), distribution, and sales. The linkage of these activities is the firm’s
value creation process.1
This process can be further classified under operational strategies, those intended principally
to make the firm more cost competitive in its industry, and competitive strategies, designed
to best position the firm’s product and service offerings against its market competitors.
Competitive strategy may best be viewed as the market face of the firm—its presentation of a
value proposition for customers that establishes a market position against current and prospective
competitors. This process, also known as market-facing strategy, involves the definition of prod-
ucts and services, the establishment of distribution channels, price-setting, the development
of marketing communication strategies, creating a corporate/brand image, and providing cus-
tomers with postpurchase service and support. This distinction between operational strategies
and competitive strategies is presented in Figure 1.1.
This book will focus on the tools and dynamics of competitive business strategies. In
order to understand this aspect of organizational strategy, it is important to recognize the
wide-ranging historical and environmental conditions that have given rise to competitive
business strategies as a set of disciplines. Moreover, it is equally important to understand the
transactional dynamics—the interactions between consumers and producers—that ultimately

1
Michael E. Porter, Competitive Advantage (New York: The Free Press, 1985).

1
2 The Value Frontier

C
U
I The Firm’s Value Creation Process
S
N
Inbound Manufacturing/ Outbound T
P Distribution Sales
Logistics Processing Logistics O
U
M
T
E
R
Operational Strategies: Competitive (Market-facing) Strategies:
Procurement Product/Service Definition
Inbound/Outbound Transportation Pricing
Warehousing Marketing Communication
Inventory Management Distribution
Manufacturing/Processing Sales, Service and Support
Corporate/Brand Image

Figure 1.1 The Firm’s Operational and Competitive Strategies.

creates value for both parties. It is these transactional dynamics that inform the competitive
strategies of the firm.
The processes associated with the development of competitive business strategies have a
relatively short history. Until the mid-18th century, the great majority of business transactions
were local and determined as much by regional customs as by market dynamics. Most arti-
sans and tradesmen served relatively small communities and customer-supplier relationships
tended to be of longstanding duration. Therefore, competitive business strategies were both
geographically and culturally circumscribed, creating limited opportunities for new market
entrants and relatively little need for defensive actions by established firms. The focus of most
early firms was therefore on the operational aspects of the business. This changed dramatically
with the advent of the Industrial Revolution. Many businesses changed in scale and scope, as
specialization in expertise and technology led to more complex and frequently less proximal
relationships between customers and their suppliers.

Historical Concepts of Business and Competitive Strategy

In the period between the 1750s and 1820s, most firms operated on the production concept of
business. This view held that economies of scale, generally in the production of staples such
as nails, grains, and fabrics, were critical to finding a broad market for these goods. The cost
of production, and by extension the prices at which goods were offered to customers, was
the driving force of business. As manufacturing economies improved, the emphasis turned
to the product concept of business, the view, which predominated between the 1820s and 1870s,
that one best product should be mass produced for large or mass markets. Businesses were still
seeking to achieve scale economies, but they were now also focused on providing a differen-
tiated and competitive product for a large group of customers, also known as a target customer
 An Introduction to Competitive Business Strategies 3

market segment. In this era, firms such as Colt Firearms, Pears Soap, and Elgin Watches began
their ascendancy.
It did not take long for companies to realize that the product concept of business had its
limitations. Sure, firms could now mass produce for a large market that could newly afford
low-cost fabricated products, but the proliferation of manufacturers and consequent rapid
growth in production capacity resulted in a glut of goods in many markets. This caused many
producers to adopt the selling concept of business, which focuses on aggressive sales strategies to
find a mass market for the firm’s differentiated goods. The advent of the traveling salesperson,
or “drummer,” dates from this era. Many firms fielded a large sales force specifically organized
to reach every corner of their geographic markets and aggressively sell their products. This is
also the era of mass merchandising, epitomized by the emergence of large retailers, including
Sears & Roebuck, A.T. Stewart, John Wanamaker, and Montgomery Ward.The selling concept
of business drove business strategy from the 1870s through the 1940s.
The selling concept of business was facilitated by the development of the railroads in the
United States following the Civil War, as well as in England and much of continental Europe.
Drummers could be dispatched quickly and easily, and Sears & Roebuck could ship its broad
catalog of offerings (which, for a time, even included quasi-prefabricated homes!) throughout
the North American continent. In due time, not unlike the other business strategies discussed
earlier, the selling concept also became passé as mass marketing techniques gained currency.
Since the 1940s, a host of environmental changes have resulted in the marketing concept of busi-
ness, generally referred to as simply “the marketing concept.”
The marketing concept evolved naturally from the selling concept as firms in many indus-
tries became more adept at identifying customers’ unmet needs and in developing suitable
value propositions, including product and service lines, pricing programs, distribution chan-
nels, marketing communications programs, brand identities, and service and support solutions,
to meet those changing needs. Marketing research became a necessary tool for understanding
customers and for anticipating changes in customer preferences. Market segmentation was
further refined in this era as firms battled for supremacy in the service of customers’ evolving
needs and as product life cycles consequently grew shorter. In order to succeed in increasingly
fast-changing markets, firms must continually scan their macro- and micro-environments and
adapt their internal capabilities to remain competitive.
The marketing concept is still the primary operating mode for businesses in developed
economies. There are clear indications, however, that in time the societal concept of business
will become the operating mode for most companies in developed nations. This is currently
driven by the “green movement”—environmentalism and conservation, but is also associated
with a focus on product safety, business ethics, and general corporate responsibility. The soci-
etal concept of business holds that operating a business, even in free market economies is a
privilege and not a right. If the business does not add value to consumers and to society as a
whole, then the people, through their elected government (and its agencies and courts), have
the right—and in some instances the obligation—to punish or shut down the operations of
that business.
4 The Value Frontier

The Transaction Premium

The all-consuming question that all businesses must ask themselves is how they can best meet
the needs to their customers. In this book, we posit that the process of meeting customer
expectations occurs on the Value Frontier. This is the space in which customers and suppliers
meet to conduct transactions. The premise of the Value Frontier is that customers can articu-
late (or at least recognize) their own needs, and that producers can convert these needs into
a set of clearly understood value propositions. The Value Frontier will be described in more
detail later in this book; but first, it is important to understand why customers and producers
would enter into any transaction.
As with all social phenomena, businesses could not survive for long if they did not con-
tinuously add value to society. This means that businesses must transform “zero sum trans-
actions”—where one party to the transaction gains exactly the same value that the other
party loses—into value-generating transactions. They do so by generating a premium for the
producer (the firm) and the customer.
Let’s take a simple example: The purchase of an eight ounce cup of coffee. In this exam-
ple, let’s assume an individual steps off the train in a city with which she is unfamiliar. In the
course of her walk through the city she becomes tired and begins to search for a coffee ven-
dor. Given her lack of familiarity with the city and its coffee vendors, this consumer begins
with a price expectation, based on previous experiences in other places, of $1.20 for an eight
ounce cup of coffee. The traveler soon sees a 7-11 Convenience Store, and enters to make
the purchase. She approaches the coffee stand and notes that the price is $1.00 for an eight
ounce cup.
Will this consumer make the purchase? The answer is yes. The $1.00 price for the coffee
is below her perceived value for the cup of coffee. Therefore, a rational consumer will make
the transaction. Now, we know that with major purchases, rational consumers will seek to
maximize the difference between monetary price ($1.00), the actual monies exchanged, and
their perceived value ($1.20). But with the purchase of a cup of coffee, as with the purchase
of most impulse goods and convenience goods, customers are unlikely to incur the additional
frictional costs associated with search and negotiations, and will simply accept the proposed
price if it is below their perceived value. At this stage, the transaction can be diagramed as
shown in Figure 1.2.
This transaction has created $0.20 in value for the consumer by providing a value propo-
sition that exceeds, in the customer’s perception, the transaction’s monetary cost. Obviously, a
rational consumer will only enter into a transaction that provides her or him with a customer’s
transaction premium. Moreover, as stated earlier, customers will evaluate various value proposi-
tions in a given product/service category to determine which alternative transaction would
provide them with the greatest premium.
So, why don’t all producers seek to maximize their revenues by pricing their goods or ser-
vices just below each customer’s perceived value? There are two key reasons: (1) the frictional
costs mentioned earlier, and the related desire to serve a mass market, lead producers to offer
 An Introduction to Competitive Business Strategies 5

a standardized value proposition to a large number of potential consumers with different value
perceptions; and (2) the desire to retain customers for future transactions and to create posi-
tive word-of-mouth communication between customers and their friends and acquaintances.
In other words, it simply doesn’t make sense to negotiate the transaction of a cup of coffee
with each customer, and all vendors want their customers to come back—with their friends.
Therefore, in most cases marketers set a standard price for their value propositions—a price
that is often substantially below some individual customers’ perceived value.
The foregoing discussion only explains why the customer would enter into this transac-
tion. Why would a producer offer its value proposition to the customer? The answer is that
this customer is willing to pay a higher price than the next-best customer. For this, we must
assume that the next-best customer is only willing to pay $0.90 for an eight ounce cup of
coffee. The difference between what the first customer will pay ($1.00) and the next best cus-
tomer will pay ($0.90), also known as the opportunity cost, is the producer’s transaction premium.
The opportunity cost is, therefore, what the producer gives up (the next-best opportunity) in
order to accept the best available opportunity. This is illustrated by Figure 1.3.
It is important to note that the producer’s marketing transaction premium is not the
same thing as his or her profits from the transaction. This transaction may or may not be

Customer’s Perceived
Value: $1.20

Customer’s
Transaction Premium: $0.20

Monetary
Transaction: $1.00

Figure 1.2 A Transaction: The Hypothetical Purchase of a Cup of Coffee (1).

Customer’s Perceived
Value: $1.20

Customer’s Transaction
Premium: $0.20

Monetary
Transaction: $1.00

Producer’s Transaction
Premium: $0.10

Producer’s Opportunity
Cost: $0.90

Figure 1.3 A Transaction: The Hypothetical Purchase of a Cup of Coffee (2).

6 The Value Frontier

profitable, but the marketing transaction premium is always positive, otherwise the producer
would not enter into the agreement. Just as consumers are rational about seeking the highest
possible premium from each transaction, producers also seek the highest possible transaction
premium—of course, consistent with their long-term goals of customer retention and positive
word-of-mouth.
The foregoing analysis begins to explain how customer–producer transactions add value
to society. By helping to create a perception among customers that they are getting “more
than they pay for”, and giving producers the tools to identify those customers with the high-
est perceived value for their goods and services (and therefore the willingness to pay the high-
est price), transactions benefit all parties. Therefore, the total value of our hypothetical coffee
transaction is $1.30, including the $1.00 monetary exchange and the $0.30 in premium value
created by the process of understanding customers’ unmet needs and wants, and of applying
this intelligence to create a set of appropriate value propositions.
The value creation process is fundamental to the success of any business. Customers and
producers enter into transactions with the aim of maximizing the value of each transaction
consistent with the frictional costs of the transaction, the information available to guide the
transaction, and the long-term value of customer retention and positive word-of-mouth. The
space in which the customer’s expectations and the supplier’s value proposition meet is known
as the Value Frontier.

TERMS
Competitive strategies Product concept of business
Customer’s transaction premium Production concept of business
Market position Selling concept of business
Market-facing strategy Societal concept of business
Marketing concept of business (marketing concept) Target customer market segment
Mass markets The Value Frontier
Operational strategies Value creation process
Organizational strategy Value proposition
Producer’s transaction premium

REVIEW/DISCUSSION QUESTIONS
1. What are the most important differences between operational strategies and competitive strat-
egies? Explain you response by using an example of a current business or industry.
2. How does the producer’s opportunity cost differ from its profits for a given transaction?
Why is the producer’s transaction premium always positive?
3. What are some examples of the emergence of the societal concept of business as the successor
to the marketing concept? How does the societal concept differ from the marketing concept
of business?
 An Introduction to Competitive Business Strategies 7

SUGGESTED READINGS
Fullerton, Ronald,“Segmentation in Practice: An Overview of the Eighteenth and Nineteenth
Centuries,” in Jones, D.G.B. and Tadajewski, M. (eds.), The Routledge Companion to
Marketing History. Oxon, Routledge, 2016, 94.
Kotler, Philip and Gary Armstrong. Principles of Marketing. Pearson, 2014.
 CHAPTER 2

The Value Frontier

T he Value Frontier is a conceptual space for a specific product or service where the cus-
tomer’s and producer’s preferences meet. Difficulties arise because customers may not be
able to articulate their unmet needs concerning a product or service category and producers
must, therefore, work with very limited information to develop their value propositions.
This is particularly true in new markets where customers have little experience concerning
product use and functionality, prevailing prices, and related service and support solutions. The
development of value propositions in such markets is, therefore, often a process of trial and
error involving extensive market research and an uncertain value exchange between custom-
ers and producers.

Dimensions of the Value Frontier

As we have seen, even with the purchase of a cup of coffee, an event that occurs millions
of times each day in the United States, consumers are confronted with issues of quality
(Starbucks, McDonald’s, 7-11s, and the local independent coffee vendor), distribution (con-
venience, transaction timing, and immediate gratification), price, and so on. Therefore, we can
view consumers as decision-making machines, weighing the importance of various purchas-
ing criteria, and evaluating these criteria against one another in complex ways. The coffee
scenario, however, is a relatively simple example. In order to gain a better appreciation for this
process, let us look at a more complex purchasing decision: the buying of automobile tires. In
this case, a consumer may consider five salient variables (price, reliability, appearance, handling,
and warranty); each of these will play an important role in how the purchasing decision is
made. This is illustrated by Figure 2.1.
On the graph, these variables appear to be discrete, that is, individually defined and indi-
vidually determined. Without constraints, the consumer would choose the tires with the low-
est price, highest reliability, best handling, finest appearance, and longest warranty. However,

9
10 The Value Frontier

we know that economics, that is, resource limitations, places constraints on consumption,
which means that the consumer must first decide which variables are really significant for his
or her decision-making. The surviving variables will need to be quantified. This is illustrated
by Figure 2.2.
As you can see, the decision variable we called “appearance” is no longer a factor in the
customer’s decision-making. This is simply because it was not deemed sufficiently important
to that particular customer to be included in the decision-making process. Each remaining
variable now has a range that allows the consumer to compare the individual offerings of the
various tire producers. Note, too, that the orientation of price as a decision variable is inverse
to the other variables.This is because, all other things being constant, consumers prefer a lower
price to a higher one. Ultimately, the consumer in our example will need to make trade-offs
among the remaining variables (price, reliability, handling, and warranty). This is illustrated
by Figure 2.3.

Price

Reliability

Handling

Appearance

Warranty

Figure 2.1 Customer Decision-Making Variables: Initial Salient Variables.

Price
Min.

Reliability
Max.
Handling
Max.

Max.

Min. Warranty

Max.

Figure 2.2 Customer Decision-Making Variables: Quantification of Surviving Variables.

 The Value Frontier 11

The result of all of these trade-offs, that is, price versus warranty, warranty versus handling,
handling versus reliability, and so on, is a multidimensional hyperspace (a space with more than
three dimensions) that essentially quantifies each variable in the consumer’s decision-making
against every other variable in his or her decision-making. The resulting space is defined as
the Value Frontier. The Value Frontier is, therefore, all of the possible combinations of salient
decision-making variables relevant to consumers relative to the available value propositions of
suppliers. A hyperspace with four or more dimensions cannot be visualized in graphic form,
so our model is just a three-dimensional conceptualization. Our consumer (now known as
Customer A) is represented on this hyperspace example by a point, known as the customer’s
ideal point, illustrating the tradeoffs made by that specific consumer.
We know that there are multiple consumers in most markets and that they all make their
consumption decisions more or less independently (with the help of advertising, referrals from
friends and experts, etc.). Each consumer, therefore, has his or her own ideal point on the
Value Frontier. This is presented in Figure 2.4.

Price
Min. Cust. A Value
Ideal Point Frontier

Reliability

Handling

Max.

Warranty

Figure 2.3 One Customer’s Ideal Point on the Value Frontier.

Price Cust. C
Min. Ideal Point
Cust. A Value
Ideal Point Frontier

Reliability Cust. B
Ideal Point

Handling
Cust. D
Ideal Point
Max.

Warranty

Figure 2.4 Multiple Customers’ Ideal Points on the Value Frontier.

12 The Value Frontier

In addition, we know that suppliers provide value propositions, also identified as specific
points on the Value Frontier. Each value proposition may be seen as a combination of the
elements of the marketing mix (product, price, marketing communications, distribution, service
and support, and brand image) developed by the firm to satisfy customers’ unmet needs. In
our automobile tire example, these value propositions are represented by the brands Firestone,
Goodyear, Pirelli, and Toyo. (Note that this is being presented as an example and does not
represent the actual offerings or market positions of these suppliers.) The combination of
customers’ ideal points and value propositions (presented as brands) on the Value Frontier may
be illustrated by Figure 2.5.
The multidimensional model that is the Value Frontier shows consumers and producers
in proximity to one another. Each customer will prefer the value proposition, that is, closest
to his or her ideal point, assuming resource availability. On the graphic representation of
the Value Frontier, this appears to be physical distance, but is most commonly calculated as
Euclidean distance in a hyperspace. A projective customer preference map is a rendering, generally
in two-dimensional form, of the relationship of customers’ ideal points to the value prop-
ositions offered by various producers. It provides less information than a multidimensional
rendering of the Value Frontier, but it has the compensating benefit of visual simplicity.
On the projective customer preference map of our hypothetical example, with price as
one dimension and quality/performance (representing reliability, handling, and warranty) as
another dimension, the relative position of customers and suppliers can be illustrated more
simply by Figure 2.6.
Regardless of the method for calculating this distance, each supplier strives to position its
value proposition (or multiple value propositions) as closely as possible to its target customers,
consistent, of course, with customers’ resource limitations.The affinity of our conceptual custom-
ers (ideal points) to the available conceptual value propositions (brands) is illustrated by Figure 2.7.

Toyo Goodyear
Price
Min. “Value
Cust. A Frontier”
Ideal Point Cust. C
Ideal Point

Cust. B
Reliability
Ideal Point

Handling Firestone
Cust. D
Max. Ideal Point
Warranty

Pirelli

Figure 2.5 Customers’ Ideal Points and the Suppliers’ Value Propositions on the Value Frontier.
 The Value Frontier 13

HIGH Cust. D
Price Ideal Point
Pirelli

Goodyear
Cust. B
Ideal Point
Firestone
LOW HIGH
Quality/
Performance
Toyo
Cust. C
Ideal Point
Cust. A
Ideal Point
LOW

Figure 2.6 Projective Customer Preference Mapping (1). Hypothetical Example: Automobile Tires.

HIGH Cust. D
Price Ideal Point
Pirelli

Goodyear
Cust. B
Ideal Point
Firestone
LOW HIGH
Quality/
Performance
Toyo
Cust. C
Ideal Point
Cust. A
Ideal Point
LOW

Figure 2.7 Projective Customer Preference Mapping (2). Hypothetical Example: Automobile Tires.

This can also be presented in the form of the multidimensional Value Frontier of our
hypothetical automobile tire example (Figure 2.8).
In this example, customers A and C are attracted to Toyo’s value proposition; customer B
is attracted to Firestone; and customer D is attracted to Pirelli. On a larger scale, those custom-
ers with proximal ideal points may be seen as a customer cluster, or customer market segment in
the strategy nomenclature. Firms target their value propositions to individual market segments
as depicted by Figure 2.9.
This example shows that suppliers commonly have specific target customer market seg-
ments (or, more simply, target segments) in mind when they develop their value propositions.
14 The Value Frontier

Toyo Goodyear
Price
Min. Cust. A “Value
Ideal Point Cust. C Frontier”
Ideal Point

Reliability Cust. B
Ideal Point
Handling Firestone
Cust. D
Max. Ideal Point

Warranty

Pirelli

Figure 2.8 Customer Preferences Reflected on the Value Frontier.

Toyo Goodyear
Price
Min. “Value
Frontier”

Reliability

Handling Firestone
“Market
Max. Segment”

Warranty

Pirelli

Figure 2.9 Market Segments on the Value Frontier: Identification of Key Market Segments.

A target segment has these characteristics: a potentially large number of customers; significant
growth outlook; high profit potential; and the firm’s ability to serve the segment. However,
these market segments are not stationary: customers’ needs change as their lifestyles, economic
circumstances, and tastes change. Therefore, we often see market segment migration that may
render the offerings of some suppliers obsolete. This is illustrated by Figure 2.10.
In this example, the low-end segment for automobile tires has migrated to a more per-
formance oriented and less price-driven position. In such circumstances, suppliers that fail
to respond to changing market needs do so at their own peril. However, this also provides
opportunities for other competitors, as segments may migrate toward another supplier’s exist-
ing value proposition. In Figure 2.10, we can see a migration, that is, leaving Toyo’s value
proposition and heading toward Goodyear’s value proposition.
 The Value Frontier 15

Low-End
Segment
(Time 1)
Price
Min. Low-End
Segment
(Time 2)

Reliability

Handling

Max.

Warranty

Figure 2.10 Market Segment Migration on the Value Frontier.

Competitive Strategy on the Value Frontier

Firms must continually reposition their value propositions to appeal to their selected target
segments. There are a number of reasons for repositioning an existing value proposition, both
as a growth strategy and for offensive or defensive purposes (to be discussed in a later chapter),
and it is not uncommon for producers to modify their customer solutions to address different
market segments. This is illustrated by Figure 2.11.
In this example, Firestone is repositioning its value proposition from its existing loca-
tion on the Value Frontier, near the middle to high-end segment, to a new position near the
low-end segment. This may be undertaken because the newly pursued market segment is
larger, more accessible, has a higher growth rate, or promises to be more profitable. Of course,
abandoning an existing market segment may have grave implications in terms of customer
perception and loyalty. Therefore, as an alternative strategy, the firm may decide to pursue a
new market segment in addition to its current segments. This is illustrated by Figure 2.12.
This illustrates a situation where Firestone continues to pursue the middle to high-end
segment while simultaneously pursuing the low-end segment. While this strategy may make
sense from a financial standpoint, it could adversely affect the firm’s brand identity. Typically,
the firm strives to maintain a consistent brand image associated with the location of a narrow
range of value propositions. Widely dispersed offerings might be better sold under multiple
brand names, commonly known as a multibrands strategy. As an example, Honda sells a mid-
priced line of vehicles under the Honda brand and a high-end luxury automobile line under
the Acura label.
This discussion is intended to illustrate the complexities inherent in customer–producer
relationships. Traditionally, the dynamics of customer and producer decision-making have
been viewed as separate phenomena, linked by a “perception-and-response” dynamic—
16 The Value Frontier

Low-End
Segment
Price
“Value Prop
Min. Repositioning
Strategy”

Reliability

Firestone
Handling

Max.

Warranty

Figure 2.11 Repositioning Existing Value Propositions to Reach New Market Segments.

Low-End
Segment
Price
“Product Line
Min. Development
Strategy”

Reliability

Firestone
Handling

Max.

Warranty

Figure 2.12 Developing New Value Propositions to Reach New Market Segments.

essentially a negotiated settlement. In reality, while perception-and-response obviously plays

a role in participants’ decision-making, the process is more akin to a paradigmatic model in
that assumptions and expectations play perhaps more important roles than do actual negotia-
tions. Expectations and assumptions help to inform the firm’s strategic and competitive plan,
wherein the outlines of the Value Frontier first take shape.
For managers, understanding this complex process is crucial to attaining business success.
A clear presentation of their Value Frontier, in any of its alternative renderings, is a crucial
starting point for the comprehension of the firm’s current and potential relationships with
customers as well as the attractiveness of its offerings against those of its competitors. This
understanding is fundamental to the process of strategic and competitive business planning.
 The Value Frontier 17

Too many managers delude themselves concerning the competitiveness of their value propo-
sitions and develop their business plans on false premises. In the following section, we discuss
the structure and process of competitive planning founded on an understanding of the Value
Frontier.

TERMS
Customer cluster Market segment migration
Customer’s ideal point Multibrands strategy
Marketing mix Projective customer preference map

REVIEW/DISCUSSION QUESTIONS
1. The advent of mobile gaming has led to the rapid entry of game developers into this
quickly evolving market. What information would you need to use as a game developer
to accurately anticipate customers’ changing preferences?
2. As discussed in this chapter, market segments tend to migrate over time as customer
preferences change. What are the practical implications of this phenomenon to producers
seeking to remain competitive?
3. Does it ever benefit a producer to exclusively target one specific market segment? If not,
when does it make sense to develop multiple value propositions intended to appeal to
different target market segments?

SUGGESTED READINGS
Farris, Paul W., and Michael J. Moore. The Profit Impact of Marketing Strategy Project: Retrospect
and Prospects. Cambridge: Cambridge University Press, 2004.
Homburg, Christian, Sabine Kuester, and Harley Krohmer. Marketing Management: A
Contemporary Perspective. 1st ed. London: McGraw-Hill Higher Education, Ltd., 2009.
Sarin, S. Market Segmentation and Targeting. Wiley International Encyclopedia of Marketing,
New York: John Wiley & Sons, Inc., 2010.
Another random document with
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Which is the greatest of all Planets? Which Planet ranks, in
magnitude, next to Jupiter? Which of the Planets ranks third in
magnitude? Which, Fourth? What Planets are smaller than our
Earth? What Planets are smaller than the Moon?
[§ 11.] What do you call the Diameter of a ball or sphere? Is the
Diameter of the Sun larger or smaller than the Diameters of all the
Planets taken together?
The teacher may yet ask a number of questions respecting the
Diameters of the Planets, which the pupil will be able to answer by
looking on Plate III. He may, for instance, ask whether the Diameter of
the Earth is larger or smaller than that of Venus? Whether the
Diameter of Jupiter or Saturn is the largest, etc.? This will oblige the
pupil to compare the different magnitudes of the Planets and their
Diameters.
[§ 12.] What proportion does the square-Contents of the Sun’s
surface bear to that of the surfaces of all the Planets? What two
Planets have together a surface nearly as large as that of our Earth?
Are the surfaces of Ceres, Vesta, Juno and Pallas taken together
sufficient or not, to cover the surface of our Earth? What Planets,
therefore, could be covered with the Earth’s surface? Which Planet
has the largest surface? What do you observe with regard to the
square-Contents of Jupiter’s surface? and that of the surfaces of all
other Planets, taken together? What Planet’s surface comes next in
magnitude to Jupiter’s? What Planet’s surface is larger than that of
our Earth, Venus and Mercury taken together? What three Planets’
surfaces taken together are smaller than that of the Moon? What
Planet has nearly as large a surface as the Moon?
[§ 13.] What is the opinion of philosophers respecting the Four
Planets, Ceres, Vesta, Juno and Pallas?

FOOTNOTES:
[1] Numbers are purposely omitted here, because abstract
numbers convey little or no ideas to young pupils. Those who
wish these relations expressed in numbers will find them in Table
I at the end of the book.
 LESSON III.
EXPLAINING THE MOTION OF THE PLANETS AND COMETS ROUND THE
SUN.
§ 14. You have learned, in the preceding lesson, that the Earth
and the other Planets are regularly moving round the Sun; but you
must know that the time which each requires to complete a whole
revolution, that is, the time which each needs to move once round,
cannot be the same with all; as you may easily judge yourself: for the
Planets which are next to the Sun will, of course, have a much
smaller journey to perform, than those which are further from it. Thus
Mercury, which is the first Planet in order from the Sun, will naturally
come round much sooner than Jupiter, which is placed at a much
greater distance from it.
That you may the easier understand this, the following Plate, No.
VI, will represent to you our Solar System:
The Sun from which proceeds all light and heat, is placed in the
centre. Then come the Planets Mercury and Venus; Third in order is
our Earth with its Satellite the Moon; and so on. The rest of the
Planets in the same order in which they are represented on Plate II.
You will also perceive there the orbs of two Comets, distinguished as
you were told, by a tail of light. The Planets Jupiter, Saturn and
Herschel are each represented with their Moons, and the Planet
Saturn with its luminous ring.
 No. VI.

Now you will easily understand that Ceres, Vesta, Juno, Pallas,
Mars, Jupiter, Saturn and Herschel, have each a much greater
distance to travel, than our Earth; but that, on the contrary, Venus
and Mercury can complete their revolution in a much shorter time.[2]
§ 15. The time which our Earth needs to travel once completely
round the Sun, (to finish one revolution) is called a Year. Such a year
has three hundred and Sixtyfive days;—and each of these days has
again Twentyfour hours.
You see from this that the revolution of the Earth round the Sun
gives us a means of measuring time, by which we are able to bring
order and regularity into our business and transactions of life. For the
making of clocks and watches is but a late invention, and we should
be left entirely in the dark as regards the history of former ages, and
a great many people would, at this present moment, be incapable of
forming a correct estimate of time, if Providence had not given to all
this appropriate means of measuring it.
§ 16. While the Earth needs a whole year for one revolution round
the Sun; Mercury requires but Eightyone days, and Venus only about
two thirds of One of our years. Mars, on the contrary, needs for one
of his revolutions almost Two years; Vesta almost Four; Juno, Ceres
and Pallas over Four years; Jupiter almost Twelve, Saturn over
Twentynine, and Herschel nearly Eightyfour of our years![3]—And if
these Planets, as we have reason to believe, are inhabited by beings
endowed with human understanding and faculties, numbering their
years as we do ours—by the revolution of their Planets round the
Sun—how different from ours must be the Period of their existence!!
§ 17. During the time that the Earth is performing her journey
round the Sun, the Moon, our constant attendant, is continually
moving round the Earth, and completes one of these revolutions in
little more than Twentyseven days.—Very important and interesting
to us are the changes in appearance which she exhibits during each
of these revolutions.—You probably will know, that the Moon does
not appear to us, at all times, the same. Sometimes she is hardly at
all visible, (at least not with the naked eye); at other times only a
small rim of her is seen, which by degrees becomes larger and
larger, until finally she appears in her full round form. After this she
begins again to diminish, changes again into a small luminous rim,
and finally disappears entirely from our sight. These successive
changes in the Moon’s appearance are called the Moon’s Phases, or
the waxing and waning of the Moon. The time during which the Moon
is not seen is called New Moon; the time during which she exhibits
her full shape is called the Full Moon; and the different periods of her
waxing and waning (when she appears to us in the form of a
crescent) are called Quarters. Thus we speak of the First and of the
Last Quarter of the Moon. The First Quarter takes place after New
Moon; the last Quarter after Full Moon.
The following diagram, Plate No. VII, may serve to represent to you
the Moon’s phases as seen from our Earth.
 When the Moon is in a, then the light of the Sun falls just on that
side of it which is turned from the Earth. It is then, we have New
Moon. When in b, a small brim of the Moon is seen, because a small
portion of its lighted surface is then turned towards the Earth.—When
in c half of her lighted surface is turned towards us, and we have the
First Quarter. In d a still greater portion of the Moon’s lighted surface
is visible, and in e, we have Full Moon, because her whole lighted
surface is then turned towards the Earth. In f the moon commences to
wane (to grow smaller,) and in g the last quarter commences; finally,
when passed through the point h, we have in a, again New Moon. For
familiar illustration you may also take a white ivory ball, holding it
before a lighted candle, which may take the place of the Sun. When
the ball is in a straight line between your eye and the candle it will
appear to you all dark; because the lighted part is then entirely turned
toward the candle (away from you), and you have the same case
which is represented to you in the diagram, when the Moon is in a. But
if you move the ball a little to the right, you will perceive a streak of
light, similar to the First Quarter represented in the Diagram, when the
Moon is in c. If moved still farther to the right, so that the whole lighted
part of the ball is seen, it will resemble the Full Moon; represented in
the Diagram, when the Moon is in e.
No. VII.
 No. VIII.

§ 18. While the Moon is moving round the Earth, it often occurs
that she is placed in a direct line between ourselves and the Sun. In
this case a greater or less part of the Sun is concealed from us,
which causes a diminution of light or a partial darkness on our Earth.
This we call an Eclipse of the Sun. (Such an Eclipse took place in
1831, and you will probably have an opportunity of seeing many
more). If, on the contrary, the Earth is placed in a direct line between
the Sun and the Moon, then the Moon will be obscured by our Earth.
This is called an Eclipse of the Moon. The following two figures on
Plate No. VIII will serve for an illustration.
You will easily perceive from them that if the Moon (as represented
in Figure I) is placed in a direct line between the Sun and ourselves, it
must necessarily conceal from us part of that luminary; and in this
state cast a shade upon our Earth.
 But if the Earth is placed in a direct line between the Sun and the
Moon, (as represented in Figure II), then the Moon will be much more
obscured, because the Earth is much larger than the Moon, and will
therefore cast a much greater shade upon her.
§ 19. It remains for us to speak of that class of bodies known by
the name of Comets, (see Lesson I, § 6). Of these an unknown
number belongs to our Solar System.—(Some philosophers have
estimated their number to be about Twentyone; others think it must
amount to several hundred). They move round the Sun in
exceedingly long ovals, having their transparent tails always turned
away from that luminary. What is most remarkable about them is the
astonishing degree of heat to which they are exposed on account of
passing so near the Sun, and the astonishing velocity with which
they travel.
The Comet which appeared in the year 1680, is supposed to
sustain a heat nearly Two Thousand times greater than that of red hot
iron, and to move at the rate of several Hundred Thousand miles an
hour!!

RECAPITULATION OF LESSON III.

QUESTIONS.
[§ 14.] Do all Planets need the same time to complete a whole
revolution round the Sun? Why not?
If the pupils are old enough to understand the use of Dividers, it will
perhaps be well for the teacher to let them draw the Solar System on
a piece of paper.—If not, he ought to let them explain Plate IV, or an
orrery, if one be at hand.
[§ 15.] What is the time called, which our Earth needs for a
complete revolution round the Sun? How many days are there in a
year? How many hours are there in a day?
What is the revolution of the Earth round the Sun, the means of?
[§ 16.] What time does Mercury require for a complete revolution
round the Sun? What time does Venus require for the same
purpose? What time does Ceres, Vesta, Juno and Pallas need?
What, Jupiter, Saturn, and Herschel?
[§ 17.] What motion does the Moon make whilst the Earth is
travelling round the Sun? How many days does the Moon need for a
complete revolution round the Earth? Does the Moon during its
revolution round the Earth always exhibit the same shape? What
changes then does she gradually undergo? What do you call the
successive changes in the Moon’s appearance? What do you call
the time during which the Moon is not seen? What, that, during
which she exhibits her full shape? What, the different periods of her
waxing and waning? When does the First Quarter take place? When
the last?
[The teacher might now require the explanation of Plate V; the elder
pupils may draw the Diagram.]
[§ 18.] What does frequently occur during the Moon’s motion
round the Earth? What is the consequence of the Moon’s position in
a direct line between the Sun and ourselves? What is such a
diminution of light in consequence of the Moon being placed
between us and the Sun, called? What takes place when the Earth is
placed between the Sun and the Moon? What is such an obscuration
of the Moon, in consequence of the Earth’s position between her and
the Sun, called?
[The younger pupils ought now to explain Plate VIII; the elder pupils
ought to draw the Diagram on a slate or paper.]
[§ 19.] Is the number of Comets belonging to our Solar System
precisely ascertained? How many are there supposed to belong to
our System? In what manner do they move round the Sun? What
remarkable property do they possess?

FOOTNOTES:
[2] If the teacher has an orrery at hand, if it be even of the most
simple construction, he may exhibit it now. But it is the author’s
belief that a considerable portion of the pupil’s interest is lost, if he
be acquainted with it, at the beginning of the study; or, as it is the
custom in some schools, if an orrery is hung up among the charts
and maps of the school room. The pupil ought not to see the
orrery, until he knows that it is but a faint illustration of the infinite
grandeur of the heavens. Nothing detracts so much from our
estimation of things as a too familiar acquaintance with them,
before we know their real value.
[3] The exact numbers are given in Table II, at the end of the
book.
 LESSON IV.
ROTATION OF THE SUN, THE EARTH, AND THE REST OF THE PLANETS ON
THEIR AXES.—DAY AND NIGHT.—INCLINATION OF THE EARTH’S AXIS.—
SEASONS.
§ 20. Besides the progressive motion of the Planets, of which we
have spoken in the last Lesson, they have yet a peculiar motion like
a wheel turning on its Axle-tree. This motion is called the rotation of
the Planets on their Axes; because each of them seems to move
round a straight line passing through its centre; like a ball turning
round a piece of wire run through the middle of it.—Moreover it is
customary to call such a straight line imagined to be drawn through
the centre of a Planet—the Axis of that Planet.
The double motion of the Planets,—progressive and rotary,—is
perhaps one of the most difficult things for young pupils properly to
understand, without some popular illustration. If the teacher, therefore,
has no orrery to show this motion to his pupils, he may compare it to a
screw which is turned round whilst it suffers at the same time a
progressive motion; or perhaps with more propriety to a spinning-top,
which is continually turning on its Axis, while at the same time it
describes large circles.[4]
§ 21. If you have well understood what has just been said, you will
be able to comprehend, that our Earth, while it is performing its great
journey round the Sun in Three Hundred and Sixtyfive days, is, at
the same time, every Twentyfour hours turning on its Axis. This
rotary motion of our Earth on its Axis is the cause of the successive
changes of day and night; that portion of the Earth which is turned
toward the Sun having always day, when the other, which is turned
away from him, has night.
This is again a wise dispensation of God’s providence. For if the
Earth would always keep the same relative position to the Sun, then
that portion of it, which would then be turned toward the Sun, would
have continual day, whilst the other, which would then be turned away
from him, would be enveloped in perpetual darkness. But as it is now
 arranged by the Earth’s rotation on its Axis, most every portion of its
surface must at least once every Twentyfour hours be turned toward
the Sun and receive from him light and heat. Without this, one great
half of our Earth would have a perpetual winter, destructive to plants
and animals, while an everlasting summer would scorch the other half
and render it equally unfit for the support of man.
The following Diagram, Plate IX, may serve to give you an idea of
the Earth’s rotation round its Axis, and the alternate succession of
Day and Night, resulting from it. When the Earth is situated as
represented in the Diagram, then that portion of it, which is marked
A, will have Day, because it is turned toward the Sun; and the portion
marked B, will have Night. But in the course of the next Twelve hours
the order will be reversed. The portion which is marked B, will be
turned toward the Sun and have day, whilst the portion A will be
turned from him, and have night.
§ 22. The rotation of the Earth on its Axis is also the cause of the
Rising and Setting of the Sun. For no portion of our Earth is at once
turned toward or from the Sun; but moves toward or from it by
degrees (as you may see by slowly turning a ball near the flame of a
candle). This gradual motion of each portion of the Earth’s surface
toward or from the Sun, makes the Sun himself appear to us as
rising and going down; while, in fact, we ourselves are turning
towards, or receding from him. This is a kind of deception similar to
that which you experience when slowly gliding down a river; when
the objects on shore have the appearance of receding from you,
while in fact, it is you, yourself, who are travelling away from them.
 No. IX.

The gradual rise and setting of the Sun is another excellent

provision of nature. Were we from the darkness of night at once
exposed to the luminous rays of the Sun, it would dazzle our eyes and
render them unfit to distinguish a single object.—It is only by a gradual
transition from darkness to light that we are able to accustom our eyes
to the brilliancy of noon.
§ 23. There is another peculiarity in the situation of our Earth with
regard to the Sun, which you have not yet learned. The Earth’s Axis
is not even (parallel) with that of the Sun; but is somewhat inclined
towards it, as represented in the last Diagram. To this is owing the
Change of the Seasons. For on account of the inclination of the
Earth’s Axis, the Sun’s rays fall, sometimes nearly perpendicular
upon us, while at other times they are striking us more obliquely[5].
This is the principal cause of those changes of temperature which
we are in the habit of distinguishing by the names, Spring, Summer,
Autumn and Winter.
In winter the Sun’s rays strike us most obliquely; it is therefore the
coldest season of the year. In summer they are most perpendicular;—
Summer therefore is the hottest season. Spring and autumn are
standing in the middle between these two. From spring till mid-
summer the Sun’s rays are striking us more and more perpendicularly;
from mid-summer till winter more and more obliquely.
A similar change of temperature is felt every day from Sun-rise
(when the Sun-beams are most oblique) till noon, (when they are
most perpendicular); and from noon again towards evening or Sun-
set, when they are again oblique.
§ 24. It has been mentioned (Lesson IV, § 20), that each Planet in
our Solar System is regularly turning on its Axis. But all of them do
not perform this rotation with equal velocity. The Planets which are
farther from the Sun are turning quicker than those which are near
him. Jupiter, for instance, turns on its Axis twice as fast as our Earth.
The nights in Jupiter, therefore, do not last half as long as ours.
This is, in some degree, necessary. For in proportion as a planet is
further from the Sun, it receives less light and heat, which deficiency
is, in part, made up by a more frequent exposition to his rays.

§ 25. The Sun himself is also known to turn regularly on his Axis,
and to complete one whole rotation in about Twentysix of our days.
This we have been able to perceive from the spots which have been
discovered on its surface, and which gradually move toward and
disappear on one side, when in a short time after they appear again
on the other.
§ 26. The Moon, and the Satellites of the other Planets have no
rotary motion; but have always the same side turned towards their
Planets. Thus the moon keeps constantly the same side turned
towards the Earth; but her monthly motion round the Earth (Lesson
III, § 17) is equal to a rotation on her axis; because by this means
every part of her is, at least, once every Twentyseven days turned
toward the Sun; as you may see from the Moon’s phases,
represented on plate VII. A day in the Moon, therefore, is equal to
Twentyseven of our days; because the Moon moves in Twentyseven
of our days round the Earth, which is equal to turning once on her
axis.

RECAPITULATION OF LESSON IV.

QUESTIONS.
[§ 20.] Is the progressive motion of the Planets round the Sun the
only one which they are performing? What other motion have they
besides this? What is this motion called? Why is it called so? What
do you call a straight line imagined to be drawn through the centre of
a Planet?
To what may the double motion of the Planets’ progression and
rotary be compared?
[§ 21.] What time does the Earth need to turn once on its axis?
How many times does the Earth turn on its axis during its whole
journey round the Sun?[6] What is this rotary motion of our Earth the
cause of? Which portion of the Earth has day? Which night?
What would be the case, if the Earth was always to keep the same
relative position with regard to the Sun? What is the advantage
derived from the rotation of the Earth on its Axis. Would the Earth be
habitable without it or not?
[The pupil ought now to explain plate IX.]
[§ 22.] What is the rotation of the Earth on its axis further the
cause of? What does the gradual motion of each portion of our Earth
towards the Sun produce?
What would be the case, if from the darkness of night we were at
once exposed to the luminous rays of the Sun? Could our eyes
endure the brightness of noon without a gradual transition from
darkness to light?
[§ 23.] What other peculiarity is there in the situation of the Earth
with regard to the Sun? What is this the cause of? Do the rays of the
Sun strike us at all times equally perpendicular or obliquely? What
changes of temperature are thereby created?
 How do the rays of the Sun strike us in winter? What season,
therefore, is it? How do the rays of the Sun strike us in summer? What
season, therefore, is summer with regard to temperature? How are
the rays of the Sun striking us from spring till mid-summer? How, from
mid-summer till winter? What similar change of temperature do we
experience every day from Sun-rise till noon, and from noon till
evening or Sun-set?
[§ 24.] Do all Planets turn on their axes with equal velocities?
Which Planets turn quicker, those which are nearer or those which
are further from the Sun? Give an instance. How long are Jupiter’s
nights in comparison to our’s?
Why is this, in some degree, necessary?
[§ 25.] Is the Sun himself also known to turn on its axis like the
Planets? How many days does he need for one complete rotation?
By what means have we been able to observe this motion?
[§ 26.] Have the Moon and the Satellites of the other Planets also
a rotary motion? In what position does the Moon remain with regard
to the Earth? But what is her monthly revolution round the Earth
equal to? Why? What is a day in the Moon equal to? Why?

FOOTNOTES:
[4] The propriety of this comparison becomes still more evident,
when we reflect that the Axis of the top is generally somewhat
inclined to the plane.
[5] If the terms perpendicular and oblique, should not be
perfectly understood by the pupils, it will be easy for the teacher
to explain their meaning.
[6] If the Earth requires 365 days to travel round the Sun; and
each day has twentyfour hours; then the Earth will, during the
whole of this time, turn Three Hundred and Sixtyfive times on its
axis.
 LESSON V.
OF THE APPEARANCE AND PECULIARITIES OF THE MOON AND SOME OF
THE PLANETS WHEN VIEWED THROUGH A TELESCOPE.
§ 27. Next to the Sun there is no heavenly body so interesting to
us as the Moon. When viewed through a good Telescope[7] she has
nearly the same appearance as in Figure I, Plate X. The bright parts
are supposed to be lofty mountains and tracts of land; (which is
evident also from the shadow which they cast) and the dark spots
are supposed to be valleys and caverns. Many of the mountains of
the Moon are higher than the largest mountains on the Earth. Some
of them are volcanos, and their eruptions have been distinctly
observed by many distinguished Philosophers. Some of the caverns
are ascertained to have a depth of many miles and a width of almost
Three miles.—No water has as yet been discovered in the Moon.
Hence if she is inhabited, as we have reason to believe, her
inhabitants must be very differently constructed from ourselves.
§ 28. Among the Planets Venus is by far the most beautiful in
appearance. She is known also by the name of the Morning and
Evening Star. Her light is so bright that she is often seen at Noon.
When viewed through a good telescope she exhibits phases similar
to those of the Moon (Lesson III, § 17), which proves her spherical
form (Lesson I, § 3). The mountains in Venus have been calculated
to be at least Six times as high as those on our Earth. Her
Atmosphere is only half as dense as ours.
§ 29. Mars appears in many respects similar to our Earth. His light
is red and changeable; his surface exhibits black changeable spots
(see Figure II, Plate X). Some philosophers pretend to have noticed
a region of ice on his poles. His atmosphere is twice as dense as
ours.
 No. X.

§ 30. Jupiter, viewed through a telescope, exhibits a surface

covered with stripes. These are supposed to be clouds. A
representation of them is given in Fig. III, Plate X. His light is very
white and subject to but little variation. His atmosphere is nearly
Twentyseven times denser (thicker) than ours.
§ 31. Very remarkable, as we have already observed, is the Planet
Saturn, on account of its luminous ring. Viewed through a telescope
it has the appearance, represented in Figure IV. It is highly probable
that to the inhabitants of that Planet, this ring has an entirely different
appearance from what it has to us. It appears to be a solid opaque
mass, and is probably inhabited like the Planet, which it constantly
accompanies on its journey round the Sun. Saturn’s atmosphere is
nearly Ninety times denser than that of our Earth. No mountains
have as yet been discovered on its surface.

Herschel is too remote, for us to know much about its surface. Its
atmosphere is supposed to be Three Hundred and Sixty-one times
thicker than ours.
Mercury, being the nearest Planet to the Sun, has a very bright light;
but is only seen early before Sun-rise, and immediately after Sun-set.
It exhibits Phases like the Moon.

RECAPITULATION OF LESSON V.
QUESTIONS.
[§ 27.] What do you know about the Moon’s surface? What, about
its mountains, volcanos and caverns? Have any great waters been
discovered in it?
[§ 28.] What do you know about the Planet Venus? By what other
name is she known? What does she exhibit, when viewed through a
telescope? What do you know about her mountains? What, about
her atmosphere?
[§ 29.] What do you know about the Planet Mars? What, about his
light, surface and atmosphere?
[§ 30.] What surface does Jupiter exhibit when viewed through a
telescope? Of what color is the light of Jupiter? What do you know
about his atmosphere?
[§ 31.] What do you know about the Planet Saturn? What does the
ring of Saturn appear to be? What do you know about the
atmosphere of this Planet?

FOOTNOTES: