MARKETING PROBLEMS MKTG 302
Virginia Commonwealth University
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This 6 page Class Notes was uploaded by Sterling Padberg I on Wednesday October 28, 2015. The Class Notes belongs to MKTG 302 at Virginia Commonwealth University taught by Thomas Myers in Fall. Since its upload, it has received 18 views. For similar materials see /class/230604/mktg-302-virginia-commonwealth-university in Marketing at Virginia Commonwealth University.
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Date Created: 10/28/15
Chapter 3 Notes pgs5359 Decision Making Process 9 DECIDE D define the problem A problem well defined is half solved John Dewey Framework in which a problem can be solved objectives of the decision maker a recognition of constraints and a clearly articulated success measure or goal for assessing progress toward solving the problem E Enumerate the decision factors alternative courses of action changes in various elements of an org s marketing mix uncertainties uncontrollable factors that the manager cannot influence C Consider the relevant information relevant information consists of information that relates to the alternatives identified by the manager as being likely to affect future events Characteristics of the industry consumers competitive environment the organization or the alt themselves do not consider everything in a case as fact I Identify the best alternative can use a decision tree amp payoff table to describe the relationship among alternatives uncertainties and potential outcomes use decision analysis matches each alt w uncertainties amp potential outcomes D Develop a plan for implementing the chosen alternative execution phase is critical forces the case analyst to consider resource allocation and timing questions E Evaluate the decision and the decision process Was a decision made Was the decision appropriate given the situation identified in the case setting 9 9 9 1 Did I define the problem adequately Ch 2 Notes pgs 33384748 Variable Costs are expenses that are uniform per unit of output within a relevant time period yet total variable costs fluctuate in direct proportion to the output volume of units produced eg cost of goods sold materials labor and factory overhead applied directly to production Fixed Costs are expenses that do not fluctuate with output volume within a relevant time period but become progressively smaller per unit as output volume increases Relevant Costs expenditures that are expected to occur in the future as a result of some marketing action and differ among marketing alternatives being considered Sunk Costs past expenditures for a given activity and are typically irrelevant in whole or in part to future decisions Margins difference between the selling price and the cost of a product or service Gross Margin the difference between total sales revenue and total cost of goods sold Trade Margin the difference between unit sale price and unit cost at each level of a marketing channel markupmarkdown Net Profit Margin the remainder after cost of goods sold other variable costs and fixed costs have been subtracted from sales revenue Contribution difference between total sales revenue and total variable costs useful in assessing the relationships among costs prices and volumes of products and services w respect to profit BreakEven Analysis identifies the unit or dollar sales volume at which an organization neither makes a profit nor incurs a loss Total revenue total variable costs total fixed costs To determine the of units to break even unit breakeven volume total dollar fixed costs unit selling price unit variable costs Proforma translated strategies and tactics into projected income statements which include a sales forecast and listing of variable and fixed costs that can be programmed or committed 0 Sales forecasted unit volume times unit selling price 0 Cost of goods sold costs incurred in buying or producing products and services 0 Gross margin remainder after cost of goods sold has been subtracted from sales 0 Marketing expenses programmed expenses to produce sales 0 General amp administrative expenses committed fixed costs for the planning period which can not be avoided if the organization is to operate aka overhead 0 Net income before income taxes the remainder after all costs have been subtracted from sales Ch 4 Notes pgs 6573 Opportunity Analysis consists of 3 interrelated activities Opportunity Identification Opportunity Organization Matching determines whether an identified market opportunity is consistent with the definition of definition of the org s bus mission statement and distinctive competencies SWOT Opportunity Evaluation 2 distinct phases 0 Qualitative focuses on matching the attractiveness is dependent on I Competitive activity I Buyer requirements I Market demand and supplier sources I Social political economic and technological forces I Organizationalcapabilities 0 Quantitative yields estimates of market sales potential and sales forecasts produces budgets for financial human marketing and production resources Market prospective buyers wiling and able to purchase the existing or potential offerings of an org Market share the sales of a company product or service or brand divided by the sales of the market expressed a Market Segmentation the breaking down or building up of potential buyers into groups that are homogenous Benefits are 0 Identifies opportunities for new product development 0 Helps in the design of marketing programs that are most effective for reaching homogeneous groups of consumers o Improves the allocation of marketing resources Bases for Market Segmentation o Socioeconomic characteristics gender age occupation income family life cycle education geographic location 0 Behavioral variables benefits sought form products and services usage behavior lifestyle attributes Effective Market Segmentation should answer 0 Who they are What do they want to buy How do they want to buy When do they want to buy Where do they want to buy 0 Why do they want to buy 000 Each Market segment should be 0 Measurable size and buying power Strategic Marketing Management Defining the organizations business mission goals Identifying and framing organizational growth opportunities Formulating productmarket strategies Budgeting marketing financial and production resources WPF E JI Developing reformulation and recovery strategies Business Definition an organization should define a business by the type of customers it wishes to serve the particular needs of those customer groups and the means or technology by which the organization will satisfy those needs Business Mission underscores the scope of an organization s operations apparent in its business definition and reflects management s vision of what the org seeks to do Business Goals they convert the organization s mission into tangible actions and results that are to be achieved within a specific time frame 0 Production goals apply to the use of manufacturing and service capacity and to product service and quality 0 Financial goals focus on return on investment return on sales profit cash flow and shareholder wealth 0 Marketing goals emphasize market share marketing productivity sales volume profit customer satisfaction customer value creation and customer lifetime value Should be problemcentered and futureoriented II 1 and Framing Or 39 39 IGrowth Opportunities CONVERTING ENVIRONMENTAL OPPORTUNITES INTO ORGANIZATIONAL OPPORTUNITES 1 What might we do Unmet or changing consumer needs unsatisfied buyer groups and new means of technology for delivering value to prospective buyers represent sources of environmental opp for orgs 2 What do we do best Distinctive competency describes an org s unique strengths or qualities including skills technologies or resources that distinguish it from other organizations Must meet 2 conditions the strength must be imperfectly imitable by competitors AND the strength should make a significant contribution to the benefits perceived by customers and by doing so provide superior value to them 3 What must we do Success req are basic tasks that an organization must perform in a market or industry to compete successfully subtle in nature and often overlooked SWOT Analysis formal framework for indentifying and framing org l growth opp Between the internal capabilities strengthsweaknesses and its external environment envir opportunities and threats 0 Strength something an org is good at or a characteristic that gives the org an important capability 0 Which internal strengths represent distinctive competencies Do these strengths camper favorably with what are believed to be market or industry success req 0 Weakness something an org lacks or is relatively poor at 0 Which internal weaknesses potentially disqualify the organization from pursuing certain opportunities Opportunities external 39 39 or quot 39 in the 39 that have favorable implications for the org Threats pose danger to the welfare of the org ProductMarket Strategies consists of plans for matching an org s existing or potential offerings with the needs of markets informing markets that the offerings exists have offerings available at the right time and place to facilitate exchange and assigning prices to offerings Market Penetration Strategy dictates that an organization seeks to gain greater dominance in a market in which it already has an offering so that it can increase present buyers usage or consumption rate attract buyers of competing offerings or stimulate product trail among potential customers 0 Lower prices for the offerings expanded distribution to provide wider coverage heavier promotional efforts ProductDevelopment Strategy dictates the org create new offerings for existing markets via new offerings product innovation enhancement of current offerings product augmentation or broadening the existing line of offerings by adding different sizes forms flavors etc product line extension Important considerations 0 market size and volume necessary for the effort to be profitable o the magnitude and timing of the response 0 the impact of the new product on existing offerings o the capacity of the organization to deliver the offerings to the markets Successful commercialization occurs when the offering can be communicated and delivered to a welldefined buyer group at a price it is willing and able to pay Cannibalism when sales of a new product or service come at the expense of sales of existing products or services already marketed by the firm Diversification the dev l or acquisition of offerings new to the organization and the introduction of those offerings to publics not previously served by the organization Product Market Strategy Selection based on the analysis of the costs and benefits of alt strategies and their probabilities of success Marketing Mix activities that are controllable by the org like the kind of product service or idea offered product strategy how it is communicated to buyers communication strategy the method for distributing the offering to buyers channel strategy and the amount the will pay for the offering price strategy 0 is the marketing mix internally consistent 0 Do the indv Activities complement one another to communicate a clear customer value and proposition 0 Does the mix fit the org the market and the envir In which it is being introduced 0 Are buyers more sensitive to some marketing mix activities and the costs of attracting and retaining buyers 0 Do these costs exceed their benefits 0 Can the org afford the marketing mix expenditures o Is the marketing mix properly timed o Are communications scheduled to coincide with product availability o Is the entire marketing mix timely w respect to the buying cycle of consumers competitor s actions and prevailing environmental forces Customer value proposition a cluster of benefits that an org promises customers to satisfy their needs Budget a formal quantitative expression of an organization s planning and strategy initiatives expressed in financial terms A well prepared budget meshes and balances an organizations financial production and marketing resources so that org goals are obtained 0 Operating budget focuses on org income statement Projects future revenues and expenses 0 Financial budget focuses on the effect of the operating budget and other initiatives such as capital expenditures will have on the org s cash position Marketing audit a r 39 39 39 39 39 I 39 and periodic examination ofa company s marketing environment objectives strategies and activities with a view of determining problem areas and opportunities and recommending a plan of action to improve the company s marketing performance Marketing Plan embodies the strategic marketing management process formal and written it describes the context and scope of an org s marketing effort to achieve defined goals within a specified time in the future
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