Marketing Strategy: A Decision-Focused Approach Chapter 8

Front 1

1. Failures - don't finish the cycle
2. Typical Product
3. Extreme success - seems to never die
4. Fads - Enter suddenly, experience strong and quick enthusiasm, peak early, and enter the decline stage shortly thereafter.

Back 1

Types of Products according to the Life Cycle (4)

Front 2

1. Introductory Stage
2. Growth Stage
3. Shakeout or competitive turbulence stage
4. Mature stage
5. Decline stage

Back 2

Product Cycle (5)

Front 3

1. Should be relatively short to reduce production costs and hold down inventories.
2. Efforts are on differentiating the new product or product line.
3. Skimming is designed to obtain as much margin per unit as possible, it recovers investment more quickly.
4. Penetration pricing enables the firm to strive for quick market development and makes sense when there is a steep experience curve, which lowers costs.
5. Availability is very important in consumer goods; on industrial goods it's easier to use intermediaries.
6. Advertising costs are more important on consumer goods; personal selling costs are more important on industrial goods.

Back 3

Marketing Mix for Introductory Stage (6)

Front 4

1. Search for differentiation
2. Price differencies decrease
3. Build a direct-sales system
4. Promotion costs become more concern with building demand for a company's brand than for the product class

Back 4

Marketing Mix for Growth Stage (4)

Front 5

1. Eliminate weaker items
2. Emphasize on creative promotional pricing
3. Strengthen its channel
4. Direct Price Competition
5. Maintain and enhance the distribution system
6. Promotion costs increase

Back 5

Marketing Mix for Shakeout or Competitive Turbulence Stage (6)

Front 6

1. Differentiation (Selling systems instead of products, Incorporating labor-saving features, Improving the ease of use, Service)
2. Promotion and prices remain stable
3. For consumer goods distribution and in-store displays become increasingly important

Back 6

Marketing Mix for Mature Stage (3)

Front 7

1. Cost increase
2. Many firms vacate the market

Back 7

Marketing Mix for Declining Stage (2)

Front 8

1. Large investments
2. Short term loss
3. Facilities have to be built in advance to ensure supply

Back 8

Strategic Implications for Introductory and Growth Stages (3)

Front 9

1. Larger-share sellers should be able to reap the benefits of earlier investments
2. Investment in developments must continue

Back 9

Strategic Implications for Mature and Declining Stages (2)

Front 10

1. New-to-the-world products
2. New product lines
3. Additions to existing product lines
4. Improvements in or revisions of existing products
5. Repositionings
6. Cost reductions

Back 10

New Market Entries Categories (6)

Front 11

1. First choice of market segments and positions
2. Defining the rules of the game
3. Distribution advantages
4. Economies of scale and experience
5. High switching costs for early adopters
6. Possibility of positive network effects
7. Possibility of preempting scarce resources and suppliers

Back 11

Sources for Competitive Advantage for Pioneers (7)

Front 12

1. The new product-market is insulated from the entry of competitors, at least for a while, by strong patent protection, proprietary technology, substantial investment requirements, or positive network effects
2. The firm has sufficient size, resources, and competencies to take full advantage of its pioneering position and preserve it in the face of later competitive entries.
3. Marketing strategy elements (large entry scale, broad product line, high quality product, heavy promotional expenditures)

Back 12

Determinants for Success for Pioneers (3)

Front 13

1. Mass-market penetration
2. Niche penetration
3. Skimming and early withdrawal

Back 13

Strategic Marketing Programs for Pioneers (3)

Front 14

To capture and maintain a commanding share of the TOTAL market

Back 14

Objective of Mass-Market Penetration Strategy

Front 15

1. Entry barriers inhibit or delay the appearance of competitors
2. Relevant competencies include product engineering, promotional and channel management skills, and the financial and organizational resources necessary.
3. If the product category is likely to experience positive network effects.

Back 15

When is Mass-Market Penetration Strategy Successful? (3)

Front 16

1. Aggressively building product awareness and motivation to buy among a broad cross-section of potential customers
2. Making it as easy as possible for those customers to try the new product
3. Increasing customers' awareness and willingness to buy
4. Increasing customers' ability to buy

Back 16

What are the marketing program components of the Mass-Market Penetration Strategy? (4)

Front 17

1. Personal selling
2. Media advertising
3. Internet ads and videos
4. PR campaigns
5. Sales promotion
6. Reducing the risk of buying something new
7. Broaden its product offerings

Back 17

How can you increase customer's awareness and willingness to buy? (7)

Front 18

1. Keep prices low
2. Offer liberal financial arrangements or easy credit terms
3. Product availability
4. Technical compatibility

Back 18

How do you increase customer's ability to buy? (4)

Front 19

1. Differences across national borders.
2. Mode of entry:
- Exporting (export merchants, agents or cooperative organizations)
- Contractual entry modes (licensing, franchising and contract manufacturing)
- Direct investment (joint ventures, sole ownership)

Back 19

Considerations of the Mass-Market Penetration Strategy in global markets.

Front 20

1. Limited resources
2. Market expected to grow quickly
3. Number of different benefits or applications to appeal
4. Few barriers in the entry of major competitors

Back 20

Marketing Program Components for Niche Penetration Strategy (4)

Front 21

1. Setting a high price and engaging in only limited advertising and promotion to maximize per-unit profits and recover the product's development costs as quickly as possible.
2. Essential to have good R&D skills.
3. Few barriers or entry
4. Fast diffusion
5. Lacks the capacity or resources to defend the leading share position.
6. Marketing Program Components (High price, should not devote much effort to expand the line, concentration in next generation technology)

Back 21

Marketing Program Components for Skimming and Early Withdrawal Strategy (6)

Front 22

1. Ability to take advantage of the pioneer's positioning mistakes
2. Ability to take advantage of the pioneer's product mistakes
3. Ability to take advantage of the pioneer's marketing mistakes
4. Ability to take advantage of the latest technology
5. Ability to take advantage of the pioneer's limited resources

Back 22

Sources of Competitive Advantage for Followers' Strategy on entring new markets

Front 23

1. Few legal, technological, or finantial barriers to inhibit entry
2. It has sufficient resources or competencies to overwhelm the pioneer's early advantage
3. Marketing strategy elements (Resources on a larger scale than the pioneer, Offering a product with more sophisticated technology, better quality, or superior service., Pursuing peripheral target markets)

Back 23

Determinants of success of follower's strategies (3)