Ferrell Hirt Ferrell
M: Business
nd
2 Edition
FHF
McGraw-Hill/Irwin
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
Dimensions
of
Marketing Strategy
FHF
McGraw-Hill/Irwin
Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
The Marketing Mix
Keys to developing effective marketing strategy
• Maintain right marketing mix
• Satisfy target market
• Long-term customer relationships
Successful companies have at least one dimension of
value that surpasses all others
13-3
Product
[
A good, service, or idea that has tangible
and intangible attributes that provide
satisfaction and benefit to consumers
]
The most visible variable of the marketing mix
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13-4
Developing New Products
• Idea development
• New idea screening
• Business analysis
• Product development
• Test marketing
• Commercialization
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13-5
Consumer Products
Convenience products
• Purchased without doing research into price
• Widely available
• Often for immediate consumption
✴ example: a gallon of milk
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13-6
Shopping products
• Consumer has compared competitors’ prices and
has shopped around done
• Price, features, quality, style, service and image all
influence the decision to buy
✴ example: clothing, furniture
Consumer Products
(continued)
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13-7
Consumer Products
(continued)
Specialty products
• Require the greatest level of research and
shopping effort.
• Not willing to accept substitutes
• Consumers know exactly what they want and go
out of their way to find it.
• Price not the strongest consideration
✴ example: designer clothing, art, antiques
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13-8
Business Products
Used directly or indirectly in the operation or
manufacturing processes of a business
• Raw materials
• Major equipment
• Accessory equipment
• Component parts
• Processed materials
• Industrial services
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13-9
Products and Product Mix
Product line
• Group of closely related products that are treated
as a unit because of a similar marketing strategy,
production, or end-use
Product Mix
• All the products offered by the company
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13-10
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The Product Life Cycle
13-11
Identifying Products
Branding
• The process of identifying products
✴ Name
✴ Term
✴ Symbol
✴ Design
Trademark
• A brand registered with U.S. patent and trademark office
• Protected from use by any other firm
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13-12
The Most Valuable Global Brands
Source: “The 100 Best Global Brands,” BusinessWeek, September 28, 2009, p. 50.
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13-13
Brand Categories
Manufacturer brands
• Initiated and owned by the manufacturer to
identify products from production to point of
purchase.
Private distributor brands
• Cost less than manufacturer brands; owned and
controlled by wholesaler or retailer
Generic brands
• No brand name often come in simple packages
and carry their generic name
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13-14
Packaging
External container that holds & describes the product
• Protection
• Economy
• Convenience
• Promotion
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13-15
Labeling
The presentation of important information on the
package (often by law)
• 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
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13-16
Product Quality
[
The degree to which a good, service, or
idea meets the demands and
requirements of customers
]
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13-17
Pricing Strategy
Four Common Pricing Objectives
• Maximize profits and sales
• Boost market share
• Maintain the status quo
• Survival
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13-18
Specific Pricing Strategies
New Product Pricing
• Price skimming
• Penetration pricing
Psychological Pricing
• Odd/Even
• Prestige pricing
Price Discounting
• Quantity discounts
• Seasonal discount
• Promotional discounts
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13-19
Price is a Big Factor in Deciding
Where to Shop
Source: USA Today Snapshots, February 24, 2009, A1
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13-20
Distribution Strategies
Marketing Channel
• A group of organizations that moves products
from their producer to consumers
Retailers
• Buy products from manufacturers and sell them
to customers for uses other than resale
Wholesalers
• Intermediaries that buy from producers or other
wholesalers and sell to retailers
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13-21
Supply Chain Management
Creates alliances between channel members
• Channels for consumer products
• Channels for business products
✴ More likely to be direct marketing channels
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13-22
Whirlpool and Maytag merger
• A chance to reduce inefficiencies in the system
• Change in consumer buying– quicker purchase of
appliances
✴ Needed to streamline supply chain to get machines to
consumers fast
• Consolidated warehouses to regional distribution
centers
• Updated tracking technology
Supply Chain Example
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13-23
Intensity of Market Coverage
Depends on buyer behavior, the nature of the target market
and competition
• Intensive
✴ Makes a product available in as many outlets as possible
• Selective
✴ Uses only a small proportion of all available outlets to expose products
• Exclusive
✴ Exists when a manufacturer gives a middleman the sole right to sell a
product in a defined geographic territory
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13-24
Physical Distraction
Includes all the activities necessary to move products from
producers to customers
• Inventory control
• Transportation
• Warehousing
• Materials handling
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13-25
Promotion Strategy
Goal is to communicate with individuals, groups and
organizations
• Encourages marketing exchanges
• Used to influence opinions and attitudes toward
organizations, people, or causes
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13-26
Promotion Strategy
• Advertising
• Personal selling
• Publicity
• Sales promotion
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13-27
Integrated Marketing Communication
[
The process of coordinating the
promotion mix elements and
synchronizing promotion as a unified
effort
]
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13-28
Integrated Marketing Communication
A paid non-personal communication
communicated through mass media
• Advertising campaign involves designing a series of
advertisements and positioning them to reach a
target audience
• Online advertising is increasing
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13-29
Online Advertising
Ray-Ban’s Official Website Features a Virtual
Mirror Advertising
• Encourages marketing exchanges
• Used to influence opinions and attitudes toward
organizations, people, or causes
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13-30
Personal Selling
Direct two-way communication with buyers/potential buyers
Avon uses personal selling
• Targets women as customers and salespeople
• Personal interaction with customers
• Salespeople earn commissions
• Flexible hours
• The internet is an increasingly important component
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13-31
Publicity
A non-paid, non-personal communication through mass
media channels
• Mainly informative or descriptive
• Can be extremely important for a company
• Buzz marketing: marketers attempt to create a trend
through publicity
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13-32
Sales Promotion
Uses such items as coupons, contests, and free samples to
persuade buyers to purchase products
• Stimulates customer purchasing
• Enhances other promotional efforts
• Generally less expensive than advertising
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13-33
Promotion Strategies
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13-34
Objectives of Promotion
Promotion is only one element of the marketing strategy
• Must be tied to goals of firm
• Stimulate demand
• Stabilize sales
• Inform
• Remind
• Reinforce customers
Promotional positioning
• To create and maintain an image of a product in buyer’s
minds
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