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USC / Business / BUAD 307 / What is an advantage over the competition that is not easily copied an

What is an advantage over the competition that is not easily copied an

What is an advantage over the competition that is not easily copied an

Description


How does a firm choose consumer groups to pursue with its marketing efforts?




And What do we need to do to accomplish our goals?




∙ Mission Statement- Attempts to answer…What type of business are we?



Chapter 2 ∙ Marketing Strategy- Identifies a firm’s target markets, its 4 ps,  and the bases on which the firm plans to build a sustainable  competitive advantage ∙ Sustainable Competitive Advantage-an advantage over the  competition that is not easily copied and cIf you want to learn more check out ua syllabus
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an be maintained over  a long period of time o Like a wall of advantage that keeps competitors out and  away from another companies core customers ∙ 4 Macro Strategies that help achieve a sustainable competitive  advantage-focus on the marketing mix and create Customer  Value o 1) Customer Excellence-Retaining loyal customers and  excellent customer service  Strong brand, unique merchandise, and superior  customer service  Loyalty-Means being reluctant to buying competitor  One way to build loyalty is provide something unique o 2) Operational Excellence- Efficient operations and  excellent supply chain and human resource management  Like Customer relationships, vendor relationships  must be developed over the long term and cannot be offset by the competitor o 3) Product Excellence-Products with high perceived value  and effective branding o 4) Locational Excellence- Having a good physical location  and internet presence  A competitive advantage based on location is  SUSTAINABLE because it is not easily duplicated  McDonalds has developed a competitive advantage  because it has a high density of stores which make it hard for a competitor to enter the market and find  good locations o A single strategy such as low prices or excellent service is  not sufficient to build a competitive advantage o Firms require multiple approaches to build a wall around  their position that stands very high ∙ Marketing Plan-Is a written document composed of an analysis  of the current marketing situation, opportunities and threats for  the firm, marketing objectives and strategy specified in terms of  the four P’s, action programs, and projected or pro forma income  statements o A written marketing plan provides a reference point for  evaluating whether or not the firm has met its objectives∙ 5 Steps of a Marketing Plan o 1) Phanning Phase-Marketing executives and top  managers define the mission and or vision of the business o 2) Evaluate the situation by assessing how various players  inside and outside the organization affect the firms  potential success o 3) Implementation Phase-Marketing managers identify  and evaluate different opportunities by engaging in a  process known as segmentation, targeting and positioning o 4) Then they must implement the 4 P’s o 5) Control Phase-evaluation of the performance of the  marketing strategy using marketing metrics and taking any necessary corrective actions ∙ Mission Statement- Attempts to answer…What type of business  are we? And What do we need to do to accomplish our goals? o These must be answered before marketing executives get  involved ∙ SWOT Analysis-assesses both the internal environment with  regard to its Strengths and Weaknesses, and the external  environment in terms of its Opportunities and Threats o Nike SWOT Analysis o Internally- its strengths would include its great brand  recognition (More people are likely to try out their  products), and the visibility of the celebrities who wear its  products. Its weaknesses include the fact that they rely  very heavily on their athletic show lines. Another negative  is that it aligns itself with multiple “Heroes” who some  have made complete fools of themselves and damaged the brands image o Externally- It has opportunities with dominance in other  niche sport markets. Also launched a “Play Russian”  campaign in the Russian Olympics. Also the opportunity for growth in global markets. Its threats include the fact that it  must constantly be on the defensive because it holds  market dominance which makes it target for all  competitors. It also experiences threats from imitation  products. ∙ Market Segment- Consists of consumers who respond similarly to a firm’s marketing efforts How does a firm choose consumer groups to pursue with its marketing  efforts? ∙ Market segmentation-The process of dividing the market into  groups of customers with different, needs, wants or characteristics who therefore might appreciate products geared  especially for them o One group for Adrenaline junkies-Faster cars, one group for green people-Hybrid cars ∙ Target Marketing (Targeting)-After a firm has identified various  market segments that it might pursue, it evaluates each  segments attractiveness and decides which to pursue ∙ Marketing Positioning-he process of defining the marketing mix  variables so that target customers have a clear, distinctive, and  desirable understanding of what the product does or represents  in comparison with competing products o To segment the coffee drinking market, Starbucks also  finds locations where caffeine is needed (College campuses vs. shopping districts) ∙ Firms are most successful when they focus on opportunities that  build on their strengths relative to those of their competition ∙ Portfolio Analysis: In portfolio analysis, management evaluates the firm’s various products and businesses (Its portfolio)- and  allocates resources according to which products are expected to  be the most profitable for the firm in the future o Performed at the Strategic Business Unit or (Product line)  level of the firm o SBU-Is a division of the firm itself that can be managed  and operated somewhat independently from other  divisions and may have a different mission or objectives Goodyear has its 4 SBUS as 1) North American, 2) Europe,  Middle East, African 3) Latin American 4) Asia Pacific  The point of an SBU is to be agile and be able  to respond quickly to changing economic or  market situations ∙ How it is used to evaluate market performance? o Use of a two by two matrix o Stars-High growth markets and high market shares. Rapid  growth, requires lots of materials. After their market growth slows they will migrate from being heavy users of  resources to heavy generators of resources and will  become cash cows o Cash cows- low growth, but high market share.  o Question Marks-Appear in high-growth markets but have  relatively low market shares. They often require lots of  resources to maintain and increase their market share o Dogs-Low growth markets and relatively low market shares How do firms grow their businesses? ∙ Market Penetration Strategy: employs the existing marketing mix and focuses the firm’s efforts on existing customerso Encouraging more customers to patronize the firm more  often, or to buy more stuff on each visit o Often requires greater marketing efforts like increased  advertising and additional sales and promotions ∙ Market Development Strategy: employs the exisiting  marketing offering to reach new market segments, domestically  or internationally o MTV pursues a market development strategy by targeting  older customers who were MTV viewers in their youth and  are now reminiscent of their teenage years o International expansion is riskier than domestic because  firms must deal with differences in regulations, language  etc ∙ Product Development Strategy: introducing a new product or  service to a firm’s current target market  o This can increase the amount of time viewers will continue  to watch this TV channel ∙ Diversification Strategy: Introducing a new product or service  to a market segment that currently is not served, either related  or unrelated o Related diversification-The current target market shares  something in common with the new opportunity o Unrelated diversification- the new business lacks any  common elements with the present business Point of Difference ∙ Something that makes you different from your  competitors (But it has to be something that your  customer actually wants) o Example: Why choose this Mexican Restaurant?  Salsa is better  Queso is better  Prices are better  Its more authentic  Points of Parity ∙ A point of difference that a competitor has over you that  you need to counteract ∙ In most cases you wont even be able to compete in the  market unless you can invalidate this advantage that  your competitor has Criteria for Identifying a Competitor∙ Anyone who competes for customers, resources,  revenues, and or futures opportunities with you is a  competitor Reasons for marketing Collaborations ∙ Co-Marketing Alliances- (J Crew and Ray Ban/Timex) ∙ Product Development alliances- (Medicine companies  collaborating to create a cure for tough diseases) ∙ Global Distribution Alliances- McDonalds all over the world ∙ Product Development & Foreign Market Access-GE Sharing  technology with wind turbines and also crack into new foreign  markets Characteristics of a strong objective ∙ S-Specific ∙ M-easurable ∙ A-chievable ∙ R-elevant ∙ T-imely Market Share & Market penetration ∙ Unit share = Product unit sales / Market unit sales ∙ Demand Share = Product demand in # customers / market  demand in # customers ∙ Dollar share = product dollar sales / market dollar sales Market Penetration ∙ Market Penetration Index* = Market Demand / # consumers in  potential market o BUYING ANY PRODUCT ∙ Product penetration Index = Product demand / # consumers in  target market  o BUYING A PARTICULAR PRODUCT

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