The company I chose at the beginning of the quarter was JNJ (Johnson & Johnson) and the product I focused on was its innovation of baby body wash-called Johnson's Baby Milk & Rice Bath.
1. On Pricing
a. Define and discuss the difference between value-based pricing and cost-based pricing. What are strengths and weaknesses of each method? Explain in detail.
b. Describe how your project company currently prices its main products or services. Is this the best method? Why or why not?
i. Comment on the traditional approaches of skimming and penetrating in your discussion, as they would apply to your product/brand/company.
? Market-Skimming pricing (more commonly used)
Initial prices are set high relative to "Economic Value to the Customer (EVC)"
Objective is to skim the "cream" of high value customers
Prices then fall slowly over time
? Market-Penetration pricing
Initial prices are set low relative to EVC
Objective is to penetrate the market by attracting a wider range of customers early in the product life cycle
• We recognize that you are marketing an existing product, but at one point the product was new and your current product will certainly experience a revival.
2. On Distribution -
a. How does a vertical marketing system differ from a horizontal marketing system? Explain in detail.
? Vertical marketing system:
A channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate.
Provides channel leadership
? Horizontal (conventional) marketing system:
A channel arrangement in which two or more companies at the same level join together to exploit a new marketing opportunity.
Wal-Mart & McDonalds
i. What system best describes your project company's distribution approach?
b. Identify your company's primary marketing channel's strengths and weaknesses?
i. Include an analysis on where you think your company can cut costs while also providing more value from manufacturing to final retail.
• Recall that the many channels along the way are most often separate businesses each trying to maximize value for its own customer while also maximizing profit for itself. Think of this important phenomenon as you shape your discussion on distribution management.
? Channel Levels:
Level-one channel (direct marketing) channel: includes telemarketing, direct mail, door-to-door, TV selling (infomercials), and home parties
Level-two channel: contains one selling intermediary, such as a retailer
Level-three channel: contains two intermediaries
In consumer markets, these are typically a wholesaler and a retailer.
? Exclusive distribution: typical of luxury goods retailers
? (e.g. Louis Vuitton)
? Selective distribution: for more specialized goods that are carried through specialist dealers
? (e.g. brands of craft tools, electronic devices, or large appliances)
? Intensive distribution: common for basic supplies, snack foods, magazines, and soft drink beverages
3. On Promotion -
a. Provide a concise and precise overview of the five elements of the promotion mix as they apply to your project company.
? Advertising
? Sales promotion
? Personal selling
? Public relations
? Direct marketing
? Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service.
? Personal selling: Personal presentation by the firm's sales force for the purpose of making sales and building customer relationships.
i. Additionally, how might the leveraged sales approach strengthen you current sales strategy? Be specific to your project company.
? A sales force redesigned for optimal use in a multichannel selling environment - is one that is oriented towards:
Focus participation in the marketplace
Greater emphasis on acquiring and building key account relationships
Integration with other channels to increase productivity
Direct marketing: Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.
Less public: message is normally directed to a specific person
Immediate and customized
? Interactive, it allows dialogue between marketing team and consumer
? Well suited to highly targeted marketing efforts and building one-to-one customer relationships
b. Recalling our earlier theme of brand's driving business and marketing, clarify your project company's brand vision, brand personality and brand positioning - be specific as you describe this important brand management model.
? Vision:
One emotion, destination
? Personality:
Qualities of a being
? Position:
Features, benefits, solutions
c. When launching a new brand, we discussed in lecture that it is best to build the brand first with PR, and then sustain it with advertising if necessary. Explain this reasoning by providing support from the readings.
? Definition:
Building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.
Examples: press releases, sponsorships, events, and Web pages
i. Pull from Berger's Contagious to further support your discussion.
4. On the Global Marketplace -
a. Defend or reject or modify Levitt's bold assertions on the nature of the global firm. Consider your marketing plan company as a reference point to help build your discussion.
i. The world's needs and desires have been irrevocably homogenized. This makes the multinational corporation obsolete and the global corporation absolute.
ii. Technology drives consumers relentlessly toward the same common goals - alleviation of life's burdens and expansion of discretionary time and spending power.
iii. Cultural preferences follow one of two paths: they eventually lose relevance to economic decision making, or they diffuse to other groups and become the substance of global trends.
b. Lastly, identify and discuss the main globalization opportunity or challenge impacting your project company. What must be done to strengthen the global position of your company's brand?
i. Pull from Holt, et al's How Global Brands Compete to further support your discussion.