Chp 2 - Developing Marketing Strategies and Marketing Plan

Question 1

define marketing strategy

Answer 1

identifies a firm’s target market, a related marketing mix - the 4 P’s, and the bases upon which the firm plans to build sustainable competitive advantage

Question 2

define sustainable competitive advantage

Answer 2

something the firm can persistently do better than its competitors that is not easily copied and thus can be maintained for a long period of time

Question 3

4 strategies for developing customer value and sustainable competitive advantage:

Answer 3

1) customer excellence
2) operational excellence
3) locational excellence
4) product excellence

Question 4

explain customer excellence for developing value and competitive advantage - 4 points

Answer 4

1) Focus on retaining loyal customers and excellent customer service
2) Loyalty is more than preferring to purchase from one firm instead of another, it means that customers are reluctant to patronize competitive firms
3) Can achieve loyalty through emotional attachment with loyalty programs, unique merchandise, strong brand, superior customer service
4) viewing customers with lifetime value perspective rather than transaction basis is key to customer retention

Question 5

explain operational excellence for developing value and competitive advantage - 2 points

Answer 5

1) Focus on efficient operations and excellent supply chain management
2) efficient operations and good relationships with vendors can help firm offer lower-priced goods or better margins to focus on advertisement and better service

Question 6

explain locational excellence for developing value and competitive advantage - 2 points

Answer 6

1) Focus on good physical location and internet presence

2) Competitive advantage with location is sustainable because it is not easily duplicated

Question 7

explain product excellence for developing value and competitive advantage

Answer 7

Focus on achieving high quality products and effective branding and positioning

Question 8

what do firms require with regards to sustainable competitive advantages?

Answer 8

require multiple sustainable competitive advantages to build a wall around their position and attract loyal customers

Question 9

3 major phases of marketing plan

Answer 9

planning, implementation, control

Question 10

what composes marketing plan?

Answer 10

Composed of analysis of current marketing situation, opportunities and threats, marketing objectives, strategy, 4P’s, projected financial statements

Question 11

2 steps in planning phase of marketing plan

Answer 11

1) business mission and objectives

2) situational analysis (LO3)

Question 12

define business mission

Answer 12

broad description of firm’s objectives and scope of activities: answers what type of business is it and what does it need to do to accomplish goals?

Question 13

2 steps in implementation phase of marketing plan

Answer 13

3) identify opportunities (using segmentation, targeting, positioning)
4) implement marketing mix and allocate resources (4 Ps)

Question 14

step in control phase of marketing plan

Answer 14

5) evaluate performance by using marketing metrics

Question 15

what do we require in steps of marketing plan

Answer 15

logical link between all 5 steps

Question 16

define situational analysis

Answer 16

using a SWOT analysis that assess both the internal environment and external environment with respect to strengths, weaknesses, opportunities, threats

Question 17

with regards to external environment, what does situation analysis assess - 2 points

Answer 17

1) assesses opportunities and uncertainties in the market due to changes in CDSTEP (cultural, demographic, social, tech, economic, political) forces and sustainable competitive advantage relative to competition
2) assesses market trends, customer and competitive analysis

Question 18

how can firms react to opportunities and threats

Answer 18

outside firm’s control so they can only decide how they want to respond

Question 19

how can firms react to strengths and weaknesses

Answer 19

within control so can take actions for and against them

Question 20

explain strengths

Answer 20

what you do well or have access to; should be maintained/enhanced

Question 21

explain weaknesses

Answer 21

what you are lacking or do poorly; could lead to failure

Question 22

explain opportunities

Answer 22

suggest new basis for competitive advantage, possibility for improved performance

Question 23

explain threat

Answer 23

may impede strategy implementation; may change rules/resources required; may hurt performance

Question 24

define market segment under segmentation

Answer 24

a group of customers who respond similarly to a firm’s marketing efforts

Question 25

define market segmentation under segmentation

Answer 25

dividing market into distinct groups of customers, where each individual group has similar needs, wants, or characteristics, who therefore might appreciate products geared especially for them in similar ways

Question 26

define target marketing under targeting

Answer 26

process of evaluating attractiveness of various market segments and then deciding which to pursue as a market

Question 27

define market positioning under positioning

Answer 27

process of defining marketing mix variables so that target customers have a clear, distinct, desirable understanding of what the product does or represents in comparison with competing products

Question 28

example of positioning

Answer 28

Hertz is positioned as quality car rental company where customers can have peace of mind

Question 29

explain product implementation to increase customer value

Answer 29

Firms attempt to develop products that customers perceive as valuable enough to buy

Question 30

explain price implementation to increase customer value - 2 points

Answer 30

1) Firms charge a price that customers perceive as giving them good value for the products they receive 2) Too high a price, not much volume generated. Too low a price, may result in lower than necessary margins and profits

Question 31

explain promotion implementation to increase customer value

Answer 31

Communicate value of their offering to customers through variety of media

Question 32

explain place implementation to increase customer value

Answer 32

Firm must make product readily accessible when and where customer wants it

Question 33

step 5: define metric - 2 points

Answer 33

1) measuring system that identifies trend, dynamic, characteristic 2) used to explain why things happened and to project future

Question 34

step 5: who is accountable for performance - 2 points

Answer 34

1) Business unit and manager should be held accountable only for profits it can control 2) Performance evaluations are used to pinpoint problem areas

Question 35

4 things for step 5: evaluate performance with marketing metric

Answer 35

1) identify who is accountable for performance 2) identify performance objectives and metrics 3) identify financial performance metrics 4) identify social responsibility performance metrics

Question 36

3 points in step 5: performance objectives and metrics

Answer 36

1) Can compare firm performance over time or to competing firms 2) Can view firm’s products as a portfolio and profits from some products are used to fuel growth for others 3) Not one metric to evaluate performance as many factors contribute

Question 37

1 point in step 5: financial performance metrics

Answer 37

Attempt to maximize one metric may lower another, so don’t just use 1 metric. Like increase sales by lowering prices may also decrease profits

Question 38

define portfolio analysis

Answer 38

Management evaluates firm’s products and allocates resources according to which products are expected to be most profitable for firm in future

Question 39

where is portfolio analysis performed?

Answer 39

Typically performed at strategic business unit (SBU) or product line level

Question 40

define strategic business unit (SBU)

Answer 40

division that can be managed independently from other divisions since it markets a specific set of products to a clearly defined group of customers

Question 41

define product line

Answer 41

group of products that consumers may use together or perceive similar in some way

Question 42

define relative market share

Answer 42

measure of product’s strength in particular market, defined as sales of focal product divide by sales achieved by largest firm in industry

Question 43

define market growth rate

Answer 43

annual rate of growth of the specific market in which product competes

Question 44

portfolio analysis table - high relative market share, high market growth rate

Answer 44

stars

Question 45

portfolio analysis table - low relative market share, high market growth rate

Answer 45

question marks

Question 46

portfolio analysis table - high relative market share, low market growth rate

Answer 46

cash cows

Question 47

portfolio analysis table - low relative market share, low market growth rate

Answer 47

dogs

Question 48

portfolio analysis: define stars - 2 points

Answer 48

1) often require heavy resource investment line in promotions and new production facilities to facilitate growth 2) Will move to cash cows as market growth slows

Question 49

portfolio analysis: define cash cows - 2 points

Answer 49

1) products have already received high investment | 2) resources can be used for products that need it

Question 50

portfolio analysis: define question marks - 2 points

Answer 50

1) significant resources to maintain market share | 2) Managers can phase out product or infuse it with cash cow resources so they become stars

Question 51

portfolio analysis: define dogs

Answer 51

should be phased out unless needed to boost sales of another product or for competitive purposes

Question 52

growth strategies: current products, current market

Answer 52

market penetration

Question 53

growth strategy: new product, current market

Answer 53

product development

Question 54

growth strategy: current product, new market

Answer 54

market development

Question 55

growth strategy: new product, new market

Answer 55

diversification

Question 56

growth strategy: define market penetration - 3 points, 2 example

Answer 56

1) Employs existing marketing mix and focuses firm’s efforts on existing customers 2) Example: encouraging current customers to visit store more often by using advertisements or discounts/sales to current customers. 3) Example: sending email coupon out to current customers to drive sales 4) Generally requires greater marketing efforts 5) Easiest to implement

Question 57

growth strategy: define market development

Answer 57

Employs existing market offering to reach new market segments

Question 58

growth strategy: define product development

Answer 58

Offers a new product/service to a firm’s current target market

Question 59

growth strategy: define diversification

Answer 59

Firm introduces new product/service to market segment it does not currently serve

Question 60

growth strategy: 2 types of diversification

Answer 60

1) related diversification | 2) unrelated diversification

Question 61

growth strategy: define related diversification and give example

Answer 61

1) current target market and/or market mix shares something in common with the new opportunity 2) Example: firm may be able to purchase from existing vendors

Question 62

growth strategy: define unrelated diversification

Answer 62

new business lacks common elements with present business

Question 63

growth strategy: define downsizing

Answer 63

exiting markets, reducing product portfolios, closing certain businesses or store or plant locations

Question 64

lecture - what do we use to implement marketing mix and define it

Answer 64

tactics - an action or strategy carefully planned to achieve a specific end

Question 65

lecture - 3 things to do after situational assessment and note

Answer 65

1) set objectives - what you want to achieve 2) develop strategy - decide how you'll do it 3) develop tactics - how you'll make it happen Note: all decisions are made in context of environment you just analyzed

Question 66

STP: explain process

Answer 66

first understand customer needs and wants through market research, then divide market into distinct segments, determine which segments it should target, and decide how it should position products to best meet needs of chosen target market

Question 67

STP: Segmentation: 4 ways to segment market

Answer 67

by demographics, benefits sought, geographic areas, behavioural factors (how products are used)

Question 68

2 examples of step 5: social responsibility performance metrics

Answer 68

impact on environment, ability to diversify workforce

Question 69

2 strategies that have been responsible for making marketing firms successful:

Answer 69

portfolio analysis, product-market growth strategies

Question 70

what does each circle represent in portfolio analysis BCG strategy?

Answer 70

circles represent brands, larger circles correspond to higher levels of sales, smaller circles correspond to lower levels of sales

Question 71

x and y axis of portfolio analysis

Answer 71

x axis is relative market share, y axis is market growth rate