Chap. 2 Marketing

value proposition
A statement (30 sec.) that summarizes the key benefits or values for target customers. It explains why customers should buy a product, why stakeholders should donate, or why prospective employers may want to hire someone for their organization.
target markets
The group of customers toward which an organization directs its marketing efforts.
strategic planning process
A process that helps an organization allocate its resources under different conditions to accomplish its objectives, deliver value, and be competitive in a market-driven economy.
Situational analysis (SWOT analysis)
An assessment of an organization’s internal and external environments.
What does SWOT stand for?
Strengths, Weaknesses, Opportunities, Threats
What are the internal and external factors of SWOT?
Internal- Strengths and weaknesses
External- Opportunities and threats
Example of Strength
Firm’s brand name and resources, Extensive range of employee benefits raises staff morale
Example of Weaknesses
Low product awareness, poor facility location, too relaxed management style, inconsistent service between locations
Example of Opportunities
Demand for product, size of market, International marketing
Example of Threats
Bad economy, Competitors, market saturation
mystery shoppers
A person who is paid to shop at a firm’s establishment or one of its competitors’ to observe the level of service, cleanliness of the facility, and so forth, and reports his or findings to the firm.
green marketing
Marketing environmentally safe products and services in a way that is good for the environment.
objectives
What organizations want to accomplish (the end results) in a given time frame.
strategies
Actions (means) taken to accomplish objectives.
tactics
Actions taken to execute strategies.
marketing plan
A document that is designed to communicate the marketing strategy for an offering. The purpose of the plan is to influence executives, suppliers, distributors, and other important stakeholders of the firm so they will invest money, time, and effort to ensure the plan is a success.
market penetration strategies
Selling more of existing products and services to existing customers.
product development strategies
Creating new products or services for existing markets.
market development strategies
Selling existing products or services to new customers. Foreign markets often present opportunities for organizations to expand. Exporting, licensing, franchising, joint ventures, and direct investments are methods that companies use to enter international markets.
export
Sell products to buyers in foreign markets.
license
Sell the right to use some aspect of the production process, trademark, or patent to individuals in foreign markets.
franchising
Granting an independent operator the right to use your company’s business model, techniques, and trademarks for a fee.
contract manufacturing
When companies hire manufacturers to produce their products in another country.
joint ventures
An entity that is created when two parties agree to share their profits, losses, and control with one another in an economic activity they jointly undertake.
direct investment
Owning a company or facility overseas.
diversification strategies
Offering products that are unrelated to other existing products produced by the organization.
corporate-level plans
Plans developed for the corporation as a whole take place at the corporate level.
strategic business unit (SBI)
Businesses or product lines within an organization that have their own competitors, customers, and profit centers.
business-level plans
Plans developed for each strategic business unit typically have their own mission statement.
portfolio
A group of business units owned by a single firm
portfolio planning approach
An approach to analyzing various businesses relative to one another.
Boston Consulting Group (BCG) matrix
A portfolio planning approach that examines strategic business units based on their relative market shares and growth rates. Businesses are classified as stars, cash cows, question marks( (problem children), or dogs.
star
Business or offering with high growth and a high market share.
cash cow
Business or offering with a large share of a shrinking market.
question marks (problem children)
Business or offering with a low share of a high-growth market.
dog
Business or offering with low growth and a low market share.
harvest
When a firm lowers investment in a product or business.
divest
When a firm drops or sells a product or business.
General Electric (GE) Approach
A portfolio planning approach that examines a business’s strengths and the attractiveness of industries.