Term Paper: Successful Marketing Mix That Will Increase Results

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¶ … Successful Marketing Mix That Will Increase Results

The development of an effective marketing mix is critical for being able to stay competitive in the turbulent global markets that companies compete in daily. The critical need for keeping the four attributes of the marketing mix synchronized with one another in order to attain strategic objectives is illustrated through the many examples throughout this paper. Product strategies' contribution to a company's entire marketing mix, the role of promotional strategies to reinforce branding and messaging, and distribution channels' role in getting branding, messaging and products to market are analyzed in this paper in addition to the critical process of new product development and introduction (NPDI) that acts as a catalyst for the marketing mix to become the foundation for new product introductions. Of all strategies that a company undertakes, the launch of new products is both the most challenging and potentially the most lucrative as well.

Introduction

The Role of Products in the Marketing Mix

The Power of Pricing

Promotional Strategies as part of the Marketing Mix

Distribution (Place) as part of the Marketing Mix

References

Introduction

The framework of product, price, promotion, and place or distribution pervades nearly every marketing strategy that has been executed in both manufacturing and services industries, and the synchronization of these factors needs to be well managed if strategic plans are going to be achieved. Thinking of each of these attributes as a synchronized, interconnected system of processes and strategies is a critical for any company to get the maximum contribution possible from this set of components that create a cohesive strategy.

One of the most critical lessons learned from the companies that are discussed in this paper is that the marketing mix must be used as an agile framework for aligning the specific strengths of a company in each of the four areas of the mix with requirements in the market. Of the four components of the model, product strategies by far require the longest lead times to create products that specifically align with the needs of a given market. Product lifecycles are by definition the time required to complete product development cycle from initial product specification through delivery of the final product. What makes product development so difficult is that the right product features need to be defined for inclusion in the product design that will be released to customers as near as possible to the time they are looking for their benefits. An example of this challenge is seen in the high technology industry where Apple continually creates new iPods to both attract entirely new customers while at the same time setting a pace of innovation that their competitors find nearly impossible to keep up with. The Apple iPod product strategy illustrates how the frequency of new product introductions with new products precisely aligned with the needs of customers can be highly effective. The greatest products make to the entire marketing mix however is in fueling a highly effective and profitable new product introduction. The majority of companies generate their majority of their revenue from new product introductions, with integrated microprocessor and chip producers generating over 80% of their revenue within the first months of a new product launch. The new product development and introduction (NPDI) is the most critical of all processes by which products make their greatest contribution to the profitability of firms. The NPDI process is in fact the impetus for many companies to create highly coordinate, synchronized product introduction plans, marketing strategies, and launch plans that extensively create coordination between each area of the marketing mix. As a result of the NPDI process being a catalyst for the marketing mix becoming highly focused on a single, unifying objective of successfully launching a product; it is covered in depth within the product area of this paper. As pricing as the only component that directly delivers profitability, its role in the mix is extensively analyzed. Pricing is in fact one of the most often used differentiators by companies to make their products more competitive relative to other products in their markets. Wal-Mart uses pricing extensively as a loss-leader concept to attain market penetration in toys during the holidays for example.

Promotional strategies are used for accentuating of the value of a product or service through additional offers, lower prices, bundling, or the use of techniques to bring greater value to the customer through the use of innovative packaging. Sales promotion in the context of a sales funnel acts as the basis by which prospects for a product or service first learn of a company and its offerings, and ascertain its ability to meet their needs or not. The role of Sales promotion is to create excitement and interest in the product or service as well so prospects will hopefully move through the sales cycles of the product and purchase. Sales' promotions' role in the marketing mix is multi-faceted and often requires synchronization with all other parts of the marketing strategies of companies attempting to sell into diverse cultures for example. Sales promotion fulfills the same role in terms of front-ending the sales funnel, and this role is accentuated in the marketing mix, as sales promotions need to clearly state both the unique value proposition of the company and the product. In many companies the use of sales promotion to tailor messaging to a specific geography, and within that, customer group, is an evolving best practice in many industries including automotive, apparel, Internet services, and retailing. Bundling, pricing, and promotional strategies vary widely across geographies and segments, forcing companies engaged in global strategies to align their promotional strategies tightly with the unmet needs and most relevant messaging style, tone, and delivery that fit with the given market. (the role of place or distribution is becoming increasingly unified as its own strategy as well, with multi-channel management becoming one of the highest strategic priorities for manufacturing and services companies alike. The coordination of indirect channels including distributors, dealers, and resellers selling products and services with direct selling channels including sales forces, e-commerce initiatives, and call centers has created an entirely new approach to distribution. The days of having only a single distribution channel have long gone; today more and more companies are working to adopt a multichannel management structure that provides them with agility to respond rapidly to changing market conditions Aberdeen Research, 2006).

The Role of Products in the Marketing Mix

The ability of a company to consistently develop and release products on time that reflect the wants and needs of existing and future products is a major competitive advantage. Product lifecycles, or the period of time a product is salable in its target markets before another product generation needs to be introduced to keep a company competitive in its target markets, have proven to be an excellent barometer of how successful a company is at staying competitive in their chosen markets. The challenge from a product standpoint in the execution of the marketing mix is in continually developing new products to replace existing ones. During the product development process existing product sales must also be maximized to create the highest level of revenue possible to fund future growth. As a result of the need for continual new product development and sales of existing products, this aspect of the marketing mix is often the most complex and highly integrated throughout engineering, product development, marketing, supply chain management, services, pricing, finance and sales. All of these areas of any company need to be closely coordinated and synchronized with one another in the development of new products and their introduction. As product introductions are the largest source of revenue for many manufacturing and services companies alike, this process gets specific attention in this analysis.

The more competitive the industry, the more critical it is for companies to turn new product development and introduction (NPDI) and the entire product lifecycle management (PLM) series of processes companies into a competitive strength. Exacerbating the need to turn NPDI and PLM into lasting competitive advantages are the mindsets and opinions of senior management and board members. The differences between AMD and Intel in their NPDI and broader PLM processes are certainly defined by each of their relative innate competitive advantages, yet Intel is definitely the more aggressive and less risk averse at acquiring new technologies for adoption into their three broad businesses of networking, core microprocessors, and memory components.

Intel's aggressiveness on acquiring new technologies has in fact paid off more than the philosophy inside AMD of trying to successively build their brand of microprocessor. AMD favors organic growth of product lines and brands while Intel has a much more aggressive merger & acquisition (M&a) strategy for growth.

Approaches Companies Take to New Product Development

The dichotomy of how AMD and Intel develop new products is symptomatic of how many market leaders in other industries develop new products. AMD's focus on organic growth and low-cost production through process specialization of their most popular microprocessors delivers higher ROI… [END OF PREVIEW]

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