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Marketing 3310 Chapter 3

Terms in this set (29)

Market penetration strategies
increase sales of existing products to existing markets.
Example: Quaker Oatmeal and General Mills' Cheerios = lower cholesterol.
Product development strategies
create growth by selling new products in existing markets.

Example: Extending the firm's product line (new flavors, sizes, packages) or altering/improving the product (adding vitamins, reducing
Diversification strategies
emphasize both new products and new markets to achieve growth.

Example: Enterprise Rent-A-Car sells coffee thru Keefe Coffee Company
Diversification strategies
emphasize both new products and new markets to achieve growth.

Example: Enterprise Rent-A-Car sells coffee thru Keefe Coffee Company
Ethical/Sustainable Decisions in the Real World
To offset costs, pharma companies raise the price of drugs that have no or low growth.
Execute Marketing Strategy
1. perform situation analysis
2. marketing objectives
3. Develop marketing strategy
4. Implement and control marketing plan
Step 1: Perform a Situation Analysis
PEST analysis
SWOT analysis
Competitive analysis
Step 2: Set Marketing Objectives
SMART= Smart, measurable, attainable, relevant, time
Help achieve the overall business objectives
Step 3: Develop STP Strategies
Segmentation - Identify meaningfully different groups of customers

Targeting - select which segment(s) to serve

Positioning - choose an image and appeal by adjusting marketing mix
Product Strategies
key benefits and attributes
product design
packaging= color, material etc
branding
support= FAQs
upgrades
product variation= flavors
Pricing Strategies
1. how much a firm charges for a product.
2.Debundling
3 Bundling ("all inclusive")
Bundling ("all inclusive")
may be coming back in airlines because:
Customer complaints (feel Nickle-and-dimed)
Customers may not see value in some unbundled attributes
Debundling ("a la cart")
here each individual attribute of the product is priced individually
Example: In 2008, airlines started to charge extra fees (e.g., checked baggage, exit seat, front of the plane, etc.)?
Promotional Strategies
how marketers communicate a product's value proposition to the target market.
(IMC)
Most marketers use an Integrated Marketing Communication Mix of

Advertising
Sales promotion
Public relations
Direct marketing
Personal selling
Distribution Strategies
outline when, how, and where the firm will make the product available to targeted customers.
sell directly vs retailer
Choosing the right distribution strategy
depends on product, pricing, and promotion decisions.
example : The introduction of online travel agents (e.g., Expedia, Kayak) contributed to the demise of traditional travel agencies.
Step 4: Implement & Control the Marketing Plan
firms follow formal process to determine progress toward marketing objectives.
1. measure actual performance
2. compare performance = objectives
3. make adjustments to objectives
(ROMI)
Return on Marketing Investment ( not expense)

Revenue (or profit) generated by investment in a given marketing program divided by the cost of the program at a given level of risk.
ROMI
Example:
Revenue from Marketing Investment = $150,000

Cost of Marketing Program = $30,000

ROMI = 150,000/30 = 5.0

ROMI=uplift/cost
ROMI Caution
1. measure of marketing productivity
2.ignores other marketing assets (e.g., brand equity)
3. ignores sustainability commitment
Action Plans
"marketing programs") are individual support plans included in a marketing plan that provide guidance for implementation and control of the various marketing strategies within the plan.
why are action plans created ?
plans for key elements involved in implementing the marketing strategy.
Creating Action Plan Timelines
lowchart form to help managers and employees visualize sequence of tasks
Examples: Gantt Chart, PERT/CPM Chart
Gantt chart
shows duration of task, overlapping tasks, slack time
PERT/ CPM Chart
shows parallel and sequencing between tasks
Setting a Budget
1. each cost linked to budget
2. increase accountability
3. helps forecasting
Deciding on Measurements and Controls
measuring, comparing performance, making adjustments
metrics
Selecting the right metrics should account for short-term objectives balanced against firm's long-term sustainability
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