Chapter 2 - Company and Marketing Strategy

Market segment

a group of consumers who responding a similar way to a given set of marketing efforts

market penetration strategy

a growth strategy that employs the existing marketing mix and focuses the firm's efforts on existing customers

diversification strategy

a growth strategy whereby a firm introduces a new product or service to a market segment that it does not currently serve

Portfolio analysis

a major activity in strategic planning whereby management evaluates the products and businesses that make up the company

Mission Statement

a statement of the organization's purpose - what it wants to accomplish in the larger environment

differentiation

begins the positioning process

product development

company growth by offering modified or new products to current market segments

Threats (SWOT)

current and emerging external factors that may challenge the company's performance

Market-oriented definition

defined in terms of satisfying basic customer needs

Product-Oriented Vision Statements

defines a business in terms of a good or service provided

Opportunities (SWOT)

external factors that the company may be able to exploit to its advantage

strengths (SWOT)

internal capabilities that may help a company reach its objectives

Weaknesses (SWOT)

internal limitations that may interfere with a company's ability to achieve its objectives

value delivery network

made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve performance of the entire system

Return on Marketing Invstment (Marketing ROI)

measurement of the profits generated by investments in marketing activities

market development strategy

offering to reach new market segments, whether domestic or international with existing products

Promotion and place are for...

positioning

What is a SWOT analysis?

strengths, weaknesses, opportunities, threats

Product and price are for...

target customers

Business Portfolio

the collection of businesses and products that make up the company

Market segmentation

the division of a market into distinct groups of buyers who have different needs, characteristics, or behaviours and who might require separate products or marketing mixes

Marketing strategy

the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships

Strategic Planning

the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities

market targeting

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

Value Chain

the series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products

Marketing mix

the set of tactical marketing tools - product, price, place, and promotion - that the firm blends to produce the response it wants in the target market

Market Implementation

turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives

Downsizing

when a company must prune, harvest, or divest businesses that are unprofitable or that no longer fit the strategy

What are the steps to manage marketing?

1) Analysis 2) Planning 3) Implementation and Organization 4) Control

What elements form customer value-driven marketing strategy?

1) Market segmentation 2) Market segment 3) Marketing targeting 4) Market positioning 5) Differentiation

What are the steps in strategic planning?

1. Defining the company mission 2. Setting company objectives and goals 3. Designing the business portfolio 4. Planning marketing and other functional strategies

According to the Boston Consulting Group approach, ________ serves as a measure of company strength in the market. A) relative market share B) product development C) market diversification D) product attribute E) market segmentation

A

Which of the following is an element of the marketing mix? A) place B) education C) needs D) wants E) esteem

A

market positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Marketing plays a key role in the company's strategic planning in all of these ways EXCEPT ________. A) providing input to identify attractive market opportunities B) designing new products from scratch C) creating customer value and building profitable relationships with customer groups D) designing strategies for reaching a unit's objective E) providing a guiding philosophy

B

Which of the following is NOT a market-oriented business definition? A) "We empower customers to realize their dreams." B) "We make high-quality consumer food products." C) "We sell success and status." D) "We create the Hilton experience." E) "We bring innovation to every home."

B

What are three business objectives

Build profitable customer relationships Invest in research Improve profits

Which of the following best describes a strategic business unit? A) the internal value chain of a company B) the supply chain of a company C) the key businesses that make up a company D) the key channel intermediaries of a service company E) the key competitors of a company

C

Which of the following is a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification? A) BCG matrix B) analysis of variance C) product/market expansion grid D) Harris matrix E) SWOT analysis ​

C

Which of the following is true with regard to a SWOT analysis? A) It classifies SBUs into four distinct categories. B) It measures customer response to a new product. C) It evaluates the company's overall strengths. D) It evaluates the growth potential of a market segment. E) It ignores the threats faced by a company while assessing its situation in the market.

C

Which of the following is true with regard to strategic planning? A) At the corporate level, the company starts the strategic planning process by determining what portfolio of businesses and products is best for the company. B) A strategic plan deals with a company's short-term goals. C) The focus of strategic planning is to define a game plan for long-run survival and growth. D) The strategic plan is a statement of an organization's purpose. E) Strategic planning involves identifying segments of consumers with identical preferences.

C

Strategic Business Units (SBU) can be a...

Company division Product line within a division Single product or brand

Each department in a company that carries out value-creating activities can be thought of as a link in the company's ________. A) channel of intermediaries B) external value stream C) demand chain D) internal value chain E) supplier chain

D

________ is the process of developing and maintaining a crucial fit between the organization's goals and capabilities and its changing marketing opportunities. A) Benchmarking B) SWOT analysis C) Market segmentation D) Strategic planning E) Diversification

D

Problems with Matrix Approaches

Difficulty in defining SBUs and measuring market share and growth Time consuming Expensive Focus on current businesses, not future planning

Question Marks (BCG Matrix)

High growth Low market share Require a lot of cash to hold their share

Describe 'Stars' in BCG matrix

High growth rate High market share Require heavy investment bc rapid growth Eventually turn into cash cow

What are three Marketing objectives

Increase market share Create local partnerships Increase promotion

Dogs (BCG Matrix)

Low growth Low market share Generate enough to maintain Not large source of cash

Describe 'Cash Cows' in BCG matrix

Low growth rate high market share Established Less investments to maintain

Four elements of product expansion grid

Market Penetration Product Development Market Development Diversification

What are the 4Ps

Product, Price, Place, Promotion

BCG Matrix

Star - high market growth rate, high relative market share Question Mark - high market growth rate, relative market share Cash Cow - low market growth rate, high market share Dog - low market growth rate, low market share