Marketing Strategy Exam 1

Elsa started an Etsy store selling custom sugar cookies at a price commensurate with other vendors. While she envisioned making cookies for birthday or holidays, her first order was for a bachelorette party. Elsa obliged, but was uncomfortable with the X-rated fare. The cookies were so well received that Elsa quickly became the go-to baker for bachelorette party cookies. What mistake did Elsa make when beginning her business? She used a production orientation instead of a sales orientation for her business. She did not create a basic marketing plan denoting her target market. She did not adequately anticipate her customer's needs, wants, and demands. She did not consider the perceived value of her cookies versus those of other vendors.

She did not create a basic marketing plan denoting her target market.

Three stages in Porter's external analysis

1. Analyze industry structure •How concentrated is it? •What are the dynamics 2. Analyze the industry's appropriability •Are there powerful buyers? •Are there powerful suppliers? 3. Analyze its long-term viability •Will more firms enter? •Will substitute products or services be found?

Customers prefer one brand over another based on its value, which, in turn, is based on different combinations of ... a. needs and wants. b. benefits and perceptions. c. perceived benefits and percieved costs. d. perceptions and costs.

c. perceived benefits and percieved costs

To have a good value proposition a company should maximize all three types of customer value equally. true false

false

In addition to current competitors, it is important to consider potential market entrants such as firms that might engage in all but one of the following: Market expansion Forward integration Low-cost strategies Backward integration

low-cost strategies

For a market segmentation approach to be effective, the customer groups created must meet the following five criteria:

-Identifiable/Differentiable: -Measurable: -Substantial: -Accessible -Responsive

Customer Value Proposition Examples:

A good value Excellence on an important product or service attribute The best overall quality Product line breadth Innovative offerings A shared passion for an activity or a product Global connections and prestige

The Research Process

Define the problem/opportunity. Develop a research plan. Collect data. Analyze the data. Prepare and present findings. Outline follow-up and create an action plan.

primary competitors

Examples of primary competitors would be McDonald's versus Burger King, Apple versus Samsung, and Huggies versus Pampers

Sustained Competitive Advantage

Four attributes - VRIN: •it must be valuable - V - it can exploit opportunities and/or neutralizes threats in its environment •it must be rare - R - not simultaneously implemented by large numbers of other firms •it must be imperfectly imitable - I - firms that do not possess them resources can't obtain them. •there cannot be strategically equivalent substitutes for this resource - N

The Product-Market Investment Strategy

Invest to grow (or enter a product market) Invest only to maintain the existing position Milk the business by minimizing investment Recover as many of the assets as possible by liquidating or divesting the business

Psychographic

Lifestyle Personality

general model of customer experience

Need Recognition, Information Search, Evaluation of Alternatives, Purchase/Choice, Post-Purchase Evaluation and Behavior

marketing mix

Product, Price, Place, Promotion

Influences on Customer Experience

contextual, individual, and social

Strategic marketing is involved in making decisions, some of which include investment decisions. Of the following which is not an investment decision: a. Invest for growth b. Milk c. Maintain d. Liquidate e. Innovation

e. Innovation

In completing a checklist on competitor assets and competencies, some of the areas to be considered include all but one of the following a. Company culture b. Innovation c. Manufacturing d. Management e. Strategic programming

e. Strategic programming

A local grocery store would like to position the pre-made meals area of its store to excel on performance. Which of the following approach do you recommend as the best path to sustainable competitive advantage? emphasize convenience, aim for parity with competitors on customization and price emphasize low price, and aim for parity with competitors on customization and on convenience. emphasize customization and aim for parity with competitors on convenience and price. choose either a CRM or Comprehensive Solution Management System.

emphasize convenience, aim for parity with competitors on customization and price

A strategic uncertainty should be evaluated with respect to its impact and relevance to future strategy. true false

false

Firms that focus on relational value as a value proposition just need to provide good functional benefits of their product or service. true false

false

One of the three components of environmental analysis is internal analysis. true false

false

The competitive strength grid lists the product-markets served by each competitor and identifies for each product market the strengths of each competitor. true false

false

The exceptional service available on Singapore Airlines is an example of relational value. true false

false

Secondary competitors

offer different products that could be substituted for your product.

Maslow's Hierarchy of Needs

physiological needs, safety needs, love and belonging needs, esteem needs, and self-actualization needs

A company can create synergies by leveraging its assets for multiple uses and by aligning its business model elements. true false

true

A successful price value proposition is usually multifaceted and supported by a cost-oriented culture. true false

true

Porter's five-factor model provides insight into the present and future profitability of an industry. true false

true

Types of Perceived Risk

•Functional risk •Physical risk •Time risk •Financial risk •Psychological risk •Social risk

Segmentation Variables

•Geographic •Demographic •Psychographic •Behavioral

Reduce the uncertainty

•by information acquisition •analysis of an information-need area

macro-environment

the larger societal forces that affect the microenvironment - demographic, economic, natural, technological, political, and cultural forces (Macro-Environment influences on marketing decisions: S = social/cultural, P = political/regulatory/legal, E = economic, N = natural/environmental, and T = technological influences.)

Market segmentation

the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

Functional Strategies and Programs

•Manufacturing strategy •Distribution strategy •Brand-building strategy •Communication strategy •Information technology strategy •Sourcing Strategy

While discussing strategic groups, mobility barriers refer to barriers inhibiting the movement of a person from one social class to another. True False

False

Competitor Analysis

Goal: •Insights that will influence the development of successful business strategies Analysis: •Identification of threats, opportunities, or strategic uncertainties •Created by emerging or potential competitor moves, weaknesses, or strengths.

Assets and Competencies

Strategic Competency: •What a business unit does exceptionally well •Has strategic importance to the business •Based on knowledge or a process Strategic Asset: A resource

A strategic competency is what a business unit does exceptionally well, such as manufacturing, promotion, distribution, etc. which has strategic importance to the business. True False

True

Behavioral

Usage Benefits Brand loyalty

micro-environment

sometimes referred to as the internal environment, includes anything in the environment that directly affects or is directly affected by the marketing manager's decisions

Marketing Defined

the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large Summary: -Marketing is defined as managing exchanges, typically between buyers and sellers. -Specifically, marketing's main purpose is to increase the probability of an exchange taking place by increasing the value of the exchange for both parties.

Educational institutions, as well as companies, face stiff competition. The University of Florida and Florida State University, who target the same students, would be considered a. intense competition b. secondary competition c. primary competition d. educational competition

c. primary competition

Dimensions of a Market Analysis

•Emerging submarkets •Actual and potential market and submarket size •Market and submarket growth •Market and submarket profitability •Cost structure •Distribution systems •Trends and developments •Key success factors

Porter's Five-Factor Model ofMarket Profitability

-Competition among Existing firms -Threat of Potential Entrants -Threat of Substitute Products -Bargaining Power of Customers -Bargaining Power of Suppliers

External Analysis

Addresses the following questions •Should existing business areas be liquidated, milked, maintained, or targeted for investment? •Should new business areas be entered? •What are the value propositions? What should they be? •What assets and competencies should be created, enhanced, or maintained? •What strategies and programs should be implemented in functional areas?

competitive advantage.

An advantage over competitors gained by offering greater customer value

The Segmentation Process

Define the broad market. Narrow the market. Select general variable category(ies) for segmentation. Choose specific segmentation variables within a selected category. Identify categories within each selected segmentation variable. Develop a profile for each segment.

A price value proposition generally consists of all of the approaches below except Scale economies No-frills product/service Delivery of superior customer service Experience curve

Delivery of superior customer service

A strategic group is a customer segment that is strategically important to the business. True False

False

In obtaining a list of motivations, a set of 10 individual interviews will generate 90%-95% of the list. True False

False

unique selling proposition—

M&Ms The milk chocolate melts in your mouth, not in your hand (see Figure 2.4). DeBeers A diamond is forever. FedEx Corporation When it absolutely, positively has to be there overnight. Dollar Shave Club Affordable blades to your door. The North Face Products that last a lifetime.

Properly designed and executed, marketing can do which of the following? Create a need for something. Influence people to do things they don't want to do. Make it more appealing to buy certain things over others. Make people buy things they really can't afford.

Make it more appealing to buy certain things over others.

Philosophy of Marketing

The best marketers manage exchanges that maximize the benefits for both the company and the customer in spite of the fact that the two parties have conflicting goals: The company wants each customer to pay the maximum they are willing to pay but give the customer the minimum benefits, while the customer wants to pay the least amount possible for maximum benefits. Summary: -Marketing has a particular philosophy. Marketers are naive scientists who test ideas, measure their effectiveness, and refine them based on results. -Research is critical to marketing to determine if marketing activities are effective.

Which statement is valid in managing exchanges between a company and its customers? Customers want to pay the least amount possible. The company wants to maximize customer benefits. Customers are the primary drivers of the purchase decisions. The two parties have conflicting goals.

The two parties have conflicting goals.

What is the best synthesis of needs and wants? They can be affected by quality marketing efforts. They affect one's quality of life. They reflect one's status in society. They are unaffected by pandemics or natural disasters.

They affect one's quality of life.

beth owns and operates a garden store focusing on plants native to her region. Though she knows she needs to monitor all kinds of brick-and-mortar and online companies selling plants, she feels most concerned about other garden stores within driving distance. These stores would be considered her a. primary competitors b. retail competitors c. unexpected competitors d. secondary competitors

a. primary competitors

A __________ is a subgroup within an organization that decides its own strategy and has its own customers. a. Strategic department b. Strategic business unit c. Functional business unit d. Functional department

b. Strategic business unit

Which of the following is not an indicator of market maturity or decline? a. Customer disinterest b. Price Pressure c. Saturation d. Predictions for high growth e. Buyer sophistication and knowledge

d. Predictions for high growth

A sustained competitive advantage is one that is valuable and ... a. can be tied to a slogan. b. is easy to communicate. c. is consistent with your mission statement. d. can't be easily copied by competitors.

d. can't be easily copied by competitors.

Some of the benefits of strategic groups include all but one of the following: a. Makes the process of competitor analysis more manageable b. Refines the strategic investment decision c. Includes a set of mobility barriers d. They will be affected by and react to industry developments in similar ways e. They produce strategic options

e.. They produce strategic options

Business

manufacturing, plant locations, executive hiring outside marketing, firm wide compensation plans, etc.

steps in strategic process

plan (goals), implement (tools and tactics), evaluate (measure and feedback)

UNMET NEEDS

strategically important because they represent opportunities for firms to ... •increase their market share •break into a market •create and own new markets

marketing strategy

the managerial process of creating and maintaining plans of action that facilitate exchanges that have value to both the customer and the company in an evolving market environment. In basic terms, marketing strategy is goal-driven action plans that get customers to do what the company wants

Demographic trends can be a strong indicator of the growth of a market and it can be predictable. true false

true

What Marketing Is Not

-Misconception #1: Marketing Is Common Sense -Low Prices Do Not Always Translate to High Sales Volume -Reality: Better service is only more valuable if customers are willing to pay more for it. -Reality: Too many options can lower sales. -Misconception #2: Marketing Is Equivalent to Sales or Advertising -Misconception #3: Marketing Makes People Buy Things They Don't Need -Misconception #4: Marketing Is an Art, and You Either Have the Gift or You Don't -Misconception #5: Marketing Does Not Involve Numbers Summary: -Marketing is not simply common sense. Common sense can lead to failure and often does. -Marketing is more than just advertising or sales. Other key decisions marketers must make include product, price, and place. -Marketing cannot make people buy something against their will. Marketers try to influence wants, but customers ultimately decide if something is worth buying or not. -Marketing is equal parts art and science. -Marketing involves lots of four-function math, and you need to be comfortable with the math used in marketing to be successful in your marketing job.

Management Tasks

1.Strategic Analysis 2.Innovation 3.Multiple Business - Strategies and Issues 4.Creating SCAs 5.Developing Growth Platforms

unexpected competitor

An unexpected competitor offers the same core benefit but with an entirely different product. As air travel has become increasingly expensive and business travelers have less time to travel, business travelers have been increasingly taking advantage of options that allow them to conduct business meetings without the expense and time required for business travel. Enter companies such as Zoom, Skype, Microsoft, and the like

Hector's Tacos is a small food stand on campus. Hector recently has lost a fair number of customers to another food stand that sells similar, but cheaper tacos. Hector is concerned because he was about to launch a line of unique, fresh tacos—ones his clientele has been asking for—that would cost a bit more. Of the following, what is the best advice for Hector? Hector should lower his prices on his current taco offerings. Then he should add fresh taco selections at his current prices. He might lose money at first, but his customers will consider these moves value propositions, which will maximize satisfaction in the long run. Hector should remember that customers will be driven by their wants, needs, and demand for the product. If they want fresh ingredients, they will pay any price to get them. Hector should act like a naïve scientist. He should test his ideas for new tacos and study the outcomes. With this information, Hector can create a marketing plan and set his prices. Hector should define his target market and then provide better tacos than his competitors. His target market will perceive value, thus paying a higher price for Hector's tacos and returning for more.

Hector should define his target market and then provide better tacos than his competitors. His target market will perceive value, thus paying a higher price for Hector's tacos and returning for more.

Emerging submarkets

Submarkets could include offerings that: •Provide a lower price point—discount airlines •Serve nonusers—Kodak Brownie camera •Serve niche markets—performance snowboards •Provide systems solutions—home theaters •Serve unmet needs—Lexus car buying experience •Respond to a customer trend—nutrient-dense energy drinks •Leverage a new technology—Gillette Fusion Razors

What is a Business Strategy?

The Product-Market Investment Strategy - where to compete The Customer Value Proposition Assets and Competencies Functional Strategies and Programs

Which of the following is not a type of value that can be offered by firms as their customer value proposition: a. performance value b. asset value c. price value d. relational value

a. performance value

Apple's relationship with Samsung in the cell phone space is an example of a. primary competitors b. dual suppliers c. unexpected competitors d. joint venture

a. primary competitors

Each of the four elements of a company's marketing mix is designed to create or communicate what to the consumer? a. value b. differentiation c. consistency d. brand identity

a. value

In conducting a competitor analysis, which of the following is not relevant: a. Accounting methodologies b. Market share c. Image d. Positioning strategy e. Objectives and commitments

a.Accounting methodologies

Potential market entrants might use all but one of the following to enter a market: a. Market expansion b. Market penetration c. Product expansion d. Backward/forward integration e. Export assets or competencies

b. Market penetration

Jennifer observed that a local restaurant was successful because they were willing to deliver breakfast to customers who were unable to leave their homes due to stay-at-home orders that were enacted to prevent the spread of COVID-19. She said, "I'll start a breakfast delivery service and the customers will be just as willing to order from me." What Jennifer doesn't understand is the concept of ... a. brand name creation. b. product differentiation. c. mission statement development. d. value exchanges.

b. product differentiation.

Companies differentiate by focusing on their ... a. advertising. b. unique selling proposition. c. pricing. d. mission statement.

b. unique selling proposition.

Marketing

branding, advertising, social technology, media, call centers, training of customer contact people, etc

Five management tasks used to develop strategic competencies do not include the following: a. Strategic analysis b. Manage multiple business units c. Identify competitors d. Develop a sustainable advantage e. Develop a growth platform

c. Identify competitors

Decision-driven scenarios ... a. provide insights into future potential environments b. help create contingency plans to guard against disasters c. help make the go/no-go decision d. suggest investment strategies to capitalize on future opportunities

c. help make the go/no-go decision

Which term means a firm's business focus that provides direction for the company? a. Organizational structure b. Marketing mix c. Mission statement d. Strategic plan

c. Mission statement

Exit barriers are crucial to a firm's ability to exercise an exit alternative. Which of the following is not an exit barrier? a. Managerial pride b. Government or social barriers c. Specialized assets d. High market growth rate e. Fixed costs

d. High market growth rate

A national movie theatre chain like AMC Theatres would consider which of the following organizations an indirect competitor? a. Cinemark Theatres b. Google c. ESPN d. Netflix

d. Netflix

Home Depot decided to pursue the value proposition of relational value, and hence focused on its homeowner customers rather than professional contractors, as the latter would be more strongly driven by performance and price. What would Home Depot do ... a. emphasize quality, taste, convenience, nutrition, or other functional attributes b. emphasize low price c. emphasize personal touch, customization, and service. d. All of the above. e. None of the above.

c.emphasize personal touch, customization, and service.

positioning statement

clearly spells out the differences between what your company offers customers and what other companies offer and should guide all marketing efforts for a specific target market. The positioning statement has four components: We: The company, brand, unit that is providing the offer. Target customer: The target customer is clearly identified in terms of the important segmentation characteristics. Key benefit: Target customer wants and the company will provide (sometimes referred to as a unique selling proposition). Competitive reference: Who does the company want the customer to use as a comparison?

Steps for sustainable competitive advantage

cost leadership, differentiation, defensive strategies and strategic alliances.

How Marketing Has Changed over Time

-Simple Trade and Bartering -Production Orientation -Sales Orientation -Market Orientation -Social Orientation summary: -Some marketers have the bartering philosophy, which views an exchange as a fair trade of equal value goods or service. -A production orientation for marketing suggests marketers focus on providing affordable products by making them widely available. -A sales orientation for marketing involves persuasion to make sales as efficiently as possible. -A market orientation for marketers can be characterized by the phrase "the customer is king/queen," because the focus is on meeting customer needs while making a profit. -Companies that adopt a social orientation to marketing focus on making money but also on providing a social benefit while doing so.

the view of exchange

-You will need to decide with whom you try to exchange -You will need to decide what you will offer to exchange -You will need to determine what you want in return from your customers for the gelato. -You will need to decide how customers will buy from you, including where, when, and how customers will exchange with you. -You will need to decide how to influence the customers to exchange with you

The Customer Value Proposition

Perceived benefit to customer: Functional Emotional Social Self-Expressive

A value proposition needs to be all of the following, except ... a. real b. be perceived as real by customers c. feasible d. non-substitutable e. relevant and sustainable

b. be perceived as real by customers

marketing myopia

defining your mission too narrowly and focusing on the company instead of the customer and potential future environmental trends.