Chap013

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Published on January 22, 2008

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Chapter Thirteen:  Chapter Thirteen Dimensions of Marketing Strategy Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin The Marketing Mix:  The Marketing Mix Maintaining the right marketing mix that satisfies the target market and creates long-term relationships with customers Did You Know? Domino’s Pizza delivery drivers cover 9 million miles a year delivering 400 million pizzas.2 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Product Strategy:  Product Strategy Product development Classification Mix Life cycle Identification Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Developing New Products:  Developing New Products New Idea Screening Business Analysis Product Development Test Marketing Commercialization Source: Rebecca Buckman, “Window into the future,” Wall Street Journal, June 25, 2001, p. R19. Did You Know? In 2001, Microsoft planned to spend $4 billion on R&D. Classifying Products:  Classifying Products Consumer Products Convenience products Shopping products Specialty products Business Products Raw materials Major equipment Accessory equipment Component parts Processed materials Industrial services Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Product Line and Product Mix:  Product Line and Product Mix Product Line Closely related products that are treated as a unit because of similar marketing strategy, production, or end-use considerations Product Mix All of the products offered by an organization Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Colgate-Palmolive’s Product Mix and Product Lines:  Colgate-Palmolive’s Product Mix and Product Lines Source: “Our Products,” Colgate-Palmolive (n.d.), www.colgate.com/app/Colgate/US/Corp/Products.cvsp (accessed June 5, 2004). Product Life Cycle:  Product Life Cycle Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Identifying Products:  Identifying Products Branding The process of naming and identifying products; can use a brand mark or trademark Packaging The external container that holds and describes the product Labeling The presentation of important information on a package Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved The 10 Bottled Water Brands:  The 10 Bottled Water Brands Source: Advertising Age Fact Pack 2004 Edition, p. 23. For each of the top 10 bottled water brands, discuss potential competitive advantages. Categories of Brands:  Categories of Brands Manufacturer Brands Kellogg’s, Ford, Sony Private Distributor Brands Kenmore appliances (Sears) Generic Brands peanut butter, dog food, kitty litter Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Packaging Functions:  Packaging Functions Protection Economy Convenience Promotion Did You Know? While shopping, the average time a consumer looks at a package is 2.5 seconds. Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Labeling:  Labeling The content of labeling, often required by law, may include: Ingredients or content Nutrition facts (calories, fat, etc.) Care instructions Suggestions or use (such as recipes) The manufacturer’s address and toll-free number Web site Other useful information Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Product Quality:  Product Quality The degree to which a good, service, or idea meets the demands and requirements of customers Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Pricing Strategy:  Pricing Strategy Four Common Pricing Objectives: Maximize profits and sales Boost market share Maintain the status quo Survival Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Pricing Strategies:  Pricing Strategies New Product Pricing Price skimming Penetration pricing Psychological Pricing Odd/Even Prestige pricing Price Discounting Quantity discounts Seasonal discount Promotional discounts Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Price vs. Non-Price Competition:  Price vs. Non-Price Competition For the following products, indicate whether they are sold using price competition or non-price competition and defend your selection: Toyota Hybrid Prius Hyundai Sonata Porsche Cayenne SUV Estee Lauder Electric Intense Lipcreme Avon Brilliant Moisture Lip Color Louis Vuitton’s Murakami Handbags Olay Complete Moisturizing Lotion Toshiba Widescreen Televisions Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Distribution Strategy:  Distribution Strategy Marketing Channels Retailers (Wal-Mart, Sears) Wholesalers (food brokers to restaurants) E-tailers (Amazon.com) Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Supply Chain Management:  Supply Chain Management Long-term partnerships among channel members to reduce costs, waste, and unnecessary movement through the channel to satisfy customers Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Channels for Consumer Products:  Channels for Consumer Products Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Channels for Business Products:  Channels for Business Products More than half of all business products are sold through direct marketing channels Other business products may be distributed through channels employing wholesaling intermediaries Industrial distributors Manufacturer’s agents Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Intensity of Market Coverage:  Intensity of Market Coverage Intensive distribution Makes a product available in as many outlets as possible Selective distribution Uses only a small proportion of all available outlets to expose products Exclusive distribution Exists when a manufacturer gives a middleman the sole right to sell a product in a defined geographic territory Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Physical Distribution :  Physical Distribution Physical distribution includes all the activities necessary to move products from producers to customers Inventory control Transportation Warehousing Materials handling Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Importance of Distribution in a Marketing Strategy:  Importance of Distribution in a Marketing Strategy Distribution decisions are the least flexible marketing decisions Use committed resources Establish contractual relationships Are bound by time Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved The Promotion Mix:  The Promotion Mix A strong promotion program results from the careful selection and blending of: Advertising Personal selling Publicity Sales promotion Integrated marketing communications The process of coordinating the promotion mix elements and synchronizing promotion as a unified effort Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Advertising:  Advertising A paid form of non-personal communication transmitted through a mass medium Advertising campaign Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Advertising Media:  Advertising Media Print media Newspapers Magazines Direct mail Outdoor (billboards) Electronic media Television Radio Cyber ads Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved U.S. Advertising Expenditures in Millions of Dollars:  U.S. Advertising Expenditures in Millions of Dollars Internet Advertising:  Internet Advertising Total revenues from advertising, paid content, and e-commerce on mobile devices in the U.S. is projected to grow from $100 million today to $3.3 billion in 2005 Source: “E-MONEY,” American Demographics, June, 2001, p. 32. Top 10 Product Categories for Advertising Spending in the United States for the year 2003:  Top 10 Product Categories for Advertising Spending in the United States for the year 2003 Source: “U.S. Advertising Spending Rose More than 5% in 2003, Nielson Media Research press release, February 19, 2004, available at http://www.nielsenmedia.com Ten Leading National Advertisers:  Ten Leading National Advertisers Personal Selling:  Personal Selling Direct, two-way communication with buyers and potential buyers A six-step process: Prospecting Approaching Presenting Handling objections Closing – asking for the order Following up Did You Know? A typical sales call on an industrial customer can cost between $200 and $300 per call Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Publicity:  Publicity Non-personal communication transmitted through mass media but not paid for directly by the firm Presented in news story form Describes what a firm is doing, what products it is launching, or other newsworthy information Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Sales Promotion:  Sales Promotion Direct inducements offering added value or some other incentive for buyers to enter into an exchange Store displays Premiums Sampling and demonstrations Coupons Consumer contests and sweepstakes Refunds Trade shows Did You Know? Annually, 248 billion cents-off coupons are distributed, but less than 2% are redeemed Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Push and Pull Strategies:  Push and Pull Strategies Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Objectives of Promotions:  Objectives of Promotions Stimulate demand Stabilize sales Inform, remind, and reinforce customers Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Promotional Positioning:  Promotional Positioning The use of promotion to create and maintain an image of a product in the buyer’s mind A natural result of market segmentation Assists in product differentiation Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Average Salary for Sales and Marketing Executives, 2003:  Average Salary for Sales and Marketing Executives, 2003 Source: Galea, Christine. “the 2004 compensation Survey,” Sales & Marketing Management, May 2004, table p.29. Solve the Dilemma:  Solve the Dilemma Design a marketing strategy for the new product line. Critique your marketing strategy in terms of its strengths and weaknesses. What are your suggestions for implementation of the marketing strategy? Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Explore Your Career Options:  Explore Your Career Options Do you think the role of marketing will continue to be important in the face of increasing technological advances? Should professionals such as doctors, lawyers, and dentists utilize marketing in the same way that manufacturing and retail firms do? Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Additional Discussion Questions and Exercises:  Additional Discussion Questions and Exercises Research and development is the process of identifying new ideas and technologies that can be developed into new products. Where do these new ideas come from? Assume you have the opportunity to buy a company that markets a product. Which stage of the life cycle of that product would offer you the greatest opportunity for profits? Why? Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Additional Discussion Questions and Exercises:  Additional Discussion Questions and Exercises What is the difference between a “brand mark” and a “trademark”? What are the advantages of businesses using coupons and/or contests and sweepstakes for sales promotion purposes? Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Chapter 13 Quiz:  Chapter 13 Quiz In the introductory stage of a product’s life, buyers may be charged the highest possible price for the product. This pricing approach is called penetrating pricing psychological pricing price skimming. break-even point. Branding may include the brand name. the brand mark the trade mark all of the above. Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Chapter 13 Quiz:  Chapter 13 Quiz Products that are purchased after the consumer has compared competitive products are convenience products. shopping products. specialty products. a product line. Intermediaries who sell products to ultimate consumers for home and household use rather than for resale or for use in producing other products are wholesalers. retailers. merchant middlemen agent middlemen. Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Multiple Choice Questions about the Video:  Multiple Choice Questions about the Video One way that Hotel Monaco sets itself apart is by offering guests a(n) ______ as a temporary pet companion during their stay. dog cat goldfish bird According to Business Week readers, after price and location, _______ is very important in a hotel service. room quality food quality bed quality Web site quality Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

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