Business Strategy and Targeting Concepts

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Questions and Answers

What is a primary reason firms may struggle to pursue aggressive strategies?

Overreliance on a single product

High competition in the market

External factors weakening their position (correct)

Limited product innovation

What is one recommended approach for firms to offset threats they face?

Focus solely on existing products

Limit their market presence

Use marketing strategy to diversify (correct)

Maintain the status quo in operations

When firms have too many internal problems, what is their typical strategy?

Seek external funding

Aggressively explore new markets

Invest heavily in product development

Take a defensive posture (correct)

What must firms typically do before looking beyond their current products or markets?

Put their own house in order Signup and view all the answers

What do goals in a firm represent?

Broad accomplishments stated in general terms Signup and view all the answers

What is the main risk associated with 'slice-of-the-pie' targeting?

It may overlook consumers who would value the offering. Signup and view all the answers

What is described as 'optimal' targeting in the context provided?

Sniper targeting. Signup and view all the answers

What could be a consequence of not correctly identifying consumer descriptors?

Ineffective marketing spending. Signup and view all the answers

How has Coca-Cola modified its branding strategy?

By standardizing brand elements across products. Signup and view all the answers

What issue arises when targeting consumers too broadly based on observable descriptors?

Misalignment between offers and consumer needs. Signup and view all the answers

Why is it important to evaluate perceptions from each customer segment?

To avoid meaningless generalizations across segments Signup and view all the answers

What should be the focus when conducting analyses for product-market combinations?

Separate analyses for each product-market combination Signup and view all the answers

What type of competitors must not be overlooked during analysis?

Generic competitors addressing the same needs Signup and view all the answers

How are external issues defined in the context mentioned?

Situations that are influenced by external environments Signup and view all the answers

In the SWOT analysis, what do opportunities and threats represent?

Conditions independent of the firm within external environments Signup and view all the answers

How can collaboration with other functional areas benefit the SWOT analysis?

It allows information sharing for innovative solutions Signup and view all the answers

What can firms with a dominant market position achieve?

Influence industry standards to align with their goals Signup and view all the answers

What are key strategies for aggressive growth in firms?

Continuously developing new products and exploring new markets Signup and view all the answers

Which of the following characteristics should marketing goals possess?

They should be attainable and realistic. Signup and view all the answers

Which of the following refers to the '4Ps' in marketing?

Promotion, Product, Price, Place Signup and view all the answers

Which of the following outcomes are associated with the '4As' of marketing?

Awareness, Acceptability, Affordability, Availability Signup and view all the answers

What is meant by 'some degree of intangibility' in marketing goals?

There can be qualitative aspects that are harder to measure. Signup and view all the answers

What type of benchmarks should be used to gauge progress towards marketing goals?

Continuous or discontinuous with reasonable effort. Signup and view all the answers

How should marketing goals be structured for effective tracking?

They should be specific and quantitative. Signup and view all the answers

Which element is NOT part of the brand strategy's marketing mix?

Profit Margin Signup and view all the answers

What characterizes outcomes in marketing strategies?

They should be aligned with the 4As of marketing. Signup and view all the answers

Which characteristics must objectives have to be considered 'SMART'?

Specific, Measureable, Achievable, Relevant, Time-specific Signup and view all the answers

What type of objective focuses specifically on the profit and financial aspect of marketing strategy?

Financial or profit objective Signup and view all the answers

What does it mean for a benchmark to be 'attainable'?

It can be achieved with a reasonable degree of effort. Signup and view all the answers

Which of the following is NOT a type of objective mentioned for developing marketing strategies?

Brand awareness objectives Signup and view all the answers

What type of methods is mentioned as a distinct category for gauging marketing objectives?

Sales Extrapolation methods Signup and view all the answers

How should objectives be assigned in a marketing context?

To specific areas, departments, or individuals responsible for their achievement. Signup and view all the answers

Which of the following is an example of a customer objective?

Enhance customer satisfaction ratings by 20%. Signup and view all the answers

What is implied by the term 'discontinuous' in the context of benchmarks?

They involve significant shifts from current objectives. Signup and view all the answers

Why is the traditional sales funnel still considered a useful model?

It helps set strategic objectives despite evolving consumer interactions. Signup and view all the answers

What aspect is critical when adapting the traditional sales funnel?

The sector and customers’ consumption habits. Signup and view all the answers

What is one of the ultimate goals of marketing strategy?

To build a sustainable differential advantage relative to competitors. Signup and view all the answers

How do marketing strategies influence a firm?

They influence human resources, operations, and R&D. Signup and view all the answers

What is required for the traditional sales funnel to remain relevant?

It must be updated to include digital touchpoints. Signup and view all the answers

What represents a fundamental change in consumer behavior impacting marketing strategies?

Consumers interact with multiple touchpoints. Signup and view all the answers

What do the various business operations need to achieve in a firm?

To achieve particular goals that align with the overall scope and direction. Signup and view all the answers

How should firms approach their marketing strategies to create value for stakeholders?

By making decisions that ensure sustainable competitive advantages. Signup and view all the answers

Study Notes

Strategic Marketing - Study Notes

Customer Heterogeneity: A fundamental assumption in developing effective marketing strategies. Companies must acknowledge and address the diverse needs and preferences of their customers.
Military Context of Strategy: Strategy's foundations can be traced back to military contexts, emphasizing the attainment of relative superiority at the decisive point, even in the absence of absolute superiority.
Evolution of Marketing Strategy:
- Early focus on firm performance (1960s-70s)
- Shift towards customer perspective (1990s)
- Continuous emphasis on customer-centricity (current trend)
Customer-centricity: Crucial to effective marketing strategy; the customer decides success or failure. This trend involves incorporating customer perspectives in long-term strategic planning.
Five Elements of Marketing Strategy:
- Customer perspective
- Differential advantage over competitors
- Sustaining advantage over time
- Enhancing firm performance
- Guiding decisions/actions focused on creating value for stakeholders
Understanding the Market:
- Needs: States of deprivation (e.g., physiological, safety, social, individual)
- Wants: Form needs take as influenced by society, culture, and personality.
- Benefits: Qualities of objects that satisfy customer needs.
- Attributes: Characteristics that support benefits.
- Demand: Includes consumers with desire and ability to obtain desired products.
Consumers Are Not Created Equal: Consumers' mental processes shape their responses to marketing mixes; this influences different perceptions and behaviors, and requires understanding those variations.
Customer Heterogeneity - A Fundamental Assumption of Marketing Strategy:
- Diversity of customer needs must be addressed when developing an effective marketing strategy.
- Assuming all customers are the same is problematic and recipe for failure
Five Sources of Customer Heterogeneity:
- Individual differences
- Life experiences
- Functional needs
- Self-identity/image
- Marketing activities
Managing Customer Heterogeneity - Approaches:
- Mass Marketing: appealing to an entire market with a single message. (Large target market size)
- Segmentation: Dividing the market into groups of similar customers.
- Niche Marketing: Focusing all marketing efforts on a small segment of the population. (Small target market size)
- One-to-one Marketing: Tailoring marketing to the individual customer.
STP Approach:
- Segmentation: Dividing markets into distinct groups of similar customers
- Targeting: Selecting the most appropriate and profitable segment to target.
- Positioning: Establishing a relative advantage in the minds of customers.
Traditional Market Segmentation: Dividing the market into groups of similar customers based on their similar needs (needs-based segmentation); observable characteristics are also used as descriptors (e.g., age, gender, income).
Factor Analysis: A data reduction technique used to define latent factors that describe various observable variables.
Cluster Analysis: Used to define groups of consumers with preferences for specific attributes.
Discriminant Function Analysis: Predicts which segment a customer belongs to based on their descriptors.
Archetypal Analysis/Segmentation: Identifying consumer characteristics and types by using an approach that defines extreme types or archetypes.
Segment Personification: Describing segments using a detailed persona that represents the segment in terms of its various characteristics.
Segmentation Requirements:
- Homogeneous: Customers within a segment are similar in some relevant way.
- Measurable: There should be a way to measure the segment's size.
- Substantial: The segment should be large and profitable enough.
- Accessible: The segment should be reachable, particularly for the product/service distribution and communication.
- Actionable: The segment must be able to be targeted using specific marketing activities.
- Responsive: The segment must react to a particular marketing mix.
Strategic Targeting vs. Tactical Targeting:
- Strategic targeting focuses on identifying customers who value the firm's product/service offerings and create long-term value for the company and its partners.
- Tactical targeting focuses on cost-effective means of targeting, including matching and optimizing product characteristics to the target market.
Criteria for Valuing Segments for Targeting:
- Size, Growth, Structural Characteristics, and Compatibility
Tactical Considerations in Targeting:
- "Slice-of-the-pie"
- "Sniper" targeting
- "Shot-in-the-dark" targeting
The Customer Journey Map: The stages and processes of a customer's experience, from awareness to purchase to support of the product.
The Marketing Funnel: A process of awareness through consideration of a product to preference through purchase to loyalty and advocacy.
Deconposing Created Value-The Hierarchy of Effects: This method involves looking into awareness, intention, and availability as it relates to market share, it is useful to help analyze the firm's current situation and strategy.
The Race Model (REACH, ACT, CONVERT, ENGAGE): A marketing funnel-based framework structured to describe the marketing processes and stages of customer journey.
The Hierarchy of Effects in Markstrat: A model to understand the sequence of events customers experience before and after a purchase/or service interaction.
KANO Model of Consumer Satisfaction: Model that helps to categorize customer needs related to a particular product purchase from must-have (satisfies and is expected from customers), one-dimensional (satisfiers), to exciting quality (delighters).
Market Opportunity: Planning for market entry and growth encompasses defining market potential via sales analysis.
Corporate Strategy vs. Marketing Strategy:
- Corporate Strategy: Overall direction of a firm and operations, to achieve overall objectives.
- Marketing Strategy: Building a profitable advantage for stakeholders, by addressing customer-centric values.
Strategic Marketing Analysis Framework: A framework to structure the analysis of market situations as it relates to strategic marketing, by linking elements of the market (context, competitors, industry), the organization (capabilities/resources), and the plans (segmentation, targeting, positioning).
Technology Adoption Curve: A model that showcases the phases in which consumers adopt new technologies (Innovators, Early Adopters, Early Majority, Late Majority, Laggards).
Product Life Cycle: Model showing the stages of a product or service (Introduction, Growth, Maturity, and Decline) to determine marketing strategy based on profitability and competition.
Market Characteristics across the Product Life Cycle: Characteristics change across stages of a product's lifecycle; specific strategies are required for each. (e.g., competition, products, customer segments, drivers, channels).
Defining Competition: A critical element in market structure analysis that defines an entity as a competitor according to different criteria/levels (form, category, generic, budget).
Competitive Advantage: Offering greater value (benefits at lower prices) is crucial.
Sources of Competitive Advantage:
- Cost Advantage: Lower costs relative to competitors. (e.g., lower costs of production, large scale production, favorable logistics)
- Differentiation Advantage: Products, services or brand reputation that offers customers significant value over competitors. (e.g., premium quality, unique features, strong brand name)
- Marketing Advantage: Strategic marketing, to enhance a product offering. (e.g., market leader, strong brand reputation).
Channel Advantage: Controlling distribution channels for a product/service to increase market access.
Important Considerations for Portfolio Planning Matrix, the BCG or GE/McKinsey Matrix
Evaluate product quality versus attractiveness of market. Assess opportunities and limitations of using specific product portfolio matrices.
Understanding the Company's position to determine which competitive role (Leader, Challenger, Follower, Nicher) to adopt when evaluating the market.

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Description

This quiz explores important concepts in business strategy, including challenges firms face when pursuing aggressive strategies, approaches to offset threats, and the risks of effective targeting. It also delves into the implications of internal problems on strategic directions and branding strategies exemplified by Coca-Cola.