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The Marketing Mix for Pets.com - Case Study Example

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The Marketing Mix for Pets.com

Diversity of product was what differentiated the site from other competitors, both online and bricks-and-mortar, thus attracting more potential target segments. During the launch and growth period of Pets.com, product was one of the primary selling points along the marketing mix. Place was emphasized for convenience, providing new opportunities for consumers to get pet products without having to visit a bricks-and-mortar competitor. Place was important in the late 1990s as the Internet was just beginning to become part of consumer lifestyle and thus represented innovation in sales strategy. Furthermore, price was an important part of the marketing mix. This was reflected in the company’s guarantees for a flat rate shipping fee of $4.95 regardless of the volume and weight of the products being delivered. Sales and discounting incentives that provided further value also emphasized the company’s focus on pricing as a differentiation tool. Finally, Pets.com also utilized promotion effectively, gaining brand exposure through cross-promotional strategies with The Discovery Channel and Animal Planet. A very large expenditure to be included in the 2000 Super Bowl ad gave the company considerable promotional exposure and gained more consumer interest in the process. Analysis of Differentiation Strategy Diversity of product variety served to differentiate from other pet-related competition, illustrating that the business wanted to gain market attention and assist many different target segments. However, there were difficulties with this strategy as the company did not maintain the distribution and warehousing capacity needed to support this differentiation tactic. Further, holding costs of high volume inventories must be considered that include lighting, labor, and taxation that can significantly raise operating costs (Heizer and Render 174). Sales and discounting incentives also differentiated the business from competition. The advantage of this is that price-sensitive consumers are more attracted to the business model over competition. When offering a flat rate guaranteed shipping price, this also had advantages related to price. Furthermore, using expert consultations from experts in the pet field, such as breeders and scientists, gave the business more credibility and expressed perceptions of competence to many target segments. Some of the differentiation strategies were implemented successfully, including having expert information available to pet owners that gave the business a better market position under quality. However, discounting and high volume merchandise selection offerings conflicted the process of avoiding losses associated with operational budget. If the business had re-examined its low flat rate shipping policy and redetermined its distribution network strategy, it is likely the cost of goods sold would not have been so high and attracted more investor confidence and interest in common stock purchasing. The Product-Market Growth Matrix Analysis Adding horse products to the business model was a diversification strategy, branching into untapped or new markets with a new line of relevant products (Boone and Kurtz 218). The result of this strategy along the product-market growth matrix proposed by Ansoff is having presence in a new market where the business had not previously been devoted. The company’s diversification strategy, however, was not efficient, especially since the business did not have the capacity to sustain such high volume inventories and inventory holding costs. Horse ownership is a niche market and most consumers procure their products from local organizations and, because of this, it is not likely that Pets.com would have gained much revenue growth in an effort to lure horse enthusiasts to buy ...Show more

Summary

As far as product, Pets.com emphasized vastness of merchandise offerings that would cater to a large variety of pets, including ferrets, turtles, and fish. Diversity of product was what differentiated the site from other competitors, both online and bricks-and-mortar, thus attracting more potential target segments…
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