Marketing Management Quizzes
4 parts of a good marketing plan outline: consistent
-between marketing plan outline and outline of other functional area plans -with the planning process used at the corporate or business-unit levels -ensures executives and employees outside of marketing will understand the marketing plan/process
goals
-broad, simple statements of what will be accomplished through the marketing strategy -guides the development of objectives and provides direction for resource allocation decisions
marketing plan vs. business plan
-business plan usually contains marketing plan -business plan also includes other issues such as business organization/ownership, operations, financial strategy, HR, and risk management
transactional marketing
-complete a large number of discrete exchanges with individual customers -focus on acquiring customers and making the sale, not on the customers' needs and wants
strategic planning at the top levels
-concerned with macro issues -corporate mission, management of the mix of SBUs, resource acquisition/assignments, corporate policy decisions
what is a critical issue in evaluation and control?
-coordination among functional areas (key is to ensure that functional areas maintain open lines of communication at all times) -fulfillment of market strategy can depend on coordinated execution with other functional strategies -ex: timely distribution/product availability depends on accurate/timely production
what will small businesses usually consolidate?
-corporate, business-unit, and marketing plan into a single document -even though business plans and marketing plans are not the same
decline in customer satisfaction can be attributed to several reasons?
-customers have become much less brand loyal than in previous generations -today's customers are very price sensitive, especially in commoditized markets where products lack any real means of differentiation (e.g. airlines) -customers constantly seek the best value and thrive on their ability to compare prices among competing alternatives -customers are quite cynical about businesses in general and are not that trusting of marketers -today's customers not only have more power, but also have more attitude
psychological utility
-deliver positive experiential or psychological attributes that customers find satisfying -ex: sporting events with intense rivalry (atmosphere, excitement)
derived demand
-demand for one product depends on (is derived from) the demand of another product -marketer must also track the consumption and usage of the complementary product -ex: tire manufacturers track demand for automobiles
market planning at the business unit level
meeting goals and objectives within defined product markets
marketing strategy
-describes how the firm will fulfill the needs and wants of its customers -plan for how the organization will use its strengths and capabilities to match the needs and requirements of the market -includes maintaining relationships with other stakeholders, such as employees, shareholders, or supply chain partners
what is a disadvantage of media fragmentation and what is a big advantage?
-disadvantage: challenge of reaching mass audiences -advantage: easier to reach small, highly targeted audiences who are more receptive to specific marketing messages
other aspects of executive summary
-does not provide detailed information found in following sections -introduces major aspects of marketing plan, such as objectives, sales projections, costs, and performance evaluation measures -should identify the scope (breadth) and time frame of the plan
4 issues with situation analysis: conducting a situation analysis is a challenging exercise
-dynamic nature of internal & external environments -must be well-organized, systematic, supported by sufficient resources, and an ongoing effort
market-oriented structure
-every level of the organization has its focus on serving customer needs -each level serves the levels above it by taking actions necessary to ensure that each level performs its job well -ex: ceo's role is to ensure employees have everything they need to perform well. this same service mentality carries through all levels, including customers. therefore, job of frontline manager is to ensure that frontline employees are capable and efficient. end result is a complete focus on customer needs.
implantation of functional plans have at least 2 markets, which are?
-external market (e.g. customers, suppliers, investors) -internal market (e.g. employees, managers, executives)
balanced performance scorecard
-firms can achieve better performance if they align their strategic efforts by approaching strategy from 4 complementary perspectives: 1. financial 2. customers 3. internal process 4. learning and growth
very sound marketing plans can prove unsuccessful if...
-implementation of the plan is not adequately funded -marketing is competing for scarce resources with other business functions (e.g. finance, R&D, HR all have strategic plans of their own), so the marketing plan must sell itself to top management
supply chain
-involves a long line of activities-- from the sourcing of raw materials, through the production of finished products, to ultimate delivery to final customers -least apparent decisions in marketing, take place behind the scenes -customers don't notice these issues until something goes wrong (e.g. item goes out of stock)
product positioning
-involves establishing a mental image, or position, of the product offering relative to competing offerings in the minds of target buyers -goal is to distinguish the firm's product from competitors by standing out among the crowd -ex: southwest's "no bag fees"; walmart's "everyday low prices"
balanced performance scorecard: customer perspective
-looks at customer satisfaction metrics as a key indicator of firm performance, particularly as the firm moves ahead -financial measures can't suit this task, as they report past performance rather than current
what's also important during the evaluation and control phase?
-maintaining a customer focus (internally and externally) -functional managers should have the ability to see the interconnectedness of all business decisions and act in the best interests of the organization and its customers
market planning at the top level
-mission -vision -goals -allocation of resources among business units -decisions regarding the purchase/divestment of business units
objectives
-more specific than goals -stated in quantitative terms to permit reasonably precise measurement
strategic planning at the lower levels
-more tactical -development of marketing plans (more specific game plans for connecting products/markets in ways that satisfy both organizational and customer objectives)
market planning at the bottom level
-most specific planning/decisions -tactical decisions regarding marketing strategy (target markets and the marketing program) and marketing plans
4 issues with situation analysis: analysis alone is not a solution
-must be combined with intuition and judgement -should not replace the manager in the decision-making process, should empower the manager with information for more effective decision-making
4 parts of a good marketing plan outline: logical
must flow in a logical manner so that it will sell itself to top managers (illogical outline could force rejection or underfunding)
functional objectives
-must be expressed in clear, simple terms so that all personnel understand what type/level of performance the organization desires -must be written so that accomplishment can be measured accurately -must support the organization's missions and goals -must be reconsidered for each planning period
why are pricing decision important?
-only element of the marketing mix that leads to revenue and profit (product + promotion are expenses) -typically has a direct connection with customer demand (which makes pricing the most over manipulated element of the marketing mix; can adjust price to stimulate or curb demand) -easiest element of the marketing program to change (can be altered in real time, can adjust prices to reflect local market conditions, online merchants can charge different prices for different customers based on total sales or customer loyalty) -major quality cue for customers (higher prices = higher quality)
metamediary
-provides a single access point where buyers can locate and contact many different sellers in the metamarket -allows for one-stop shopping -ex: edmunds.com, zillow.com
marketing plan
-provides the outline for how the organization will combine product, pricing, distribution, and promotion decisions to create an offering that customers will find attractive -also addresses the implementation, control, and refinement of those decisions
what examples of functional objectives?
-sales volume (dollars or units) -profitability per unit -% gain in market share -sales per square foot -average customer purchase -% of customers in the firm's target market who prefer its products
4 parts of a good marketing plan outline: comprehensive
no omissions of important information
market-oriented firms
-successfully generate, disseminate, and respond to market information -focus on customer analysis, competitor analysis, and integrating the firm's resources to provide customer value and satisfaction, as well as long-term profits -firms must be able to focus its efforts and resources toward understanding their customers in ways that enhance the firm's ability to generate sustainable competitive advantages -creates an organizational culture that puts customer first, so they tend to perform at higher levels and reap benefits of more highly satisfied customers -decentralizes decision making (vs. traditional structures that were very authoritative...decision-making came from top of hierarchy)
possession utility
-transfer of ownership/title from marketer to customer -making it easier to acquire -ex: furniture stores (easy credit terms, home delivery); credit cards (people who don't carry cash or checks)
strategic planning at the middle levels
-usually a SBU or division -similar to the top levels, but focus on things that pertain to their particular product/market
situation analysis (2)
-widely used approach to the collection and analysis of marketing information -purpose is to describe current and future issues and key trends as they affect 3 key environments (internal, external, customer)
marketing strategy can be composed of...?
1 or more marketing programs
what does it mean by a shift in power from marketers to consumers?
1. went from businesses having the ability to manipulate customers via technology to customers manipulating businesses because of their: -access to information -ability to comparison shop -control they have over spending 2. individual consumers and business customers can compare prices and product specifications in a matter of minutes
5 questions to be asked with a mission statement
1. who are we? 2. who are our customers? 3. what is our operating philosophy (basic beliefs, values, ethics, etc.)? 4. what are our core competencies or competitive advantages? 5. what are our responsibilities with respect to being a good steward of our human, financial, and environmental resources?
top managers who approve the marketing plan will ask what two important questions?
1. will the proposed marketing plan achieve the desired marketing, business unit, and corporate goals and objectives? 2. are there alternative uses of resources that would better meet corporate or business unit objectives than the submitted marketing plan?
what is the purpose of the executive summary?
provide an overview of the plan so the reader can quickly identify key issues related to his/her role in implementing the marketing strategy
marketing plan (2)
provides a detailed formulation of the actions necessary to carry out the marketing program -action document--handbook for marketing implementation, evaluation, and control
strategic planning process
series of plans for each functional area of the organization
2005 AMA definition of marketing
value creation for customers: -marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders
competitive/differential advantage
when a firm possesses capabilities that allow it to serve customers' needs better than the competition
4 parts of a good marketing plan outline: flexible
will fit the unique needs of different situations
balanced performance scorecard: financial perspective
traditional view of strategy and performance
5W model: "what" question
"what do customers do with our products?"
why are internal markets important for implementation?
(-employees, managers, executives) -firms must rely on the commitment and knowledge of employees, as they will perform the activities that will implement the strategy
what will many executives respond when asked "what is your reason for existence"?
-"to make money" -profit may be ultimate objective, but not a mission/vision (mission is what a firm stands for and its basic operating philosophy)
mission
-"what business are we in?" -clear and concise statement (1-2 paragraphs) -explains organization's reason for existence -what the company does in its business operations -more broad
vision
-"what do we want to become?" -future-oriented -more specific
4 issues with situation analysis: data are not the same as information
-*data*: collection of numbers/facts that have the potential to provide information (no shortage, easy to collect/store) -*information*: a person/process transforms data or combines data with other data in a manner that makes them useful to the decision maker
metamarket
-a cluster of closely related goods and services that center around a specific consumption activity -ex: automotive, home ownership
why was strategic planning born out of necessity?
-as firms approached 21st century, they realized traditional planning/measurement approaches were not able to capture value created by the organization's intangible assets (e.g. customer relationships, processes, HR, innovation, information) -these assets were becoming increasingly important to business success, but were not being reported through traditional financial measures
"what do customers do with our products?"
-assessment of how customers consume and dispose of firm's products -usage rate (rate of product consumption), heavy vs. light users, whether customers use complementary products during consumption, and what customers do with the firm's products after consumption -in business markets, customers typically use firm's products in creation of their own products, so they pay close attention to product specifications and quality
form utility
-attributes or features that set product apart from the competition -ex: luxury cars (more features, higher quality)
time utility
-available when customers want them -ex: 24/7 restaurants around college campuses
place utility
-available where customers want them (where customers are) -ex: vending machines, delivery of a product
what was created by balanced strategic planning?
-balanced performance scorecard -by robert kaplan and david norton at harvard university
SWOT analysis should also...
-be analyzed relative to market needs and competition -should help company determine what it does well and where it needs to improve
4 issues with situation analysis
1. analysis alone is not a solution 2. data are not the same as information 3. the benefits of analysis must outweigh the costs 4. conducting a situation analysis is a challenging exercise
4 parts of a good marketing plan outline
1. comprehensive 2. flexible 3. consistent 4. logical
types of utility
1. form 2. time 3. place 4. possession 5. psychological
5 purposes of a marketing plan
1. it explains both the present and future situations of the organization. this includes the situation and SWOT analyses and the firm's past performance 2. it specifies the expected outcomes (goals and objectives) so that the organization can anticipate its situation at the end of the planning period 3. it describes the specific actions that are to take place so that the responsibility for each action can be assigned and implemented 4. it identifies the resources that will be needed to carry out the planned actions 5. it permits the monitoring of each action and its results so that controls may be implemented. feedback from monitoring and control provides information to start the planning cycle again in the next time frame
changes occurring today caused by the internet
1. power shift to customers 2. massive increase in product selection 3. audience and media fragmentation 4. changing value propositions 5. shifting demand patterns 6. privacy, security, and ethical concerns 7. unclear legal jurisdiction
marketing programs consist of 2 elements
1. target market(s) 2. marketing mix (4 P's)
5 conditions that must be met for an exchange
1. there must be at least 2 parties 2. each party has something of value to the other party 3. each party must be capable of communication and delivery 4. each party must be free to accept or reject the exchange 5. each party believes it is desirable to exchange with the other party
effective marketing requires strategic planning at...?
a number of levels in the organization: -top -middle -lower
utility
ability of a product to satisfy a customer's desires
tactical planning
addresses specific markets or market segments and the development of marketing programs that will fulfill the needs of customers in those markets
when customers see goods and services as commodities, they will...?
turn to the most convenient, least-expensive alternative
corporate strategy
central plan for utilizing and integrating resources in the area of production, finance, R&D, HR, and marketing to carry out the organization's mission and achieve the desired goals/objectives
the marketing plan is the means of...
communicating the strategy to top executives who make the decisions regarding the productive/efficient allocation of resources
what does the market planning process require?
coordination of broad-based decisions at the top of the corporate hierarchy with more narrowly defined actions at the bottom
market segmentation
dividing the total market into smaller, relatively homogenous groups that share similar needs, wants, or characteristics
internal environment
a firm's objectives, strategy, performance, allocation of resources, structural characteristics, and political climate
balanced performance scorecard: learning and growth perspective
focuses on people and includes vital issues (e.g. corporate culture, employee training, communication, knowledge management)
SWOT analysis
focuses on the internal factors (strengths, weaknesses) and external factors (opportunities and threats)-- derived from situation analysis-- that give the firm certain advantages/disadvantages in satisfying the needs of its target market(s)
balanced performance scorecard: internal process perspective
focuses on the way business is running by looking at both mission-critical and routine processes that drive day-to-day activity
focus of strategic planning in the 20th century
focusing on the customer has not been the hallmark of strategic planning throughout history: -in the early 20th century, planning focused on production ideals such as efficiency and quality...ignored customer needs and wants (e.g. henry ford black cars) -by the middle of the 20th century, planning started to focus on selling products to customers rather than making products for customers
distribution and supply chain management
goal is to get the product to the right place, at the right time, in the right quantities, at the lowest possible cost
target market
identify 1 or more segments of individuals/businesses/institutions toward which the firm's marketing efforts will be directed
what is the most pressing concern for success of a marketing plan?
identifying needed resources
mission width and stability
if mission is too broad, it will be meaningless and can lead companies to establish plans/strategies in areas where their strengths are limited (leads to failure): -however, mission statement should not stifle creativity, it just must help a firm from moving too far from its core competencies -ex: exxon office products, sears real estate & financial services if mission is too narrow, it can constrain the vision of the organization (e.g. railroad industry with airplanes)
competitive intellience
involves analyzing the capabilities, vulnerabilities, and intentions of competing businesses (competitive environment)
environmental scanning
involves the analysis of economic, political, legal, technological, and cultural events/trends that may affect the future of the organization and its marketing efforts (external environment)
internal analysis
involves the objective review of internal information pertaining to the firm's current strategy and performance, as well as the current and future availability of resources
what does the evaluation and control phase of strategic planning do?
keeps planned activities on target with goals and objectives
4 issues with situation analysis: the benefits of analysis must outweigh the costs
only valuable to the extent that it improves the quality of the marketing plan
strategy
outlines the organization's game plan for success (meeting goals and objectives)
situation analysis
overall process of collecting and interpreting internal, competitive, and environmental information
transactional marketing vs. relationship marketing
shift away from transactional marketing to relationship marketing, as marketers can learn more about their customers and earn higher profits this way
what is the single most important change during the last 2 decades?
shift in power from marketers to consumers
what was born out of necessity?
shift to balanced strategic planning
executive summary
synopsis of the overall marketing plan, with an outline that conveys the main thrust of the marketing strategy and its execution
what do organizations have to do in regards to marketing programs?
they have to choose the right combination of target market(s) and marketing mix(es) to create competitive advantages over its rivals
