WEEK 2 LECTURE Flashcards
(10 cards)
What is a marketing strategy?
The activities of selecting and describing one or more target markets, and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets
What are three key considerations for marketing strategies?
Identifying a strategic window (the point of time in which the right environmental conditions exist fir a particular marketing opportunity.
Leveraging a competitive advantage (developing unique and desirable strategic elements that formulate competitive gain).
Avoiding marketing myopia (defining a strategy too narrowly and selfishly).
What are the different levels of marketing strategies?
Corporate strategy (the highest level of the strategic hierarchy that deals with the overall direction of the organisation).
Business strategy (the second level of the strategic hierarchy that deals with the overall direction of the strategic business unit).
Functional strategy (the third level of the strategic hierarchy that deals with the implementation of the strategic direction at the operational level).
What is a SWOT analysis?
S is strengths (things the company does well)
W is weaknesses (things the company does not do well)
O is opportunities (conditions in the external environment that favour strengths)
T is threats (conditions in the external environment that don’t relate to strengths or favour current weaknesses)
What is environmental scanning in marketing and its six factors?
The collection and interpretation of information about forces, events and relationships in the external environment that may affect the future of an organisation.
Six macro-environmental forces are social, demographic, economic, technological, political and legal, competitive.
What are the different types of competitive advantage?
Cost competitive advantage – maintaining a low-cost strategy
Product differentiation strategy – looking at what our products offer/do differently to others products
Niche competitive advantage – focusing on a specific segment and market share
Sustainable competitive advantage – differentiated from competitors, the way the product differs to others on the market is difficult/impossible to replicate (e.g. patent, trademark)
What is the BCG Portfolio Matrix?
Used to set strategic directions
Organisations have a portfolio of offerings that possess different growth rates and market shares
Technique managers use BCG to quantify performance measures and growth targets for individuals SBU’s
To determine which SBU or offering generates cash or requires cash to fund growth
A portfolio of products can be analysed using the BCG matrix, and categories the SBU’s into four different types, based on
- Market share – does the product being sold have a low or high market share
- Market growth – are the number of potential customers in the market growing or not
Elements of a BCG Matrix
Cash cows – SBU’s that generate large quantities of cash. These are mature successful products with little need for investment.
Stars – SBU’s with a high share of high growth markets that require cash to fund rapid growth. They may need high investments to maintain market share and if they continue to, they transition into cash cows if market share is held.
Question marks – SBU’s with a low share of high growth markets, large amounts of cash are required to maintain market share. They possess low market share in high growth markets, they have potential but often require significant investment, resulting in its feasibility being questionable.
Dogs – SBU’s with low shares of slow growth markets, this SBU becomes a liability potentially if uses more cash than it earns. Has low market share in low growth markets, and aren’t often worth investing in.
What is market share and market growth?
Market share: relative market share = the ratio between the company’s share and the share of the largest competitor (e.g. Nike has 50% market share in the running shoe market and New Balance has 5%, the ratio is 10 to 1
Market growth: the annual rate of growth of the SBU’s industry and
- Can usually be found in industry reports
- Measured in percentage terms
- The cut off point is usually at 10%
- Growth above 10% is high
- A good indicator of markets strength and future potential
What are the features of Ansoff’s matrix?
Market penetration: increase sales of current product in current market
Market development: sell current products to a new market
Product development: selling new products to current market
Diversification: selling new products in new markets
