978-1259709074 Chapter 2 Part 2

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Chapter 2 – Developing Marketing Strategies and a Marketing Plan Marketing 6th

McGraw-Hill Education.

External

OPPORTUNITIES

 Growing Market

THREATS

 New competitors (McDonald’s and

Taco Bell)

2. Which growth strategies have been pursued by Starbucks and Dunkin’ Donuts in the past?

Which strategies do you believe will be most successful for the two firms in the future? Why?

Starbucks: Starbucks connects with fans through social marketing channels, including its popular

Dunkin’ Donuts: Through partnerships with sports teams (e.g., “Pats Win, You Win) Dunkin’ Donuts

promotion will continue to bring fans to its stores.

3. Which marketing metrics would be most helpful for an executive in charge of developing new

products for a coffee chain?

Students will answer with different metrics. Some commonly used metrics to assess performance include

revenues, or sales, and profits. An attempt to maximize one metric may therefore lower another. Thus,

the resources the manager controls.

Additional Teaching Tips

In this chapter, the goal is to introduce students to an overview of the marketing plan, the concept of

customer value, and the utility of the SWOT matrix. It is important to teach students that the importance of

the marketing plan is to communicate the value proposition to consumers and to provide direction on how

that will be achieved.

The utility of the marketing plan must be conveyed throughout the course. Teach students that the

marketing plan is a subset of the business plan that forms the foundational strategy of business.

Students come to realize the importance of the marketing plan when the instructor frequently makes

connections to its purpose not only on the day the concept is taught but also throughout the course.

Customer value is a difficult concept for students to grasp. Instructors may want to ask students to write

down something they find of value and what aspects lead to creating that value. The instructor can then

ask what they would trade for that value. It is important that instructors communicate that value is more

than monetary worth and can’t easily be measured. As a result, marketers must conduct target market

research in order to create the value proposition of their marketing strategy.

The SWOT matrix may be easily demonstrated by dividing your class into groups and having each group

contribute one item to each of the four quadrants using the college they are attending (common ground

for all students) or a major chain food (such as McDonald’s) so that all students are familiar with the

strengths, weaknesses, opportunities, and threats that may apply. Students can work as a group and then

each group may put their items on the whiteboard to form a collective classroom SWOT. Instructors

should then make the link that the opportunities and strengths should filter into the marketing message

delivered in advertising campaigns and other marketing tools. Online tip: Instructors may want to divide

their class by last name A-E Strengths, F-J Weaknesses, and so forth to answer a discussion board

question using the same concept. Students could then complete an individual SWOT as an assignment.

Another option would be to use the same concepts and integrate it as an online team assignment where

each team forms their respective completed SWOT.

Chapter 2 – Developing Marketing Strategies and a Marketing Plan Marketing 6th

McGraw-Hill Education.

Connect Activities

Activity

Type

Learning Objectives 02–

Disney and the Strategic Marketing Planning

Process

Click & Drag

Staples: Implementing the Marketing Mix

Video Case

Home Shopping Network

Video Case

SWOT Analysis – Domino’s Pizza

Click & Drag

The Netflix Rollercoaster: How a Strategy Can

Fail

Case Analysis

Spirit Airlines: Home of the Bare Fare

Video Case

SWOT Analysis: Ford Motor Company & Fiat

Chrysler Automobiles

Click & Drag

The Coffee Wars

Case Analysis

iSeeIt Video Case: Marketing Strategy and the

Marketing Plan

Video Case

Disney and the Strategic Marketing Planning Process

▪ Activity Type: Click & Drag

▪ Learning Objectives: 02–02

▪ Difficulty: Medium

▪ Activity Summary: Students view a short case describing the Walt Disney Company’s use of

technology to improve the customer experience in their parks, and are asked to match excerpts from

the case description to the appropriate step in the strategic marketing planning process.

Activity

▪ Introduction: Firms like Disney plan their marketing strategies to adjust to changes in the

environment, the competition, and their customers. Effective marketing doesn’t just happen.

▪ Concept Review: The strategic marketing planning process represents a set of steps a marketer

goes through to develop and implement a strategic marketing plan. The three major phases of the

process are planning, implementation, and control.

Follow-Up Activity

Assign and discuss the following article: “At Disney Parks, a Bracelet Meant to Build Loyalty (and Sales),”

by Brooke Barnes, New York Times, published 1/7/2013:

http://www.nytimes.com/2013/01/07/business/media/at-disney-parks-a-bracelet-meant-to–build-loyalty-

and-sales.html?_r=0

This article describes the “MyMagic+” bracelet that is one key element of Disney’s technology upgrade

program. In addition to improving the customer experience, discuss how it also benefits Disney by

providing customer information that can be used both to understand customer behavior in the parks (a

form of marketing research) and also to improve service to individual customers (as part of a customer

relationship management program).

Chapter 2 – Developing Marketing Strategies and a Marketing Plan Marketing 6th

McGraw-Hill Education.

Staples: Implementing the Marketing Mix

▪ Activity Type: Video Case

▪ Learning Objectives: 02–05

▪ Difficulty: Medium

▪ Activity Summary: This video case discusses the “Easy” retail strategy adopted by Staples, with

examples of each of the four Ps in action. After the video ends, students are asked questions about

the video and related course concepts.

Activity

▪ Introduction: The 4 Ps—product, price, promotion, and place—are functions retailers use to create

value for their customers. Staples, Inc. successfully integrates the 4 Ps with its “easy” brand promise.

Its ability to execute the 4 Ps seamlessly within the parameters of this brand promise helps to make

Staples successful.

▪ Concept Review: The marketing mix consists of the four Ps—product, price, promotion, and place—

and each P contributes to customer value. To provide value, the firm must offer a mix of goods and

services at fair prices in the eyes of its target market. Firms make trade–offs between product and

price, help customers to form a positive image about the firm and its products, and get the

appropriate goods and services to customers when they want them and in the quantities they need.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activities

▪ Discuss how the Staples “Easy” brand promise helps the company to compete with online-only sellers

of office supplies like Amazon.com. Examples: the Staples branded products help Staples to stock

lower-priced products; making products like paper and toner easily available at the front of

conveniently located stores with plenty of parking offers convenience.

▪ Choose a successful restaurant chain (Chipotle or Chick-fil-A would be good selections in the U.S. as

they tend to be popular with students) and ask for examples of each of the four Ps in the chain’s

strategy.

Home Shopping Network

▪ Activity Type: Video Case

▪ Learning Objectives: 02-01, 02-04, 02-05

▪ Difficulty: Medium

▪ Activity Summary: This video case focuses on changes HSN made to its strategy starting in 2006 to

better understand and serve its target market. After the video ends, students are asked questions

about the video and related course concepts.

Chapter 2 – Developing Marketing Strategies and a Marketing Plan Marketing 6th

McGraw-Hill Education.

Activity

▪ Introduction: HSN (Home Shopping Network) is a $2.8 billion multichannel retailer, using television,

e-commerce, m-commerce, catalogs, and brick and mortar stores. They have recently launched apps

for all major smartphones. HSN currently reaches 90 million homes, 24 hours a day, 7 days a week,

365 days a year. Managing their marketing efforts and staying on top of the competition requires

careful and ongoing strategic planning and implementation.

▪ Concept Review: A marketing strategy is the actions a firm intends to implement to appeal to

potential customers. A successful strategy identifies (1) a firm’s target markets; (2) a related

marketing mix—its 4 Ps; and (3) the basis on which the firm plans to build a sustainable competitive

advantage. HSN (Home Shopping Network) is one example of a firm that has very successfully

implemented its strategy using multichannel marketing efforts. Understanding how HSN has

implemented a successful marketing strategy helps us identify the different components of that

strategy. HSN continually monitors opportunities and threats and reevaluates their strategies in

response to these.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activities

• Students can research some of HSN’s recent initiatives to see how the company is currently using

lifestyle programming to attract attention to its products. As of this writing, there are two initiatives that

are very much consistent with HSN’s lifestyle strategy:

o A multi-film agreement with Disney to hold shopping events promoting films of interest to HSN’s

target market: http://www.hollywoodreporter.com/news/disney-strikes-multi-film-partnership-

694720

o HSN’s “Live in Concert” series, featuring various artists in conjunction with sales of their music.

• Suppose that HSN decided to launch a second channel with men who are sports fans as the target

market. How would its strategy be different from the current HSN channel’s strategy?

Chapter 2 – Developing Marketing Strategies and a Marketing Plan Marketing 6th

McGraw-Hill Education.

SWOT Analysis: Domino’s Pizza

▪ Activity Type: Click & Drag

▪ Learning Objectives: 02–03

▪ Difficulty: Medium

▪ Activity Summary: This activity presents information about Domino’s franchise stores possibly

staying open 24 hours. Eight factors are presented related to this proposed change, and students are

asked to classify them using the SWOT analysis framework.

Activity

▪ Introduction: Recently, a Domino’s pizza franchise in southwest Ohio made the strategic decision to

stay open 24 hours a day. The manager, Steve Martin, made this decision about a month ago in

response to increased demand for Domino’s pizza. Other Domino’s franchise owners are now

considering adopting a similar strategy. In this activity, you will categorize a set of statements

regarding activities in the internal and external environments as they relate to Domino’s pizza, and a

potential initiative of staying open 24 hours a day. These statements will identify either a Strength,

Weakness, Opportunity, or Threat.

▪ Concept Review: Developing a marketing plan consists of five steps. The second step in the

process, after developing a mission statement, is to conduct a situation analysis, using the SWOT

framework. This tool allows firms to assess both the internal environment (strengths and

weaknesses) and the external environment (opportunities and threats).

The Netflix Rollercoaster: How a Strategy Can Fail

▪ Activity Type: Case Analysis

▪ Learning Objectives: 02-01, 02-02, 02-05, 02-06, 02-07

▪ Difficulty: Medium

▪ Activity Summary: This case deals with Netflix’s 2011 decision to split its service into DVD rental

and streaming subscriptions, resulting in a significant price increase for current customers. Students

answer questions relating the case to chapter concepts.

Activity

▪ Introduction: The letter arrived in millions of e-mail boxes simultaneously in November of 2010.

Reed Hastings, the CEO of Netflix, announced in excited tones the latest innovation by the company

that had revolutionized the movie rental industry. But the response was not quite what he, or Netflix

shareholders, had expected. Since that time, Netflix has recovered and gone on to renewed success

and new challenges; however, the series of events, before and after, offers a clear lesson in how a

failure to sufficiently plan for marketing strategy changes can backfire on even the most successful of

companies.

▪ Concept Review: A marketing strategy identifies (1) a firm’s target market(s), (2) a related marketing

mix—its four Ps, and (3) the bases on which a firm plans to build a sustainable competitive

advantage. Firms develop marketing plans to formalize their marketing strategies. One important

element in formulating a marketing plan is to do a situation analysis, also known as a SWOT analysis.

Chapter 2 – Developing Marketing Strategies and a Marketing Plan Marketing 6th

McGraw-Hill Education.

Following the analysis, firms need to segment their market, target which segments they will serve,

and develop a position that communicates a clear understanding of the market offering. They should

then implement the marketing mix; the four Ps. Finally, they should use various marketing metrics to

evaluate the results of their strategies. There are also four growth strategies firms can implement to

increase their market share.

Follow-Up Activity

Netflix recovered quickly from its misstep; it’s worth reviewing what has happened since the end of the

case write-up, and then discussing the challenges Netflix faces in the future. Students could be asked to

research this topic themselves, or you can use these articles:

▪ “How Netflix Reinvented Itself,” by Peter Cohan, Forbes, 4/23/13.

http://www.forbes.com/sites/petercohan/2013/04/23/how-netflix-reinvented-itself/

▪ “Netflix Ends Huge Year with Price Shift and Executive Raises,” by Nick Summers, Business Week,

12/31/2013. http://www.businessweek.com/articles/2013–12-31/netflix-ends-huge-year-with-price-

shift-and-executive-raises

Spirit Airlines: Home of the Bare Fare

▪ Activity Type: Video Case

▪ Learning Objectives: 02-01, 02-02, 02-03, 2-04, 2-05, 2-07

▪ Difficulty: Medium

▪ Activity Summary: This video case explains the marketing strategy pursued by Spirit Airlines. After

the video ends, students are asked questions about the video and related course concepts.

Activity

▪ Introduction: Spirit Airlines competes as an ultra-low-cost carrier (ULCC), and does so by

“unbundling” extra services from its basic fare. As a result, things that other airlines include in their

prices (for example, carry-on bags) cost extra on a Spirit flight. This approach allows Spirit Airlines to

keep prices low, attracting a different type of customer who values price above comfort and

amenities.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activity

▪ Review a section of the Spirit Airlines website to learn more about their strategy and how the website

reflects it. Two suggestions based on the website as it exists when I’m writing this:

o https://www.spirit.com/OptionalServices – shows the extras they charge for

o http://marketing.spirit.com/how-to-fly-spirit-airlines/en/ – “Spirit 101,” where they explain their

approach to pricing

Chapter 2 – Developing Marketing Strategies and a Marketing Plan Marketing 6th

McGraw-Hill Education.

SWOT Analysis:

Ford Motor Company & Fiat Chrysler Automobiles

▪ Activity Type: Click & Drag

▪ Learning Objectives: 02–03

▪ Difficulty: Medium

▪ Activity Summary: This activity presents information about Ford Motor Company, focusing on F–

series trucks, and on Fiat Chrysler’s array of brands. Students are asked to classify the information

provided about each firm using the SWOT analysis framework.

Activity

▪ Introduction: SWOT stands for strengths, weaknesses, opportunities, and threats. SWOT analysis

evaluates what a firm is good at, where it could improve, where in the marketplace it might excel, and

what events in the marketplace could potentially harm the firm. This activity is important because it

demonstrates how integral SWOT analysis is to the strategic planning process.

The Coffee Wars

▪ Activity Type: Case Analysis

▪ Learning Objectives: 02-01, 02-03, 02–07

▪ Difficulty: Medium

▪ Activity Summary: This case compares and contrasts the marketing strategies Starbucks and

Dunkin’ Donuts in the coffee market. After reading the case, students answer questions applying

chapter concepts to the case information.

Activity

▪ Introduction: Starbucks and Dunkin’ Donuts are the two largest competitors in the coffee and

breakfast retail market. Their approaches to competing in this market are described in the case. This

activity is important because a strong marketing strategy—one that helps to build a sustainable

competitive advantage—is the basis for all marketing activities.

Follow-Up Activity

Look at the Dunkin’ Donuts and Starbucks websites in class. Consider their active promotions; are they

consistent with the strategies discussed in the case?

iSeeIt Video Case:

Marketing Strategy and the Marketing Plan

▪ Activity Type: Video Case

▪ Learning Objectives: 02-02, 02-03, 2-04, 2-06

Chapter 2 – Developing Marketing Strategies and a Marketing Plan Marketing 6th

McGraw-Hill Education.

▪ Difficulty: Easy

▪ Activity Summary: This video case views marketing strategy from the perspective of the owner of an

independent coffee shop, as she considers working through the different phases of a marketing plan

for her shop.

Activity

▪ Introduction: Strategic marketing is an approach where an organization effectively leverages its

resources to reach its target market. The marketing plan is how organizations operationalize their

strategies by planning how to reach their markets, implementing their marketing activities, and

measuring marketing performance. Take for instance the Coffee Collective and how it has

successfully marketed its unique coffee experience. Martha, the owner, knows that the 4 P’s are only

one key aspect of effective marketing—the implementation phase. She realizes that before she can

implement a marketing strategy, she must first understand the environment in which her coffee shop

exists. She also understands the importance of evaluating marketing effectiveness as the final

component of the marketing plan. Success, after all, is more than selling just one cup of coffee and

can be measured using a range of outcomes from revenue to customer loyalty.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.