DEVELOPING A MARKET STRATEGY Costly and Important 50% or more of the selling price Carefully planned Meet customer needs Make a profit Market Planning A COMPANIES PLAN THAT IDENTIFIES HOW IT WILL USE MARKETING TO ACHIEVE ITS GOAL IS CALLED MARKET STRATEGY. Developing a Market Strategy Step 1: Identify the target market Step 2: Develop a Marketing Mix Target Market Aim to Broad Too many unhappy people Customers don’t like product Waste money Specific aim Much easier to please customers Activity snowmobile Flashlight - cranks Tool Set Honda Odyssey Laptop Computer New Jordan Shoes Panda Car (4 feet tall) Marketing Mix Blending of 4 elements Product Place Price Promotion Product Brand Name Functionality Styling Quality Safety Packaging Repairs and Support Warranty Accessories and Services Place Distribution Channels Market Coverage Specific Channel members Inventory Management Warehousing Distribution Centers Order Processing Transportation Reverse Logic Price Pricing Strategy Suggested Retail Price Volume discounts and wholesale pricing Cash and early payment discounts Seasonal pricing Bundling Price flexibility Price discrimination Promotion Promotional strategy Advertising Personal selling & sales force Sales promotions Public relations and publicity Marketing communications budget Where do Companies go wrong? Assume they know what the customer wants. Making a product – then trying to sell it to customers. Fail to think of possible drawbacks. Web TV WebTV (now MSN TV) offered consumers Internet connection via their television sets in the mid-1990s. A Cable World article by Andrea Figler describes it this way: The service grew quickly at first, attracting mainstream users that typically shied away from technology. But to WebTV's dismay, they became the dreaded consumer: a customer who failed to produce new revenue streams but insisted on creating expensive customer service problems. So Microsoft which bought WebTV in 1997, scrapped the brand. It never passed the one-million-subscriber mark. Kellogg's Breakfast Mates The idea behind Kellogg's Breakfast Mates was fairly simple -- pack a box of cereal with milk and a spoon, and you have a tasty meal on the go! Hey, it worked for Lunchables, right? Unfortunately, Kellogg's failed to take two things into account. First of all, though the milk included in the Cereal Mate did not require refrigeration, no one likes the idea of warm milk. And second, the ads showed parents sleeping while children helped themselves to Cereal Mates -- but the packaging was not child-friendly. The confusion associated with Breakfast Mates led to its ultimate failure. Colgate Kitchen Entrees The Brand Failures blog explains: In what must be one of the most bizarre brand extensions ever Colgate decided to use its name on a range of food products called Colgate's Kitchen Entrees. Needless to say, the products did not take off and never left U.S. soil. The idea must have been that consumers would eat their Colgate meal, then brush their teeth with Colgate toothpaste. The trouble was that for most people the name Colgate does not exactly get their taste buds tingling. Touch of Yogurt Shampoo The Brand Failures blog says: The shampoo failed to attract consumers (in 1979) largely because nobody liked the idea of washing their hair with yogurt. Of those who did buy it, there were even some cases of people mistakenly eating it, and getting very ill as a result. The "Touch of Yogurt" concept is made even more remarkable because three years earlier Clairol introduced a similar shampoo called the "Look of Buttermilk." This product instantly bombed in test markets where consumers were left asking: what exactly is the "look of buttermilk" and why should I want it? A successful marketing strategy… Consider needs of consumers. Don’t assume – research! Conclusion: Step 1 • Study similarities and differences Step 2 • Identify target Market Step 3 • With this information develop a marketing mix Activity Retired Travelers First time Cruisers Option 4 Families With small children Option 3 A Cruise Vacation Option 2 Option 1 Couples with no children Create a marketing mix (the 4 P’s) for one of the above Cruise vacations.
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