Chapter 2

Question 1

What is strategic planning?

Answer 1

The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.

Question 2

What is a mission statement?

Answer 2

A statement of the organization’s purpose - what it wants to accomplish in the larger environment.

Question 3

What are 4 steps in strategic planning?

Answer 3

1) Defining the company mission
2) Setting company objectives and goals
3) Designing the business portfolio
4) Planning marketing and other functional strategies

Question 4

What is business portfolio?

Answer 4

The collection of business and products that make up the company.

Question 5

What is portfolio analysis?

Answer 5

The process by which management evaluates the product and business that make up the company.

Question 6

What is a growth-share matrix?

Answer 6

A portfolio planning method that evaluates a company’s strategic business units (SBUs) in terms of its market growth rate and relative market share. SBUs are classified as stars, cash cows, question marks, or dogs.

Question 7

What is product-market expansion grid?

Answer 7

A portfolio planning tool for which identifying company growth opportunities through market penetration, market development, product development, or diversification.

Question 8

What is market penetration?

Answer 8

A strategy for company growth by increasing sales of current products to current market segments without changing the product.

Question 9

What is market development?

Answer 9

A strategy for company growth by identifying and developing new market segments for current company products.

Question 10

What is product development?

Answer 10

A strategy for company growth by offering modified or new products to current market segments.

Question 11

What is diversification?

Answer 11

A strategy for company growth through starting up or acquiring business outside the company’s current products and markets.

Question 12

What is downsizing?

Answer 12

Reducing the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy.

Question 13

What is value chain?

Answer 13

The series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products.

Question 14

What is value delivery network?

Answer 14

The network made up of the company, suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system.

Question 15

What is marketing strategy?

Answer 15

The marketing logic by which the company hopes to create customer value and achieve profitable customer relationships.

Question 16

What is market segmentation?

Answer 16

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate products or market programs.

Question 17

What is market segment?

Answer 17

A group of customers who respond in similar ways to a given set of marketing efforts.

Question 18

What is market targeting?

Answer 18

The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.

Question 19

What is positioning?

Answer 19

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of consumers.

Question 20

What is differentiation?

Answer 20

Actually differentiating the market offering to create superior customer value.

Question 21

What is marketing mix?

Answer 21

The set of controllable, tactical marketing tools - product, price, place, and promotion - that the firm blends to produce the response it wants in the target market.

Question 22

What is marketing implementation?

Answer 22

The process that turns marketing strategies and plans into marketing actions to accomplish strategic marketing objectives.

Question 23

What is marketing control?

Answer 23

The process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved.

Question 24

What is a return on marketing investment?

Answer 24

The net return from a marketing investment divided by the cost of marketing investment.