Marketing Presentation Mgt 322 Ppt2003

Justin Newberry, Mason Karnas, Greg Batz, Daniel Lenzi

Management 322 - 001

Product Strategy

Product: a good, idea, or service received in an exchange

How do general economic conditions affect product issues for companies?During economic downturns, many

companies begin cutting back the amount of product and/or service to the customer because of cost issues

Product Strategy

Harrah’sHad to reduce the premium services it

offered its members in the VIP lounges○ Replaced plates of hearty complimentary

sandwiches with bruschetta and hummus and cut the hours of many of the VIP lounges

○ This was a big deal and angered many members, especially since the high-class treatment that they pay for is a distinguishing product factor that keeps these customers loyal

1. Retailers - Demand based pricing strategy. Sales Inventory , which is causing retailers to cut prices

to cap losses. Price Leaders - promoting some products at or below cost Target Stores - aggressively pursuing price leaders

strategy with daily online ads.

2. Hotels - Demand based pricing strategy. Room rates are being slashed. Many Las Vegas hotels (including MGM Grand) have

lowered room rates as much as 9% in a traditionally recession-proof Las Vegas industry.

Online Travel agencies offering aggressive sales on room rates and travel packages.

Pricing Strategy

Pricing Strategy

3. Airline Industry Increase Airfare prices

Cut Capacity; Reduce Supply, Increase Price American Airlines - plans to cut U.S. flights by 12% Delta intends to cut capacity by 13% United Airlines to cut domestic capacity 16%

Hedging Contracts for fuel- paying a % of fuel costs above market price due to drop in oil prices. Contribute to higher Airfares

Airfares booked on Travelocity.com are up 16% compared to last year.

Pricing Strategy

4. Sports Franchises Using a “Robin Hood” approach to ticket pricing. They

are raising the price of premium seats and are holding or reducing the prices on seats elsewhere in the arenas.

In the NBA, there are an average of 1,000 seats per game priced at $10 league wide.

New Jersey Nets are offering buy-now-pay-later on season tickets and offering to give back 10% of the purchase back in the form of a gas card to boost season ticket renewal rates.

Place

Generics are big in today’s marketplace due to the rise in cost of gas, living, and the overall decline of the economy.

BusinessWeek Magazine Oct. 30, 2008 states that “in the year ending in June 2008 we saw a 10% rise in private label goods, whereas there was only a 4% gain for national brands”

Consumers are tending to stray towards private label goods because they are less expensive and similar quality.

Place

Safeway Branches Out. Safeway brand cereal licenses it’s brand

out to other stores due to it’s success within their own store.

Due to the success of many companies marketing generic brands Safeway followed suit and has been seeing positive results in marketing Kroger, and Safeway Brand products

Promotion

Economic downturn has marketers rethinking promotion strategies

Companies are trying to maintain the idea of value without looking “cheap”

Other companies are attempting to reach customers and let them know things aren’t as bad as they think

Promotion

Holiday InnAt first was considering a $50 video game

credit in hopes of attracting tech-savvy business travelers

A poll showed that people are looking for “value” right now and ways to stretch their dollars further

Holiday Inn needed to appeal more directly to the pocket book with more than a video game credit

Promotion

Holiday Inn (continued)Scrapped the video game promotion and

went with the “Stay here, Fly There” campaign

This offer provides a $99 flight voucher if the customer books the room at the “Stay to Fly Rate’’

Promotion

ToyotaLoaded with cash, totaling $18.95 billionOffering no-interest loans in an attempt

to dispel the myth that financing and leasing is not available

This ability to offer loans could help boost their U.S. marketshare

Toyota cuts other costs, but is investing heavily in marketing

SourcesAnderson, M. (2008, November 17). Target Plans Price Cuts Despite Lower 3Q Earnings. Comcast.net

Finance. Retrieved from http://finance.comcast.net

Armour, N. (2008, October 27). Cheap-seats Fans Getting a Break as Economy Sours. Business Week.

Retrieved from http://businessweek.com

Audi, Tamara; Lattman, Peter; McCracken, Jeff. (2008, October 27). Harrah’s Changes Its Game. The Wall Street Journal, Retrieved from http://online.wsj.com/article/SB122506790177270673.html?mod=djem_jiewr_MK

Boudette, N. (2008, October 17). Toyota to Push No-Interest Loans. The Wall Street

Journal, Retrieved from

http://online.wsj.com/article/SB122420001433942793.html?mod=relevancy

Boyle, Matthew. (2008, October 30). Generics Are Gaining on Name Brands. Business Week. Retrieved from http://www.businessweek.com/print/magazine/content/08_45/b4107062252752.htm

Futterman, M. (2008, October 14). As Economy Weakens, Sports Feel a Chill. The Wall Street Journal.

Retrieved from http://online.wsj.com/article/SB122394181925330941.html

Kell, J. (2008, October 29). MGM Mirage Suspends Casino Projects as Profit Fall. The Wall Street Journal.


SourcesKesmodel, David. (2008, September 17). Store Brands Boost Kroger Profit. The Wall Street Journal.

Retrieved from http://online.wsj.article/SB122161004801445657.html?mod=djem_jiewr_MK

Lavallee A. (2008, October 24). Marketers Rethink Promotions to Accent Value. The

Wall Street Journal, Retrieved from

http://online.wsj.com/article/SB122480810794465065.html

Nassauer, S. (2008, September 7). Web Competition Spurs Travel Deals. The Wall Street Journal.


Phillips, M. (2008, September 3). After Labor Day: A Look at Airline Capacity Cuts. The Wall Street Journal.

Retrieved from http://online.wsj.com/middleseat/2008/09/03/after-labor-day-a-look-at-airline-capacity-cuts/

Prada, P. (2008, October 16). Airlines Start to Make Climb. The Wall Street Journal. Retrieved from


Prada, P. (2008, October 17). Fuel Hedges Cloud Airline Results. The Wall Street Journal. Retrieved from


Marketing Presentation Mgt 322 Ppt2003

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