Chapter 08 – Developing Marketing Strategies
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CHAPTER
Developing Marketing Strategies
CHAPTER CONTENTS
Learning Objectives 8.2
Chapter Overview 8.2
Brief Chapter Outline 8.3
Chapter Outline and Teaching Notes 8.4
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Chapter 08 – Developing Marketing Strategies
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LEARNING OBJECTIVES
After studying the material in this chapter, the student will be able to:
1. Describe the marketing concept, and explain how it can be used by a small business.
2. Show how marketing research can be used to implement the marketing concept.
CHAPTER OVERVIEW
Everything up to this point has involved planning and organizing. The next step is Marketing;
determining customers’ needs and wants, developing goods and services to satisfy those needs and wants,
and getting those goods and services to the customer. Marketing includes decisions about product devel-
opment, design, packaging, pricing or fees, transportation, storage, and promotion. (Chapter 9 has addi-
tional information.)
In Chapter 8 emphasis is placed on learning and meeting the customers’ needs, and finding a
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BRIEF CHAPTER OUTINE
I. THE MARKETING CONCEPT
A. Meeting Customers’ Needs
B. Implementing the Marketing Concept
C. Seeking a Competitive Edge
II. USING MARKETING RESEARCH TO IMPLEMENT THE MARKETING CONCEPT
A. How Does Marketing Research Aid Marketing?
III. DEVELOPING A MARKETING STRATEGY
A. Setting Objectives
IV. THE PRODUCT LIFE CYCLE
A. Stages of the Product Life Cycle
B. Need for a Wide Product Mix
V. PACKAGING
VI. PRICING YOUR PRODUCT
A. Establishing Pricing Policies
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CHAPTER OUTLINE AND TEACHING NOTES
CHAPTER OPENING PROFILE: Hummingbird Ideas
Hummingbird Ideas focuses on a non-traditional advertising
I. THE MARKETING CONCEPT
Learning Objective 1.
Describe the marketing concept, and explain how it can be
used by a small business.
A. Companies that are successful marketers
share some basic strategies, including:
1. Moving quickly to satisfy customer
needs.
B. The MARKETING CONCEPT involves
giving special consideration to the needs,
desires, and wishes of present and pro-
spective customers.
1. Marketing Concept involves three
basic elements:
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CHAPTER OUTLINE AND TEACHING NOTES
(2) Return on investment, or
market share.
C. Meeting Customers’ Needs
1. When people buy something, they
purchase satisfaction as well.
a. Know what they buy, and when
they buy.
2. The Marketing Concept should guide
the attitudes of the firm’s salespeo-
ple.
a. To build personal relationships
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CHAPTER OUTLINE AND TEACHING NOTES
3. Customer satisfaction involves all as-
pects of business, such as
a. Store design and upkeep
D. Implementing the Market Concept
1. You should try to apply the Marketing
Concept by using one or more of the
following ideas:
a. Be conscious of image.
2. Be conscious of image.
a. Show what is unique about your
product – its positive benefits.
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CHAPTER OUTLINE AND TEACHING NOTES
3. Practice consumerism
a. The rights of consumers:
(1) To buy safe products.
b. CONSUMERISM involves prod-
ding businesses to improve the
quality of their products and to
expand consumer knowledge.
REAL WORLD EXAMPLE 8.2
One employee at Peoples Drug store cost the store sales
by being uninterested in customer needs.
E. Seeking a Competitive Edge
1. A COMPETITIVE EDGE (competitive
advantage) is a particular characteris-
tic that makes one firm more attrac-
tive to customers than its competi-
tors.
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CHAPTER OUTLINE AND TEACHING NOTES
4. A competitive edge is based on
providing one or more forms of value
to customers:
a. Better Quality Differentiation.
5. It is seldom possible to compete in all
three, but you should find one area in
which to compete.
6. Digital technology is key to success
and consumers have shifted to e-
commerce.
a. E-COMMERCE is technology-
mediated exchanges between
II. USING MARKETING RESEARCH TO IM-
PLEMENT THE MARKETING CONCEPT
Learning Objective 2.
Show how marketing research can be used to implement
the marketing concept.
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CHAPTER OUTLINE AND TEACHING NOTES
A. MARKET RESEARCH is the systematic
REAL WORLD EXAMPLE 8.3
Marketing research does not solve all problems. Despite
being the most highly researched car in history, the Ford Edsel
failed.
1. By studying customers’ actions and
reactions and drawing conclusions
from them, you can improve your
marketing activities.
2. You can use marketing research to
B. How Does Marketing Research Aid
Marketing? By:
1. Identifying customers for the firm’s
products.
nel of distribution.
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CHAPTER OUTLINE AND TEACHING NOTES
5. Evaluating advertising and promo-
tional effectiveness.
C. How to Do Marketing Research
1. In its simplest form, marketing re-
search
.
2. Many managers do some form of
marketing research daily:
a. Checking returned items to see if
3. Defining the problem
a. Look beyond the symptoms of a
4. Gathering and evaluating information
a. Using existing information is in-
expensive, however sales rec-
ords, credit records, and even
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CHAPTER OUTLINE AND TEACHING NOTES
complaints can reveal a lot about
customers.
5. TEST MARKETING simulates the
conditions under which a product is
to be marketed.
(1) Primary Data is usually
gathered by and research
and compiled into a usable
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CHAPTER OUTLINE AND TEACHING NOTES
(2) Secondary Data is existing
information that someone
else has documented.
6.. Using specialized research tech-
niques
(1) License plates, telephone
D. Gathering Information on the Web
1. Customers use the Web for infor-
mation or to submit information.
2. Websites then track the number of to-
E. Using Computerized Databases
1. A variety of information is available at
public libraries or online; such as
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CHAPTER OUTLINE AND TEACHING NOTES
2. DATABASE MARKETING is a mar-
keting process for acquiring custom-
ers that involves obtaining meaning-
REAL WORLD EXAMPLE 8.7
Dominos uses caller ID to identify returning customers
and tailor the response to the customer’s preferences.
III. DEVELOPING A MARKETING STRATEGY
Learning Objective 3.
Explain how to develop and implement a marketing strat-
egy.
A. Setting Objectives
1. Marketing objectives should be tied in
with your competitive edge and flow
B. Choosing Target Markets
1. A TARGET MARKET is the part of
the total market toward which promo-
tional efforts are concentrated.
2. MARKET SEGMENTATION is identi-
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CHAPTER OUTLINE AND TEACHING NOTES
a. Identify the characteristics of two
or more segments of the total
market.
Real World Example 8.8
Victoria’s Secret hired Bob Dylan to do an ad for the re-
tailer, successfully reaching the desired audience.
3. Shifting Target Markets: Study the
REAL WORLD EXAMPLE 8.9
The Pizza Patron restaurants have several locations in the
west U.S. that accept Mexican pesos and dollars to serve their
market.
4. Population and age shifts
a. The underlying market factor de-
termining demand is the number
and type of people with the pur-
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CHAPTER OUTLINE AND TEACHING NOTES
(3) Age shifts. In 2010 the aver-
age age increased by
38.5%.
(4) The age distribution is
changing with the advancing
REAL WORLD EXAMPLE 8.10
The travel industry targets senior citizens, an exploding
market segment, with special discounts and promotions.
REAL WORLD EXAMPLE 8.12
When Cracker Barrel expanded from the South into the
North and West, it had to adjust its menu to appeal to local
tastes.
5. Regional Difference in Purchases
1) An example of this is as sim-
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CHAPTER OUTLINE AND TEACHING NOTES
(2) Immigration has increased
into New York, Florida, Cali-
fornia, and the Southwest.
(3) Also, people are moving
REAL WORLD EXAMPLE 8.13
Badia Spices identified Miami’s changing ethnic makeup
and added products to satisfy the emerging cultural tastes.
C. Developing an Effective Marketing Mix
1. A MARKETING MIX is the proper
blending of the basic elements of
product, price, promotion, and place
into an integrated marketing program.
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CHAPTER OUTLINE AND TEACHING NOTES
c. Promotion refers to any method
IV. THE PRODUCT LIFE CYCLE
Learning Objective 4.
Explain how the product life cycle affects marketing strate-
gies.
A. Stages of the Product Life Cycle
1. THE PRODUCT LIFE CYCLE has
four major stages: introduction,
growth, maturity, and decline.
a. As the product moves through its
2. Introductory stage
a. In this stage, it is vital to com-
municate the product’s features,
3. Growth stage
a. During the growth stage, sales
rise and profits peak.
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CHAPTER OUTLINE AND TEACHING NOTES
4. Maturity stage
a. Competition becomes more ag-
gressive; prices and profits de-
5. Decline stage
a. Sales fall rapidly during this
stage, especially if a new tech-
B. Need for a Wide Product Mix
1. The life-cycle concept, indicates that
many, if not most, products will even-
tually become unprofitable.
2. Small firms should investigate and
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CHAPTER OUTLINE AND TEACHING NOTES
V. PACKAGING
Learning Objective 5.
Explain how packaging affects marketing.
A. Packaging both protects and promotes
the product.
REAL WORLD EXAMPLE 8.16
A product’s color and consumer buying preferences are
closely linked. Red (Coca-Cola, Campbell’s soups) is consid-
ered to be warm and bright.
1. Packaging can make a product more
convenient to use or store and can
3. A better package can help create a
new product or market.
4. Easier to open and use packaging is
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CHAPTER OUTLINE AND TEACHING NOTES
VII. STRATEGY FOR MARKETING SERVICES
Learning Objective 7.
Show how marketing services differs from marketing
goods.
A. Nature of Service Businesses
1. PERSONAL SERVICES are per-
formed by a business for consumers.
2. BUSINESS SERVICES are provided
B. How Services Differ
1. Service firms are chosen on the basis
of their perceived reputation, so a
good image is basic.
a. There are few objective stand-
ards for measuring the quality of