DePaul University The Marketing Mix in Multinational Corporations Summary

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jx22

Business Finance

DePaul University

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Here is the detail of the one-page summary extra –credit opportunity.

  1. Select one article from any newspaper, magazine, online, and any other media
  2. Link this selected article to any knowledge point from the textbook chapters and/or lecture notes
  3. Write one-page summary including (a) describe the main point of this selected article; (b) explain how this selected article links to the specific knowledge point in the textbook chapters and/or lecture notes.

I have added a powerpoint to the question that you can look at to link to the lecture notes. It's only a one page summary so it shouldn't take too long. Thank You!

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Product Strategy Related to Chapter 8, 9 1 Agenda  Levels of product  Product Life Cycle (PLC)  Product Decision  Individual product decisions  Product mix decisions 2 1 WHAT IS A PRODUCT? NOT JUST A PHYSICAL ENTITY... 3 THREE LEVELS OF PRODUCT AUGMENTED EXPECTED CORE 4 2 Levels of Product Installation Core Product Packaging Convenience Delivery and Credit Brand name Features Core Benefit/ Service Quality Level Design Warranty Aftersales Service Actual Product Physical product, Software, Package Augmented Product Delivery, 1yr warranty 5 A CRUCIAL DISTINCTION: FEATURES VS. BENEFITS 6 3 DEFINITION: A PRODUCT IS A GOOD, SERVICE, OR IDEA CONSISTING OF A BUNDLE OF TANGIBLE AND INTANGIBLE BENEFITS… 7 THE PRODUCT LIFE CYCLE (PLC): The life of a product over four stages: introduction, growth, maturity, and decline. 8 4 Product Life Cycle (PLC) and its relation with a firm’s marketing objectives and marketing mix actions 9 THE PRODUCT LIFE CYCLE INTRODUCTION STAGE  Competition: Few  Product: Usually just one  Promotion: Primary Demand (desire for product class) vs. Selective Demand (desire for specific brand)   Price: Skimming Strategy vs. Penetration Pricing Place: Limited 10 5 THE PRODUCT LIFE CYCLE GROWTH STAGE  Rapid Sales Increases  Repeat Purchasers   Product: New Features, More Versions Promotion: Stress Point of Differences (Selective Demand)  Price: Gain Market Share (penetration pricing), Deal  Place: Broader Distribution 11 THE PRODUCT LIFE CYCLE MATURITY STAGE  Industry/Product Sales Slow  Fewer Competitors   Product: Further line extension, Full product line Promotion: Reminder Oriented  Price: Defend market share, profit oriented  Place: Maximum Expansion 12 6 THE PRODUCT LIFE CYCLE DECLINE STAGE  Industry/Product Sales Drop  Environmental Changes  Deletion  Harvesting Product: Only keep the best selling, most profitable product items Promotion: Minimal Pricing: Cost-driven, Keep profitable  Place: Concentrate on fewer outlets    13 Characteristics of PLC  Length of PLC varies  PLCs range from a few week to decades   TVs vs. VCRs Length of individual stage varies from one product category to next   Extended introduction stage: Home Computer Extended maturity stage: TVs, Automobiles 14 7 Shapes of Alternative PLC  Shape of the Product Life Cycle • Generalized Life Cycle • High-Learning Product • Fashion Product • Low-Learning product • Fad Product 15 Alternative product life cycle curves based on product type 16 8 Managing PLCS  PRODUCT MODIFICATION  MARKET PENETRATION  MARKET DEVELOPMENT  PRODUCT REPOSITIONING 17 MANAGING PLS MODIFYING THE PRODUCT OR MARKET  Product Modification • Product Bundling • New Characteristics Market Modification  • Market Penetration: Finding New Customers  Market Development •Increasing a Product’s Use •Creating a New Use Situation 18 9 MANAGING THE PRODUCT LIFE CYCLE REPOSITIONING THE PRODUCT  Product Repositioning Change the place in consumer’s mind relative to competitive product Don’t need to physically change the product 19 Product Decisions Individual Product Decisions • Product attributes • Branding • Packaging • Labeling • Product support services Product Mix Decisions • Product mix width • Product mix length • Product mix branding 20 10 Individual Product Decisions: Product attributes  Product quality   Product features   Quality level: Is high quality always good? How many features should we put on the product? Product design 21 Individual Product Decisions: Branding  Advantages to Branding   Buyers:  Identification  Quality and value Sellers  Provides legal protection  Helps segments markets 22 11 Types of Brand  Manufacturer’s brand   Private brand (= Store brand)    Sears’ Diehard batteries, Kenmore appliances Ralphs Licensed brand   Barbie (Mattel) Harry Potter toys, clothing Co-brand 23 Brand Equity  Brand equity is the value of a brand  Brand equity is related to     brand loyalty brand awareness perceived quality strong brand associations with positive benefits 24 12 The World’s Most Valuable Brands (Business Week, August 2002) 25 The World’s Most Valuable Brands (Business Week, August 2002) Rank Brand Brand Value ($billion) Rank Brand Brand Value ($billion) 1 COCA COLA 69.6 11 Ford 20.4 2 MICROSOFT 64.1 12 Toyota 19.5 3 IBM 51.2 13 CitiBank 18.1 4 GE 41.3 14 HP 16.8 5 INTEL 30.9 15 Ame. Express 16.3 6 NOKIA 30.0 16 Cisco 16.2 7 DISNEY 29.3 17 AT&T 16.1 8 McDONALD’S 26.4 18 Honda 15.1 9 MARLBORO 24.2 19 Gillette 15.0 10 MERCEDES 21.0 20 BMW 14.4 26 13 Price Increment You Would Pay for Computer Over No-Name Brand       IBM Compaq Hewlett Packard Dell Apple AST Computer $339 $318 $260 $230 $182 $17 27 Individual Product Decisions: Packaging  Functions of the package  product protection (functional benefit) 28 14 packaging 29 Individual Product Decisions: Packaging  Functions of the package   product protection (functional benefit) Information about product quality: bad packaging signals low quality (communication benefit) 30 15 Individual Product Decisions: Packaging  Functions of the package    product protection (functional benefit) Information about product quality: bad packaging signals low quality (communication benefit) product identification (perceptual benefit) 31 32 16 Individual Product Decisions: Product support services  some companies offer warranties on their products and increasingly on services  post-purchase service is important to deal with repairs, maintenance, customer questions and complaints; a major satisfaction-building tool 33 What car buyers consider most important in deciding what new car to buy 34 17 Product Decisions Individual Product Decisions • Product attributes • Branding • Packaging • Labeling • Product support services Product Mix Decisions • Product mix width • Product mix length • Product mix branding 35 Product mix  Product mix is the set of all products offered for sale by a company   Product mix width: the number of product line carried Product mix length: variety of sizes, colors, and models offered within each product line 36 18 Product mix: Proctor & Gamble Product mix width Detergents Product mix length Ivory snow Dreft Tide Cheer Dash Oxydol Bold Gain Era Toothpastes Gleem Crest Bar Soaps Deodorants Ivory Kirk’s Lava Camay Zest Safeguard Coast Oil of Olay Secret Sure Lotions Wondra Noxema Oil of Olay Camay Raintree Tropic Tan Bain de Soleil 37 Product Mix Strategies: Product mix width  Product Line Extension  Adding new product lines to the company’s present assortment P&G •Detergents •Toothpastes •Bar soaps •Deodorants •Lotions P&G •Detergents •Toothpastes •Bar soaps •Deodorants •Lotions •Potato Chips 38 19 Product Mix Strategies: Product mix length  Downward-stretch  adding lower price product to the existing product line  EX: Small Mercedes-Benz at lower price 39 Downward-stretch 40 20 Product Mix Strategies: Product mix length  Downward-stretch  adding lower price product to the existing product line  Upward-stretch  adding higher price product to the existing product line  EX: Holiday Inns’ introduction of higher-priced Crown Plaza hotel 41 Product Mix Branding Product Line Existing Brand Name  EX: Small Mercedes-Benz at lower price New Existing Line extension Brand extension New Multibrands New brands 42 21 Product Mix Branding: Line Extension  Existing brand names extended to new forms, sizes, and flavors of an existing product category(=product line) 43 Line Extension Using the same brand name for brands within the same product line  Coke  Diet Coke Diet Coke with Lemon Cherry Coke Diet Cherry Coke Vanilla Coke     44 22 Product Mix Branding: Line Extension  Existing brand names extended to new forms, sizes, and flavors of an existing product category  Advantages   Risks   It might lose its specific meaning or image Poor performance of one item may negatively impact others in line 45 Product Mix Branding Product Line Existing Brand Name  Promotion of one item promotes the firms other products Facilitates acceptance of new products by retailer and consumer New Existing Line extension Brand extension New Multibrands New brands 46 23 Product Mix Branding: Multibrands  New brand names introduced in the same product category  Advantages   Disadvantages  Increased cost 47 Product Mix Branding Product Line Existing Brand Name  Each brand is unique to each market segment No risk of the failure of a brand New Existing Line extension Brand extension New Multibrands New brands 48 24 Product Mix Branding: Brand Extension  Existing brand names extended to new or modified product categories 49 Brand Extension 50 25 Product Mix Branding: Brand Extension  Existing brand names extended to new or modified product categories  Advantages    Disadvantages    Unsuccessful new brand might damage original brand Dilution of the original brand image  Heinz  Heinz pet food inappropriate brand name and image  Colgate gum 51 Product Mix Branding Product Line Existing Brand Name  Instant recognition and earlier acceptance of extended brand Lower promotion cost Extend to complementary goods  EX: HP Printer  HP printer ink New Existing Line extension Brand extension New Multibrands New brands 52 26 Product Mix Branding: New Brands  New brand names in new product categories.  Advantages   Differentiation of each brands Disadvantages  Increased cost 53 Product Mix Branding Product Line Brand Name Existing New Existing Line extension Brand extension New Multibrands New brands Multiproduct Branding Strategy Multibranding Strategy 54 27 Alternative branding strategies 55 Service Marketing Related to Chapter 12 56 28 What is a Service?  A SERVICE is a form of product that consist of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.  Examples include:       Banking Hotels Tax preparation Home repair services Entertainment Education 57 Importance of services  More than 75% of labor force is employed in service industries  Over 70% of nation’s gross national product is produced by services  From 1986 to 2000, virtually all new jobs were in the service industries 58 29 Importance of services GDP 59 Products and Services: Product-service continuum Pure Tangible Good Soap Auto With Accompanying Repair Services Both tangible good & Service Restaurant Pure Service Airline Trip With Doctor’s Accompanying Exam Snacks 60 30 Characteristics of services: 4 I’s  Intangibility  services cannot be held, touched, or seen before purchase  Making the Intangible Tangible  Visualize benefits-Ad-Promotion Strategy  Use metaphors, symbols—BrandingProduct Strategy 61 Virgin Atlantic Airlines 62 31 American Express 63 Characteristics of services: 4 I’s (cont.)  Inconsistency (Variability)     Quality of services depends on who provides them and when, where, and how Difficult to standardize and manage service quality Managing service quality is essential Example: McDonald/KFC/…   Reducing Inconsistency by Training and Standardization Owned vs. Franchising 64 32 Characteristics of services: 4 I’s (cont.)  Inseparability  services cannot be separated from the service providers (service delivers)  Importance of the service agents   Internal Marketing: Happy employees produce happy customers On-line services—online service agents   E-banking/On-line shopping For high quality service, still need to be complemented by traditional face-to-face service agents 65 Characteristics of services: 4 I’s (cont.)  Inventory (Perishability)    Services cannot be stored for later sale or use Demand for some services fluctuate by season or by time of day Managing Perishability: Capacity Management (influence customer demand) Variable pricing(=off-peak pricing)  Example: Airline /Hotel /Restaurant/ /Amusement Park/Movie Theater/Cell Phone Plan  66 33 HARDER TO EVALUATE SERVICES THAN PRODUCTS  Search properties (attributes)   Experience properties (attributes) Credence properties (attributes) 67 Consumers use search, experience, and credence properties to evaluate services 68 34
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Running head: PRODUCT STRATEGY

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Product Strategy
Student’s Name
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PRODUCT STRATEGY

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Product Strategy

The following article is an intuitive summary of the marketing mix in multinational
corporations. It addresses key elements that include product mix as well as product decisions
through branding, packaging, and product attributes among others. The article ch...


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