Chapter 2: Company & Marketing Strategy

Strategic Business Unit (SBU)

a company division, product line within a division, or sometimes a single product or brand

Value Delivery Network

a network composed of the company, suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value

The Product/Market Expansion Grid (Market Growth Strategies)

a portfolio planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification

BCG (Boston Consulting Group) Matrix

a portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market shared

Positioning

arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Differentiation

differentiating the firm;s market offering to create superior customer value

Market Targeting

evaluating each market segment's attractiveness and selecting one or more segments to enter

Product Development (Market Growth Strategy)

existing market/new product; offering modified or new products to current markets; ex: Starbuck's K-Cup

Market Penetration (Market Growth Strategy)

existing market/product; making more sales to current customers without changing its original products; ex: selling in bulk

Star (BCG Matrix)

high-growth, high-share businesses or products; need heavy investments to finance their rapid growth; eventually turn into cash cows

Cash Cows (BCG Matrix)

low-growth, high-share businesses or products; need less investment, thus produce a lot of cash that the company is able to use to pay bills and support other SBUs

Dog (BCG Matrix)

low-growth, low-share business and products; may generate enough cash to maintain themselves, but do not promise large sources of cash

Question Marks (BCG Matrix)

low-share, high-growth markets; require a lot of cash to hold their share, or increase it; debate on what question marks to build into stars or phase out

Market Development (Market Growth Strategy)

new market/existing product; same product sold in a different way to a new group

Customer Value Driven Marketing Strategy

segmentation, targeting, differentiation, positioning

Business Portfolio

the collection of businesses and products that make up the company

Mission Statement

- a statement of the organization's purpose - market oriented - defined in terms of satisfying basic customer needs - emphasizes the company's strengths - focus on customers and customer experience

Marketing Segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs

Diversification (Market Growth Strategy)

New Market/New Product; starting up or buying businesses beyond its current products or markets