Chapter 2 - Marketing Strategy

Question 1

Strategic Planning

Answer 1

• Long term (usually 1 or more years)
• Done by top management w/ conceptual skills
• Matches an organization’s resources and capabilities to its market opportunities for long-term growth and survival.

Question 2

Tactical Planning

Answer 2

• Short term
• Middle Management w/ human skills.
• Developing detailed plans for strategies and tactics for the short term that support the long term plan.

Question 3

Operational Planning

Answer 3

• Day to Day Planning

- Supervisory Management w/ technical skills

Question 4

Business Plan

Answer 4

A plan that includes the decisions that guide the entire organization.

Question 5

SBU’s

Answer 5

• Strategic Business Units
• Individual units within the firm that operate like separate businesses, with each having its own mission, business objectives, resources, managers, and competitors.

Question 6

Contingency Planning

Answer 6

• A backup plan
• Reactive (If x, then y)
• Proactive (preventative)
• Logical approach is proactive, but reactive may be better.

Question 7

Cross-functional planning

Answer 7

Managers work together in developing tactical plans for each functional area in the firm so that each plan considers the objectives of the other areas.

Question 8

Marketing Strategy

Answer 8

1. SWOT Analysis (strengths and weaknesses)
2. Mission Statement (fundamental purpose)
3. Segment/Target (break market up and decide on target customer)
4. Positioning (About the image and mind of the customer)
5. Marketing Mix (4 P’s = last step)

Question 9

Mission Statement

Answer 9

A formal statement in an organization’s strategic plan that describes the overall purpose of the organization and what it intends to achieve in terms of its customers, products, and resources.

• Should guide all planning and actions
• Important to identify the industry you’re in.

Question 10

Business Portfolio

Answer 10

The group of different products or brands owned by an organization and characterized by different income-generating and growth capabilities.

Question 11

Portfolio analysis

Answer 11

A tool for evaluating a firm’s business mix and assessing the potential of an organization’s strategic business units.

Question 12

BCG Growth-Market Share Matrix

Answer 12

• Focuses on the potential of a firm’s existing successful products to generate cash that the firm can then use to invest in new products.
• Helps decide if keep or rid a customer
• Market Growth Rate & Market Share
  1. High, High = Stars (large revenue)
  2. High, Low = Question Marks (failed to compete)
  3. Low, High = Cows (competitors don’t enter)
  4. Low, Low = Dogs (specialized products)

Question 13

SWOT Analysis

Answer 13

• Strengths and weaknesses are internal

- Opportunities and threats are external

Question 14

Internal Environment

Answer 14

The controllable elements inside an organization including its people, facilities, and how it does things that influence the operations of the organization.

Question 15

External Environment

Answer 15

The uncontrollable elements outside of an organization that may affect its performance either positively or negatively.

Question 16

Competitive Advantage

Answer 16

The ability of a firm to outperform the competition, thereby providing customers with a benefit the competition can’t.

Question 17

Distinctive Competency

Answer 17

A superior capability of a firm in comparison to its direct competitors.

Question 18

Differential Benefit

Answer 18

Properties of products that set them apart from competitors’ products by providing unique customer benefits.

Question 19

Marketing Myopia

Answer 19

• To define self by product

- Very mindset, don’t consider the industry that they are in. Only focus on the product at hand.

Question 20

Positioning

Answer 20

• The image and mind of the customer.

- What comes to mind.

Question 21

Product-Market Growth Matrix

Answer 21

4 strategies based on the market and product emphases (existing and new):

1. EE = MARKET PENETRATION
2. EN = PRODUCT DEVELOPMENT
3. NE = MARKET DEVELOPMENT
4. NN = PRODUCT DIVERSIFICATION

Question 22

Market Penetration

Answer 22

Growth strategies designed to increase sales of existing products to current customers, nonusers, and users of competitive brands in served markets.

Question 23

Market Development

Answer 23

Growth strategies that introduce existing products to new markets.

Question 24

Product Development

Answer 24

Growth strategies that focus on selling new products in served/existing markets.

Question 25

Diversification

Answer 25

Growth strategies that emphasize both new products and new markets.

Question 26

Porter’s 5 Forces Model

Answer 26

1. Supplier Power
2. Substitutes
3. Buyer Power
4. New Entrants
5. Competition

Question 27

The Value Chain

Answer 27

1. Customer Needs
2. Supplies
3. Operations
4. Channel Mgmt
5. Communication
6. Service
7. Value Pkg. to customer

Question 28

Situation Analysis

Answer 28

• First part of a marketing plan.

- Description of the firm’s current situation including internal and external environments.

Question 29

Marketing Budget

Answer 29

A statement of the total amount to be spent on marketing and the allocation of money for each activity under the marketer’s control.

Question 30

Controlling the marketing plan

Answer 30

Measuring actual performance, comparing it to planned performance and making changes.

Question 31

Trend analysis

Answer 31

An analysis of past industry or company sales data to determine patterns of change that may continue in the future.

Question 32

Marketing Audit

Answer 32

A comprehensive review of a firm’s marketing function.