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Organization

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Legal entity that consists of people who share a common mission.

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Offerings

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Products, services, or ideas.

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3 Types of Organizations:

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1. For-profit 2. Nonprofit 3. Government Agencies

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For-Profit Organization (Business Firm)

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Privately owned organization such as Target that serves its customers to earn a profit so that it can survive. (profit is the reward for the risk it undertakes in marketing and its offerings).

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Nonprofit Organization

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A nongovernmental organization that serves its customers but does not have profit as an organizational goal. Instead, its goals may be operational efficiency or client satisfaction.

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Industry

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Organizations that develop similar offerings.

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Strategy

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An organization's long-term course of action designed to deliver a unique customer experience while achieving its goals.

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(Structure of Organizations) Corporate Level

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Where top management directs overall strategy for the entire organization; (board of directors and senior management).

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(Structure of Organizations) Strategic Business Unit Level (SBU)

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A subsidiary, division, or unit of an organization that markets a set of related offerings to a clearly defined group of customers; (multimarket or multiproduct firms manage a group of businesses); In this level, managers set a more specific strategic direction for their businesses to exploit value-creating opportunities. -Example: Prada manages a portfolio or group of businesses - including perfume, leather goods, and luggage - each of which may be viewed as a strategic business unit (SBU)

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(Structure of Orgaizations) Functional Level

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Where groups of specialists actually create value for the organization (most specific strategy) -Department refers to these specialized functions such as marketing and finance. -Key Role in marketing department is to keep the organization focused on creating value both for it and the customers.

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Cross-Functional Teams

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Consist of a small number of people from different departments who are mutually accountable to accomplish a task or a common set of performance goals. (brought together by senior management in order to develop/improve marketing programs).

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Core Values

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The fundamental, passionate, and enduring principles that guide its conduct over time.

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Mission

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A statement of the organization's function in society that often identifies its customers, markets, products, and technologies. Often used interchangeably with vision.

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Organizational Culture

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The set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization.

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Organizational Direction: What will it do?

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The organization's foundation enables it to set a direction in terms of (1) the business it is in and (2) its specific goals.

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Business

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Describes the clear, broad, underlying industry or market sector of an organization's offering. ("What do we do?" or "What business are we in?"; Ice cream business).

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Business model

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The strategies an organization develops to provide value to the customers it serves. -Technological innovation is often the biggest trigger for change.

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Goals or Objectives

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Statements of an accomplishment of a task to be achieved, often by a specific time. (profit, sales, market share, quality, customer satisfaction, employee welfare, social responsibility).

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Market share

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The ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.

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Organizational Strategies: How will it do it?

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By level (corporate, Strategic Business Units SBU, Functional) or by offering (product, service, idea)

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Marketing Plan

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A road map for the marketing activities of an organization for a specified future time period, such as one year or five years. The planning phase or the strategic marketing process usually results in a marketing plan that sets the direction for the marketing activities of an organization.

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Marketing Dashboard

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The visual computer display of the essential information related to achieving a marketing objective. -Often active hyperlinks provide further detail. -Example: A CMO wants to see daily what the effect of a new TV advertising campaign has on a product's sales.

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Marketing Metric

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A measure of the quantitative value or trend of a marketing activity or result (the choice of which ones to display is critical for a busy marketing manager)

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Data visualization

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Presents information about an organization's marketing metrics graphically so marketers can quickly spot deviations from plans and take corrective actions. -Examples: Pie, line, and bar charts

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Competencies

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The organization's special capabilities- the skills, technologies, and resources - that distinguish it from other organizations and provide customer value. Example: Medtronic's competencies include world-class technology, training, and service that respond to life-threatening medical needs.

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Competitive Advantage

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A unique strength relative to competitors that provides superior returns, often based on quality, time, cost, or innovation. -Competencies should be distinctive enough to provide this.

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Asking an organization where it is at the present time involves identifying its:

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Competencies, customers, and competitors.

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Two techniques to aid managers in knowing the growth strategies direction for the firm:

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Business portfolio analysis and diversification analysis.

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Business Portfolio Analysis

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A technique that managers use to quantify performance measures and growth targets to analyze their firms' strategic business units (SBUs) as though they were a collection of separate investments. -The purpose is to determine the appeal of each SBU or offering and then determine the amount of cash each should receive. -Vertical Axis is the Market Growth Rate which is the annual rate of growth of the SBU's industry. -Horizontal Axis is the Relative Market Share, defined as the sales of the SBU divided by the sales of the largest firm in the industry.

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Cash Cow

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SBUs that generate large amounts of cash, far more than they can invest profitably in themselves. They have dominant shares of slow-growth markets and provide cash to cover the organization's overhead and to invest in other SBUs.

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Stars

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The SBUs with a high share of high-growth markets that may need extra cash to finance their own rapid future growth. When their growth slows, they are likely to become cash cows.

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Question Marks

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SBUs with a low share of high-growth markets. They require large injections of cash just to maintain their market share, much les increase it. The name implies management's dilemma for these SBUs: choosing the right ones to invest in and phasing out the rest.

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Dogs

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SBUs with low shares of slow-growth markets. Although they may generate enough cash to sustain themselves, they do not hold the promise of ever becoming real winners for the organization. Dropping SBUs that are dogs may be required, except when relationships with other SBUs, competitive considerations, or potential strategic alliances exist.

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Organization should do this with an SBU:

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Try to change its relative market share (cannot influence the market growth rate); to do this, management decides what future role each SBU should have and either injects or removes cash from it.

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Disadvantages in the Business Portfolio Analysis:

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(1) getting the needed information and (2) incorporating competitive data into business portfolio analysis.

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Diversification Analysis

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A technique that helps a firm search for growth opportunities from among current and new markets as well as current and new products. -For any market, there is both a current product and a new product and for any product there is both a current market and a new potential market. -4 market strategies: Market Penetration, Market Development, Product Development, Diversification

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Market Penetration

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A marketing strategy to increase sales of current products in current markets. There is no change in either the basic product line or the markets served. (could involve either selling more of the product, or instead, raising the prices of the product).

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Market Development

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Marketing strategy to sell current products to new markets.

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Product Development

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Marketing strategy of selling new products to current markets.

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Diversification

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Marketing strategy of developing new products and selling them in new markets.

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Strategic Marketing Process

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An organization allocates its marketing mix (4 Ps) resources to reach its target markets. 3 Phases: Planning, Implementation, and Evaluation.

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3 steps of Planning (SMP):

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1. Situation analysis (SWOT) 2. Market-product focus and goal setting 3. The marketing program.

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Situation Analysis

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Taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization's marketing plans and the external forces and trends affecting it.

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SWOT Analysis

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Summary of a situational analysis; an acronym describing and organization's appraisal of its internal Strengths, Weaknesses, and its external Opportunities, and Threats. (want to: build on a strength, correct a weakness, exploit an opportunity, avoid a disaster-laden threat)

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Four Areas on which the firm builds its marketing program (SWOT is based on the study of these)

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1. Identify trends in the organization's industry 2. Analyze the organization's competitors 3. Assess the organization itself 4. Research the organization's present and prospective customers.

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Market Segmentation

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Involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. (search for the target market segments)

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Strategic Marketing Process: Market Product Focus and Goal Setting

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1. Set marketing and product goals 2. Select target markets 3. Find points of difference 4. Position the product.

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Points of Difference

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Those characteristics of a product that make it superior to competitive substitutes. (similar to the organization's overall competitive advantage but in terms of an individual product compared to the competitive products)

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Strategic Marketing Process: Marketing Program

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The "how" phase; involves developing the program's marketing mix and its budget. (4 P's)

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The Implementation Phase of the Strategic Marketing Process

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Four components: (1) obtaining resources (2) designing the marketing organization (marketing program needs and organization to implement it) (3) developing planning schedules, and (4) actually executing the marketing program designed in the planning phase.

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Marketing strategy

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The means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it. -This term implies both the end sought (target market) and the means to achieve it (marketing program)

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Marketing Tactics

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Detailed day-to-day operational decisions essential to the overall success of marketing strategies. Example: Writing ads and setting prices for new product lines.

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Evaluation Phase of the Strategic Marketing Process

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Requires the marketing manager to (1) compare the results of the marketing program with the goals in the written plans to identify deviations and (2) act on these deviations (correcting negative deviations and exploiting positive ones)

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Planning gap

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The difference between the projection of the path to reach a new goal and the projection of the path of the results of a plan already in place.

MAR 3023: Ch. 2 – Flashcards

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