Transcript Marketing 2!

Chapter 14
Exam Review
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Two types:
1.
2.
Business firms – serves customers in order
to earn a profit (rev > cost)
Not-for-profit – serves customers but not have
profit as a goal
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Three Level of strategy in an organization:
1. Corporate Level – top mgt directs overall
strategy
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Mgt focusses on the shareholder happiness and
stock price
Strategic Business Units (SBU): a group of
different businesses within one firm
2. Business Unit Level – business unit
managers set the direction for products and
markets
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Three Levels of strategy in an organization:
3. Functional Level – each business unit has a
specialty function like ‘finance’
◦ Name of a department is usually the specialty function
Strategy Issues in Organizations
 Orgs need a reason to exist and a direction
 This is where business, mission and goals
converge
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A Look Around: Where are we Now?
 Answer involves ID of
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Customers – strategic directions must be
customer-focussed and provide genuine value
and benefits
Competencies – what does the organization do
best? Special capabilities, skills, resources,
technology
Competitors – know who they are
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Business Portfolio Analysis uses quantified
performance measures and market growth to
analyze a firm’s strategic business units as though
they were a collection of separate investments
 Position your firm’s SBU on a “growth Share”
matrix
 Verticle axis – market growth rate
 Horizontal axis – relative market share
 eg largest competitor 50% of market

your brand 25% of market
 Your brand RMS = 25%/50% = 50%
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Cash Cows
 Generate lots of cash
 Have dominant market share of slow growth
market
Stars
 High share of high-growth markets
 May need extra cash to fuel growth
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Question Marks/problem children
 Low share of high growth markets
 Require lots of cash to maintain market share
Dogs
 Low share of low growth markets
 Generate enough cash to sustain
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1. Situation Analysis
◦ SW/OT – Next Slide
◦ Porter 5 forces
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Industry (Rivalry)
Supplier -strength
Customer analysis (Buyer -strength)
Competitor (Substitutes)
New Companies (Entry Exit)
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Before marketing activities are defined,
marketers must understand the current and
potential environment internally and externally
Internal: organizational resources
Strengths
Weakens
eg. Costs, skills budget
External: environmental scanning
Opportunity
Threats
eg. Social, demographic, technological
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2. Market Analysis - product focus and goal setting
◦ ID target markets through segmentation: grouping
consumers into groups or segments eg all students
or all girls
◦ Set marketing and product goals
◦ Select Target Markets
◦ Determine competitive advantages
◦ Position the product
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Marketing Objective: statement of what is to be
accomplished through marketing
Should:
1. realistic, measurable
2. Time specific
“Achieve 10% increase in market share with in 12
months”
3. Direction
“...and introduce 5 new products in the next year”
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Marketing Strategy involves selecting and
describing market segments
Market Segment: group sharing
characteristics with similar product needs eg.
Students
A target marketing strategy involves using a
market opportunity analysis which is the
description and estimation of size of market
and sales potential, assessment of
competitors in segment
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Competitive Advantage: unique features make
product superior to competitors
A. Cost Competitive Advantage – getting low cost
raw materials, efficiently produce item, having
easily manufactured products
Cost Competitive Advantage: being a low cost
compeitor in the industry while making a profit
leasing to superior customer value
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Cost advantage – getting low cost raw materials,
efficiently produce item, having easily
manufactured products
Costs reduced through:
1. Experience curves – costs go down as
experience with a product increases
-reflect learning by doing, technological
advances eg. Salad making
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Cost advantage – getting low cost raw materials,
efficiently produce item, having easily
manufactured products
Costs reduced through:
2. Efficient Labour – outsourceing
3. No-frills goods and services – eg WestJet no
meals
4. Government Subsidies – no interest loans
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Cost advantage – getting low cost raw materials,
efficiently produce item, having easily
manufactured products
Costs reduced through:
5. Product Design – make product easy to
produce
6. Re-engineering – rethink and redesign
processes
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Cost advantage – getting low cost raw materials,
efficiently produce item, having easily
manufactured products
Costs reduced through:
7. Product Innovations – make production easier
8. New Methods of Service Delivery – online
ordering
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Competitive Advantage: unique features make
product superior to competitors
B. Product /Service Differentiation Competitive
Advantage – longer lasting advantage, providing
value beyond low price eg. Brand names based
on quality
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Competitive Advantage: unique features make
product superior to competitors
C. Niche Competitive Advantage – target and
serve single market
-usually for smaller companies with limited
not able to compete with larger competitors
eg. Serve only certain age group, geographical
area
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Competitve Advantage: unique features make
product superior to competitors
A Sustainable Competitive Advantage – cannot
be copied by competitors, consumers have no
reason why to patronize competitors eg. Rolex
-created through:
1. skills – superior customer service
2. assets – patents, superior
-imitation by competitors indicates lack of
competitive advantage
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3. Marketing Programme

Marketing Mix: blend of product,
place/distribution, promotion, pricing (four
P’s) to bring about maximal value of
exchange
-use to gain advantages over competitors
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Marketing Mix:
Product – package, warranty, after sales
support, image
Place/distribution – making products
available when and where customers want
them
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Marketing Mix:
Promotion – advertising, public relations,
sales promotion, personal selling
– informing, education and
persuading
Pricing – what buyer must give up to get
product
- quickest to change
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4. Implementation: turns marketing plan into
action to accomplish plan’s objectives (goals)
-involves:
-detailed job assignments
-timelines
-budgets
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5. Evaluation: gauging the extent to which
marketing objectives have been achieved
Common reasons for failing to achieve
objectives/goals:
1.Unrealistic
objectives
2.Inappropriate marketing strategies
3.Poor implementation
4.Changes in the environment
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Control: correcting actions that do not help
organization help achieve objectives
done through...
Marketing Audit: periodic
evaluation of the objectives and performance
of organization
-manage marketing resources
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Marketing Audit characteristics:
a) comprehensive coverage of marketing
issues, good and bad
b) Systematic and orderly
c)Independantly conducted to be objective
d)Periodicly carried out on a scheduled
timeline not only during crisis
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