CHAPTER 7 MARKETING STRATEGY MARKETING STRATEGY Growth Strategies

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 • Fed. Ex 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 • Mc. Donald’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 Mc. Donald House • E-mail Previous Buyers

COLLEGE TEXTBOOKS • Traditional Distribution • Pricing Options • Buying Options