Market-Oriented Business Strategies

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Questions and Answers

What should a mission statement focus on to be considered market-oriented?

Satisfying basic customer needs (correct)

The products the company sells

Increasing product variety

Maximizing profits for shareholders

Which company focuses on customer experience in their market-oriented definition?

Starbucks (correct)

Sephora

Home Depot

Panera

What is emphasized in a market-oriented business definition?

Customer needs (correct)

Operational efficiency

Product innovation

Cost leadership

How does NPR define its mission in a market-oriented way?

We create a more informed public. Signup and view all the answers

Which company’s mission focuses on empowering consumers to achieve their dreams?

Home Depot Signup and view all the answers

What distinguishes a product-oriented definition from a market-oriented definition?

Focus on product features rather than customer needs Signup and view all the answers

What aspect does Sephora emphasize in its market-oriented definition?

Lifestyle and self-expression Signup and view all the answers

In what way does Walmart define its market-oriented mission?

Providing the lowest prices every day Signup and view all the answers

What is the primary purpose of strategic planning in marketing?

To maintain a strategic fit between goals and changing opportunities Signup and view all the answers

Which of the following best describes how marketing contributes to a company's strategic planning?

By identifying and responding to market opportunities Signup and view all the answers

What does the term 'customer value-driven marketing strategy' refer to?

Creating marketing plans based on customer insights and value assessment Signup and view all the answers

Which element is crucial when measuring marketing's contribution to return on investment?

Evaluating the relationship between marketing activities and profitability Signup and view all the answers

What is the primary focus of customer value-driven marketing strategy?

Creating customer value and profitable relationships Signup and view all the answers

How do companies typically develop growth strategies within their marketing framework?

By partnering with stakeholders to explore opportunities Signup and view all the answers

Which component is NOT part of the integrated marketing mix?

Public Relations Signup and view all the answers

What does the marketing mix typically include?

Elements such as product, price, place, and promotion Signup and view all the answers

What is the main goal of market segmentation?

To group buyers with similar needs and characteristics Signup and view all the answers

What is an important factor that influences marketing strategies?

Dynamic market conditions and consumer behavior Signup and view all the answers

What aspect is crucial for effective market differentiation?

Creating superior customer value Signup and view all the answers

How is a company-wide strategic plan typically assessed?

Through a holistic view of operational and marketing effectiveness Signup and view all the answers

What is the purpose of a value delivery network?

To include suppliers, distributors, and customers in value creation Signup and view all the answers

What is a primary purpose of the BCG Growth-Share Matrix?

To analyze a company’s market growth rate and relative market share Signup and view all the answers

Which of the following is NOT a reason to abandon products or markets?

Market saturation Signup and view all the answers

What does the process of upsizing typically involve for a company?

Acquiring additional resources to support growth Signup and view all the answers

What is a key benefit of setting a hierarchy of objectives within a company?

It helps in developing a clear strategic focus Signup and view all the answers

In business portfolio planning, what is the primary focus of management's evaluation?

To assess the attractiveness of strategic business units Signup and view all the answers

Which statement about partnering in marketing is true?

It involves collaboration with other company departments to enhance customer value. Signup and view all the answers

What is typically a key component in the design of growth strategies?

Identifying market opportunities to exploit Signup and view all the answers

What does the term 'downsizing' refer to in a business context?

Eliminating unprofitable products or units Signup and view all the answers

What is one criticism of the Four Ps of the marketing mix?

It omits or underemphasizes service products. Signup and view all the answers

What does the 'Threats and Opportunities Analysis' section in a marketing plan help with?

To anticipate important positive or negative developments. Signup and view all the answers

Which section of a marketing plan outlines the broad marketing logic?

Marketing Strategy Signup and view all the answers

Which marketing department organization type focuses on the specific needs of a certain region?

Geographic Organization Signup and view all the answers

What is the primary purpose of operating control in marketing?

To ensure achievement of sales and profit goals. Signup and view all the answers

In the context of market implementation, which aspect is NOT typically addressed?

How marketing strategies will be funded. Signup and view all the answers

What is a key component of strategic control in marketing?

Evaluating the match between strategies and opportunities. Signup and view all the answers

Which of the following is NOT one of the four A's that buyers would emphasize instead of the Four Ps?

Advocacy Signup and view all the answers

Study Notes

Principles of Marketing, Chapter 2

Company and Marketing Strategy: The chapter focuses on partnering to build customer engagement, value, and relationships.
Objectives Outline:
- Explain company-wide strategic planning and its four steps.
- Discuss designing business portfolios and developing growth strategies.
- Explain marketing's strategic planning role, its collaboration with partners, and delivery of customer value.
- Describe customer value-driven marketing strategy and mix and influencing forces.
- List marketing management functions, including a marketing plan, and the importance of managing marketing investment.

Strategic Planning

Long-Run Survival and Growth: Strategic planning is a game plan for long-term survival and growth.
Strategic Fit: It maintains a strategic fit between business goals, capabilities, and changing market opportunities.

Steps in Strategic Planning

Company-Wide Strategic Planning: Guides marketing strategy and planning.
Corporate Level: Defining the company mission, setting objectives and goals, and designing the business portfolio.
Business Unit, Product, and Market Level: Planning marketing and other functional strategies.

Step 1: Mission Statement

Organization's Purpose: Statement of the organization's purpose.
Company Strengths: Emphasizing the company's strengths.
Market-Oriented Approach: Defined in terms of satisfying basic customer needs.
Customer Focus: Focus on customers and their experience.

Product- versus Market-Oriented Definitions

Product-Oriented: Focuses on the product itself.
Market-Oriented: Focuses on the customer experience and value creation.

Step 2: Setting Company Objectives and Goals

Detailed Objectives: Supporting objectives for all management levels.
Hierarchy of Objectives: Setting a hierarchy of objectives- business and marketing objectives.

Step 3: Designing a Business Portfolio

Business Portfolio Planning: Collection of businesses and products making up the company.
- Analysis of current business portfolio.
- Developing future portfolio strategies

Portfolio Analysis

Strategic Business Units (SBUs): Management evaluation of products and businesses.
- Identification of SBUs.
- Assessing attractiveness and deciding on the level of support for each SBU.
- Directing resources towards profitable SBUs and phasing out weaker ones.

Growth-Share Matrix: Evaluates company SBUs based on market growth rate and relative market share: Stars, Question Marks, Cash Cows, and Dogs.
Investment Decisions: Helps determine how much investment to allocate to different SBUs.
Alternative Actions: Guides the company on whether to build, hold, harvest, or divest an SBU.

Challenges: Difficult, time-consuming, and costly to implement and evaluate.
Measurement Difficulties: Challenges in reliably defining and measuring aspects required for the analysis.
Limited Future Planning Advice: Provides limited guidance for future planning

The Product/Market Expansion Grid

Product Development: Introducing new products into existing markets.
Market Development: Expanding into new markets with existing products.
Market Penetration: Increasing market share in existing markets with existing products.
Diversification: Developing new products for new markets.

Developing Strategies for Growth

Starbucks Growth: Significant growth from a small Seattle coffee shop to a large global company.
Expansion Pace: Rapid expansion of Starbucks stores.

Downsizing

Unprofitable Products or Units: Products/business units no longer fitting the company's overall strategy.
Reasons for Abandonment: Rapid company growth, lack of market experience, market environment changes, and declining products.

Step 4: Planning Marketing to Build Customer Relationships

Marketing Concept: Company strategy should create and build customer value and relationships.
Strategic Planning Input: Identifying market opportunities and potential advantages.
Objectives Alignment: Developing strategies to achieve company objectives.

Partnering with Other Company Departments

Internal Value Chain: Departments as links in the company's internal value chain.
Coordinating Activities: Firm success depends on well-coordinated activities between different departments.
Customer Focus: Marketers ensure all departments are customer-focused and create a seamless value chain.

Partnering with Others in the Marketing System

Value Chain Assessment: Companies assess value chains- internal and external: Suppliers, distributors, and customers.
Value Delivery Network: Composed of the company, its suppliers, distributors, and customers.

Managing Marketing Strategy and the Marketing Mix

Customer Value and Relationships: Marketing is about creating customer value and profitable relationships.
Marketing Strategy Questions: Identifying target customers and creating value for them.
Marketing Program (4Ps): Designed to deliver intended value to targeted consumers.

Customer Value-Driven Marketing Strategy

Marketing Logic: Creates customer value and achieves profitable relationships.
Marketing Mix: Product, price, place, and promotion.
Marketing Analysis, Planning, and Control: Integral to effective application of marketing strategy and mix.

Market Segmentation and Market Targeting

Market Segmentation: Dividing the market into distinct groups with different needs and characteristics requiring tailored products or marketing programs.
Market Targeting: Evaluating segment attractiveness and selecting segments to enter.

Market Differentiation and Positioning

Product Positioning: Product occupies a clear, distinctive, and desirable place relative to competitors.
Differentiation: Creating superior customer value.
Marketing Program Support: Entire marketing program should support the chosen positioning strategy.

The Four Ps of the Marketing Mix

Product: Variety, quality, design, features, brand name, packaging, and services.
Price: List price, discounts, allowances, payment period, and credit terms.
Place: Supply chains, channel coverage, channel management, logistics, and transportation.
Promotion: Advertising, personal selling, sales promotion, public relations, and direct marketing.

Criticisms of the Four Ps

Service Product Focus Deficiency: Omits or underemphasizes service products.
Packaging as a Product Decision: Needs to include packaging as a product decision.
Buyer Perspective: Buyer's perspective on the Four Ps should emphasize acceptability, affordability, accessibility, and awareness.

Managing Marketing: Analysis, Planning, Implementation, and Control

Analysis: Initial step to develop the company-wide and marketing strategies and plans.
Planning: Develop strategic and marketing plans.
Implementation and Organization: Putting the plans into action.
Control: Evaluate results and take corrective action.

SWOT Analysis

SWOT: Analyzing strengths, weaknesses, opportunities, and threats.
Matching Strengths to Opportunities: The goal is to match internal strengths with attractive opportunities.
Addressing Weaknesses and Threats: To mitigate weaknesses and minimize threats.

Contents of a Marketing Plan

Executive Summary: Brief summary of goals and recommendations given the market description.
Current Marketing Situation: Product, competition, and distribution review. Helps to anticipate positive or negative developments.
Threats and Opportunities Analysis: Anticipating positive or negative developments.
Objectives and Issues: States and discusses marketing objectives and key issues, including an analysis of threats and opportunities.
Marketing Strategy: Outlines broad marketing logic, specifics of target markets, positioning, marketing expenditure, and strategies.
Action Programs and Budgets: Spells out how marketing strategies are turned into action programs with detailed budget breakdown.
Controls: Outlines monitoring progress, reviewing results, and identifying products not meeting goals.

Market Implementation

Turning Strategies into Actions: Aligns marketing strategies and plans to accomplish strategic marketing objectives.

Marketing Department Organization

Functional Organization: Department organized by functional area.
Geographical Organization: Department organized by region.
Product Management Organization: Department organized by product.
Market or Customer Management Organization: Department organized by customer segment.
Combination Organization: Combines different organizational structures mentioned.

Marketing Control

Measure and Evaluate Results: Measuring and evaluating marketing strategies and plans.
Operating Control: Ensuring that sales, profits, and other goals are met.
Strategic Control: Ensuring that basic strategies match opportunities.

Measuring and Managing Marketing Return on Investment (ROI)

Net Return on Investment: Net return from a marketing investment divided by the cost of the investment.
Assessment Measures: Includes standard marketing performance measures and customer-centered measures.

Marketing Return on Investment

Customer Value and Engagement: Improved customer value and engagement are key elements of marketing ROI.
Attraction and Retention: Increased measures of customer attraction and retention indicate effective marketing.
Lifetime Values and Equity: Enhanced customer lifetime values and equity demonstrates the financial impact of the marketing efforts.

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Description

This quiz explores key concepts of market-oriented business strategies, including the focus of mission statements, customer experience, and the definition of customer value-driven marketing. Additionally, it discusses examples from companies like NPR, Sephora, and Walmart, highlighting their unique approaches to strategic planning in marketing.