Lateral Marketing Strategy

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Please respond to the following: "Lateral Marketing Strategy"

  • Assess the value of target marketing as an effective health care marketing strategy. Appraise the degree to which vertical and traditional segmentation help marketing managers use target marketing strategies. Support your rationale with at least two (2) specific examples of target marketing within a health care organization with which you are familiar.
  • Evaluate the impact of lateral segmentation in encouraging marketing managers to look broadly at markets in order to identify previously overlooked opportunities. Provide at least one (1) specific example of quality initiatives within a health care organization.

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CHAPTER 13 David Taylor’s Brand Stretch Spectrum LEARNING OBJECTIVES After examining this chapter, readers will have the ability to: ■ Understand the importance of evaluating newly developed healthcare products in an effort to determine whether they will carry existing brand names or be assigned new ones. ■ Realize the tradeoffs associated with the use of brand extensions in the healthcare marketplace. ■ Appreciate the value of David Taylor’s Brand Stretch Spectrum as a tool for formulating a variety of brand extension pathways. INTRODUCTION On an ongoing basis, healthcare marketers forward intensive efforts to develop the brands they are responsible for managing. Such concentrated attention to brand management responsibilities is to be expected because of the many benefits that successful brands afford to healthcare entities. Most notably, brands establish product identity, allowing customers to easily locate the goods and services of given organizations and differentiate them from competitive offerings. When healthcare marketers develop successful brands, they deliver valuable institutional assets that, if well managed, will yield enduring benefits for their associated healthcare organizations. Brand management initiatives are called upon for a variety of reasons, one of which is new product development. When new products are developed, healthcare marketers encounter numerous, related branding issues, with one of the most notable being the determination of whether new goods and services will carry existing brand names, termed brand extensions, or be assigned entirely new ones. Whether to field brand extensions or introduce new brands requires careful consideration. Brand extensions carry the benefit of familiarity in that target audiences already possess an awareness of associated brand names. This certainly affords advantages for new offerings in that the burden of building a base identity is significantly reduced and might even be outright eliminated depending on the strength of established brand names. Despite this powerful benefit, brand extensions are not always desirable. Brand portfolios can occasionally be overextended with too many products carrying given badges, resulting in confusion for both healthcare marketers and their customer populations. New product offerings also might not logically fit under existing brand names, warranting that such offerings carry newly developed identities. Significantly, brand extensions carry risks associated with the application of successful brand names to new and unproven product offerings. If these new products are not successful, such offerings will likely diminish the overall value of the brand names that they carry, negatively impacting all of the other product offerings in given brand portfolios. Regardless, the extension of established brand names to newly developed product offerings represents a practice worthy of consideration any time new goods and services present themselves. Interestingly, in the course of managing brands, healthcare marketers may discover logical additions to existing product arrays, resulting in various brand extensions. Hence, brand extensions can spur new product development even in the absence of formal initiatives to do so. For assistance whenever brand extensions are under consideration, healthcare marketers can turn to the Brand Stretch Spectrum, a tool developed by David Taylor. Illustrated in Figure 13-1, Taylor’s Brand Stretch Spectrum identifies three paths for extending, or stretching, existing brands: the core range extension, the direct stretch extension, and the indirect stretch extension. Each of these paths presents opportunities for growth and expansion under the right circumstances, with risk increasing as extensions move further away from core product offerings. These three brand extension pathways, accompanied by examples in Figures 13-2 and 13-3, are explained as follows. FIGURE 13-1 Taylor’s Brand Stretch Spectrum Adapted from Brand Stretch: Why 1 in 2 Extensions Fail and How to Beat the Odds by David Taylor. Copyright © 2004 by John Wiley & Sons Limited. Reproduced with permission. FIGURE 13-2 A Pharmaceutical Firm’s Brand Stretch Spectrum Constructed using design methodologies in Taylor, David. Brand Stretch: Why 1 in 2 Extensions Fail and How to Beat the Odds. Chichester, West Sussex, UK: Wiley, 2004. FIGURE 13-3 A Medical Clinic’s Brand Stretch Spectrum Constructed using design methodologies in Taylor, David. Brand Stretch: Why 1 in 2 Extensions Fail and How to Beat the Odds. Chichester, West Sussex, UK: Wiley, 2004. THE CORE RANGE EXTENSION The core range extension represents the application of a brand name to a new version (i.e., a product form variant) of an existing branded product. Because the brand is applied to a product with common core characteristics, such extensions are quite logical and reasonably safe pursuits. An extra-strength version of a branded aspirin product offered by a pharmaceutical manufacturer, for example, would represent a core range extension. So, too, would a newly established weekend medical clinic that carried the brand name of an existing weekday clinic. Yet another core range extension would be that of a deluxe wheelchair line offered by a durable medical equipment company that was placed under the same brand name as an existing wheelchair line possessing a standard array of features. Core range extensions are essentially equivalent product offerings, distinguished only by moderate feature and benefit differences. With such products, brand extensions make perfect sense because the given offerings are so closely related to each other. This affords excellent opportunities for newly developed goods and services to benefit from existing brand awareness in the marketplace. THE DIRECT STRETCH EXTENSION The direct stretch extension involves the application of an existing brand name to a broadened array of goods and services that differs from the core offering upon which the extension was based. This extension essentially stretches the brand name to cover items within a particular product class, which extends beyond the specific product form from which the brand name was derived. A pharmaceutical manufacturer that introduces cold and flu, allergy, and cough remedies under an existing brand associated with its array of aspirin products has effected a direct stretch extension. A medical clinic offering primary care services would, too, effect a direct stretch extension by placing a new specialty care clinic under its existing brand name. Likewise, a durable medical equipment company that introduces a new line of walkers, canes, and crutches under the brand name of its successful array of wheelchairs effects a direct stretch extension. Although direct stretch extensions differ from the core offerings that provided their associated brand identities, these extensions do fit into like product classes. Regardless, direct stretch extensions carry a greater degree of risk than core range extensions because the associated product offerings are different. This necessitates that healthcare marketers carefully evaluate direct stretch initiatives to ensure that these extensions represent appropriate applications for existing brand names. THE INDIRECT STRETCH EXTENSION The indirect stretch extension involves entry into a new product class. The degree of differentiation between the existing product class and the newly pursued one can range from mild to substantial. Because indirect stretch extensions branch out into unrelated product classes, they stretch brand names across a wide array of diverse product offerings, essentially creating umbrella brands. A pharmaceutical manufacturer exclusively focused on the pain relief product class would effect an indirect stretch extension by introducing a vitamin product under the brand name carried by its pain relief products. A medical clinic focused on the provision of comprehensive medical services in outpatient settings would effect an indirect stretch extension if the establishment decided to construct and operate a hospital or nursing home. A durable medical equipment company providing a comprehensive array of personal mobility products would effect an indirect stretch extension by introducing a new line of hospital beds under the brand name associated with its array of personal mobility products. Indirect stretch extensions pierce through the current product classes pursued by healthcare entities, placing them in new product classes containing goods and services that may be closely associated with, or very distant from, the goods and services offered in existing product classes. Clearly, indirect stretch extensions carry the highest level of risk associated with stretching brand names because established identities are being applied to product classes that are new and different. Given this, healthcare marketers must ensure that a goodness of fit exists between new product classes and existing brand identities because weak connections might possibly diminish existing brand equity. OPERATIONAL MATTERS Taylor’s Brand Stretch Spectrum clearly identifies three potential paths for extending brand names to cover products that are increasingly distant from the core offerings upon which the associated brand names originated. Each of these extensions can be successfully effected under the right circumstances. As with any new product pursuit, extensions should carefully be evaluated to ensure that markets for given products exist and that the application of existing brand names to new offerings makes sense to both internal and external audiences. If these conditions are met, the brand extension route affords many opportunities for marketing success. If, however, new goods and services appear to possess great potential, but existing brand names do not seem to represent appropriate identities for these new offerings, the establishment of entirely new brand identities would likely yield better marketing results. Significantly, Taylor’s Brand Stretch Spectrum can be used to spark new product ideas. By understanding the various pathways for stretching brands, healthcare marketers can review their existing product arrays and ask themselves how they might go about effecting core range, direct, and indirect stretch extensions. This activity can yield very productive new product insights even if formal systems for new product development do not exist. It is not uncommon for some of the best new product ideas to grow out of existing product offerings and, when this happens, the application of existing brand names to these new goods and services offers excellent opportunities to quickly connect with target audiences. SUMMARY David Taylor’s Brand Stretch Spectrum provides healthcare marketers with a useful portrayal of potential paths for effecting brand extensions. Aside from its use as a tool for understanding such extensions, Taylor’s Brand Stretch Spectrum can be used to foster new product development initiatives by encouraging healthcare marketers to envision how they might potentially extend their product arrays beyond core offerings. EXERCISES 1. Define and comprehensively discuss David Taylor’s Brand Stretch Spectrum, providing insights into its guidance and use as a device for the extension of core brands. Preface your discussion by reflecting on the advantages and disadvantages associated with brand extensions. How would you characterize the prevalence of brand extensions in the healthcare industry? What is the basis of your characterization? 2. Select a healthcare good or service of your choice and assign the product an appropriate brand name. Using David Taylor’s Brand Stretch Spectrum, envision potential brand extensions to this hypothetical healthcare offering by formulating core range extensions, direct stretch extensions, and indirect stretch extensions. Provide an illustration of your Brand Stretch Spectrum and offer a narrative explaining your rationale for assembling the brand portfolio as you did. REFERENCE Taylor, David. 2004. Brand stretch: Why 1 in 2 extensions fail and how to beat the odds. Chichester, West Sussex, UK: Wiley. CHAPTER 14 The Market-Product Grid LEARNING OBJECTIVES After examining this chapter, readers will have the ability to: ■ Understand the three-step process of target marketing and its importance in the healthcare industry. ■ Realize the benefits afforded to healthcare entities as a result of target marketing practices. ■ Understand major segmentation variables upon which markets can be divided. ■ Recognize the value of the Market-Product Grid as an instrument for segmenting markets and targeting appropriate segments. INTRODUCTION In an effort to more effectively address the wants and needs of customers, marketers engage in target marketing, a practice that involves three interrelated activities: market segmentation, targeting, and product positioning. Market segmentation is the process of dividing a market into groups (i.e., segments) of individuals who share common characteristics. When the market has been segmented, marketers engage in targeting where they select (i.e., target) attractive segments and focus their efforts on satisfying the wants and needs of these groups. These targeted segments are known as an entity’s target market. Product positioning follows targeting and involves the determination of an appropriate and effective image for products to convey to customers. Target marketing developed out of desires to more appropriately address the various wants and needs of different customer groups. The practice stands in contrast to mass marketing, which involves offering products to the market as a whole without regard for individual tastes and preferences. Target marketing makes sense. Women of childbearing age, for example, have potential needs for labor and delivery services. Parents have needs, courtesy of their infants and young children, for pediatric medical services. Elderly individuals have needs for home health care, assisted living, and nursing home services. By focusing on the specific wants and needs of market segments, marketers can deliver goods and services that are specifically tailored for the associated groups. This practice not only improves customer satisfaction but also allows for better use of promotions resources through the selection of communications vehicles that precisely reach desired populations. A useful tool for target marketing is known as the Market-Product Grid, an instrument that specifically addresses the segmenting and targeting aspects of the practice. Illustrated in Figure 14-1, the MarketProduct Grid, as depicted by Roger Kerin, Eric Berkowitz, Steven Hartley, and William Rudelius, consists of a matrix with markets identified on its vertical axis and products identified on its horizontal axis. The actual number of cells in the matrix is, of course, dependent on the number of markets and products identified. As a result, Market-Product Grids range from being quite small for entities with few markets and few products to being very large for entities that offer multiple markets an extensive array of products. To create a Market-Product Grid, marketers simply (1) construct a matrix of sufficient size, (2) list potential markets on the vertical axis, (3) list product offerings on the horizontal axis, and (4) evaluate each of the resulting market-product combinations, characterizing them as large, medium, small, or nonexistent markets. The activity of listing the goods and services of entities on the Market-Product Grid is quite simple, but identifying and listing potential markets can be somewhat challenging without some point of reference. This point of reference can often be found by consulting a breakdown of segmentation variables, such as the one listed in Table 14-1. This table provides examples of specific segments that exist within each of the four major segmentation categories: geographic, demographic, psychographic, and behavioral. It, however, presents only a few of the almost endless market segments that marketers could potentially pursue. Such a table serves as a useful starting point for identifying markets for placement on the Market-Product Grid. FIGURE 14-1 The Market-Product Grid Adapted from Marketing, 7th ed. by Roger A. Kerin, Eric N. Berkowitz, Steven W. Hartley, and William Rudelius. Copyright © 2003, 2000, 1997, 1994, 1992, 1989, 1986 by The McGraw-Hill Companies, Inc. Published by McGraw-Hill. Reproduced with permission of The McGraw-Hill Companies. Table 14-1 Major Segmentation Variables From Kotler, Philip; Armstrong, Gary, Principles of Marketing, 10th Edition, © 2004, Pg. 240. Reprinted by permission of Pearson Education, Inc., Upper Saddle River, NJ. OPERATIONAL MATTERS Figure 14-2 illustrates a Market-Product Grid that was developed for a home health agency. Here, the agency used the grid to assess the market potential of different areas of Jackson County. The grid indicates that the south and central sections of Jackson County possess large markets, the east section possesses a medium market, and the north and west sections contain small markets. The grid clearly identifies the most prominent markets (i.e., the south and central regions) for home health services within the county—information that can greatly assist the agency in determining which markets it wishes to pursue. FIGURE 14-2 A Home Health Agency’s Market-Product Grid Constructed using design methodologies in Kerin, Roger A., Eric N. Berkowitz, Steven W. Hartley, and William Rudelius. Marketing. 7th ed. New York: McGraw-Hill, 2003. Figure 14-3 presents a more complex Market-Product Grid that was developed for a sports medicine clinic. Here, the clinic sought to examine Washington County’s market potential for various sports medicine procedures by type of sport. The grid notably reveals a prominent market across all sports for foot and ankle procedures, followed closely by knee procedures. It also reveals that, among sports types, the tennis and golf sports populations possess the largest markets for broad sports medicine procedures—details that shed significant light on segment opportunities. FIGURE 14-3 A Sports Medicine Clinic’s Market-Product Grid Constructed using design methodologies in Kerin, Roger A., Eric N. Berkowitz, Steven W. Hartley, and William Rudelius. Marketing. 7th ed. New York: McGraw-Hill, 2003. It should be noted that although the largest markets might seem to represent the most productive marketing pursuits, such markets are not always appropriate targets. Organizations must, for example, factor in marketplace competitors, their dominance in certain segments, and their overall numbers. Certain segments, although large, may be saturated with competitors or dominated by market leaders. In such situations, smaller markets with fewer competitors may be more desirable segments to pursue. Aside from competitive elements, healthcare organizations might select smaller markets based on the particular missions they embrace. Entities that cater to underserved , rural populations represent excellent examples of institutions engaging in this practice. It should also be noted that Market-Product Grids are only as accurate as the information that is used to complete them. Although they remain useful even with informally collected data, the use of data derived from formal market research can greatly improve their accuracy. SUMMARY The Market-Product Grid provides a simple, yet highly useful, method for segmenting and targeting markets. By using this tool, marketers can more precisely identify and target appropriate customer groups. The Market-Product Grid also ensures that marketers consider multiple market opportunities. EXERCISES 1. Define and comprehensively discuss the Market-Product Grid and its role as an instr ...
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Hello, review the attached document and contact me in case you need any changes. Otherwise, good luck in your study and if you need any further help in your assignments, please let me know. Always invite me to answer your questions.

Running head: LATERAL MARKETING STRATEGY

Lateral Marketing Strategy
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LATERAL MARKETING STRATEGY

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Lateral Marketing Strategy
Businesses that are focusing on growing their operations and sales in the market have to
adjust their marketing strategies. In today’s market, the strategies of marketing rely on vertical
market segmentation which can limit the possibilities of a higher...

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