chapter 2 Flashcards
is a clear, concise, and enduring statement of the reasons for an organization’s exis-
tence
mission
Often referred to as its core purpose, is a long-term goal that provides com-
pany employees and management with a shared sense of purpose, direction, and opportunity
mission
Good mission statements have five major characteristics.
- They focus on a limited number of specific goals.
- They stress the company’s major policies and values.
- They define the major markets that the company aims to serve.
- They take a long-term view.
- They are as short, memorable, and meaningful as possible.
define it as “the shared experiences, stories, beliefs, and norms that characterize an organization
corporate culture
strategic business unit (SBU) has three characteristics:
(1) It is a single business, or a collection of related businesses, that can exist separately from the rest of the company
(2) It has its own set of competitors
(3) It has a manager responsible for strategic
planning and profit performance, who controls most of the factors affecting profit.
involves SBUs with fairly narrow assortments consisting of one or a few
product lines.
specialized portfolio
involves SBUs with fairly broad assortments containing multiple product lines
diversified portfolio
involves choosing a well-defined market in which the company will compete and determining the value it intends to create in this market.
Strategy
also called the marketing mix, make the
company’s strategy come alive: They define the key aspects of the offering developed to create value in a given market
Tactics
Marketing strategy incorporates two key components: the target market in which the company will
compete and the value proposition for the relevant market entities—the company, its target customers,
and its collaborators.
The target market in which a company aims to create and capture value comprises five factors: the customers whose needs the company intends to fulfill, the competitors that aim to fulfill the same needs of the same target customers, the collaborators that
help thecompany fulfill the needs of customers, the company that develops and manages the offering, andthe context that will affect how the company develops and manages the offering.
A successful offering must create superior value not only
for target customers but also for the company and its collaborators. Accordingly, when developing
market offerings for the relevant entities in the market exchange, a company needs to consider all three
types of value: customer value, collaborator value, and company value
Developing a Value Proposition.
the worth of an offering to its customers and hinges on customers’ assessment of how well an offering fulfills their needs
Customer value
the worth of an offering to the company’s collaborators. It sums up all benefits and costs that an offering creates for collaborators and reflects how attractive an offering is to collaborators
Collaborator value
is the worth of the offering to the company. The value of an offering is defined relative to all benefits and costs associated with it, its affinity with the company’s goal(s), and the value of other opportunities that could be pursued by the company
Company value
balances the value for customers, collaborators, and the company
Optimal value proposition
The value of the offering is connected across the three entities, such that it creates value for target customers and collaborators in a way that enables the company to achieve its strategic goals.
Optimal value
the actual good that the company deploys in order to fulfill a particular customer need
Market offering
Marketing managers have seven tactics at their disposal to develop an offering that creates market value: product, service, brand, price, incentives, communication, and distribution. Also called the:
Marketing mix
these seven attributes (also referred to as tactics or Ts) represent the combination of activities required to transform the market offering’s strategy into reality
Marketing mix
7 Tactics (Marketing Mix)
Product
Service
Brand
Price
Incentives
Communication
Distribution
The first P (product) comprises product, service, and brand; price remains the second P; the third P (promotion) is expanded to incentives and communication; and distribution replaces the fourth P (place).
The two key aspects of a company’s business model:
strategy and tactics
The ultimate purpose is to facilitate the development of a viable business model that can enable the company to achieve market success
Value map
can be thought of as a visual representation
of the key components of a company’s business model and the ways in which they are related to oneanother.
Market Value Map
which articulates the company’s goal and delineates a course of action to reach this goal, is the backbone of marketing planning
action plan
GSTIC
Goal-Strategy-Tactics-Implementation-Control
describes the company’s ultimate criterion for success; it specifies the end result that the company plans to achieve. The two components of the goal are its focus, which defines the metric (such as net income) used to quantify the intended result of the company’s actions, and the performance benchmarks that signal movement toward the goal and define the time frame
goal
provides the basis for the company’s business model by delineating the company’s target market and describing the offering’s value proposition in this market.
strategy
carry out the strategy by defining the key attributes of the company’s offering. These seven tactics—product, service, brand, price, incentives, communication, and distribution are the tools used to create value in the company’s chosen market.
Tactics
consists of the processes involved in readying the company’s offering for sale, includes developing the offering and deploying the offering in the target market.
Implementation
measures the success of the company’s activities over time by monitoring the company’s performance and the changes in the market environment in which the company operates.
Control
The goal’s focus defines the desired outcome of the company’s activities, an important criterion of a firm’s success. Based on their focus, goals can be monetary or
strategic.
are based on such outcomes as net income, profit margins, earnings per share, and return on investment
Monetary goals
are centered on nonmonetary outcomes that are of strategic importance to the
company.
Strategic goals
set out the specific milestones to be achieved as the company moves toward its ultimate goal
Quantitative benchmarks
identify the time frame for achieving a specific quantitative or qualitative benchmark
Temporal benchmarks
which the company aims to create value is defined by five factors: customers whose needs will be fulfilled by the offering, competitors whose offerings aim to fulfill the same needs of the same target customers, collaborators that help the company meet the needs of target
customers, the company managing the offering, and the context in which the company operates.
target market
defines the benefits and costs of the market offering with which the company plans to meet target customers’ needs. The three components of the value proposition are customer value, collaborator value, and company value. The value proposition is often complemented by a positioning statement that highlights the key benefit(s) of the company’s offering in a competitive context.
value proposition
Implementation consists of three key components:
development of the company resources, development of the offering, and commercial deployment of the offering.
entails securing the competencies and assets needed to implement the company’s offering.
Resource development
transforms the company’s strategy and tactics into an actual good that will be offered to target customers
Development of the offering
the logical outcome of offering development and establishes the company’s offering in the market.
Commercial deployment
Controls have two key components:
evaluating the company’s performance and monitoring the market environment.
It is a tangible outcome of a company’s strategic planning process, outlining the company’s ultimate goal and the means by which it aims to achieve this goal
marketing plan
be regarded as the “elevator pitch” for the marketing plan. It presents a streamlined and succinct overview of the company’s goal and the proposed course of
action.
executive summary
provides an overall evaluation of the environment in which the company operates, as well as of the markets in which the company competes and/or will compete.
situation overview
section forms the core of the marketing plan
G-STIC
streamline the marketing plan by keeping tables, charts, and appendices in a distinct section to separate the less important and/or more technical aspects of the plan from the essential information.
Exhibits
a comprehensive examination of the marketing aspect of an offering or a company’s marketing department.
marketing audit
An effective marketing audit should be comprehensive, systematic, unbiased, and periodic.
