Read the case of LOGITECH International page 50-51 (Principles of Marketing). 1. Identify the product portfolio of Logitech International. 2. Create customer value. 3. Draw or illustrate the value delivery network for Logitech International.

Chapter 2 Company and Marketing Strategy: Partnering to Build Customer Relationships tent, or pick up an entertainment-system re- mote, it's a pretty good bet that you'll have your Sources Lisa Johnston and John Lapocky, "Logitech Intros Accessories, Ships Bilion Mouse, " TWICE, December 15, hand on a Logitech device, It's also a good bet 2008, p. B4: CIN Edwards, "Here Comes Mighty Mouse, " Musinem Week, September 4, 2006, p. 76; Cuff Edwards, The Mouse That Scars, " BusinessWeek, August 20, 2007, p. 22; Haig Simonian, "Logitech Warm of Gloom that you'll really like the way it works and feels, Ahead, " FT.com, January 21, 2009, www.it.comicmy/vDiba| 7cle4-#75b-1/ did ael2-0000779frizac.html; "Logitech "The goal (is] passing the 'ooooh' test," says a International S. A. " Hoover's Company Records, May 13. 2010. p. 42459; and annual reports and other information Logitech project leader, "creating a visceral ex- from httpdir.logitech. com/overview.clmid=us en and www.logitech.com, accessed October 2010. perience that communicates both performance and luxury, " BMW is "The ultimate driving machine." The Ford Escape promises "So much fun. So little fuel." At video site Hulu, you can "Watch Your Favorites. Anytime. Free." You Tube let's you "Broadcast Yourself." At MeDonald's you'll be saying "I'm lovin' it," whereas at Burger King you can "Have it your way." Such deceptively simple statements form the backbone of a product's marketing strategy. O For example, Burger King designs its entire worldwide integrated marketing campaign-from television and print commercials to its Web sites-around the "Have it your way" positioning. In positioning its product(s), the company first BURGER identifies possible customer value differences that KING provide competitive advantages on which to build the position. The company can offer greater customer value by either charging lower prices than competi- tors or offering more benefits to justify higher prices. But if the company promises greater value, it must HAVE IT YOUR WAY' then deliver that greater value. Thus, effective posi- tioning begins with differentiation-actually dif ferentiating the company's market offering so that it gives consumers more value. Once the company has chosen a desired position, it must take strong steps to deliver and communicate that position to target con- Positioning: Burger King builds its entire worldwide marketing campaign around its "Have it your way" positioning. sumers. The company's entire marketing program should support the chosen positioning strategy. Developing an Integrated Marketing Mix Differentiation After determining its overall marketing strategy, the company is ready to begin planning the Actually differentiating the market details of the marketing mix, one of the major concepts in modern marketing. The offering to create superior customer value. marketing mix is the set of tactical marketing tools that the firm blends to produce the re- Marketing mix sponse it wants in the target market. The marketing mix consists of everything the firm can The set of tactical marketing tools- do to influence the demand for its product. The many possibilities can be collected into four product, price, place, and promotion- groups of variables-the four Pa. Figure 2.5 shows the marketing tools under each P. that the firm blends to produce the response it wants in the target market. Product means the goods-and-services combination the company offers to the target market. Thus, a Ford Escape consists of nuts and bolts, spark plugs, pistons, headlights, and thousands of other parts, Ford offers several Escape models and dozens of optional features, The car comes fully serviced and with a comprehensive warranty that is as much a part of the product as the tailpipe.50 Part One Defining Marketing and the Marketing Process Real Marketing 2.2 up to 30 feet away There's also a cool-factor at play. Wielding the MX Air is like holding a work of art. And at Logitech, it's not just about mice Logitech: The Little Mouse That Roars anymore. Logitech now applies its cool-factor to create sleek, stylish, and functional devices that enhance not only your PC experience but Among the big tech companies, market leader scouring the Far East to find just the night non- also help you get the most out of everything Microsoft is the king of the jungle. When giant stick coatings and sound-deadening foam. An- from Internet navigation to all the new gadgets Microsoft looms, even large competitors other spent hours taking apart wind-up toys in today's digital home. For example, Logitech's quake. But when it comes to dominating spe- Others pored over the contours of luxury BMW family of Harmony advanced universal remote cific market niches, overall size isn't always the motorcycles, searching for designs to crib controls helps even technology challenged most important thing. For example, in its own They were members of a most unusual team novices tame the complexities of their home- corner of the high-tech jungle, Logitech Inter- that spent thousands of hours during a two- entertainment systems. national is the little mouse that roars. In its year period on a single goal: to build a better Breeding mice and other peripherals has niches, small but mighty Logitech is the undis- mouse. The result: Logitech's revolutionary MX been very good for nicher Logitech. For exam- puted market leader. Revolution, the next-generation mouse that hit ple, thanks to its dedication to creating the Logitech focuses on what it calls "personal consumer electronics shelves like a flash of next best mouse, Logitech has captured a peripherals"-interface devices for PC navigation, ightning. It represented the company's most dominating 40 percent share of the world ambitious attempt yet to refashion the lawly Internet communications, home-entertainment mouse market, with giant Microsoft as its computer mouse into a kind of control center systems, and gaming and wireless devices Log- runner-up. And although Logitech isn't nearly for a host of PC applications The sheer scope of itech's rapidly expanding product portfolio now as big as Microsoft, pound for pound it's more the secret mission-which crammed 420 com- includes everything from cordless mice and key- profitable Over the past seven years, despite ponents, including a tiny motor, into a palm- boards, gaming controllers, and remote controls tough economic times for the PC and con- sized device that usually holds about to Webcams, PC speakers, headsets, notebook sumer electronics industries, Logitech's sales 20-brought together nearly three dozen en- stands, and cooling pads. But it all started with and profits have more than doubled. Looking gineers, designers, and marketers from around computer mice. the globe. ahead, as Logitech forges forward in its per- Logitech makes every variation of mouse sonal peripherals niche, Logitech is well posi- imaginable Over the years, it has flooded the Part of Logitech's product-development tioned to weather the recent economic storms world with more than one billion computer mice strategy is defensive. Once content to design and emerge stronger than ever of all varieties, mice for left- and right-handed mice and other peripherals for PC makers to "Our business is about the last inch be- people, wireless mice, travel mice, mini mice, 3-0 slap their own names on, Logitech over the tween people and content and technology," mice, mice shaped like real mice for children, and past half-decade has increasingly focused on explains Logitech CEO Guerrino De Luca, No- even an "air mouse" that uses motion sensors to selling its branded add-on equipment directly body spans that last inch better than Logitech. let you navigate your computer from a distance. to consumers Nearly 90 percent of Logitech's The next time you navigate your PC, watch or In the PC mouse market, Logitech competes annual sales now come from retail, That forces listen to downloaded Web audio or video con- head-on with Microsoft, At first glance, it looks Logitech to deliver regular like an unfair contest With more than $58 billion improvements and new de- In sales, Microsoft is nearly 30 times bigger than vices to entice new shoppers 12.2 billion Logitech, But when it comes to mice and purchases. and other peripherals, Logitech has a depth of "We think of mice as focus and knowledge that no other company pretty simple," says one in- dustry analyst, "but there's a n the world-induding Microsoft-can match. Whereas mice and other interface devices are pretty aggressive technology battle going on to prove pretty much a sideline for software maker Microsoft-almost a distraction-they are the what the mouse can do." main attraction for Logitech. As a result, each new `One of Logitech's latest feats of cutting edge wizardry is its Logitech device is a true work of both art and so- ence. Logitech's mice, for example, receive raves MX Air, which promises to change the very definition of from designers, expert reviewers, and users alike. the computer mouse as we A BusinessWeek analyst gives us a behind-the-scenes look at Logitech's deep de- know it More like an airborne sign and development prowess remote control than a tradi tional mouse, you can surf the Nichers: In its own corner of the high-tech jungle, Logitech One engineer, given the moniker * Tefion Tim* Web, play games, and control is a little mouse that roars, with giant Microsoft as its by amused colleagues, spent three months your home theater PC from runner-up