This is an opportune time to put the PIMS program into an historical perspective. Not because it is yesterday's news, but in recognition of its continuing relevance. Indeed, it is striking how well the PIMS framework complements contemporary thinking on strategy-making.

This retrospective view also reveals some continuing dilemmas the field of strategy is struggling to address. While PIMS may not resolve these issues, the framework and the cumulative research using the database help to highlight and properly frame the questions.

The sources → positions → performance framework for assessing the competitive advantages (Day and Wensley 1988) of businesses will guide our exploration of the contributions of PIMS and the evolution of the field of strategy. The sources are the resources the firm deploys – their capabilities, assets, and controls – and the strategic choices of markets to serve and competitive positions to pursue. What one sees in the market, from the vantage point of a customer or competitor, is a positional advantage. These advantages can be achieved in a myriad of ways through some combination of lower costs and superior customer value (Markides 2001). These positional advantages should translate into superior performance (growth, profitability, and economic value creation).

The evolution of strategy

Firms have always had strategies, whether strategy is viewed as a choice of competitive position; as a collection of rules; as stretch and leverage; as intent; as the embodiment of a firm's values, or in other ways (Markides 2001).

From one perspective, the objective of this chapter is to develop a researcher's “wish list” for an idealized dataset to address questions in marketing strategy and elsewhere. From another viewpoint, the topics in this chapter indicate how our field has shifted since the early seventies. In the process of studying “the profit impact of marketing strategy” we have learned that “profit” is not so easily defined and that “strategy” is a somewhat ambiguous term.

While the subject of this chapter is mainly what a revised and revived PIMS project might look like, we should note that PIMS Europe is alive and well. (See Box 11.1 for a brief update of the current PIMS management philosophy.) While PIMS Europe is also open to proposals from academics and others for joint research projects, the organization is clearly more consulting-oriented than either the original PIMS project or what we have in (wishful) mind.

Our final chapter is organized as follows. With the assumption that form and substance will follow function, we begin with a discussion of how the marketing mix has changed. Section 11.1 discusses changes in marketing programs, dimensions of marketing strategy, and the possibilities for defining marketing costs that would be encompassed by a present-day PIMS project. Collectively, these changes have substantially redefined the strategic marketing mix for many companies. Section 11.2 discusses new performance measures that may redefine or augment traditional measures of ROI and ROS, which occupied center stage for the original PIMS project.

The marketing literature contains several structural models, many of them based on the PIMS database, in which one variable is a definitional component of another, related to it through an identity. These definitional relationships have the potential for providing important insights into marketing phenomena, if they are appropriately modeled. On the other hand, they result in inconsistent parameter estimates if they are not separated from other, non-definitional, relationships in the model that need to be empirically estimated. This chapter first discusses the substantive information that can be obtained by studying the definitional components of a composite variable instead of the variable alone. Then, it examines each of the ways in which definitional relationships appear in marketing models, identifies those that are misspecified, analyzes the impact of the misspecification, and then provides the correct specification. It also disproves a commonly held belief that using instrumental variable estimation in a simultaneous equation system resolves the problems caused by mixing definitional relationships with structural ones. Thus, it provides a comprehensive view both of the potential benefits and of the pitfalls of definitional relationships in structural models. Much of the work reviewed in this chapter was inspired and enabled by the PIMS research database, which provides data not only on profitability, but also on each of its cost and revenue components for a variety of strategic business units over multiple years.