Chapter 13 Dimensions of Marketing Strategy

Summary

 

Objectives:

 

Chapter Outline:

  1. Describe the role of product in the marketing mix, including how products are developed, classified, and identified.
    1. Product strategy – A product is a good, service or idea containing tangible and intangible attributes that provide satisfaction and benefits.
    2. Process of developing new products:
      1. Idea development
      2. Idea screening
      3. Business analysis
      4. Product development
      5. Test marketing
        1. Trial mini-launch of new product
      6. Commercialization
        1. Full introduction of marketing strategy and product launch
    3. Classification of Products:
      1. Consumer products
        1. Convenience products
        2. Shopping products
        3. Specialty products
      2. Industrial products
        1. Raw materials
        2. Major equipment
        3. Accessory equipment
        4. Component parts
        5. Processed materials
        6. Supplies
        7. Industrial services
    4. Product line – group of closely related products that are treated as a unit
    5. Product mix – all the products offered by the organization
    6. Product Life Cycle
      1. Four Stages:
        1. Introductory
        2. Growth
        3. Maturity
        4. Decline
    7. Product Identification
      1. Branding
        1. A brand is a name, term, symbol, design, or combination that identifies a product and distinguishes it from other products
        2. Brand name is part of the brand that can be spoken
        3. Brand mark is the part of the brand that is a distinctive design
        4. Trademark is a brand registered with the U.S. Patent and Trademark Office and legally protected from use by any other firm.
      2. Types of brands:
        1. Manufacturer brands
        2. Private distributor brands
        3. Generic products
      3. Approaches to branding:
        1. Packaging
        2. Labeling
        3. Quality

  2. Define price and discuss its importance in the marketing mix, including various pricing strategies a firm might employ
    1. Price – value placed on an object exchanged between a buyer and a seller and is probably the most flexible variable in the marketing mix.
    2. Pricing Strategies: -- provide guidelines for achieving the company’s pricing objectives and overall marketing strategy.
      1. Typical Pricing Strategies:
        1. Price skimming
        2. Penetration price
        3. Psychological pricing
        4. Price discounting

  3. Identify factors affecting distribution decisions, such as marketing channels and intensity of market coverage.
    1. Distribution Strategy
      1. Marketing channel – channel of distribution that is a group of marketing organizations that directs the flow of products from producers to consumers. Marketing channels make products available to buyers.
        1. Intermediaries or Middlemen
          1. Retailers
          2. Wholesalers
        2. Supply chain management – long-term partnerships among marketing channel members working together to reduce costs, waste, and unnecessary movement in the entire marketing channel in order to satisfy customers.
        3. Channels for services
          1. Services are usually distributed through direct marketing channels
      2. Intensity of marketing coverage – how many and what type of outlets should carry a product
        1. Depends on buyer behavior, nature of the target market, and competition.
          1. Intensive distribution
          2. Selective distribution
          3. Exclusive distribution
      3. Physical distribution – all the activities necessary to move products from producers to customers including:
        1. Transportation
        2. Warehousing
        3. Materials handling

  4. Specify the activities involved in promotion, as well as promotional strategies and promotional positioning
    1. Promotion Strategy – communicate with individuals, groups, and organizations to facilitate an exchange directly or indirectly.
    2. Integrated marketing communications -- Process of coordinating the promotion mix elements and synchronizing promotion as a unified effort
    3. Promotion mix elements:
      1. Advertising
      2. Personal selling
        1. Most flexible of promotional methods
          1. Three categories of salespersons:
            1. Order takers
            2. Creative salespersons
            3. Support salespersons
          2. Personal selling – 6-step process:
            1. Prospecting
            2. Approaching
            3. Presenting
            4. Handling objections
            5. Closing
            6. Following up.
      3. Publicity
      4. Sales promotion
        1. Coupons, contest, free samples
    4. Promotion Strategies:
      1. Push strategy – used to motivate middlemen to push the product down to their customers
      2. Pull strategy – creates consumer demand for the product so that consumers will exert pressure on marketing channel members to make the product available.
    5. Objectives of Promotion
      1. To stimulate demand
      2. To stabilize sales
      3. To inform, remind, and reinforce customers
    6. Promotional positioning—uses promotion to create and maintain an image of product in buyer’ minds.