Professional Documents
Culture Documents
Chap 017
Chap 017
McGraw-Hill/Irwin
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PART FIVE
LAUNCH
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Launch
Figure V.1
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Figure V.2
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Marketing people make the decisions that constitute a marketing plan. The technical work is complete when the new item hits the shipping dock. Marketing people take over. The marketers task is to persuade the end user to use the new product. The more sales potential there is in a market segment, the better that segment is as a target candidate. The pioneer wins control of a new market. As with Broadway shows, opening night is the culmination of everything we have been working for.
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CHAPTER SEVENTEEN
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Strategic Givens
Corporate, some team decisions made earlier. Often found in the PIC Guidelines.
A specified gross margin: affects funding. Speed-to-market: affects promotional outlays and schedules. Commitment to a given channel: affects distribution plan. Advertising policy: affects promotion decisions. Pricing policy: affects decision to use penetration or skimming pricing (slide down demand curve).
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Other
Competitive Effect Image Change Morale Change
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Permanence
Permanent, stand-alone. Permanent, but as a bridge to other items -e.g., platform strategy. Temporary. Given firms tendency to develop streams of products, more and more new products are actually only temporary.
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Splitting channels
The existing one is simply dropped when the new one is announced. Example: Ford's marketing of Mondeo and dropping of Sierra. Same as butt-on, but arranging the switch at a low point between seasons. Tour companies use this switch when they develop their new catalogs. Same as butt-on, but arranging the new item at the top of a season. Example: Polaroid used this strategy often, putting new replacement items out during the Christmas season. Another version of butt-on, but arranged by a sequence of market segments. Mercedes introduced its C series country by country. Keeping the earlier product along side the new, but with decreased support. Example: The 386 chip stayed along side the 486, until the Pentium was introduced. Putting the new item in a different channel or diverting the existing product into another channel. Example: Old electronic products often end up in discounter channels.
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Figure 17.2
Aqualine
Islands
Molokai
Fashion
Splash Sunflare
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Product Positioning
Who -- Why -- How
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Figure 17.2
Position on a Surrogate Nonpareil Parentage Manufacture Target Rank Endorsement Experience Competitor Predecessor
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Branding Decisions
What is the brands role or purpose?
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Will this product be a bridgehead to a line of products? Do you expect a long-term position in the market? Is the name irritating or insulting to any market segment?
Guideline If the brand is to aid in positioning, choose a brand name with meaning (DieHard, Holiday Inn). If purely for identification, a neologism (made-up word) such as Kodak or Exxon will work. If so, choose carefully so as not to be a limitation in the future (Western Hotels changed name to Western International, then finally to Westin.) If not, a dramatic, novelty name might be useful (such as Screaming Yellow Zonkers). Women found Bic's Fannyhose to be objectionable.
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Figure 17-9
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Figure 17-10
Patents or trademarks
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Figure 17.11
Is consistent.
Marketing activities are coordinated. What the brand means to customers is well understood. Is supported over the long run.
Examples Starbucks offers coffee house experience, not just coffee beans, and monitors bean selection and roasting to preserve quality. Gillette continuously invests in major product improvements (MACH3), while using consistent slogan The best a man can get. P&G reduced operating costs and passed on savings as everyday low pricing, thus growing margins. Saturn competes on excellent customer service, Mercedes on product superiority. Visa stresses being everywhere you want to be. Michelob tried several different positionings and campaigns between 1970 and 1995, while watching sales slip. The Gap has Gap, Banana Republic, and Old Navy stores for different market segments; BMW has the 3-, 5-, and 7-series. Coca-Cola uses ads, promotions, catalogs, sponsorships, and interactive media. Bic couldnt sell perfume in lighter-shaped bottles; Gillette uses different brand names such as Oral-B for toothbrushes to avoid this problem. Coors cut back promotional support in favor of Coors Light and Zima, and lost about 50% of its sales over a four-year period. Disney studies revealed that its characters were becoming overexposed and sometimes used inappropriately. They cut back on licensing and other promotional activity as a result.
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Figure 17.12
Dead End
Example: Nine Lives Optimum strategies: Slash costs and prices Trump market leader with superpremium brand
Low Road
Example: Oscar Meyer Optimum strategies: Cut costs and reduce prices Build brand equity
Hitchhikers
Example: Neutrogena, Post Optimum strategies: Dont rock the boat Innovate Find a niche market
High Road
Example: Gillette, Clorox Optimum strategies: Value-improving innovations Premium prices
Source: Adapted from Vijay Vishwanath and Jonathan Mark, Your Brands Best Strategy, Harvard Business Review, May-June 1997, pp. 123-129.