Chapter #1 Strategic Marketing

Question 1

Strategic marketing (analysis and planning)

Answer 1

company’s mission definition; evaluation of firm’s strengths/weaknesses; analysis of marketing environment; competitor’s identification and mapping; consumer behavior analysis; segmentation and targeting; strategic aim definition

Question 2

Company’s mission definition

Answer 2

a statement of organization’s purpose; what it wants to accomplish in the larger environment

Question 3

Product-oriented

Answer 3

mission merely defined in product or technology terms

Question 4

Market-oriented (more appropriate approach)

Answer 4

mission widely defined in terms of satisfying basic customer needs

Question 5

Mission statements ex- NASA

Answer 5

PO def- we explore outer space; MO def- we reach for new heights and reveal the unknown so that what we do and learn will benefit all humankind

Question 6

MIS

Answer 6

marketing information system

Question 7

Internal/external audit

Answer 7

data collection

Question 8

Tools for data collection

Answer 8

company’s internal data; competitive marketing intelligence; marketing research

Question 9

Data sources

Answer 9

secondary data; primary data

Question 10

Portfolio analysis

Answer 10

analysis through which managers perform an evaluation of current products/activities of company; aim of analysis is to allocate significant financial resources to most profitable and promising products/activities and reduce and/or cut investments on weaker ones

Question 11

SBU

Answer 11

strategic business unit

Question 12

Phase 1 of portfolio analysis

Answer 12

SBUs identification: departments, product lines and/or single brands/products

Question 13

Phase 2 of portfolio analysis

Answer 13

evaluation of “market potential” for each SBU and relative allocation of financial resources

Question 14

BCG Matrix

Answer 14

the ‘growth share’ matrix; created by Bruce Henderson at Boston Consulting Group in 70s

Question 15

Dog (BCG Matrix)

Answer 15

low market share/low market growth: profits can’t cover costs; products/services never successful; disinvestment strategy (‘cut your losses’)

Question 16

Cash cow (BCG Matrix)

Answer 16

high market share/low market growth: established products in mature markets; high profits (useful for other SBUs too); static competitive situation; keeping strategy (‘milking the product’)

Question 17

Market growth rate

Answer 17

aka market attractiveness; demand is growing rapidly, opening doors for companies to grow; requires major investments- assets to increase capacity, marketing to grow market share –> attractive, but results in consumption of cash

Question 18

Relative market share

Answer 18

aka company competitiveness; comparing company’s market share to competitors (divide own share with that of the largest competitors market share); ‘experience curve effect’

Question 19

Experience curve effect

Answer 19

economies of scale + increased production experience = cost advantage compared to competitors ….. the more experience a company has in production of a particular product, the lower the cost

Question 20

Question mark (BCG Matrix)

Answer 20

low market share/high market growth: products in launching phase; interesting/dynamic markets; low profits; cautious investment strategy

Question 21

Star (BCG Matrix)

Answer 21

high market share/high market growth: established products; dynamic/expanding markets; high profits but strong competitively; necessarily of strong investments (‘strike while the iron is hot’)