Marketing Strategies and Planning

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Questions and Answers

What is the primary purpose of the General Electric McKinsey matrix?

To analyze market competition across different industries

To prioritize investments among business units (correct)

To evaluate employee performance across divisions

To determine the life cycle stage of a product

Which advantage is NOT associated with vertical integration?

Reduced competition in the market (correct)

Increased control over supply chain

Improved efficiency

Elimination of profit centers

What is the primary purpose of limiting the number of hypotheses in a marketing plan?

To increase the complexity of the plan.

To satisfy management requirements.

To maintain focus and relevance. (correct)

To ensure more detailed analysis.

In the context of intensive growth, what aspect does the Ansoff matrix primarily focus on?

Evaluating new products in existing and new markets Signup and view all the answers

Which component is NOT part of adjusting the marketing mix for each target market?

Stock market strategy Signup and view all the answers

What are the two levels of marketing planning mentioned?

Strategic and tactical Signup and view all the answers

What is the purpose of performing a situation analysis in marketing planning?

To examine marketing assets in light of market conditions Signup and view all the answers

What does Return on Marketing Investment (ROMI) measure?

Revenue generated per marketing program divided by program costs. Signup and view all the answers

Which of the following is a key factor that must be considered when setting marketing objectives?

Market potential and assumptions Signup and view all the answers

Which budgeting method requires justifying all expenses for each new period?

Zero-based budgeting Signup and view all the answers

What obstacle does NOT relate to the integration of the marketing plan?

High level of consumer satisfaction Signup and view all the answers

What does market potential describe?

The maximum level of market demand under ideal conditions Signup and view all the answers

Which of the following is NOT a part of the external audit in marketing?

Internal strengths Signup and view all the answers

Which action should be taken based on the analysis of a marketing plan's performance?

Make adjustments to objectives or strategies. Signup and view all the answers

Which issue could arise from marketing planning being perceived as a routine?

Lack of innovation in the marketing approach Signup and view all the answers

What is a common result of inadequate information and resources in a marketing department?

Lack of support from management Signup and view all the answers

What is the main goal of building relationships with customers in marketing communications?

To enhance customer loyalty and trust Signup and view all the answers

Which of the following is NOT considered a traditional marketing communication tool?

Social media Signup and view all the answers

Which model represents a marketing communication strategy where marketers interact with a single customer?

One to one model Signup and view all the answers

What is a critical first step in creating a successful marketing communication strategy?

Identifying the target audience Signup and view all the answers

Which of the following best describes a multichannel promotions strategy?

Integrating traditional marketing with digital initiatives Signup and view all the answers

Which audience is prioritized using a traditional communications mix to build trust?

Prospects Signup and view all the answers

What type of marketing communication focuses on generating conversations and building buzz?

Many to many model Signup and view all the answers

What is the purpose of filling the gap between customer understanding and the marketer’s message?

To ensure clarity and effectiveness of communication Signup and view all the answers

What is the main purpose of breaking bulk in distribution strategy?

To reduce transactions by selling large quantities in smaller amounts Signup and view all the answers

What is a primary advantage of using a direct channel of distribution?

Greater control over pricing, service, and delivery Signup and view all the answers

Why might a company choose indirect distribution channels?

To benefit from intermediaries' efficiency and brand loyalty Signup and view all the answers

Which of the following is a facilitating function in the distribution process?

Offering credit to buyers Signup and view all the answers

What is a characteristic of dual/multiple distribution systems?

Engages multiple types of channels simultaneously Signup and view all the answers

When developing distribution objectives, which factor is crucial for bulky products?

Minimizing shipping costs Signup and view all the answers

Which option does NOT represent a risk-taking function in distribution?

Ensuring efficient transportation Signup and view all the answers

What role do intermediaries serve in the distribution process?

They create efficiencies and facilitate transactions Signup and view all the answers

What is a characteristic of price skimming strategy?

Prices are reduced over time after a high initial price. Signup and view all the answers

Which scenario is most appropriate for using penetration pricing?

Demand is likely to be price elastic in the target market. Signup and view all the answers

What does the trial pricing strategy primarily aim to accomplish?

To generate high interest over a limited time. Signup and view all the answers

In which pricing strategy is high initial pricing followed by gradual reductions?

Skimming pricing Signup and view all the answers

Why might a firm choose penetration pricing in a new market?

To achieve a large market share with low prices. Signup and view all the answers

What is the primary distinction between high/low pricing and EDLP?

High/low pricing involves significant discounts at times. Signup and view all the answers

Which of the following would not typically be a reason for using a skimming pricing strategy?

There is a large number of competitors in the market. Signup and view all the answers

What type of pricing strategy focuses on maintaining the lowest possible prices to attract customers continuously?

Everyday low pricing (EDLP) Signup and view all the answers

Study Notes

General Electric McKinsey Matrix

A strategic tool used to prioritize investments within a multi-business corporation.

Vertical Integration

Buying businesses that perform functions within the supply chain.
Advantages: increased efficiency, control, elimination of profit centers.

Horizontal Integration

Buying businesses in the same industry to increase market share.
Advantages: economies of scale, expanded market share, reduced competition.

Intensive Growth

Ansoff Matrix: a framework using two dimensions: existing/new markets and products.

Marketing Plan

A comprehensive document outlining advertising and marketing efforts for a year.
Covers business activities to achieve specific marketing objectives within a set time frame.

Strategic vs Tactical

Strategic: SWOT, Value Proposition, target market definition
Tactical: marketing mix implementation

Steps in Marketing Planning

Situation Analysis:
- Marketing Audit: systematic examination of marketing assets and activities.
- External audit: economic environment, market, competitors.
- Internal audit: company capabilities.
Set Marketing Objectives:
- Specific, Measurable, Achievable, Realistic, Time-bound (SMART).
- Formulate key assumptions (hypotheses).
Develop Marketing Strategies:
- Identify target markets.
- Adjust marketing mix for each target market (product, price, promotion, distribution).
Implement and Control Marketing Plan:
- Measure performance: Return on Marketing Investment (ROMI) - revenue generated by marketing investment divided by the cost.
- Forecast expected results.
- Compare performance to objectives.
- Adjust objectives or strategies based on analysis.
Budget:
- Develop a 3-year strategic budget and a detailed 1-year budget.
- Consider zero-based budgeting: each expense needs justification.

Obstacles to Marketing Plan Integration

Insufficient support from marketing department and upper management.
Lack of a clear marketing plan.
Lack of management support due to competence issues, information and resource scarcity, organizational structure, and negativity.
Inaccurate goal and strategy representation (lack of numbers).
Excessive detail in the plan.
Perception of marketing planning as a routine task.
Separation of operational and strategic planning.
Poor integration between marketing and corporate planning.

Marketing Communication Tools

Advertising, Sales Promotions, Public Relations, Direct Marketing, Interactive Marketing, Word-of-Mouth, Personal Selling.

3 Marketing Communication Models

One-to-Many: reaching a large customer base (advertising, sales promotion, public relations).
One-to-One: individualized interactions (database marketing, direct marketing, personal selling).
Many-to-Many: facilitating conversation (buzz building, social media).

Multichannel Promotions Strategy

Combines traditional marketing (advertising, sales promotion, public relations, direct marketing) with social media and online buzz-building activities.

Promotion Plan

Identify Target Audience:
- Prospects: traditional communication mix (media advertising, online advertising).
- Current Users: build long-term relationships (lower price, premium products).
- Employees: communication campaign targeted at customers can motivate employees.
Permit Promotional Opportunities: create opportunities for customers to engage with the brand.

Distribution Strategy

Create Efficiencies: reduce transactions in the product flow.
- Breaking Bulk: purchasing large quantities and selling smaller amounts.
- Create Assortment: offering a variety of products in one location.
Transportation and Storage.
Facilitate Functions: offering credit to buyers.
Risk-taking Functions: taking the risk of unsold inventory.
Communication and Transaction Functions: supplying sales force, advertising, marketing communication.

Wholesaling Intermediaries

Independent Intermediaries: merchant wholesalers, merchandise agents, brokers.
Manufacturer-Owned Intermediaries: directly managed by the producer.

Types of Channels of Distribution

Direct Channel:
- Control over pricing, service, and delivery.
- Lower prices for consumers.
- Collect customer data.
Indirect Channels:
- Brand loyalty.
- Intermediaries create value and efficiency.
- Physical distribution functions.
- Bulk purchasing leads to lower prices for consumers.

Dual/Multiple Distribution

Producers, dealers, wholesalers, retailers, and customers participate in more than one type of channel.

Steps in Distribution Planning

Develop Distribution Objectives:
- Minimize shipping costs (for bulky products).
- Minimize handling (for fragile products).
- Price Strategies based on Competition:
  - Price fixing among a few firms (common in oligopolies).
- Pricing based on customer needs:
  - Value pricing or Everyday Low Pricing (EDLP).
  - High/Low Pricing or Promo Pricing.
Develop Pricing Strategy:
- New Product Pricing Strategies:
  - Skimming: high initial price, gradual reduction.
  - Penetration: low introductory price, maintained over time.
  - Trial: low temporary price to generate interest, price increase later.

Midterm Exam Format

10 multiple choice questions (2 points each).
10 true/false questions (1 point each).
45 minutes duration.

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Description

Explore essential marketing strategies like the McKinsey Matrix, integration concepts, and the Ansoff Matrix in our quiz. Understand the difference between strategic and tactical marketing and the steps in creating a robust marketing plan. Test your knowledge on frameworks and tools essential for making informed marketing decisions.