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Objectives and Strategy

Objectives and Strategy. Session 13 B6601: Marketing. Product Life Cycle. AA. Jones Blair. FedEx. Dell. ODI. Generic Problem 1: New Product Strategies. Customer adoption Opinion leaders Awareness and trial. ODI Case. How to implement the introduction strategy?. Will the right

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Objectives and Strategy

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  1. Objectives and Strategy Session 13 B6601: Marketing

  2. Product Life Cycle AA Jones Blair FedEx Dell ODI

  3. Generic Problem 1: New Product Strategies • Customer adoption • Opinion leaders • Awareness and trial

  4. ODI Case How to implement the introduction strategy? Will the right customers adopt this product? What is the feasible introduction strategy? EVC Diffusion process (advantage, complexity, compatibility, observability, risk, divisibility) Success of the product depends not only on EVC but also onbarriers to adoption

  5. ODI Case How to implement the introduction strategy? Will the right customers adopt this product? What is the feasible introduction strategy? Innovators and opinion leaders Company resources Regional approach

  6. ODI Case Will the right customers adopt this product? How to implement the introduction strategy? What is the feasible introduction strategy? Awareness and trial Targeted promotions Company-sponsored experiment(s) Cash flow issues

  7. Generic Problem 2: Formulating Growth Strategies Customers New Old Market Penetration Market Development Old Product Product Development Diversification New

  8. Dell Case How to implement growth strategies? Are Dell’s online growth objectives feasible? How to achieve those growth objectives? Industry dynamics Dell’s competitive advantage Online growth Will Dell sustain its advantage in the online market?

  9. Dell Case How to implement growth strategies? Are Dell’s online growth objectives feasible? How to achieve those growth objectives? Online channel Product focus Geographic focus Customer focus Prioritize the strategic options based on growth potential, economics, and competitive advantage

  10. Dell Case How to implement growth strategies? Are Dell’s online growth objectives feasible? How to achieve those growth objectives? Key to implementation is “Premium Pages” Sales force issues

  11. Generic Problem 3: Strategies for Mature Markets • Customer segmentation • Targeting • Managing marketing mix

  12. Jones Blair Case What are the strategies for targeted segment(s)? What are market segments? Which segment(s) should JB target? Why segment How to segment Segment Characteristics Key to success in mature industries is better segmentation

  13. Jones Blair Case What are the strategies for targeted segment(s)? What are market segments? Which segment(s) should JB target? Segment attractiveness (growth, price sensitivity, appreciation for quality, competition…) Company strength (distribution, premium positioning, resources) Key to strategic choice is to select the attractive segment(s) where company is strong and competitors are weak

  14. Jones Blair Case What are the strategies for targeted segment(s)? What are market segments? Which segment(s) should JB target? Play up strength (distribution) Play down weakness (price) Assess cost-benefit of programs

  15. Generic Framework Situation Analysis 3 C’s Strategic Choices Implementation 4 P’s Assess: Customer needs Company’s strengths Competitor’s position Target segments Competitive position Alternative strategies (e.g.. retention, acquisition, expansion) Marketing programs: Product Price Promotion Place

  16. Strategic Options

  17. Conclusion • Strategy formulationkey issues strategic options programs3C’s strategic choices 4P’s • Key issues and appropriate strategies depend on • stage of the product lifecycle • company size and resources • short and long run objectives of the company • nature of competitive environment

  18. Citibank Case: Preparation Questions • Should Citibank launch the credit card? • Consider qualitative factors • Consider the economics of launching cards, that is, how many customers do we need in order to be profitable? (Use the available revenue, fixed cost, and variable cost numbers in the case. Calculate acquisition cost per customer from information in Table A.) • Is this number reachable? (what % does it represent of your selected target segment.) Feasible for Citibank? • Who should be target segment (type of customer)? How should the card be positioned? • Which countries to enter and in what order? • Consider country attractiveness (size of target market, card penetration, competition, etc.) vs. Citibank strength • How will you acquire customers (direct mail, direct sales, take-ones, bind-ins) • How will you design the product? What price will you set?

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