Developing a Marketing
Strategy and Marketing Plan
Chapter 9
1
What memorable
impression is Nabisco
trying to leave with
consumers who view this
ad?
How are the words and
images in the ad used
effectively?
What is the marketing
strategy of this ad?
A marketing strategy is the
way marketing activities
are planned and
coordinated to achieve an
organization’s goal.
2
Differentiating Market Segments
Effective marketers rarely try to serve all
potential consumers in a market.
 However, many businesses will target more than
one segment in a market.
 The most important factor used to segment a
market are the needs and wants of the
consumer.
 Other factors used to segment a market include
demographics, psychographics, geographics,
and consumer buying behavior.

3
Selecting Target Markets



A target market is a clearly
identified segment of the market
to which the company wants to
appeal.
The people in the target market
must have common, important
needs that are different from
those outside the target market.
Each target market requires a
marketing mix that is different in
important ways from other
target markets.
4
Selecting Target Markets
Businesses will select the
market segment that offers
the best marketing
opportunity to become the
target market.
 Each target market
requires a unique
marketing mix that
responds to the
differences of each
market.

5
Fine-Tuning the Product





The product or service as a marketing mix element
includes anything offered to the customer by the
business that will be used to satisfy needs.
The basic product offered for sale is the most important
factor when customer’s make a decision to buy.
Features can be added to a basic product to make one
company’s product different from and better than
competitors’ products.
Options give customers choices of the product features
they want to purchase.
It is difficult for businesses to compete when their
products are nearly identical to those of their
competitors.
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Fine-Tuning the Product

A brand is the
unique name,
symbol, or design
that identifies a
product, service,
or company.
Frameworks 6.1
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Fine-Tuning the Product
The North Face, Inc. is an
outdoor product company
specializing in outerwear,
fleece, footwear, and
equipment such as backpacks,
tents, and sleeping bags.
 The North Face brand was
established in 1968 in San
Francisco, California.
 This name “North Face“ was
chosen because the north face
of a mountain is generally the
most difficult face to climb.

8
Mt. Everest is the tallest
mountain on earth.
The north face has been
one of the most frequently used
paths to the top.
The number of corpses
never recovered and still remaining
on Everest is about 120.
9
Walt Disney Company
A Family of Brands

Studio Entertainment

Parks and Resorts

Media Networks

Consumer Products
◦
◦
◦
◦
Disney Studios
Miramax Pictures
Touchstone Pictures
Pixar Animation
◦
◦
◦
◦
Disney Land
Disney World
Disney Land Paris
Hong Kong Disney
◦ ABC, ESPN, and The
Disney Channel
◦ The Walt Disney Store
Fine-Tuning the Product
• Private brands, also called store
brands, or dealer brands, are
owned and sold by wholesalers
and retailers. These can create
store loyalty. Example:
Kenmore, Great Value, Ol’ Roy,
Best Choice
• Manufacturer brands, also
called producer brands or
national brands are owned and
created by manufacturers. More
profitable. Example: LG, Sony,
Purina, Motorola
Frameworks 6.3.1
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Fine-Tuning the Product
• A trade/brand character is a brand mark with human
form or characteristics.
Frameworks 6.1
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Fine-Tuning the Product
• Trade/Brand characters continued …
Frameworks 6.1
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Fine-Tuning the Product
• Trade/Brand characters continued …
Frameworks 6.1
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Fine-Tuning the Product
• A trade/brand character can be used to position your
product in the mind of the consumer. In the Apple
Computer ads the company has ALSO used a trade
character to position their competition!
15
Classic advertising icons get
modern makeovers
• Trade/Brand characters video:
Frameworks 6.1
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Fine-Tuning the Product
• A co-branding strategy combines one or more brands
to increase customer loyalty and sales for each
individual brand.
Frameworks 6.3.2
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Co-Branding: Jeep and a Video Game
When the new “Call of Duty” series hits stores this week, players will be
able to drive across virtual battlefields in a digitally animated Jeep.
 If they enjoy the ride, they’ll be able to buy a real-life version of the toughguy vehicle, thanks to an unusual and ambitious partnership with the car
company.
 A special-edition Jeep will go on sale late this month branded with the
“Call of Duty: Black Ops” name.
 This is apparently the first time a vehicle and video game have gotten into
such a co-branding relationship.
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19
Fine-Tuning the Product
• Brand licensing is the legal authorization by a
trademarked brand owner to allow another company
(the licensee) to use its brand, brand mark, or trade
character for a fee. This allows for the sale of more
products
Frameworks 6.3.2
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Fine-Tuning the Product

The image is a
unique,
memorable quality
of a brand. Some
brands have an
image of quality,
others of low
price, and still
others of
innovation.
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Fine-Tuning the Product

A guarantee is a
general promise
or assurance of
quality.
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Fine-Tuning the
Product

A warranty is a
specific written
statement of a
seller’s
responsibilities
related to the
guarantee.
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Should You Purchase Extended
Warranties?
Extended warranties are one of
the most profitable things sold by a
business.
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The Product Life Cycle
A product life cycle identifies the four stages a product
goes through from the time it enters the market until it is
no longer sold.
Introduction
 Growth
 Maturity
 Decline

Frameworks 6.4.1
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Stages of a Product Life Cycle
The Introduction
Stage – The first
stage in the product
life cycle. There are
no direct competitors.
The price is usually
high, but this is the
least profitable stage.
A 100% electric car parked at a
recharging device in London.
Frameworks 6.4
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A Product in the Introduction Stage
The Tesla Roadster is
an all-electric sports car
produced by the electric
car firm Tesla Motors.
The Roadster is the only
highway-capable allelectric vehicle for sale
today.
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Chapter 9
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Stages of a Product Life Cycle
The Growth Stage – Sales increase and competitors
are attracted during this stage. Features, options, and
services are added to the product.
Frameworks 6.4
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Stages of a Product Life Cycle
The Maturity Stage – Sales will peak and
profits will begin to decline. Many business
now offer their own brand of the product. All
brands tend have the same options.
Frameworks 6.4
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Stages of a Product Life Cycle
The Decline Stage – This stage occurs when
consumers decide that a product is no longer
satisfying their needs or they discover a new
and better product.
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Frameworks 6.4
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33
Cellular Telephones
 First
used by Marty
Cooper on the streets
of New York City in
1973.
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How Consumers Shop
 The
consumer purchase classification
system is based on two factors:
Importance of the purchase to the consumer
Willingness of the consumer to shop and
compare products before making the
purchase
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Classifying Products
for the Consumer Market

Convenience Goods – Purchased with little
thought given to shopping around for the best
price.
◦ Staple goods – Products that are regularly, routinely
purchased. Examples: bread, milk, toothpaste, snacks
◦ Impulse goods – Products purchased on the spur of
the moment without advance planning. Examples:
candy, gum, magazines, soft drinks
◦ Emergency goods – Products purchased as a result
of an urgent need. Examples: towing services, gas,
umbrellas, plumbing and other repair services
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Classifying Products
for the Consumer Market

Shopping Goods – These are more expensive
than convenience goods and consumers will
spend time shopping around for the right
product and/or price.
◦ Attribute-based goods – A variety of differences exist
in products and the consumer will consider a number
of factors to determine the best value. Examples:
computers and cell phones
◦ Price-based goods – Products are very similar but
can have significant price differences. Examples:
plasma screen TV’s, college textbooks, and
pharmaceutical drugs
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Classifying Products
for the Consumer Market

Specialty Goods –
Products with
strong brand
loyalty among
customers.
Customers will
refuse to accept a
substitute. These
are well-known
brands and are
often very
expensive.
Examples: Rolls
Royce, Porsche,
Rolex
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Classifying Products
for the Consumer Market

Unsought Goods – These are goods that
customers do not want to buy because they do not
perceive a strong need for the product. Examples:
life insurance, legal services, funeral services
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Developing a Marketing Plan
A marketing plan is a clear written description
of the marketing strategies of a business and
the way the business will operate to
accomplish each strategy.
 A marketing plan is a detailed document that
provides guidance for the implementation of a
marketing strategy.
 A market analysis identifies a business’s
strengths and weaknesses and the
opportunities and threats it faces. This is
known as a SWOT analysis.
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40
41
What would be the strengths,
weaknesses, opportunities, and threats
of starting a patented DNA business?
42
Developing a Marketing Plan

The mission or purpose of the company
identifies the nature of the business or the
reasons the business exists.
Example: Inspiring life-long learners is our highest
priority. With our students, their families and our community,
we share an uncompromising commitment to excellence for
all. – Mission Statement For ????

A positioning statement is a specific description
of the unique qualities of the marketing mix
that make it different from the competition and
satisfying to the target market.
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Developing
Successful Products
Chapter 10
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Starting With a Product
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A product is anything tangible offered to a
market by a business to satisfy needs.
Consumer view a product differently than the
business that produces it.
The satisfaction provided from a product’s use
is more important to consumers than the
physical appearance.
The failure rate for new products is very high
and very expensive.
To interest a consumer, a product must be
useful and meet the consumers’ needs.
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Starting With a Product
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
When using a test market, a limited quantity of the
new product is developed, and the marketing mix
is implemented in a small part of the market to
determine if it will be successful.
A test market is a specific city or geographic area
in which marketing experiments are conducted.
◦ This is increasingly expensive.
◦ Competitors are tipped off about a company’s new
products and marketing strategies.
◦ Competitors will take actions to influence the test market
results.
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Components of the Product
Mix Element
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The most important part of the product is the
physical product.
In product design, the basic product is modified
and improved with features and options.
Not every product enhancement will add to
customer satisfaction. Some consumers do not
want a bike with 27 different gear speeds.
An important way of improving customer
satisfaction with products is to suggest the
purchase of additional products that make the
original product more useful.
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Components of the Product
Mix Element

A product line is a group of similar products
with slight variations in the product mix to
satisfy different needs in a market.
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Components of the Product
Mix Element

A product assortment is the complete set of all
products a business offers to its market.
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The Package
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
A package is the physical container
or wrapping for a product.
The package can aid in identifying
and selling the product.
The packaging provides protection
and security for the product until the
consumer can use it.
Packaging can also make the
product more desirable or useful for
consumers. Example: A plastic
screw on cap for orange juice.
Frameworks 6.5
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The Package
Promoting and Selling the Product Customer reaction to a package and
brand name is an important factor in determining marketplace success or
failure.
Defining Product Identity Packages can invoke prestige, convenience,
status, or other positive attributes.
Frameworks 6.5
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The Package
Providing Information Packages give directions for product use,
information about contents, guarantees, nutritional information, and
potential hazards.
Meeting Customer Needs Various sizes meet the needs of different
market segments: family packs meet the needs of larger families;
smaller packages are made for individuals.
Frameworks 6.5
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The Package
◦ Ensuring Safe Use
Plastic packaging,
tamper-resistant
packaging, and
childproof containers
protect customers.
◦ Protecting the Product
Packages protect a
product during shipping,
storage, and display,
prevent tampering, and
sometimes help prevent
shoplifting of the
product.
Frameworks 6.5
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Tylenol Product Tampering
The incident occurred when seven
people died after taking pain-relief
capsules that had been poisoned.
It happened in1982 in the Chicago
area. These poisonings involved ExtraStrength Tylenol medicine capsules
which had been laced with potassium
cyanide.
The incident led to reforms in the
packaging of over-the-counter
substances and to federal antitampering laws.
The case remains unsolved and
no suspects have been charged. A
$100,000 reward, offered by Johnson &
Johnson for the capture and conviction
of the "Tylenol Killer," has never been
claimed.
Frameworks 6.5.1
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The Package
Environmental Packaging Some customers are willing to
pay more for products with packages that are reusable,
recyclable, less wasteful, and safer for the environment.
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The Package
Cause Packaging Some
companies use packages
to promote social issues.
Example: Ben &
Jerry’s Homemade ice
cream cartons promote
environmental and even
political causes.
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Do Consumers Really Judge a
Product by its Package?
“A book cover's image can be worth a thousand words - and
more, if it entices you to buy.” – CBS News Sunday Morning
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How Valuable is
the Package?
“A first edition of 'The
Great Gatsby,' if he or she bought
a copy that did not have the dust
jacket, they could buy a nice copy
for maybe around $10,000," said
Inman. "If you buy a copy that
has a dust jacket - even if it's
rather tattered - you're looking at
probably $80,000 and up.” - CBS
News Sunday Morning
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Brand Development

A trademark is the legal protection of the
words or symbols for use by a company.
Indicates a “registered
trademark”
Frameworks 6.1
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Should Colleges
and Universities
protect their
trademarks?
This story appeared in the Harrison
Daily Times on July 10, 2010.
Starbucks vs. Sambucks Coffee
Starbucks, the giant chain that sells huge amounts of ridiculously expensive
coffee, is picking on a little guy.
On the coast of Oregon where the Columbia River meets the Pacific, sits the
small town of Astoria, population 10,000. Up here, when people want their coffee they
often head to a little shop run by Sam Buck. Buck grew up here, went to the local high
school and bought a tiny coffeehouse and named it Sambucks, using her name for the
store.
Buck is actually her maiden name. When she married in 1993 she became
Sam Lundberg but she used her maiden name for the shop because around Astoria, she
says, everyone knows her by that name.
"When I bought the coffee shop, there were no Starbucks within 100 miles,"
she said.
You can guess what came next. When Starbucks discovered she was using the
name Sambucks, they sent her a letter and told her to stop.
"I was in shock. I thought, is this real? I mean, they're attacking me?" said
Buck.
She says she ignored Starbucks' cease-and-desist letter. After all -- Sam
Buck was her name. No one was going to tell her she couldn't use her name. So
Starbucks sued her for trademark infringement. Sambucks? Starbucks?
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Brand Development

A licensed brand is a well-known name or
symbol established by one company and
sold for use by another company to
promote its products.
Frameworks 6.3.2
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63
Levels of Brand Recognition
Non-recognition
Consumers are unable to identify the
brand.
Rejection
Consumers will not purchase the
product because of the brand
Recognition
Consumers can recall the brand name
but it has little influence on purchases.
Preference
Consumers view the brand as valuable
and will chose it if it is available.
Insistence
Consumers value the brand to the
extent that they reject other brands.
Chapter 10
The Consumer Market
Consumer Markets: Individuals or socially
related groups who purchase products for
personal consumption.
 Direct Demand: Is the quantity of a product or
service needed to meet the needs of the
consumer.

64
The Business Market
Business Markets: Companies and
organizations that purchase products for the
operation of a business for the completion of a
business activity.
 Derived Demand: The quantity of a product or
serviced needed by a business in order to
operate at a level that will meet the demand of
its customers.

Example: The number of potatoes
needed by McDonalds is directly
derived by the amount of consumer
demand for its French Fries.
65
The Business Market

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


Capital Equipment: Includes the business’s land, buildings,
and major pieces of equipment needed to produce other
goods and services. Examples include delivery trucks and
office buildings.
Operating Equipment: Small machines needed in the
operation of the business with a shorter life span than capital
equipment. Examples include phones, fax machines, and
printers.
Supplies: Products and materials consumed in the operation
of the business. Examples include paper, pencils, paper
clips, and cleaning supplies.
Raw Materials: Unprocessed products used as basic
materials for the business’s product. Examples include a
railroad car full of wheat to be used in the production of bread
or city water used in the production of Pepsi products.
Component Parts: Have been either partially or totally
processed by another company. Examples include computer
chips that will be used to build a PC or an alternator for a car.
66
What Is a New Product?
Few products are really new. Most “new”
products are existing products that have been
changed and/or improved.
 A new product must be entirely new or
changed in an important and noticeable way.
 The Federal Trade Commission regulates the
use of the term “new.”
 There is a six-month time limit for the use of
the word “new.”

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The Steps in New Product
Development






Idea development
Idea screening
Strategy development
Financial analysis
Product development and testing
Product marketing
68
Is this really a new product?
With cigarette sales falling, the smoking industry is going smokeless.
Companies like R.J. Reynolds and Philip Morris are introducing new smokeless
tobacco products that are nothing like your granddaddy's messy chew or dip.
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Test
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