HT1 - Marketing and Marketing Strategy

Question 1

Levitt (1965)

Answer 1

Product life cycle model: birth, growth, maturity, decline
market development: the product is introduced for the first time, sales are low(developing demand)
market growth: the size of the market expands rapidly(competition, differentiation)
market maturity: demand levels off(new ways of competing)
market decline: product loses consumer appeal, sales decline(revitalising)

Question 2

Day (1981)

Answer 2

Criticism of the product life cycle
Brands undergo several changes during their life – ups and downs, no evident cycle
Birth - Determinants of the rate of diffusion: comparative advantage, perceived risk by buyer, barriers to adoption
Growth - substitutes (differentiation) and repeat buying is important, entry to new markets and segmentation
Maturity - dominating factor: replacement rate, expanding potential, price sensitivity
Decline - sales might stabilise at a lower level
Role of analysis: shows the consequences of actions, portfolio classification

Question 3

Levitt (1975)

Answer 3

“growth” industries can be created and capitalised - failure of industries is the mistake of executives
Customer-oriented approach instead of product-oriented approach
Products need to be defined broadly - firms need to be marketing-minded to sell ‘services’
Technical development (R&D) cannot replace the power of marketing
e.g. oil industry - did not create demand for their product and is being replaced

Question 4

Grönroos (1994)

Answer 4

A relationship-oriented approach is needed towards marketing instead of a product-oriented one
Criticism of 4P - The categories are not mutually exclusive or easily identifiable so no point in separating them
Integrating function of marketing - it needs to be considered as a whole
Network approach to industrial marketing - relationship building
Understanding the customer and their needs lowers transaction costs for everyone
Relationship marketing: mutual exchange and fulfilling the promises, building trust
Internal marketing is just as important to convey the right image of the firm

Question 5

Dev & Schulz (2015)

Answer 5

4 “Why’s” instead of 4Ps
Consumer acquisition, satisfaction, retention, recommendation
Maximising customer satisfaction on a new level and overall customer lifetime value
New customers have an impact on existing portfolio
Encouraging customers to recommend brand to others is important - connection to relationship marketing

Question 6

Usunier (2005)

Answer 6

Consumer behaviour in a cross-cultural perspective:
1. Global: universal theories and customers
2. Imported perspective: products are tailored to the local markets, but the underlying theory is the same
3. Ethnic consumption: specific theories, but consumers are the same
4. Cultural meaning: specific theories to specific customers
etic (universal) and emic (specific) approaches of studying consumer behaviour
Cultural differences:
1. Hierarchy of needs are different, e.g. hindu promotes self-actualisation
2. Individualism vs collectivism - e.g. Japan has stronger group norms
3. Independent vs interdependent self - e.g. Western cultures vs Asian norms
4. Institutions, social conventions, habits and customs - e.g. church, ceremonies, eating habits
Other differences: loyalty, involvement of customer in product purchase, perceived risk, legal marketing environment

Question 7

Jaworski et al. (2000)

Answer 7

Market-driven strategy:
- Oriented to understanding and reacting to the preferences of consumers
- Focus on keeping the status quo

Market driving strategy:
- Influencing the structure of the market and/or the behaviour of market players in a direction which improves the competitive position of the firm
- Deconstruction - removing players from the value chain
e.g. Dell - eliminated the retail channel through encouraging customers to buy directly from the firm
- Construction - creating new markets, e.g. adopting a web strategy
- Functional modification - Changing functions of the value chain, e.g. changing customer experience

Question 8

Slater & Narver (1998)

Answer 8

• Customer-led strategies are seen as leading to failure through causing firms to myopically focus on their existing customers - reactive philosophy
• ‘tyranny of the served market’ - managers see the world only through their current customers’ eyes
• Committed to understanding both the expressed and latent needs of their customers - acquiring market information in an anticipatory manner
• Focus on lead users, customers with advanced needs - ‘window into the future’
• Should be integrated into all aspects of the firm
• Good in turbulent environments

Question 9

Moon (2005)

Answer 9

• Companies can change how customers mentally categorize them, extending the growth phase
• By trying to augment products as they mature, firms inevitably follow the pattern of the PLC
• new features do not rejuvenate the product effectively enough to reposition it
  3 strategies to reposition products in the PLC:
  1. Reverse positioning:
• stripping away attributes that consumers expect in a mature product
• adding some surprising new features
• e.g. IKEA: stripped-down offering, but surprising add-ons life restaurant and the experience of the store
  2. Breakaway positioning:
• The product escapes its category by deliberately associating with a different one
• The new category redefines the main features and the competition
• e.g. The Simpsons: cartoon for adults
  3. Stealth positioning:
• Concealing the true nature of a product by affiliating it with a different category
• e.g. Mac Mini (Apple): it is not a PC – emphasizing other uses