Chapter #1 Strategic Marketing Flashcards
Strategic marketing (analysis and planning)
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
Company’s mission definition
a statement of organization’s purpose; what it wants to accomplish in the larger environment
Product-oriented
mission merely defined in product or technology terms
Market-oriented (more appropriate approach)
mission widely defined in terms of satisfying basic customer needs
Mission statements ex- NASA
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
MIS
marketing information system
Internal/external audit
data collection
Tools for data collection
company’s internal data; competitive marketing intelligence; marketing research
Data sources
secondary data; primary data
Portfolio analysis
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
SBU
strategic business unit
Phase 1 of portfolio analysis
SBUs identification: departments, product lines and/or single brands/products
Phase 2 of portfolio analysis
evaluation of “market potential” for each SBU and relative allocation of financial resources
BCG Matrix
the ‘growth share’ matrix; created by Bruce Henderson at Boston Consulting Group in 70s
Dog (BCG Matrix)
low market share/low market growth: profits can’t cover costs; products/services never successful; disinvestment strategy (‘cut your losses’)
Cash cow (BCG Matrix)
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’)
Market growth rate
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
Relative market share
aka company competitiveness; comparing company’s market share to competitors (divide own share with that of the largest competitors market share); ‘experience curve effect’
Experience curve effect
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 mark (BCG Matrix)
low market share/high market growth: products in launching phase; interesting/dynamic markets; low profits; cautious investment strategy
Star (BCG Matrix)
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’)
