Exam 2 (Chapters 7,8,9)

Question 1

Mission Definition

Answer 1

The mission of the organisation is the unique purpose that distinguishes it from other companies and defines the boundaries of its operations. The mission statement is a proclamation of the organisation’s primary object- ive that encapsulates its core values.

Question 2

4 sources of influence on an organizations mission

Answer 2

Corporate governance: To whom should the organisation be accountable and within what regulatory framework should executive decisions be overseen and reviewed?
Stakeholders: Stakeholders in an organisation include such groups as customers, suppliers, shareholders, employees, financiers and the wider social community.
Business ethics: An ethical dimension also affects the mission and object-
ives that an organisation should fulfil.
Cultural context: The aspects of mission that are prioritised will reflect the cultural environment that surrounds the corporation.

Question 3

Characteristics of successful mission statements

Answer 3

Credibility
● Uniqueness
● Specific capabilities
● Aspirational

Question 4

Broad vs narrow mission statements

Answer 4

Missions can be framed with a very narrow view of the business or be given
much broader frame of reference
Broad focus: The use of a broad mission statement is fairly common and generally refers to all the various stakeholders in the business: share- holders, customers and employees as well as the area of business to be served.

● Narrow focus: Some organisations choose to frame a mission statement with a very narrow focus.
Narrow: build good ships- at a loss if we must- but always good ships.

Question 5

Goals vs objectives and characteristics of successful objectives

Answer 5

Objectives are the specific intended outcomes of strategy. Strategic goals are general aspirations that the organisation needs to achieve but are difficult to measure or put within a specific time scale. Objectives therefore are more specific than goals and state what is to be achieved; they are given a quantifiable measure and a specific time scale.

Whichever perspective is taken on this matter successful objectives also need
to demonstrate the following characteristics
− Acceptability
− Flexibility
− Comprehensibility

Question 6

Objectives should be SMART

Answer 6

Specific
Measurable
Aspirational
Realistic
Time Scaled

Question 7

Hierarchy of objectives

Answer 7

Levels of objectives: Corporate, Functional, and Operations

Question 8

competitive advantage

Answer 8

the process of identifying a fundamental and sustainable basis from which to compete. Ultimately, marketing strategy aims to deliver this advantage in the market place.

Question 9

fundamental sources of competitive advantage

Answer 9

cost leadership, differentiation and focus.

Broad industry wide(Differentiation (Unique), Overall Cost Leadership(Low Cost))
Narrow specific segment(Focused differentiation(Unique), Focused cost leadership(Low Cost))

Question 10

Characteristics of sustainable competitive advantage

Answer 10

• In order to be sustainable, the competitive advantage must be
  − Relevant
  − Defensible
  (a prerequisite to competitive advantage is sustainability)

Question 11

8 sources of competitive advantage

Answer 11

Actual product performance
Perception of product
Low cost operations
Legal advantage
Alliances and relationships
Superior skills
Flexibility
Attitude

Question 12

4 market categories

Answer 12

Market leaders
- Expanding the market
- Offensive strategy
- Defensive strategy

Market challengers
− Selective targeting
− Attack the leader

Market follower
− Duplication adaptation
− Adaptation

Market niche
− Niche players focus on specific market segments
− Focus strategies adopted by niche players commonly involve geographic,
end-user, or product line specialization

Question 13

Market factors in evaluating attractiveness of segment

Answer 13

Market factors
− Segment size
− Segment’s rate of growth
− Segment’s profitability
− Customers price sensitivity
− Stage of industry life cycle
− Predictability
− Pattern of demand
− Potential for substitution

Question 14

Questions to ask when aligning assets with competencies

Answer 14

Marketing assets: does the market segment allow a company to take advantage of its current marketing strengths?
Cost advantages: entering a price sensitive segment would be consistent with the capabilities of an organization that has a low cost base
Technological strengths: Where the organization has access to superior technology is its use compatible with the market segment, and will it allow the company to gain any advantage?
Managerial capabilities and commitment: Does the company have the technical and managerial skills necessary to successfully enter the market segment?

Question 15

4 factors for successful strategic positioning

Answer 15

Credence: The attributes used to position the product have to be perceived to be credible by the target customers.
2 Competitiveness: The product should offer the consumer benefits which competitors are not supplying.
3 Consistency: A consistent message over time is invaluable in helping to establish a position against all the other products and services fighting for a share of the consumers mind.
4 Clarity: The positioning statement an organisation chooses has to create a clearly differentiated position for the product in the minds of the target market.

Question 16

Successful segment selection process

Answer 16

− Ability to allow the creation of a sustainable market position
− Compatibility with the organization’s mission, values, and culture
− Ability to provide a focal point for action and future development in the
organization
− Compatibility with current data collection and reporting systems and policies

Question 17

Reasons for strategic wear out

Answer 17

Changes in customer requirements
Changes in distribution systems
Innovation by competitors
Poor control of company costs
Lack of consistent investment
Ill-advised changes in successful strategy

Question 18

Three strategies for declining and/or hostile markets

Answer 18

Generate growth
Survival
Exit

Question 19

Associations used to position a brand

Answer 19

Product attributes
− Product benefits
− Usage occasions
− Users
− Activities
− Personality
− Origin
− Competitors
− Product class
− Symbol

Question 20

3 types of positioning mistakes

Answer 20

● Underpositioning: In this situation consumers have only a very limited perception of the brand and are unaware of any distinguishing features.
● Overpositioning: Consumers have a perception that the brand is only active in a very focused area, when in fact the brand covers a much broader product range.
● Confused: Consumers have an unclear view of how the brand relates to competitive offerings.

Question 21

4 repositioning options

Answer 21

1 Image repositioning: This takes place when both the product and the target market remain unchanged.
2 Market repositioning: Here the product remains unchanged but it is repositioned to appeal to a new market segments.
3 Product repositioning: In this situation the product is materially changed but is still aimed to appeal to the existing target market.
4 Total repositioning: This option involves both a change of target market
and accompanying product modifications.

Question 22

Brand extension

Answer 22

Occasionally an organization will try to extend the use of a brand name to new
products in the same market
* Brands that carry high brand equity are candidates for brand extensions as they
have the ability to increase the attractiveness of the new products

Question 23

Brand stretching

Answer 23

Brand stretching takes place when an organization stretches a brand into new
unrelated markets
* This policy is more likely to be successful where the original brand values are
compatible with the aspirations of the new target group

Question 24

three alternative approaches to consider when positioning

Answer 24

− Building on a current position
− Building on an unoccupied position
− Repositioning of an existing brand