Lecture Business: A changing world - Chapter 13: Dimensions of marketing strategy

After reading this chapter, you will be able to: Describe the role of product in the marketing mix, including how products are developed, classified, and identified; define price and discuss its importance in the marketing mix, including various pricing strategies a firm might employ; identify factors affecting distribution decisions, such as marketing channels and intensity of market coverage;...

Chapter Thirteen Dimensions of Marketing Strategy   Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 The Steps in Research and Development 13-1 Idea Develop­ ment   Screening New Ideas Irwin/McGraw­Hill Business Analysis   Product Develop­ ment Test Marketing Commercial­ ization ©The McGraw­Hill Companies, 2000 13-2 Product  Innovation  at 3M   Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 Classifications of  Consumer Products 13-3   Convenience products  Products bought frequently without a  lengthy search and bought for  immediate consumption Shopping products Products purchased after buyer has  compared competitive products Specialty products Products that the buyer searches for  and makes a special effort to obtain Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 PepsiCo Product Mix Pepsi­Cola Brands 13-4a   • • • • • • Irwin/McGraw­Hill Pepsi­Cola Diet Pepsi Mountain Dew Slice Mug Root Beer Mug Crème   • • • • • AllSport Lipton(Partnership) Aquafina Josta Frappuccino âTheMcGrawưHillCompanies,2000 PepsiCoProductMix TropicanaBrands 13-4b • • • • •   Irwin/McGraw­Hill Tropicana Pure Premium  Juices Tropicana Season’s Best Juices Tropicana Pure Tropics Juices Tropicana Twister Juice  Beverages Dole Juices Fruit Smoothies and Healthy  Shakes   • • • • • • • • • Tropicana 100% Pure  Juices Copella Juices  Fruvita Juices Hitchcock Juices Kirin­Tropicana Juices Looza Juices Looza Nectars Juice Bowl Juices Juice Bowl Nectars ©The McGraw­Hill Companies, 2000 PepsiCo Product Mix Frito­Lay Brands 13-4c • • • • • • • • • • •   Irwin/McGraw­Hill Baked Lay’s Brand Potato Crisps Baked Tostitos Brand Tortilla Chips Cheetos Brand Cheese flavored  Snacks Chester’s Brand Popcorn Doritos Brand Crackers Doritos Brand Dips Doritos Brand Tortilla Chips Fritos Brand Corn Chips Funyons Brand Onion flavored  Rings Grandma’s Brand Cookies Lay’s Brand Potato Chips   • • • • • • • • • • Munchos Brand Potato Chips Rold Gold Brand Pretzels Ruffles Brand Potato Chips Santitas Brand Tortilla Chips Smartfood Brand Popcorn Sunchips Brand Multigrain  Snacks Tostitos Brand Crackers Tostitos Brand Dip Tostitos Brand Tortilla Chips Baken­ets Brand Fried Pork  Skins ©The McGraw­Hill Companies, 2000 The Life Cycle of a Product 13-5 Sales $ Introduction Growth Maturity Decline Sales Volume Profit Time   Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 Top Ten Worldwide Brands 13-6   Irwin/McGraw­Hill McDonald’s Coca­Cola Disney Kodak Sony   Gillette Mercedes­Benz Levi’s Microsoft 10.Marlboro ©The McGraw­Hill Companies, 2000 Pricing Strategies 13-7 Implement Pricing Strategies • New­product strategies Price skimming  Penetration pricing • Psychological pricing strategies Odd/Even Prestige pricing • Price Discounting Quantity discounts Seasonal discounts Promotional discounts   Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 Who’s Watching Commercials Americans are exposed to about 270 ads a day 1 in all media, but few seem to notice. How many ads a day they thing they saw/heard: 13-14 1­30 31­50  51­100  101­300  300 or more  McKinsey & Co   Irwin/McGraw­Hill 15% 17% 9% 15% 25% 20% 18% 30% Men   27% 25% Women Source: USA Today, February 23, 1999, p. B­1 Internet Advertising 13-15 Internet advertising spending ($billions) $1.3 1,050 735 $0.5 $0.03 ‘95   Irwin/McGraw­Hill Web sites that accept advertising 1,345 $0.2 ‘96 ‘97   ‘98 ‘96 ‘97 ‘98 Source: Forbes, December 28, 1998, p. 100 Principal Publicity Mechanisms 13-17   • • • • • Irwin/McGraw­Hill News releases Feature articles Captionedphotographs Pressconferences Interviews âTheMcGrawưHillCompanies,2000 MajorToolsofSalesPromotion 13-17 • • • • • Irwin/McGraw­Hill Point­of­purchase displays Premiums Sampling and demonstrations Coupons Consumer contests and sweepstakes Refunds Trade shows   ©The McGraw­Hill Companies, 2000 Coupon Clippers 13-18 Income % that Clip Coupons Less than $15,000 $15,000­$24,999 $25,000­$49,000 $50,000 or more   Irwin/McGraw­Hill   79% 91% 78% 83% Source: NCH NuWorld 1998 Consumer Behavior Study, American Coupon Council from USA Today Snapshot, October 28, 1998 Push and Pull Strategies Pushing Strategy 13-19 Producer Wholesalers Retailers Consumers Retailers Consumers Pulling Strategy Producer Wholesalers Flow of Communications   Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 Objectives of Promotions 13-20   • Stimulate demand • Stabilize sales • Inform, remind, and reinforce customers Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 Per Contact Cost Method 13-21 Cost ad in specialized business publication the Internet direct mail business letters telemarketing trade shows industrial sales calls   Irwin/McGraw­Hill   $0.32 $0.98 $1.68 $13.60 $31.16 $162.00 $277.00 Source: Matthew J. Cravatta, “Goodwill Targeting,” Marketing Tools, June 1998 Solve the Dilemma 13-22   a Design a marketing strategy for the new  product line b Critique your marketing strategy in terms of  its strengths and weaknesses c What are your suggestions for  implementation of the marketing strategy? Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 Explore Your Career Options 13-23   Do you think the role of marketing will  continue to be important in the face of  increasing technological advances? Should  professional fields such as doctors, lawyers  and dentists utilize marketing in the same  way that manufacturing and retail do? Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 Additional Discussion  Questions and Exercises 13-24a 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? What is the difference between a “brand mark” and a  “trademark”?   Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 Additional Discussion  Questions and Exercises 13-24b   What are the advantages of businesses using coupons and/or  contests and sweepstakes for sales promotion purposes? Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 Chapter 13 Quiz 13-25a In the introductory stage of a product’s life, buyers may be charged that highest possible price for the product. This pricing approach is called a penetrating pricing b psychological pricing c price skimming d break­even point Branding may include a the brand name b the brand mark c the trade mark d all of the above   Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 Chapter 13 Quiz 13-25b Products that are purchased after the consumer has compared  competitive products are a convenience products b shopping products c specialty products d 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 a wholesalers b retailers c merchant middlemen d agent middlemen   Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 Chapter 13 Quiz 13-25c   When a manufacturer gives a middleman the sole right to sell a  product in a defined geographic territory, this is known as  a intensive distribution b selective distribution c exclusive distribution d physical distribution Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000 ... ©The McGraw­Hill Companies, 2000 Types of Market Coverage Intensive Makes a product available in as many  outlets as possible Selective distribution Uses only a small proportion of all  available outlets to expose products... increasing technological advances? Should  professional fields such as doctors, lawyers  and dentists utilize marketing in the same  way that manufacturing and retail do? Irwin/McGraw­Hill   ©The McGraw­Hill Companies, 2000... Design a marketing strategy for the new  product line b Critique your marketing strategy in terms of its strengths and weaknesses c What are your suggestions for  implementation of the marketing strategy?