Marketing Chapter 2

Market development

A marketing strategy that entails the creation of new customers to existing products

Product development

A marketing strategy that entails the creation of new products for present markets

Market penetration

A marketing strategy that tries to increase market share among existing customers.

Diversification

A strategy of increasing sales by introducing new products for present markets

Portfolio Mateo

A tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate

Marketing plan

A written document that acts as a guidebook of marketing activities for the marketing manager

Identify strategic alternatives and know a basic outline for a marketing plan

Ansoff's opportunity matrix presents four options to help management develop strategic alternatives: market penetration, market development, product development, and diversification. A marketing plan should define the business mission, perform a situation analysis, define objectives, delineate a target market, and establish components of the marketing mix.

Marketing planning

Designing activities relating to marketing objectives and the changing marketing environment

Define srategic business units (SBUs)

Each SBU should have these characteristics: a distinct mission and a specific target market, control over its resources, it's own competitors, a single business, and plans independent from other SBUs in the organization. Each SBU has its own rate of return on investment, growth potential, and associated risks, and requires its own strategies and funding.

Cash cow

In the portfolio matrix, a business unit that generates more cash than it needs to maintain its market share

Dog

In the portfolio matrix, a business unit that has low growth potential and a small market share

Star

In the portfolio matrix, a business unit that is a fast-growing market leader

Problem child (question mark)

In the portfolio matrix, a business unit that shows rapid growth but poor profit margins

Understand the importance of strategic planning

Strategic planning is the basis for all marketing strategies and decisions. These decisions affect the allocation of resources and ultimately the financial success of the company.

Strategic planning

The managerial process of creating an maintaining a fit between the organizations objectivrs and resources and the evolving market oppurtunities

Strategic business unit (SBU)

a subgroup of a single business or collection of related businesses within the larger organization

Planning

the process of anticipating future events and determining strategies to achieve organizational objectives in the future