CHAPTER 7
MARKETING STRATEGY
MARKETING STRATEGY
• Growth Strategies
• Marketing Choices
• Guerrilla Marketing
• Marketing Mix
GROWTH STRATEGIES
• Internal Growth
• External Growth
INTERNAL GROWTH
• Market Penetration – existing products in existing markets
• Product Development – new products in existing markets
• Market Development – existing products in new markets
MARKET PENETRATION
• Use more of product
• Cross-sell products
• Take competitor’s business
MARKET PENETRATION EXAMPLES
• Arm & Hammer
• Bank Services
• Frito-Lay
BANK CROSS-SELLING
• Checking accounts
• Credit/Debit cards
• Safety deposit boxes
PRODUCT DEVELOPMENT
• Bring out new products
• Modify existing products
• Continuous product changes
PRODUCT DEVELOPMENT EXAMPLES
• 2014 Honda
• Heinz blue ketchup
• 2014 designer clothes
CONTINUOUS PRODUCT CHANGES
• New Yearly Products
• Seasonal Fashions
• New Technologies
MARKET DEVELOPMENT
• Expand geographical market
• Expand overseas
• Sell to new markets
MARKET DEVELOPMENT EXAMPLES
• Pappas expands to Chicago
• Scantrons sold to large hospitals
• FedEx and UPS in China
INTENSIVE GROWTH OF
BLUE BELL ICE CREAM
• Market Penetration
- Increase sales of existing products
• Product Development
- Introduce a new line of Diet Blue Bell
• Market Development
- Enter Oklahoma with Blue Bell
CANNIBALIZATION ISSUES
Products
Introducing new products which take
revenue from existing products
Retail Stores
Introducing new stores which take
revenue from existing stores
EXTERNAL GROWTH
• Backward Integration
- Control of supply system
• Forward Integration
- Control of distribution system
• Horizontal Integration
- Control of competition
BACKWARD INTEGRATION EXAMPLES
• McDonald’s making own hamburger buns
• Ford operating their own steel mills
• Kroger operating own milk plant
KROGER MANUFACTURING
FACILITIES
• Dairy plant
• Bakery
• Meat plant
• Carbonated beverages
FORWARD INTEGRATION EXAMPLES
• Dell opened up retail outlets
• Pepsi Cola buying Pepsi distributors
• Ralph Lauren setting up retail stores
HORIZONTAL INTEGRATION EXAMPLES
• Ernst and Whinney merging with
Arthur Young
• Chevron buying Gulf Oil
• Black & Decker merging with Stanley
MARKETING CHOICES
• Niche Markets
• Multiple Revenue Streams
• Market Positioning
NICHE MARKETS
• Concentrated Niche
- One target market
• Multiple Niches
- Multiple target markets
CONCENTRATED NICHE EXAMPLES
• Cliff Notes
• Blue Jeans
• Cuties
• L’eggs Hosiery for nurses
CONCENTRATED NICHES
FOR BLUE JEANS
• Not Your Daughter’s Jeans
• Male Skinny Jeans
• Long Haul Jeans
LONG HAUL BLUE JEANS
Target Market – Professional Truck Drivers
Product – Cut wider in seat and thighs
Promotion – Ads in Trucking Magazines
Pricing – Premium Pricing
Distribution – Truck Stops
L’EGGS HOSIERY NICHE STRATEGY
Target Market
Nurses
Product
White Pantyhose
Problem
Retailers refuse to stock
with slow turnover
Solution
Market directly to 250,000
nurses using mail catalogue
MULTIPLE NICHE EXAMPLES
• General Motors
• Anheuser – Busch Beer
GENERAL MOTORS AUTOMOBILES
• Chevrolet
• Cadillac
• Buick
ANHEUSER – BUSCH BEER
• Budweiser
• Michelob
• Busch
MULTIPLE REVENUE STREAMS
• Harry Potter
• Angry Birds
• UH Football
MULTIPLE REVENUE EXAMPLES
HARRY POTTER
• Sold books
• Movie revenue
• Theme park
400 million
6.4 billion
200 million
MULTIPLE REVENUE EXAMPLES
ANGRY BIRDS
• Angry Birds Apps
• Stuffed Toys
• T-Shirts
UH FOOTBALL REVENUE
• Seat tickets
• Parking
• Food and drinks
MARKET POSITIONING
The perception a buyer has about your
product versus your competitor’s product
MARKET POSITIONING EXAMPLES
• Lite Beer
• Gerber baby food
• Barbie doll
GERBER’S POSITIONING STATEMENT
“Babies Are Our Business – Our Only Business”
• Heinz makes ketchup
• Swift makes meat
• Beechnut makes gum
GUERRILLA MARKETING
Unconventional marketing intended to get
maximum results from minimal resources
GUERRILLA MARKETING EXAMPLES
• Bauer student organizations
“borrowing” tables
• Mobile taco stands
• Free publicity
MARKETING MIX
Target Market(s)
Product/Service
Strategy
Distribution
Strategy
Pricing
Strategy
Promotion
Strategy
MARKETING MIX EXAMPLES
• Girl Scout Cookies
• College Textbooks
GIRL SCOUT COOKIES
• Product Strategy
• Distribution Strategy
• Promotion Strategy
• Pricing Strategy
GIRL SCOUT COOKIES
PROMOTION EXAMPLES
• New Car Dealership
• Iraq Troops
• Ronald McDonald House
• E-mail Previous Buyers
COLLEGE TEXTBOOKS
• Traditional Distribution
• Pricing Options
• Buying Options