Chapter 2

Marketing plan is the systematic process of:

-Assessing marketing opportunities and resources -Determining objectives -Defining Strategies -Establishing guidelines for implementation and control of the marketing program

A marketing objective should:

-Be based on a study of the SWOT analysis -Match strengths to opportunities and/or eliminate weaknesses or threats -Be stated in clear, simple terms -Be accurately measurable -Specify a time frame for accomplishment -Be consistent with business-unit and corporate strategy

First-mover advatages:

-Build a firm's reputation as a market leader -Market is free of competition -Establish brand loyalty for the firm due to its customer's costs to switch later on -Firm can protect its trade secrets or technology through patents

If actual performance does not meet performance standards:

-Determine why a marketing strategy was less effective -Determine whether the marketing objective, against which performance is measured, is realistic or not

Disadvantages of being a late mover:

-First mover may have patents on its technology and trade secrets that prevent the late mover from reverse engineering its product or producing a product that is too similar -Customers who have already purchased the first mover's product may believe that switching to the late mover's product is too expensive or time-consuming for them -Timing of entry to the market is crucial and can determine the amount of late-mover advantage that is actually possible

Risks of being the first to enter a market:

-High cost associated with creating a new product from scratch (Market research, product development, production, and marketing or buyer education costs) -Early sales growth may not be as high as the company predicted if it makes mistakes with regard to the product or its marketing -Risk that the product will fail due to market uncertainty, or that the product might not meet consumers' expectations or needs

Late-mover advantages:

-Learn from first mover's mistakes and thus create an updated/improved product design and marketing strategy -Lower initial costs since first mover has developed an infrastructure/educated buyers -More certainty about the success of the market for the product

If actual performance exceeds performance standards:

-Marketing strategy is viewed as being effective -Try to gain an understanding of why the strategy is effective

Managing identity requires:

1) Broadcasting a company's mission, goals, and values 2) Sending a consistent image 3) Implementing a visual identity with stakeholders

All marketing mix decisions should be:

1) Consistent with the business-unit and corporate strategies 2) Flexible to permit the organization to alter the marketing mix in response to changes in market conditions, competition, and customer needs

Communication is facilitated by an:

1) Effective training program where employees can learn, ask questions, and become accountable for marketing performance 2) Information system within the marketing unit and with other departments in the organization

Strategic performance evaluation consists of:

1) Establishing performance standards 2) Measuring actual performance 3) Comparing actual performance with established standards 4) Modifying the marketing strategy, if needed

Establishing an implementation timetable involves several steps:

1) Identifying the activities to be performed 2) Determining the time required to complete each activity 3) Separating the activities to be performed in sequence from those to be performed simultaneously 4) Organizing the activities in the proper order 5) Assigning responsibility for completing each activity to one or more employees, teams, or managers

Creating the marketing mix requires:

1) In-depth research into the characteristics of the target market 2) Analysis of customer needs, preferences, and behaviors with respect to product design, pricing, distribution, and promotion

Levels of strategic Planning (5)

1) Mission Statement 2) Corporate strategy 3) Business-unit strategy 4) Marketing strategy 5) Marketing mix elements (product, distribution, promotion, pricing)

marketing implementation depends on:

1) Organization of the marketing department 2) Motivating marketing personnel 3) Effectively communicating within the marketing unit 4) Coordinating all marketing activities 5) Establishing a timetable for the completion of each marketing activity

Low Product-market growth High Relative market share; have a dominant share of the market but low prospects for growth

Cash cow

The place where opportunities, core competencies, and strategic windows meet

Competitive Advantage

________ determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to reach the organization's goals

Corporate strategy

-- __________ are concerned with broad issues such as: Corporate culture, Competition, Differentiation, Diversification, Interrelationships among business units, Environmental and social issues --Match the resources of the organization with the opportunities and threats in the environment

Corporate strategy planners

Low Product-market growth Low Relative market share; haveasubordinateshareofthe market and low prospects for growth

Dog

Information about the company's current situation with respect to the marketing environment Highlights: (1) Assessment of the marketing environment factors (2) Assessment of target market(s) (3) Assessment of current marketing objectives and performance

Environmental analysis

_______ is the ability of an innovative company to achieve long-term competitive advantages by being the first to offer a certain product in the marketplace

First-mover advantage

________ is the ability of later market entrants to achieve long- term competitive advantages by not being the first to offer a certain product in a marketplace

Late-mover advantage

______ of an organization depends on having some products that generate cash and others that use cash to support growth

Long-term health

outline of how the company will implement its marketing strategies; Highlights: (1) Marketing objectives (2) Activities and responsibilities (3) Implementation timetable

Marketing Implementation

A statement of what is to be accomplished through marketing activities

Marketing Objective

Specification of the company's marketing objectives; Highlights: (1) Qualitative measures of what is to be accomplished (2) Quantitative measures of what is to be accomplished

Marketing Objectives

A plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market

Marketing Strategy

________ breaks down and classifies costs to determine which are associated with specific marketing efforts

Marketing cost analysis

coordinated Marketing Activities

Marketing managers must work with other departments to ensure marketing activities mesh with other functions of the firm

Outline of how the company will achieve its objectives; Highlights: (1) Target market(s) 2. Marketing matrix

Marketing strategies

_______ refer to favorable conditions in the environment that could produce rewards for the organization if acted on properly

Opportunities

_______ and _______ exist independently of the company and therefore represent issues to be considered by all organizations, even those that do not compete with the company

Opportunities and threats

Explanation of how the company will evaluate the performance of the implemented plan; Highlights: (1) Performance standards (2) Financial controls (3) Monitoring procedures (audits)

Performance Evaluation

______ is an expected level of performance against which actual performance can be compared

Performance standard

High Product-market growth Low Relative market share; have a small share of a growing market and generally require a large amount of cash to build market share

Question mark

_________: Recognizing outstanding performance is one approach to motivating marketing personnel

Recognition

_____ to employees should be tied to organizational goals and be fair, ethical, and well understood by employees

Rewards

assessment of the organization's strengths, weaknesses, opportunities, and threats; Highlights: (1) Strengths of the company (2) Weaknesses of the company (3) opportunities in the environment and industry (4) Threats in the environment and industry

SWOT Analysis

______ is a tool marketers use to assess an organization's strengths, weaknesses, opportunities, and threats

SWOT analysis

______ uses sales figures to evaluate a firm's current performance

Sales analysis

High Product-market growth High Relative market share; tars are products with a dominant share of the market and good prospects for growth

Star

__________ is a division, product line, or other profit center within the parent company

Strategic business unit (SBU)

_______ refer to competitive advantages or core competencies that give the company an advantage in meeting the needs of its target market

Strengths

_______ and _______ are internal factors that can influence an organization's ability to satisfy its target market

Strengths and weaknesses

Selecting an appropriate target market may be the most important decision a company makes in the strategic planning process

Target Market Selection

corporate strategy

The broadest of the three levels of strategy (corporate, business unit, and marketing) and should be developed with the organization's overall mission in mind

Strategic Marketing Management

The process of planning, implementing, and evaluating the performance of marketing activities and strategies, both effectively and efficiently

_______ refer to conditions or barriers that may prevent the company from reaching its objectives

Threats

_______ refer to any limitations a company faces in developing or implementing a marketing strategy

Weaknesses

An organization's mission statement should answer two questions:

Who are our customers? What is our core competency?

corporate strategy

Who are our customers? What is our core competency?

Marketing Plan

Written document that specifies the activities to be performed to implement and control the firm's marketing strategies --aligned with corporate / business-unit strategies and is accessible/shared with employees

One way to analyze costs is by comparing ________ with _________ --When looking at industry averages, a company should take into account its own unique situation --Company's costs can differ from the industry average for several reasons, including its own marketing objectives, cost structure, geographic location, types of customers, and scale of operations

a company's costs; industry averages

Mission statement

a long-term view, or vision, of what the organization wants to become

Strategic planners should recognize the strategic performance capacities of each SBU and:

allocate scarce resources among those divisions

The strategic planning process begins with:

an analysis of the marketing environment, including a thorough analysis of the industry in which the company is operating or intends to sell its products

Strategic windows

are temporary periods of optimal fit between the key requirements of a market and the particular capabilities of a company competing in that market

Core competencies

are things a company does extremely well, which sometimes gives it an advantage over its competition

Authority is concentrated at the top level; Very little delegation to lower levels

centralized organizations

Must _____ the activities of marketing staff within the firm and integrate those activities with the marketing efforts of external organizations

coordinate

Managers can improve ________ by making each employee aware of how his or her job relates to others and how his or her actions contribute to achieving marketing objectives

coordination

Walmart's ______, which is efficiency in supply chain management, has enabled the chain to build a strong reputation for low prices at high quality levels on a wide variety of goods

core competency

Companies develop and manage their _____________—their unique symbols, personalities, and philosophies—to support all the firm's activities, including marketing

corporate identity

Business-unit strategy shouldbe consistent with _______

corporate strategy

Companies that truly adopt the marketing concept develop a distinct organizational culture:

culture based on a shared set of beliefs that makes the customer's needs the pivotal point of the company's decisions about strategy and operations

Decision making authority is delegated as far down the chain of command as possible

decentralized organizations

To motivate marketing personnel, managers must:

discover their employees' needs and then develop motivational methods that will help employees satisfy those needs

one to two page synopsis of the entire marketing plan -highlights: (1) stress key points (2) include 1-3 key points that makes the company unique

executive summary

Market opportunity

is a combination of circumstances and timing that permits an organization to take action to reach a particular target market

Competitive advantage

is the result of a company matching a core competency to opportunities it has discovered in the marketplace

A ____ is a group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase those products

market

All the companies SBUs and products should be integrated into a single, overall ______ and evaluated to determine strategies for individual products and overall portfolio strategies

market growth/market share matrix

The _________ is a helpful business tool, based on the philosophy that a product's market growth rate and its market share are important considerations in determining its market strategy

market growth/market share matrix

_________ is also important for the successful implementation of marketing strategies

market orientation

The percentage of a market that actually buys a specific product from a particular company is referred to as that product's (or business unit's) ______

market share

The process of putting marketing strategies into action

marketing implementation

At the ______ level, a company can detail how it will achieve a competitive advantage

marketing mix

Decisions made in creating a ______ are only as good as the organization's understanding of its target market

marketing mix

Performance standards are derived from

marketing objectives that are set while developing marketing strategies

The goals of any organization should derive from its __________

mission statement

selecting effective _______ has become more complex because of greater differences among workers in terms of race, ethnicity, gender, and age

motivational tools

The revenues, costs, investments, and strategic plans of each SBU can be separated from those of the _______ and evaluated

parent company

For example, a 20% reduction in customer complaints, a monthly sales quota of $150,000, or a 10% increase per month in new-customer accounts

performance standard

efficiency

refers to minimizing the resources an organization uses to achieve a specific level of desired customer relationships

_________ Most common method of evaluation because sales data partially reflect the target market's reactions to a marketing mix and often are readily available

sales analysis

Current sales data must be compared with forecasted sales, industry sales, specific competitor's sales, or the costs incurred to achieve the ______

sales volume

Each of these units sells a distinct set of products to an identifiable group of customers, and each competes with a well-defined set of competitors

strategic business unit (SBU)

_________ should be guided by a market orientation to ensure that a concern for customer satisfaction is an integral part of the process and permeates the entire company

strategic planning

A ________ is one that the competition cannot copy in the foreseeable future

sustainable competitive advantage

Identification and analysis of a ______ provide a foundation on which a company can develop a marketing mix -Marketers should also assess whether the company has the resources to develop the right marketing mix to meet the needs of a particular target market

target market

effectiveness

the degree to which long-term customer relationships help achieve an organizations objectives

Any strategic planning effort must assess:

the organization's available financial and human resources and capabilities as well as how the level of these factors is likely to change in the future

strategic planning

the process of establishing an organizational mission and formulating goals, corporate strategy, market objectives, and marketing strategy

One of the most important types of communication in marketing is communication that flows

upward from the frontline of the marketing unit to higher-level marketing managers