Product Marketing and Expansion

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Marketing occurs in all aspects including in the following areas: business, the arts, retailers, publishers, sporting events, fashion designers, people, travel companies, the government, political parties, medicine, NGOs, banks and financial institutions, educational centers, tourist locations and many other areas (Groucutt, Leadley & Forsyth, 2004, P.6).

According to the Charted Institute of Marketing (CIM), marketing is “the management process that identifies, anticipates and satisfies customer requirements profitably” (CIM, 2011). Therefore, marketing plays a role of getting customers on board, delivering products that satisfy their needs and initiating strategies aimed at retaining those customers.

For marketing to be complete, it involves marketing concept, “the philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs better than the competition” (NetMBA, 2010).

The marketing concept is very dependent on marketing research that is done to determine market segments, their proportion, and their requirements. To meet market needs, the management must make informed decisions regarding the variable aspects of marketing mix.

The marketing mix includes the 4 Ps that are involved in the process of ensuring a product or a service is finally in the hands of the customer, thus these elements should be designed to meet customer needs and requirements (Times, 2011).

For any business leaders planning to promote or restructure their business in this digital economy, they should consider the following major forces reshaping the digital economy.

The potential impact of the internet on future market and business behavior; globalization, with the consumers around the world being exposed to new ways of living and consuming and want many of the things they see; deregulation and privatization, which are opening up markets and creating vast new opportunities; and the new economy based on the digital revolution (Kotler, Jain, & Maesincee, 2002, P.4).

Compare and contrast the various benefits and disadvantages of the strategies Tod’s could adopt for products in their portfolio that have been identified as reaching the maturity stage of the Product Life Cycle.

Tod’s luxury shoes business is a well-established business, which has “built its reputation by fabricating subtle variations of its signature gommini, or driving moccasin” (Alderman, 2010). Thus, in order to beat competition and stay in the market, it is considering two marketing strategies (extending of the product line and seeking a new market for the product) which are evaluated below.

First, the two strategies can increases the brand image of Tod’s and make the feedback benefits to the parent brand and the organization achievable (Managementstudyguide, 2011). Secondly, the gains achievable through the two strategies are temporary in the hypercompetitive markets, since the launching firm must try to generate a succession of those gains from a temporary position of strength (Grohsjean & Kretschmer, 2009, P.4).

Thirdly, both strategies can create less awareness and trail where the management may not provide enough investment for the introduction of the new product or penetration of the new market assuming that the spin-off effects from the original brand name will compensate (Managementstudyguide, 2011).

Fourthly, both strategies are mechanisms of enhancing sustaining company’s profitability that is under threat from competition and growing extra revenue for the company. This is enhanced by the increase in the quantity of products or services sold, thereby increasing revenue (Harrison, 2007, P.89). Firth, both strategies increase the company’s market reach by introducing new customers to the firm industry.

Sixthly, seeking of new market for the product may result in market dominance and higher than-average profitability over time while extension of the product line suffers from competition of already established similar products in the market (Ettington, 2011).

Seventh, extension of product line increases barriers in its production or preempts alternative marketing themes that a challenger might logically employ; such moves force the challenger to take the defender head-on instead of being able to take gain an unopposed beachhead, or command premium prices that can used to offset higher costs while penetrating into new market for the existing products is not faced by these barriers (Porter, 1998, P.489).

Eighth, both strategies are faced by many similar challenges including understanding market dynamics, possession of the skills and knowledge to exploit the market potential, and other limiting factors such as lack of money for financing new investment, lack of spare capacity and high employee turnover (Needham, 1999, P.19).

Ninth, both strategies will involve the inbound marketing (market research, competitive analysis, pricing, positioning, naming and branding) and outbound marketing (advertising and promotion, public and media relations, sales, customer service, customer satisfaction, social networking) which require a lot of time and invest which the company might not avail when required leading to failure of the strategies(Managementstudyguide, 2011).

More so, extension of the product line will involve extra cost incurred in the product development while taking the existing products to a new market can save this cost.

Additionally, extension of product line increases product differentiation, enhancing opportunity for product bundling that involves offering customers the opportunity to buy a complete range of products at a single combined price. This increases the value of the company’s product line because customers often obtain a price discount from buying a set of products and become used to dealing with just one company and it representatives.

The result of this is enabling the company to obtain a competitive advantage from increased product differentiation while seek new market for a product does not offer this opportunity (Hill & Jones, 2007, P.309). Lastly, extension of product line offer customers a variety to choose from while seeking new market for the existing product does not offer this advantage.

Conclusion

Seeking of new market and expansion of the product line are some the most widely used strategies for enhancing sustainability of the business and increasing revenue and profitability of the company in the highly competitive business.

Though these strategies are faced by various challenges, when planned, utilized and executed with proper and strategic management processes they can offer any company a global competitive advantage and market reach.

Reference List

Alderman, L., 2010. Fanatic focus drives shoe firm’s patriarch. Web.

CIM. 2011. What is marketing? Some basic definitions of marketing and the marketing concept. Web.

Ettington, D. R., 2011. First-Mover Advantage. Web.

Grohsjean, T. & Kretschmer, T., 2009. Product Line Extension in Hypercompetitive Environments – Evidence from the US Video Game Industry. Denmark. Copenhagen Business School. Web.

Groucutt, J., Leadley, P. & Forsyth, P., 2004. Marketing: essential principles, new realities. London: Kogan Page Publishers.

Harrison, J. S., 2007. Foundations in Strategic Management. OH: Cengage Learning.

Hill, C. W. L. & Jones, G. R., 2007. Strategic management: an integrated approach. Cengage Learning.

Kotler, P., Jain, P. & Maesincee, S., 2002. Marketing moves: a new approach to profits, growth, and renewal. NY: Harvard Business Press.

Managementstudyguide. 2011. Brand Extension – Meaning, Advantages and Disadvantages. Web.

Needham, D., 1999. Business for Higher Awards. Oxford: Heinemann.

NetMBA. 2010. The Marketing Concept. Web.

Porter, M. E., 1998. Competitive advantage: creating and sustaining superior performance: with a new introduction. New York: Simon and Schuster.

Times. 2011. The marketing mix. The Times Newspapers Ltd and MBA Publishing Ltd. Web.

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Product Marketing and Expansion

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