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This 4 page Class Notes was uploaded by Brittanie Bakken on Saturday August 27, 2016. The Class Notes belongs to Mar 3023 at University of South Florida taught by M. Luckett in Fall 2016. Since its upload, it has received 10 views.
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Date Created: 08/27/16
MKTG Chapter 2 What is strategic planning? Creating and maintaining a plan that balances an organization’s goals, resources, and opportunities. Primary Goal: create longterm growth and profit. Strategic Business units (SBUs) Primary used by large companies to manage several different businesses. SBUs characteristics o Specific mission statement and target market o Control over resources o Competitors o Single business or a collection of businesses. o Plans unique to that business Strategic Alternatives 4 ways Ansoff’s Strategic Opportunity Matrix: o Market Penetration: a strategy that seeks to increase market share among current customers. (current product, current customers) o Market Development: attract new customers to existing products. (new customers, current products) o Product Development: create a new product for current customers. (new product, current customers) o Diversification: introduce new products to new customers. (new products, new customers) The Innovation Matrix: o Core Innovation: use current products to add convenience to current customers. (packaging changes, size changes, etc.) (current customers, current products) o Adjacent Innovation: make new related products to expand market share. (new complimentary products, expand current market share) (like shampoo and conditioner) o Transformational Innovation: create new products for new markets. (new products, new customers). The Boston Consulting Group Model: Encourages management to find a balance between the SBUs (individual businesses that contribute to a larger company) that produces growth and profits. This model uses the portfolio matrix to assign resources among products or SBUs based on relative market share and market growth. Portfolio Matrix SBUs Categories: o Stars: this is a business unit that is growing fast in the market. (ex. IPads) o Cash cows: a business unit that makes more money than it needs to maintain its share of the market. Low growth, but plenty of buyers (ex. Laptops) o Problem Children (?): this is a business unit that is rapidly growing, but has poor profit margins. (ex. palm device) o Dogs: a business unit that has low growth and a small share of the market. Most products usually cycle out of production. (ex. Mainframe computers) The 4 based strategies in which to allocate resources to SBUs once they have been identified: o Build: this strategy is used in the event the company believes it has a “potential star”. In this case, the company will invest to build the product up. this can mean taking some money from other products and putting that money toward this product for the time being. o Hold: this strategy is used when the company has cash cow products. In this case, the company will try to maintain its market share in order to continue receiving its positive cash flow. o Harvest: this strategy is used for all classifications except stars. The goal is to focus on increasing short term profit. o Divest: this strategy is used when the company has problem child or dog classification in which the is low growth within low shares. The ultimate goal is to get rid of this product. The General Electric Model: This model classifies SBUs based on their market attractiveness and business position. (refer to pg. 20, ex. 2.4) The Marketing Plan Steps: o Planning: the process of predicting events to come and choosing a strategy to achieve the companies’ goals based on what is predicted. o Marketing Planning: designing activates, advertisements, etc. to meet marketing objectives and change the marketing environment. o Marketing Plan: a written “guidebook” of marketing activities for the marketing manager. Why write a Marketing Plan? o So that employees and managers clear understand the goals and objectives that need to be accomplished. (this cuts down on mistakes and unnecessary expenses) o It also serves as a risks and benefits analysis. Marketing Plan Elements: o Mission Statement o Situation (SWOT) Analysis o Objectives o Marketing Strategy (includes target market and marketing mix) o Implementation Evaluation Control Writing the Marketing Plan o Clearly and concisely convey important and concepts. Defining the Business Mission: o Mission Statement: this is the foundation of any marketing plan. It is the statement in which the firm is based on. (who are we and what do we do?). o Be sure to avoid statements that are to broad or too narrow (this can negatively affect the business). o Marketing Myopia: This occurs when a mission statement is too narrow and cause the business to suffer. This mainly happens when a business is defined in terms of good/services rather than customer benefits. Conducting a Situation Analysis: o SWOT Analysis: this analysis points out internal strengths (S) and weakness (W). It also presents external opportunities(O) and threats (T). o Environmental Scanning: Occurs when a company analyzes the marketing environment for eternal opportunities and threats. This is a process in which information is collected and interpreted (about forces, events, and relationships in the external environment) that could affect the business and/or its marketing plan. Competitive Advantage : o the unique features of a company (or product) that set them apart from their competitors. This is determined by the perception of the target market. Cost Competitive Advantage: o This means that a company is a lowcost competitor while still maintaining acceptable profit margins. o Ways to reduce cost: Experience Curves: curves showing cost declines at a predictable rate as product experience increases. Efficient Labor: only work the minimum number of workers required. Nofrills Goods and Services: provide basic products and designs (standard). Government Subsidies: government grants and interest freeloans Product Design: elite design technology can offset labor costs. Reengineering: rethink and redesign of a business process to improve performance. Product Innovations: new technology and simplified products. New Methods of Service Delivery: (online subscriptions etc.) Product/Service Differentiation Competitive Advantage: o When a company provides something unique and valuable to buyers beyond offering a lower price than the competitors. Niche Competitive Advantage: o Occurs when a company seeks to target and effectively serve a small portion of the market. Building Sustainable Competitive Advantage: o An advantage that competitors can’t copy (ex. Netflix). Setting Marketing Plan Objectives: o Marketing Objective: a statement of what needs to be accomplished. o Objectives must be (SMART): Specific Measurable Attainable Relevant Time Specific Describing the Target Market: Marketing Strategy: the process of selecting and defining one or more target markets and developing a plan to satisfy the needs and wants of the target market. Target Market Strategy: o Market Opportunity Analysis (MOA): estimate of the size and sales potential of market segments that have an interest in the company and an assessment of the competition. The Marketing Mix (the four Ps): o A mixture of product, promotion, place(distribution), and pricing in which a mutually beneficial exchange with the target market is desired. Following up on the Marketing Plan: o Implementation: doing what you said you would and ensuring that your plan is executed in a that will achieve the objectives. Evaluation and Control: Evaluation: Gauging the overall success of the plan within a certain time frame. Control: provides a way of assessing the success of the plan in light of the objectives and corrections for actions that did not help the organization reach the objectives within the budget. Audit: Marketing Audit: thorough, systematic, periodic assessment of the objectives, structure, performance, and strategies used to carry out the plan. Post audit Tasks: Basically 3 reassessments of the success of the marketing plan. (provides a deep look into the success of the plan) Effective Strategic Planning: Continuous attention, creativity, and management. (an ongoing process)