MKTG 480 Chapter 1-2
Vison or Vision Statement
"What do we want to become?" Typically outline where the organization is headed and where it wants to go, less-specific in how they might achieve the end goal
What are some examples of how consumers changed value propositions'?
- Customers now turn to Travelocity and Expedia, rather than travel agents - Buyers are moving their house hunting online and sellers are taking the "for sale by owner" route.
What is a common mistake in a SWOT analysis?
- Failure to separate internal issues from external issues - To list the firm's strategic alternatives as opportunities, this belongs in the discussion of marketing strategy not in SWOT
The evaluation and control phase of the planning process is an ending and beginning
- On one hand, evaluation and control occur after a strategy has been implemented - On the other hand, evaluation and control serve as the beginning point for the planning process in the next planning cycle
Market-oriented strategy flow
- The role of the CEO is to ensure that their employees have everything they need to perform their jobs - a frontline manager is to ensure that frontline employees are capable and efficient - The end result is a complete focus on customer needs
The focus of strategic planning has shifted from
- customer transactions to customer relationships -customers to all stakeholders - competition to collaboration
_______ involves activities that actually execute the functional area strategy
Implementation
Why was McDonalds $100 million launch of the Arch Deluxe considered the fourth worst product failure in history?
It was designed for older customers (who are not their core market), was expensive, and had a very high calorie content
In order for a functional strategy to be implemented successfully, the organization must rely on the commitment and knowledge of
Its employees - its internal market
Something that can be acquired via exchange to satisfy a need or a want
Product
Some marketing planners use the term _______ ________ to refer to the overall process of collecting and interpreting internal, competitive, and environmental information
Situation Analysis
What is one of the most difficult parts of developing a marketing plan and why?
Situation analysis, because it must be both comprehensive and focused on key issues in order to prevent information overload
Tactical Planning
addresses specific markets or market segments and the development of marketing programs that will fulfill the needs of customers in those markets
Goals
broad, simple statements of what will be accomplished through the marketing strategy - Major function is to guide the development of objectives and to provide direction for resource allocation decisions
How can IMC reduce promotional expenses
by eliminating the duplication of effort among separate departments (marketing, sales, etc.) and by increasing efficiencies and economies of scale
Corporate Strategy
central plan for utilizing & integrating resources in the areas of production, finance, research and development, human resources, and marketing to carry out the organization's mission and achieve the desired goals and objectives
Supply Chain decisions
involve a long line of activities - from the sourcing or raw materials, through the production of finished products, to ultimate delivery to final customers
Product Positioning
involves establishing a mental image, or position, of the product offering relative to competing offerings in the minds of target buyers -Goal is to distinguish the firm's product offering from competitors
Marketing Control
involves establishing performance standards, assessing actual performance by comparing it with these standards, and taking corrective action if necessary to reduce discrepancies between desired and actual performance.
Executive Summary
is a synopsis of the overall marketing plan, with an outline that conveys the main thrust of the marketing strategy and its execution. - Purpose is to a provide an overview of the plan so the ready can quickly identify key issues or concerns related to their role in implementing the marketing strategy
Organizations design the evaluation and control phase of strategic planning to
keep planned activities on target with goals and objectives Ex: - Timely distribution and product availability almost always depends on accurate and timely production. Maintaining contact with production manager, the marketing manager helps to ensure effective marketing strategy implementation (by ensuring timely production)
Environmental Analysis (Environmental Scanning)
Involves the analysis of economic, political, legal, technological, and cultural events and trends that may affect the future of the organization and its marketing efforts
Internal Analysis
Involves the objective review of internal information pertaining to the firm's current strategy and performance, as well as the current and future availability of resources
Marketing plan
Is a written document that provides the blueprint or outline of the organization's marketing activities, including the implementation, evaluation, and control of those activities
How does media fragmentation have an advantage?
It is easier to reach small, highly targeted audiences who are more receptive to specific marketing messages.
_____________ is concerned with specific markets or market segments and the development of marketing programs that will fulfill the needs of customers in those markets
a. The marketing plan b. Strategic planning c. Marketing d. Tactical planning e. Competitive intelligence D. Tactical planning
What is the goal in Relationships Marketing
to develop and maintain long-term, mutually satisfying arrangements where both buyer and seller focus on the value obtained from the relationship - Promotes customer trust and confidence in the marketer
What does the marketing plan do?
- explains how the organization will achieve its goals and objectives - instructs employees as to their roles and functions in fulfilling the plan - Provides specifics regarding the allocation of resources and includes the specific marketing tasks, responsibilities of individuals, and the timing of all marketing activities
Marketing Plan Structure
1. Executive Summary 2. Situation Analysis 3. SWOT Analysis 4. Marketing Goals and Objectives 5. Marketing Strategy 6. Marketing Implementation 7. Evaluation and Control
One of the more interesting aspects of implementation is that all functional plans have at least 2 target markets
1. External Market (Customers, suppliers, investors, potential employees, society at large) 2. Internal Market (employees, managers, executives)
Functional Strategies must
1. Fit the needs & purposes of the functional area with respect to meeting its goals and objectives 2. Be realistic given the organization's available resources and environment 3. be consistent with the organization's missions, goals, and objectives
A good marketing plan will fulfill these 5 purposes in detail
1. It explains both the present and future situations of the organization (Situation and SWOT analyses and the firm's past performance) 2. It specifies the expected outcomes (goals & objectives) so that the organization can anticipate its situation at the end of the planning period 3. It describes the specific actions that are to take place so that the responsibility for each action can be assigned and impended 4. It identifies the resources that will be needed to carry out the planned actions 5. It permits the monitoring of each action and its results so that controls may be implemented
5 common principles when implementing the balanced scorecard
1. Translate the strategy into operational terms (how intangible assets are transformed into value for customers and other stakeholders) 2. Align the organization to Strategy (common themes, priorities, and objectives) 3. Make Strategy everyone's everyday job (strategy to the front lines of the organization) 4. Make Strategy a continual process (review performance regularly) 5. Mobilize change through executive leadership
What are the two questions top managers will ask to approve a marketing plan?
1. Will the proposed marketing plan achieve the desired marketing, business unit, and corporate goals/objectives? 2. Are there alternative uses of resources that would better meet corporate or business unit objectives than the submitted marketing plan - in most cases, final approval lies with the CEO, president, or chairperson
The implementation phase of the marketing strategy calls into play the
5th P of the marketing program: People.
Marketing Strategy
A plan for how the organization will use its strengths and capabilities to match the needs and requirements of the market
Which of the following has been cited as a major cause of declining brand loyalty in the United States?
A. Customers see competing products in many industries as being virtually the same. b. Customers are much more educated and cynical than in the past. c. Customers are much more willing to file lawsuits against problem firms. d. Parity among competing products with respect to quality and value. e. Customer complaints and defections are at an all-time high. a. Customers see competing products in many industries as being virtually the same.
Which of the following is the primary reason for the shift in value propositions in today's economy?
A. The power shift to mass merchandise retailers B. The massive increase in product selection C. New sources of competitive advantage D. The speed and efficiency of the internet E. Declining brand loyalty D. The speed and efficiency of the internet
Which state has landed assembly plants from Mercedes, Honda, and Hyundai by attracting direct investment by foreign firms?
Alabama (marketed themselves, place)
How do customers manipulate businesses?
By their access to information, the ability to comparison shop, and the control they have over spending.
To be successful, a firm must possess one of more _______ _______ that is can leverage in the market in order to meet its objectives
Competitive advantages
Product: Places
Cities, states, and nations all market themselves to tourists, businesses, and potential residents.
A good marketing plan outline is
Comprehensive: ensures there are no omissions of important information Flexible: Any outline you choose must be flexible enough to be modified to fit the unique needs of your situations Consistent: Consistency between the marketing plan outline and the outline of other functional area plans is an important consideration. Ensures that executives and employees outside of marketing will understand the marketing plan Logical: bc the marketing plan must ultimately sell itself to top managers, it must flow in a logical manner
What forces consumer and business buyers to rethink value propositions and focus on the importance of frugality?
Consumers face pay cuts or losing their jobs in addition to increased expenses. Economic hardships
In situations where customers see goods and services as commodities, they will turn to the most _______, __________ alternative.
Convenient, least-expensive
Mission statements have become much more
Customer oriented. If the focus is on profit then it is just about positive happenings for the owners and managers, not the customer or stakeholders
Why do retailers like Best Buy and Target price match Amazon?
Customers can walk in and scan bar codes to check prices on Amazon, and order it for 2 day delivery while in the store.
Possession Utility
Deals with the transfer of ownership or title from marketer to customers. More satisfying because marketers make them easier to acquire. - Combine supplemental services with tangible goods to increase possession utility Ex: Furniture stores that offer easy credit terms and home delivery enhance the possession utility
As the economy weakened, buyers had to look for other ways to lower expenses. This trend began after the _________ as consumers saw for the first time that they could bypass some types of firms and do things for themselves.
Dot-com collapse
An orientation toward customers also requires that the organization's suppliers and even competitors be customer oriented as well
Ex: Nissan uses Toyota's hybrid fuel system in its vehicles
Objectives should be written so that their accomplishment can be measured accurately
Ex: Units of measures might include sales volume, profitability per unit, percentage gain in market share, etc. - Should be reconsidered for each planning period
Product: Real or Financial Property
Exchange of stocks, bonds, and real estate, once marketed completely offline, now occurs increasingly online Ex: Realtor.com
What should always be the last element to be written in a marketing plan and why
Executive summary because it is easier and more meaningful to write after the entire marketing plan has been developed. It may be the only element of the plan read by a large number of people
Today, customers get information and news from _________ and _______ rather than the New York Times or CBS
Facebook and Twitter
Concerns over privacy and security are especially acute with online businesses such as
Facebook, Google, mobile banking, and mobile devices that can potentially track every more we make. These same concerns are also keen with respect to children.
Evaluation and Control
Final section, details how the results of the marketing program will be evaluated and controlled
Types of Utility
Form Time Place Possession Psychological
Higher priced product lines offer more _____ _______ because they have more features or bells-and-whistles
Form utility (Ex: Luxury cars)
Since the advent of cable television in the 1970s, mass media audiences have become increasingly ______________.
Fragmented (Ex: TV audiences shifted from the big 3 networks - ABC,CBS, NBS - and began watching programming on EPSM, Nickelodeon, HGTV, and the Discovery channel.
Organizations design _______ to provide a total integration of efforts that focus on achieving the area's stated objectives
Functional Strategies Ex: production - involve strategies for procurement, just-in-time inventory control, or warehousing Human Resources - strategies dealing with employee recruitment, selection, training, etc. Marketing - process focuses on selecting one or more target markets and developing a marketing program
What are things classified as products?
Goods Services Ideas Information Digital Products People Places Experiences and Events Real or Financial Property Organizations
Products: Ideas
Include issues aimed at promoting a benefit for the customer Ex: cause-related or charitable organizations such as Red Cross
Products: Information
Include websites, magazine and book publishers, schools and universities, research firms, churches, and charitable organizations. Ex: Wikipedia, TED Talks
Products: People
Individual promotion of people, such as athletes or celebrities'. The exchange and trading of professional athletes takes place in a complex system of drafts, contracts, and free agency.
Distribution and Supply chain issues are among the ______ apparent decisions made in marketing, particularly with customers
Least
Products: Experiences and Events
Marketers can bring together a combinations of goods, services, ideas, information, or people to create a one-of-a-kind experience or event Ex: Disney, Super Bowl
At what level of the marketing plan does the firm detail how it will gain a competitive advantage by doing something better than the competition
Marketing Strategy
To stand a reasonable chance for success, marketing plans should be developed with a keen appreciation of how they fit into the strategic plans of the ______ and _____ levels of the firm
Middle and Upper levels
Marketing goals must be consistent with the firm's _________, while marketing objectives must flow naturally from the marketing goals
Mission
Strategic Planning: Lower Levels of an organization
More tactical in nature, planners concern themselves with the development of marketing plans- more specific game plans for connecting products and markets in ways that satisfy both organizational and customer objectives
When should the mission statement change?
Only when it is no longer in sync with the firm's capabilities, when competitors drive the firm from certain markets, when new technology changes the delivery of customer benefits, or when the firm identifies a new opportunity that matches its strengths and expertise
Marketing Strategy
Outlines how the firm will achieve its marketing objectives. Refers to how the firm will manage its relationships with customers in a manner that gives it an advantage over the competition
Strategy
Outlines the organization's game plan for success.
Strategic Planning: Top Levels of the Organization
Planners concern themselves with macro issues such as corporate mission, management of the mix of strategic business units, resource acquisition and assignments, and corporate policy decisions.
Form Utility
Products high in form utility have features that set them apart from the competition. Result from the use of high-quality raw materials, ingredients, components. Ex: Papa John's Pizza slogan "Better Ingredients, Better Pizza"
Place Utility
Products high in place utility are available where customers want them, which is typically wherever the customer happens to be at the moment - Home delivery of any product convenience stores, vending machines, and e-commerce
Psychological Utility
Products high in psychological utility deliver positive experiential or psychological attributes that customers find satisfying - Sporting events, Vacation to the beach might offer more psychological utility to some customers bc it is seen less stressful than Disney
Time Utility
Products high in time utility are available when customers want them. - Grocery stores and restaurants that are open 24/7, overnight delivery
Technology has made our society more open than in the past, but it now forces marketers to address real concerns about _______ and _______,both online and offline.
Security and privacy
_______ rather than tangible goods, dominate modern economies like the U.S. Economy
Services
Products: Digital Products
Software, music, movies are among the most profitable in our economy. Content producers grant customers a license to use them, rather then outright ownership
What is at the conclusion of the SWOT analysis?
Strategic focus and competitive advantages to be leveraged in the strategy - The key to developing strategic focus is to match the firm's strengths with its opportunities to create capabilities in delivering value to customers.
SWOT Analysis
Strengths and weaknesses are internal issues unique to the firm conducting the analysis. Opportunities and threats are external issues that exist independently of the firm conducting the analysis
Situation Analysis
Summarizes all pertinent information obtained about three key environments: internal environment, customer environment, and the firm's external environment In addition, this section summarizes the firm's current marketing objectives and performance
Change in Daily Media Usage by U.S. Adults 2010-2014
TV: 3.7% Desktop Online: - 13.6% Tablets: 676.2% Smartphones: 235.0% Radio: - 15.5% Newspapers: - 9.4% Magazines: - 34.9%
The marketing of ___________ __________ is arguably one of the most widely recognizable business activities in the world
Tangible Goods
Which company had a massive data breach in 2013 and loss roughly 148 million and customer losses from thieves hacking into their systems?
Target
To develop a marketing strategy, an organization must select the right combination or _______ ______ and ________ _____ in order to create distinct competitive advantages over its rivals
Target market(s) and marketing Mix(es)
Changes in _________ have shifted customer demand for certain product categories
Technology (EX: Blockbuster is no longer, everyone uses Netflix and Hulu)
Marketing Implementation
The HOW answers these questions 1. What specific marketing activities will be undertaken? 2. How will these activities be performed? 3. When will these activities be performed? 4. Who is responsible for the completion of these activities? 5. How will the completion of planned activities be monitored? 6. How much will the activities cost?
Which purpose above is the most pressing concern for success?
The fourth purpose: identifying needed resources
Why are competitive advantages critical?
They set the tone, or strategic focus, of the entire marketing program Ex: Apple computers continue to command a price premium because they bundle multimedia software and a top-rated user expedience in the mix
EX: Book retailing segment. Borders closed their doors after competitions from Barnes & Noble, Amazon, Walmart & Target took their shoppers. E-book readers like kindle also impact traditional book publishing.
This is the essence of being frugal, as customers look for ways to cut spending on unnecessary parts of their lives
Products that are high in both ___ and ___ utility are exceptionally valuable to customers because they provide the utmost in convenience
Time and Place Utility
Consumer usage of ____________ is declining, while the usage of _________ is on the rise.
Traditional Media Mobile Media
Strategic Planning: Middle Levels of the Organization
Typically a division or strategic business unit, concern themselves with similar issues, but focus on those that pertain to their particular product/market
The Balanced Performance Scorecard
Vision and Strategy IS USED FOR ALL OF THESE 4: 1. Financial Perspective: "to succeed financially how should we appear to our shareholders?" 2. Internal Process Perspective: "to satisfy our shareholders and customers, what business processes must we excel at?" 3. Learning and Growth Perspective: "to achieve our vision, how will we sustain our ability to change and improve?" 4. Customer Perspective: "to achieve our vision, how should we appear to our customers?"
In most firms, the responsibility for planning lies at the level of
a marketing vice president or marketing director
What is wrong with the following mission statement?: "Our mission is to make all people happy by providing them with entertaining products."
a. It focuses on customer happiness (satisfaction), which has no place in a mission statement. b. It says nothing about competition. c. It does not mention the firm's values. d. It is too focused on entertainment. e. It is too broad (wide). e. it is too broad (wide)
A firm's competitive advantages cannot be fully realized unless:
a. competitors take them seriously. b. the government loosens its restrictions on the firm or industry. c. the firm has the financial resources to make them happen. d. target customers see the advantages as valuable. e. the firm's employees truly believe in the advantages. d. target customers see the advantages as valuable
As illustrated in the text, the strategic planning process begins with:
a. conducting a SWOT analysis. b. developing business-unit strategy. c. an analysis of the firm's internal, customer, and external environments. d. developing the organization's goals and objectives. e. developing the marketing plan. c. an analysis of the firm's internal, customer, and external environments
What is the primary theme of the Balanced Performance Scorecard approach to strategic planning?
a. financial performance is only one of four key dimensions that should drive marketing planning b. organizational learning and growth are the keys to strategic planning c. real-time customer satisfaction metrics are needed to achieve marketing goals and objectives d. competitive information should drive the marketing plan e. internal performance metrics are more important than financial performance a. financial performance is only one of four key dimensions that should drive marketing planning
The ________ is the handbook of marketing implementation, evaluation, and control.
a. strategic thrust b. marketing strategy c. marketing program d. marketing plan e. SBU strategy d. marketing plan
Business Plan
although they typically contain a marketing plan, encompass other issues such as business organizations and ownership, operations, financial strategy, human resources, and risk management
Mission or Mission Statement
answers the questions "what business are we in?" is a clear and concise statement (paragraph or two at most) that explains the organization's reason for existence
To effectively meet the needs of their customers and fulfill organizational objectives, marketers must be astute in
creating products and combining them in ways that make them unique from other offerings.
In a market-oriented organization, every level of the organization has its focus on serving
customer needs - each level serves the levels above it by taking any actions necessary to ensure that each level performs its job well
Marketing Goals and Objectives
formal statements of the desired and expected outcomes resulting from the marketing plan Purposes: 1. It sets the performance targets that the firm seeks to achieve by giving life to its strategic focus through its marketing strategy (what the firm hopes to achieve) 2. It defines the parameters by which the firm will measure actual performance in the evaluation and control phase of the marketing plan (how performance is actually measured)
Think of the marketing plan as an action document - it is the handbook for
marketing implementations, evaluation, and control
Marketing objectives
more specific and are essential to planning. Should be stated in quantitative terms to permit reasonably precise measurement
The key to coordination is to ensure that functional areas maintain what
open lines of communications at all times
Whether at the corporate, business unit, or functional level, the planning process begins with an in-depth analysis of the organization's internal and external environments - sometimes referred to as a
situation analysis
Market-oriented firms
successfully generate, disseminate, and respond to market information. Focus on customer analysis, competitor analysis, and integrating the firm's resources to provide customer value and satisfaction, as well as long-term profits
The goal of distribution and supply chain management is
to get the product to the right place, at the right time, in the right quantities, at the lowest possible cost
In crafting a mission statement, management should be concerned about the statement's width for what reason?
- If the mission is too broad, it will be meaningless to those who read and build upon it
Example: A corporate goal to increase return on investment might translate into
- Marketing objective: To increase sales - Production Objective: To reduce the cost of raw materials - Financial Objective: To rebalance the firm's portfolio of investments - Human resources objectives: to increase employee training and productivity
Although customer analysis is vital to the success of the marketing plan, the organization must also have access to what 3 other types of information and analysis?
1. Internal Analysis 2. Competitive Analysis 3. Environmental Analysis
Why are pricing decisions important?
1. Only element in the marketing mix the leads to revenue and profit 2. has a direct connection with customer demand (most overmanipulated element) 3. easiest element of the marketing program to change 4. Major quality cue for customers (higher prices with higher quality)
What are the 2 reasons why media audiences have become fragmented?
1. The sheer number of media choices we have available today 2. The limited time we have to devote to any one medium
Elements of the mission statement
1. Who are we? 2. Who are our customers? 3. What is our operating philosophy (basic beliefs, values, ethics)? 4. What are our core competencies or competitive advantages? 5. What are our responsibilities with respect to bein ga good steward of our human, financial, and environmental resources?
In the digital age, the production and distribution of ________ has become a vital part of our economy
Information
When the growth of the _________, _______, and ________ are added, it becomes difficult for marketers to reach a true mass audience.
Internet, Satellite Radio, and Mobile Communication
Competitive analysis (Competitive Intelligence)
Involves analyzing the capabilities, vulnerabilities, and intentions of competing businesses
As power continues to shift to customers, marketers have little choice but to ensure that their products are
Unique and of high quality, thereby giving customers a reason to purchase their products and remain loyal.
Product: Organizations
Virtually all organizations strive to create favorable images with the public- not only to increase sales or inquiries, but also to generate customer goodwill
The concept of "exchange" is fundamental to the definition of marketing. What is the best description of exchange?
a. The transfer of products in return for monetary considerations. b. The transfer of products that occurs among for-profit organizations. c. The development of products, distribution channels, promotional strategies, and pricing objectives to satisfy customer requirements. d. The activities that are performed primarily by manufacturers and retailers. e. The transfer of goods, services, or ideas in return for something of value. E. The transfer of goods, services, or ideas in return for something of value.
Products that are high in form utility:
a. are best able to transfer ownership or title from marketer to customer. b. are available where customers want them, which is typically wherever the customer happens to be or where the product needs to be. c. are available when customers want them. d. are tangible rather than intangible. e. have attributes or features that set them apart from the competition. E. have attributes or features that set them apart from the competition.
Business-unit strategy
determines the nature and future direction of each business unit, including its competitive advantages, the allocation of its resources, and the coordination of the functional business areas
Product: Services
intangible products consisting of acts or deeds toward people or their professions. EX: Banks, hospitals, taxi drivers, nannies
What is the goal of Transactional Marketing
is to complete a large number of discrete exchanges with individual customers. Focus is on acquiring customer and making the sale
The identification and selection of one of more target markets is the result of the
market segmentation process - They divide the total market into smaller, relatively homogeneous groups or segments that share similar needs, wants or characteristics
The single most important change during the last two decades is the shift in power from _____________ to _______________.
marketers to consumers
Marketing Plan
provides the outline for how the organization will combine product, pricing, distribution, and promotion decisions to create an offering that customers will find attractive. Also address the Implementation, control, and refinement of these decisions
Competitive Advantage
something the firm does better than its competitors that gives it an edge in serving customers' needs and/or maintaining mutually satisfying relationships with important stakeholders
Many respected companies like Mrs. Fields Cookies, Sony BMG, and Hershey Foods, have been fined for violating the
standards of the Children's Online Privacy Protection Act (COPPA)
Products: Goods
tangible items ranging from canned food to fighter jets, from sports memorabilia to used clothing.
Utility
the ability of a product to satisfy a customer's desires
Modern marketing has replaced the term promotion with the concept of Integrated Marketing Communication (ICM)
the coordination of all promotional activities to produce a unified, customer-focused message
The primary focus of marketing is
the customer and how the organization can design and deliver products that meet customers' needs
Marketing Implementation
the process of executing the marketing strategy, is the "how" of marketing planning. - Not an add on to marketing strategy and plan, is a part of planning itself.