Principles of Marketing – Exam 1 Review (Chapter 2) – Flashcards
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The managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities
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Strategic Planning
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What is the organization's main activity at a particular time? How will it reach its goals? The managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities
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Strategic Planning Questions
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A subgroup of a single business or collection of related businesses within the larger organization
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Strategic Business Units (SBU)
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1. A distinct mission and specific target market 2. Control over its resources 3. Its own competitors 4. A single business or a collection of related businesses 5. Plans independent of other SBUs
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Characteristics of Strategic Business Unit
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A marketing strategy that tries to increase market share among existing customers Present Market/Present Product E.g. Starbucks sells more coffee to customers who use reloadable card
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Market Penetration
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A marketing strategy that entails attracting new customers to existing products New Market/Present Product: E.g. Starbucks opens stores in Brazil and Chile
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Market Development
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A marketing strategy that entails the creation of new products for present markets Present Market/New Product: E.g. Starbucks develops powdered instant coffee called Via
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Product Development
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A strategy of increasing sales by introducing new products into new markets New Market/New Product: E.g. Starbucks launches Hear Music and buys Ethos Water
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Diversification
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Tool used for strategic alternative: Market Penetration - Increase market share among existing customers Market Development - Attract new customers to existing products Product Development - Create new products for present market Diversification - Introduce new products into new markets
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Ansoff's Opportunity Matrix
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1. Core Innovation - These decisions implement changes that use existing assets to provide added convenience to existing customers and potentially entice customers from other brands 2. Adjacent Innovation - Decision are designed to take company strengths into new markets 3. Transformational Innovation - Decisions result in brand-new markets, products, and often new businesses
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Innovation Matrix
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A tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate
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Portfolio Matrix
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1. Star 2. Cash Cow 3. Question Mark/Problem Child 4. Dog
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Boston Consulting Group Portfolio Matrix
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Fast-growing market leader. Marketing Tactic: Protect existing market share by reinvesting earnings in product development
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Star
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A business unit that generates more cash than it needs to maintain its market share Maintain market dominance by being price leader and making technological changes in the product
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Cash Cow
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Shows rapid growth but poor profit margins Invest heavily to gain better market share, acquire competitors, or drop the SBU
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Question Mark/Problem Child
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Low growth potential and a small market share
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Dog
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The process of anticipating future events and determining strategies to achieve organizational objectives in the future
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Planning
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Designing activities relating to marketing objectives and the changing marketing environment
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Marketing Planning
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Written document that acts as a guidebook of marketing activities for the marketing manager
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Marketing Plan
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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 Start of marketing plan.
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Mission Statement
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Strengths - Things the company does well Weaknesses - Things the company does not do well Opportunities - Conditions in the external environment that favor strengths Threats - Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness
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SWOT Analysis
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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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Environmental Scanning
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1. Social 2. Demographic 3. Economic 4. Technological 5. Political/Legal 6. Competitive
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Major Environmental Forces (6)
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A set of unique features of a company and its products that are perceived by the target market as a significant and superior to those of the competition 3 types of it
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Competitive Advantage
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Experience Curves Efficient labor No-frills products Government subsidies Product Design Reengineering Product innovations New service delivery methods
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Sources of Cost Reduction
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When a firm provides something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition
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Product/Service Differentiation Competitive Advantage
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Brand names Strong dealer network Product reliability Image Service
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Examples of Product/Service Differentiation
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Competitive advantage that seeks to target and effectively serve a single segment of the market.
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Niche Competitive Advantage
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Advantage that cannot be copied by the competition A firm that has successfully achieved a competitive advantage will stake out a position unique in some manner from its rivals
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Sustainable Competitive Advantage
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An advantage that cannot be copied by the competition. Sources: Patents Copyrights Locations Equipment Technology Customer service Promotion
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Sources of Sustainable Competitive Advantage
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Statement/goal of what is to be accomplished through marketing activities. Must Be: 1. Realistic 2. Measurable 3. Time specific 4. Compared to a benchmark
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Marketing Objective
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Group of individuals or organizations who share one or more characteristics, therefor may have relatively similar product needs
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Market Segment
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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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Marketing Strategy
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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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Marketing Opportunity Analysis (MOA)
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1. Segment the market based on groups with similar characteristics 2. Analyze the market base on attractiveness of market segments 3. Select one or more target markets
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Target Market Strategy (3)
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A unique blend of product, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market Product Place Promotion Pricing
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Marketing Mix
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Includes not only the physical unit but also its package, warranty, after-sale service, brand name, company image, value, and many other factors
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Product
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Making products available when and where customers want them. All business activities concerned with storing and transporting raw materials or finished products
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Place (Distribution)
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Includes advertising, public relations, sales promotion, and personal selling.
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Promotion
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What the buyer must give up in order to obtain a product
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Pricing
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Written document that acts as a guidebook of marketing activities for the marketing manager 1. Implementation 2. Evaluation 3. Control 4. Marketing Audit
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Following Up Marketing Plan (4)
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Requires continual attention, creativity, and management commitment The managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities
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Effective Strategic Planning
