Marketing Principles & Concepts Chapter 2

Marketing strategy    A firm's target market, marketing mix, and method of obtaining a sustainable competitive advantage.

Sustainable competitive advantage   Something the firm can persistently do better than its competitors.

What are the four macro, or overarching strategies that focus on aspects of the marketing mix and delivering value to develop sustainable competitive advantages?    Customer, operational, product, and locational excellence.

Customer excellence     Involves a focus on retaining loyal customers and excellent customer service.

Operational excellence    Involves a firm's focus on efficient operations and excellent supply chain management.

Product excellence    Involves a focus on achieving high-quality products; effective branding and positioning is key.

Locational excellence     A method of achieving excellence by having a strong physical location an/or Internet presence.

Mission statement      A broad description of a firm's objectives and the scope of activities it plans to undertake; attempts to answer to main questions: What type of business is it? What does it need to do to accomplish its goals and objectives?

Exhibit 2.2 The Marketing Plan

Situational analysis    Second step in a marketing plan; uses a SWOT analysis that assesses both the internal environment with regard to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats.

SWOT analysis    A method of conducting a situation analysis within a marketing plan in which both the internal environment with regard to its Strength and Weaknesses and the external environment in terms of its Opportunities and Threats are examined.

Segmentation, targeting, and positioning (STP)    Firms use these processes to identify and evaluate opportunities for increasing sales and profits.

Integrated marketing communications (IMC)    Represents the promotion dimension of the four Ps; encompasses a variety of communication disciplines - general advertising, personal selling, sales promotion, public relations, direct marketing, and electronic media - in combination to provide clarity, consistency, and maximum communicative impact.

Metric    A measuring system that quantifies a trend, dynamic, or characteristic.

Strategic business unit (SBU)     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.

Product lines    Groups of associated items, such as those that consumers use together or think of as a part of a group of similar products.

Figure 2.6 Boston Consulting Group Matrix

Market share    Percentage of a market accounted for by a specific entity.

Relative market share    A measure of the product's strength in a particular market, defined as the sales of the focal product divided by the sales achieved by the largest firm in the industry.

Market growth rate    The annual rate of growth of the specific market in which the product competes.

Figure 2.7 Markets/Products and Services Strategies

Market penetration strategy     A growth strategy that employs the existing marketing mix and focuses the firm's efforts on existing customers.

Market development strategy     A growth strategy that employs the existing marketing offering to reach new market segments, whether domestic or international.

Product development strategy   A growth strategy that offers a new product or service to a firm's current target market.

Diversification strategy    A growth strategy whereby a firm introduces a new product or service to a market segment that it does not currently serve.

Related diversification   A growth strategy whereby the current target market and/or marketing mix shares something in common with the new opportunity.

Unrelated diversification    A growth strategy whereby a new business lacks any common elements with the present business.

When Singapore Airlines positions itself as a leader in technology, innovation, quality, and ___ service it ensures that competitors will have difficulty matching its standards. These strategies have helped Singapore Airlines remain profitable even as other airlines struggle to survive.   Customer

Firms achieve operation excellence through which of the following?     Strong relationships with suppliers, excellent supply chain management, efficient operations.

Marketers strive for efficient operations to provide their customers with all of the following EXCEPT:    Low quality products

Identify which of the four strategies best describes operational excellence.        Focuses on excellent supply chain.

Product excellence:     Occurs by having products with high perceived value and effective branding and positioning.

Which of the following are the primary strategies used to achieve product excellence?     Effective positioning, and investing in your brand.

Firms can maintain competitive advantage by:    Reinforcing the brand image through merchandise, service, and promotion.

True or false: Locational excellence is not very important to retailers and service providers.     False.

When a company focuses on having ___ excellence it may also focus on having good Internet presence.    Locational

In the ___ step of the five-step marketing planning process, marketers evaluate the situation by assessing how various players, both in and outside the organization, affect the firm's potential for success.      Second (SWOT Analysis)

Step 3 of the five-step marketing planning process:      Involves segmentation, targeting, and positioning.

In ___ of the five-step marketing planning process, marketing managers are responsible for implementing the marketing mix using the four Ps.     The fourth step

Step 5 of the marketing plan, which entails evaluating the performance of the marketing strategy using marketing metrics and taking any necessary corrective action, is party of which phase.    Control phase

Which of the following is the primary question a mission statement should answer?    What type of business are we?

Identify the following terms included in a SWOT analysis.     Strengths, weaknesses, opportunities, and threats.

The components of SWOT analysis include the following except which two?      Target markets and segmentation.

What does "strengths" refer to in SWOT analysis?      The positive internal attributes of a firm.

Licensing of the brand, a reputation for quality, and a large number of retail stores are examples of potential ___. These refer to internal attributes identified during a SWOT analysis.    Strengths

If a firm has aging equipment that slows down production, this is an example of a(n) ___ for the firm.    Weakness

In a SWOT analysis, ___ pertain to positive aspects of the external environment.    Opportunities

What do "threats" represent in SWOT analysis.      The negative aspects of the company's external environment.

When conducting a SWOT analysis, adverse economic conditions and intense competition are examples of potential ___ for firms.     Threats

STP includes which of the following?    Segmenting, targeting, and positioning.

A ___ is a written document that includes the current marketing situation, specified objectives and strategies, action programs, and projected income statements.    Marketing plan

Which of the following is NOT one of the three major phases of the marketing plan?    Planning, implementation, and control are the three phases.

In Step 1 of the planning phase, a firm:     Defines the mission and/or vision of the business.

Firms must instill good service over the long term to consumers so it becomes part of the ___ and helps retain loyal customers.    Organizational culture

Firms that achieve a sustainable competitive advantage through their merchandise and service offerings, and effective branding and positioning, are doing so using ___ excellence.     Product

___ excellence is when a firm focuses on having perceived value and effective branding and positioning.    Product

Step 4 of the five-step marketing planning process:     Is the point at which a firm implements the four Ps.

Which of the following are examples of strengths that might be identified in a SWOT analysis?     A strong network of retailers, and licensing of a brand.

Currently, In 'N' Out Burger sells hamburgers, French fries, shakes and sodas to undifferentiated buyers in Southwestern USA. Match each of the following growth options for In 'N' Out with actions the firm might take.

Penetration
Market development
Product development
Diversification       Penetration - Promotes double patty burgers in-store and in the drive through. Market development - Opens two stores in Sydney, Australia. Product development - Test markets adding chicken sandwiches to the menu in LA stores. Diversification - Includes soup on the menu in a delivery service introduced to retirement homes daily.

Firms that achieve a sustainable competitive advantage through their merchandise and service offerings, and effective branding and positioning, are doing so using ___ excellence.   Product

___ excellence is when a firm focuses on having high perceived value and effective branding and positioning.    Product

Which of the following are true regarding market share?    It defines a product's strength in a particular market, and it is the percentage of a market accounted for by a specific entity.

A firm can build sustainable competitive advantage:    Through some business activities over a long period of time.

A strategy that employs the existing marketing mix and focuses the firm's efforts on increasing sales to current customers is called:    Market penetration

___ diversification takes place when a new business lacks any common elements with the present business.     Unrelated

What are the four components of a SWOT analysis?    Strengths, weaknesses, opportunities, and threats.

___ is the element of the 4Ps responsible for communicating value to customers.    Promotion

A marketing plan includes: all of the following EXCEPT:     A plan on how to pitch to your investors.

Place is the component of the four Ps responsible for ___ value.    Delivering

Match the micro strategies for developing customer value with the specific actions that organizations can take to achieve them.
Customer excellence
Operational excellence
Product excellence
Locational excellence         Customer excellence - loyalty programs and superior service Operation excellence - excellent supply chain management, strong supplier relations, and human resource management.
Product excellence - effective branding and positioning. Locational excellence - high density of stores and closer proximity to customers.

In a SWOT analysis, possible threats for firms can include each of the following except:     Proper manufacturing processes and procedures.

A ___ competitive advantage is an advantage over the competition that is not easily copied and can be maintained over a long period of time.      Sustainable

Which of the following strategies are frequently used to achieve locational excellence.    High density of stores and closer proximity to customers.

Which of the following are strategies for achieving operational excellence?     Efficient operations and supply chain management.

Revenues, sales, and profits are commonly used ___ to assess performance.       Metrics

Disney has identified a ___ diversification opportunity when acquiring ABC as they are the premier family entertainment and communication companies.    Related

Firms achieve operational excellence through which of the following?            Strong relationships with suppliers, excellent supply chain management, and efficient operations.

STP includes which of the following?   Segmentation and positioning.

A ___ is a measuring system that quantifies a trend, dynamic, or characteristic.    Metric

Which of the following is one of the macro strategies for developing customer value through effective branding and positioning?     Product excellence

Customer excellence is focused on:     Retaining loyal customers and offering excellent customer service.

In Step 1 of the planning phase, a firm:     Defines the mission and/or vision of the business.

Willow Creamery currently has four flavored versions of their yogurt. Willow Creamery has not decided they should also manufacture hand cream. This new growth strategy is known as ___ diversification.    Unrelated

In portfolio analysis:     Management evaluates the firm's various products and businesses and management allocates its resources to products with the greatest potential to be profitable.

A ___ strategy introduces a new product or service to a new market segment, one that currently the firm has not targeted.     Diversification

In ___ of the five-step marketing planning process, marketing managers identify and evaluate different opportunities by engaging in a process known as segmentation, targeting, and positioning.      Third step

In Step 5 of the marketing plan, a firm:     Evaluates its performance using marketing metrics.

Some commonly used financial performance metrics include:     Profits and sales revenue.

___ is the quantity of a market comprised by a specific entity.    Market share

Firms can maintain competitive advantage by:     Reinforcing the brand image through merchandise, service, and promotion.

The product development strategy incorporates a ___ product or service to a firm's ___ target market.     New; current

Which of the following are strategies for achieving operational excellence?      Supply chain management and efficient operations.

Willow Creamery currently has four flavored versions of their yogurt. Willow Creamery has now decided they should also manufacture hand cream. This new growth strategy is known as ___ diversification.    Unrelated

The process of deciding which specific segment(s) to pursue is known as:

A ___ competitive advantage is an advantage over the competition that is not easily copied and can be maintained over a long period of time.    Sustainable

___ excellence, as a competitive advantage, focuses on retaining loyal buyers and offering excellent service.    Customer

One firm's competitive advantage makes it ___ for other firms to compete for the same target customers.    Harder

When a company focuses on having ___ excellence it may also focus on having good internet presence.    Locational

A firm can build sustainable competitive advantage:    Through some business activities over a long period of time, and when it outperforms competition.

The three major phases of the marketing plan are:    Planning, implementation, and control.

Disney has identified a ___ diversification opportunity when acquiring ABC as they are the premier family entertainment and communication companies.      Related

Which of the following are examples of how firms use information from loyalty programs?     Analyzing buying habits of customers and tailor their offering to meet the needs of customers.

Market ___ is the process of dividing the market into groups of customers according to their needs, wants, or characteristics.    Segmentation

A mission statement:     Defines the scope of activities a firm plans to undertake.

In portfolio analysis:     Management evaluates the firm's various products and businesses, and management allocates its resources to products with the greatest potential to be profitable.

Which one of the following is true regarding SBUs?     An SBU may have a different mission or objective from other divisions.

Which of the following are true regarding price?    It should be based on the value that the customer perceives and it will not generate much volume if it is too high.

A ___ identifies a firm's target markets, a related marketing mix, and the bases upon which the firm plans to build a sustainable competitive advantage.    Marketing strategy

When conducting a SWOT analysis, adverse economic conditions and intense competition are examples of potential ___ for firms.    Threats

A firm needs a marketing plan:    To explain how overall objectives will be met.

___ involves the process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.          

Step 4 of the five-step marketing planning process:     Is the point at which a firm implements the four Ps.

Why do firms use metrics?     To make it possible to compare results across regions, product lines, and time periods, and to explain why things happen.

A ___ ___ is a group of products that consumers perceive as similar in some way and that the firm regards as a group.    Product line

Step 5 in the marketing plan process is when a firm ___ the results of the strategy and implementation process.    Evaluates

In the marketing mix, Product is the element that ___ value.   Creates

A market development strategy employs the existing product offering to:         Reach new market segments.

Firms consider pursuing various ___ as part of their overall growth strategies.    Market segments.

___ consist of consumers who respond similarly to a firm's marketing efforts.    Market segments

In portfolio analysis:     Management evaluates the firm's various products and businesses and management allocates its resources to products with the greatest potential to be profitable.

A marketing strategy:    Outlines what a firm plans to do to appeal to potential customers.

Locational excellence is particularly important for which one of the following types of firms?    Retailers

Brand ___ means that customers are reluctant to patronize competing firms.    Loyalty

In the ___ step of the five-step marketing planning process, marketers evaluate the situation by assessing how various players, both in and outside the organization affect the firm's potential for success.    Second

The macro strategies for developing customer value include each of the following except:     The macro strategies are operational, product, customer, and locational excellence.

A market penetration strategy, as one of the possible growth options, may be achieved by which of the following?     Encouraging current customers to patronize the firm and the brand more often.

Of the following, who would require access to a company's marketing plan?      Stakeholders

STP works through each of the following steps except:    Planning a marketing strategy

A competitive advantage based on location:    Is sustainable when real estate is difficult or expensive to obtain.

In portfolio analysis, the ___ measures how attractive a particular market is.      Market growth rate

What is the purpose of a performance evaluation?     To identify and explain performance above or below what anticipated levels.

A firm can begin to implement the marketing mix immediately after which of the following steps?    It has finished segmentation, targeting, and positioning.

In ___ analysis, management evaluates the firm's various products and businesses, and then allocates resources according to potential profit outlook.   Portfolio

A firm needs a marketing plan:     To explain how overall objectives will be met, to implement the marketing mix, and to clearly state its overall objectives.

A market penetration strategy, as one of the possible growth options, may be achieved by which of the following?     Encouraging current customer to patronize the firm and the brand more often.

A firm can begin to implement the marketing mix immediately after which of the following steps?     Targeting, segmentation, and positioning.

Marriott Hotels recognizes that there are different groups of travelers with different needs, wants, and characteristics in their choice of lodging. The process of dividing Marriott's market into these various groups is       Market segmentation

Which growth strategy is being used when a firm introduces a new product or service to a market segment that is currently not served by the firm?            Diversification

GM determined that it would close down divisions that were in low-growth markets that had relatively low market shares. According to the BCG product portfolio analysis, GM was identifying divisions in the ___ category for closure.    Dogs

What two metrics are used in the BCG portfolio analysis to evaluate the various products of a firm?     Relative market share and market growth rate

What are the five steps of the marketing plan?  1. Define the business mission

What are the three phases of the marketing plan?  1. Planning phase
2. Implementation phase
3. Control phase