Marketing chapter 2

what is the purpose of strategic planning

find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment.

what do large companies that produce products flowing into many different geographic and customer markets usually employ?

some combination of functional, geographic, product, and market organization forms.

what is the area of each SBU proportional to?

the SBU dollar sales

what level does marketing planning occur at

the business-unit, product, and market levels.

what do the circles represent on the growth share matrix

the current SBUs

who is the chief marketing officer (CMO)

this person heads up the company's entire marketing operation and represets marketing on the company's top management team. -Role=champion the customers cause- to be the chief customer officer.

what does strategic planning allow the business to do

through strategic planning, the company decides what to do with each business unit

how does the company find the best marketing mix

• To find the best marketing strategy and mix, the company engages in marketing analysis, planning, implementation, and control. Through these activities, the company watches and adapts to the actors and forces in the marketing environment.

what is the marketing mix

The set of tactical marketing tools that the firm blends to produce the response it wants in the target market. consists of the 4 p's

what is the boston consulting group approach

-a company classifies all of its SBUs according to the Growth share metric

what is operating control

- involves checking ongoing performance against the annual plan and taking corrective action when necessary. -Purpose: ensure that the company achieves its sales, profits, and other goals set out on its annual plan. -Also involves determining the profitability of different products, territories, markets, and channels.

which companies might choose to serve several related segments

-A company might choose to serve several related segments-perhaps those with different kinds of customers but with the same basic wants. •Ex: GAP, old navy, athlete, banana republic

which company might decide to serve niches

-A company with limited resources might decide to serve only one or a few special segments or market niches. • Ex: Ferrari

what are reasons that a company might want to downsize

-A firm might have grown too fast or entered areas where it lacks experience. -The markets environment might change, making some products or markets less profitable. -Some products or business units might age and die.

what is a product position

-A products position: the place it occupies relative to competitor's products.

what is a market or customer management organization

-Best For companies that sell one product line to many different types of markets and customers who have different needs and preferences -Market managers are responsible for developing marketing strategies and plans for their specific markets or customers. -main advantage: the company is organized around the needs or specific customer segments. --Many companies develop special organizations to manage their relationships with large customers.

what is CVS' business objective and marketing objective

-Business objective: increase access, lower costs, and improve quality of care. -Marketing objectives: increase sales by improving customer engagement and raising the company's share of the health-care market. To increase customer engagement, sales, and market share, CVS health has reshaped and broadened its lines of products and services

what is the problem with matrix approaches

-Can be difficult, time consuming, and costly to implement. -Management finds it difficult to define SBUs and measure market share and growth oThese approaches focus on classifying current businesses but provide little advice for future planning. oToday's strategic planning has been decentralized. oIncreasingly, companies are placing responsibility for strategic planning in the hands of cross-functional teams of divisional managers who are close to their markets. o Example: Disney has become a sprawling collection of media and entertainment businesses that requires big doses of the fames "Disney magic" to manage -Proved hard to manage and performed unevenly. -To improve company performances, Disney disbanded the centralized strategic planning unit, decentralizing the functions to Disney Division managers.

what is a functional organization

-Different marketing activities are headed by a functional specialist- a sales manager, an advertising manager, a marketing research manager, a customer service manager, and a new product manager. Most common form

what does effective positioning begin with

-Effective Positioning begins with differentiation-actually differentiating the company's market offering to create superior customer value

why can marketing ROI be hard to measure

-In measuring financial ROI, both the R and the I are uniformly measured in dollars. -no consistent definition of marketing ROI -a company can assess marketing ROI in terms of standard marketing performance measures, such as brand awareness, sales, or market share

once the company has classified its SBU, it must determine what role it will play in the future. It can pursue one of four strategies for each SBU...

-It can invest more in the business unit to build its share -It can invest just enough to hold the SBUs share at the current level. -It can harvest the SBU, milking its short term cash flow regardless of the long term effect -finally, it can divest the SBU by selling it or phasing it out and using the resources elsewhere. -Many SBUs start out as question marks and move into the star category if they succeed. They later become cash cows as market groth falls and then finally die off or turn into dogs toward the end of the life cycle, The company needs to add new products and units continuously so that some of them will become starts and, eventually, cash cows that will help finance other SBUs

what does marketing planning involve

-Marketing planning involves choosing marketing strategies that will help the company attain its overall strategic objectives. -The marketing plan begins with an executive summary that quickly reviews major assessments, goals, and recommendations. -The main section of the plan represents a detailed swot analysis of the current marketing situation as well as potential threats and opportunities. -The next plan states major objectives for the brand and outline the specifics of a marketing strategy for achieving them. -A marketing strategy consists of specific strategies for target markets, positioning, the marketing mix, and marketing expenditure levels, -It outlines how the company intends to engage target customers and create value in order to capture value in return. -In this section, the planner explains how each strategy responds to the threats, opportunities, and critical issues spelled out earlier in the plan

what should mission statements be like

-Mission statements should be market oriented and defined in terms of satisfying basic customer needs -Too often, they are wtitten for public relations purposes and lack specific, workable guidelines.

how do most companies enter a market

-Most companies enter a new market by serving a single segment; if this proves successful they add more segments.

most standard portfolio analysis methods evaluate SBUs on 2 important dimensions. what are they>

-The attractiveness of the SBU's market or industry -The strength of the SBU's position in that market or industry

what is a business portfolio

-The collection of businesses and products that make up the company -The best business portfolio is the one that best fits the company's strengths and weaknesses to opportunities in the environment

what is a product management organization

-Used by companies with very different products or brands -Using this approach, a product manager develops and implements a complete strategy and marketing program for a specific product or brands.

what is a geographic organization

-a company that sells across the country or internationally often use this. -Its sales and marketing people are assigned to specific countries, regions, and districts. -allows salespeople to settle into a territory, get to know the customers, and work with a minimum of travel times and cost

what five marketing management functions does managing the marketing process require

-analysis -planning -implementation -organization -control -• The company first develops company-wide strategic plans and then translates them into marketing and other plans for each division, product, and brand. Through implementation and organization, the company turns the plans into actions. Control consists of measuring and evaluating the results of marketing activities and taking corrective action where needed. Finally, marketing analysis provides the information and evaluations needed for all other marketing activities

what is DuckDuckGo

-plucky search engine start-up that's carving out its own special market niche. Provides something that other big giants cannot-privacy. •"Smarter Search. Less clutter. Real Privacy" •Instant answer feature. •The answers do not only rely on third part data sources, but also on the deep and diverse knowledgeof its active, growing, and loyal community. •Search engine driven by community •Makes money by sponsoring ads that are related to the specific search.

What is Starbuck's growth strategy

-sells the starbucks experience -opens stores at breakneck places, seemingly everywhere

strategic business units (SBU's)

-the key businesses that make up a company -can be a company division, a product line within a division, or a single product or brand

the strategic planning process at corporate level

1. Define the overall purpose and mission 2. Mission is turned into detailed supporting objectives that guide the entire company 3. headquarters decides what portfolio of business and products is best for the company and how much its gives each one.

contents of a marketing plan

1. executive summary and table of contents: presents a brief overview of the proposed plan 2. current marketing situation: presents relevant background data on the market, product, competition, distribution, and macroenvironment 3. SWOT and issue analysis: Identifies the main opportunities/threats, strengths'weakensses, and issue facing the product line 4. objectives: Defines the plan's financial and marketing goals in terms of sales volume, market share, and profit 5. marketing strategy: presents the broad marketing approach that will be used to achieve the plan's objectives 6. action programs: presents the special marketing program designed to achieve the business objectives 7. projected benefits and loss statement: forecasts the plan's expected financial outcomes 8. controls: indicates how the plan will be monitored

steps of the business portfolio

1. identify the SBU 2. assess the attractiveness of its various SBUs and decide how much support each one deserves.

what are the 4 steps marketing control involve?

1. sets specific marketing goals 2. measures its performance in the marketplace 3. evaluates the causes of any differences between the expected and actual performance 4. management takes corrective action to close the gaps between goals and performance. This may require changing the action programs or even changing the goals.

the growth share matrix defines 4 types of SBUs

1. stars 2. cash cows 3. question markets 4. dogs

marketing plays a key role in the company's strategic planning in several ways:

1.Marketing provides a guiding philosophy-the marketing concept- that suggests the company strategy should revolve around creating customer value and building profitable relationships with important consumer groups 2.Marketing provides inputs to strategic planners by helping to identify attractive market opportunities an assessing the firm's potential to take advantage of them. 3.Within individual business units, marketing designs strategies for reaching the unit's objectives. Once the units are set, marketing's task is to help carry them out profitably.

what two steps does business portfolio planning involve

1.The company must analyze its current business portfolio and determine which businesses should receive more. 2.It must shape the future portfolio businesess and phase down or drop its weaker ones

what percent of the market share does microsoft, bing, and yahoo, combined, have

31 percent

what percent of the market share does google have

67%

what is market penetration

:-Company growth by increasing sales of current products to current market segments without changing the product. -It can spur growth through marketing mix improvements-adjustements to its product design, advertising, pricing, and distribution efforts -ex: under armor: •added increasing range of styles and colors in its original apparal lines. •Boosted its spending on advertising and professional athlete and team endorsement. •Added direct-to-consumer distribution channels including its own retail stores and sales web sites.

what is a market segment

A group of consumers who respond in a similar way to a given set of marketing efforts.

what is the 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.

what is the growth share matrix

A portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market share. -vertical axis: market growth provides a measure of market attractiveness -horizontal axis- relative market share serves as a measure of a company strength in the market

what is the product/market expansion grid

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

what is SWOT analysis

An overall evaluation of the company's strengths (S), Weaknesses (W), opportunities (O), and threats (T)

what is positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. •Example: Subaru: "Confidence in motion"; Coke: "open happiness"; Wendys: "Quality Is Our recipe"

what is a mission statement

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

what do the cash cows represent in the growth share matrix?

Cash cows are low-growth, high-share businesess or products. These established and successful SBU's need less investment to hold their market share. Thus, they produce a lot of the cash that the company uses to pay its bills and support other SBUs that need investment.

what is market development

Company growth by identifying and developing new market segments for current company products.

what is product development

Company growth by offering modified or new products to current market segments.

what is diversification

Company growth through starting up or acquiring businesses outside the company's current products and markets -Example: Under armour recently expanded into digital personal health and fitness tracking markets by acquiring 3 fitness app companies (MapMyFitness, MyFitnessPal, Endomondo) -When diversifying, companies must be careful not to overextend their brands positioning.

what is marketing segmentation

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

what do the dogs represent in the growth share matrix

Dogs are low-growth, low-share businesses and products. They may generate enough cash to maintain themselves but do not promise to be large sources of cash.

what do the question marks represent in the growth share matrix?

Question marks are low-share business units in high-growth markets. They require a lot of cash to hold their share, let alone increase it. Management has to think hard about which question marks it should try to build into stars and which should be phased out.

what do the stars represent in the growth share matrix

Stars are high-growth, high share business or products. They often need heavy investments to finance their rapid growth. Eventually their growth will slow down, and they will turn into cash cows.

what is the marketing strategy

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

marketing return on investment (ROI)

The net return from a marketing investment divided by the cost of the marketing investment. It measures the profits generated by investments in the marketing activities.

what is strategic planning

The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities -sets the stage for the rest of the planning in the firm -: involves adapting the firm to take advantage of opportunities in its constantly changing environment.

what is market targeting

The process of evaluating each market segment's attractiveness and selecting one or more segments to enter. -happens after a company has defined its market segments

What is the company's internal value chain

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

example of the internal value chain

True Value Hardware's goal is to create customer value and satisfaction by providing shoppers with the hardware and home improvement products they need at affordable prices along with top-notch customer service. -The marketers help to deliver value to customers. -A company's value chain is only as strong as its weakest links. -Marketing department actions can increase purchasing costs, disrupt production schedules, increase inventories, and ceate budget headaches -Marketers must find ways to get all departments to think "consumer"

marketing implementation

Turning marketing strategies and plans into marketing action to accomplish strategic marketing objectives

marketing planning vs. marketing implementation

Whereas marketing planning addresses the what and why of marketing activities, implementation addresses the who, where, and when, and how. -Both are critical to success

what is the major activity in strategic planning?

business portfolio analysis: The process by which management evaluates the products and businesses that make up the company

what is strategic control

involves looking at whether the company's basic strategies are well matched to its opportunities. Marketing strategies and programs can quickly become outdated, and each company should periodically reassess its overall approach to the marketplace.

what must the company decide for each SBU

it must decide whether to build, hold, harvest, or divest.

what are people concerned with with the 4 p's concept

it takes the sellers point of view, not the buyers. If it did, it should be the 4 A's (accessibility, affordability, ____, awareness

marketin dashboards

meaningful sets of marketing performance measures in a single display used to monitor strategic marketing performance.

what is marketing control

measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved.

what are marketers increasingly using

o Increasingly, marketers are using customer-centered measures of marketing impact, such as customer acquisition, customer engagement, customer retention, customer lifetime value, and customer equity. -these not only measure current performance but also future performance.

what is the goal of SWOT analysis

o The goal is to match the company's strengths to attractive opportunities in the environment while simultaneously eliminating or overcoming the weaknesses and minimizing the threats.

ESPN

•ESPN is much more than a haphard collection of media entities. It's a skillfully managed brand portfolio that delivers an immersive sports entertainment experience, inexorably linked with customers' sports memories, realities, and anticipations. •24 hours sports network •ESPN sprouted 8 additional US networks •ESPN radio is the largest sports network •ESPN digital media is omposed of 19 U.S> websites. •Has access to itsown content: plentiful supply of material •Sports illustrated •Manages events •What ties this huge collection of ESPN entities together? The brand's customer focused mission: it wants to serve sports enthusiasts •"best available screen" •P. 44

the 4 p's

•Product: The goods-and-services combination the company offers to the target market. •Price: The amount of money customers must pay to obtain the product •Place: includes activities that make the product available to target consumers. •Promotion: Refers to activities that communicate the merits of the product and persuade target customers to buy it