Chapter Two-Developing Marketing Strategies and a Marketing Plan

Marketing Strategy
identifies a firm’s target market, a related marketing mix–its four P’s–,the bases on which the firm plans to build a sustainable competitive advantage.
Sustainable competitive advantage
an advantage over the competition that is not easily copied and thus can be maintained over a long period of time
customer excellence
achieved when a firm develops value-based strategies for retaining loyal customers and provides outstanding customer service
operational excellence
involves a firm’s focus on efficient operations and excellent supply chain management
product excellence
involves a focus on achieving high quality products; effective branding and positioning is key
locational excellence
a method of achieving excellence by having a strong physical location and or Internet presence
marketing plan
written document complosed of an analysis of the current marketing situation, opportunites and threats for the firm, marketing objectives and strategy specified in terms of the four P’s action programs, and projects or proforma income statements
planning phase
marketing executives in conjunction with other top managers define the mission and or vision of the business
implementation phase
marketing managers identify and evaluate different opportunites by engaging in a process known as segmentation, targeting, and positioning (STP)
control phase
entails evaluating the performance of the marketing strategy using marketing metrics and taking any necessary corrective actions
mission statement
broad description of a firm’s objectives and the scope of activities it plans to undertake, attempts to answer two main questions: What type of business are we? What do we need to do to accomplish our goals and objectives?
situation analysis
using a SWOT analysis that asseses both the internal environment with regard to its Strengths and Weakneses and the external environment in terms of its Opportunities and Threats.
segmentation, targeting, and positioning
market segment
consisting of consumers who respond similarly to a firm’s marketing efforts
market segmentation
the process of dividing the market into groups of customers with different needs, wants, or characteristics–who therefore might appreciate products or serivces geared especially for them
target marketing or targeting
the process of evaluating the attractiveness of various segments and then deciding which to pursue as a market
market positoning
the process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.
include services, constitute the first of the four P’s
a measuring system that quantifies a trend, dynamic or characteristic
strategic business unit (SBU) or product line
level of the firm, though managers also can use it to analyze brands or even individual items. A division of the firm itself that can be managed and operated somewhat Independently from other divisions and may have a different mission or objectives.
market share
percentage of a market accounted for by a specific entity and is used to establish the product’s strength in a particular market
relative market share
used in this application because it provides manager with a products relative strength compared to that of the largest firm in the industry
market growth rate
the annual rate of the specific market in which the product competes
market penetration strategy
employs the existing marketing mix and focuses the firm’s efforts on existing customers
market development strategy
employs the existing marketing offering to reach new market segments, whether domestic or international
product development strategy
offers a new product or service to a firm’s current target market
diversification strategy
introduces a new product or service to a market segment that currently is not served
related diversification
the current target market and or marketing mix shares something in common with the new opportunity

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