Transcript for:
Developing Marketing Strategies and Marketing Plan

foreign hi everyone welcome back here we are we're jumping into chapter two um developing marketing strategies and a marketing plan which I mentioned in the last lecture that we're going to be doing next and going into much more detail about the development of a marketing plan um as almost like a GPS or a map or some sort of guide for companies to go ahead and market their services or their products in a very very specific way to so they can so they can measure the results um when you think about it most of us as individuals we do not have a plan a documented plan for what we want to achieve over the next six months year three years it's always recommended that we do I mean I've always there's always been recommendations that you write down your goals and and write down things so that you can measure your progress um but I don't think it's really been a regular practice for most individuals to do that companies on the other hand must have a business plan and then a marketing plan derived from that overall business plan where the business sets up their overall goals and if it's a conglomerate then obviously there are a lot of different Market divisions and business divisions that would each have their own separate marketing plan for whatever products they're launching or or marketing or producing or just selling so so I'm going to go ahead and share the PowerPoint and we're going to get going first we're going to start with discussing Pepsi a little bit uh PepsiCo right PepsiCo is is one of those uh conglomerate type companies right they are a direct competitor of Coca-Cola however PepsiCo has not just sold drinks and beverages but they have also gone ahead and gotten into the salty snack Market um they have also gone ahead to expand their Market to include healthier options uh they've done that through acquisition of different companies that provide healthier snacks they have created their salty snacks in lower fat or lower calorie versions or snack packs um and they were the first big beverage company to recognize the um the desire to have more options in the uh seltzer Market flavored seltzers um they launched their bubbly line and uh within um a year they had taken 10 of the shelter market so you know they were the first ones to kind of recognize that and through that development through that foresight they were able to get a an exclusive contract with Southwest Airlines so that um because they were able to provide what Coca-Cola who had that contract with Southwest Airlines was unable to do and that was more variety of seltzers for their customers so there's a lot of ways that that can go but Pepsi PepsiCo has always been very focused on on expanding and growing what they have and then adding complementary products to fulfill customer needs and over time what has happened is in the market in the consumer Market in societies there's been kind of a push for healthier alternatives um you know obviously uh sugary sodas uh the you know the consumption of sugary sodas and beverages is is on is on a decline globally and this is going to impact Coca-Cola and Pepsi um equally but since Pepsi also has all these other things and all these other products they are their their risk is limited um whereas Coca-Cola has really not been able to um kind of hedge their bets um with that so they are kind of rushing to keep up with that Coca-Cola had been the leader and now um you know in beverages and they may still be in that area but PepsiCo still has the upper hand because of all of the different things that they provide so let me go ahead and share and we'll get going on this um this chapter which seems like it will have a lot more to go and there are a lot of different things involved in developing marketing strategies and a marketing plan um but first are learning objectives we're going to Define what a marketing strategy is describe the elements of marketing plan analyze a marketing situation utilize using SWOT analysis describe how a firm chooses which consumer groups to pursue with its marketing efforts outline the implementation of the marketing mix as a means to increase customer value summarize portfolio analysis and its use to evaluate marketing performance and we're going to describe how firms grow their business um I also have a few videos that I'm going to interject in here as we go so that you can get a little bit of insight into other companies they do have a lot of call outs and a lot of company descriptions in this chapter specifically with a lot of examples so you're going to want to take a look at those as well okay so like I said the development of PepsiCo reflects very careful analysis of the market and very specific efforts to ensure that it continues to attract the wide range of consumers that it have been used to so let's jump in here what is a marketing strategy well marking strategy will do several things um it identifies the the firm's Target markets it it the related marketing mix or the four Ps that we talked about uh last in the last module and the basis on which the firm plans to build a sustainable competitive Advantage okay the sustainable competitive Advantage is an advantage over competition that is not easily copied and that the hope is that it can be maintained over a longer period of time um it's like building a wall around your company's interests where um you know scaling that wall will take a long time for your competitors to do because they may not be able to figure out exactly what you're doing or you have differentiated yourself so much or taken enough in the market share that you've insulated yourself a little bit from that competition so that is that's one of the keys to truly creating a sustainable business and a sustainable Advantage so Pepsi consumers you know customers around the world know Pepsi and consider it a primary go-to brand if they want refreshing drinks that's a positioning that Pepsi has established with careful targeting and a marketing mix implementation right so in terms of the four P's Pepsi already has their product Excellence with its signature colas which which is Pepsi and Diet Pepsi they also have variations of those but those are their main products um it's also continually adding new products and product lines and and those items create interesting product Innovations and just enhance people saying hey let's just try that even if they don't like it they've tried it they've bought it um to Market his products it relies on its extensive distribution Network which is also built on their salty snack market right because people know them for that their distribution system is set up much more broadly because of that so they're able to kind of get to places that are very familiar and appealing in stores in more than 200 countries so its pricing is also a competitive advantage and very strategic because Pepsi is very often cheaper than Coca-Cola products and Central to its promotion efforts are Pepsi's celebrity endorsements uh back from the time they had Michael Jackson um as doing a celebrity endorsement for them they've had cardi B Beyonce Michael Buble with the with the Buble um seltzer water so you know they've had Chance the Rapper the Backstreet Boys they have you know it's they've gotten themselves in um in front of a lot of people that they may not have been in front of through all of these celebrity endorsements so they've been very very smart about that um so jumping uh I might jump to a video just because marketing strategy is is really kind of about planning it's like how are you going to compete with X Y and Z using these uh for PS um and of course then we can jump back there are into the four macros or strategies that will focus on aspects in the marketing mix that will create and deliver value and develops that sustainable competitive Advantage um but and then we're going to go into that detail a little bit more but let me first jump over to this one this uh how Disney Plus plans to compete with Netflix and it's um I'm going to I'm going to share I'm going to share the window that I'm on right now so it's gonna get a little weird but hold on hold on to your hats because it's going to be okay um so here I am right here I'm going to share it I'm going to go here and here we go 1940s just as millions of Americans began embracing TV most major film studios were selling off permanent rights to movies to try and profit off the new platform but Walt Disney saw what his peers didn't an opportunity to partner with networks to Showcase seasonal specials and compilations from Disney's vast library of the movies and short films on Christmas day of 1950 Disney aired a special calls an hour in Wonderland on NBC featuring a compilation of scenes from Alice in Wonderland Snow White and other default properties the special was a hit and reinforced Disney's Theory as other film studios were distancing their sounds on television we all saw the opportunity of a future direct to Consumer model for these duties [Music] immediate way with the pictures you worked for years and uh and it's quite a while before you know how what you're working on is going to come out how it's going to be received with television you know well in a very short time [Music] just as in the early days of TV Disney's now looking to pull their shows and films from a third party like Netflix and instead launched their very own direct to Consumer products in 2019 the company is launching Disney plus an on-demand streaming service that will feature the company's massive backlog of movies short films and shows in addition to recent releases Disney's developing all new content for their platform exclusive programming includes a Monsters Inc series and the Mandalorian an all-new Saga based in the Star Wars Universe see Disney's brain strength allows them to use sequels and remakes to instantly Drive interest to its platform with the acquisition of 21st century reports builds Disney's Library even further giving the company a controlling stake in Hulu access to new characters inbox's entire backlog content this catalog already challenges the library Netflix has spent billions of dollars to curate but it doesn't stop in 2014 CPS launched all access their own over-the-top on-demand streaming service to allow viewers to catch shows from any device but it wasn't until assessment of Star Trek Discovery in 2017 that the platform saw a significant growth in fact they recorded the greatest number of single day week and monthly signups since all access had launched it's the same reason a viewer will subscribed to HBO now for three months out of the year just to watch Game of Thrones consumers will follow their favorite shows and remain as happy paying customers as long as the platform offers satisfactory content in return now let's take a look back Disney's box office lineup for 2019 we'll be seeing Toy Story 4 the live-action Lion King the live-action Aladdin Star Wars Episode 9 and Avengers and the game all of these films are based on decades-old successful properties that trigger emotion and Nostalgia programs worldwide just as Star Trek set records for CBS all access Disney was able to increase Studio Revenue by over 20 on the The Incredibles 2. so it's pretty clear viewers will follow the characters and shows that they love it this is why Disney will continue continue to push out remakes and revivals over the coming years they've become a sequel Factory because Nostalgia wins customers over so this is how Disney Plus plans to take market share from Netflix with an impressive long lineup of new content based on classic characters and stories the Walt Disney Company has become incredibly dominant through a number of revenue streams TV networks theme parks and Resorts Motion Pictures and consumer products Now by building their own on-demand streaming platform and they can capitalize on their largest revenue Source while also taking control of the user experience no longer will Disney have to rely upon a middleman such as Netflix the box office experience or two distribution to release new content by building their own streaming products they'll have access to experiment with how viewers consume media new ad space to sell other products like merchandise and a direct line of communication with fans but Disney is the only Corporation making plans to compete this way apple is rumored to launch their own streaming service in late 2019 as well while Apple has spent on original content like carpool karaoke in the past rumors are circulating that the intend to utilize their cash pile of over 130 billion dollars to acquire a key studio such as Sony pictures a24 or Lionsgate or if they were really looking to burn a hole in their pocket Apple could look to acquire Viacom or even CBS content lineup isn't very promising but you can never keep a giant as they could easily make the necessary moves to compete with Disney and Netflix while Disney's collection of assets likely puts them in a best position to take on Netflix it's important to recognize that Americans watch over 1 billion hours of video every day and as viewers continue to control big players will flood the market with content and streaming products in their attempt to stay relevant as we move to a new era for media um [Music] so we kind of know what's happened with this right Disney plus did launch Disney took all of their stuff back and they've actually been taking stuff off their own platform now um because they want to relaunch things in the movie theaters um so Disney to me is basically the Pepsi of the entertainment World um right they're they're they've got their hands in a bunch of different things theme parks movies TV merchandise now streaming uh we do know that Apple did launch their streaming service and as of today there has been no major Studio acquisition by Apple for any particular content either so that was several years ago I'm sure that Kobe messed things up but so we kind of know what happened there but that was that was their plan and it was based on their own internal strengths that was their marketing strategy that they were working on before they launched right so there was this there was this very methodical way of moving towards that goal um that that they implemented and they successfully did finally launch um so let me go back to our PowerPoint and uh jump into here these are now the macro strategies for developing customer value that we were talking about there's customer Excellence operational excellence product excellence and locational Excellence now let's just talk about those individually customer excellence is achieved when a firm develops value-based strategies for retaining loyal customers and provides outstanding customer service um the book does kind of refer to Disney as my magic system with the magic band of wristbands which I used when I was there a while ago I'm not even sure if this is still in play I know that they've made some changes since covid but but I will tell you having that magic man wristband made things so much easier to get around the parks to get into your motels to get your meals from their meal plan uh to get on their rides it was honestly it was it was a game changer and it probably made it probably made it easier for the customer service people because they didn't have as many issues to deal with um so that is one way of doing it um so uh in addition to having those loyal customers though is in and of itself An important method of sustaining that advantage over the competitors right because you have you have a huge loyal following uh it's it's just loyalty is more than just simply preferring to purchase one firm instead of another it's it goes deeper than that like like this brand like the brand it's almost like the brand is your friend and you don't want to betray it right um so you know like what Pepsi does you know even if Coca-Cola goes on sale people may still buy Pepsi products um because Pepsi will focus on satisfying customers who buy various bottles or cans to keep in their homes all the time right so they'll so people people will go ahead and buy a case of something just to have in their home um because that's that's the brand they're loyal to that's the brand that they know they like and they know that Pepsi is going to not let them down so it also considers though whether those consumers might want some salty snacks to go with their beverages how can help them combine those because you know sometimes around like Super Bowl or holiday events kind of things you'll get you could get possibly get coupons for for Beverages and like add certain you know Frito-Lay snacks or PepsiCo snacks um you know so that you have like so now you have your whole your snacks and your drinks together and they make it worthwhile for you to do that um so like uh let me see another method of achieving that Customer Loyalty which creates an emotional attachment is through loyalty programs right now I mentioned this last week where um you know supermarkets have it you get you know you scan your card you get coupons um but these these loyalty programs go bigger than that to bigger companies right they constitute part of it overall CRM customer relationship management strategy and program it prevails in many Industries Airlines right we know that Airlines have loyalty programs and there's clubs in the airports that you can go to and you get free upgrades to first class I mean they make it very very nice for you if you use their service a lot um hotels movie theaters retail stores have it too um so that's so you know so that is a way of rewarding your bigger customers or those who have those who are seemingly going to have a higher lifetime value um so another way is providing outstanding customer service as we're talking about um so marketers also build sustainable competitive Advantage by offering excellent customer service through consistency but you know like consistency in the customer service area can be difficult to um you know to provide it's um humans are human and they're not always consistent it requires a lot of training and the right temperament and the right hiring in order to make this work right so we talked about Disney quickly but secondly business customer service is virtually unparalleled right visitors to the Disney parks are always greeted with assertively friendly staff they've been extensively trained to find ways to communicate positively and to provide better service they've also been trained to recognize the look of somebody who's lost or somebody who might need help and how to help them they've also been able to provide services where if somebody is on the opposite side of the park from the restaurant that they want to go to that that uh that that they're person their Disney person on the other side like the name is escaping me right now um but that of their their custodian is what they call them on the other side of the park can actually tell them what time that restaurant opens even though they are not near that restaurant so there's a lot of training that goes into that um and it's so not always easy uh Sally Beauty's loyalty program is one of the um little added adding value cases in the chapter and it's very interesting so you should you should make your point to read that so operational excellence is another way um the second way to achieve a sustainable competitive advantage through efficient operations excellent Supply Chain management which we've talked about and strong relationships with suppliers which also kind of goes into your Supply Chain management if you have strong relationships with your suppliers you should always be able to get your raw materials you should always be able to um complete your product and make maintain your efficiency and operations um so you know operational excellence is required for some of these bigger bigger companies to maintain the level of service that they do for example you know Amazon Prime being able to uh do want do free one day or two-day shipping um you know on all orders in some zip codes same-day shipping Amazon has to be has to be completely 100 on its operational excellence right it's required to be able to execute that program so not only does it need to have the technology to coordinate there's the individual buyers but in these the effective uh human resource hiring program that trains those employees that are capable of going that extra mile just like with Disney Amazon has to do the same thing product Excellence is also another way the Third Way um to achieve a sustainable competitive Advantage it occurs by providing products with high perceived value and effective branding and positioning this is not always easy because some firms have a little bit of difficulty when they're developing a competitive advantage through their merchandise or service offerings because maybe they're just not that different so when that happens um other other firms that have been in that situation have focused more on building a sustainable competitive Advantage by investing in the positioning of the brand itself as opposed to the individual products um so like some of those top Global Brands is Apple Google Microsoft Coca-Cola Amazon Samsung Toyota Facebook Mercedes and IBM now you may now they have pretty much the brand positioning uh and you know maybe they have one or two products that you might know and and but they're but their focus our main focus has been on The Branding on the brand positioning so we all know location location is big that's your place and your four P's and it's uh particularly important for retails for retailers and service providers right so the book set the book actually did go into a little bit of detail on this but the competitive Advantage is based on locations not easily duplicated because you can only have one company in a space so I know you know I know they say Starbucks makes it very difficult for competitors to enter the market to find good locations because Starbucks takes those good locations and keeps them um people will not go that far they will not drive that far they will not walk that far for a cup of coffee so location is important for that kind of um for that kind of a product I know Dunkin Donuts you can't you can't go to town without finding at least one or two Dunkin Donuts so they have that in certain areas of the country as well in certain regions they stand out even more so than Starbucks um so yeah so when it comes to be a retailer who's selling like almost like an Impulse buy or a habitual buy right like when you're driving to work you might stop at the same place every morning to get your coffee well so not only are you being brand loyal but you have a good location that you go to as well and whatever that coffee shop is then they you know they have a very loyal customer um so what's important to keep in mind here is that single strategies any one of those alone is probably not enough to build a sustainable competitive Advantage it might get you a little bit higher on the list but it's not really going to be sustainable um so you really have to take a multi take multiple approaches to Build That Wall around your position um you really need to focus on several of these uh levels of excellence in order to elevate the brand so keep that in mind okay here's our First Progress check please make sure that you are keeping these questions and answers in a safe place they may come up on your quiz so let's talk about the marketing plan right as I said good marketing affected marketing it doesn't just happen it's not by luck it's not by accident it is planned so this marketing plan is a written document composed of an analysis of the current marketing situation opportunities and threats for the firm marketing objectives and strategies specified in terms of the four Ps action programs and projected or performa income statements there are three major phases that go into the development of a marketing plan and those include planning implementation and control and you'll see they're kind of broken out on this exhibit um so it is important though that you know a firm has to have one of these but it's extremely important that everyone involved in implementing the plan understands what that overall objectives for the firm are as they would be laid out in the business plan as far as the objectives and how they're supposed to be met or how the how management was expecting them to be met so the marketing plan does entail five steps right step one the planning phase um that's when we Define the mission and or vision of the business as a whole we're going to go deeper into this but um Second Step they'll evaluate the situation by assessing how various players inside and outside the organization affects the firm's potential for success that's a SWOT analysis right strikes weaknesses opportunities and threats in the implementation phase which is steps three and four um marketing managers will identify and evaluate different opportunities by engaging in a process known as segmentation targeting and positioning and then they're going to be responsible for implementing the marketing mix using the four Ps right product price place and promotion and then in the control phase that is when um they evaluate the performance of the marketing strategy using established marketing metrics and then taking necessary corrective steps now what this exhibit is showing you though with all the arrows is that evaluating the performance and making changes doesn't mean you always have to go back to Step One you might even go back to step three or step four you know you don't it's you don't always start from the beginning if you're um making some tweaks in some part of the plan based on evaluation of performance and your controls um you know you can jump around into the different phases so step one was to find the business well what is a mission statement it is a broad description of the firm's objectives and the scope of activities it plans to undertake attempts to answer three main questions what type of business are we what are our objectives and what do we need to do to accomplish those objectives okay so let's look at this pepsico's mission statement to provide consumers around the world with delicious affordable convenient and complimentary foods and beverages from wholesome breakfast to healthy and fun daytime snacks and beverages to evening treats that doesn't really answer the three questions but it does say what they do Crook's mission statement to refresh the world Inspire moments of optimism and happiness and create value and make a difference that's very vague but most mission statements kind of are um I don't know how you would evaluate those maybe we should do that as a little project but I will decide I will let you know so step two or well this is actually step two conductive situation analysis using the SWOT analysis where we talk about internal strengths and internal weaknesses and then external opportunities and external threats and um so this is this is performed to assess to assess different how different um different uh situations are going to play off of each other uh you you're going to because the external opportunities and threats are your competitor analyzes which are then going to be compared to your internal analyzes and then you can see where your weaker where you need to be focusing your resources and whatnot um to say uh so besides those four though you should also be assessing opportunities and uncertainties in the marketplace due to changes in cultural demographic social technological economic and political forces right because these are all things that are kind of out of the control of the of the company itself but could have a major impact on it so here's Pepsi's SWOT analysis foreign now I'm going to put these slides up you could also look at this in the book but they did they did put this here for a little bit of an example and a little bit of analysis so Pepsi's internal diverse brand portfolio strong celebrity endorsers hoax High market share strong brands overall I mean I don't know I mean the book is very very is very high on PepsiCo and then that they're so great and a little down on Coca-Cola but if you look back I mean these were done in 2019 and 2018 so these are really really just examples um but you know weakness lower brand awareness than rival Coca-Cola Less Market shared right so you're going to think like the strengths of Coca-Cola are going to be the weakness for Pepsi and vice versa opportunities might be the same for both right Coca-Cola takes a more global view at their SWOT analysis Pepsi takes a really incredible more uh Hands-On uh tactical View at how they're going to address their opportunities and threats so it's very interesting to see how these companies really do this okay step three we're going to identify and evaluate opportunities using segmentation targeting and positioning let's go ahead and Define what those are because segmentation has different parts to it um segmentation is basically it starts with the understanding that firms cannot satisfy everyone right now you can't you can't set you can't sell to everyone um all your products it just doesn't work that way so each of these groups um you know we want to break down our Market into market segments that consist of consumers who respond similarly to it firms marketing efforts and then you want to go further and divide that market into groups of customers with different needs different wants or characteristics that is then broken further into called Market segmentation right so we have market segments and then we go deeper into segmentation so it could be a little confusing but um there is an exhibit here where Hertz Market segmentation illustration in the book that you can take a look at here it is um here's the segments because they have different segments and different cars right um so here's a segment Sigma single Thrill Seekers and gear heads on vacation they have Corvettes and Camaro um that's their adrenaline connection um then if you're gonna hear commercial customers they had a Ford cargo van right like they they've broken it out so that they know exactly so they have different um different offerings for different types of people so targeting after a firm is then identified those various market segments it might decide to pursue it evaluates each segment's attractiveness and decides which to pursue using a process known as Target marketing or targeting okay um and that's when you that's that's where you're going to focus your marketing campaigns right because that's if that's who you're trying to attract that's who you want the messaging to get out to and then finally when the firm decides which segments to pursue it's going to determine how it wants to be positioned within those segments right so the positioning is the marketing messaging or marketing positioning that involves the process of defining the marketing mixed variables so that Target customers have a clear and distinctive desirable understanding of what the product does or represents in comparison to the competing products so the STP is very important because this is like you're basically establishing the Avatar that your company is going to be selling to that's your company is going to be marketing this particular product to um so you want to keep that in mind but so then after identifying all those Target segments The Firm has to evaluate each of its strategic opportunities based on that right so a method of examining which segments to pursue um is is we're going to talk about later in growth strategies um firms typically are most successful when they focus on opportunities that build on their strengths relative to those of their competitors right so this is where they can pull those SWOT analysis pull out the differentiators and then build on that and that's always a good way to go um so step four implement the marketing mix and allocate your resources okay this is where we're going to jump back to our four Ps okay when the firm has finally identified and evaluated the different growth opportunities by performing the STP analysis this is when all of the uh Tactical actions are initiated okay so now marketers are going to implement the actual marketing mix products price place and promotion for each product and service on the basis of what they believe their target markets will value right this is when your targets you you've got to understand what the needs and desires and the value proposition should be for those clients so your product and value creation products are the products that include services and constitute the first of the four P's right because the key to the success of any marketing program is a creation of value firms will attempt to develop products and services that customers perceive perceive as valuable enough to buy right this is um this is where the value creation comes in price and value capture this is the second element remember it's the price as part of the exchange process the firm provides a product or service for some combination thereof and in return it gets money place and value delivery is the third P after it has created value through a product in our service firm must be able to make that product or service readily accessible when and where the customer wants it and then promotion and value communication this is when we get into uh our integrated marketing Communications um which is which we are going to dive into a chapter later in the semester this represents the fourth P this is a big way of representing the fourth p uh promotion but you know that this is the biggest aspect of the process I mean once you have your product and all this this is the most important part this is all of the ways that you can get your messaging out to your target market and be able to elicit a response um so this encompasses the variety of communication disciplines advertising personal selling sales promotion public relations direct marketing and online marketing including social media in combination to provide Clarity consistency and maximum communicative impact right so this again this is where your value proposition comes in which is that unique value that a product or service will provide to its customers and how it is better than or different from their competitors step five we're going to evaluate performance using them using marketing metrics Now metric is just a measuring system that quantifies a trend the dynamic or characteristic and they are used specifically to explain why things happened and to try to project the future which is almost impossible now evaluating performance it to lecture on this is going to be extremely I think it's going to be more confusing than if you read it so I'm just going to talk very briefly about this and I'd like you to make sure that you read this section carefully in your textbook um about who is who is accountable for performance um you know at each level of organization business unit and its managers will be held should should be held accountable for only the things that they can impact this is something that a lot of companies don't understand that if higher-ups decide they're going to cut the price on something but another business unit is being evaluated on profitability they have just impacted their profitability and then all of those individuals are going to be evaluated on something they can't control so so that's why a lot of companies don't really get that um and keep going um this though I do want to talk about this the Boston Consulting Group Matrix was built off of the off of one of the analyzes methods called portfolio analysis um portfolio analysis is typically performed at the Strategic business unit or product line level an sbu or strategic business unit is a division of the firm itself that can be managed or operated somewhat independently from other divisions and may have a different Mission or objective um product line and contrast is just a group of products that consumers may use together or perceive as similar in some way so so the Boston Consulting Group requires the firm to classify their products and services by the two by two Matrix now here it is okay um this Matrix the horizontal access represents relative market share and uh and um it is used it's like you know market share obviously is percentage of the market accounted for by a specific entity um the uh let me just let me just make sure I'm I'm explaining this correctly so um right so relative market share and then market growth rate is on the left right so is is your uh your vertical axis so let's just talk about what these quadrants are um because depending on which quadrant a product is in that will directly impact the level of resources and um and managerial time and expertise that has to be put into those products right so here so here's what I mean so if it is a if if a product has a very high growth rate and a very high market share we're going to call it star that's the upper left-hand quadrant um these Stars will require very very heavy resource investment in promotions and new product production facilities to fuel the rapid growth because they're probably newer products and they don't have the stock in those products and they may be just kind of gearing up their production um so the lower left quadrant our products that have a very high market share but a low growth rate right so these are kind of a little bit more mature we call these the cash cows these are the ones that are easy um you know they have excess resources that can then be spun off to the products that need it like they can if they have excess capacity or excess funds and resources that they can go towards this towards supporting the growth of the Stars question marks at the upper right low market share but high growth rate [Music] um these are often the most managerially intensive products and that they're going to require significant resources to maintain and potentially continue to increase their market share now the dogs are in the lower right quadrant low growth markets low market share um so although they may generate enough resources to sustain themselves they're not destined for stardom and they will eventually be phased out unless they are needed to complement or boost sales of another product in one of the other quadrants right so um so I'm gonna um I'm gonna jump over to another video um because because I think that this kind of a matrix was done was done at Hershey and it made them question whether or not chocolate was was good for the future of their company which is kind of bizarre because Hershey is a chocolate company but let me just I'm going to stop sharing this I will come back to this and we'll finish it up but I'm going to stop this and go back and make and so that we can look at why Hershey might be questioning if chocolate is the future of their company so hold on one second let me get this going in 1929 Milton Hershey the biggest name in chocolate was worried his Flagship product wasn't enough to sustain his business long term but Justice Middleton was looking to Branch out the stock market crashed ushering in the Great Depression and settling any murder now more than a century later the company is grappling with the same concern its founder was is chocolate enough in 1894 Milton Hershey had an idea make chocolate which was a luxury for the rich affordable for the masses by 1909 Hershey Chocolate Company was the largest impactful on company in the U.S and dominated market share and as Hershey grew so do the town around it there was Hershey Park Hershey theater Hershey Hotel Hershey Zoo there was the Hershey orphanage do you know Fanfare Milton Hershey had quietly set up a trust to support a school for Orphans the school which has since expanded to include children of need still exists today but through the years there's been increasing doubt about the ability of chocolate alone to support the Hershey Company is be the only chocolate player in town Mars became a tough editor the owner of Eminem's Snickers forced where she to finally create a marketing department in the 60s [Music] it's about chocolate itself fears about caffeine led her feet to build its tech center that still exists today later sugar would be a focus certainly one of the things that consumers are trying to focus on the most is cutting sugar and that of course is is a headwind for things like sugar confections where there has been a little bit Hershey has over the years tried to buffer these risks it's bought or owned friendly ice cream parlors pasta cookies bars and nuts non-stop efforts to grow internationally have also been challenged it considered buying Cadbury in England but it was too expensive looking around here there's a bunch of different things like Brands I haven't heard of by 2002 the Hershey trust was concerned and relied on dividends from the Hershey Company to fund the school that Milton had founded if something happened to the chocolate business those funds would be at risk so it announced it was spring breaking up for sale but the town that Hershey built was revolted they were Outdoors of protests with concerns about the loss of jobs and the loss of Milton's Legacy [Applause] we're here because they don't want Hershey foods sold to an outsider period at last minute under immense pressure the trust reversed the course Hershey again the buff takeover attempts in 2007 and 2016. today the company is asking itself the same question that Milton was in 1929 what become for the company that makes its money namely in U.S chocolate submits though are more dire more convection competitors have come into the U.S and concerns around sugar are even greater you're seeing salty snacks in particular growing at around four percent where chocolate the candy was around yo Michelle Bach it's trying to remake itself as a snacking Powerhouse chocolate of course was one of the original snacks it's long snack section products the combination of sweets and savory Goods it's got healthier snack Brands like skinny pop popcorn and crave beef jerky the world looks very different today than it was five years ago or ten years ago Michelle Buck recently told CNBC and we learned a lot across many aspects of the business and I feel very committed to our strategy so yeah so uh Hershey is still struggling with the same question um and as they have now so this this video was great because it not only showed like now they're looking at their their Stars their cash cows their you know um their dogs and their oh my gosh in there I cannot believe this question marks um you know they're they're actually questioning it and then figuring out how to diversify so that they can add to that portfolio and be able to further support some of the things that that started the company that that you don't want to uh disappear um you know so so it's actually you know um it's an interesting thing that he asked that question you know almost 100 years ago uh and now they're asking the same question only thing only societal pressures are much are harsher now uh because of everything that we've talked about as far as society and health concerns so let's go ahead and now go back to our um our PowerPoint and we're going to wrap this up um okay so now we're just we're going to hit that progress check again this is two of three for this chapter uh please make sure that you have these handy so let's talk about growth strategies okay uh firms that you know firms do consider pursuing various market segments as part of overall growth strategies and again you know we have this handy dandy little Matrix here um that gives us different you know that the different strategies for doing this so Market penetration employs the existing marketing mix and then focuses the firm's efforts on existing customers right so this is just basically trying to get deeper get more market share it can be achieved by attracting new consumers the firm's current target market or encouraging current customers to buy additional merchandise or more of the same um Market development um this this is basically employing the existing marketing offering to reach new market segments domestic or International it doesn't matter product development is the third growth strategy and that offers a new product or service to the firm's current target market and then we look at diversification which which product development is diversification can kind of be combined but a diversification strategy is um introduces a new product or service to a market segment that currently is not served diversification opportunities may be related or unrelated okay and we're going to talk let me just Define those both and I'm going to show you one more video on something that became very unrelated but still we're still figuring out if it's going to ultimately be successful uh for Amazon so in a related diversification opportunity um the current target market and our marketing mix shares something in common with that new opportunity um but in contrast an unrelated diversification is like new business lacks any common elements with the present business I think that what I'm going to show you right now kind of Falls somewhere in the middle there but it's kind of a new Avenue for Amazon um so let me I'm going to do this last one for you guys and uh and then we're gonna wrap this up let's just see we are back now with our big board and we're breaking down Amazon's you need to move to acquire the grocery chain Whole Foods and how it's Blockbuster 13.7 live with me Robin million with a million dollar deal will affect the way you shop on our cheap business correspondent Rebecca Jarvis is here with us we're called the details you're back with all the details you're here earlier good to see both of you this morning Michael and Robin and this puts Amazon on track to be one of the top five brochures in the country in the next five years the company that completely changed retail is now taking aim at revolutionizing how we shop for food it's the tech Titan that just keeps on growing Amazon already a leader in online shopping furthering its aim at the way we get our food last week putting in a 13.7 billion dollar bid to acquire Whole Foods Markets looking to boost its stake in an industry it struggled with in the past Amazon has tried they have Amazon Fresh but they haven't really made a big push they've been seen as being behind online in the grocery space Amazon now taking direct aim we met companies like Walmart one of America's biggest grocery Sellers and other grocery services like Fresh Direct and Peapod and some industry experts say Amazon CEO has something other companies do not an ability to cut costs Jeff ethos historically has done whatever it takes to really transform a business at the expense of profitability or quarter to quarter results bezos's company which has already revolutionized the way we buy books clothing and electronics online Alexa is it gonna rain tonight Alexa what's on my calendar I'm about to turn the lights off okay Alexa take a photo now with its technology reaching for our refrigerators many are wondering will the Amazon giant soon dominate every aspect of our shopping the deal also prompting some very funny reactions on social including this tweet referencing Amazon CEO Jeff Bezos Bezos Alexa buy me something from Whole Foods Alexa Buy Whole Foods Bezos oops uh and then there was this one all I can hope for is free Prime delivery on my groceries from Whole Foods but all kidding aside this is a huge game changer for groceries we've seen Amazon change the world now they're aiming at groceries there was another Tweet someone said I also spent 13 billion dollars exactly thank you Rebecca stay in tune and Dottie George we know it's a big story uh Amazon way back when they just sold books [Music] when he was just selling books and I remember during the commercial break he said I am just getting started and the irony is he's just getting started now I'm gonna introduce a new term called ontel which is retailing and online combined and basically what he's realizing and this is just the first category is you can combine the two you could have seen this whole food situation where people may be online buy their canned goods but there's issues when you want to the Touchback Meat and Fish and things like that so the stuff is waiting for you when you come in but then you just get your perishables so all kinds of combinations you'll see this Pharmaceuticals that come you see it this is just the beginning I mean four out of ten dollars online goes through Amazon for just about half of everything but everything in this country is Amazon's stomach they've always been on The Cutting Edge detecting he points out this is a CEO Jeff Bezos who is obsessed obsessed and he continuously hammers this point home with all of his employees obsessed with what the consumer wants and knowing what the consumer wants before they even know so convenience the biggest change you might see are in their stores Amazon go for example one of their stores is cashier lists you don't necessarily need to wait in a checkout line anymore they're completely reimagining that in-store experience also you have Alexa now Alexa you can place your orders through Alexa get your groceries that way and because they know what you want before you know it you don't even necessarily have to place orders of future of every aspect it is you know it's interesting some people are saying they're a little worried but check Bezos has a quote that says you will be irresponsible as a human being if you don't shop through Amazon and that's kind of a stunning set of words they are the difference between this company the company before not in the car business they're in the buying of stuff business yeah and so you go where does that go and one day they buy NFL rights and it just doesn't stop me you name whatever we do buy think consume they can go in that business but how big is it's too big and at what point could people have concerns about this becoming a monopoly right well and right now it appears to be a good thing for consumers because they've driven down prices they've made things more convenient the other big question is workers already this year retail has been decimated retail workers have been losing jobs by the thousands and that is a key question going forward for the whole economy I had a stock tip for everybody out there why buy Amazon when you're both here unless I'm gonna be a guest on your podcast thank you yes um this might come up I think it should and maybe everybody's got something we'll talk about it there too so so I mean there you have it oops okay let me get it let me just turn that off real quick okay so that is uh you know there you're hot Amazon jumped into [Music] um the grocery business we know how that turned out um so we talked about all diversification and now Amazon did kind of jump into something that related because I think it's tried it with Amazon go but unrelated because it's never done like because it never because didn't do like a brick and mortar version of it but um in the book they talk about Marvel in the in these diversification and market growth strategies um which again they're kind of tapping back into Disney on that but you can read that in the book I wanted to give you something a little bit different uh on the lecture so here is our uh final progress check um and these that get these questions um answered for you and um and I am going to stop sharing and I'm going to leave it at that um and I'm going to say thank you so much for uh watching this I know it's a little bit I know it's you know an hour can be a long time but uh since we don't have um you know we don't usually we're not going to see each other I want you to make sure I want to make sure that you have um the lectures that you need to dive into the main topics in the book uh please also read the chapter uh especially some of the call outs and adding value and the ethical dilemmas uh that are very interesting at the end of chapter two there is also an appendix on writing a marketing plan you don't have that that is not required for this week I'm not going to quiz you on that but that could come in handy in the future if you find yourself in a situation where you may want a more brighter marketing plan whether it's for a company you're working for or even for yourself right because when you get out of college you have yourself to market and sometimes having a little bit of a marketing plan for yourself you can do you do a SWOT analysis on yourself um I did that when I got out of school and it did help me to kind of direct my career so um it's just a suggestion and I will then see you next week um next week we will you might have more than one of these but um you probably will because I want to try to get through a certain number of chapters in this semester so uh thank you for joining me and I'll see you next week bye