MKT 2 – Flashcard
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Strategic Planning
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the managerial process of creating and maintaining a fit between the organization objectives and resources and the evolving market oppurtunities
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Three Primary Levels of Strategy
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Corporate, Business Unit, & Functional
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Strategic business unit (SBU)
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a subgroup of single business or collection of related businesses within the larger organization
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SBU Characteristics
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-A single business or a collection of related business -A distinct mission and specific target market -Control over its resources -Its own competitors -Plans independent of other SBUs in the larger organization
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Market penetration
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a marketing strategy that tries to increase market share among existing customers
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Market Development
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a marketing strategy that entails attracting new customers to existing products
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Product Development
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a marketing strategy that entails the creation of new products for present markets
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Diversification
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a strategy of increasing sales by introducing new products into new markets
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Present Market, Present Product
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Market Penetration
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Present Market, New Product
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Product Development
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New Market, Present Product
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Market Development
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New Market, New Product
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Diversification
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Increase market share among existing customers
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Market Penetration
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Attract new customers to existing products
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Market Development
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Create new products for present markets
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Product Development
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[Innovation Matrix] Add related products, Enter adjacent markets
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Adjacent Innovation
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Innovation Matrix - Axes
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x: How to win y: Where to play
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Introduce new products into new markets
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Diversification
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[Innovation Matrix] Use existing products, Serve existing markets
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Core Innovation
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[Innovation Matrix] Develop new products, Create new markets
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Transformational Innovation
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BCG Portfolio Matrix
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a tool for allocating resources among products or strategic business units on the basis of relative market share (x) and market growth (y)
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Star
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[BCG Portfolio Matrix] -profit potential -attracts competition -may need heavy investment
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Cash cow
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[BCG Portfolio Matrix] -established, successful SBUs -competition weakened -no serious investments -produce cash
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Problem child (question mark)
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[BCG Portfolio Matrix] -build into stars or phase out -requires cash to build market share
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Dog
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[BCG Portfolio Matrix] -low profit potential -usually discontinued
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Planning
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the process of anticipating future events and determining strategies to achieve organizational objectives in the future
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[BCG Portfolio Matrix] Market Growth Rate: high Relative Market Share: high
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star
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[BCG Portfolio Matrix] Market Growth Rate: low Relative Market Share: high
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cash cows
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[BCG Portfolio Matrix] Market Growth Rate: high Relative Market Share: low
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question marks / problem children
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[BCG Portfolio Matrix] Market Growth Rate: low Relative Market Share: low
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dogs
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Portfolio Management Strategies: BUILD
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SBUs with potential to be stars
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Portfolio Management Strategies: HOLD
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successful cash cows
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Portfolio Management Strategies: HARVEST
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all SBUs except stars
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Portfolio Management Strategies: DIVEST
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dogs
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GE Strategy Model - Axes
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x: Business Position y: Market Attractiveness
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GE Strategy Model
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similar to BCG Portfolio Matrix -- how to invest in the BCG models (harvest/divest, cautiously invest, invest/grow)
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The Marketing Plan
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a written document that acts as a guidebook of marketing activities for organization -examines the marketing environment -creates common awareness of marketplace factors -establishes strategies and activities that work towards stated objectives -basis for comparison of actual and expected performance
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Marketing Planning
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designing activities relating to marketing objectives and the changing marketing environment
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Mission Statement
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a statement of the firm's business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions
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Business Mission Statement
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-what business are we in -focus on the market and consumer benefits, not the good or service -limited # of goals -stresses major policies & values -defines major competitive spheres -LT view -short, memorable, & meaningful
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Marketing Myopia
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defining a business in terms of goods and services rather in terms of the benefits customers seek
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SWOT analysis
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identifying internal strengths (S) and weaknesses (W), and also examining external opportunities (O) and threats (T)
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Environmental scanning
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collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan
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Competitive Advantage
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a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition
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Cost competitive advantage
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being the low-cost competitor in an industry while maintaining satisfactory profit margins
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Experience curves
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curves that show costs declining at a predictable rate as experience with a product increases
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Product/ services differentiation competitive advantage
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the provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition
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Niche competitive advantage
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the advantage achieved when a firm seeks to target and effectively serve a small segment of the market
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Competitive Advantage: -Used by small companies with limited resources -May be used in a limited geographic market -Product line may be focused on a specific product category
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Niche
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Sustainable competitive advantage
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an advantage that cannot be copied by that competition
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Sources of Sustainable competitive advantage
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-patents -copyrights -locations -equipment -technology -customer service -promotion
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Marketing objective
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a statement of what is to be accomplished through marketing activities
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Marketing objectives should be:
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-realistic -measurable -time specific -consistent with the priorities of the organization
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Purpose of good marketing objectives
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1. Communicate marketing management philosophy 2. Provide management direction 3. Motivate employees 4. Force executives to clarify their thinking 5. Allow for better evaluation of results
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Marketing Strategy
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the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets
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Target Market(s) + Marketing Mix =
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Desired Results
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Market Opportunity Analysis (MOA)
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the description and estimation of the size and sales potential of market segments that are of interest to the firm AND the assessment of key competitors in these market segments
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Target Market Strategy
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-Appeal to the entire market with one marketing mix? -Concentrated on one marketing segment? -Appeal to multiple markets with multiple mixes?
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Marketing mix (four Ps)
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a unique blend on product, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market
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Can be tangible goods, ideas, or services Ex. physical unit, package, warranty, service, brand, image, value
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Product
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-Product availability where and when customers want them -All activities from raw materials to finished products -Ensure products arrive in usable condition at designated places when needed
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Place
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Role is to bring about exchanges with target markets by: -> informing, educating, persuading, and reminding Includes integration of: -> personal selling, advertising, sales promotion, & public relations
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Promotion
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-What a buyer must give up to obtain a product -The most flexible of the Four Ps (quickest to change) -Competitive weapon Price x Units Sold = Total Revenue
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Price
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Implementation
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the process that turns a marketing place into action assignments and ensures that these assignments are executed in a way that accomplishes the plans objectives
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Evaluation
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gauging the extent to which the marketing objectives have been achieved during the specified time period
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Control
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provides the mechanisms for evaluating marketing results in light of the plan's objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines
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Marketing Audit
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a thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organziation
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4 Characteristics of Marketing Audit
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Comprehensive, systematic, independent, and periodic
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Of the four Ps, the marketing mix typically starts with the
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product
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___ involves the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets.
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marketing strategy
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____ means attracting new customers to existing products
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market development
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Market penetration is best defined as a marketing strategy that aims to:
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increase market share among existing customers
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___ component of the marketing mix includes after-sale service.
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product
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Use of experience curves supports which type of competitive advantage?
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Cost
