CHAPTER 7CHAPTER 7MARKETING STRATEGYMARKETING 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 JEANSTarget 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 400 million
• Movie revenue 6.4 billion
• Theme park 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
• Heinz makes ketchup
• Swift makes meat
• Beechnut makes gum
“Babies Are Our Business – Our Only Business”
GUERRILLA MARKETING
Unconventional marketing intended to getmaximum results from minimal resources
GUERRILLA MARKETING EXAMPLES
• Bauer student organizations “borrowing” tables
• Mobile taco stands
• Free publicity
MARKETING MIX
Target Market(s)
Product/ServiceStrategy
DistributionStrategy
PricingStrategy
PromotionStrategy
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