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MGMT 220: Marketing > Chapter 2: Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships > Flashcards

Chapter 2: Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships Flashcards

1
Q

Strategic planning

A

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

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2
Q

The annual and long-range plans

A

deal with the company’s current businesses and how to keep them going

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3
Q

the strategic plan

A

involves adapting the firm to take advantage of opportunities in its constantly changing environment.

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4
Q

At the corporate level, the company starts the strategic planning process by

A

defining its overall purpose and mission

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5
Q

marketing planning occurs at

A

the business-unit, product, and market levels

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6
Q

MIssion statement

A

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

Can act as an “invisible hand”

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7
Q

Purpose statement questions

A

What is our business?
Who is the customer?
What do consumers value?
What should our business be?

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8
Q

Business portfoliio

A

Collection of businesses and products that make up the company

THe best one’s are the ones that fit the company’s strengths and weaknesses to opportunities in the environment

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9
Q

Business portfolio planning involves two steps

A

First, the company must analyze its current business portfolio and determine which businesses should receive more, less, or no investment.

Second, it must shape the future portfolio by developing strategies for growth and downsizing.

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10
Q

Portfolio analysis

A

Management evaluates the products and businesses that make up the company.

The company will want to put strong resources into its more profitable businesses and phase down or drop its weaker ones.

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11
Q

Portfolio analysis Step 1

A

identify the key businesses that make up the company, called strategic business units (SBUs)

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12
Q

strategic business units (SBUs)

A

can be a company division, a product line within a division, or sometimes a single product or brand

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13
Q

most standard portfolio analysis methods evaluate SBUs on two important dimensions:

A

1) the attractiveness of the SBU’s market or industry

2) the strength of the SBU’s position in that market or industry

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14
Q

The Boston Consulting Group Approach (BCG)

A

a company classifies all its SBUs according to the growth-share matrix

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15
Q

Growth-share matrix

A

A portfolio-planning method that evaluates a company’s SBUs in terms of market growth rate and relative market share

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16
Q

The growth-share matrix defines four types of SBUs:

A

1) Stars
2) Cash cows
3) Question Marks
4) Dogs

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17
Q

1) Stars

A

Stars are high-growth, high-share businesses or products. They often need heavy investments to finance their rapid growth. Eventually their growth will slow down, and they will turn into cash cows.

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18
Q

2) Cash cows

A

Cash cows are low-growth, high-share businesses or products. These established and successful SBUs need less investment to hold their market share. Thus, they produce a lot of the cash that the company uses to pay its bills and support other SBUs that need investment.

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19
Q

3) Question Marks

A

Question marks are low-share business units in high-growth markets. They require a lot of cash to hold their share, let alone increase it. Management has to think hard about which question marks it should try to build into stars and which should be phased out.

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20
Q

4) Dogs

A

Dogs are low-growth, low-share businesses and products. They may generate enough cash to maintain themselves but do not promise to be large sources of cash.

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21
Q

Once it has classified its SBUs, the company must determine what role each will play in the future. It can pursue one of four strategies for each SBU.

A

1) It can invest more in the business unit to build its share.
2) Or it can invest just enough to hold the SBU’s share at the current level.
3) It can harvest the SBU, milking its short-term cash flow regardless of the long-term effect.
4) Finally, it can divest the SBU by selling it or phasing it out and using the resources elsewhere.

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22
Q

Problems with Matrix Approaches

Limitations:

A

They can be difficult, time consuming, and costly to implement.

Management may find it difficult to define SBUs and measure market share and growth

these approaches focus on classifying current businesses but provide little advice for future planning.

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23
Q

Product /Market expansion grid

A

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

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24
Q

Market penetration

A

making more sales to current customers without changing its original products

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25
Q

Market development

A

Company growth by identifying and developing new markets for its current products

For instance, managers could review new demographic markets.

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26
Q

Product development

A

Company growth by offering modified or new products to current markets

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27
Q

Diversification

A

starting up or buying businesses beyond its current products and markets

28
Q

Why a firm would downsize?

A

A firm may have grown too fast or entered areas where it lacks experience.

The market environment might change, making some products or markets less profitable.

Finally, some products or business units simply age and die.

29
Q

The company’s strategic plan establishes

A

what kinds of businesses the company will operate and its objectives for each.

30
Q

Marketing plays a key role in the company’s strategic planning in several ways.

A

First, marketing provides a guiding philosophy—the marketing concept—that suggests the company strategy should revolve around creating customer value and building profitable relationships with important consumer groups.

Second, marketing provides inputs to strategic planners by helping to identify attractive market opportunities and assessing the firm’s potential to take advantage of them.

Finally, within individual business units, marketing designs strategies for reaching the unit’s objectives. Once the unit’s objectives are set, marketing’s task is to help carry them out profitably.

31
Q

Value chain

A

Series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firms products

32
Q

Value delivery network

A

Network composed of the company suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value

33
Q

Managing Marketing Strategies and the Marketing Mix

A

Customers in the middle (center)

34
Q

Marketing strategy

A

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

The company decides which customers it will serve (segmentation and targeting) and how (differentiation and positioning). It identifies the total market and then divides it into smaller segments, selects the most promising segments, and focuses on serving and satisfying the customers in these segments.

35
Q

Market Segmentation

A

Consumers can be grouped and served in various ways based on geographic, demographic, psychographic, and behavioural factors

36
Q

Market Segmentation definition

A

The process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviours and who might require separate marketing strategies or mixes

37
Q

Market segment

A

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

38
Q

Marketing targeting (AKA targeting)

A

Evaluating each market segment’s attractiveness and selecting one or more segments to enter

A company should target segments in which it can profitably generate the greatest customer value and sustain it over time.

39
Q

Positioning

A

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

40
Q

Differentiation

A

actually differentiating the company’s market offering to create superior customer value

41
Q

Marketing mix

A

the set of tactical marketing tools that the firm blends to produce the response it wants in the target market

The marketing mix consists of everything the firm can do to engage consumers and deliver customer value. The many possibilities can be collected into four groups of variables—the four Ps

42
Q

Product

A

the goods-and-services combination the company offers to the target market. Thus, a Ford Escape consists of nuts and bolts, spark plugs, pistons, headlights, and thousands of other parts.

43
Q

Price

A

the amount of money customers must pay to obtain the product. For example, Ford calculates suggested retail prices that its dealers might charge for each Escape

44
Q

Place

A

includes company activities that make the product available to target consumers. Ford partners with a large body of independently owned dealerships that sell the company’s many different models.

45
Q

Promotion

A

refers to activities that communicate the merits of the product and persuade target customers to buy it.

46
Q

Four A’s

A

Acceptability
Affordability
Accessibility
Awareness

47
Q

Managing the marketing process requires the five marketing management functions

A

analysis, planning, implementation, organization, and control

48
Q

SWOT analysis

A 
the company’s overall 
strengths  (S), 
weaknesses  (W), 
opportunities (O),
threats (T)
49
Q

Strengths include

A

internal capabilities, resources, and positive situational factors that may help the company serve its customers and achieve its objectives.

50
Q

Weaknesses include

A

internal limitations and negative situational factors that may interfere with the company’s performance

51
Q

Opportunities include

A

are favourable factors or trends in the external environment that the company may be able to exploit to its advantage.

52
Q

Threats

A

unfavourable external factors or trends that may present challenges to performance.

53
Q

Marketing Planning

A

involves choosing marketing strategies that will help the company attain its overall strategic objectives

54
Q

A marketing strategy consists

A

of specific strategies for target markets, positioning, the marketing mix, and marketing expenditure levels

55
Q

Market implementation

A

the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives

56
Q

Whereas marketing planning addresses

A

the what and why of marketing activities, implementation addresses the who, where, when, and how.

57
Q

chief marketing officer (or CMO)

A

This person heads up the company’s entire marketing operation and represents marketing on the company’s top management team

58
Q

Modern marketing departments can be arranged in several ways. The most common form of marketing organization is the

A

functional organization

59
Q

Marketing control

A

evaluating results and taking corrective action to ensure that the objectives are attained.

60
Q

Marketing control involves four steps

A

Management first sets specific marketing goals. It then measures its performance in the marketplace and evaluates the causes of any differences between expected and actual performance. Finally, management takes corrective action to close the gaps between goals and performance.

61
Q

Operating control

A

involves checking ongoing performance against the annual plan and taking corrective action when necessary.

62
Q

Strategic control

A

involves looking at whether the company’s basic strategies are well matched to its opportunities

63
Q

marketing return on investment (or marketing ROI)

A

the net return from a marketing investment divided by the costs of the marketing investment. It measures the profits generated by investments in marketing activities.

64
Q

The main components of a marketing plan

A

are the executive summary, the current marketing situation, threats and opportunities, objectives and issues, marketing strategies, action programs, budgets, and controls.

65
Q

A​ company’s value chain is only as strong as its weakest link. What should a company do to properly gauge the strength of its links and continually​ improve?

A

Examine how well each group performs its work of adding customer value.

66
Q

One useful device for identifying growth opportunities is the​ product/market expansion​ grid, which includes which of the following​ strategies?

A

Market​ penetration, market​ development, product​ development, and diversification

MGMT 220: Marketing (10 decks)

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