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marketing chapter 2

STUDY
PLAY
planning
process of anticipating future events and conditions and of determining the best way to achieve organization objectives
marketing planning
implementing planning actives devoted to achieving marketing objectives- establishes the basis for any marketing strategy. ( product lines, pricing decisions, selection of appropriate distribution channels, and decisions relating to promotional campaigns)
strategic planning
process of determine an organizations primary objectives and adopting courses of action that will achieve these objectives
tactical planning
guides the implementation of actives specified in the strategic plan. address shorter term actions that focus on current and near future activities that a firm must complete to implement larger strategies.
top management
in charge of strategic planning such as organization wide objectives, long term plans, total budget
middle management
in charge of tactical planning such as quarterly and semiannual plans, divisional policies and procedures
supervisory management
in charge of operational planning such as daily and weekly plans, unit budgets, etc.
mission
essential purpose that differentiates the company from others. specifies the organizations overall goals and operational scope and provides general guidelines for future management actions.
marketing strategy
overall, companywide program for selecting a particular target market and then satisfying consumers in that market through careful blending of the elements of the marketing mix- product, distribution, promotion, price.
sustainable competitive advantage
when other companies cannot provide the same value to their customers that the firm does
porters five forces
1. potential new entrants
2. bargaining power of buyers
3. bargaining power of suppliers
4. threat of substitute products
5. rivalry among competitors
first mover strategy
attempting to capture the greatest market share and develop long term relationships by being the first to enter the market with a good or service. ex. mcdonalds being open 24/7
second mover strategy
observing closely the innovations of first movers and then improving on them to gain advantage in the marketplace.
SWOT analysis
helps planners compare internal organizational strengths and weaknesses with external opportunities and threats
core competencies
capabilities that customers value and competitors find difficult to duplicate
leverage
matching an internal strength with an external opportunity produces a situation
strategic window
limited periods during which the key requirements of a market and the particular competencies of a firm best fit together. shows planners a way to relate potential opportunities to company capabilities.
target market
group of people toward whom the firm aims its marketing efforts and ultimately its merchandise
marketing mix
blend of four strategic elements to fit the needs and preferences of a specific target market. should be an ever-changing combination of variables to achieve success
product strategy
includes decisions about customer services, package design, brand names, trademarks, patents, warranties, the life cycle of a product, etc.
rule of three
the three strongest most efficient companies dominate between 70 and 90 percent of the market
portfolio analysis
evaluating the companies products and visions to determine the strongest and weakest
strategic business units
key units within diversified firms. have their own managers, resources, objectives, and competitors
categories
strategic business unites focus the attention of company managers so that they respond effectively to changing consumer demand within limited markets
market share
percentage of a market that a firm currently controls. (or company sales divided by a total market sales)
strategic planning
to survive in a challenging environment that includes soaring fuel costs, several airlines have decided to merge
tactic planning
cutting the number of flights and charging passengers extra for checked baggage
final step of marketing planning process
managers monitor performance to ensure that objectives are achieved
bargaining power of buyers
can depress prices
bargaining power of suppliers
can increase cost or reduce selection
pros of first mover strategy
capturing the greatest market share and developing long term relationships with customers.
disadvantages of first mover strategy
possibility that companies that follow can learn from mistakes by first movers.
product, price, promotion, place
four strategic elements of the marketing mix
marketing environment
competitive, political legal, economic, technological, and social cultural factors
bcg matrix
stars, cash cows, question marks and dogs
stars
products with high market shares in high growth markets
cash cows
command high market shares in low growth markets
question marks
achieve low market shares in high growth markets
dogs
manage only low market shares in low growth markets
steps in marketing planning
define the organizations mission and objectives, assess organizational resources and evaluate environmental risks and opportunities, formulate implement and monitor a marketing strategy
porters generic strategies
cost leadership:
-most efficient producer
-principal reason customers buy is price
-generally implies ability to set price
competitive advantage
set of unique features of a company its products that are perceived by the target market significant and superior to the competition
build
give up short term profits and use its financial resources to invest and improve (problem child)
hold
preserve market share to take advantage of the cash flow (cash cow)
harvest
increase the short term cash return without long term concern (all but Stars)
divest
get rid of subs with low shares of low growth markets (Problem child, dog)
operational planning
shorter decision making such as less than a year, monthly, weekly or daily. super visional management is in charge of this. in charge of budget units and departmental rules and procedures
environmental scanning
collection and interpretation of information about external forces, events, and relationships that may affect the future of the organization or the implementation of the marketing plan
value chain
includes primary and support actives such as inbound logistics, operations, outbound logistics, marketing and sales, service, procurement, technology development, human resource development and infrastructure
primary activities
( on bottom) inbound logistics, operations, outbound logistics, marketing and sales, service
support activities
( on top) procurement, technology development, human resource envelopment, infrastructure