jamming strama Flashcards
Total revenue (R; the total amount of money taken in) equals average price (P; the
average amount received for each individual unit sold) multiplied by quantity sold (Q; the
number of units sold)
Formula: R = P * Q
Total variable costs (TVC; the costs of goods sold) equals variable costs per unit (VCu;
the cost of each unit sold) multiplied by quantity sold (Q)
Formula: TVC = VC/u * Q
Total revenues (R; money in) minus total costs (C; money out) equals profit (n; the
money the firm can keep)
Formula: R - C = n
refers to how costs related to selling a product or service are categorized for
business purposes. It has several variables that define it and allow a business to determine
operating costs on a broad, company-wide level or an individual product level.
Cost Structures
Total costs (C; the overall total paid out to operate the business) equal total variable
costs (TVC) plus total fixed costs (FC or “overhead”; costs that don’t vary with production
or change across levels of sales):
Formula: C = TVC + FC
Sensitivity Analysis
- is a tool used in financial modeling to analyze how the different values of a set of
independent variables affect a specific dependent variable under certain specific
conditions
Sensitivity Analysis
relates the demand for a commodity, such as gasoline, to changes in the price of that commodity
price elasticity of demand
change depending on how many products or services a business sell. As
a business grows, offers new products or increases sales of a product, its variable costs
may increase. These often include direct labor costs, bonuses and commissions, travel
expenses, direct material costs, payroll taxes and marketing costs.
Variable costs
are business expenditures that don’t change, regardless of how many
products or services the company sells. Fixed costs can include rent, utilities, property
taxes and salaries. These expenses may fluctuate month to month, but they don’t
change based on the number of goods or services the business sells.
Fixed costs
refers to responsiveness of demand. In other words.
is a measure of changes
in demand/sales due to changes in any marketer input, including things like advertising, sales
effort, and so forth.
Elasticity
Objectives are specific, measurable outcomes that you aim to achieve in the short to
medium term. They are often quantitative and serve as benchmarks for progress.
Understanding Objectives
are key financial concepts used to determine the profitability of
products or services. Although they are often used interchangeably, they have distinct
meanings and calculations.
Margins and mark-ups
allows you to either invest a lump sum or make regular payments to build up funds,
which then provide you with a series of payments in the future. It’s a way to manage money over
time, ensuring that you have regular income or a structured financial plan for future needs.
Annuity
Tactics are specific actions or steps taken to implement the strategy and achieve the
objectives. They are more detailed and short-term compared to the overarching strategy.
Understanding Tactics
is the amount added to the cost price of a product to determine its selling price.
It is expressed as a percentage of the cost price.
- shows how much more a company’s selling price is than the amount the item
costs the company.
Mark-up
- refers to the difference between the selling price of a pro
-refers to the revenue a company makes after paying COGS. The profit margin is
calculated by taking revenue minus the cost of goods sold.
margin
● Where are we now?
● Where do we want to go?
● How do we get there?
All strategic marketing plans pose and answer three fundamental questions:
All strategic marketing plans pose and answer three fundamental questions:
● Where are we now?
● Where do we want to go?
THE STRATEGIC MARKETING PLAN ASSESSMENT
A strategy is your company’s overall plan of action to achieve long-term goals. It
encompasses the broad, high-level approach that guides decision-making and resource
allocation.
Understanding Strategy
refers to situations where the learning process is not
as effective or productive as it could be, leading to suboptimal outcomes for students
and educators. Although the case method is widely regarded as a powerful tool for
developing critical thinking, problem-solving, and decision-making skills, inefficiencies
can arise due to various factors.
Inefficiency in the case method
“If you hold a cat by the tail, you learn things you cannot learn any other way.”
Mark Twain
are decisions that specify something that should be done. In other
words, these decisions identify one or more actions that should be taken. Action-oriented
decisions can be compared, in particular, with descriptions, evaluations, and plans to decide
Action-oriented decisions
These show examples of good or bad management. They are more about
learning from examples than solving a problem.
Illustration Cases
These are rare in marketing strategy. They provide data for specific
analyses and aim for “correct answers.”
Tools-Oriented Cases
These cases present a complex situation with a challenge or problem. They
require you to analyze the situation and come up with solutions or recommendations
Problem Cases
The majority of the first section of the text deals with the process of formulating, implementing, and maintaining a marketing strategy. Before digging into that process, however, we should know where it leads. What should the outcome of the process be?
What is Marketing Strategy
- Who the firm will serve—
- When the firm will serve those customers and those needs
- Where the firm will do business—the geographic markets the firm will serve–
- What needs the firm will meet;
- How the firm will serve those customers and needs—
- Why the firm will do these things—
A comprehensive marketing strategy specifies the who, what, when, where, why, and how of the business:
Questions about who the firm serves, when the firm meets those needs (i.e., on what occasions), where it does these things (i.e., geographic markets) and, especially, what needs the firm meets are all essentially about what segments the business serves.
Target Segments
Questions about how the firm serves those target segments.
Competitive Advantages
The idea is that a strategy must specify how the firm meets some set of customer needs better than the competition doesn’t mean that the firm has to be better than the competition on all elements of the offering.
Singularity
At its core, strategic marketing involves crucial decisions about which customers and what needs the firm will serve and what means the firm will employ to serve those needs. In other words, strategic marketing is the creation and maintenance of a market- oriented strategy.
THE MARKETING CONCEPT AND A CUSTOMER FOCUS
According to Porter, two competitive dimensions are the keys to business-level strategy. The first dimension is a firm’s source of competitive advantage: whether a firm seeks to gain an edge on rivals by keeping costs down or by offering something unique in the market. The second dimension is a firm’s scope of operations: whether a firm tries to target customers in general or seeks to attract just a segment of customers.
GENERIC FRAMEWORK OF MARKETING STRATEGIES
is an invaluable tool for tracking how customers perceive your products. Customers, whether households or businesses, look for products that give them the best value for their money. The Value Map displays the performance-vs.-price choice that your customers face as they evaluate your products against competitors. Armed with a carefully developed Value Map, managers can see instantly how competitive their products are. In companies that do a good job of managing customer value, managers at all levels use Value Maps to track how their customers are perceiving them in a world in which competitors’ prices, products and features are continuously changing.
Value Map
The Ansoff Matrix outlines four key strategies for business growth
Growth Strategies Framework
Selling more of existing products to current markets.
Market Penetration
Selling existing products in new markets.
Market Development
Offering new products to existing markets.
Product Development
Selling new products to new markets.
Diversification
is a choice a company makes that will shape its future and how well it competes in the market. Unlike everyday decisions that might affect things in the short term, strategic decisions are about planning for the long haul. They involve considering how today’s choices will influence the company’s position and success over many years.
strategic decision
Evaluating the current market and internal conditions.
Situation Assessment
- Situation Assessment: Evaluating the current market and internal conditions.
- Strategy Formation: Developing strategic plans based on the assessment.
- Implementation: Executing the strategy through positioning and marketing mix decisions.
- Documentation, Assessment, and Adjustment: Recording the process, evaluating outcomes, and making necessary adjustments.
Four Essential Stages of The Strategic Marketing Analysis and Planning Process
These decisions initially seem like routine or minor choices, but over time, their true significance becomes apparent. They might not seem important at first glance, but they end up having a major impact on the company’s strategy and success.
Ad Hoc Strategic Decisions
Effective marketing strategy requires balancing high-level strategic thinking with day-to-day management.
Strategic questions often lack clear labels, requiring marketers to identify and analyse issues before formulating strategies.
High-Level Strategic Perspective
Developing strategic plans based on the assessment.
Strategy Formation
Executing the strategy through positioning and marketing mix decisions.
Implementation
Recording the process, evaluating outcomes, and making necessary adjustments.
Documentation, Assessment, and Adjustment
What It Means: You need to identify specific groups of customers you want to reach with your marketing efforts. This involves understanding different market segments and tailoring your objectives to these groups.
Defined Target Markets and Customer Segments
Effective metrics such as market share and customer satisfaction require clearly defined target markets and customer segments.
Importance of Clear Targets
What They Are: Metrics are measurable indicators used to evaluate performance. Common metrics include market share (the percentage of total sales in a market that your company holds) and customer satisfaction (how happy customers are with your product or service).
Effective Metrics
-The tasks and considerations associated with customer assessment as well as segmentation (within strategy formulation), marketing research (at the centre of positioning with the marketing mix) and, finally, strategic assessment (within assessment and adjustment) all emphasise keen attention to and deep understandings of customers and their responses to marketing actions. It’s a detailed look at the needs and expectations of your customers. If you don’t know what is most important to your customers, it is difficult to fulfil their needs and meet their expectations.
CUSTOMER ASSESSMENT
is all about knowing the possible strategies of your competitors to achieve their goals.
Competitive intelligence
Trends are broad-based changes in the marketplace that occur over time. Trends represent significant marketing opportunities that are grounded on substantive transformations such as changes in values, lifestyles, or technology, and are accessible to the “mainstream”or the majority of the market.
IDENTIFYING CUSTOMER TRENDS
Throughout this text we use “customers” to refer to both direct customers—that is, business-to-business customers, distributors, or retailers—and the ultimate customer or consumer of a product. The term “consumers” is reserved for the ultimate user of a final product.
Organizing Customer-Focused Research
An analysis of the industry or industries within which the firm operates is a more specific “micro” perspective embedded within the broader, “macro” setting of situation assessment and the four Cs.
INDUSTRY ANALYSIS
All products and all markets are in a constant state of evolution. Some evolve in fairly smooth and expected patterns while others evolve less predictably, such as when “disruptive technologies” cause unexpected, sharp declines.
Product Lifecycle
- Who the firm will serve—
- When the firm will serve those customers and those needs
- Where the firm will do business—the geographic markets the firm will serve–
- What needs the firm will meet;
- How the firm will serve those customers and needs—
- Why the firm will do these things—
A comprehensive marketing strategy specifies the who, what, when, where, why, and how of the business:
are concepts used in business strategy and economics to describe how changes in a company’s market position can impact its performance and competitive strength.
The market share effects / Share leverage
Questions about who the firm serves, when the firm meets those needs (i.e., on what occasions), where it does these things (i.e., geographic markets) and, especially, what needs the firm meets are all essentially about what segments the business serves.
Target Segments
Questions about how the firm serves those target segments.
Competitive Advantages
The idea is that a strategy must specify how the firm meets some set of customer needs better than the competition doesn’t mean that the firm has to be better than the competition on all elements of the offering.
Singularity
At its core, strategic marketing involves crucial decisions about which customers and what needs the firm will serve and what means the firm will employ to serve those needs. In other words, strategic marketing is the creation and maintenance of a market- oriented strategy.
THE MARKETING CONCEPT AND A CUSTOMER FOCUS
According to Porter, two competitive dimensions are the keys to business-level strategy. The first dimension is a firm’s source of competitive advantage: whether a firm seeks to gain an edge on rivals by keeping costs down or by offering something unique in the market. The second dimension is a firm’s scope of operations: whether a firm tries to target customers in general or seeks to attract just a segment of customers.
GENERIC FRAMEWORK OF MARKETING STRATEGIES
is an invaluable tool for tracking how customers perceive your products. Customers, whether households or businesses, look for products that give them the best value for their money. The Value Map displays the performance-vs.-price choice that your customers face as they evaluate your products against competitors. Armed with a carefully developed Value Map, managers can see instantly how competitive their products are. In companies that do a good job of managing customer value, managers at all levels use Value Maps to track how their customers are perceiving them in a world in which competitors’ prices, products and features are continuously changing.
Value Map
Selling more of existing products to current markets
Market Penetration
