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Chapter 2 Flashcards

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1
Q

What are the three components of a marketing strategy?

A
  1. A firm’s target market(s)
  2. A related marketing mix (its four Ps)
  3. Bases for sustainable competitive advantage
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2
Q

Define sustainable competitive advantage.

A

An advantage over the competition that is not easily copied and can be maintained over a long period of time.

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3
Q

What is customer excellence?

A

Focuses on retaining loyal customers and providing excellent customer service.

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4
Q

What does locational excellence refer to?

A

Having a good physical location and Internet presence.

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5
Q

How is operational excellence achieved?

A

Through efficient operations and excellent supply chain and human resource management.

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6
Q

What constitutes product excellence?

A

Having products with high perceived value and effective branding and positioning.

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7
Q

How can firms achieve customer excellence?

A

By developing value-based strategies for retaining loyal customers and providing outstanding customer service.

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8
Q

What perspective is key to modern customer retention programs?

A

Viewing customers with a lifetime value perspective rather than on a transaction-by-transaction basis.

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9
Q

What is the second way to achieve a sustainable competitive advantage?

A

Operational excellence.

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10
Q

What are the key elements in achieving operational excellence?

A
  1. Efficient operations
  2. Excellent supply chain management
  3. Strong relationships with suppliers
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11
Q

What is product excellence?

A

Providing products with high perceived value and effective branding and positioning

Product excellence is one of the three ways to achieve a sustainable competitive advantage.

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12
Q

What challenge do firms face when developing a competitive advantage through merchandise?

A

Competitors can deliver similar products or services easily

This challenge can limit the uniqueness of a firm’s offerings.

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13
Q

Why is locational excellence particularly important for retailers and service providers?

A

It is sustainable and not easily duplicated

A strong location can serve as a significant competitive advantage.

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14
Q

What phrase summarizes the importance of location in retailing?

A

Location, location, location

This phrase highlights how critical location is for retail success.

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15
Q

Why do many people limit their distance when looking to buy coffee?

A

They will not walk or drive very far

This behavior emphasizes the significance of convenient locations for retailers.

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16
Q

How has Starbucks developed a competitive advantage?

A

Through its location selection and high density of stores

This makes it difficult for competitors to enter the same market.

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17
Q

What is a limitation of relying on a single strategy for competitive advantage?

A

A single strategy, such as low prices or excellent service, is not sufficient

Firms need a diverse approach to reinforce their market position.

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18
Q

What do firms need to build a strong competitive position?

A

Multiple approaches to build a ‘wall’ around their position

This strategy enhances the sustainability of their competitive advantage.

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19
Q

What is a marketing plan?

A

A written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or pro forma income statements.

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20
Q

What are the four Ps in marketing?

A
  • Product
  • Price
  • Place
  • Promotion
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21
Q

What is the first step in creating a marketing plan?

A

Define the Business Mission and Objectives.

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22
Q

What does a mission statement attempt to answer?

A
  • What type of business are we?
  • What are our objectives?
  • What do we need to do to accomplish those objectives?
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23
Q

What is a situation analysis?

A

An assessment performed after developing a mission, using a SWOT analysis to evaluate internal strengths and weaknesses and external opportunities and threats.

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24
Q

What does SWOT stand for?

A
  • Strengths
  • Weaknesses
  • Opportunities
  • Threats
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25
What external factors should be assessed in a situation analysis?
* Cultural * Demographic * Social * Technological * Economic * Political/legal
26
True or False: The mission statement is a broad description of a firm’s objectives and the scope of activities it plans to undertake.
True
27
Fill in the blank: A marketing plan includes a situation analysis, SWOT analysis, and _______.
[projected or pro forma income statements]
28
What are the key components of a marketing plan?
* Analysis of current marketing situation * Opportunities and threats * Marketing objectives and strategy * Action programs * Projected financial statements
29
What do a company’s strengths refer to?
Positive internal attributes of the firm.
30
What are weaknesses in a company?
Negative attributes of the firm.
31
What do opportunities pertain to in a business context?
Positive aspects of the external environment.
32
What do threats represent in a business context?
Negative aspects of the company’s external environment.
33
What does STP stand for in marketing?
Segmentation, Targeting, and Positioning.
34
What is the first step in the STP process?
Dividing the marketplace into subgroups or segments.
35
What is the second step in the STP process?
Determining which segments to pursue or target.
36
What is the final step in the STP process?
Deciding how to position products and services.
37
What is market segmentation?
Dividing the market into groups of customers with different needs, wants, or characteristics.
38
What is the process called when a firm evaluates the attractiveness of various market segments?
Target marketing or targeting ## Footnote This process involves assessing different segments to determine which ones to pursue.
39
What does market positioning involve?
Defining the marketing mix variables ## Footnote This helps target customers understand what the product represents compared to competitors.
40
What are the main components of the marketing mix?
* Product * Price * Place * Promotion ## Footnote These components are tailored based on the target market's values.
41
What is the fourth step in the marketing planning process?
Implement Marketing Mix and Allocate Resources ## Footnote This step involves executing the marketing mix and making resource allocation decisions.
42
What must a firm determine after deciding which market segments to pursue?
How it wants to be positioned within those segments ## Footnote Positioning helps create a distinct image in the minds of target customers.
43
Fill in the blank: The real action begins after performing an STP analysis, when the firm has decided what to do, how to do it, and how many resources should be ______.
Allocated ## Footnote This allocation is crucial for effective marketing execution.
44
What is the final step in the planning process?
Evaluate Performance Using Marketing Metrics ## Footnote This step involves assessing the results of the strategy and implementation program.
45
What is a metric?
A measuring system that quantifies a trend, dynamic, or characteristic ## Footnote Metrics help explain why events occurred and project future outcomes.
46
Why are metrics important in performance evaluation?
They allow comparison of results across regions, strategic business units, product lines, and time periods ## Footnote Metrics help determine the reasons for achieving or not achieving performance goals.
47
What can understanding the causes of performance help firms with?
Make appropriate adjustments ## Footnote This includes addressing whether performance exceeded, met, or fell below established goals.
48
What are performance evaluations used for?
To pinpoint problem areas ## Footnote Evaluations help identify why performance levels are above or below planned levels.
49
What factors should a manager consider if performance is below planned levels?
Sales force effectiveness, economic conditions, competition, and forecasting accuracy ## Footnote Understanding these factors is crucial for accountability.
50
What are some commonly used metrics to assess performance?
* Revenues * Sales * Profits ## Footnote These metrics provide a global measure of a firm's activity level.
51
How can a manager increase sales, and what is a potential downside?
By lowering prices, which may reduce gross margin ## Footnote This illustrates the trade-off between different performance metrics.
52
Why is it unwise to use only one metric for evaluation?
It rarely tells the whole story ## Footnote Managers must understand how actions affect multiple performance metrics.
53
What is portfolio analysis?
Management evaluates the firm’s various products and businesses and allocates resources according to expected profitability for the future.
54
At what levels is portfolio analysis typically performed?
Strategic business unit (SBU) or product line level, but can also analyze brands or individual items.
55
What is the first step in the strategic decision-making process according to the planning process?
Define the business mission.
56
Name the steps in the strategic planning process.
* Define the business mission * Perform situation analysis * Identify strategic opportunities * Evaluate alternatives * Set objectives * Allocate resources * Develop implementation plan * Evaluate performance and make adjustments
57
True or False: Actual planning processes always follow the steps in a strict sequence.
False
58
What does a market penetration strategy focus on?
Employs the existing marketing mix and focuses on existing customers.
59
How can a market penetration strategy be achieved?
* Attracting new consumers to the current target market * Encouraging current customers to buy more often or more merchandise
60
What marketing efforts might be required for a market penetration strategy?
* Increased advertising * Additional sales and promotions * Intensified distribution efforts
61
What does a market development strategy employ?
The existing marketing offering to reach new market segments, whether domestic or international.
62
Fill in the blank: A market penetration strategy generally requires greater _______.
[marketing efforts]
63
What is a market development strategy?
A strategy that employs the existing marketing offering to reach new market segments, whether domestic or international. ## Footnote This strategy aims to expand the customer base by targeting new demographics or geographical areas.
64
What does a product development strategy entail?
Offering a new product or service to a firm’s current target market. ## Footnote This strategy focuses on innovation and enhancing the existing product line.
65
What is a diversification strategy?
Introducing a new product or service to a market segment that currently is not served. ## Footnote This approach can help mitigate risks associated with market fluctuations.
66
What are the two types of diversification opportunities?
Related and unrelated diversification. ## Footnote Related diversification shares common elements with the current business, while unrelated diversification does not.
67
What characterizes a related diversification opportunity?
The current target market and/or marketing mix shares something in common with the new opportunity. ## Footnote This may involve using existing vendors or distribution channels.
68
In contrast to related diversification, what is unrelated diversification?
The new business lacks any common elements with the present business. ## Footnote This type of diversification often involves entering entirely different industries or markets.

Marketing (2 decks)

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