Chapter 2 Marketing – Developing Marketing Strategies and a Marketing Plan

Identifies: 1) a firms target markets
2) A related marketing mixer (four P’s)
3) the bases on which the firm plans to build a sustainable competitive advantage
Marketing strategy
Sustainable competitive advantage
advantage over the competition that is not easily copied and can be maintained over a long period of time
Customer excellence
achieved when a firm develops a value-based strategy for retaining loyal customers and provides outstanding customer service
Operational excellence
efficient operations, excellent supply chain management, strong relationships with suppliers, and excellent human resource management
Product excellence
providing products with high perceived value and effective branding and positioning
Locational excellence
competitive advantage based on location is sustainable because it is not easily copied
Customer, operational, product, location excellence
4 Ways to achieve sustainable competitive advantage
Marketing plan
written document composed of analysis of current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in four P’s, action programs, and projected income and other financial statements
Planning, implementation, control
3 phases of marketing plan
Planning phase
Phase 1, Step 1 Marketing executives define the mission and/or vision of the business, and step 2 is evaluate the situation by assessing how various players affect the firm’s potential success (SWOT)
Implementation phase
Phase 2, Step 3 identify opportunities by engaging in Segmentation, Targeting, Position (STP), Step 4 implement marketing mix (4 P’s)
Control phase
Phase 3, Step 5 evaluate performance using marketing metrics
Mission statement
Broad description of a firm’s objectives and the scope of activities it plans to undertake
Situation analysis
SWOT analysis that assesses internal environment in regards to Strengths & Weaknesses, and external in regards to Opportunities & Threats
STP
Segmentation, Targeting, Positioning, ways to identify and evaluate opportunities for increasing sales and profits
market segment
consists of consumers who respond similarly to a firm’s marketing efforts
market segmentation
diving the market into groups of customers with different needs, wants or characteristics
Target marketing / targeting
evaluates each segment’s attractiveness and decides which to pursue
Market positioning
process of defining the marketing mix variables so that the target customers have a clear, distinctive, desirable understanding of what the product does or represents
metric
measuring system that quantifies a trend, dynamic, or characteristic
Strategic business unit
division of the firm itself that can be managed and operated somewhat independently from other divisions and may have other missions or objectives
Market share
percentage of market accounted for by a specific entity and is used to establish the products strength in a market
Relative market share
special type of market share metric, relative strength compared to that of the largest firm in its industry
Market growth rate
annual rate of growth of the specific market in which the product competes
Stars
high growth high share require heavy resource investment, will become cash cows
Cash cows
low growth high share, have excess resources that can be spun off to products that need it
Question marks
high growth low share, require significant resources to maintain that can increase market share, managerially intensive products
Dogs
low growth low share, should be phased out
Market penetration strategy
employs the existing marketing mix and focuses the firm’s efforts on existing customers
Market development strategy
employs the existing market offering to reach new market segments, whether domestic or international
Product development strategy
offers new products or services to a firm’s current target market (MTV creating tv series similair to Real World)
Diversification strategy
Introduces a new product or service to a market segment that currently is not served
Related diversification
current target market shares something in common with the new opportunity (someone rich watches a rich show, MTV creates a new show similar to the one rich people watch)
Unrelated diversification
new business lacks any common elements with the present business
Market penetration, market development, product development, diversification
4 growth strategies
Organizational culture
system of shared values, attitudes, and behaviors
Benchmarking
discovering how others do something better than you so you can imitate or leapfrog competition