How are the basic business philosophies or orientations of major consumer products firm such as General Mills or Nestlé and a small entrepreneurial start-up in a fast-growing, hi-tech industry likely to differ? What are the implications of such philosophical differences for the role of marketers in the strategic planning processes of the two firms?
A) The major consumer products firms like General Mills and Nestlé have to be market oriented in. In Exhibit 1.6 its show the Marketing Orientated firms have a broad product line, pricing based on perceived benefits, and packaging focused on customer convince. Also It says that “many of America’s most market-oriented firms are well-established competitors in relatively mature industries. This is because they are in an established market that if you don’t have what the customers want they will be able to find it someplace else. But in a fast-growing, hi-tech industry a small entrepreneurial start-up should be product oriented trying to create new better products and not to focus on specifics that the customer wants. As it says in the book pg. 14 “ Early entrants into newly emerging industries, particularly industries based on new technologies, are especially likely to be internally focused and not very market-oriented. This is because there are likely to be relatively few strong competitors during the formative years of a new industry, costumer demand for the new product is likely to grow rapidly and outstrip available supply, and production problems and resource.”
B) The role of the marketers for a firm like General Mills is to market the product with what benefits that product provides for the consumer. There is going to be more market research focus on identifying new opportunity and applying new technology to satisfy customer needs. This price for their product will be based on the perceived benefits for the product. But for a small start-up in the high-tech industry would be to market their product to show the features its has and not really show the benefits. There will be technical research; focus on product improvement and cost cutting in the production process. Cost will be based on production and distribution cost.
As the small entrepreneurial firm described in question 1 grows larger, its market matures, and its industry becomes more competitive. How should its business philosophy or orientation change? Why?
As the small entrepreneurial firm grows, its market matures, and the industry becomes more competitive they would change from product orientation to market orientation. The book says on pg. 15 “ As industries mature, sales volume levels off, and technological differences among brands tend to disappear as manufactures copy the best features of each other;’s products. Consequently, a firm must see new market segments or steal shore the the competitors by offering lower prices, superior services, or intangible benefits or other firms cannot match. At this stage, managers can most readily appreciate the benefits of a market orientation.”
1. The Kelly Bottling Company, located in a large metropolitan area of some 5 million people, produced and marketed a line of carbonated beverages consisting mainly of flavored soft drinks ( not including colas), soda water, and tonics. They were sold in different types of packages and sizes to a wide variety of retail accounts. How might such a company expand its revenues by pursuing each of the different expansion strategies discussed in Exhibit 2.5?
The 4 strategies to increase corporate growth
1. Increase penetration of current product-market
The Kelly Bottling company could use a method like the Ryanair corp. did by cutting cost
in their production and also cutting prices. 2. Develop new products for current customers
The Kelly Bottling company could develop new products for its current customers by
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