Article Review: Marketing Growth Strategies
In researching for this paper, I found many articles demonstrating the four particular growth strategies mentioned in the book, Marketing Management. The majority of the articles that I selected demonstrate successful strategies with limited negative outcomes. During this exercise, I have gathered many new and exciting ideas that I plan to use in my personal business plan for my garage door business. The next few paragraphs will demonstrate how actual businesses have used market penetration strategies, market development strategies, product development strategies, and diversification strategies in attempts to increase sales and help their organization to grow.
The book describes market penetration strategies as improving current products and services, cutting costs and prices, and outspending competitors on ads and promotions (Mullins, Walker, & Boyd, 2008). The article, Auto Industry Accelerates as Economy Slows gives a great example of this strategy by explaining that in 2002, automakers were seeing up to an 8.2% increase in sales despite the struggling economy. This rise in sales can be attributed to strategies of companies like GM and Ford who offered significant discounts and promotions, as well as easy financing to lure customers. The auto industry has also found that consumers buy luxury cars, despite their financial situation, to give the impression of being wealthy and successful. GM and Ford decided to use this strategy by offering more luxurious upgrades (at an upgraded price, of course) in their SUVs and pickups in order to improve their image and attract status seeking customers. On the downside, the increase in sales depleted auto inventories, causing a demand to make more cars. During that time the price of steel was steadily increasing due to high demand and tariffs that were placed on steel imports. The rise in operating costs caused GM and Ford to reduce the number of new cars to be made, so the days of zero percent interest and attractive discounts came to an end (Dolbeck, 2002).
Product development strategies are described in the book as introducing new products to current markets by extending product lines and introducing new products or services. The book gives an example of Arm & Hammer presenting new products such as laundry soap, tooth paste, and deodorant that are made with their original product, baking soda (Mullins, Walker, & Boyd, 2008). Valuation of the Electronics Manufacturing Industry describes how product development strategies were actually used by SIC Group 36 to increase demand for their products. The industry focused on making electronics that were more energy efficient to meet the growing needs of consumers interested in environmentally friendly products. A specific example described in the article is the introduction of high definition Blu-ray DVDs and DVD players (Dolbeck, 2008).
The book suggests that the greatest potential for companies to expand