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Applied Strategic Marketing > Exam Prep > Flashcards

Exam Prep Flashcards

1
Q

Strategy Control & Evaluation are key components of strategic marketing process

A

Ongoing process of measuring & processing appropriate formulated strategy & effectiveness of its implementation

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2
Q

Strategic Control tools

A

Strategic Control - continuous monitoring, review & update of strategy
Operational Control - track performance against standards & deviation
Marketing Audit - periodic, comprehensive & systematic checklists

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3
Q

Operational control requires

A
  1. Set performance standards
  2. Measure actual performance
  3. Evaluate deviations
  4. Take necessary corrective action
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4
Q

Low-cost strategy as competitive strategy ( cost - leadership strategy)

A

Reduce manufacturing costs to lower customer price; based on interplay between cost, profit margins & market share with 2 alternatives:

  • lower margin/ higher market share
  • lower costs/ higher margins
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5
Q

Cost drivers determine cost of given activity through

A
  • Economies of scale
  • No-frills products/services
  • Low-cost distribution
  • Location cost advantage
  • Institutional factors
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6
Q

Pitfalls of low-cost strategy

A
  • concentrating only on manufacturing costs
  • ignoring purchasing/procurement functions
  • overlooking smaller activities
  • failure to exploit linkages
  • contradictory cost reduction exercises
  • entry of low-cost competitors
  • reduced flexibility
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7
Q

Strategies during decline phase of product life cycle

A
  • Divest & Liquidate - quit the industry
  • Hold or maintenance - maintain investment at minimum
  • Harvesting - maximize cash flow reducing investment & costs
  • Niche - identify markets with sustainability
  • Be a profitable survivor - invest in purchase other competitors
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8
Q

Attractiveness of declining markets

A
  • Conditions of demand - depend on rate of decline
  • Exit barriers - the higher the exit barrier the less attractive the industry
  • Intensity of future competitive rivalry - if rivalry intensity is high it may not justify remaining in market
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9
Q

Relationship Marketing

A

Interactions within a networks of relationship as establishment, maintenance & enhancement of relationships with customers & other players

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10
Q

Benefits of relationship building for organization

A
  • Getting to know customer better
  • Creating value
  • Customer retention
  • Improve customer loyalty
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11
Q

Characteristics of relationships

A
  • longevity ( commitment)
  • trust
  • collaboration
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12
Q

Four actions to build relationships with customers

A
  • Operating efficiency
  • Offering excellency
  • Customer development
  • Relationship development
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13
Q

Framework of Marketing Plan

A 
Executive summary
Situation analysis
Swot analysis
Issues that plan should address
Marketing goals & objectives
Market strategy
Marketing strategy 
Sales forecast, budgets e financial indicators 
Action plans for each strategy
Appendices...
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14
Q

Pre-emptive strategy

A

Actions of a pioneer organization which establishes sustainable competitive advantage through being first in market

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15
Q

Requirements of pre-emotive move

A

Innovation
Commitment of substantial resources
Assumption that competitor struggle to copy or compete

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16
Q

Sources of pre-emptive opportunities

A 
Supply systems
Product opportunities
Operations systems
Customer opportunities
Distribution & service systems
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17
Q

Advantages of pre-emptive strategies

A

Image & reputation
Early entry builds experience
Customer loyalty
Absolute cost advantage

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18
Q

Disadvantages of pre-emptive move

A

Competition
Costs
Timing on the market
Technological change

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19
Q

Follower strategy

A

Organization beaten by pre-emptive mover or chooses to let another org. take the lead

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20
Q

Advantages of follower strategy

A

Exploit competitors positioning mistakes
Exploit competitors product mistakes
Technological flexibility
Exploit competitor resources limitations

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21
Q

Focus strategy

A

Sustainable competitive advantage by occupying niche with limited product range

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22
Q

2 methods of Focus Strategy

A

Low-cost focus - organization must find buyer segment whose needs are less costly to meet (low-cost airlines)
Differentiation focus - specific buyer segment wants unique product attributes (computer applications)

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23
Q

Ways to achieve focus strategy

A

Focus on the product life
Target specific market segment
Choose limited geographical area
Target low-share competitors

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24
Q

Advantages of Focus strategy

A

Avoid distraction or dilution of strategy
Make an impact with limited resources
Provide positioning device - product line
Bypass competitor assets & skills

25
Q

Sustainability of Focus strategy

A

Porter identified 3 factors:

  • Sustainability against targeted competitors
  • Sustainability against imitators
  • Sustainability against segment substitution
26
Q

Conditions to make Focus strategy attractive

A
  • Profitability
  • Growth potential
  • Size
  • Resources
  • Protection
27
Q

Aeker’s model of brand equity

A
  • Brand awareness
  • Brand loyalty
  • Perceived quality
  • Brand associations
  • Other proprietary assets
28
Q

Brand awareness is measured by

A

Recognition
Recall
Top-of-mind
Domination

29
Q

Brand loyalty

A

Reduces marketing costs as is less costly to retain customer than to attract new customers

30
Q

Perceived quality

A

Relationship between customer perceived benefit & its actual cost

31
Q

Brand association

A

Positive attitudes & feelings towards a brand

32
Q

Keller’s brand equity pyramid

A

Brand identity - who are you? ( SALIENCE)
Brand meaning - what are you? ( MEANING) performance & imagery
Brand response - what about you? What do I feel about you? ( RESPONSE) Judgements & Feelings
Brand relationships - what about you and me? (RELATIONSHIP) Resonance

33
Q

Porter’s 5 force model of competitive forces

A
  • Threat of new entrants / competitors
  • Threat of substitutes
  • Bargaining power of buyers
  • Bargaining power of suppliers
  • Rivalry between competitors
34
Q

Threat of new entrants

A 
Economies of scale
Cost advantage
Cost of switching
Limited access to distribution channels
Government policy
Product differentiation
Strong brand identity
Likelihood of retaliation from competitors
35
Q

Threat of substitutes

A 
Willingness of buyer to substitute
Price & performance
Advantages over traditional products
Cost of switching
Image/ identity of substitutes
36
Q

Bargaining power of buyers

A

Few dominant buyers & many sellers in industry
Products are standardized
Buyers threaten to integrate backward into industry
Industry is not key suppliers to buyers

37
Q

Rivalry between direct competitors

A

Industry costs
Switching costs
Product differences

38
Q

To secure competitive advantage over rivalry, companies must:

A

Select price, added features, choice of distribution channel, exploit supplier relationships

39
Q

Market Analysis

A 
Actual & potential market size
Market growth
Market profitability
Cost structure
Distribution system
Market trends & developments
Key success factors
40
Q

Market growth - market share mix is based on

A

Share of the market

Growth rate of the market

41
Q

BCG matrix

A

Stars - high market share in high growth market
Cash cows - high market share in low growth
Question marks - low market share in high growth market
Dogs - low market share in low growth market

42
Q

BCG strategies

A

Build - company invest to increase market share
Hold - company invest enough to keep position
Harvest - company reduce investment to maximize cash-flow & profit
Divest - company phase out or sell business

43
Q

Porter’s strategy model

A

Competitive scope - broad or narrow

Competitive advantage - cost or differentiation

44
Q

Cost leadership

A

Operate at lower cost than competitors to be competitive; when value for money is important; increase market share & apply low-cost strategy

45
Q

Differentiation

A

Offering product or service different from competitors; unique product offer; high prices high investment return

46
Q

Focus

A

Most intense; focus segment to achieve cost advantage or differentiation; high customer loyalty

47
Q

Strategies in Growth phase of PLC

A
  • Growth in existing product markets
  • Growth through product development
  • Growth through market development
  • Growth through diversification
48
Q

Growth in existing markets

A
  • growth through increasing market share
  • growth through increasing quantity of usage
  • growth through increasing frequency of usage
49
Q

Growth through product development

A
  • development of new product features
  • development of new generation products
  • development of new products for existing markets
50
Q

Growth through market development

A

Looking for new markets to sell existing products - expand geographically ( locally, regionally, nationally or internationally )

51
Q

Growth through diversification

A
  • Related diversification - org. acquires another organization with similar products & services which contributes to synergy & economies of scale
  • Unrelated diversification - expansion into unrelated fields, risky expansion
52
Q

Define marketing

A

Process of creating, distributing, promoting, pricing goods & services & ideas to satisfy exchange relationships with customers

53
Q

Components of marketing strategy

A 
Market segment strategy
Position strategy
Product strategy
Price strategy 
Distribution strategy
Promotion strategy
54
Q

Forward segmentation

A

Classifies customers on the basis of personal characteristics - demographic, geographic & psychographic

55
Q

Backward segmentation

A

Identifies groups of customers who demonstrate different behavior towards products & brands trough:

  • cluster analysis - statistical tools to cluster customers into groups
  • perceptual maps - construct maps of costumer perceptions
56
Q

Five steps of segmentation research process

A
  • Gather raw data from customers
  • Interpret raw data in terms of customer needs
  • Organize needs hierarchy of primary & secondary needs
  • Establish relative importance of needs
  • Reflect on results & process
57
Q

Identifying customer segments

A

Homogeneity/Heterogeneity - customers response to offer should be homogeneous but segments response should be heterogeneous
Size - segments large enough to justify marketing effort
Measurable/identifiable - customers should be identifiable & described in unique needs & characteristics
Accessible - segment must be accessible via marketing distribution & communication

58
Q

Attractiveness of potential segments

A
  • Segment size & growth possibilities
  • Attractiveness & potential profitability
  • Resources & skills of organization
  • Compatibility with organization’s objectives
  • Cost of reaching target market

Applied Strategic Marketing (1 decks)

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