MKT 327 Introduction to Marketing 1st Edition Lecture 15 General Marketing and Competitive Strategies / Innovation managementOutline of Last Lecture A. Strategic framing decisions1. Marketing demand2. Product classifications Outline of Current Lecture B. Positioning strategiesI. Strategic directionII. Tactical directionIII. Competitive strategyIV. Framing marketing mixV. InnovationVI. Successful new product developmentCurrent Lecture1) Positioning strategiesa) Value propositionsi) Starbucks: quality coffee packaged in psychological lifting ambiance and experienceii) Dunkin donuts: maximize satisfaction for food and beverage rituals iii) McDonalds: maximum value with maximum access to product stables (give Starbucks quality at Dunkin’ Donuts price)iv) Biggby: Fresh quality coffee with ‘home town’ flavor 2) Strategic Directiona) Nature of demandi) Selectiveii) Primaryb) Competitive positioni) Leaderii) Challengeriii) NicherThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.c) Market positionsi) Many open ii) Few openiii) Noned) Utilityi) Formii) Timeiii) Placeiv) Possession e) McDonalds- i) Nature of demand(1) Primaryii) Competitive position(1) Challengeriii) Market positions(1) Noneiv) Utility(1) Time(2) Place (3) Possessionv) INCREASE PURCHASING RATE-general marketing strategy f) Starbucksi) Nature of demand(1) Selectiveii) Competitive position(1) Leader(2) Nicheriii) Market Position(1) Noneiv) Utility(1) Formv) RETAIN BY INCREASING SATISFACTION- general marketing strategy3) Tactical Directiona) McDonaldsi) Convenienceii) Trusted brand leader (establish a relationship) / high quality iii) Price for trialiv) Promote brand preferencev) Intensive distributionb) Starbucksi) Heterogeneous shopping/ specialty(1) Differentiation/ value in use (environment)(2) Promote prestige image (3) Premium pricing(4) Selective distribution (modular strategy)4) Competitive Strategy (keeping/ retaining position)a) A competitive strategy defines what other organizations the firm will measure its performance against (Perspective)b) And how a firm will allocate its resources versus these other organizations (strategic actions)c) To protect its weaknesses and/ or exploit its strengths (tactical approach)i) Leader- do what it takes to stay at topii) Challenger(1) Attack(2) Differentiation(3) Low-costiii) Follower(1) Can be happy and profitable in the middleiv) Niche(1) Be acceptable in that small piece of the market place5) Framing marketing mixa) Strategic directionb) Tactical framing factorsi) Product life cycle(1) The conceptual framework of the stages products move through over their lives that marketers use to identify broad marketing mix strategies (2) Identifying stage in life cycle (a) Product development(b) Introduction(i) Single or few firms(ii) Low-moderate sales growth (iii) Losses (c) Growth(i) Firms entering industry(ii) Accelerating growth in growth rate(iii) Profits occur and increase(d) Maturity(i) Industry stable (entry/exits)(ii) Sales peak(iii) Profits peak(e) Decline (i) Firms exiting industry(ii) Accelerating decline in growth rate(iii) Profits minimum(f) Graphed with losses/investments- sales/profits (y-axis)ii) Product classification6) Innovationa) New to firm (re-engineering)b) New to market (re-design)c) New to world (invent)i) Ultimate innovation(1) Is not merely to come up with new products and services, but to create entirely new markets- and better yet- to change way we live and workd) Reasons for innovations importancei) Consumer dynamics(1) Inherent need to search/exploreii) Competitor dynamics(1) Continuous quality improvementiii) Impact on wealth(1) Direct impact on stocks 7) Successful new product developmenta) Depends uponi) Product related factors(1) Relative advantage(a) Clear perceived superiority(2) Compatibility(a) Consistency/ fit with consumer beliefs(3) Satisfaction(a) Degree product meets needs of consumers(4) Product complexity(a) Extent product use is easy(5) Trialability(a) Extent product can be tested(6) Observability(a) Speed in which benefits experiencedii) A tale of two revolutions(1) In 2001 two innovators predicted their latest creation would revolutionize the world.(a) One did- iPod(b) One didn’t- Segwayiii) Management related