CHAPTER TWO Flashcards
Define Strategic Planning
The long-term process of developing and maintaining a strategic fit between the firm’s goals and capabilities
and it’s changing marketing opportunities in the
business environment
What are the steps in strategic planning? [4]
- Defining the company mission
- Ending company objectives and goals
- Designing the business portfolio
- Planning market and other function strategies
What is mission statement?
Mission Statement, a statement of the firm’s overall purpose
How do firms define a market-orientated mission statement? [2]
- we want the marketing concept as our marketing management orientation
- This means defining the firm based on the VALUE it brings not the products it sells
Compare Vision vs Mission vs Purpose [3]
Vision: long term plan that involves what the organization wants to become
Mission: how to achieve the vision and explanation of existence
Purpose: what your purpose is and how you’ll do it
How does a firm set its’ goals and objectives?
These objectives and goals are set in such a way that the firm’s mission can be achieved at all levels of management
Marketing __________ and programmes are then developed to facilitate the achievement of these __________ and goals
strategies
objectives
What is a business portfolio?
The collection of businesses and products that makeup the organization
A good business portfolio plays to a businesses ___________ and turns its weaknesses into ______________ in the business environment
strengths
opportunities
What two steps are involved in business portfolio? [2]
- Analyzing the current portfolio
- Developing a future portfolio using growth/downsizing strategies
What is an example of a company with strategic business units (SBUs)?
The firm: The Coca Cola Company
SBUs: Sprite, fuze tea, bonaqua, fanta etc
What is an example of a company with strategic business units (SBUs)?
The firm: The Coca Cola Company
SBUs: Sprite, fuze tea, bonaqua, fanta etc
A firm is often made up of many businesses, called
________ ___________ ________(SBUs). An SBU may be a ___________ of the firm, a _____________ line or a single product or brand
Strategic
Business
Units
division
product
True or false, SBU’s CAN’T have their own mission statement and objectives
False, Some SBUs may even have their own mission statement and objectives
What can firms use to analyze the success of their SBU’s using the?
Boston Consulting Group growth-share matrix
What are the problems with the BCG matrix? [4]
- Difficult, costly and time-consuming to implement
2.Maybe difficult to define SBU’s and measure market share and growth
3.Focus on current trends and provide little for future planning
4.A possible solution is to design business portfolios using PRODUCT LIFE CYCLES
Why do firms need to grow?
Firms need to grow in order to be competitive, function effectively, attract talent and bring satisfaction to their consumer base
How do marketers attempt to ahieve profitable growth?
Marketers try to achieve profitable growth by identifying opportunities in the marketplace and developing strategies to capture them
What is a useful tool for identifying growth opportunities in the marketplace?
Ansoff’s product/market expansion grid
What does the product market expansion grid/ Ansoff’s product look like? [4]
- Market penetration
- Market development
- Product development
- Diversification
Within designing the business portfolio, explain market penetration and when it is useful [2]
- Market Penetration is taking an existing product and penetrating it deeper into a current market
- This is particularly useful when trying to maintain market share without expansion into new markets
How can market penetration be achieved? [2]
*Can be achieved through the building of new stores, increased advertising, change in prices, increased promotions
*Increases the availability of a product
Within designing the business portfolio, explain market development and what plays a crucial role in it [2]
*Involves identifying and developing new markets for an existing product
*Demographics and geographies play an important role in market development
Market development offers marketing to different ___ groups, _________ groups, offering ________ purchasing
age
income
credit
How do businesses invoke market development?
Establishing new stores in areas that are not currently exposed to the product
How do businesses invoke market development?
Establishing new stores in areas that are not currently exposed to the product
What is product development?
Offering a new or modified product to a current market
How do businesses implement product development?
Expanding the range of products sold at a store to appeal to a wider range of consumers
Product has a better chance of gaining market share as it is sold by a _____- known brand in an established market
well
What is diversification of a business portfolio?
Starting up or buying businesses outside of the current products or markets
When is diversification best used?
Best used when the current market is saturated, and expansion and development will have little or no effect
True or false, diversification of business portfolios also allows the firm to reach previously inaccessible markets
True
What is downsizing in a business portfolio?
Reducing or phasing out unprofitable areas of the firm
What may a change in marketing environment reduce in a business portfolio?
Change in marketing environment may reduce the demand for the firm’s product therefore reducing its profitability and market share (dogs)
Some businesses and products also naturally age and die out, so what may firms want to do in terms of downsizing portfolio?
Also, firms may want to sell businesses or products that it has been unable to run successfully due to inexperience or rapid growth
What does the strategic plan define and where is it derived from? [2]
The strategic plan defines the firm’s overall mission & objectives and the marketing strategy is derived from the strategic plan
The objective of the marketing strategy is to create __________ customer relationships
profitable
Guided by the marketing strategy, the firmis able to create what strategy?
marketing mix (4Ps) to execute the strategy
What does the firm undertake to find the optimal marketing strategy & marketing mix? [4]
- marketing analysis
- planning
- implementation
- control
How do you manage marketing effort? [3]
- Analyze
- Plan
- Execute
Through the use of a negative feedback loop
