Chapter 2 -- Overview Flashcards
What is a strategic business unit (SBU)?
a subgroup of a single business or collection of related businesses within the larger organization
What are the characteristics of SBUs?
- distinct mission & target market
- control over its resources
- its own competitors
- a single business or a collection of related businesses
- plans independent of other SBUs in total organization
Draw Ansoff’s Strategic Opportunity Matrix.
See drawing
Define market penetration.
a marketing strategy that tries to increase market share among existing customers
Define market development.
a marketing strategy that entails attracting new customers to existing products
How is an Innovation Matrix different from Ansoff’s Strategic Opportunity Matrix?
Enables a company to see exactly what types of assets need to be developed and what types of markets are possible to grow into (or create) based on company’s core capabilities
Draw the Innovation Matrix.
Draw & learn meanings of core innovation, adjacent innovation, transformational innovation
What is the portfolio matrix?
a tool for allocating resources among products or SBUs on the basis of relative market share and market growth rate
What is a star?
In the portfolio matrix, a business unit that is fast-growing market leader.
What is a cash cow?
In the portfolio matrix, a business unit that generates more cash than it needs to maintain its market share
What is a problem child (question mark)?
In the portfolio matrix, a business unit that shows rapid growth but poor profit margins
What is a dog?
In the portfolio matrix, a business unit that has low growth potential and small market share
Draw the Portfolio Matrix/BCG Model.
Draw
Define marketing myopia.
Defining a business in terms of goods and services rather than in terms of the benefits customers seek
What is market opportunity analysis (MOA)?
the description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in the market segments
What are the 5 types of competitive advantages?
Cost competitive, product/service differentiation, niche, sustainable
Draw the General Electric Model.
Draw
What are the elements of a marketing plan?
Business mission statement, situation, or SWOT, analysis, objectives, marketing strategy (target market strategy, market mix), implementation & evaluation & control
What does the SWOT Analysis consist of?
Strengths, Weaknesses, Opportunities, Threats
What should you focus on when creating a SWOT analysis?
organizational resources, such as production costs, marketing skills, financial resources, company or brand image, employee capabilities, and available technology
What is environmental scanning?
collection and interpretation of information on forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan; helps ID market opportunities and threats, and provide guidelines for the design of marketing strategy
What are the three types of competitive advantages?
- cost
- product/service differentiation
- niche
How does cost leadership occur?
From obtaining inexpensive raw materials, creating an efficient scale of plant operations, designing products for ease of manufacture, controlling overhead costs, and avoiding marginal customers
Having a cost competitive advantage means being the ___ competitor in an industry while maintaining ___ profit margins.
low-cost; satisfactory
What is an experience curve?
Costs decline at a predictable rate as experience with a product increases; reflect learning by doing, technological advances, and economies of scale
What are 5 different ways that costs can be reduced?
- Experience curves
- Efficient labor
- No frills goods and services
- Government subsidies
- Product design
- Reengineering
- Production innovations
- New methods of service delivery
When does a product/service differentiation competitive advantage exist?
When a firm provides something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition
What is a niche competitive advantage?
It seeks to target and effectively serve a single segment of the market; most important for small companies with limited resources
When are niche strategies used by companies?
To serve a limited geographic market
What is a sustainable competitive advantage?
An advantage that cannot be copied by the competition (ex. Netflix)
Successful firms that engage in competitive advantage don’t imitate, they ___.
They stake out a position unique in some manner from its rivals.
Competitive advantages in the future markets are:
skills and assets; assets include patents, copyrights, locations, equipment, and technology that are superior to those of the competition; skills are functions like customer service and promotion that firms perform better than competitors
What is a marketing objective?
A statement of what is to be accomplished through marketing activities; must be consistent with and indicate the priorities of the oragnization
What are the functions of objectives?
- communicate marketing management philosophies and provide direction for lower-level marketing managers so marketing efforts are integrated and pointed in one direction
- serve as motivators
- motivate those charged with achieving objectives
- process forces executives to clarify their thinking
- form a basis for control
What should marketing objectives consist of to be effective?
- should be realistic
- should be measurable
- should be time specific
- should be compared to a benchmark
How are target markets selected?
- by appealing to the entire market with one marketing mix
- concentrating on one segment
- appealing to multiple market segments using multiple marketing mixes
What is the marketing mix?
The blend of product, place, promotion, and pricing strategies, designed to produce mutually satisfying exchanges with a target market
Which P does the marketing mix start with?
Product (product offering and product strategy)
Product includes not only the physical unit, but also….
its package, warranty, after-sale service, brand name, company image, value, etc.
What does promotion include?
advertising, public relations, sales promotion, and personal selling
What is promotion’s role in the marketing mix?
To inform, educate, persuade, and remind them of the benefits of an organization or a product
Which of the 4 Ps is the easiest to change?
the price is the most flexible of the 4 Ps and easiest to change
What is implementation?
The process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes the plan’s objectives
What does implementation involve?
detailed job assignments, activity descriptions, time lines, budgets, and lots of communications
What is one difficult part of implementation?
Acceptance of changes; people fear change because they worry they will lose something
What are 4 common reasons why marketing objectives fail?
- unrealistic objectives
- inappropriate marketing strategies
- poor implementation
- changes in the environment after the objective was specified and the strategy implemented
Why are evaluation and control important?
Evaluation entails gauging the extent to which marketing objectives have been achieved during the time period. Control provides the mechanisms for evaluating marketing results based on objectives and for correcting actions that don’t move the organization towards reaching these goals
What is marketing audit?
a thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization; helps management allocate resources efficiently and improve communication
What are the three post-audit tasks?
- audit should profile existing weaknesses, strengths, and opportunities
- ensure that the role of audit has been clearly communicated
- make someone accountable for implementing recommendations
What are the 4 characteristics of a marketing audit?
- comprehensive
- systematic
- independent
- periodic
What does effective strategic planning require?
- continual attention
- creativity
- management commitment (such as management support & participation)
What is an example of a company that uses top management’s support and participation for successful strategic planning?
