Marketing – Chapter 2 Strategy – Flashcards
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What is the definition of strategic planning?
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Process of developing and maintaining a strategic fit between the organizations goals and strategies and its changing market opportunities.
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Why does every company need strategic planning?
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Each company must find a game plan fro long term survival and growth that makes the most sense given its specific situation, opportunities, objectives, and resources.
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What are the four steps of the strategic planning process?
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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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What is a mission statement?
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A statement of the organizations purpose-what it wants to accomplish in the larger environment.
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How should mission statement be?
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Market Oriented, realistic, specific, motivating, illustrative of market competencies
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How does the second step of the strategic planning process combine with the first one?
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The firms mission is translated into a set of objectives for the current period These objectives must be measurable.
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What is a business portfolio?
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The collections of businesses and products that make up the company.
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What is the best business portfolio?
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One that best fits the company's strengths and businesses to the opportunities in the environment.
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What are the two steps in business portfolio planning and explain them?
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1) Company must analyze current portfolio and determine which businesses should receive more or less investment 2) It must shape the future portfolio by developing strategies for growth and downsizing.
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What is portfolio analysis?
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Management evaluates the products and businesses that make up the company
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What is the first step and second step of portfolio analysis?
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Identify the key businesses that make up the company. These are called the strategic business units. The next part is to measure the attractiveness of each SBU and decide how much support each deserves.
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What two important dimensions are the SBU's evaluated on by most standard portfolio analysis methods?
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The attractiveness of the SBU's market or industry and the strength of SBU's position in the market and industry.
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What are the strategies for SBU?
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1) You can invest more in the business unit to build its share 2) You can invest just enough to hold SBU's share at the current level 3) It can harvest the SBU, milking its short term cash flow regardless of the long term effect 4) It can divest the SBU by selling it or phasing it out and using the resources elsewhere
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What are some problems with BCG and other methods of strategic planning?
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They can be difficult, time consuming, and costly to implement. Management might find it difficult to define SBU's and measure market share growth. Moreover, these approaches focus on classifying current businesses but provide little advice for future planning. - Limited number of variables uses - Ignores interrelationships between businesses - The placement of a business in the matrix is highly dependent on the definition of market
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What should portfolio planning consider in regards to the future?
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Designing the business portfolio involves finding businesses and products the company should consider in the future.
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What should a company's main objective in regards to growth be?
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A company's objective is to manage profitable growth.
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What is the product/market expansion grid?
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A useful device for identifying growth opportunities.
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What are the four parts of the product/market expansion grid?
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1) Market Penetration - making more sales w/o changing original product 2) Product Development - Identifying and developing new markets for its current products (Ex. women customers, demographic) 3) Market Development - Offering modified or new products to current products ( Ex. cotton) 4) Diversification - Starting up or buying businesses beyond its current products or markets
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Not only growth but what else must a company must also develop strategies to do what else?
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Downsizing their business portfolios.
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What is the definition of marketing strategy?
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The marketing logic by which a company hopes to create this customer value and achieve these profitable relationships. The company decided which customers it will serve (segmentation, targeting) and how (differentiation, positioning)
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What is market segmentation?
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Dividing market into distinct group of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs.
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What does a market segment consist of?
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Group of consumers who would respond in a similar way to a give set of marketing efforts.
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What is market targeting?
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Evaluating each market segment's attractiveness and selected one or more segments to enter. A company should select segments in which it can profitably generate the greatest customer value and sustain it over time.
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What should a company do after it has decided which market segments to enter?
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It must determine how to differentiate its market offering for each targeted segment and what positions it wants to occupy in those segments.
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What is 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 the consumer.
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What does effective positioning begin with?
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Differentiation. That is actually differentiating the market offering to create superior customer value.
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What are the four key management functions needed to manage the marketing process?
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Analysis, planning, implementation, control
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What is the SWOT analysis used for?
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To analyze a company's current situation by looking at strengths, weaknesses, opportunities,and threats
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What is the goal of the company through SWOT?
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The goal is to match a company's strengths with opportunities while overcoming weaknesses and minimizing threats.
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What is operating control?
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Checking ongoing performance against the annual plan and taking corrective action if necessary.
