Ch. 15 - Strategic Marketing

Question 1

Strategic Planning

Answer 1

The process of developing and maintaining a fit between the organization’s goals/capabilities and market opportunities

Question 2

What are the 4 steps to strategic planning?

Answer 2

1. Define mission statement
2. Derive company goals and objectives
3. Design business portfolio
4. Design marketing strategy

Question 3

Mission Statement

Answer 3

A statement of the organization’s purpose. Should be market-oriented and defined in terms of customer needs

Question 4

Marketing Myopia

Answer 4

Prioritizing short term goals over long term growth and business needs over consumer needs

Question 5

Product-Oriented Mission Statement

Answer 5

Tells people what product(s) you sell

Question 6

Market-Oriented Mission Statement

Answer 6

Why buy your product(s)? Focuses on consumer needs

Question 7

Company goals and objectives

Answer 7

Goals that are related to the company’s mission statement and objectives (measures to achieve goals) that are related to goals.

Question 8

Business Portfolio

Answer 8

The collection of businesses (strategic business units), products, and/or brands that make up a company

Question 9

Strategic Business Units (SBUs)

Answer 9

A smaller unit within a company that operates independently. Big companies likely have SBUs, but they are not as necessary for small businesses

Question 10

What questions does a marketing strategy answer?

Answer 10

• Who is our target market?
• What makes us different?
• What type of product are we selling?

Question 11

Marketing Strategy

Answer 11

Involves detailed planning:
- Understanding the company’s situation (SWOT)
- Segmenting the market
- Targeting specific customers
- Positioning your product
- Developing a marketing mix

Question 12

BCG Matrix (Boston Consulting Group’s Growth-Share Matrix)

Answer 12

A graph measuring growth rate and relative market share. It is used to answer the following questions:
- How are a company’s SBUs performing right now?
- How might they perform in the future?
- How much should a company invest in each SBU?

Question 13

Star (BCG Matrix)

Answer 13

• High market growth rate, high relative market share
• Highest payoff
• Action: Spend money to defend position in the market

Question 14

Cash Cow (BCG Matrix)

Answer 14

• Low market growth rate, high relative market share
• Most desirable position for most companies
• Action: Nurture to generate cash

Question 15

Question Mark (BCG Matrix)

Answer 15

• High market growth rate, low relative market share
• Common position for new products entering the market
• Action: Use cash (for promotion) to turn into a star

Question 16

Dog (BCG Matrix)

Answer 16

• Low market growth rate, low relative market share
• Not a desirable position
• Action: Fix (by investing to gain market share) or abandon product

Question 17

Market Penetration

Answer 17

Offer an existing product to a market segment you already have market share in. This is a low risk/low cost move and generally has a smaller return

Question 18

Product Development

Answer 18

Offer a new product targeting consumers already buying your other products. This has more risk/cost than market penetration, but it has potential for a higher return

Question 19

Market Development

Answer 19

Introduce an existing product to a new market segment

Question 20

Diversification

Answer 20

Offer a completely new product to a new market segment. This is risky/costly, but diversification has the potential for the greatest return