MKTG Ch. 2

Centralized Organizations

-authority is concentrated at the top level -very little delegation to lower levels

Levels of Strategic Planning

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

Market Share

percentage of a market that actually buys a specific product from a particular company

Business-Unit Strategies

should be consistent with corporate strategy.

Decentralized Organizations

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

Corporate Identity

Companies develop and manage their corporate identity- their unique symbols, personalities, and philosophies- to support all the firm's activities, including marketing.

Creating the Marketing Mix

Decisions made in creating a marketing mix are only as good as the organization's understanding of its target market Requires: -in-depth research into the characteristics of the target market -analysis of customer needs, preferences, and behaviors with respect to product design, pricing, distribution, and promotion

Target Market Selection

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

Assessing Organizational Resources and Opportunities

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. -must assess the org available financial and human resources and capabilities as well as how the level of these factors is likely to change in the future

Market Opportunity

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

Strategic business unit (SBU)

a division, product line, or other profit center within the parent company. -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 -revenues, costs, investments, and strategic plan of each SBU can be separated from those of the parent company and evaluated.

Market

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

SWOT Analysis

a tool marketers use to assess an organization's strengths, weaknesses, opportunities, and threats -Strengths and weaknesses are internal factors that can influence an organization's stability to satisfy its target market -opportunities and threats exist independently of the company and therefor represent issues to be considered by all organization, even those that do not compete with the company.

First-mover Advantage

ability of an innovative company to achieve long-term competitive advantages by being the first to offer a certain product in the marketplace -build a firm's reputation as a market leader -market is free of competition -est. 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

SWOT Weaknesses

any limitations a company faces in developing or implementing a marketing strategy

Organizing the Marketing Unit

companies that truly adopt the marketing concept develop a distinct organizational culture.

SWOT Strengths

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

Corporate Strategy planners

concerned with the broad issues such as: corporate culture, competition, differentiation, diversification, interrelationships among business units, environmental and social issues. -They match the resources of the org with the opportunities and threats in the environment.

SWOT Threats

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

Corporate Strategy

determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to reach the organizations goals -broadest of the three levels of strategy and should be developed with the org overall mission in mind

SWOT Opportunities

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

Market growth/Market share Matrix

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. -all the companies SBUs and products should be integrated into a single, overall matrix and evaluated to determine strategies for individual products and overall portfolio strategies.

Mission Statement

long-term view or vision of what the organization wants to become. -goals of any org. should derive from its mission statement -should answer the questions "who are our customers" and "what is our core competency?"

Sustainable Competitive Advantage

one that the competition cannot copy in the forseeable future

Marketing Strategy

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

Strategic Planning

process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, and marketing strategy. -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 -important for the successful implementation of marketing strategies.

Marketing Implementation

process of putting marketing strategies into action. Depends on: -organization of the marketing department -motivating marketing personnel -effectively communicating within the marketing unit -coordinating all marketing activities -est. a timetable for the completion of each marketing activity

Efficiency

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

Managing identity

requires a)broadcasting a company's mission, goals, and values, b) sending a consistent image and c) implementing a visual identity with stakeholders

Marketing Objective

statement of what is to be accomplished through marketing activities -based on a study of SWOT analysis - stated in clear, simple terms -accurately measurable -specifies a time frame for accomplishment -consistent with business-unit and corporate strategy

Strategic Windows

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

Effectiveness

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

Competitive Advantage

the result of a company matching a core competency to the opportunities it has discovered in the marketplace -the place where opportunities, core competencies, and strategic windows meet

Core Competencies

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

Late-mover disadvantages

-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

First-mover Risks

-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 customers' expectations or needs

Growth Share Matrix

Stars: products with a dominant share of the market and good prospects for growth Cash Cows: have a dominant share of the market but low prospects for growth Dogs: have a subordinate share of the market and low prospects for growth Question Marks: have a small share of a growing market and generally require a large amount of cash to build market share -long-term health of an organization depends on having some products that generate cash and others that use cash to support growth

Strategic Marketing Management

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

Late-mover Advantage

ability of later market entrants to achieve long-term competitive advantages by not being the first to offer a certain product in the market place -learn from first mover's mistakes and thus create an improved product design and marketing strategy -lower initial costs since first mover has developed and infrastructure of buyers -more certainty about the success of the market for the product