chapter 2

Question 1

value chain

Answer 1

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.

Question 2

market-sensing process

Answer 2

gathering and acting upon information about the market.

Question 3

new-offering realisation process

Answer 3

researching, developing, and launching new high-quality offerings quickly and within budget.

Question 4

customer-acquisition process

Answer 4

defining target markets and prospecting for new customers.

Question 5

customer relationship management process

Answer 5

building deeper understanding, relationships, and offerings to individual customers.

Question 6

fulfilment management process

Answer 6

receiving and approving orders, shipping goods on time and collecting payment.

Question 7

inbound logistics

Answer 7

bringing materials into a business.

Question 8

operations

Answer 8

converting materials into final products.

Question 9

outbound logistics

Answer 9

shipping out final products.

Question 10

firm infrastructure

Answer 10

covers the cost of general management, planning, finance, accounting, legal, and government affairs.

Question 11

marketing plan

Answer 11

the central instrument for directing and coordinating the marketing effort. it operates at two levels; the strategic marketing plan and the tactical marketing plan.

Question 12

strategic marketing plan

Answer 12

lays out the target markets and the firms’ value proposition based on an analysis of the best market opportunities.

Question 13

tactical marketing plan

Answer 13

specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service.

Question 14

market-oriented strategic planning

Answer 14

the managerial process of developing and maintaining the fit between the organisation’s objectives, skills, and resources and its changing market opportunities.

Question 15

strategic planning

Answer 15

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.

Question 16

mission statement

Answer 16

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.

Question 17

strategic business units (SBU’s)

Answer 17

the goal is to develop separate strategies and assign appropriate funding. SBU’s have three characteristics.

Question 18

intensive growth

Answer 18

identify growth opportunities within the current business.

Question 19

market-penetration strategy

Answer 19

consider whether it can gain more market share with the current products in the current market. it is part of intensive growth.

Question 20

market-development strategy

Answer 20

consider whether new markets can be found or developed for the current products. it is part of intensive growth.

Question 21

product-development strategy

Answer 21

consider whether new products can be developed for the current market. it is part of intensive growth.

Question 22

diversification strategy

Answer 22

review whether new products can be developed for new markets. it is part of intensive growth.

Question 23

integrative growth

Answer 23

identify opportunities to build business related to current business. a firm can increase sales and profits through backward, forward, or horizontal integration.

Question 24

diversification growth

Answer 24

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.

Question 25

corporate culture

Answer 25

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.

Question 26

scenario analysis

Answer 26

develops plausible representations of a firm’s possible future using assumptions about forces driving the market and different uncertainties.

Question 27

business mission

Answer 27

define a mission within the broader company mission.

Question 28

SWOT analysis

Answer 28

the overall evaluation of the company’s strengths, weaknesses, opportunities, and threats.

Question 29

marketing opportunity

Answer 29

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.

Question 30

environmental threat

Answer 30

a challenge posed by an unfavourable trend or development that, in the absence of defensive marketing action, would lead to lower sales or profit.

Question 31

strengths and weaknesses analysis

Answer 31

finding attractive opportunities and evaluating the internal strengths and weaknesses of the business.

Question 32

strategy formulation

Answer 32

how to achieve a goal?

Question 33

strategy

Answer 33

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.

Question 34

overall cost leadership

Answer 34

achieve the lowest production and distribution cost to sell at a lower price than competitors do.

Question 35

differentiation

Answer 35

achieve superior performance in an important customer benefit area.

Question 36

focus

Answer 36

focus on one or more narrow market segments.

Question 37

strategic group

Answer 37

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.

Question 38

strategic alliance

Answer 38

where competing firms direct the same strategy to the same strategic market. there are four major categories of marketing alliances.

Question 39

product or service alliances

Answer 39

one company licenses another to produce its product, or two companies jointly market their complementary products or a new product.

Question 40

promotional alliances

Answer 40

one company agrees to carry a promotion for another company’s product or service.

Question 41

logistics alliances

Answer 41

one company offers logistical services for another company’s product.

Question 42

pricing collaborations

Answer 42

one or more companies join in a special pricing collaboration.

Question 43

partner relationship management (PRM)

Answer 43

the ability to form and manage partnerships as core skills. to keep strategic alliances thriving, firms are developing organisational structures to support them.

Question 44

marketing plan

Answer 44

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.

Question 45

financials projections

Answer 45

sales and expense forecast, break-even analysis, and risk analysis.

Question 46

implementation controls

Answer 46

goals and budgets per month or quarter.

Question 47

situation analysis

Answer 47

current target market (needs, trends, growth), product review, competitors, SWOT (PESTEL, Five Forces, and VRIN).

Question 48

marketing tactics

Answer 48

the marketing program (4 P’s).

Question 49

marketing strategy

Answer 49

mission, marketing and financial objectives, target markets, and positioning.

Question 50

marketing implementation

Answer 50

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.

Question 51

marketing metrics

Answer 51

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.

Question 52

marketing-mix models

Answer 52

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.

Question 53

marketing dashboard

Answer 53

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.

Question 54

customer-performance scorecard

Answer 54

records how well a company is doing year after year.

Question 55

stakeholder-performance scorecard

Answer 55

tracks the satisfaction of various constituencies who have a critical interest in and impact on the company’s performance.

Question 56

marketing control

Answer 56

the process by which firms assess the effects of their marketing activities and programs and make necessary changes and adjustments.

Question 57

annual plan control

Answer 57

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.

Question 58

profitability control

Answer 58

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.

Question 59

efficiency control

Answer 59

checks whether there are more efficient ways to manage the sales force, advertising, sales promotion, and distribution.

Question 60

strategic control

Answer 60

each company should periodically reassess its strategic approach to the marketplace with a good marketing audit.

Question 61

marketing audit

Answer 61

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.