MKTG 448 Exam 1 - FLASHCARDS - Building a market position for enhanced performanc
What defined as a business’ crucial decisions concerning its planned pattern of behavior in the marketplace to achieve a competitive advantage?
Marketing strategy
What two questions of how to compete in the marketplace does marketing strategy address?
– How to create, communicate, and deliver products that offer value to customers in mutually beneficial exchanges with the organization?
– How to engender specific affects, cognitions and behaviors in target customers?
What is the extent to which some facts and perceptual elements are prominent and easier to recall than others?
Salience
Due to its ease and higher probability of recall, salient information is often incorrectly perceived as being important.
How is the salience of a strategic area measured?
Measured by the probability with which a benefit is recalled and mentioned by a customer.
What represents the extent to which a strategic area is associated with an outcome of interest?
Importance
True or false: The stronger the association between an input and outcome of interest, the more important the input?
TRUE
What does SWOT stand for?
Strengths, Weaknesses, Opportunities, Threats
What is CLV?
Customer lifetime value
What are the 4 P’s?
Product, Price, Place, and Promotion
What is the resource-advantage (R-A) theory in marketing strategy?
The R-A theory explains superior performance through competitive market positioning, founded on heterogeneous firm resources and competitive dynamics.
What are the key assumptions of the resource-advantage theory?
The theory assumes heterogeneous and dynamic demand, imperfect consumer and firm information, constrained self-interest seeking, firm resources as financial, physical, legal, human, organizational, informational, and relational, and competitive dynamics as disequilibrium-provoking.
How does comparative advantage in resources impact market position?
Firms with unique and specialized resource configurations achieve a competitive advantage in market position, leading to superior performance in a specific market segment.
What are the types of firm resources?
Financial, physical, legal, human, organizational, informational, relational
What resources in a firm are tangible?
Financial, physical and legal
What resources in a firm are intangible?
Human, organizational, informational, relational
What type of resources are the firm’s policies, cultural routines, norms, and competences?
Organizational
What type of resources are current and potential cash resources of the firm?
Financial
What type of resources are legal expertise in the firm and legally protected assets?
Legal
What type of resources are the buildings, raw materials, and equipment that the firm owns?
Physical
What type of resources are the skills and knowledge of individual employees?
Human
What type of resources are business relationships with customers, suppliers, and competitors?
Relational
What type of resources are knowledge a firm possesses related to its products and competitors?
Informational
How do financial resources contribute to market position?
Financial resources enable firms to expand, develop new products/services, withstand economic cycles, and maintain competitive stability.
What constitutes superior performance?
It rests on the ability to establish a competitive advantage in market position within specific customer segments.
What is the three-step process for applying resource-advantage theory?
- Defining the customer value equation
- Determining market position
- Resource mapping and configuration assessment
What is the customer value equation?
The customer value equation identifies key attributes driving customer value within a segment, assigning importance weights to them through statistical analysis.
How is the customer value equation developed?
It is developed through customer feedback, surveys, and statistical analysis to determine key drivers of satisfaction and their importance weights.
What is the role of multiple regression in analyzing customer value?
Multiple regression quantifies the relationship between customer satisfaction and different attributes, providing importance weights for strategic decision-making.
What are performance grades, and how are they calculated?
Performance grades reflect perceived customer satisfaction with a firm’s attributes, calculated as a percentage based on survey ratings.
What is the Market Position Grid, and how does it help firms?
The Market Position Grid compares a firm’s performance grades against competitors, visualizing strengths and areas for strategic resource allocation.
What is resource mapping in market positioning?
Resource mapping identifies and analyzes firm resources allocated to key attributes, guiding decisions on investment, maintenance, or divestment.
How does resource-advantage theory guide strategic decision-making?
The theory helps firms allocate resources efficiently, focusing on competitive advantages to enhance market position and performance.
What is the significance of heterogeneous demand in resource-advantage theory?
Heterogeneous demand means that customer needs vary across and within industries, requiring firms to develop unique resources and strategies to gain competitive advantages.
How do tangible and intangible resources differ in their role in competitive positioning?
Tangible resources provide foundational assets, while intangible resources drive differentiation and sustained competitive advantage.
Why is it important for firms to understand the customer value equation?
Understanding the customer value equation helps firms identify key attributes customers value, allowing them to tailor their strategies to enhance perceived value and market position.
How do firms determine the importance weights of attributes in the customer value equation?
Firms use statistical methods, such as multiple regression, to assess how different attributes impact customer satisfaction and assign weights accordingly.
What is the role of segmentation, targeting, and positioning (STP) in market strategy under R-A theory?
STP allows firms to identify distinct customer segments, target them effectively, and position offerings to maximize competitive advantage within each segment.
How does competitive dynamics create disequilibrium in markets?
Continuous innovation, changes in consumer preferences, and strategic moves by competitors disrupt market equilibrium, requiring firms to adapt dynamically.
What are some examples of legal resources, and why are they important?
Legal resources include trademarks, patents, and licenses, which help firms protect competitive advantages and maintain market differentiation.
How does resource mapping help firms allocate resources effectively?
Resource mapping identifies how different types of resources contribute to market positioning, helping firms optimize investment, maintenance, and divestment strategies.
What role does innovation play in resource-advantage theory?
Innovation is endogenous to competition, meaning firms must continuously develop and apply resources creatively to sustain superior performance.
Why do firms need to compare their market position to competitors?
Understanding competitors’ strengths and weaknesses helps firms refine their strategies, invest in key areas, and maintain or improve competitive advantage.
How can firms use cost accounting in resource allocation decisions?
Cost accounting helps firms track spending on different resources and activities, ensuring strategic investments align with performance objectives.
What is the relationship between brand equity and resource-advantage theory?
Strong brand equity results from effective resource allocation, enhancing customer perceptions, loyalty, and long-term market position.
How do firms balance resource investment in competitive market positioning?
Firms analyze resource costs versus produced value, prioritizing attributes that maximize customer satisfaction and competitive differentiation.
What strategic insights can firms gain from the Market Position Grid?
The Market Position Grid helps firms identify areas where they outperform competitors and where they need to invest resources for improvement.
What are some potential risks of misallocating resources in market strategy?
Misallocation can lead to wasted investments, competitive disadvantages, or failure to meet customer needs, ultimately harming performance.
