Book Reference:
Ferrell, O.C., & Hartline, M (2014). Marketing Strategy : Texts and Cases, 6th edition. Mason, OH: South-Western, Cengage Learning.
** All answers must be at least 350 words (not including references at the end of each question) and must include two additional outside references. All 3 references should be cited in the body of the text.
1). Do some research on value-pricing strategy in marketing. What is it? Discuss the relationship of price to value. Does a low price necessarily mean a better value? Give an example to illustrate your opinion. How can a firm offer good value in a mature market where price is the only visible means of differentiation?
Case: Gillette
Gillette has long been known for innovation in both product development and marketing strategy. In the highly competitive, but mature, razor and blade market, Gillette holds a commanding worldwide market share. However, innovation in razors and blades is thwarted by a lack of new technology and increasing consumer reluctance to pay the high prices associated with the "latest and greatest" in shaving technology. Gillette must decide how to put the razor wars behind them and maintain or increase its share of the global razor market.
2). What is your take on the razor wars, first between Gillette and Schick, and now with online competitors? Does Gillette face a serious threat with respect to its pricing model? Explain
3). How can Gillette use other parts of the marketing program to take the focus away from pricing? Are there specific types of non-price strategies that Gillette could utilize?
4). The continued success of online competitors like the Dollar Shave Club has Gillette management worried. They have asked you to sketch a basic plan for selling Gillette's razors and blades via an online subscription model. Explain how you would create such a model using each element of the marketing program.
Case: Netflix
Changing technology and shifting customer preferences with respect to movie distribution led to the demise of Blockbuster Video. Meanwhile, Netflix grew to become the top rent-by-mail and video streaming company, while other strong competitors emerged to dominate movie distribution via kiosks (Redbox) and online (Apple, Amazon, Hulu, and others). Looking to the future, Netflix's survival depends on its ability to adapt to and adopt new technology and marketing practices-issues Blockbuster failed to navigate due to its reactive, rather than proactive, stance toward a rapidly changing market.
5). As the use of DVDs declines and streaming continues to grow, Netflix faces a somewhat uncertain future. What strategic changes will Netflix have to make to remain competitive in the future?
6). From a supply chain perspective, Netflix will always be somewhat vulnerable because it does not own/control the source of supply (movies). How can Netflix insulate itself from this threat to its existence?
7). Many have argued that Netflix must more vertically integrate its operations in order to be viable in the future. This means acquiring sources of supply (movies, movie studios) or other avenues for distribution (kiosks, TV or cable networks, wireless providers). Prepare a list of pros and cons related to various integration options that Netflix could pursue.