Chapter 2 -- Overview

Question 1

What is a strategic business unit (SBU)?

Answer 1

a subgroup of a single business or collection of related businesses within the larger organization

Question 2

What are the characteristics of SBUs?

Answer 2

1. distinct mission & target market
2. control over its resources
3. its own competitors
4. a single business or a collection of related businesses
5. plans independent of other SBUs in total organization

Question 3

Draw Ansoff’s Strategic Opportunity Matrix.

Answer 3

See drawing

Question 4

Define market penetration.

Answer 4

a marketing strategy that tries to increase market share among existing customers

Question 5

Define market development.

Answer 5

a marketing strategy that entails attracting new customers to existing products

Question 6

How is an Innovation Matrix different from Ansoff’s Strategic Opportunity Matrix?

Answer 6

Enables a company to see exactly what types of assets need to be developed and what types of markets are possible to grow into (or create) based on company’s core capabilities

Question 7

Draw the Innovation Matrix.

Answer 7

Draw & learn meanings of core innovation, adjacent innovation, transformational innovation

Question 8

What is the portfolio matrix?

Answer 8

a tool for allocating resources among products or SBUs on the basis of relative market share and market growth rate

Question 9

What is a star?

Answer 9

In the portfolio matrix, a business unit that is fast-growing market leader.

Question 10

What is a cash cow?

Answer 10

In the portfolio matrix, a business unit that generates more cash than it needs to maintain its market share

Question 11

What is a problem child (question mark)?

Answer 11

In the portfolio matrix, a business unit that shows rapid growth but poor profit margins

Question 12

What is a dog?

Answer 12

In the portfolio matrix, a business unit that has low growth potential and small market share

Question 13

Draw the Portfolio Matrix/BCG Model.

Answer 13

Draw

Question 14

Define marketing myopia.

Answer 14

Defining a business in terms of goods and services rather than in terms of the benefits customers seek

Question 15

What is market opportunity analysis (MOA)?

Answer 15

the description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in the market segments

Question 16

What are the 5 types of competitive advantages?

Answer 16

Cost competitive, product/service differentiation, niche, sustainable

Question 17

Draw the General Electric Model.

Answer 17

Draw

Question 18

What are the elements of a marketing plan?

Answer 18

Business mission statement, situation, or SWOT, analysis, objectives, marketing strategy (target market strategy, market mix), implementation & evaluation & control

Question 19

What does the SWOT Analysis consist of?

Answer 19

Strengths, Weaknesses, Opportunities, Threats

Question 20

What should you focus on when creating a SWOT analysis?

Answer 20

organizational resources, such as production costs, marketing skills, financial resources, company or brand image, employee capabilities, and available technology

Question 21

What is environmental scanning?

Answer 21

collection and interpretation of information on forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan; helps ID market opportunities and threats, and provide guidelines for the design of marketing strategy

Question 22

What are the three types of competitive advantages?

Answer 22

1. cost
2. product/service differentiation
3. niche

Question 23

How does cost leadership occur?

Answer 23

From obtaining inexpensive raw materials, creating an efficient scale of plant operations, designing products for ease of manufacture, controlling overhead costs, and avoiding marginal customers

Question 24

Having a cost competitive advantage means being the ___ competitor in an industry while maintaining ___ profit margins.

Answer 24

low-cost; satisfactory

Question 25

What is an experience curve?

Answer 25

Costs decline at a predictable rate as experience with a product increases; reflect learning by doing, technological advances, and economies of scale

Question 26

What are 5 different ways that costs can be reduced?

Answer 26

1. Experience curves 2. Efficient labor 3. No frills goods and services 4. Government subsidies 5. Product design 6. Reengineering 7. Production innovations 8. New methods of service delivery

Question 27

When does a product/service differentiation competitive advantage exist?

Answer 27

When a firm provides something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition

Question 28

What is a niche competitive advantage?

Answer 28

It seeks to target and effectively serve a single segment of the market; most important for small companies with limited resources

Question 29

When are niche strategies used by companies?

Answer 29

To serve a limited geographic market

Question 30

What is a sustainable competitive advantage?

Answer 30

An advantage that cannot be copied by the competition (ex. Netflix)

Question 31

Successful firms that engage in competitive advantage don't imitate, they ___.

Answer 31

They stake out a position unique in some manner from its rivals.

Question 32

Competitive advantages in the future markets are:

Answer 32

skills and assets; assets include patents, copyrights, locations, equipment, and technology that are superior to those of the competition; skills are functions like customer service and promotion that firms perform better than competitors

Question 33

What is a marketing objective?

Answer 33

A statement of what is to be accomplished through marketing activities; must be consistent with and indicate the priorities of the oragnization

Question 34

What are the functions of objectives?

Answer 34

1. communicate marketing management philosophies and provide direction for lower-level marketing managers so marketing efforts are integrated and pointed in one direction 2. serve as motivators 3. motivate those charged with achieving objectives 4. process forces executives to clarify their thinking 5. form a basis for control

Question 35

What should marketing objectives consist of to be effective?

Answer 35

1. should be realistic 2. should be measurable 3. should be time specific 4. should be compared to a benchmark

Question 36

How are target markets selected?

Answer 36

1. by appealing to the entire market with one marketing mix 2. concentrating on one segment 3. appealing to multiple market segments using multiple marketing mixes

Question 37

What is the marketing mix?

Answer 37

The blend of product, place, promotion, and pricing strategies, designed to produce mutually satisfying exchanges with a target market

Question 38

Which P does the marketing mix start with?

Answer 38

Product (product offering and product strategy)

Question 39

Product includes not only the physical unit, but also....

Answer 39

its package, warranty, after-sale service, brand name, company image, value, etc.

Question 40

What does promotion include?

Answer 40

advertising, public relations, sales promotion, and personal selling

Question 41

What is promotion's role in the marketing mix?

Answer 41

To inform, educate, persuade, and remind them of the benefits of an organization or a product

Question 42

Which of the 4 Ps is the easiest to change?

Answer 42

the price is the most flexible of the 4 Ps and easiest to change

Question 43

What is implementation?

Answer 43

The process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes the plan's objectives

Question 44

What does implementation involve?

Answer 44

detailed job assignments, activity descriptions, time lines, budgets, and lots of communications

Question 45

What is one difficult part of implementation?

Answer 45

Acceptance of changes; people fear change because they worry they will lose something

Question 46

What are 4 common reasons why marketing objectives fail?

Answer 46

1. unrealistic objectives 2. inappropriate marketing strategies 3. poor implementation 4. changes in the environment after the objective was specified and the strategy implemented

Question 47

Why are evaluation and control important?

Answer 47

Evaluation entails gauging the extent to which marketing objectives have been achieved during the time period. Control provides the mechanisms for evaluating marketing results based on objectives and for correcting actions that don't move the organization towards reaching these goals

Question 48

What is marketing audit?

Answer 48

a thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization; helps management allocate resources efficiently and improve communication

Question 49

What are the three post-audit tasks?

Answer 49

1. audit should profile existing weaknesses, strengths, and opportunities 2. ensure that the role of audit has been clearly communicated 3. make someone accountable for implementing recommendations

Question 50

What are the 4 characteristics of a marketing audit?

Answer 50

1. comprehensive 2. systematic 3. independent 4. periodic

Question 51

What does effective strategic planning require?

Answer 51

1. continual attention 2. creativity 3. management commitment (such as management support & participation)

Question 52

What is an example of a company that uses top management's support and participation for successful strategic planning?

Answer 52

Google