chapter 2 - marketing management
A new hardware company is writing its mission statement. Which of the following is the BEST mission statement possible for the new company?
We will help customers build, invigorate, restore, refurbish, or completely redesign their homes or businesses.
Products and technologies eventually become outdated, but basic market needs can last forever. For this reason, company mission statements should be ______.
market-oriented
What is a business portfolio?
The collection of businesses and products that make up a company
MorningLinks, Inc., makes breakfast sausages and has begun to use the slogan, "Start Your Day the Organic Way" to jump on the eco-friendly movement. Unfortunately, as soon as consumers discovered MorningLinks' not-so-organic ingredients, the company began to see a rapid decline in profits and customer loyalty. What was MorningLinks' mistake?
MorningLinks did not deliver on the promise it made.
The goal of a market development growth strategy is to do which of the following?
Identify and develop new markets for current products of a company's market
How do company objectives and goals relate to the company mission statement?
The goals and objectives outline the steps necessary to accomplish the company's mission statement.
A company's external value delivery network consists of __________.
suppliers, distributors, and customers
You've selected the formula for the turmeric shake. You now need to decide on the best packaging style. Your design team has come up with three options for the pre-mixed shakes. Based on what you learned from your focus group, what is the best packaging style?
drink pouch - 12 oz drink pouches with screw tops are resealable, portable, lightweight. pouches are fairly inexpensive to purchase.
Stars, cash cows, question marks, and dogs are the four types of strategic business units (SBUs) defined in which of the following?
Growth-share matrix
Based on your focus group, you ask your product research team to propose different formulas for turmeric meal replacement shakes. Keeping in mind that all In Fine Fettle's products use ingredients that are of higher quality than the competition's, your food scientists offer you three different formulations. Choose the formula that would be most attractive to the target market.
- has the second highest turmeric content and anti-inflammatory properties - made with superior quality ingredients - taste rated as 7/10
A SWOT is a part of which marketing management function?
Analysis
In 2014, Company A reported profits of about $49 billion on sales of $226 billion. For that same period, Company B posted a profit of about $16 billion on sales of $118 billion. So Company A is a better marketer, right? Sales and profits provide information to compare the profitability of these two competitors, but between these numbers is information regarding the efficiency of marketing efforts in creating those sales and profits. Using the following information from the companies' income statements (all numbers are in thousands), calculate profit margin, net marketing contribution, marketing return on sales (or marketing ROS), and marketing return on investment (or marketing ROI) for each company. Company A Company B Sales:$226,125,000(A) $117,676,000(B) Gross Profit: $70,031,000(A) $46,048,000(B) Marketing Expenses: $8,459,150(A) $15,914,600(B) Net Income (Profit): $48,840,000(A) $16,036,000(B)
Company A Company B Profit Margin 21.60% (A) 13.63% (B) NMC $61,571,850 (A) $30,133,400 (B) Marketing ROS 27.23% (A) 25.61% (B) Marketing ROI 727.87% (A) 189.34% (B) Company A is performing more efficiently.
After discussions with your boss, you decide to focus your attention on advertising, one of the key promotional elements. Choose the type of media that you feel is the best channel for your advertising, keeping your target market and prior marketing mix decisions in mind.
Electronic media - utilize In Fine Fettle's website and social media to engage customers in a conversation. Costs are still relatively low for this media-rich interactive channel.
________ is the process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate marketing strategies or mixes.
Market segmentation
What are the four growth strategies identified by the product/market expansion grid?
Market penetration, market development, product development, and diversification
To create value for customers, marketers must improve the performance of the ______________, which includes partnering with suppliers, distributors, and customers.
value delivery network
What are the five marketing management functions used to manage the marketing process?
Analysis, planning, implementation, organization, and control
What are stars in the growth-share matrix?
High-growth, high-share businesses or products
Now that you've selected the product strategies for the shake, you need to decide on a pricing strategy. The meal replacement market is very crowded with competitors. Therefore, In Fine Fettle must consider the competition's prices when setting the price for its new product. A market analysis reveals that most ready-made meal replacement shakes sell for between $2 and $4 per shake. Keep your target market and product decisions in mind as you consider your pricing options.
above market, In Fine Fettle will offer the shakes for $4.50, which is above the market average.
What is the correct sequence of the steps in the strategic planning process?
Define the company mission, set company objectives and goals, design the business portfolio, and plan the market and other functional strategies
Products must be available to consumers when and where they want them. Retailers and wholesalers act as the intermediary between manufacturers and consumers and provide services to both manufacturers and consumers. In Fine Fettle is considering three different options for selling its new product: warehouse clubs, supermarkets, and high-end health food markets. Keep your target market, product, price, and promotion decisions in mind as you consider your place options.
High-end health food markets; they carry only health food products in a boutique-like setting. These markets have knowledgable customer service associates available in every department. On average, product prices are relatively high.
When a company engages in strategic planning, it must consider which of the following?
How to take advantage of current business opportunities
To begin, you must decide which part of the marketing mix to focus on first: product, price, promotion, or place. Which is the best starting point for your marketing mix decisions? VP of Marketing: "Remember that each marketing mix decision will have implications for the remaining decisions. Think carefully about which part of the marketing mix to start with, because each one will affect the others."
Product
The marketing mix is one of the fundamental concepts in marketing today. Commonly known as the four Ps, the marketing mix is the marketer's strategic toolbox. The four Ps must work together to create value for the customer; therefore, these decisions should be seen as interdependent rather than independent. Each of the four Ps consists of many tactical tools and decisions. Review the four P tactics below and place them into the proper category.
Product - Brand name is an element of the product tactic. Price - Seven days represents the payment period that the firm offers to its intermediary, which is an element of price. Promotion - The salesforce is engaged in personal selling, which is an element of promotion because it is a form of communication. Place - Transportation is part of place because transportation is a critical step necessary to get the product from a producer to a consumer.
What are the variables in a company's marketing mix?
Product, price, place, and promotion
Most standard portfolio analysis methods evaluate strategic business units (SBUs) on their performance in two important dimensions. What are these two dimensions?
The attractiveness of the SBU's market or industry and the strength of the SBU's position in that market or industry
Using the BCG growth-share matrix as a guide, Masumura Technologies identified question marks in its business portfolio but is currently maintaining its market share. At a recent meeting with the company's senior management team, the CEO of Masumura and her team members decided to allocate all of the company's profits toward the growth and expansion of these question marks, in order to cause the question marks to become stars. What is likely to happen to this company?
The growth of the company will be unpredictable because there is no guarantee that a question mark will become a star.
The VP of Marketing reviews the target market's profile with you: "Our current target market is consumers who want to eat healthy and live an active lifestyle. We are focusing on consumers ages 18-34. In their limited free time, this market enjoys going to the gym, spending time outdoors, and playing sports. Household sizes are typically small, usually 1-3 people." "These consumers are willing to pay higher prices for functional foods and convenience foods. They also value natural ingredients and authentic foods." "These consumers are highly connected, social, and mobile, relying on each other to make decisions on products. Their media consumption is primarily through Internet-enabled devices: 90% of millennials use smartphones and tablets daily. Less than 15% of millennials have a current newspaper subscription." Given the target market's profile and needs and wants, which product do you recommend that In Fine Fettle launch first?
Turmeric meal replacement shakes
For strategic planning purposes, marketing provides a guiding philosophy that suggests the company's strategy should revolve around creating customer value and building profitable relationships with important consumer groups. This philosophy is called _______.
the marketing concept