Strategic Marketing Problems: Study Guide
Midterm Exam Study Guide, Spring, 2014 Chapter 1: Foundations of Strategic Marketing Management Role of marketing in the strategic planning function Primary purpose of marketing is to create long-term mutually beneficial exchange relationships between an entity and the publics with which it interacts Product-Market Strategy Selection A recurrent issue in strategic marketing management is determining the consistency of product-markets strategies with the organization’s definition, mission and capabilities, market capacity and behavior, environmental forces, and competitive activities Strategic marketing process steps:
Business, mission, goals a. What kind of business are we in? b. Compliments the definition. Written statement hat underscored ths scope of an org’s operations in its definition and reflects managements vision of what the org seeks to do i. Crystallizes managements vision of the org’s long term direction and character ii. Provides guidance in identifying, purusing, and evaluationg market and prduct opps iii. Inspire and challenge employees to do things that are valued by the org c. Goals convert the orgs mission into tangible actions and results to be achieved within a certain time frame 2.
Organizational growth opportunities a. What might we do- environment opp. Unmet or changing consumer needs, unsatisfied buyer groups, and new means of tech for delivering value to prospective buyers b. What we do best- org capability and competency. Distinctive competency is what they UNIQUELY do best c. What must we do- success requirements in certain industries to be able to even slightly compete 3. Product-market strategies, including both growth strategies and marketing tactics Budgets a. Formal statement of plan in financial terms i. Operating- pro forma income statement because it is made up of futurerevenues and expenses ii. Financial- how to operating income statement will affect thte company’s cash position 5. Reformulation/recovery strategies a. Marketing audit- examination of company’s marketing environ, objectives, and strats to determine problem areas and opps and recommend a plan of action to improve the company’s marketing performance b. Are we doing things right, are we doing the right things? And the what ifs SWOT analysis formal framework for identifying and framing organizational growth opportunities S = strength W = weakness O = opportunity T = threat
What strengths are distinctive competencies? What weaknesses disqualify the org from pursuing certain opps? Product-market grid and strategies (market penetration, market development, product development, diversification) product-market strategies consist of plans for matching an org existing or potential offerings with the needs of mkts, informing mkts that offerings exist, having offerings available at the right time and place to facilitate exchange, and assigning prices to offerings product market grid Market-Penetration.
Strategydictates that an org seeks to gain greater dominance in a mkt in which it already has an offering involves attempts to increase present buyers’ usage or consumption rates of the offering, to attract buyers of competiting offeringss, or to stimulate product trial among potential customers marketing managers should consider a number of factors before adopting a penetration strategy: must examine market growth must consider competitive reaction must consider the capacity of the market to increase usage or consumption rates and the availabilty of new buyers Marketing Development Strategydictates that an org introduces its existing offerings to markets other than those it is currently serving examples include introducing existing products to different geographical areas or different buying publics mix of mkt activities used must often be varied to reach different markets with differing buying patterns and requirements marketing development involves a careful consideration of competitor strengths and weaknesses and competitive retaliation potential mkt development in the international arena has grown in importance and usually takes 1/4 forms: exporting licensing joint venture direct investment
Product-Development Strategy dictates that the org creates new offerings for existing markets approach taken may be to develop totally new offerings to enhance the value to customers of existing offerings or to broaden the existing line of fferings by adding different sizes, forms, flavors, and so forth (product extension) companies successful at developing and commercializing new offerings lead their industries in sales growth and profitability companies liklihood of success is increased if its product-development effort results in offerings that satisfy a clearly understood buyer need toy industry qualities:lasting play value ability to be shared with other children ability to stimulate a child’s imagination successful commercialization occurs when the offering can be communicated and delivered to a well-defined buyer group at a price it is willing and able to pay cannibalism occurs when sales of a new product or service come at the expense of sales of existing products or services already marketed by the firm.
Diversificationinvolves the development or acquisition of offerings new to the organization and the introduction of those offerings to publics not previously served by the organization diversification is often a high-risk strategy because both the offerings and the public or market served are new to the org Ethics and social responsibility should permeate every aspect stated above must do the right thing even if it may end up hurting your position in the org failure to recognize issues and to take action is the least ethical thing you can do—don’t ignore Anheeuser-Bush- Drink responsibly