Marketing Chapter 2

marketing mix

Blending of the four strategy elements—product, distribution, promotion, and pricing—to fit the needs and preferences of a specific target market.

Identify the two basic elements of a marketing strategy.

Development of a marketing strategy is a two-step process: - selecting a target market and - designing an effective marketing mix to satisfy the chosen target. The target market is the group of people toward whom a company decides to direct its marketing efforts. The marketing mix blends four strategy elements to fit the needs and preferences of a specific target market: product strategy, distribution strategy, promotion strategy, and pricing strategy.

Mission

Essential purpose that differentiates one company from others

marketing planning

Implementing planning activities devoted to achieving marketing objectives.

strategic business units (SBUs)

Key business units within diversified firms.

strategic window

Limited periods when key requirements of a market and a firm's particular competencies best fit together.

Porter's Five Forces

Model developed by strategy expert Michael Porter that identifies five competitive forces that influence planning strategies

marketing strategy

Overall, company wide program for selecting a particular target market and then satisfying consumers in that market through the marketing mix.

tactical planning

Planning that guides the implementation of activities specified in the strategic plan.

Describe successful planning tools and techniques, including Porter's Five Forces model, first and second mover strategies, SWOT analysis, and the strategic window.

Porter's Five Forces are identified as the five competitive factors that influence planning strategies: potential new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products, and rivalry among competitors. With a first mover strategy, a firm attempts to capture the greatest market share by being first to enter the market; with a second mover strategy, a firm observes the innovations of first movers and then attempts to improve on them to gain advantage. SWOT analysis (strengths, weaknesses, opportunities, and threats) helps planners compare internal organizational strengths and weaknesses with external opportunities and threats. The strategic window identifies the limited periods during which the key requirements of a market and the competencies of a firm best fit together.

Planning

Process of anticipating future events and conditions and of determining the best way to achieve organizational objectives.

strategic planning

Process of determining an organization's primary objectives and adopting courses of action that will achieve these objectives.

SWOT analysis

Review that helps planners compare internal organizational strengths and weaknesses with external opportunities and threats.

Distinguish between strategic planning and tactical planning.

Strategic planning is the process of identifying an organization's primary objectives and adopting courses of action toward these objectives. In other words, strategic planning focuses on the big picture of which industries are central to a firm's business. Tactical planning guides the implementation of the activities specified in the strategic plan. Once a strategy is set, operational managers devise methods (tactics) to achieve the larger goals.

Identify the six steps in the marketing planning process.

The basic steps in the marketing planning process are defining the organization's mission and objectives; assessing organizational resources and evaluating environmental risks and opportunities; and formulating, implementing, and monitoring the marketing strategy.

Describe the methods for marketing planning, including business portfolio analysis and the BCG matrix.

The business portfolio analysis evaluates a company's products and divisions, including strategic business units (SBUs). The SBU focuses the attention of company managers so that they can respond effectively to changing consumer demand within certain markets. The BCG matrix places SBUs in a four-quadrant chart that plots market share against market growth potential. The four quadrants are stars, cash cows, dogs, and question marks

Describe the environmental characteristics that influence strategic decisions.

The five dimensions of the marketing environment are competitive, political-legal, economic, technological, and social-cultural. Marketers must also address growing concern about the natural environment, including new regulations, and increasing cultural diversity in the global marketplace.

first mover strategy

Theory advocating that the company first to offer a product in a marketplace will be the long-term market winner.

second mover strategy

Theory that advocates observing closely the innovations of first movers and then improving on them to gain advantage in the marketplace.

Explain how marketing plans differ at various levels in an organization.

Top management spends more time engaged in strategic planning than middle- and supervisory-level managers, who tend to focus on narrower tactical plans for their units. Supervisory managers are more likely to develop specific plans designed to meet the goals assigned to them—for example, streamlining production processes so that they operate more efficiently.