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LOMA 320- ISTAR > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

What are the 4 interrelated activities are required for the management process (4 fundamentals)

A
  1. planning- setting and adjusting goals
  2. organizing- coordinating resources
  3. implementing - executing plans
  4. controlling- monitoring and correcting.
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2
Q

define the process of planning

A

this is the process where the company evaluates oppertunities, assess resources and creates strategies in order to reach a desired future.
requires access to accurate and relevant information that can be measured against strategic and tactical plans.

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3
Q

What is a company’s mission statement?

A

a formal written statement of a company’s fundamental purpose or reason for being.
- should be broad to cover a;; business engagements, but specific enough to focus activities.

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4
Q

A mission statement is the basis for a company’s corporate strategic planning. What are corporate plans?

A

they set the tone and direction for employee efforts across the company and in turn, each department creates plans to guide departmental activities towards corporate goals.

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5
Q

The marketing department conducts strategic marketing planning to define long-term marketing goals. Define Marketing plans

A

These are documents that state customer specific, product-specific, or market-specific marketing objectives and describe how the company hopes to achieve those objectives.
- must align with strategies in the corporate business plan,

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6
Q

What are some typical questions are asked to build the foundation of a marketing plan?

A
  1. how will the company compete with similar companies for its target customers
  2. how will the company handle the daily activities needed to cary out its marketing plans?
  3. how will the company execute on priority objectives that support meeting the needs of target customers and improving the customer experience.
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7
Q

Marketing plans often include what components?

A 
executive summary
situation analysis 
goals/objectives
marketing strategies
tactical/action programs
evaluation 
control methods.
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8
Q

define executive summary

A

this briefly states the plan’s purpose and recommendations.

- brief overview of what the plan proposed to do, Costs, and how results are measured.

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9
Q

True or False: a company that communicates its marketing plan to all affected employees before implementing the plans has a much better change of its plans being successful?

A

Yes, specially when the employees know what tasks they will be asked to preform and when those tasks needs to be completed.

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10
Q

To gather the information needed to create marketing plans, companies analyze environmental factors and their own strengths and weaknesses to help them form a clearer picture of their goals. Which two types of analysis to they use?

A
  1. situation analysis (which includes SWOT and PEST)
  2. business portfolio analysis (includes the market share/market growth matrix) and the market attractiveness/business strength matrix
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11
Q

Define what happens in situational analysis

A

a company looks at its environment for factors that are likely to affect company’s marketing activities and actions.

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12
Q

Situational analysis includes what 3 main parts?

A
  1. environmental analysis - examination of events and forces outside the company that identify potential threats
  2. environmental forecast - info from analysis to make forecast about trends that affect future business
  3. internal assessment - examines company’s activities and ability to respond to threats and opportunities in the environments.
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13
Q

What is SWOT analysis?

Strengths, weakness, opportunities, and threats

A

a tool that allows a business to assess its strengths, weaknesses and abilities to respond to potential opportunties and threats in the environment.

  • used to help evaluate the overall strong and weak aspects of the company to find marketing oppertunities
  • used to identify the best possible places to use resources to enter a strategic window before it closes.
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14
Q

What is a strategic window in the world of SWOT analysis?

A

this exists when an optimum fit exists between a company’s distinct strength and the key requirements of a marketing opportunity.

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15
Q

What are the key environmental areas to monitor in markerting strategies?

A 
economy 
competition
society
regulation
technology
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16
Q

What is PEST analysis?

Political Economic Social and Technological

A

another tool used for gathering and organizing environmental information which examinates Political Economic Social and Technological factors in the external environement that can benefit or harm the company, its products, competitors, or the industry in general.

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17
Q

What are some examples of political factors, which can affect how a company operates

A

tax policies
laws and regulations
trades and restrictions and tariffs
political instability

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18
Q

What are some economic factos, which can affect the pirchasing power of consumers and the company’s cost of capital ?

A

interest rates
inflation rates
employment rates
exchange rates

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19
Q

What are some social factors, which are demographic and cultral factors that can affect consumer needs?

A

age distribution
career attitudes
population growth
health consciousness

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20
Q

What are some technological factors, which can affect barriers to entry service capacity and outsourcing decisions?

A
  1. automation
  2. rates of technological change
  3. research and developmental activity.
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21
Q

What is business portfolio analysis?

A

companies use it to analyze the strength and weakness of their separate business units and discover what contributions each units can make to the company, based on current market trends.

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22
Q

In order to conduct a business portfolio analysis, a company must identify its strategic business units (SBU). What is this ?

A

its an area of business that is distinct from other areas wihtin a company and generally

  1. operates as its own profit center
  2. own set of customers and competitors
  3. own management and a distinct mission statement and goals
  4. own marketing strategy.
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23
Q

True or False. An SUB has seperate profit centers, and cost of certain opperations. IT works as a seperate unit completely/

A

False, it usually will share the costs of certain business operations (HR, IT, Finance) to help be more cost efficient.

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24
Q

Business portfolio analysis allows company planners to assess each units’ potential for what?

A
  1. generating financial resources
  2. consuming finanical resources from the comapny.
  • this is used to help comapnies limit support/shut down SBU that are finanically drianning.
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25
Q

What are the two most commonly used methods of business portfolio analysis?

A
  1. Market share/market growth matrix- which places each business unit or product line in one of 4 quadrants on a matrix based on 1) current growth rate of the market the business unit competes in. and 2) the business units’ relative share of the market compare to its’ largest competitor.
  2. Market attractiveness/business strength matrix- which places each business unit or product line into one of more of 9 matrix cells based on two complex set of criteria. 1) represents the attractiveness of the SBU’s market and 2) represents the SBU’s business strenghts.
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26
Q

Which companies originated the 1) Market share/market growth matrix- and 2) the Market attractiveness/business strength matrix-

A

1) Bostons consulting Group

2) General Electric and McKinsey & Company

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27
Q

In relation to the Market Share/Market Growth matrix chart. Define the business unit or product line assessment known as a

  1. Star
  2. Cash Cow
  3. Question mark
  4. Dog
A
  1. high market share in a high-growth market. $$$ and able to fund their own cash needs. May require additional coorporate resources.
  2. high market share in low-growth market. Generate more profit than they need to keep market share. Income to cover corporate overhead, and fund other business units.
  3. low market share in high growth market. Used when company tries to enter growing markets. high growth potential but need more cash than they generate.
  4. low market share in low-growth market. Generate enough money to cover their own expenses, unlikely to develop or contribute any profitability.
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28
Q

How do most SBU’s begin, and what is their journey on the table?

A

start as ? then grow into stars, mature as cash cows, and spend the end of their life cycles as dogs before they are sold or discontinued.

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29
Q

Comapanys can use the results from the market share/market growth matrix along with the expected potential for future growth to set strategies for their business units. What are 4 basic strategies?

A
  1. build strategy - increases unit market share. works for SBUs with low market shares in markets with high growth potentials. (?’s)
  2. hold strategy - company invests only enough to keep promotional activites and customer service. Works for SBUs with high market shares in low growth markets
  3. harvest strategy - company tries to take advantage of a business units’ short-term earnings and cashflow. Works best for business units with weak growth potential.
  4. withdrawal strategy. - company decides to sell or discontinue its SBUs with the weakest growth and investment potential. (Dogs)
30
Q

What is a major criticism of the market share/market growth matrix ?

A

too simplistic. does address any business units that might hold a middle market share position.
What if market growth rates change.

31
Q

How is the Market Attractiveness/business strength matrix table divided?

A

There are 9 cells, which are divided into 3 zones. Each of which reflects different growth and investment opportunities.
Those located in Cells A - represent good investment and growth oppertunities. Those in B cells represent average oppertunities, and those in C cells have little growth or investment potential.

A company will determine which factors are relevant for a particular business, rate them, weight each of them, and then combine the weights and ratings to determine the overall index rating for the business units.

32
Q

What are some examples of market attractiveness?

A
  1. market size
  2. market growth rate
  3. government regulation
  4. market stability
  5. competitive intensity
  6. technological requirements.
33
Q

What are some business strenghts?

A
  1. price competitiveness
  2. product quality
  3. customer loyalty
  4. marketing skills
  5. sales growth rate
  6. sales growth rate
  7. relative cost advantages
  8. technollogical resources
  9. financial resources
34
Q

T or False: in strategic marketing planning, a company sets its major long-term marketing objectives and chooses the overall strategies it will follow to reach them? Why/How?

A

True- it focuses on marketing activites. It regularly reviewed long-range objectives and strategies to ensure they are still valid and updates the objectives and strategies to meet current conditions.

35
Q

How often do companies review and update their objectives and strategies?

A

quarterly or semiannually.

36
Q

How does marketing strategies work? and what are the 4 basic phases of marketing strategies planning?

A

they focus on how to best use the company’s marketing mix to accomplish marketing objectives.
Phases:
1) setting marketing objectives
2. developing marketing strategies
3) selecting target markets
4) determining financial resources needs.

37
Q

What are marketing objectives?

A

specific written goals that a company wants to achieve using marketing efforts and activites. Should be SMART objectives.

38
Q

What are SMART objectives?

A 
Specific- clear and unambiguous 
Measurable- capable of being evaluated
Attainable - capable of being achieved. 
Relevant- important to the company 
Time- bound- capable of being completed by a specific end date.
39
Q

True or False.
A marketing plan often sets a primary marketing objective and a related secondary objectives. The primary objectives contribute to accomplishing the secondary objective?

A

False:

The secondary objectives contribute to accomplishing the primary objective

40
Q

What are some measurable factor examples that make be used as part of markerting objectives?

A

total premium collected, persistency, market share and number of new customers insurerd.

41
Q

What are marketing strategies?

A

a company’s plan for reaching its marketing objectivves.

42
Q

What is a marketing penetration strategy?

A

a corporate growth strategy in which a company aims to increase sales of current products to current markets.

43
Q

Are marketing strategies or marketing objectives more specific?

A

marketing strategies are more specific.. They explain the actions needed to achieve the objective.

44
Q

what are target markets?

A

a specific segment of a larger market.

45
Q

How can a company enxure that it picks the best target market? Which 3 questions should it be asking its self?

A
  1. does this market have the oppertunity for an additional entrant or is it already saturated?
  2. Does this market fir in well with out overall corporate mission and goals?
  3. do the individuals in this target market need our products or services?
46
Q

Companies usually use of of two general approaches to budgeting called;

  1. Bottom-up approach to budgetting
  2. top-down approach to budgeting

Define these

A
  1. marketing Managers communicated to sr. management 1) the amount of resources they need and 2) when they need those tresources. Sr management then allocates the funds.
  2. Sr management allocates a specified amount of the company’s budget to marketing. MArketing managers then divide the funds they receive from Sr. management to cover all individual marketing acitivies.
47
Q

What is Tactical marketing planning?

A

translate strategic marketing decisions into a set of specific, details, action-orienterd activities for a company to follow to reach its tagert markets and satisfy customer needs. Used for day-to-day activites and extends 1-2 years in the future.

Corporate strategic planning > strategic marketing planning > tactical marketing planning.

48
Q

What are some insurance tactics that may be used for trainning and supporting an insurance sales force?

A
  1. hosting a webinar to announce a new product line and its features
  2. creating and implementing a LinkdIn and facebook campaign to support sales intermediarties
  3. hosting a product kickoff meeting to inform and mortivate the sales force.
49
Q

What is the purpose of a tractical/action plan?

A
  1. how the company will perform planned activities
  2. when and where each activity will be performed
  3. who will be responsible for performing each activity.
  4. how much an activity costs
  5. results expected from each activity
  6. the unknowns or uncertainty of each actvity
  7. how and with what frequency the company will monitor and evaluate results.
50
Q

During tactical planning, mangement may want to benchmark what activities and processes other companies or competitiors use. What does benchmarketing do?

A
  1. identifies the best outcomes that other companies have acheived for a specific activity and what practices they used to cause those outcomes
  2. attempts to replicate or surpass the best outcomes.
51
Q

Why do companies use marketing control?

What are the two primary activities?

A

to monitor the results of their marketing plans and take corrective action as needed to make sure their marketing goals are reached. They consist of two primary activities; evaluating performace and reporting results.

52
Q

What is a performance standard?

A

an ideal level of performance agaisnt which actual preformance is measured.

53
Q

Comapnies can use internal or external standards to meaasure and evaluate performance. Define the difference.

A

1) internal: a standard a company sets and is based on how the company performed in the past
2) external: standard based on outside information such as published industry-wide averages or other company’s best practices.

54
Q

True or False.

Company’s commonly use benchmarketing to judge marketing performances

A

true

55
Q

Performance standards are typically expressed in what terms?

A
  1. Units- policies or contracts sold, number of applications taken
  2. Time- number of days between application and delivery, length of relationship.
  3. Money- assets under manegement, total expenses
  4. rations- lapse rates, makert share, response rates.
56
Q

What is management by exception? What is the advance of this?

A

When managers investigate performance only if there is very good or very poor comparison to the predictoin.
This saves time by directing managers focus to potential oppertunities or problems.

57
Q

How can a company that identified a problem correct it?

A
  1. change the tactical/action programs desgined to carry out a strategy
  2. creating new ways to put tactical/action programs into action
  3. developing new products, marketing strategies or marketing goals.
  4. changing how it collects and analyzes performances data if the current way doesnt reflect true performances
  5. reviewing preformances standards to ensure they reflect challenging but obtainable goals.
  6. exploring new opportunities further.
58
Q

What is the purpose of a control tool?

A

to help managers determine if a performance standard is being met.
eg: project-balance scorecards, customer service data, sales analysis, marketing audits

59
Q

What is sales analytsis?

A

its when a company examines its sales numbers to evaluate current performances for a specific product, product line, or the company.

60
Q

How does a company conduct a sales analysis?

A

it compares its current actual sales with one or more performances measured, including

  1. forecasted sales,
  2. sales in previous years
  3. expenses incurred to generate the sales
  4. current competitor sales
  5. estimated market or sales potential for a particular geographic are or customer segment
  6. current industry sales
61
Q

how do insurance companies typically measure sales for their products?

A 
# of products sold
first year commissions, 
total face amount sold
number of new cases generated
market share
average premium per case or product unit
average policy size
62
Q

define close ratios

A

the percentage of customer contacts that results in sales numbers by region, district, producer, product, product line, customer segment, type of distrubution system, or some other factor or combination of factors.

63
Q

What is expense Analysis.

A

Insurance companies keep trac of the expenses they incur to develop, market and sell a product so that the company can effectively monitor and control costs.

64
Q

What is expenses analysis

A

this ties marketing costs to particular marketing activities, helps marketing managers decide if a cost is worth the value of the activity provides.
It can also locate possible performance problems

65
Q

In an expense analysis, marketing managers often use expense rations. define these

A

they are mathematical companions that divide the amount of expenses by a certain unit of measure, such a level of cost. Those who use this, effectively rack the numbers carefully and use the information to improve outcomes

66
Q

define profit analysis

A

compares the sales an activity fenerates with the expenses it incures to make those sales.
Helps the company figure out which activityes lose money or make money for the company.
used to measure how profitable a redion agency, sales representative, product, product line, distribution system, or customer segment is.
helps determine when to change, maintain, expand, reduce or discontinue marketing activities or operations. - long term

67
Q

define digital analytics

A

Companies who want to measure how well their website and social medical campaigns are functioning and contributing to business growth.

68
Q

What is web analytics

A

these are tools that track and report website traffic and mobile app activity which enables companies to better evaluate how well these channels contribute to business growth. Details about

  1. visitors (first and repeat.
  2. pages viewed
  3. request for product information
  4. request for price quotes
  5. purchase made through webside or app
69
Q

what is a Marketing Audit

A

it creates a system to examine and appraise its marketing environment, goals, strategies, tactical/action programs, organizational structure and personell on a very broad basis.

  • can be company wide to review strength and weaknesses
  • can be smaller scale to look at operating problems or review marketing activities.
70
Q

What are the factors that determine whether a full-scale or small scale audit needs to be done?

A
  1. company’s need for feedback on the environment and

2) how well its activities are reaching goals.

71
Q

What are some qualifications of effective reporting systems?

A

the amount and types of information that management and staff need to make reliable decisions.
- they are cost effective, accurate, flexible enough to adjust to changing information needs, and easy for managers to understand and use to evaluate performances.

LOMA 320- ISTAR (10 decks)

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