Strategic Marketing Management Unit 1 - 5
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What is a marketing plan and why is it important?

A marketing plan is a written document detailing the current situation concerning customers, competitors, and the external environment; providing guidelines for objectives, marketing actions, and resource allocations over the planning period for either an existing or a proposed product or service. It is important because it provides a concrete history of a product's strategies and performance over time, aiding institutional memory and educating new managers. It is also an important tool for communicating and coordinating expectations and responsibilities through the firm.

Which of the following strategy components address issues such as the time frame in which each target should be attained and the target level of performance to be achieved on each dimension?

  • Objectives (correct)
  • Development strategy
  • Sources of synergy
  • Scope and mission

    • The principles of sustainability involve meeting humanity’s needs without harming future generations. What is the expansion for the acronym SMART used in specifying corporate objectives?

  • Structured, Marketable, Accountable, Reusable, and Targeted
  • Standardized, Manageable, Accountable, Relevant, and Targeted
  • Specific, Measurable, Attainable, Relevant, and Time-bound (correct)
  • Structured, Manageable, Acceptable, Related, and Theoretical

    • Cash cows are businesses with a high relative share of __________ markets.

    <p>low-growth</p> Signup and view all the answers

    A _____ policy relates to the breadth or diversity of product lines, their level of technical sophistication, and the target level of product quality relative to competitors.

    <p>Product</p> Signup and view all the answers

    Which of the following businesses seldom adheres to a policy of low competitive prices?

    <p>Prospector</p> Signup and view all the answers

    High advertising and sales promotion expenditures have a negative impact on ROI for _____ businesses.

    <p>Low-cost defender</p> Signup and view all the answers

    Explain the characteristics of strategic business units.

    <p>Strategic business units ideally have homogeneous markets, unique product-market sets, control over necessary factors, and responsibility for profitability.</p> Signup and view all the answers

    Discuss the appropriate conditions for a low-cost defender strategy.

    <p>Successful low-cost defender strategy needs efficiency, early groundwork, volume seeking, cost minimization, standardization, and profitability focus.</p> Signup and view all the answers

    Briefly discuss pricing and distribution policies.

    <p>Pricing policies: Low-cost defenders focus on low prices, while differentiated defenders and prospectors may have higher prices. Distribution policies: Defenders maintain tight control, while prospectors rely more on independent channel members.</p> Signup and view all the answers

    What is typically a part of using customer equity to estimate the value of alternative marketing actions?

    <p>Calculating the lifetime values of each of its customers</p> Signup and view all the answers

    What are the components of sustainable competitive advantage at the corporate level?

    <p>Company resources that are hard to acquire, take a long time to develop, and are not possessed by other firms such as information systems, market research operations, customer relationships, brand recognition, alliances, and loyal customers.</p> Signup and view all the answers

    How can customer equity be used to estimate the value of alternative marketing actions?

    <p>By calculating the economic return for a marketing initiative based on its impact on the firm's customer equity, considering the lifetime values of current and future customers, and analyzing historical data.</p> Signup and view all the answers

    What are the various sources of synergy for a firm?

    <p>Knowledge-based synergy, corporate identity and brand synergy, and shared resources synergy.</p> Signup and view all the answers

    What do strategic business units (SBUs) refer to?

    <p>Components of a firm engaged in multiple industries or businesses.</p> Signup and view all the answers

    What is an ideal characteristic of SBUs?

    <p>Having control over factors necessary for successful performance.</p> Signup and view all the answers

    Which of the following is true of an analogy forecasting method?

    <p>It is a useful approach for entrepreneurs to forecast sales of a new business.</p> Signup and view all the answers

    Which of the following is true of a live test market?

    <p>It does not let a firm’s competitors to buy the checkout scanner data without bearing test marketing expenses.</p> Signup and view all the answers

    _____ is an example of a mathematically-driven approach to forecast sales.

    <p>Conjoint analysis</p> Signup and view all the answers

    Which of the following statements is true of an adoption process?

    <p>The speed of the adoption process depends on the relative simplicity of a new product.</p> Signup and view all the answers

    Which of the following adopters forms the smallest group in the diffusion of innovation curve?

    <p>Innovators</p> Signup and view all the answers

    Which of the following characteristics is true of adopter groups?

    <p>Late majority adopt a new product for either economic or social reasons.</p> Signup and view all the answers

    Which of the following statements is true of forecasting?

    <p>Forecasts are not immune to anchoring biases.</p> Signup and view all the answers

    BizWear Inc. is a retail chain specializing in business wear for women. Which market knowledge systems is employed by the retail chain?

    <p>Internal records systems</p> Signup and view all the answers

    Which of the following ways of collecting information best illustrates a marketing database?

    <p>&quot;Cookies&quot; or electronic signatures placed at a customer's personal computer</p> Signup and view all the answers

    A(n) _____ refers to the margins that a buyer generates over a lifetime less the cost of serving the customer.

    <p>customer lifetime value</p> Signup and view all the answers

    Which of the following is true of competitive intelligence systems?

    <p>It uses online databases and government documents as its source of information.</p> Signup and view all the answers

    The design, collection, analysis, and reporting of study intended to gather data pertinent to a particular marketing challenge or situation is referred to as ______.

    <p>marketing research</p> Signup and view all the answers

    Which of the following is a component of strategy that involves detailing the desired levels of accomplishment on one or more performance dimensions over specified time periods for the organization as a whole?

    <p>Goals and objectives</p> Signup and view all the answers

    Decisions about the organization’s scope and resource deployments across its divisions or businesses are the primary focus of which strategy?

    <p>Corporate</p> Signup and view all the answers

    In which of the following levels of strategy is sustainable competitive advantage a major component?

    <p>Business strategy</p> Signup and view all the answers

    Which of the following falls within the scope of corporate strategy?

    <p>Vertical integration</p> Signup and view all the answers

    Business-level strategies allocate resources to:

    <p>among businesses in the corporate portfolio</p> Signup and view all the answers

    The primary focus of marketing strategy is to:

    <p>allocate and coordinate resources and activities to accomplish the firm’s objectives within a specific product-market</p> Signup and view all the answers

    Which of the following statements about market-oriented firms is true?

    <p>They are characterized by a consistent focus on customers' needs by personnel in all departments</p> Signup and view all the answers

    The tendency for firms to automatically continue strategies that were successful in the past, even though current market conditions are changing, is referred to as:

    <p>strategic inertia</p> Signup and view all the answers

    Which of the following is the reason why early entrants into newly emerging industries, particularly industries based on new technologies, are especially likely to be internally focused and not very market-oriented?

    <p>Due to rapid growth in demand for the new product</p> Signup and view all the answers

    Product-oriented firms differ from market-oriented firms in that product-oriented firms:

    <p>base their pricing on production and distribution costs</p> Signup and view all the answers

    Which of the following is a feature of a production-oriented organization?

    <p>Its primary focus when offering a product is on the product’s functional performance and cost</p> Signup and view all the answers

    Market-oriented organizations differ from product-oriented organizations in that market-oriented organizations:

    <p>make product packaging for the customer’s convenience</p> Signup and view all the answers

    Which of the following statements is true of a market-oriented strategy?

    <p>Pricing is based on perceived benefits the product provides</p> Signup and view all the answers

    A product-oriented organization differs from a market-oriented organization in that a product-oriented organization:

    <p>focuses technical research on product improvement and cost-cutting in production</p> Signup and view all the answers

    Which of the following statements about services is true?

    <p>Good services improve customer loyalty over the long term</p> Signup and view all the answers

    E-tailers such as Amazon and iTunes are examples of which category of e-commerce?

    <p>Business-to-consumer</p> Signup and view all the answers

    PriceTag.com is a site that enables users to bid on unsold airline tickets and other goods and services.PriceTag.com is an example of which type of e-commerce?

    <p>Consumer-to-business</p> Signup and view all the answers

    Out of the 4Cs of a market analysis, _____ would be considered under “characteristics of customers.

    <p>Market segmentation</p> Signup and view all the answers

    A distinct subset of people with similar needs, circumstances, and characteristics that lead them to respond in a similar way to a particular product or service offering is known as a _____.

    <p>Market segment</p> Signup and view all the answers

    Which of the following contents of a marketing plan specifically presents the expected financial payoff from the plan?

    <p>Projected profit-and-loss statement</p> Signup and view all the answers

    Which of the following contents of a marketing plan specifies the goals to be accomplished in terms of sales volume, market share, and profit?

    <p>Objectives</p> Signup and view all the answers

    What is the primary focus of marketing-level strategies and what critical issues do they focus on?

    <p>The primary focus of marketing strategy is to allocate and coordinate marketing resources and activities to achieve the firm's objectives within a specific product-market. Critical issues center around defining target markets, seeking competitive advantages, and aligning marketing mix elements with customer needs and wants.</p> Signup and view all the answers

    Why are some firms not very focused on their consumers or competitors?

    <p>Some firms may lack market orientation due to factors like early market entry into emerging industries with rapid growth, resulting in internal focus rather than being market-oriented.</p> Signup and view all the answers

    Which of the following forces increases industry attractiveness?

    <p>Lesser threat of new entrants</p> Signup and view all the answers

    According to Porter, rivalry among competitors is greater when:

    <p>low switching costs exist for the buyers</p> Signup and view all the answers

    The threat of new entrants to an industry is less when:

    <p>the economies of scale are strong</p> Signup and view all the answers

    A distribution agency replacing facsimile machines with all-in-one printers exemplifies:

    <p>the threat of substitute products</p> Signup and view all the answers

    The bargaining power of suppliers increases when:

    <p>the suppliers can realistically threaten backward integration</p> Signup and view all the answers

    Which of the following increases a buyer’s bargaining power?

    <p>Low buyer profitability</p> Signup and view all the answers

    Opportunities are attractive at the micro level on the market side when:

    <p>the company has other segments for which the currently targeted segment may provide a springboard</p> Signup and view all the answers

    For an industry, attractive opportunities are available at the micro level when:

    <p>the company’s business model is economically viable</p> Signup and view all the answers

    Which of the following is considered a critical success factor in retailing?

    <p>Location</p> Signup and view all the answers

    A(n) _____ is used to assess the impact and the timing of an environmental event in a firm.

    <p>Opportunity/threat matrix</p> Signup and view all the answers

    In a _____ approach, a central person or persons take the responsibility for forecasting and prepare an overall sales forecast.

    <p>Top-down</p> Signup and view all the answers

    Which of the following approaches is used to prepare a sales forecast in decentralized firms?

    <p>A bottom-up approach</p> Signup and view all the answers

    Which of the following is true of a statistical forecasting method?

    <p>It generally assumes that the future will look very much like the past</p> Signup and view all the answers

    RobustTires is an established tire manufacturer in Topeka. It plans to open a branch in Buffalo City and intends to use time series analysis to forecast sales. Which method of forecasting is exemplified by RobustTires?

    <p>Statistical method</p> Signup and view all the answers

    Which of the following is true of surveys?

    <p>A survey of buyer’s intention helps in forecasting sales of a prototype</p> Signup and view all the answers

    HoneyDew plans to introduce a new candy and estimates potential buyers by asking regular customers to sample the product. Which forecasting technique is HoneyDew using?

    <p>Survey</p> Signup and view all the answers

    When major TV manufacturers introduced high-definition TVs, they used data from color TV introductions. What forecasting method was used?

    <p>Analogy method</p> Signup and view all the answers

    Study Notes

    Market-Oriented Perspectives

    • A market-oriented perspective is essential for successful corporate, business, and marketing strategies.
    • It involves understanding customer needs, wants, and expectations, and creating value for them.

    Corporate Strategy

    • Corporate strategy involves decisions about the organization's scope, resource deployments, and competitive advantage.
    • Goals and objectives are a component of corporate strategy, detailing the desired levels of accomplishment on one or more performance dimensions over specified time periods.

    Business Strategy

    • Business strategy allocates resources among businesses in the corporate portfolio.
    • It focuses on creating a sustainable competitive advantage in a specific product-market.

    Marketing Strategy

    • Marketing strategy focuses on allocating and coordinating marketing resources and activities to accomplish the firm's objectives within a specific product-market.
    • It involves specifying the target market, competitive advantage, and marketing mix elements (4 Ps: product, price, place, promotion).

    Market Orientation

    • Market-oriented firms are characterized by a consistent focus on customers' needs by personnel in all departments.
    • They prioritize customer satisfaction, adapt to environmental changes, and use cross-functional teams during the development of new products.

    Product-Oriented vs. Market-Oriented

    • Product-oriented firms focus on the product's functional performance and cost, and prioritize production and distribution efficiency.
    • Market-oriented firms, on the other hand, focus on customer needs, wants, and expectations, and prioritize customer satisfaction and value creation.

    E-Commerce

    • E-commerce can be classified into four categories: business-to-business, consumer-to-business, business-to-consumer, and consumer-to-consumer.
    • Examples of e-commerce include Amazon (business-to-consumer) and PriceTag.com (consumer-to-business).

    Marketing Plan

    • A marketing plan is a written document detailing the current situation, objectives, marketing actions, and resource allocations over the planning period for a specific product or service.
    • It is an important tool for communicating and coordinating expectations and responsibilities within the firm.

    Corporate Objectives

    • Corporate objectives specify the goals to be accomplished in terms of sales volume, market share, and profit.
    • They should be SMART (Specific, Measurable, Attainable, Relevant, and Time-bound).

    Performance Criteria

    • Performance criteria include profitability, contribution to owners, competitive strength, and growth.
    • They are used to assess the success of a firm's strategies and objectives.

    Growth Strategies

    • Growth strategies include market penetration, market development, product development, and diversification.
    • They are used to expand a firm's market share, customer base, or product offerings.### Diversification Strategies
    • A processed-meat manufacturer launching a chain of retail outlets is an example of forward vertical integration.
    • A generic drug manufacturer planning a foray into the design and manufacture of re-locatable structures is an example of unrelated diversification.

    Cash Cows and Dogs

    • Cash cows are businesses with a high relative share of low-growth markets.
    • Dogs are low-share businesses in low-growth markets.

    Growth-Share Matrix

    • A limitation of the growth-share matrix is that outcomes are highly sensitive to variations in how growth and share are measured.

    Value-Based Planning

    • Value-based planning provides a basis for comparing the economic returns to be gained from investing in different businesses pursuing different strategies.
    • A limitation of value-based planning is that it is typically a tool for evaluating strategy alternatives identified and developed through managers' judgments.

    Customer Equity

    • Customer equity is the sum of the lifetime values of a firm's current and future customers.
    • Customer equity can be used to estimate the value of alternative marketing actions by calculating the economic return for a prospective marketing initiative based on its likely impact on customer equity.

    Sustainable Competitive Advantage

    • Sustainable competitive advantage at the corporate level is based on company resources, resources that other firms do not have, that take a long time to develop, and that are hard to acquire.
    • Examples of sustainable competitive advantage include highly developed information systems, extensive market research operations, and cooperative long-term relationships with customers.

    Synergies

    • There are three sources of synergies: knowledge-based, corporate identity and the corporate brand, and shared resources.
    • Knowledge-based synergies enhance the performance of one business by the transfer of competencies, knowledge, or customer-related intangibles from other units within the firm.
    • Corporate identity and the corporate brand give a firm a sustainable advantage in the market.
    • Shared resources involve sharing operational resources, facilities, and functions across business units.

    Strategic Business Units (SBUs)

    • SBUs are components of a firm engaged in multiple industries or businesses.
    • Ideal characteristics of SBUs include:
      • A homogeneous set of markets to serve with a limited number of related technologies.
      • A unique set of product-markets, in the sense that no other SBU within the firm competes for the same customers with similar products.
      • Control over those factors necessary for successful performance, such as production, R&D and engineering, marketing, and distribution.
      • Responsibility for their own profitability.

    Business Strategies

    • A prospector strategy involves operating within a broad product-market domain that undergoes periodic redefinition.
    • A defender strategy involves protecting its domain by offering lower prices, higher quality, or better service than competitors.
    • A reactor strategy lacks any well-defined competitive strategy.
    • An analyzer strategy involves maintaining a strong position in its core product-market but also seeks to expand into new—usually closely related—product-markets.

    Performance Dimensions

    • Adaptability is measured in terms of speed and effectiveness in responding to changes in the environment.
    • Effectiveness is measured in terms of sales growth relative to competitors or changes in market share.
    • Efficiency is measured in terms of profitability as a percent of sales and return on investment.
    • Synergy is measured in terms of the ability to create value by sharing resources across business units.

    Environmental Factors

    • A prospector strategy is favored by an industry in early growth stage, with a large number of competitors, and a relatively high level of uncertainty.
    • A defender strategy is favored by an industry in late growth stage, with a small number of competitors, and a relatively low level of uncertainty.### Market-Oriented Perspectives
    • A market-oriented perspective is essential for successful corporate, business, and marketing strategies.
    • Low-cost defenders focus on efficiency and low price as their primary competitive strategy.
    • This strategy is not effective in fragmented markets, but rather in commodity industries such as basic chemicals, steel, or flour.
    • Businesses pursuing other strategies should also operate efficiently given the functional activities necessary to implement those strategies.

    Pricing and Distribution Policies

    • Success in offering low prices relative to competitors is positively related to the performance of low-cost defender businesses.
    • Differentiated defenders and prospectors seldom adhere to a policy of low competitive prices.
    • Distribution policies for defenders involve maintaining tight control over the behavior of channel members, particularly in established markets.
    • Prospectors rely on independent channel members, such as manufacturer's representatives or wholesale distributors, to distribute their products.

    Understanding Market Opportunities

    • A market is defined as a group of individuals and organizations interested in and willing to buy a good or service to obtain benefits that will satisfy a particular need.
    • An industry is a group of firms that offer a product or class of products that are similar and are close substitutes for one another.
    • Demographic trends, such as an aging population, influence market attractiveness.
    • Sociocultural trends, such as fitness and nutrition patterns, also impact market attractiveness.
    • The natural environment, such as the rise of hybrid gas-electric vehicles, affects market opportunities.
    • Technological advancements, such as the use of the internet and social media, influence market opportunities.
    • Economic trends, such as changes in interest rates, impact market opportunities.
    • Regulatory trends, such as the rise of government regulations, also influence market opportunities.

    Porter's Five Competitive Forces

    • The threat of new entrants is a key force in the fast-food industry.
    • The threat posed by substitute products is a key force in the fast-food industry.
    • The bargaining power of suppliers and buyers also impacts industry attractiveness.
    • Rivalry among competitors is greater when low switching costs exist for buyers.

    Market Analysis

    • Opportunities are attractive at the micro level on the market side when the company has other segments for which the currently targeted segment may provide a springboard.
    • Attractive opportunities are available at the micro level when the company's business model is economically viable.
    • Critical success factors, such as price, location, and promotion, are essential for success in retailing.

    Forecasting and Market Knowledge

    • A top-down approach is used to prepare a sales forecast in centralized firms.
    • A bottom-up approach is used to prepare a sales forecast in decentralized firms.
    • Statistical forecasting methods, such as time series analysis, are used to forecast sales and market potential.
    • Survey methods, such as surveys of buyer's intention, are used to forecast sales.
    • Analogy methods, such as comparing the sales of similar products, are used to forecast sales of new products.

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    This quiz assesses knowledge of Unit 1 -5 of Strategic Marketing Management, covering market-oriented perspectives in corporate, business, and marketing strategies.

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