Chapter Two: Developing Marketing Strategies Concept Review: Generally, the concept questions are designed to achieve a single purpose – to encourage students to test their knowledge and understanding of the theoretical content of the chapter. These questions encourage recall and reflection, which will better prepare students to answer the marketing applications questions based on their understanding of the theory. Briefly describe the activities involved at each of the three phases of the marketing planning process: (1) planning, (2) implementation, and (3) control. The planning phase involves defining the firm’s mission and vision, conducting a situation analysis (SWOT, market trend analysis, environmental analysis, and competitor analysis), and identifying and evaluating the firm’s opportunities, which involves segmentation, targeting, positioning and developing the marketing mixes for the chosen target markets, i.e. using its marketing mix to deliver good value to customers. The implementation phase defines how a firm plans to implement its mission and vision. This requires designing the marketing organisation, allocating funds (making a budget), and developing schedules and putting the plan into action. The control phase evaluates the firm’s performance in order to determine to what extent the firm achieved its goals, what aspects of the marketing plan worked, what didn’t, and how performance can be improved in the future. What is meant by a mission or vision statement? What purpose does a mission statement serve and how does it influence marketing planning? The mission statement gives a broad description of a firm’s objectives and the scope of activities it plans to undertake. It attempts to answer two main questions: What type of business are we? What do we need to do to accomplish our goals and objectives? These fundamental business issues must be answered at the highest corporate levels before marketing executives can get involved. Once the mission is defined, the firms and its various departments develop marketing plans that contribute to achieving the firm’s mission. What does SWOT mean? List two benefits of SWOT analyses. What do think the differences are between a SWOT analysis for the entire firm and a SWOT analysis for a product? SWOT stands for strengths, weaknesses, opportunities and threats and is a type of strategic analysis. There are many benefits to SWOT analyses including its flexibility of scope from an entire firm to a specific product, and also its focus on internal and external forces simultaneously. The difference between a SWOT analysis for a firm versus a product is the scope. The first looks at the big picture including organisational strengths and weakness, and opportunities in the market as a whole, and major competitors across all categories. The latter would evaluate the smaller picture: strengths and weaknesses only of that specific product, and market opportunities unique to that product and competitors and threats only against the product. Both SWOT analyses would help a manager assess the situation accurately and plan strategy accordingly. What type if information is required to conduct a SWOT analysis and where do marketers typically look for this information? Strengths and weaknesses refer to the internal environment of the firm and are usually evaluated with information residing within the company. Opportunities and threats refer to the firms external environment are usually assessed based on a combination of research and analysis of various external sources of public and propriety information, which the firm may buy from market research firms. The firm may also conduct its own environmental scanning to get a good sense of the business environment. Why are segmentation, targeting, and positioning (STP) crucial for identifying and evaluating market opportunities? How does STP influence the development of the marketing mix – 4Ps? Proper segmentation, targeting and positioning are crucial because they evaluate the many different opportunities available for a firm to pursue. A firm can not satisfy the needs of every possible customer, so it must be strategic in its analysis and selection of the target markets in order to choose ones it can satisfy better than competitors. With each of these targets a firm must then identify how it wants to be perceived by its target segments i.e. develop a market positioning. STP heavily influences every aspect of the 4Ps because all of the marketing mix decisions are made directly to reach, communicate with, and inspire action from, the individuals in the selected targets. Each element of the 4Ps must be integrated with the others, and must work to achieve the strategic priorities of the STP analysis and of the firm in a seamless way. Describe the four growth strategies that firms typically pursue. Use a fast food restaurant or a grocery chain in Canada (e.g., Loblaws, Safeway, or Food Basics) to illustrate each of the four growth strategies. Illustrated using Loblaws as examples, the four growth strategies are: Market penetration: targeting existing customers with existing products. Loblaws uses television advertising and flyer advertising to promote existing products to existing customers. It often offers weekly specials for certain products in order to get customers to buy more. Market development: targeting new customers with existing products. Loblaws added a health and beauty section in the weekly flyer in some markets to highlight their existing cosmetic offering to attract new young female shoppers into the stores. Product development: targeting existing customers with new products. Loblaws uses its Insider’s Report each quarter to launch brand new food products to their existing market of loyal shoppers. Diversification: targeting new customers with new products. Loblaws developed its Joe Fresh line of clothing as a new product offering to draw in a new demographic of customers. Of the four growth strategies described in the chapter, which is the most risky? Which is the easiest to implement? Why? Riskiest: Diversification, because there is no guarantee that the new product or service will even appeal to the new market segment. A company that diversifies also might stretch itself too thin in terms of resources, and the new product and market segment focus might cause the company’s original product/market focus to suffer. Easiest to implement: Market penetration, because the company deals with its existing product and customer base but promotes the offering more heavily and/or broadly. Identify and describe four macro strategies that firms could use to grow their business. What other strategies could companies use to compete in the market? Customer excellence, which focuses on retaining loyal customers and excellent customer service. Operational excellence through efficient operations and excellent supply chain management. Product excellence, or achieving high-quality products; effective branding and positioning are key. Locational excellence, which focuses on finding the best location for the business. This is particularly important for retailers and service providers – many say that the three most important things in retailing are location, location, location. What are the four components of the BCG Matrix? When would “stars’ be preferred over “cash cows”? The four components of the BCG Matrix, plotted against the market growth rate and relative market share respectively, are stars (high, high), question marks (high, low), cash cows (low, high) and dogs (low, low). When successful, a star will become a cash cow. Stars are preferred over cash cows when a company is looking to invest in a new project or make a large capital investment – because returns here are more likely than in other scenarios. The profits generated by cash cows can be reinvested in star opportunities. Explain why in the BCG Matrix all products start out as questions marks and either end up as stars, cash cows or as dogs. When looking for market opportunities, a company wants to focus on products with high potential. The first place to investigate is in markets that have high growth rates and where the company may have low relative market share. This represents the biggest opportunity for the company. However, with new products the success rate is often low and failure rate is high, hence, there is little guarantee that the product will be successful, thus they are deemed question marks. With appropriate investment, strong managerial support, and excellent marketing savvy, question marks can be successful and become stars, generating tremendous revenues for the company. Over time as new products are introduced, stars become cash cows because they require little investment to maintain their position but generate a constant stream of revenues for the company. As growth rates shrink and the market becomes more competitive, the revenues generated and the low market share may not be sufficient to justify the investment required to keep the product the market i.e. it costs the company more to have these products in their portfolio than the revenues they generate, thus they are called dogs. Marketing Applications How has WestJet Airlines created a sustainable competitive advantage? WestJet Airlines has developed a sustainable competitive advantage through several strategic initiatives: 1. Customer Service Excellence: WestJet has built a reputation for exceptional customer service, focusing on providing a friendly and personalized experience to passengers. This includes initiatives like their "Owners Care" program, where employees are encouraged to treat customers as stakeholders or "owners" of the company. 2. Innovation: The airline has consistently introduced innovative services and amenities to enhance the passenger experience. This includes features like the introduction of live TV on board, which was a first for Canadian airlines, and their investment in modern aircraft with advanced amenities. 3. Strong Brand Identity: WestJet has cultivated a strong brand identity centered around its friendly and approachable image, which resonates with customers. This brand image helps differentiate WestJet from competitors and fosters customer loyalty. 4. Cost Leadership: WestJet has implemented efficient operations and cost-saving measures, allowing it to offer competitive prices to customers while maintaining profitability. This includes strategies such as maintaining a young and fuel-efficient fleet and optimizing routes and schedules. 5. Employee Engagement: WestJet prioritizes employee satisfaction and engagement, understanding that motivated and empowered employees are essential for delivering excellent customer service. The company invests in training and development programs for its staff, fostering a culture of teamwork and accountability. By combining these elements, WestJet has created a sustainable competitive advantage that allows it to attract and retain customers in a highly competitive industry. Instructor’s Notes: In considering how WestJet creates and sustains its advantage relative to other major airlines, students should address how it differs from other airlines on a variety of criteria—ticket price, service, type of airports served, nature of the reservation system, average turnaround time for planes at the gate, percentage of on-time departures and arrivals, and overall customer experience. Example answer: WestJet Airlines has created a sustainable competitive advantage by offering low-frills, low-price service to cost-conscious customers while also meeting or beating competitors’ average on-time arrival and departure performance. Such service causes WestJet’s customers to come back again and again. WestJet is also widely recognised for its very friendly, helpful and efficient customer service. Perform a SWOT analysis for your college or university. There's a SWOT analysis for a college or university: Strengths: 1. Reputation: A strong reputation for academic excellence and/or specialized programs can attract high-quality students and faculty. 2. Faculty Expertise: Well-qualified faculty members bring expertise and experience to the classroom, enhancing the quality of education. 3. Facilities: Modern facilities, including libraries, labs, and recreational amenities, contribute to a positive student experience. 4. Location: A prime location with access to cultural amenities, internships, and job opportunities can be a significant strength. 5. Diverse Student Body: A diverse student population enriches the academic and social environment, fostering cultural exchange and understanding. 6. Alumni Network: An active and supportive alumni network can provide resources, mentorship, and networking opportunities for current students. Weaknesses: 1. Financial Constraints: Limited funding may restrict investments in infrastructure, faculty development, and student support services. 2. Limited Resources: Insufficient resources such as faculty, facilities, and technology can impact the quality of education and research. 3. Bureaucracy: Administrative inefficiencies and bureaucratic hurdles can hinder decision-making and responsiveness to student needs. 4. Retention Rates: Low retention rates or high dropout rates may indicate issues with student support services, academic advising, or campus culture. 5. Competition: Intense competition from other institutions, particularly in attracting top students and faculty, can pose challenges. 6. Infrastructure Maintenance: Aging infrastructure may require significant investments for maintenance and upgrades, impacting the overall student experience. Opportunities: 1. Online Education: Expanding online education offerings can reach a wider audience and diversify revenue streams. 2. International Partnerships: Collaborating with international institutions can enhance research opportunities, student exchange programs, and global recognition. 3. Industry Partnerships: Forming partnerships with industries can provide internship opportunities, funding for research, and potential employment prospects for graduates. 4. Continuing Education: Developing continuing education programs can cater to professionals seeking to upgrade their skills or pursue advanced degrees. 5. Research Funding: Pursuing research grants and partnerships can enhance the institution's reputation and provide resources for faculty and student research projects. 6. Community Engagement: Engaging with the local community through outreach programs, cultural events, and collaborative initiatives can foster goodwill and support. Threats: 1. Budget Cuts: Reductions in government funding or economic downturns can lead to budget cuts, affecting staffing, programs, and services. 2. Changing Demographics: Shifting demographics or declining enrollment in the college-age population can impact student recruitment and retention. 3. Regulatory Changes: Changes in government regulations, accreditation standards, or immigration policies can affect enrollment, financial aid, and international student recruitment. 4. Technological Disruption: Rapid advancements in technology may require significant investments in infrastructure and faculty development to keep pace with educational trends. 5. Public Perception: Negative publicity, scandals, or controversies can damage the institution's reputation and affect enrollment and donor support. 6. Global Events: Events such as pandemics, natural disasters, or geopolitical tensions can disrupt operations, affect international student enrollment, and strain financial resources. Instructor’s Notes: This exercise challenges students to think about their educational institution from the perspective of not a student but rather a marketing professional. To complete the SWOT analysis, students will need to think about what the school does well, how it might perform better, how those strengths might open new opportunities for growth, and the potential weaknesses created by the school’s identified weak areas. Example answers: An example of SWOT analysis for the Telfer School of Management, University of Ottawa might contain the following:
Strengths • Top-ranked program for innovation and entrepreneurship studies AACSB accreditation International student body and alumni network Accomplished academic faculty
Weaknesses • Image: Viewed as a French university outside in English Canada but as an English university in Quebec No PhD in Management program
Opportunities • Expansion of online program offerings Leverage growing international alumni network Expansion of Graduate Research Degree programs
Threats • Many competing entrepreneurship programs in the Ontario and Canada Potential for school ranking to drop
Describe the primary target markets for the Toronto Blue Jays, Victoria’s Secret, and Gatorade. How do these three firms position their products and services so that they appeal to their respective target markets? The primary target markets for the Toronto Blue Jays, Victoria’s Secret, and Gatorade vary significantly due to the nature of their products and services. Let's break it down: 1. Toronto Blue Jays: Target Market: Baseball fans, sports enthusiasts, families, and individuals interested in entertainment. Positioning Strategy: The Blue Jays position themselves as a professional baseball team providing entertainment and sportsmanship. They focus on creating an engaging fan experience through exciting games, promotional events, and community outreach programs. They also emphasize their Canadian identity, catering to fans across the country. Additionally, they utilize player endorsements and merchandise to further connect with their target market. 2. Victoria’s Secret: Target Market: Women aged 18-45, interested in lingerie, fashion, and beauty. Positioning Strategy: Victoria’s Secret positions itself as a premium lingerie and beauty brand, targeting women who seek sophistication, sensuality, and glamour. Their marketing campaigns often feature supermodels and promote an aspirational lifestyle associated with confidence and femininity. They focus on creating an immersive shopping experience in their stores, offering personalized fittings, exclusive collections, and a wide range of products catering to different tastes and body types. 3. Gatorade: Target Market: Athletes, fitness enthusiasts, and individuals seeking hydration and energy replenishment. Positioning Strategy: Gatorade positions itself as a leading sports drink brand, focusing on hydration, performance, and recovery. Their target market includes athletes of all levels, from amateur to professional, as well as fitness-conscious consumers. Gatorade emphasizes the scientific research behind their products, highlighting the benefits of electrolytes, carbohydrates, and hydration for athletic performance. They sponsor sports events, teams, and athletes to reinforce their association with athleticism and performance excellence. In summary, each of these firms employs distinct positioning strategies tailored to their respective target markets, focusing on key attributes and values that resonate with their customers' needs and preferences. Instructor’s Notes: Using three popular brands, students can explore to whom the products are targeted and how the companies apply this targeting to appeal to the consumer segment in question. Example answers: Toronto Blue Jays: Predominantly men who enjoy and watch sports in Toronto and in Ontario. The organization positions its product through television and print advertising in sports-related media outlets, broadcasts of games on both cable and broadcast television stations, product merchandising, and personal endorsements of other products by players. Victoria’s Secret: Primarily 20-something women looking for fashion-forward, body-conscious lingerie designs, as well as young men who are interested in these women. The company promotes its products through risqué television and print advertisements, as well as lingerie-themed fashion shows available through cable pay-per-view networks. Gatorade: Anyone who takes part in strenuous activity—particularly sports—looking for refreshment that replenishes body fluids depleted due to that activity, but especially those under 30 years of age. Gatorade uses vibrant, sports-themed television and print advertisements, as well as sponsored sporting events and product placements at those same events. Pick your favourite product, service provider, or retailer. How do they add value through the implementation of the 4Ps? My favorite product is a subscription-based meal kit service. Let's break down how they add value through the implementation of the 4Ps: 1. Product: The meal kit service offers a convenient solution for busy individuals or families who want to enjoy home-cooked meals without the hassle of meal planning and grocery shopping. They provide high-quality ingredients pre-portioned for each recipe, along with easy-to-follow cooking instructions. By offering a variety of meal options, including vegetarian, vegan, gluten-free, and low-calorie options, they cater to a wide range of dietary preferences and restrictions, ensuring customer satisfaction. 2. Price: While meal kits might seem pricey at first glance compared to traditional grocery shopping, the value lies in the convenience and time-saving aspect. The pricing is usually competitive, with discounts offered for subscribing to weekly meal plans or for purchasing larger quantities of meals. Additionally, by eliminating the need to buy excess ingredients that often go to waste, customers can potentially save money in the long run. 3. Place: These services are primarily online-based, making it easy for customers to browse through meal options, customize their orders, and manage their subscriptions from the comfort of their homes. Meals are delivered directly to customers' doorsteps on scheduled days, ensuring freshness and convenience. Some services also offer the flexibility to skip weeks or pause subscriptions, adding further convenience for customers. 4. Promotion: Meal kit services often use a variety of marketing channels to promote their offerings, including social media, email newsletters, influencer partnerships, and referral programs. They highlight the benefits of their service, such as saving time, reducing food waste, and enjoying delicious, chef-designed meals at home. Special promotions, discounts, and introductory offers are frequently used to attract new customers and retain existing ones. Overall, through the strategic implementation of the 4Ps, meal kit services add value by providing convenience, quality, and variety to customers seeking a hassle-free cooking experience. Instructor’s Notes: Students must think about how value might be created by his or her favourite product or service on the basis of the four elements of the marketing strategy—product, price, place, and promotion—and how they come together to create that value. Example answers: Scion automobile: Product: A low-cost vehicle with many customizable options. Price: Low company costs passed on to the consumer in the form of low prices, which makes the vehicle affordable even on a student’s limited budget. Place: A combination of wide dealership distribution and robust online sales, which enables the student to choose his or her vehicle options online and have it ready for pick up at an associated dealership. Promotion: Street-smart, hip, high-energy advertising that highlights how many options a student has in making the car his or her own unique, personal statement. Choose three retailers. You believe the first builds customer value through product excellence, the second through operational excellence, and the third through customer excellence. Justify your answer. Analyze three different retailers: 1. Apple Inc. - Apple is known for its product excellence. They invest heavily in research and development to create innovative and high-quality products that meet the needs and desires of their customers. From iPhones to MacBooks, Apple products are often considered best-in-class in terms of design, performance, and user experience. Their focus on product excellence has built a strong brand reputation and a loyal customer base willing to pay premium prices for their products. 2. Amazon.com, Inc. - Amazon is a prime example of operational excellence. They have revolutionized the retail industry with their efficient supply chain management, logistics, and fulfillment processes. Amazon's vast network of warehouses, advanced algorithms for inventory management, and sophisticated delivery systems enable them to offer fast and reliable service to millions of customers worldwide. Their emphasis on operational excellence allows them to provide a wide selection of products at competitive prices with speedy delivery, which enhances the overall customer experience. 3. Zappos - Zappos is renowned for its customer excellence. They prioritize building strong relationships with their customers by providing exceptional service and support. Zappos' customer service representatives are known for going above and beyond to ensure customer satisfaction, whether it's through hassle-free returns, personalized recommendations, or 24/7 support. By focusing on customer excellence, Zappos has cultivated a loyal customer base that values the company not only for its products but also for its outstanding service and commitment to customer happiness. Each of these retailers excels in a different aspect of value creation, demonstrating how different strategies can lead to success in the competitive retail landscape. Instructor’s Notes: Whereas the previous questions ask students to consider how various marketing elements (such as the 4Ps) create value for consumers, this exercise challenges them to consider more macro-level strategies for creating and delivering value, as well as for developing sustainable competitive advantage. Example answers: Product excellence: Apple effectively has branded its iPod media player and iTunes online media store so that comparable, cheaper MP3 devices and online music stores seem inferior. Operational excellence: Southwest Airlines offers consistent customer experience, regardless of the airport, and manages its logistics so that it meets or beats the on-time arrival and departure performance of all other major airlines. Customer excellence: Enterprise Rent-A-Car provides strong customer service, both at the counter and by offering to pick up customers at their homes or businesses when they rent a vehicle from the agency. Visit the website of your bank and try to identify how it uses STP to develop various types of bank accounts (products) and charge different fees (price) for different types of accounts. STP is a process that enables transactions to be processed electronically without manual intervention. Banks utilize STP to streamline their operations, reduce costs, and enhance efficiency. When it comes to developing various types of bank accounts, STP can be employed in several ways: 1. Account Opening: Banks can implement STP to automate the account opening process. This includes capturing customer information electronically, performing necessary checks (such as identity verification and credit checks), and generating account documents without manual intervention. 2. Account Maintenance: STP can be used for account maintenance tasks, such as updating customer information, processing changes in account status, and managing account features (e.g., overdraft protection, linked accounts). 3. ransaction Processing: STP facilitates the processing of transactions initiated by account holders, such as deposits, withdrawals, transfers, and payments. By automating these processes, banks can expedite transaction processing times and minimize errors. 4. Risk Management: Banks can leverage STP for risk management purposes, such as monitoring account activity for suspicious transactions, implementing fraud detection algorithms, and enforcing compliance with regulatory requirements. Regarding fees, banks typically charge different fees for different types of accounts based on factors such as account features, usage patterns, and customer demographics. STP plays a role in determining these fees by enabling banks to analyze account data efficiently and tailor fee structures to align with customer needs and preferences. For example: 1. Fee Differentiation: Banks can use STP to analyze account usage patterns and customer profiles to identify which account features are most valued by customers. They can then adjust fee structures to reflect the value proposition of each account type, charging higher fees for accounts with premium features and lower fees for basic accounts. 2. Dynamic Pricing: STP enables banks to dynamically adjust fees based on real-time account activity and market conditions. For instance, banks may offer promotional pricing or fee waivers to attract new customers or encourage certain types of transactions. 3. Personalization: STP allows banks to personalize fee structures based on individual customer preferences and behaviors. By analyzing customer data, banks can offer customized fee packages that align with each customer's unique financial needs and usage patterns. In summary, banks use STP to develop various types of bank accounts by automating account-related processes such as account opening, maintenance, transaction processing, and risk management. Additionally, STP enables banks to determine fees for different types of accounts by facilitating fee differentiation, dynamic pricing, and personalization based on customer data and market conditions. Instructor’s Notes: This question asks student to apply their knowledge of segmentation to a real company and a real situation with which most of them would have a cursory knowledge. This exercise would not only show them first-hand how banks segment their customers’ bank accounts but would also how STP are used to satisfy different customer needs and wants or customers with similar characteristics. Example answers: Students will most likely visit the website of their respective banks and would look at different types of bank accounts. Take for example, Scotiabank segments its transactions-based accounts into 6 segments:
Account Segments Fees
Scotia One $9.95/mth
Covers Unlimited transactions (teller-assisted or self-service)
Scotia Powerchequing No fees with $2,000 minimum monthly balance. Otherwise, $3.95/mth covers 15 self-service transactions including cheques
Basic Banking $3.95/mth covers 12 transactions, including up to 4 teller-assisted
Basic Banking Plan $7.00/mth covers 50 self-service transactions including cheques
Scotia Value Account $11.95/mth Covers 50 transactions (teller-assisted or self-service); plus a variety of no-charge and discounted everyday banking services
Scotia U.S. Dollar Daily Interest Account No fees with U.S. $200 minimum monthly balance. Otherwise, U.S. $1.00/mth covers 2 debit transactions.
o Customer segments are determined using Scotiabank’s Account Selector Reality Check®, an online tool that recommends the account that best fits with the customer’s banking patterns. Select a company with which you are familiar or surf the Internet to find a company that has pursued a diversification strategy as one of its growth strategies. How successful was the company’s diversification strategy? What factors do you think account for its success or failure? One notable example of a company that has pursued a diversification strategy for growth is Alphabet Inc., the parent company of Google. Alphabet began as a search engine company but has since diversified its portfolio significantly, expanding into various other sectors such as technology, healthcare, artificial intelligence, and autonomous vehicles, among others. The success of Alphabet's diversification strategy can be seen in its robust financial performance and its position as one of the most valuable companies in the world. Here are some factors that have contributed to its success: Strong Core Business: Alphabet's core business, Google, continues to dominate the search engine market and generate substantial revenue through advertising. This provides a solid financial foundation that allows the company to explore and invest in other ventures. Strategic Acquisitions: Alphabet has made several strategic acquisitions over the years, such as YouTube, Nest, and Waymo (the autonomous vehicle division). These acquisitions have not only expanded Alphabet's product offerings but have also brought in talented teams and innovative technologies. Focus on Innovation: Alphabet places a strong emphasis on innovation and invests heavily in research and development. This focus has led to the creation of new products and services across various industries, driving growth and staying ahead of competitors. Diversification of Revenue Streams: By diversifying into multiple industries and business areas, Alphabet has reduced its dependence on any single market or product. This diversification helps mitigate risks and provides stability, especially in rapidly evolving industries. Adaptability and Flexibility: Alphabet has demonstrated a willingness to adapt to changing market conditions and consumer preferences. The company is not afraid to experiment with new ideas and quickly pivot if necessary, allowing it to stay relevant and capitalize on emerging opportunities. While Alphabet's diversification strategy has been largely successful, it hasn't been without challenges and failures. Some factors that could potentially hinder its success include: Integration Challenges: Integrating diverse businesses and cultures can be complex and may lead to operational inefficiencies or cultural clashes within the organization. Regulatory Scrutiny: Alphabet's dominance in multiple markets has attracted regulatory scrutiny, particularly regarding antitrust and privacy concerns. Regulatory challenges could impact the company's ability to execute its diversification strategy effectively. Competition: Alphabet faces competition from established players as well as emerging startups in each of its diversified markets. Maintaining a competitive edge requires ongoing investment in innovation and strategic decision-making. Resource Allocation: Allocating resources effectively across diverse business units and projects is crucial for success. Poor resource allocation or overstretching could lead to missed opportunities or underperformance in certain areas. Overall, Alphabet's diversification strategy has been largely successful, driven by its strong core business, strategic acquisitions, focus on innovation, diversification of revenue streams, and adaptability. However, the company must continue to navigate challenges such as regulatory scrutiny, competition, and resource allocation to sustain its growth trajectory in the long term. Instructor’s Notes: The focus of this question is to get students to think about related and unrelated diversification strategies and tactics companies can use to grow their businesses. They should be able to identify the factors that could influence the success or failure of diversification strategies. Example answers: The key to answering this question is for students to be able to first identify the core business, products or service the company provides and then the new business, product, or service they are entering or have entered. The next step is to think about the benefits and risks of diversification that could eventually influence their success. An example of unrelated diversification occurred when banks started offering insurance products and services. A few years ago, banks were not allowed to sell insurance products since banking products and services were considered legally different from insurance products and services. However, the banks successfully lobbied the government to change the law and they are now selling insurance products and services. Another example is Rogers Communications, a cable and cell phone service provider (a telecommunications company) that is seeking approval to offer credit card services (a financial service) to its customers. Similarly, Apple, for example, was originally a computer company before it entered the mobile music market. This could be seen as both a related and an unrelated diversification since Apple was able to leverage its technological know-how, use some of its existing distribution network, and focus on its existing customer base. However, it can be characterized as an unrelated diversification since mobile music was seen as quite different from simply making and selling computers. This example could be used to emphasize the fact that the line between related an unrelated diversification is not always clear and distinct. Students may identify a wide range of factors that may influence the success of diversification strategies, some of which may be specific to the companies chosen while others may be more general such as: Knowledge of the target market – that is how well the company understands the needs and wants of consumers in the new market and can serve them Product/service characteristics and value – how well the product fulfils the needs of the market and the extent to which it does it better than competing products/services and the overall value offered Access to manufacturing facilities and distribution networks Promotion strategies and tactics – convincing customers that as a new entrant they are capable and reliable to offer a high quality product or service that equals to better than existing products/services Market size and access – how big is the market and how easy is it to enter could influence success. Larger markets that are less competitive may be easier to penetrate than more competitive markets, especially if they are small. Imagine that you have just developed and launched a new sports bike for cycling enthusiasts and your business has become an instant success. You would like to capitalize on this success and fame to grow your business. Explain how you would go about expanding your business over the next three years Expanding a successful sports bike business over the next three years requires a strategic approach to capitalize on the initial success and sustain long-term growth. Here's a comprehensive plan: Market Analysis and Research: Conduct thorough market analysis to identify target demographics, trends, and competitors. Gather feedback from existing customers to understand their needs and preferences better. Product Diversification: While maintaining the core sports bike product line, consider diversifying into related products such as biking accessories, apparel, and equipment. This expands the product range and caters to a broader audience. Brand Building: Invest in branding efforts to strengthen the company's image and increase brand awareness. This includes effective marketing campaigns across various channels, sponsorship of cycling events, and collaborations with influencers and athletes. Distribution Expansion: Explore new distribution channels to reach more customers. This could involve partnering with additional retailers, expanding e-commerce operations, and establishing international distribution networks to tap into global markets. R&D and Innovation: Continue investing in research and development to improve existing products and develop innovative features. Stay updated with technological advancements and incorporate them into product design to stay ahead of the competition. Customer Experience Enhancement: Focus on providing exceptional customer service to build brand loyalty and attract repeat business. Implement customer feedback mechanisms and ensure prompt resolution of issues to maintain customer satisfaction. Sustainability Initiatives: Embrace sustainability practices throughout the supply chain, from manufacturing to packaging and distribution. This not only aligns with consumer preferences but also contributes to long-term environmental and social responsibility. Community Engagement: Foster a sense of community among cycling enthusiasts by organizing group rides, workshops, and events. Engage with customers through social media platforms and online forums to create a vibrant and supportive community around the brand. Strategic Partnerships: Form strategic partnerships with other businesses in the cycling industry, such as bike tour companies, fitness centers, or bike rental services. These partnerships can help expand reach and attract new customers. Financial Management: Maintain prudent financial management practices to ensure sustainable growth. Monitor key financial metrics regularly, allocate resources efficiently, and reinvest profits into strategic initiatives to fuel expansion. By implementing these strategies over the next three years, the sports bike business can capitalize on its initial success and establish itself as a prominent player in the cycling industry, both domestically and internationally. Instructor’s Notes: The goal of this question is get students to think about how they may apply the four growth strategies – market penetration, product development, and market development, and diversification. Example answers: Students’ should be able to identify an appropriate sequence in the application of the growth strategy. Given that it is a new business that has been an instant success, students should likely suggest a market penetration strategy for most of the three years, if not all of it, followed by either a market development or product development strategy, depending on which of these two they consider more lucrative or risky. Students should be asked to justify their choice of growth strategies and to identify specific products they would develop or specific markets they would pursue. Use the sports bike scenario from the previous question, describe what kinds of analysis you might conduct before deciding what growth strategies to implement? Before deciding on growth strategies for the sports bike scenario, several analyses would be essential to inform the decision-making process: Market Analysis: Understanding the current market trends, size, growth rate, and competitive landscape is crucial. This includes analyzing customer preferences, demographics, and psychographics. Are there any emerging trends in sports bike usage or preferences? What is the market demand for sports bikes, and how is it expected to evolve? Competitor Analysis: Assessing competitors' strengths, weaknesses, strategies, and market positioning is vital. What are the key players in the sports bike industry doing? How are they differentiating themselves? Are there any gaps or opportunities that competitors have overlooked? SWOT Analysis: Conducting a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis helps in identifying internal strengths and weaknesses as well as external opportunities and threats. What are the strengths and weaknesses of the sports bike company? What opportunities exist in the market, and what threats could potentially hinder growth? Customer Analysis: Understanding the target audience is crucial for developing effective growth strategies. Who are the primary customers for sports bikes? What are their needs, preferences, and pain points? Are there any untapped customer segments that the company could target? Financial Analysis: Evaluating the company's financial health, revenue sources, profitability, and cost structure is necessary. What is the current financial performance of the sports bike company? How much capital is available for growth initiatives? What are the expected returns on investment for different growth strategies? Technology and Innovation Analysis: Assessing technological advancements and innovations in sports bike design, manufacturing, and distribution can provide insights into potential growth opportunities. Are there any new technologies or innovations that could disrupt the sports bike industry? How can the company leverage technology to enhance its competitive advantage? Regulatory and Legal Analysis: Considering regulatory requirements, compliance issues, and legal constraints is essential, especially in highly regulated industries like automotive. What are the regulatory hurdles or legal challenges that the company may face? How can the company ensure compliance while pursuing growth strategies? By conducting these analyses, the sports bike company can gain valuable insights into the market dynamics, competitive landscape, customer preferences, financial implications, technological advancements, and regulatory constraints, which will help in formulating effective growth strategies tailored to its specific context and objectives. Instructor’s Notes: This question requires students to consider the type of information they would need in order to decide on which strategy to employ. Example answers: Students who choose market penetration may decide to focus on customer satisfaction and feedback data in order to improve their offering. Those that intend to use market development will likely focus on researching the new market(s) or segment(s) in order to get insights about customers’ needs and wants and how they align with their existing resources and capabilities. Those that focus on a product development strategy will more likely collect information on customers’ unmet needs or latent needs in order to develop new products to satisfy those needs. You and a few of your classmates are planning to open a new spa facility near the campus of your university. Explain how you would segment the market for your services, which segment would you target, and how would you position your spa to the chosen target market. To effectively segment the market for our new spa facility near the university campus, we would first need to understand the diverse needs and preferences of potential customers. Here's how we could approach it: Demographic Segmentation: We could divide the market based on demographic factors such as age, gender, income, and occupation. For example, students, faculty, and staff may have different needs and budgets compared to local residents or professionals working nearby. Psychographic Segmentation: Understanding the lifestyles, personalities, and values of our potential customers would be crucial. Some may seek relaxation and stress relief, while others may prioritize wellness and self-care as part of their lifestyle. Behavioral Segmentation: By analyzing how customers behave regarding spa services, we can segment based on factors like usage rate, benefits sought, loyalty status, and readiness to try new treatments. Geographic Segmentation: Considering the proximity of our spa to the university campus, we can target local residents, students, and faculty who seek convenient relaxation options. Given these segments, our primary target market would likely be university students and faculty, as they would constitute a significant portion of the local population and have specific needs that align with our services. Positioning our spa to this target market would involve: Convenience: Emphasizing our location near the university campus to make our spa easily accessible for students and faculty members with busy schedules. Affordability: Offering competitive pricing and student discounts to cater to the budget-conscious nature of our primary target market. Customized Services: Providing a range of spa treatments tailored to the needs and preferences of students and faculty, such as stress-relief massages, skincare routines for busy schedules, and wellness workshops. Relaxing Atmosphere: Creating a tranquil and welcoming environment within the spa to provide an escape from the academic rigors of university life. Promotion and Engagement: Utilizing social media platforms and campus events to promote our spa services, engage with the university community, and offer special promotions or loyalty programs to encourage repeat visits. By focusing on these strategies, we can effectively position our spa as a convenient, affordable, and tailored relaxation destination for the university community, thereby attracting and retaining our target market. Instructor’s Notes: This question requires that students apply their knowledge of the process of segmenting a market and to list the criteria for selecting a market segment. Example answers: Students’ answers may vary but they must clearly indicate that segmentation is about creating groups of customers that respond similarly to the firm’s marketing efforts. They must state bases for segmenting the market, for example, using demographic factors (e.g., age, sex, income, location, etc) or psychological or behavioural considerations. Students must also identify the criteria for selecting a target market i.e. a segment’s attractiveness in terms of factors such as size and growth potential. Net Savvy Petro-Canada is considered a progressive company in terms of its values and the mission statement that drives its business. Visit its website (http://www.petro-canada.ca) and review the portion that discusses the company, its mission, and its values. Discuss aspects of its mission and values that might be considered progressive. Do you believe its progressive attitude creates a special position in the market that contributes to a sustainable competitive advantage? Petro-Canada indeed presents itself as a progressive company with a strong focus on sustainability and corporate responsibility. Their mission and values, as outlined on their website, reflect this commitment. One aspect that stands out is their dedication to environmental stewardship. Petro-Canada emphasizes responsible resource development and reducing the environmental impact of their operations. This includes initiatives like investing in renewable energy sources and minimizing greenhouse gas emissions. This progressive stance aligns with the growing societal concern for environmental sustainability and positions Petro-Canada as a forward-thinking player in the energy industry. Moreover, Petro-Canada emphasizes safety, integrity, and diversity in its values. These are increasingly important considerations for consumers and stakeholders. A commitment to safety ensures the well-being of employees and communities, while integrity fosters trust with customers and partners. Embracing diversity not only promotes inclusivity but also brings a variety of perspectives and ideas to the table, fostering innovation and adaptability. In terms of creating a sustainable competitive advantage, Petro-Canada's progressive attitude can indeed play a significant role. Consumers are increasingly making purchasing decisions based on a company's values and social responsibility efforts. By aligning itself with progressive values such as environmental sustainability, safety, integrity, and diversity, Petro-Canada can differentiate itself in the market and attract environmentally conscious consumers. Furthermore, as governments and regulatory bodies impose stricter environmental regulations and standards, companies like Petro-Canada, with a proactive approach to sustainability, may be better positioned to adapt and thrive in a changing regulatory landscape. This can lead to cost savings, operational efficiencies, and enhanced reputation, all of which contribute to a sustainable competitive advantage. Overall, Petro-Canada's progressive mission and values not only resonate with evolving societal expectations but also position the company as a leader in sustainability within the energy industry. This can indeed contribute to a sustainable competitive advantage by attracting environmentally conscious consumers and stakeholders, fostering innovation, and mitigating regulatory risks. Instructor’s Notes: This exercise challenges students to consider how and to what extent socially and/or environmentally progressive policies might contribute to a company’s competitive advantage. The real question for the students, however, is whether this competitive advantage is sustainable for Petro-Canada. Example answers: There are several aspects that might be considered progressive (see the screen shots for examples of the mission statement, company values, and social and environmental assessments): Economic opportunity creation for those who traditionally have been economically disadvantaged. Environmentally conscious manufacturing and waste management. Ecologically safe agriculture methods and practices. Promotion of social justice domestically and internationally. Do these efforts translate into sustainable competitive advantage? Perhaps not, because there is nothing to stop a competitor from copying these values or methods. The ultimate logic of these values actually advocates that this competitive advantage should not be sustainable for a single company because these practices should be shared by all companies. 2. More and more firms seem to be entering the dating service industry. Visit eHarmony (http://www.eharmony.ca) and tour its website to find the types of activities and methods such companies use to help match compatible couples. Now, analyse the environment that might affect Internet dating services using a SWOT analysis. Analysis of eHarmony and the Online Dating Industry Using SWOT Analysis Strengths: 1. Scientific Matching Algorithm: eHarmony boasts a unique matching algorithm based on psychological principles, enhancing the likelihood of compatible matches. 2. Brand Recognition: eHarmony is one of the most recognizable names in online dating, benefiting from years of establishment and trust. 3. Diverse User Base: With millions of users worldwide, eHarmony offers a large pool of potential matches, increasing the chances of finding compatible partners. 4. Comprehensive Profiles: The platform encourages users to provide detailed information, facilitating more accurate matching and deeper connections. 5. Success Stories: eHarmony showcases numerous success stories, enhancing its reputation and attracting more users. Weaknesses: 1. Costly Subscription Model: eHarmony operates on a subscription-based model, which may deter potential users who are unwilling to pay for online dating services. 2. Limited User Control: Some users may find the lengthy questionnaire and reliance on algorithms restrictive, preferring more control over their matches. 3. Competitive Market: The online dating industry is highly competitive, with numerous players offering similar services, potentially limiting eHarmony's market share. 4. Limited Target Audience: eHarmony's focus on long-term relationships may alienate individuals seeking casual or short-term connections, reducing its appeal to certain demographics. 5. Dependence on Technology: Any disruptions or glitches in the platform's technology could negatively impact user experience and trust in the service. Opportunities: 1. Expansion into New Markets: eHarmony could explore expansion opportunities in emerging markets or demographic segments currently underserved by online dating platforms. 2. Mobile App Development: Developing a user-friendly mobile app could attract more users, catering to the growing trend of mobile dating. 3. Partnerships and Collaborations: Collaborating with other companies or integrating with social media platforms could expand eHarmony's reach and attract new users. 4. Integration of AI and Machine Learning: Leveraging advancements in AI and machine learning could enhance eHarmony's matching algorithms, improving the accuracy of matches and user satisfaction. 5. Diversification of Services: Offering additional services such as relationship counseling or offline events could provide new revenue streams and enhance user engagement. Threats: 1. Data Security Concerns: With the increasing prevalence of data breaches and privacy concerns, eHarmony faces the risk of damaging its reputation and losing users' trust. 2. Regulatory Challenges: Changes in regulations related to online dating, data privacy, or advertising could impact eHarmony's operations and profitability. 3. Changing Consumer Preferences: Shifts in societal norms or preferences towards online dating could affect eHarmony's relevance and demand for its services. 4. Emergence of New Competitors: The entry of new competitors with innovative features or disruptive business models could threaten eHarmony's market position. 5. Economic Instability: Economic downturns or fluctuations could lead to decreased consumer spending on discretionary services like online dating, impacting eHarmony's revenue. Instructor’s Notes: Students can apply what they have learned to a novel service area they might not have considered before. To obtain an understanding of how a company like eHarmony attempts to match singles, students must consider what factors affect online dating services in the guise of a SWOT analysis. Example answers: eHarmony uses questionnaires to probe what people think about relationships (i.e., what they want, what’s important, what they like or don’t like), as well as personality tests to create a high-quality dating match. According to the following SWOT analysis, eHarmony might face problems on two fronts. First, singles could use many other low-cost options—both online and real-world—to meet and get to know one another. With so many options, clients might not be willing to pay for the eHarmony subscription service. Second, there is no guarantee that clients can avoid potentially negative, or even dangerous, situations with bad matches or sexual predators who use the service for their own ends.
Strengths • At-home convenience factor Multiple matching criteria Low client risk
Weaknesses • No guarantee that matches will be good or safe Requires client subscription to enable communication between matches
Opportunities • Use matching criteria for couples to provide inexpensive counselling International expansion
Threats • Many no-charge opportunities for singles to meet, online or off Potential for sexual predators to use the service negatively
• End-of-Chapter Case Study: Toronto Football Club: Rebirth to Excitement What do you think the company’s mission is? Comment on the appropriateness of its mission. The mission of Toronto Football Club (TFC) appears to revolve around revitalizing and reinvigorating the football culture in Toronto, aiming to transform it into a hub of excitement and passion for the sport. This mission seems highly appropriate, especially if TFC aims to not only establish itself as a prominent football club but also to deeply embed itself within the local community. By focusing on creating an atmosphere of excitement and engagement around football, TFC can effectively differentiate itself in the market and attract both fans and sponsors. Furthermore, such a mission aligns with the broader goal of fostering a sense of belonging and pride among the local population, which can have positive ripple effects on various aspects of community life. In assessing the appropriateness of the mission, it's essential to consider factors such as the club's resources, capabilities, and the prevailing cultural and economic conditions in Toronto. If TFC has the necessary means to execute its mission effectively and if there's a demand for football-related entertainment in the city, then this mission is not only appropriate but also strategic in positioning TFC for long-term success. Instructor’s Notes: Although the case does not mention the mission statement, students should attempt to discern what it might be on the basis of the information provided in the case. Example answers: Possible mission statement: “Inspiring the young soccer fans, soccer enthusiasts, and even new fans to play and watch the soccer” or “Inspiring the young soccer fans, soccer enthusiasts, and even new fans to support soccer and the TFC so as to make soccer the number one played and watched sport in Canada.” In discussing this mission’s appropriateness, it might suggest that the TFC are trying to change the attitudes of Torontonians and Canadians to become avid lovers and supporters of the game to the extent to make it the number one watched and played sport in Canada. Conduct a situation analysis for Toronto FC using SWOT. To what extent are the company’s objectives appropriate for long-term success? SWOT Analysis for Toronto FC: Strengths: Strong Fan Base: Toronto FC boasts a passionate and dedicated fan base, contributing to ticket sales, merchandise revenue, and overall brand loyalty. Strategic Partnerships: The club has secured lucrative partnerships with sponsors and broadcasters, providing financial stability and exposure. Talent Acquisition: Toronto FC has a history of recruiting top-tier players, both domestically and internationally, enhancing the team's performance on the field. Modern Facilities: The club has access to state-of-the-art training facilities and a well-maintained stadium, providing players with optimal conditions for development and performance. Weaknesses: Performance Inconsistency: Toronto FC has experienced periods of inconsistency in on-field performance, leading to fluctuations in fan engagement and revenue. Injury Concerns: The team has faced challenges with player injuries, impacting squad depth and overall performance throughout the season. Financial Dependency: Reliance on external funding sources and revenue streams leaves the club vulnerable to economic downturns or changes in sponsorship deals. Competition: Toronto FC faces stiff competition from other Major League Soccer (MLS) teams, as well as from other sports franchises in Toronto, potentially limiting market share and revenue growth. Opportunities: Market Expansion: There is room for Toronto FC to expand its fan base locally and globally through targeted marketing efforts and community engagement initiatives. Youth Development: Investing in youth development programs can help cultivate local talent, reducing reliance on expensive international transfers and fostering long-term success. Digital Innovation: Leveraging technology and digital platforms can enhance fan engagement, monetization opportunities, and data-driven decision-making processes. International Branding: Participating in international tournaments and exhibitions can raise the profile of Toronto FC globally, attracting new fans and sponsors. Threats: Economic Uncertainty: Economic downturns or unforeseen events could impact disposable income and consumer spending, affecting ticket sales and sponsorship revenue. Regulatory Challenges: Changes in league regulations or FIFA policies could affect player recruitment strategies, salary caps, and overall financial management. Player Exodus: Top players may seek opportunities in more prominent leagues or clubs, leading to talent drain and potential declines in on-field performance. Public Health Crisis: Global pandemics or health crises, such as COVID-19, can disrupt league schedules, fan attendance, and revenue streams, posing significant challenges to the club's operations. Assessment of Objectives for Long-Term Success: Toronto FC's objectives appear to be appropriate for long-term success, considering the strengths, weaknesses, opportunities, and threats outlined in the SWOT analysis. However, there are areas where the club could further optimize its strategies: Youth Development: Increasing emphasis on youth development could help mitigate weaknesses related to financial dependency and player acquisitions. By investing in local talent, Toronto FC can build a sustainable pipeline of players while reducing reliance on expensive international transfers. Digital Innovation: Leveraging digital platforms and technology can amplify the club's strengths in fan engagement and revenue generation. Implementing innovative digital strategies can enhance the fan experience, drive merchandise sales, and unlock new monetization opportunities. Risk Management: Proactive risk management strategies should be implemented to address threats such as economic uncertainty and public health crises. Diversifying revenue streams, maintaining financial reserves, and implementing contingency plans can help mitigate the impact of external threats on the club's operations. Overall, Toronto FC's objectives align with the competitive landscape of Major League Soccer and the broader sports industry. By capitalizing on strengths, addressing weaknesses, seizing opportunities, and mitigating threats, the club can position itself for sustained success in the long term. Instructor’s Notes: This exercise illustrates how SWOT can be used together to gain insight into a company’s marketing environment, which can enable it to plan and execute its marketing strategy. Example answers:
Strengths • New state-of-the-art stadium Huge seating capacity Strong management expertise of the Maple Leafs Sports Entertainment Good relationship with community and fan base
Weaknesses • New team with no international recognition Toronto-based and not widely know outside of Toronto Limited growth potential especially in terms of merchandising opportunities
Opportunities • Growing popularity of soccer in Canada Most televised sport in Canada, which could help to expand team recognition and appeal to larger fan base Potential to become a world class team
Threats • Inability to bring in expensive, high calibre team to Toronto Establishment of other teams in other nearby cities – diluting fan base and support Poor performance of the team over a long period Resurgence of other sports
The company’s objectives are appropriate since, as experience shows, both a strong brand and excellent customer service are keys to success and both offer sustainable competitive advantage since they are not easy to copy or imitate. What do you perceive as Toronto FC’s competitive advantage? To what extent is this competitive advantage sustainable over time? Toronto FC's competitive advantage lies in several key areas. Firstly, they have a strong and dedicated fan base, which creates an electrifying atmosphere in their home stadium, BMO Field. This passionate support not only boosts morale but also puts pressure on opposing teams. Secondly, Toronto FC has made strategic investments in player development and recruitment, bringing in top talent from around the world. Their ability to attract skilled players, coupled with effective coaching and management, has consistently propelled them to success in Major League Soccer (MLS). Additionally, the club benefits from robust financial backing, allowing them to invest in infrastructure, training facilities, and other resources that contribute to their competitiveness. The sustainability of Toronto FC's competitive advantage depends on several factors. Continuously nurturing and expanding their fan base is essential for maintaining the energetic atmosphere that gives them a home-field advantage. Additionally, they must remain vigilant in their player recruitment and development efforts to ensure they have the talent necessary to compete at the highest level. Financial stability is also crucial; they must manage their resources wisely to avoid overspending while still investing in areas that drive success on and off the field. Finally, adapting to changes in the competitive landscape of MLS and global soccer is vital for long-term sustainability. By staying agile and proactive, Toronto FC can maintain their competitive edge over time. Instructor’s Notes: To respond, students must not only identify the company’s competitive advantage but also grapple with whether that identified advantage is sustainable. Example answers: Recognisable brand name coupled with a brand new large stadium, strong management expertise and loyal fan base of soccer enthusiasts. This competitive advantage, by itself, is sustainable only if the team can exploit it through its on field success i.e., playing at very high-levels and winning games against the best teams in the world. It is not very difficult for another Canadian team to take away this advantage from Toronto FC as is the case with other sports, e.g., hockey and basketball. Who do you think Toronto FC’s target market is? Toronto FC's target market likely includes soccer fans in the Greater Toronto Area (GTA) who are passionate about the sport and eager to support their local team. This demographic may consist of a diverse range of individuals, including families, young adults, and multicultural communities who appreciate the excitement and camaraderie of live sports events. Additionally, Toronto FC likely targets fans who are interested in Major League Soccer (MLS) and global soccer leagues, as well as those who enjoy the social aspects of attending matches and participating in fan culture. Instructor’s Notes: To identify and describe the target market, students must think carefully about how Toronto FC allocated its ticket sales between season tickets, half-season tickets, and single game tickets as well as its ticket pricing strategy. Example answers: Despite the diversity of its fan base, it seems that the Toronto FC target market is hard-core soccer fans who have a deep-rooted love for the game either by playing the game regularly or watching on various Canadian and European sports channel and who tend to have a favourite soccer team and player. These fans tend to purchase season tickets and other team merchandise. Secondary target markets seems to be individuals who simply love the game but can only afford to purchase single game tickets or half-season tickets. What can Toronto FC do to keep existing fans loyal to the franchise? Toronto FC's target market likely includes soccer fans in the Greater Toronto Area (GTA) who are passionate about the sport and eager to support their local team. This demographic may consist of a diverse range of individuals, including families, young adults, and multicultural communities who appreciate the excitement and camaraderie of live sports events. Additionally, Toronto FC likely targets fans who are interested in Major League Soccer (MLS) and global soccer leagues, as well as those who enjoy the social aspects of attending matches and participating in fan culture. Instructor’s Notes: This question should help get students thinking about loyalty strategies and tactics within the context of sports marketing. Here they must apply their knowledge of customer relationship management and customer satisfaction as keys to retention and loyalty. Example answers: Making the team accessible to the fans and engaging the fans in various activities sponsored by the team such as “soccer one-on-one with the coach” and supporting local teams with young players Build strong relationship with the community and show support for the community Build strong band and implement a good merchandising strategy Actively promote the game and support minor leagues and recreational teams Most importantly, play competitively, win games, develop international reputation and bring it well-known and high-calibre international teams. Video Activities Video: Staples: Implementing the Marketing Mix
Learning Objective: LO 4
Page Number in Text: 44
Description: This video provides a detailed insight into how marketers think about and configure their marketing mix in order to deliver maximum value to customers by sticking to their brand promise and enhancing the customer overall experience.
Key Words: marketing mix; product strategy; pricing; promotion; distribution
Activity: Ask students to view the video and then (1) make a list of all the elements of each of the 4PS described in the video. For example, ask students to identify all the elements of distribution that are mentioned; (2) identify another retailer with which they are familiar either in the same line of business or another line of business (e.g. a grocery chain) and then identify the elements of each of the 4Ps for the store of their choice; (3) compare the two lists and (4) ask students to give reasons why the items on their lists are similar or different. here's how you could structure the answer for each part of the activity: 1. Elements of each of the 4Ps described in the video: • Product: Staples focuses on offering a wide range of office supplies, including technology products, office furniture, and stationery. • Price: Staples employs pricing strategies such as discounts, promotions, and competitive pricing to attract customers. • Promotion: Staples advertises through various channels like TV commercials, online ads, and in-store promotions to communicate their value proposition. • Distribution: Staples ensures accessibility through both online and offline channels, with physical stores and an e-commerce platform, providing convenient options for customers to purchase their products. 2. Elements of each of the 4Ps for another retailer (e.g., a grocery chain): • Product: The grocery chain offers a variety of food products including fresh produce, packaged goods, and household items. • Price: Pricing strategies include everyday low prices, discounts on bulk purchases, and loyalty programs. • Promotion: Promotions include weekly flyers, in-store displays, and loyalty program rewards. • Distribution: The grocery chain utilizes a network of physical stores, online ordering with delivery or pickup options, and partnerships with local suppliers for fresh produce. 3. Comparison of the two lists: • Both Staples and the grocery chain focus on offering a wide range of products to meet customer needs. • Pricing strategies may differ, with Staples focusing more on discounts and promotions, while the grocery chain emphasizes everyday low prices. • Promotion tactics vary but aim to attract and retain customers through targeted advertising and promotions. • Distribution strategies differ based on the nature of the products and customer preferences, with both retailers offering a mix of physical and online channels. 4. Reasons for similarities and differences: • Similarities may arise from the common goal of meeting customer needs and delivering value, leading to overlap in product offerings and promotional tactics. • Differences may stem from the unique characteristics of each industry (office supplies vs. groceries), customer preferences, and competitive landscapes, influencing pricing and distribution strategies accordingly. This breakdown should provide a comprehensive answer to the activity, highlighting the key elements and comparisons between the two retailers' marketing mixes. Solution Manual for Marketing Dhruv Grewal, Michael Levy, Shirley Lichti, Ajax Persaud 9780071320382, 9780070984929
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