Marketing 101 Ch. 2 – Flashcards
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strategic planning
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the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities
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steps of strategic planning
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1) defining the company mission 2) setting company objectives and goals 3) designing the business portfolio 4) planning marketing and other functional strategies
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mission statement
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a statement of the organization's purpose - what it wants to accomplish in the larger environment; answers the questions 1) what is our business? 2) who is the customer? 3) What do consumers value? 4) what should our business be?
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market oriented
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quality of mission statements that cause them to be defined in terms of satisfying basic customer needs (as opposed to being product oriented); ex. IBM is not defined as a tech company, but rather aims to "build a smarter planet"
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business portfolio
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the collection of businesses and products that make up the company, guided by the mission statement and objectives and planned by management ex. ESPN's portfolio has cable, radio, and web properties, and it in turn is a property of Disney's portfolio
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portfolio analysis
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process by which management evaluates the products and businesses that make up the company
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strategic business units (SBUs)
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key businesses that make up the company, which can consist of company divisions, product lines within a division, or a single product or brand
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growth-share matrix
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a portfolio-planning method, developed by the Boston Consulting Group, that evaluates a company's SBU in terms of market growth rate and relative market share
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market growth rate
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vertical axis of the growth-share matrix; a measure of market attractiveness
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relative market share
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horizontal axis of the growth-share matrix; measure of company strength in the market
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4 types of SBUs according to the growth-share matrix
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1) stars 2) cash cows 3) question marks 4) dogs
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stars
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type of SBU; high-growth, high-share businesses or products, often in need of heavy investments to finance their rapid growth, which will eventually slow and render them cash cows
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cash cows
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type of SBU; low-growth, high-share businesses or products that are established and successful SBUs and need less investment to hold their market share
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question marks
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type of SBU; low-share business units in high-growth markets, requiring a lot of cash to hold their share, let alone increase it
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dogs
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type of SBU; low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash
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4 strategies for approaching an SBU
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1) build: invest more for more share 2) hold: invest enough to keep share 3) harvest: milk short-term cash flow 4) divest: sell/phase out & invest elsewhere
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problems with matrix approaches
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difficult, time consuming, and costly to implement; difficult to define SBUs and measure market share and growth
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product/market expansion grid
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portfolio-planning tool for identifying company growth opportunities through market penetration, product development (in existing markets) and market development and diversification (existing markets)
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market penetration
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company growth by increasing sales of current products to current market segments without changing the product
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market development
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company growth by identifying and developing new market segments for current company products
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product development
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company growth by offering modified or new products to current market segments ex. Starbucks' Via instant coffee for the single-serve market
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diversification
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company growth through starting up or acquiring businesses outside the company's current products and markets ex. Starbucks bought a fresh OJ company to enter into the "Health and wellness" category
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reasons to downsize
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1) firm may have grown too fast or entered areas where it lacked experience 2) market environment might change, with some offerings becoming less profitable 3) some products/SBUs simply age & die
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Ways in which marketing factors into strategic planning
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1) provides guiding philosophy (marketing concept) that focuses on profitable relationships 2) provides inputs to strategic planners by helping to identify market opportunities 3) designs strategies for reaching objectives of each SBU
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value chain
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the series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products ex. Walmart's purchasing must obtain lowest prices from suppliers; operations must distribute merchandise at the lowest cost to deliver "unbeatable" prices
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value delivery network
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the network made up of the company, its suppliers, its distributors, and, ultimately, its customers who partner with each other to improve the performance of the entire system
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marketing strategy
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the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships
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market segmentation
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dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs
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market segment
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a group of consumers who respond in a similar way to a given set of marketing efforts
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market targeting
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the process of evaluating each market segment's attractiveness and selecting one or more segments to enter
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position
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the place a product occupies relative to competitors' products in consumers' minds ex. Del Monte's "bursting with life" campaign, focusing on its quality ingredients & contribution to a healthy lifestyle, constituted its position
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positioning
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arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
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differentiation
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actually differentiating the market offering to create superior customer value
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marketing mix
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the set of tactical marketing tools - product, price, place, and promotion - that the firm blends to produce the response it wants in the target market
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the 4 p's of the marketing mix
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product, price, place, promotion
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product
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the goods-and-services combination the company offers to the target market
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price
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the amount of money customers must pay to obtain the product
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place
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company activities that make the product available to target consumers
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promotion
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activities that communicate the merits of the product and persuade target customers to buy it
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4 c's of the marketing mix
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the 4 p's from the customer perspective, stated in the way the customer views them due to customer centricity: customer solution (product), customer cost (price), convenience (place), communication (promotion)
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marketing management functions
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analysis, planning, implementation, and control
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SWOT analysis
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overall evaluation of the company's strengths, weaknesses, opportunities, and threats
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strengths
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part of SWOT analysis; include internal capabilities, resources, and positive situational factors that may help the company serve its customers and achieve its objectives
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weaknesses
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part of SWOT analysis; include internal limitations, negative situational factors
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opportunities
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part of SWOT analysis; favorable factors or trends in the external environment that the company may be able to exploit to its advantage
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threats
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part of SWOT analysis; unfavorable external factors or trends that may present challenges to performance
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marketing planning
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choosing marketing strategies that will help the company attain its overall strategic objectives
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Elements of a product or brand marketing plan
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executive summary, current marketing situation, threats and opportunities analysis, objectives and issues, marketing strategy, action programs, budgets, controls
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Marketing plan setups
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executive summary, which quickly reviews major assessments, goals, and recommendations; main section including a detailed SWOT analysis of the current marketing situation as well as potential threats and opportunities; last section outlining the controls that will be used to monitor progress, measure return on marketing investment, and take corrective action; also includes marketing strategy and marketing budget
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components of marketing strategy
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specific strategies for target markets, positioning, the marketing mix, and marketing expenditure levels
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marketing implementation
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process that turns marketing plans into marketing actions to accomplish strategic marketing objectives; addresses the who, where, when & how of marketing activities
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chief marketing officer (CMO)
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person who heads up the company's entire marketing operation and represents marketing on the company's top management team; "chief customer officer"
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functional organization
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the most common form of marketing organization, under which different marketing activities are headed by a functional specialist: a sales manager, advertising manager, marketing research manager, customer service manager, or new product manager
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geographic organization
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form of marketing organization in which sales and marketing people are assigned to specific countries, regions, and districts
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product management organization
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form of marketing organization in which a product manager develops and implements a complete strategy and marketing program for a specific product or brand
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market/customer management organization
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form of marketing organization in which market managers are responsible for developing marketing strategies and plans for their specific markets or customers, with the main advantage that the company is organized around the needs of specific customer segments
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customer management
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managing customer profitability and customer equity; companies are moving toward this and away from managing product and brand profitability
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marketing control
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measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved
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4 steps of marketing control
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1) management sets marketing goals 2) measures performance in marketplace & 3) evaluates cause of any discrepancies in expected vs. actual performance 4) corrective action to close gap between expected vs. actual performance
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operating control
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checking ongoing performance against the annual plan and taking corrective action when necessary, the purpose of which is to ensure that the company achieves goals; also involves determining the profitability of different products, territories, markets, and channels
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strategic control
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looking at whether the company's basic strategies are well matched to its opportunities
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marketing return on investment (ROI)
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the net return from a marketing investment divided by the costs of the marketing investment, more crucial today than ever, but still difficult for many marketers
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marketing dashboards
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meaningful sets of marketing performance measures in a single display used to monitor strategic marketing performance
