Chapter 2

Question 1

Strategic planning

Answer 1

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

Question 2

Mission statement

Answer 2

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

Question 3

Strategic business units (SBUs)

Answer 3

The key businesses that make up a company

Question 4

Business portfolio

Answer 4

The collection of businesses and products that make up the company

Question 5

Portfolio analysis

Answer 5

The process by which management evaluates the products and businesses that make up the company

Question 6

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

Product/market expansion grid

Answer 7

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

Question 8

Market penetration

Answer 8

Company growth by increasing sales of current products to current market segments without changing the product

Question 9

Market development

Answer 9

Company growth by identifying and developing new market segments for current company products

Question 10

Product development

Answer 10

Company growth by offering modified or new products to current market segments

Question 11

Diversification

Answer 11

Company growth through starting up or acquiring businesses outside the company’s current products and markets

Question 12

Value chain

Answer 12

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

Question 13

Value delivery network

Answer 13

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 14

Marketing strategy

Answer 14

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

Question 15

Market segmentation

Answer 15

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

Question 16

Market segment

Answer 16

A group of consumers who respond in a similar way to a given set of marketing efforts

Question 17

Market targeting

Answer 17

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

Question 18

Positioning

Answer 18

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

Question 19

Differentiation

Answer 19

Actually differentiating the market offering to create superior customer value

Question 20

Marketing mix

Answer 20

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

Question 21

SWOT analysis

Answer 21

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

Question 22

Marketing implementation

Answer 22

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

Question 23

Marketing control

Answer 23

Measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved

Question 24

Return on marketing investment

Answer 24

The net return from a marketing investment divided by the costs of the marketing investment