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MBA 8650 Strategic Marketing Management > MBA 8650 Midterm > Flashcards

MBA 8650 Midterm Flashcards

1
Q

Marketing myopia

A
  • Shortsightedness: railroads, airlines, movie theaters

- Realign your assets to make them appealing in a changing environment

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2
Q

Definition of marketing

A
  • Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products and services of value freely with others.
  • Managerial process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing market opportunities.
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3
Q

“Eras” of marketing

A 
Production
Product 
Selling
Marketing
Holistic marketing
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4
Q

The 4 p’s

A

1) Product
2) Price
3) Promotion
4) Place (Distribution)

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5
Q

Marketing’s role within the organization

A
  • The Customer is the controlling function and marketing is the integrative function (marketing sits between the customer and the other facets of the business)
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6
Q

Value-added

A
  • The wealth creation that a product brings to the consumer, through the product’s strategic placement that makes it appealing either through form or function
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7
Q

Product quality

A
  • The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs
  • A determinant of pricing objectives and strategy (product quality leadership)
  • A determinant of product decisions (along with pricing, distribution, promotion, and customer service)
  • A direct measure of brand and product equity  studies have shown a high correlation between relative product quality and company profitability
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8
Q

Customer satisfaction

A
  • A person’s feelings of pleasure or disappointment that result from comparing a product’s perceived performance (or outcome) to expectations
  • The company must try to deliver a high level of customer satisfaction while also delivering acceptable levels to other stakeholders
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9
Q

The five external environments that impact the marketing decision

A
  • Economic Environment (product decisions)
  • Competitive Environment (distribution decisions)
  • Technological Environment
  • Social – Cultural Demographic Environment (promotion decisions)
  • Regulatory Environment (pricing decisions)
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10
Q

SWOT analysis – all stages

A 
-	External Environment
o	Opportunity
o	Threat
-	Internal environment
o	Strengths
o	Weakness
-	Situation Analysis used as basis for SWOT analysis
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11
Q

Marketing “Pyramid”

A 
-	Outcomes (Top)
o	Individual
o	Firm
o	Society
-	Consumer Decision Process (Business Segment)
o	Problem Recognition
o	Information Search
o	Alternative Evaluation
o	Purchase
o	Use
o	Evaluation
-	Marketing Strategy (and how cultivated culture adds economic value to the company)
o	Product
o	Price
o	Distribution / Place
o	Promotion
o	Service 
-	Marketing Segmentation
o	Identify product-related need sets
o	Group Customers with similar needs sets
o	Describe each group
o	Select attractive segment(s) to target
-	Marketing Analysis (Bottom, FIRST STEP)
o	Company
o	Competitors
o	Conditions
o	Consumers
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12
Q

BCG Matrix

A 
-	Approach at strategic portfolio planning looking at product market growth and market share
High Market Growth	Question Marks:
-	Don’t know what to do with opportunities
-	Decide whether to increase investment	Stars:
-	Doing well
-	Great opportunities
Low Market Growth	Dogs:
-	Weak in market
-	Difficult to make profit	Cash Cows
-	Doing well in no growth market
-	Limited opportunities
	Low Market Share	High Market Share
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13
Q

Cash cows

A
  • From BCG Matrix: products with high market share in low growth markets
  • Profitable despite no marketing support  can be used to capitalize other areas of business or innovation
  • Cash cows require little investment and generate cash that can be utilized for investment in other business units. These SBU’s are the corporation’s key source of cash, and are specifically the core business. They are the base of an organization. These businesses usually follow stability strategies. When cash cows lose their appeal and move towards deterioration, then a retrenchment policy may be pursued
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14
Q

Stars

A
  • From the BCG Matrix: products with a high market share in a high growth industry
  • They may generate cash but because of fast growing market, stars require huge investments to maintain their lead. Net cash flow is usually modest. SBU’s located in this cell are attractive as they are located in a robust industry and these business units are highly competitive in the industry. If successful, a star will become a cash cow when the industry matures.
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15
Q

Marketing Segmentation

A

o Geographic Segmentation
o Demographic Segmentation
o Psychographic Segmentation
o Product Related Segmentation

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16
Q

Cannibalization analysis / Cannibalization

A
  • Being sure to not dilute the brand image or cause customers to purchase internal or external competing products through integrated marketing channel mismanagement
  • Analysis is the quantification of the sales/margin/equity loss given cannibalization
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17
Q

Actualizers

A
  • To develop or achieve full potential
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18
Q

Conjoint analysis

A
  • what are some of the more important attributes for the product and at what level should you price them
  • Historical data –> not forward looking
  • Provides the utilities of various levels for each of the most important physical characteristics and for each segment
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19
Q

Situation analysis

A
  • A section of the marketing plan (along with executive summary, marketing strategy, financial projections, and implementation controls)
  • Presents relevant background data on sales, costs, the market, competitors, and the various facets in the macro environment.
  • Answers:
    o How do we define the market, how big is it, and how fast is it growing?
    o What are the relevant trends and critical issues?
  • Firms use this information to carry out a SWOT analysis.
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20
Q

Marketing audit

A
  • An approach for Strategic type of Marketing Control

- To examine whether the company is pursuing its best opportunities with respect to markets, products, and channels

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21
Q

Trend spotting

A
  • Requires “splatter vision”  the ability to look at the big picture without becoming too focused on one factor
  • Five Approaches
    o Seeing the future as an extension of the past
    o Searching for cycles and patterns
    o Analyzing the actions of customers and other stakeholders
    o Monitoring technical and social events as they unfold
    o Discerning trends from the interaction of each of the four above approaches
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22
Q

Environmental opportunity, Distinctive/Core Competency, Success Requirements

A
  • A part of linkage to assess if organizational opportunity exists:
    1. What might we do? - environmental opportunity
    2. What do we do best? - distinctive competency
    3. What must we do? - success requirements
  • Converting environmental opportunities into organizational opportunities
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23
Q

Business mission

A 
-	Business Definition
o	scope of the organization’s operations
o	customers served, needs satisfied, means/technology used
-	Business Mission
o	the organization’s purpose
o	customers, products/services, markets, philosophy, technology
-	Business Goals
o	problem-centered and future-oriented
o	situation analysis
24
Q

Reference group

A
  • All the groups that have a direct (face-to-face, or membership groups) or indirect influence on a customer’s attitudes or behaviors
  • Expose consumers to new behaviors and lifestyles, influence attitudes and self-concepts, and create pressures for conformity that may affect product and brand choices
    o Aspirational Groups – groups a person hopes to join
    o Dissociative Groups – values and behaviors an individual rejects
    o Opinion Leader – leader of a group, offers informal advice or information about a specific product or product category, such as which of several brands is best or how a particular product may be used
25
Q

Positioning audit

A
  • Steps and questions in the positioning process analysis:
    o What is our position?
    o What position do we want?
    o Where is our competition relative to our desired position?
    o Can we defend our position?
    o Is our position long-term?
    o Does our promotion reflect our position?
26
Q

Value proposition

A
  • A set of benefits that satisfy customer needs through a combination of products, services, information, and experiences
  • Is laid out in the strategic marketing plan, along with the target market, based on analysis of the best market opportunities
  • A promise about the total experience customers can expect and their relationship with the marketer
27
Q

Concentrated marketing

A
  • Single-segment focus of marketing
  • Gains deep knowledge of segment’s needs and achieves a strong market presence
  • Enjoys operating economies by specializing its production, distribution, and promotion
  • Niche  more narrowly defined segment with a distinctive mix of benefits
28
Q

Semantic scales

A
  • A report that describes how consumers perceive the market brands
  • Each respondent is asked to rate each brand along with each physical characteristic according to the way they perceive the brand. The study provides the ideal ratings of each segment for each physical characteristic and provides the importance of each characteristic
29
Q

Marketing Concept

A
  • Marketing ideal such as brand portfolio strategy or segmentation and positioning strategy
  • Holds that the key to achieving organizational goals is being more effective than competitors in creating, delivering, and communicating superior customer value to your target markets
  • Holistic marketing concept acknowledges that everything matters in marketing – and that a broad, integrated perspective is often necessary. It includes internal, integrated, performance, and relationship marketing
30
Q

Maven

A
  • Concept from Malcom Gladwell’s Tipping Point: three factors work to ignite public interest in an idea:
    o Reaching out to the three types of people who can spread an ideal like an epidemic:
     Maven: knowledgeable people
     Connectors: people who know and communicate with many others
     Salesmen: people who possess natural persuasive power
    o “Stickiness”: expressing an idea so that it motivates people to act
    o “power of context”: controls whether those spreading an idea are able to organize groups and communities around it
31
Q

Competitive skill

A
  • Attributes that provide a competitive advantage
32
Q

Opportunity evaluation

A
  • Methods and processes utilized to assess opportunities (see environmental opportunity)
33
Q

Feasibility studies

A
  • Allow you to determine the minimum cost at which a product can be realistically manufactured, and the R&D budget required to guarantee its completion at the currently requested base cost
34
Q

Societal marketing concept

A
  • Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products and services of value freely with others.
35
Q

Achievers

A
  • A psychographic segment in VALS Segmentation System, divided by three primary motivations: ideals, achievement, and self-expression
  • Motivated by the desire for achievement, Achievers have goal-oriented lifestyles and a deep commitment to career and family. Their social lives reflect this focus and are structured around family, their place of worship, and work. Achievers live conventional lives, are politically conservative, and respect authority and the status quo. They value consensus, predictability, and stability over risk, intimacy, and self-discovery.
  • With many wants and needs, Achievers are active in the consumer marketplace. Image is important to Achievers; they favor established, prestige products and services that demonstrate success to their peers. Because of their busy lives, they are often interested in a variety of time-saving devices.
36
Q

Problem definition

A
  • Laying out the issues with precise and quantifiable results intended
  • A part of the Consumer Decision Process of the Marketing Strategy and Consumer Behavior Pyramid
37
Q

Choice set

A
  • A short list of brands/products a consumer evaluates, of which may consume/purchase one or two based on which meets their preferred needs
  • Successive set are: Total  Awareness  Consideration  Choice  Decision
38
Q

Differentiated marketing

A
  • When a firm sells different products to all the different segments
  • Typically creates more sales (than undifferentiated) but also increases the cost of doing business
39
Q

Forecasting

A
  • The art of anticipating what buyers are likely to do under a given set of conditions, then communicating to the business for use of planning
40
Q

Problems

A
  • We all have them
41
Q

Supply Chain

A
  • The channel stretching from raw materials, to components, to finished product, to customer delivery
  • The partnerships a firm forges with suppliers and distributors to deliver value to customers; aka the value delivery network
42
Q

Target market

A
  • The part of the qualified available market the company decides to pursue
  • Consists of the Competition, Conditions, Company, and Consumers
43
Q

Constraints

A
  • Items that reduce the playing field which one competes in, largely due to the limited abilities of the organization, the product, or the message and whether or not it resonates with the consumer
44
Q

Product Life Cycle

A 
-	Largely has four stages:
o	Introductory
o	Growth
o	Maturity
o	Decline
45
Q

Types of Pricing Strategies

A
  • Mark-Up Pricing – margin added to the cost of the product
  • Target-Return Pricing – firm determines the price that yields its target rate of return on investment
    o Price = unit cost + ((desired return * invested capital)/unit sales)
  • Perceived Value Pricing – based on customer’s perceived value, made up of:
    o Buyer’s image of the product performance
    o Channel deliverables
    o Warranty quality
    o Customer support
    o Suppliers reputation and trustworthiness
  • Value Pricing – the firm wins loyal customers by charging a low price for a high-quality offering, and reengineering the operations to becoming a low-cost operator
    o Every Day Low Pricing (EDLP)
    o High-Low Pricing: sets higher prices but offers frequent/constant promotional discounts
  • Going-Rate Pricing – firm bases prices on competitors prices
  • Auction-Type Pricing – eBay
    o English Auctions – ascending bids, having one seller and many buyers, highest bidder wins
    o Dutch Auctions – descending bids, two types
     Auctioneer announces a high price and descends until someone takes it
     Buyers announce what they want to buy and sellers compete to offer the lowest price
46
Q

Economic Environment (product decisions)

A

o fostering FDI

o Understanding spending capacities

47
Q

Competitive Environment (distribution decisions)

A

o Reactive or proactive?
o 6-36-60
 6 months forecasting plan: near term, seasonal planning
 36 months marketing plan: mid-range planning
 60 months strategic plan: longer term planning

48
Q

Technological Environment

A

o Current trends
o Parity with competition, communicating with customers
o Book: Launchpad

49
Q

Social – Cultural Demographic Environment (promotion decisions)

A

o Knowing your audience

o Social norms and values

50
Q

Regulatory Environment (pricing decisions)

A

o Source of uncertainty
o Public Policy Analysis (circular)
 Policy Development
 Evaluation and Assessment (does it work, unintended consequences)
 Precipitating Events (financial crisis –> Dodd Frank Bill, Stimulus Bill)
o Stages in the Public Policy Process (circular)
 Genesis
 Development
 Implementation
 Feedback

51
Q

Geographic Segmentation

A

 Dividing overall market into homogeneous groups on the basis of their locations.
 Does not ensure that all consumers in a location will make the same buying decision.
 Help in identifying some general patterns.

52
Q

Demographic Segmentation

A 
	Gender
	Ethnicity
	Age
	Income
	Occupation
	Education
	Household size
	Stage in the family life cycle.
53
Q

Psychographic Segmentation

A

 Divides a population into groups that have similar psychological characteristics, values, and lifestyles
 The most common method for developing psychographic profiles of a population is to conduct a large-scale survey.
 VALS stands for “values and lifestyles.” VALS 2 is based on two key concepts: resources and self-motivation. VALS 2 divides consumers into eight psychographic categories

54
Q

Product Related Segmentation

A

1) Segmenting based on the benefits that people seek when they buy a product (dig a ditch vs. tooth brush)
2) Segmenting based on usage rates for a product (fine china vs. towel holder)
3) Segmenting according to consumers’ brand loyalty toward a product (Coach vs. LVMH)

55
Q

The Market Segmentation Decision Process

A

o The division of the total market into smaller, relatively homogeneous groups
o Four basic requirements
1. Must present measurable purchasing power and size.
2. Must find a way to promote effectively to and service the market segment.
3. Must then identify segments that are sufficiently large enough to give them good profit potential.
4. Must aim for segments that match its marketing capabilities.

56
Q

The Market Segmentation Proces

A
  1. Needs-Based Segmentation – group customers by similar needs and benefits sought in solving a consumption problem
  2. Segmentation Identification – determine which demographics, lifestyles, and usage behaviors make the segment distinct and identifiable
  3. Segment Attractiveness – using criteria (market growth, competitive industry, and market access) determine appeal of each segment
  4. Segment Profitability – determine cash flow of each segment
  5. Segment Positioning – create a “value proposition” and product-price positioning based on segment’s unique customer needs and characteristics
  6. Segment “Acid Test” – create “segment story board” to test attractiveness of each positioning strategy
  7. Marketing-Mix Strategy – expand segment positioning strategy to include all aspects of the marketing mix: product, price, promotion, place

MBA 8650 Strategic Marketing Management (1 decks)

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