Chapter 2: Company And Marketing Strategy

Question 1

Explain “strategic planning “

Answer 1

Strategic planning is the process of design and maintaining a strategic dit between the companies goals and objectives and its capabilities and its changes marketing opportunities.

Question 2

Explain the steps in strategic planning:

Answer 2

First: defining the companies mission:answers the following: what business are we in? And what are we doing?
-Strategic business units might have a mission statement.
-the mission statement identifies the business in terms of satisfaction basic customer needs.
Second:setting the companies goals and objectives:there are a)marketing objectives and b)business objectives. a) marketing objectives such as (increasing the market share-create local partnership-increase promotion). b)business objectives such as:(build strong profitable customer relationships-invest in research-improve profits).
Third:design the business portfolio: the business portfolio is a collection of businesses and products/services that make up the company.
Finally: it planning marketing and other functional strategies.

Question 3

Strategic business units (SBU) can be :

Answer 3

1) company division
2) product line within a division
3) single product or brand

Question 4

What’s “portfolio matrix”?

Answer 4

Portfolio matrix is a way of defining the potential of a product to make profits for the company by placing it in the matrix based on the market share and the growth of the product

Question 5

Explain the portfolio matrix (star-?-cashcow-dog)

Answer 5

Dog:products or services that have small shares of the market and small growth.
Cash cows: products or services that have a large market shares and low growth,which means large returns for little investment.
Star:products or services that have a high market share and high growth.which means they can attract investment or help the business gain or maintain a dominance position in a space of a large market growth.
Question mark:products or services that that don’t have significant growth but unlike dogs they have high market shares which means with analysis and the right investment question marks could become cash cows or even stars

Question 6

Explain the strategies for resource allocation:

Answer 6

A) build: provide financial resources if a strategic business unit has the potential to be a star
B)hold:preserve(protect)market share is the strategic business unit is a successful cashcow
C)harvest:increase short term cash return.(appropriate for all sbu’s except star)
D)divest:get rid of strategic business units that have low growth and low market shares

Question 7

What are the problems with the portfolio matrix approach?

Answer 7

1. difficult to find the strategic business units and measuring the market shares and growth
2. time consuming
3. focuses on current businesses not future planning
4. expensive

Question 8

Explain the product/market expansion grid:

Answer 8

The product/market expansion grid is the tool used for identifying company growth opportunities through market penetration,market development,product development or diversification

Question 9

What’s “market penetration “?

Answer 9

Marketing penetration is a growth strategy..increasing sales to a current market segment without changing the product.

Question 10

What’s “market development “ ?

Answer 10

Market development is a growth strategy that identifies and develops new market segments for current products

Question 11

What’s “product development”?

Answer 11

Product development is a growth marketing strategy that offers new or modified products for current market segment

Question 12

What’s “diversification”?

Answer 12

Diversification is a growth marketing strategy through starting up new businesses outside the companies current products and markets

Question 13

What’s “downsizing”?

Answer 13

Downsizing is the reduction (cutting) of the business portfolio by eliminating products or services that are mo longer profitable,or no longer fit the companies overall strategy

Question 14

“Marketors alone cannot create customer superior value” explain how

Answer 14

Marketers alone cannot create customer superior value,they must work with other departments to form and effective internal company value chain,and with other companies in the marketing system to create an external value delivery network.

Question 15

“Value chain” explain it:

Answer 15

Value chain is a business model that describes all the activities needed to create a product or service

Question 16

“Value delivery network” explain it:

Answer 16

Value delivery network is a part of the supply chain that includes all the direct participants included in production-distribution-marketing-customer service.

Question 17

What’s marketing segmentation?

Answer 17

The division of the market to different groups of people with different needs and characteristics and behaviors and who might need separate products or marketing mixes

Question 18

What is a market segment?

Answer 18

A group of individuals that share the same needs behaviors characteristics grouped together for marketing purposes