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Mktg Management > CH17: Driving Growth in Competitive Markets > Flashcards

CH17: Driving Growth in Competitive Markets Flashcards

1
Q

the 4 methods in the Ansoff Growth Framework

A
  • market penetration (current products, current customers)
  • market development (current products, new customers)
  • product development (new products, current customers)
  • diversification (new products, new customers)
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2
Q

market penetration strategy

A

involves growing sales of the company’s current offerings to its existing customers and is often the easiest to implement
- encourage customers to buy more
- identify new uses for the product

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3
Q

market development strategy

A

identifying new user groups for existing products
- adding B2B if only B2C
- additional distribution channels
- new locations

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4
Q

product development strategy

A

develop new products for existing customers
- develop new features
- offer different sets of benefits at different prices
- research alternative technology to develop a viable substitute for current products

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5
Q

diversification strategy

A

use when good opportunities exist outside the present businesses and the company has the strengths to succeed in those new opportunities; concentric, horizontal, conglomerate

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6
Q

concentric diversification

A

seek new products that have technological or marketing synergies with existing product lines, even though they may appeal to a different group of customers

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7
Q

horizontal diversification

A

produce complementary products, even though they might require a different manufacturing process

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8
Q

conglomerate diversification

A

seek new businesses that have no relation to its current technology, products, or markets

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9
Q

organic growth

A

increasing output and enhancing revenues internally

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10
Q

merger and acquisition growth

A
  • backward integration; acquire a supplier
  • forward integration; acquire a wholesaler or retailer
  • horizontal integration; acquire a competitor
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11
Q

product innovation

A

developing a new product; the innovator bears the expense of developing, getting it into distribution, and informing and educating the market; the reward is market leadership

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12
Q

the 3 main follower strategies

A
  • cloning: emulate the leader’s products, name, and packaging with slight variations
  • imitating: copying some things from the leader but differentiating on packaging, advertising, pricing, or location
  • adapting: adapting and improving the leader’s products
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13
Q

the 3 types of market position

A
  • share of market
  • share of mind
  • share of heart
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14
Q

share of market

A

measured by the company’s sales revenue or the number of company units sold relative to the total revenue or total units sold in a specific market

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15
Q

share of mind

A

the percentage of customers who regard the company as the first company that comes to mind in a specific industry

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16
Q

share of heart

A

percentage of customers who name the company as the company from which they would prefer to buy a specific product

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17
Q

market leader

A

has the largest market share and usually leads in price changes, new product introductions, distribution coverage, and promotional intensity

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18
Q

3 ways to grow sales to current customers

A
  • identify new occasions for usage
  • identify new uses
  • new packaging or product design
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19
Q

customer specialist

A

niche marketer that specializes in one type of end-use customer

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20
Q

product or service specialist

A

niche firm that carries or produces only one product line or product

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21
Q

2 strategies to expand existing markets

A
  • new market segment strategy (those who have never used the product or service)
  • geographical expansion
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22
Q

the 3 strategies to satisfy customer needs

A
  • responsive marketing
  • anticipative marketing
  • creative marketing
23
Q

responsive marketing

A

finding a stated need and filling it (most companies are responsive/reactive)

24
Q

anticipative marketing

A

looking ahead to needs that customers may have in the future

25
Q

creative marketing

A

discovering solutions to customer needs that customers did not ask for but to which they will enthusiastically respond

26
Q

the 6 defense strategies

A
  • position defense
  • flank defense
  • pre-emptive defense
  • counteroffensive defense
  • repositioning defense
  • contraction defense
27
Q

position defense

A

occupying the most desirable position in consumers’ mind, making the brand almost impregnable

28
Q

flank defense

A

the market leader should put up outposts to protect a weak front or support a possible counterattack (e.g. a second brand to protect against competition)

29
Q

pre-emptive defense

A
  • attack first (can be random), perhaps with guerilla action across the market
  • achieve broad market envelopment
  • introduce a stream of new products and announce in advance (e.g. launch announcements); we wary of vaporware
30
Q

counteroffensive defense

A

the market leader can meet the attacker frontally and hit its flank or launch a pincer movement so that the attacker has to pull back and defend itself

31
Q

repositioning defense

A

the leader stretches its domain over new territories through market broadening and market diversification
- shifts focus from current product to underlying generic need
- e.g. BP rebranding from an oil company to an energy company

32
Q

contraction defense

A

strategic withdrawal; giving up weaker markets that are no longer tenable and reassigning resources to stronger ones

33
Q

the 4 stages of the product life cycle

A
  • introduction
  • growth
  • maturity
  • decline
34
Q

the 4 key assumptions of the product life cycle

A
  • products have a limited life
  • product sales pass through distinct stages
  • profits rise and fall at different stages of the product life cycle
  • products require different strategies in each stage of the life cycle
35
Q

product life - introduction

A

a period of slow sales growth as the product is introduced to the market; profits are nonexistent because of the heavy expenses of product introduction

36
Q

strategy aspects in the introduction stage

A
  • low sales growth
  • negative or low profits
  • high promotional expenditures
  • higher costs and prices
  • the focus is on buyers most ready to buy
37
Q

product life - growth

A

a period of rapid market acceptance and substantial profit improvement

38
Q

strategy aspects in the growth stage

A
  • improve product quality and add new features
  • add new models and flanker products
  • enter new market segments
  • increase distribution coverage
  • shift from awareness comms to preference comms
  • lower prices to attract next layer of price-sensitive buyers
39
Q

product life - maturity

A

a slowdown in sales growth because the product has achieved acceptance by most potential buyers; profits peak or decline because of increased competition

40
Q

the 3 phases of the maturity stage

A
  • growth
  • stability
  • decaying maturity
41
Q

the 1st phase of the maturity stage

A

growth starts to slow; no new distribution channels to fill; and new competitive forces emerge

42
Q

strategy aspects in the growth phase of the maturity stage

A
  • convert nonusers
  • attract competitors’ customers
  • increase usage among current users
43
Q

the 2nd phase of the maturity stage

A

stability; the market is saturated and sales per capita flatten; future sales growth depends on population growth and replacement demand

44
Q

the 3rd phase of the maturity stage

A

decaying maturity; the absolute level of sales starts to decline; customers are switching; and giants dominate the market

45
Q

product modification strategies in the maturity stage

A
  • quality improvement; “new and improved” product
  • feature improvement
  • style improvement
46
Q

product life - decline

A

sales show a downward drift and profits erode

47
Q

harvesting

A

gradually reducing a product or business’s costs while trying to maintain sales

48
Q

divesting

A

reducing product portfolio size; exiting smaller segments and weaker trade channels; can often involve selling the unit to another company

49
Q

growth-slump-maturity pattern life cycle

A

e.g. with small appliances like toaster ovens

50
Q

cycle-recycle pattern life cycle

A

e.g. with drugs

51
Q

scalloped pattern life cycle

A

when new uses for products are discovered, e.g. Nylon

52
Q

fad

A

comes quickly into public view, is adopted with great zeal, peaks early, and declines very fast; unpredictable, short-lived, and without social, economic, and political significance

53
Q

trend

A

a direction or sequence of events with momentum and durability
- more predictable and durable than fads
- can reveal the shape of the future and provide strategic direction

Mktg Management (21 decks)

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