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Business in a Changing World McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved. Chapter 13 Dimensions of Marketing Strategy 2

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13-4 Concord Music Group Concord Music Group (CMG): A savvy flair for marketing. Merger between Concord Records and Fantasy Records in 2004; added Telarc Records in Together, largest and fastest growing independent music companies in the world.

13-5 The Marketing Mix Key to developing marketing strategy Maintain right mix satisfy target market Long-term customer relations

13-6 Dimension of value surpassing all others: Wal-Mart – price Procter & Gamble – top consumer brands Domino’s Pizza – distribution via home delivery The Marketing Mix Competitive Advantage

13-7 Product Strategy – Fred Smith and Federal ExpressFederal Express Professor said “Smith’s idea would never fly” The Marketing Mix

13-8 Developing New Products – Multi-step process Idea development Screening of new ideas Business analysis Product development Test marketing Commercialization Product Strategy

13-9 Test marketing – a trial mini-launch of a new product in limited areas that represent the potential market. Product Development

13-10 Commercialization – The full introduction of a complete marketing strategy and the launch of the product for commercial success. Product Development

13-11 ACNielsen Market Decisions Product Development

13-12 Classifying Products Consumer Products Convenience products Shopping products Specialty products

13-13 Classifying Products Business Products Raw materials Major equipment Accessory equipment Component parts Processed materials Industrial services

13-14 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 Marketing Mix

13-15 Product Life-Cycle The Life Cycle of a Product

13-16 Product Life Cycle 45 years of strong sales – Mattel’s Barbie doll’s life cycle is waning. Today, edgier dolls like Bratz dolls give Barbie a run for her money.Bratz

13-17 U.S. Hybrid Vehicle Sales Product Life Cycle

13-18 Identifying Products Branding – process of identifying products Name Term Symbol Design

13-19 Branding The Most Valuable Brands in the World

13-20 Brands 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.

13-21 Packaging External container holds & describes the product: Protection Economy Convenience Promotion

13-22 Brands Coca-Cola is the most valuable brand in the world

13-23 Branding Labeling (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

13-24 Product Quality Product quality -- Degree to which a good, service, or idea meets the demands and requirements of customers

13-25 Quality Customer Satisfaction with Airlines 1AirTran 2JetBlue 3Southwest 4Northwest 5Frontier 6Continental 7Alaska 8United 9American 10Delta

13-26 Pricing Strategy Four Common Pricing Objectives : Maximize profits and sales Boost market share Maintain the status quo Survival

13-27 Pricing Strategies New Product Pricing Price skimming Penetration pricing Psychological Pricing Odd/Even Prestige pricing Price Discounting Quantity discounts Seasonal discount Promotional discounts

13-28 A Green Marketing Strategy Target Market-consumers that want to make eco- friendly decisions Product-designed to reduce impact on the environment Price-includes added costs Promotion- electronic media to reduce the use of natural resources Distribution-reduce emissions through efficient transport, communication, & supply chain management

13-29 Distribution Strategies Marketing Channels Retailers (Wal-Mart, Sears)Wal-MartSears Wholesalers (food brokers to restaurants) E-tailers (Amazon.com)Amazon.com

13-30 Retailers

13-31 Intensity of Market Coverage Intensive distribution Makes a product available in as many outlets as possible Selective distribution Uses only a small proportion of all available outlets to expose products Exclusive distribution Exists when a manufacturer gives a middleman the sole right to sell a product in a defined geographic territory

13-32 Distribution Physical distribution -- includes all the activities necessary to move products from producers to customers. Inventory control Transportation Warehousing Materials handling

13-33 Promotion Strategy Promotion mix Advertising Personal selling Publicity Sales promotion Integrated marketing communications The process of coordinating the promotion mix elements and synchronizing promotion as a unified effort

13-34 Personal Selling Direct, two-way communication with sellers & potential buyers Prospecting Approaching Presenting Handling objections Closing – asking for the order Following up

13-35 Promotion Strategies: To Push or Pull