chapter 2 Flashcards
value chain
a tool for identifying ways to create more customer value by making use of the primary and support activities. every firm is a synthesis of activities performed to design, produce, market, deliver, and support its products. the firm’s task is to examine its costs and performance in each value-creating activity, benchmarking gainst competitors, and look for ways to improve; to succeed the company should coordinate departmental activities to conduct core business processes.
market-sensing process
gathering and acting upon information about the market.
new-offering realisation process
researching, developing, and launching new high-quality offerings quickly and within budget.
customer-acquisition process
defining target markets and prospecting for new customers.
customer relationship management process
building deeper understanding, relationships, and offerings to individual customers.
fulfilment management process
receiving and approving orders, shipping goods on time and collecting payment.
inbound logistics
bringing materials into a business.
operations
converting materials into final products.
outbound logistics
shipping out final products.
firm infrastructure
covers the cost of general management, planning, finance, accounting, legal, and government affairs.
marketing plan
the central instrument for directing and coordinating the marketing effort. it operates at two levels; the strategic marketing plan and the tactical marketing plan.
strategic marketing plan
lays out the target markets and the firms’ value proposition based on an analysis of the best market opportunities.
tactical marketing plan
specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service.
market-oriented strategic planning
the managerial process of developing and maintaining the fit between the organisation’s objectives, skills, and resources and its changing market opportunities.
strategic planning
the aim is to shape the company’s businesses and products, so they yield target profits and growth. it can take place at four organisational levels: corporate, division, business, and product. it should be prioritised in three areas.
mission statement
provides a shared sense of purpose, direction, and opportunity. a company must define its business definition by identifying what their business is about in a mission statement. a good mission statement has five characteristics.
strategic business units (SBU’s)
the goal is to develop separate strategies and assign appropriate funding. SBU’s have three characteristics.
intensive growth
identify growth opportunities within the current business.
market-penetration strategy
consider whether it can gain more market share with the current products in the current market. it is part of intensive growth.
market-development strategy
consider whether new markets can be found or developed for the current products. it is part of intensive growth.
product-development strategy
consider whether new products can be developed for the current market. it is part of intensive growth.
diversification strategy
review whether new products can be developed for new markets. it is part of intensive growth.
integrative growth
identify opportunities to build business related to current business. a firm can increase sales and profits through backward, forward, or horizontal integration.
diversification growth
identify opportunities and add attractive unrelated businesses. this makes sense when good opportunities exist outside the present business, meaning the industry is highly attractive and the company has the right mix of business strengths to succeed.
corporate culture
the shared experiences, stories, beliefs, and norms that exactly characterise an organisation. the culture is difficult to change and is often the key to successfully implementing a new strategy.
scenario analysis
develops plausible representations of a firm’s possible future using assumptions about forces driving the market and different uncertainties.
business mission
define a mission within the broader company mission.
SWOT analysis
the overall evaluation of the company’s strengths, weaknesses, opportunities, and threats.
marketing opportunity
an area of buyer need and interest that a company has a high probability of profitability satisfying. there are three main sources of market opportunities.
environmental threat
a challenge posed by an unfavourable trend or development that, in the absence of defensive marketing action, would lead to lower sales or profit.
strengths and weaknesses analysis
finding attractive opportunities and evaluating the internal strengths and weaknesses of the business.
strategy formulation
how to achieve a goal?
strategy
game plan for achieving the goal. it is the creation of a unique and valuable position involving a different set of activities. occurs when a company performs different activities from rivals or performs similar activities in different ways.
overall cost leadership
achieve the lowest production and distribution cost to sell at a lower price than competitors do.
differentiation
achieve superior performance in an important customer benefit area.
focus
focus on one or more narrow market segments.
strategic group
when competing firms direct the same strategy to the same target market. the best strategy will make the most profits. companies can quickly copy an operationally effective company, thus diminishing the advantage of operational effectiveness.
strategic alliance
where competing firms direct the same strategy to the same strategic market. there are four major categories of marketing alliances.
product or service alliances
one company licenses another to produce its product, or two companies jointly market their complementary products or a new product.
promotional alliances
one company agrees to carry a promotion for another company’s product or service.
logistics alliances
one company offers logistical services for another company’s product.
pricing collaborations
one or more companies join in a special pricing collaboration.
partner relationship management (PRM)
the ability to form and manage partnerships as core skills. to keep strategic alliances thriving, firms are developing organisational structures to support them.
marketing plan
a written document that summarises what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. it provides direction and focus for a brand, product, or company.
financials projections
sales and expense forecast, break-even analysis, and risk analysis.
implementation controls
goals and budgets per month or quarter.
situation analysis
current target market (needs, trends, growth), product review, competitors, SWOT (PESTEL, Five Forces, and VRIN).
marketing tactics
the marketing program (4 P’s).
marketing strategy
mission, marketing and financial objectives, target markets, and positioning.
marketing implementation
the process that turns marketing plans into action assignments and ensures they accomplish the plan’s stated objectives. there are two complementary approaches to measuring marketing productivity; marketing metrics and marketing mix modelling.
marketing metrics
a set of measures that helps marketers quantify, compare, and interpret their performance. firms can split marketing performance into short-term results (profit-and-loss concerns) and changes in brand equity.
a complementary approach to measuring marketing productivity. it assesses marketing effects.
marketing-mix models
used to estimate causal relationships and to analyse data from a variety of resources such as retailer scanner data, media, pricing, etc., to understand the effects of specific marketing activities more precisely. marketers can conduct multivariate analyses to deepen understanding.
a complementary approach to measuring marketing productivity.
marketing dashboard
a concise set of interconnected performance drivers to be viewed as common throughout the organisation. the marketing dashboards are implemented by a firm to make sure the value of all different metrics is maximised. they are only as good as the information on which they are based, but visualisation tools are helping to bring the data alive.
a structured way to disseminate insights gleaned from these approaches.
customer-performance scorecard
records how well a company is doing year after year.
stakeholder-performance scorecard
tracks the satisfaction of various constituencies who have a critical interest in and impact on the company’s performance.
marketing control
the process by which firms assess the effects of their marketing activities and programs and make necessary changes and adjustments.
annual plan control
ensures the company achieves the sales, profits, and other goals established in its annual plan. first, management sets monthly or quarterly goals. second, it monitors performance in the workplace. third, management determines the causes of serious performance deviations. fourth, it takes corrective action to close gaps between goals and performance.
profitability control
companies should measure the profitability of their products, territories, customer groups, segments, trade channels, and order sizes to help determine whether to expand, reduce, or eliminate any products or marketing activities.
efficiency control
checks whether there are more efficient ways to manage the sales force, advertising, sales promotion, and distribution.
strategic control
each company should periodically reassess its strategic approach to the marketplace with a good marketing audit.
marketing audit
a comprehensive, systematic, independent, and periodic examination of a company’s or business unit’s marketing environment, objectives, strategies, and activities, with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance.
