Marketing Strategy Exam 1
Marketing Strategies
Functional decisions about how to divide the market into segments, which segments to target, what products to offer each target segment, what channels to use to distribute those products, what promotional tools and appeals to employ, and what prices to charge all
Secondary Data
data collected for some other purpose than the problem currently being considered
Primary Data
data collected specifically for this research question
Resource Deployment
deciding how those resources are to be obtained and allocated across businesses, product-markets, and functional departments and ac-tivities within each business or product-market
Exploratory Research
discovery
Market Segments
distinct subsets of people with similar needs, circumstances, and characteristics that lead them to respond in a similar way to a particular product or service offering or to a particular strategic marketing pro-gram.
Marketing Strategy
effectively allocate and coordinate market-ing resources and activities to accomplish the firm's objectives within a specific product-market
What two directions can a firm go in terms of future growth?
expansion of current businesses and activities OR diversification into new businesses
Corporate Identity
flows from the communications, impressions, and personality projected by an organization.
prospector strategy
focus on growth through the development of new products and markets
Tech Push
giving the customer something they didn't know they wanted yet
Market Pull
going out into the market and seeing what people are looking for and then giving it to them
Descriptive Research
seeks to describe or explain some phenomenon. Often this involves something going on in the marketplace
Quantitative Research
used to develop a more mea-sured understanding using statistical analysis to assess and quantify the result
Firm's Mission
what customer needs are to be satisfied and the functions the firm must perform to satisfy them
Related (concentric) diversification
when a firm internally develops or acquires another business that does not have products or customers in common with its current businesses but that might contribute to internal synergy through the sharing of production facilities, brand names, R&D know-how, or marketing and distribution skills
Forward vertical integration
when a firm moves downstream in terms of the product flow, as when a manufacturer integrates by acquiring or launching a wholesale distributor or retail outlet.
Synergy
when the firm's businesses, product-markets, resource deploy-ments, and competencies complement and reinforce one another. The whole becomes greater than the sum of its parts
Differential Defenders
a business must be strong in those functional areas critical for maintaining its particular competitive advantages over time.
Marketing Information System (MIS)
a continuing pro-cess of identifying, collecting, analyzing, accumulating, and dispensing critical information to marketing decision makers
Market Growth Rate
a proxy measure for the maturity and attractiveness of an industry.
Value Based Planning
a resource allocation tool that attempts to address such ques-tions by assessing the shareholder value a given strategy is likely to create.
Marketing Plan
a written document detailing the current situation with respect to cus-tomers, competitors, and the external environment and providing guidelines for objectives, marketing actions, and resource allocations over the planning period for either an existing or a proposed product or service
Core Competencies
activities the firm does well
Market Value Added (MVA)
adding debt and the market value of its stock and then subtracting the capital that has been invested in the company
Service
any activity or benefit that one party can offer to another that is essentially intangible and that does not result in the ownership of anything. Its production may or may not be tied to a physical product
analyzer strategy
attempts to maintain a strong position in its core product-market(s) but also seeks to expand into new—usually closely related—product-markets.
Marketing Intelligence
collecting, analyzing, and storing data from the macro environment on a continuous basis
Strategic Fit
company's managers have done a good job of monitoring and adapt-ing their strategies to the market opportunities, technological advances, and competitive threats in the company's external environment
defender strategy
concentrate on maintaining their positions in established product-markets while paying less attention to new product development
Product Policies
concern the breadth or diversity of product lines, their level of technical sophistication, and the target level of product quality relative to competitors.
Market Oriented Firms
coordinate their activities around the primary goal of sat-isfying unmet customer needs
How should strategic business units be designed?
(1) A homogeneous set of markets to serve with a limited number of related technologies (2) A unique set of product-markets (3) Control over those factors necessary for successful performance (4) Responsibility for their own profitability
Good market research does what 3 things?
(1) Follows a well-defined set of activities and does not happen by accident (2) Enhances the validity of the information (3) Is impartial and objective
Corporate Objective Components
(1) Performance dimension (2) Measure for evaluating progress (3) Target level to be achieved (4) Time frame
What should a strategy specify?
(1) what (objectives to be accomplished), (2) where (on which industries and product markets to focus) (3) how (which resources and activities to allocate to each product-market to meet environmental opportunities and threats and to gain a competitive advantage)
The Four C's
(1)Company's internal resources (2)Context of the environment (3)Competitors strengths and weaknesses (4)Customers needs, wants, and characteristics
3 generic business level strategies
1. Overall Cost Leadership 2. Differentiation 3. Focus Strategy
What are the five components of a strategy?
1.Scope 2.Goals and Objectives 3.Resource Deployments 4.Identification of a sustainable competitive advantage 5.Synergy
Strategy
A fundamental pattern of present and planned objectives, resource deployments, and interactions of an organization with markets, competitors, and other environmental factors
What three things should a mission statement be?
Achievable, motivational, specific
Distribution Policies
Attempting to maintain tight control over the behavior of channel members to maintain strong positions in established markets.
What is Habit #1?
Be proactive
What is Habit #2?
Begin with the end in mind
Value Equation
Benefits - Cost = Value
Sustainable Competitive Advantage
Cannot be easily duplicated by competitors
Distinctive Competencies/Competitive Advantage
Core competencies that are superior to competitors
What is the hierarchy of strategies?
Corporate Level, Business Level, Functional Level
What are the three performance dimensions
Effectiveness, efficiency, adaptability
Promotion Policies
Extensive marketing communications
What is the main difference between goods and services?
Goods = Tangible; Services = Intangible
Business Level Strategy
Primarily addresses how a business will compete in its industry in order to attain a sustainable advantage over its rivals.
4 SBU Types
Prospectors, defenders, analyzers, reactors
Corporate Strategy
Provides direction concerning the organization's overall mission, the kinds of businesses it should be in, and its growth policies
Goals & Objectives
Strategies also should detail desired levels of accomplishment on one or more dimensions of performance—such as volume growth, profit contribution, or return on investment—over specified time periods for each of those businesses and product-markets and for the organization as a whole.
What is Habit #3?
Put first things first
What are the four parts to customer value?
Social, functional, experiential, economic
Pricing Policies
Success in offering low prices relative to those of competitors should be positively re-lated to the performance of low-cost defender businesses
Low Cost Defenders
Successful implementation of a low-cost defender strategy requires the business to be more efficient than its competitors
The three dimensions that define the scope and mission of the entire corporation also define individual SBUs. What are they?
Technical compatibility, customer needs, personal characteristics
Economic Value Added (EVA)
The amount of return a strategy or operating program generates in excess of the cost of capital
Product/Production Oriented
The business is primarily concerned with producing more of what it wants to make, and marketing generally plays a secondary role in formulating and implementing strategy
Strategic Business Unit (SBU)
The components of a firm engaged in multiple industries or businesses
Microeconomics
The study of individual economic activity (firm, household, or prices)
What is Habit #4?
Think Win-Win
Sales Oriented
hiring more salespeople, increasing advertising budgets, or offering frequent price promotions—to maintain market share and hold down unit costs.
Identification of a sustainable competitive advantage
how the organization will compete in each business and product-market within its domain.
Behavioral Data
include information about when, what, and how often customers pur-chase products and services as well as other customer "touches"
Unrelated (conglomerate) diversification
involves two businesses that have no commonalities in products, customers, production facilities, or functional areas of expertise
Qualitative Research
less structured and can employ methods such as surveys and interviews to collect the data; qualitative research employs small samples and is not meant to be used for statistical analyses
What type of firm is more profitable and successful in maintaining strong competitive positions?
market oriented firms
reactor strategy
no clearly defined strategy.
Backward Integration
occurs when a firm moves upstream by acquiring a supplier.
Marketing (big M)
serves as a core driver of business strategy. That is, an understanding of markets, competitors, and other external forces, coupled with attention to internal capabilities, allows a firm to successfully develop strategies for the future. This approach is often referred to as strategic marketing, which means a long-term, firm-level commitment to investing in marketing—supported at the highest organizational level—for the purpose of enhancing organizational performance
marketing (little m)
serves the firm and its stakehold-ers at a functional or operational level; hence, marketing (little m) is often thought of as tactical marketing. In fact, marketing (little m) almost always takes place at the functional or opera-tional level of a firm
Strategic Inertia
the automatic continuation of strategies suc-cessful in the past, even though current market conditions are changing.
Scope
the breadth of its strategic domain—the num-ber and types of industries, product lines, and market segments it competes in or plans to enter.
Value Proposition
the firm's communication of the unique value of its products to its customersC
Market Research
the methodical identification, collection, analysis, and distribution of data related to discovering and then solving marketing problems or opportunities and enhancing good decision making
Marketing Concept
the planning and coordination of all company activities around the primary goal of satisfying customer needs is the most effective means to attain and sustain a competitive advantage and achieve company objectives over time.
Demographics
the statistical characteristics of human populations, such as age or income, used to identify markets
Macroeconimics
the study of economic activity in terms of broad measures of output (gross national product or GNP) and input as well as the interaction among various sectors of an entire economy
Position
to design the product and its marketing program to emphasize attributes and benefits that appeal to customers in the target segment and at once distinguish the company's offering from those of competitors.