STRATA REVIEWER PDF

Appendix 1-4 Cost-Volume-Profit Logic (Page 2): This section lays the foundation for understanding how costs, volume, and prices interact to determine profitability. It introduces key formulas such as: ○ Total Revenue (R): R = P * Q (Price per unit * Quantity sold)...

Appendix 1-4 Cost-Volume-Profit Logic (Page 2): This section lays the foundation for understanding how costs, volume, and prices interact to determine profitability. It introduces key formulas such as: ○ Total Revenue (R): R = P * Q (Price per unit * Quantity sold) ○ Total Variable Costs (TVC): TVC = VC/u * Q (Variable cost per unit * Quantity sold) ○ Total Costs (C): C = TVC + FC (Total variable costs + Total fixed costs) ○ Profit (n): R - C = n (Total revenue - Total costs) Cost Structures (Page 3): This section explains the difference between variable costs (costs that change with production volume) and fixed costs (costs that remain constant regardless of production volume). Sensitivity Analysis (Page 4): This technique helps assess the impact of changes in one variable on another variable. It's a powerful tool for understanding how uncertainties can affect business outcomes. Elasticity (Page 5): Elasticity measures how responsive demand is to changes in factors such as price or advertising. It helps businesses understand how changes in these factors will affect sales and revenue. Breakeven Analysis (Page 5): This analysis determines the sales volume needed to cover all costs and start generating profit. The breakeven point is calculated using the formula: R = C (n = 0). Margins and Markups (Page 6): This section explains the difference between margins (the difference between selling price and cost of goods sold) and markups (the amount added to the cost price to determine the selling price). Part Two: The Time Value of Money Money Changes Value Across Time (Page 7): This section introduces the concept of the time value of money, which recognizes that money today is worth more than the same amount of money in the future due to factors like inflation and the opportunity cost of capital. Basic Logic and Formula (Page 7): This section presents the basic formula for calculating future value (C1) and present value (PV0) based on interest rates and time periods. Multiple Years (Page 8): This section extends the time value of money concept to multiple years, highlighting the importance of considering the impact of time on financial decisions. Appendix 2: Strategic Marketing Plan Exercise Strategic Marketing Plan Exercise (Page 9): This section provides a step-by-step guide for developing a strategic marketing plan, emphasizing the importance of understanding the situation, defining objectives, and developing strategies and tactics.  Situation Assessment (Page 9): This step involves answering three fundamental questions: ○ Where are we now? (Situation Assessment) ○ Where do we want to go? (Proposed Strategy and Objectives) ○ How do we get there? (Marketing Tactics) Worksheet A-1 (Page 10): This worksheet focuses on defining the business in which the company operates, including its product line, industry segment, and target customers. Worksheet A-2 (Page 10): This worksheet focuses on defining the overall market for the company's products or services, including its size, share, growth, and competitive landscape. Worksheet A-3 (Page 11): This worksheet focuses on segmenting the overall market into smaller, more manageable segments based on key characteristics. Worksheet A-4 (Page 12): This worksheet focuses on analyzing the benefits sought by customers in each market segment. Worksheet A-5 (Page 12): This worksheet focuses on identifying the decision-making units (DMUs) and decision-making processes (DMPs) in each market segment. Worksheet A-6 (Page 13): This worksheet focuses on defining the specific market segments that the company will target. Worksheet A-7 (Page 13): This worksheet focuses on analyzing the external environment, including market trends, competitive trends, and segment/customer trends. Worksheet A-8 (Page 14): This worksheet focuses on assessing the company's competitive position relative to its major competitors. Worksheet A-9 (Page 15): This worksheet focuses on assessing the company's competitive strength in each market segment. Worksheet A-10 (Page 15): This worksheet focuses on creating perceptual maps to visualize how customers perceive the company relative to its competitors. Worksheet A-11 (Page 16): This worksheet focuses on conducting a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) for the overall market and each market segment. Worksheet A-12 (Page 16): This worksheet focuses on developing a market attractiveness/competitive position portfolio model, which helps businesses prioritize their investments based on the attractiveness of different market segments and their competitive strength in each segment. Appendix 3: One Page Memo One Page Memo (Page 24): This section discusses the importance of writing concise, action-oriented one-page memos for effective communication and persuasion. What to Include/Use of Appendices (Page 25): This section provides guidance on what information should be included in the body of the memo and what information can be included in appendices. Communication and Selling Your Idea (Page 25): This section emphasizes the importance of understanding the audience and the objective of the memo when writing it.  Creating the One Page Memo (Page 26): This section provides a step-by-step guide for creating a one-page memo, including preparation and organization, writing, and reviewing. Appendix 4: Case Analysis and Action-Oriented Decisions Case Analysis and Action-Oriented Decisions (Page 27): This section introduces the case method as a powerful tool for teaching and learning strategic marketing. It emphasizes the importance of problem identification, analysis, and decision-making in a real-world context. The Case Method (Page 27): This section explains the case method and how it helps students develop critical thinking, problem-solving, and decision-making skills. Identifying Facts, Assumptions, and Opinions (Page 35): This process is crucial for analyzing cases and making informed decisions. It involves distinguishing between objective facts, subjective opinions, and assumptions. Specifying Alternatives (Page 36): This step involves identifying and evaluating different courses of action or strategic options that a company could pursue to achieve its objectives. Appendix 5-8 1. What is Marketing Strategy? (Page 1) Defining Marketing Strategy: The report starts by defining marketing strategy as a process or an outcome. It emphasizes that a comprehensive marketing strategy should address the "who, what, when, where, why, and how" of a business's marketing efforts. Target Segments (Page 1): This section highlights the importance of identifying and understanding the specific groups of customers a business wants to serve. It emphasizes that a successful marketing strategy should be tailored to the needs and preferences of these target segments. Competitive Advantages (Page 1): This section focuses on defining what makes a company stand out from its competitors in meeting customer needs. It emphasizes that a successful marketing strategy should leverage the company's unique strengths and capabilities to create a competitive edge. 2. The Marketing Concept and Customer Focus (Page 1) Customer-Centricity: This section emphasizes the importance of customer-centricity in strategic marketing. It argues that a successful marketing strategy should be built around understanding and meeting customer needs. 3. Generic Framework of Marketing Strategies (Page 1)  Porter's Framework: This section introduces Porter's framework for competitive advantage and scope of operations. It explains that a business can achieve a competitive advantage by either keeping costs down or by offering something unique in the market. It also explains that a business can choose to target customers in general or to focus on a specific segment of customers. 4. The Value Map (Page 2) Customer Value: This section introduces the Customer Value Map as a tool for visualizing how customers perceive a company's products relative to competitors. It emphasizes the importance of understanding how customers make purchase decisions based on the value they perceive in a product. 5. Growth Strategies Framework: The Ansoff Matrix (Page 2) Ansoff Matrix: This section introduces the Ansoff Matrix, which outlines four key strategies for business growth: ○ Market Penetration: Selling more of existing products to current markets. ○ Market Development: Selling existing products in new markets. ○ Product Development: Offering new products to existing markets. ○ Diversification: Selling new products to new markets. 6. Recognizing a Strategic Decision (Page 2) Strategic Decisions: This section highlights the importance of strategic decisions, which are choices that shape a company's future and its competitive position in the market. It distinguishes strategic decisions from everyday decisions, which have a shorter-term impact. 7. Two Types of Strategic Decisions (Page 2) Known Strategic Decisions: These are decisions that are obviously significant and long-term from the outset. Ad Hoc Strategic Decisions: These decisions initially seem like routine or minor choices, but over time, their true significance becomes apparent. 8. Overview of the Strategic Marketing Process (Page 2) High-Level Strategic Perspective: This section emphasizes the importance of balancing high-level strategic thinking with day-to-day management. It also highlights the importance of identifying and analyzing issues before formulating strategies. 9. Four Essential Stages of the Strategic Marketing Analysis and Planning Process (Page 3)  Situation Assessment: Evaluating the current market and internal conditions. Strategy Formation: Developing strategic plans based on the assessment. Implementation: Executing the strategy through positioning and marketing mix decisions. Documentation, Assessment, and Adjustment: Recording the process, evaluating outcomes, and making necessary adjustments. 10. Market-Related Objectives (Page 3) Clear Targets: This section emphasizes the importance of defining clear targets and metrics for measuring success, such as market share and customer satisfaction. 11. Defined Target Markets and Customer Segments (Page 3) Target Market Identification: This section highlights the importance of identifying specific groups of customers a business wants to reach with its marketing efforts. It emphasizes the importance of understanding different market segments and tailoring marketing objectives to these groups. 12. Effective Metrics (Page 3) Performance Measurement: This section introduces the concept of metrics, which are measurable indicators used to evaluate performance. It highlights the importance of using metrics to track progress and success. 13. Competitive Intelligence (Page 4) Understanding Competitors: This section emphasizes the importance of gathering information about competitors' plans, intentions, and capabilities. It argues that understanding competitors is crucial for developing effective marketing strategies. 14. Context (Page 5) External Environment: This section highlights the importance of understanding the external environment in which a business operates. It emphasizes the importance of considering political-regulatory, economic, social-cultural, and technological-physical factors. 15. Customer Assessment (Page 5) Customer Needs and Expectations: This section emphasizes the importance of understanding customer needs and expectations. It argues that a successful marketing strategy should be built around meeting these needs. 16. Identifying Customer Trends (Page 5)  Market Changes: This section highlights the importance of recognizing broad-based changes in the marketplace that can create opportunities or challenges. It emphasizes the importance of staying informed about these trends. 17. Industry Analysis (Page 5) Competitive Landscape: This section emphasizes the importance of understanding the competitive landscape of the industry in which a business operates. 18. Five Forces Industry Analysis (Page 6) Porter's Five Forces: This section introduces Porter's Five Forces model, which analyzes the competitive forces in an industry: bargaining power of suppliers, threat of substitute, bargaining power of buyers, threat of new entrants, and competitive rivalry. 19. Discovering Customer Insights (Page 6) Understanding Customer Needs: This section emphasizes the importance of understanding customer needs and desires beyond what is readily apparent. It argues that a successful marketing strategy should be built around meeting these unmet needs. 20. Laws of Strategic Marketing (Page 6) Business Dynamics: This section applies principles from physics to understand the dynamics of business, such as the concept of inertia and the product lifecycle. 21. Scale Effects/Cost Leverage (Page 6) Economies of Scale: This section explains the benefits of economies of scale and how they can lead to lower average costs and increased profitability. 22. Situation Assessment: The Company (Page 7) Guidance Statements: This section emphasizes the importance of using guidance statements, such as mission and vision statements, to define the company's purpose, values, and long-term aspirations. 23. Corporate Social Responsibility (Page 7) Ethical Considerations: This section recognizes the importance of considering ethical, social, and environmental factors in business decisions. 24. The Triple Bottom Line (Page 9)  Social, Environmental, and Economic Performance: This section emphasizes the importance of considering social, environmental, and economic factors in assessing business performance. 25. Establishing Preliminary Objectives and Targets (Page 9) SMART Objectives: This section introduces the concept of SMART objectives, which are specific, measurable, achievable, relevant, and time-bound. 26. Identifying Strategic Gap(s) or Planning Gaps (Page 9) Performance Gaps: This section explains the importance of understanding the difference between current performance and desired future objectives. 27. Integrating Situation Assessment (Page 10) Strategy Formation: This section emphasizes the importance of using situation assessments to inform strategy formation and action. 28. Strategy Formation (Page 10) Competitive Advantages: This section highlights the importance of identifying competitive advantages, segmenting the market, targeting specific customer segments, and positioning the company in the marketplace. Appendix 9-12 Page 1: Implementation Focuses on effectively executing a marketing strategy. Positioning: Establishes a brand's unique image in the marketplace by differentiating it from competitors. Aligns with customer needs through a tailored marketing mix (product, price, place, promotion). Marketing Research: Helps understand customer preferences, market segments, and competitors to guide strategic decisions. It can be exploratory, descriptive, or causal, providing essential data for evaluating marketing strategies. Page 2: Types of Errors in Science Type I Error: False positive—believing something works when it doesn't. Type II Error: False negative—failing to recognize a true success factor. Type III Error: Solving the wrong problem accurately. Page 3: Marketing Research Designs  Exploratory Research: Used to gain insights or ideas for future research. Descriptive Research: Provides detailed data on customer behavior and preferences. Causal Research: Identifies cause-and-effect relationships between variables. Page 5: Brands and Branding Positioning Statements: Defines how a brand should be perceived, outlining its target market, unique value, and differentiation from competitors. Page 6: The Marketing Mix Products: Comprises the core, expected, and augmented product. Each layer addresses different customer needs. Product Lines: A group of related products, with strategies like price lining, brand extensions, and product platforms. Page 8: Product Portfolios Growth/Share Matrix: Categorizes products as Stars, Cash Cows, Question Marks, or Dogs to help allocate resources effectively. Page 9: New Product Development Innovation Cultures: Encourages creativity and cross-functional collaboration to develop new products and stay competitive. Page 11: Promotions/Communication Strategies Integrated Marketing Communications (IMC): Coordinates various channels (ads, social media, etc.) to deliver a consistent brand message. Page 13: Pricing Strategies Skimming Pricing: High initial price, lowering over time. Penetration Pricing: Low initial price to gain market share quickly. Page 16: Breakeven Analysis Breakeven Point: The level of sales where revenues equal costs, crucial for evaluating the viability of a strategy. Page 25: PEST Analysis Analyzes external factors: Political (laws, regulations), Economic (interest rates, inflation), Social (cultural values, demographics), Technological (emerging technologies) Appendix 13-16 1. Customer Assessment – Trends and Insights (Pages 13–14) The Customer Assessment section delves into how understanding and adapting to customer needs is critical for marketing strategy success. It explains that businesses must continuously assess trends and insights to make informed decisions. Segmentation, Targeting, and Positioning (STP): This subtopic highlights the importance of dividing the market into distinct customer groups (segmentation), choosing the right group to target (targeting), and establishing a unique image in the customers' minds (positioning). This is essential for creating marketing strategies that resonate with specific audiences. Customer Relationship Management (CRM): Focuses on personalized customer engagement through ongoing data collection and analysis. By identifying the most profitable customer segments, businesses can tailor their offerings, maintain customer loyalty, and enhance customer satisfaction. Customer-Oriented Metrics: This subtopic emphasizes the use of metrics like customer satisfaction, loyalty, profitability, and revenue to evaluate marketing efforts. These metrics help businesses adjust their strategies to better serve their customers. 2. Identifying Trends: Forecasting, Data Mining, and Futuring (Pages 14–15) Identifying and leveraging marketplace trends is crucial for building sustainable marketing strategies. Trend Extrapolation: Businesses forecast future customer demands by analyzing historical data. Techniques like moving averages and S-curves help predict where the market is heading. However, the report warns that relying solely on past trends can be limiting. Causal Modeling or Econometric Forecasting: This involves using regression analysis to explore the relationship between different market variables (e.g., sales and advertising spend). While it provides insights, it does not necessarily indicate causation. Scenario Analysis: Businesses prepare for uncertain futures by imagining various market scenarios based on potential shifts in customer preferences, such as increasing health consciousness or budget constraints. Cross-Impact Matrices: A tool to analyze how different market trends and events (e.g., economic growth, technological innovation) interact. It helps businesses prepare for the combined effects of multiple factors on customer behavior. 3. Discovering Customer Insights (Page 15) The report defines customer insights as a deep understanding of what customers truly value in a product or service. It argues that businesses need to go beyond superficial data and explore unmet and unrecognized customer needs.  Inductive Reasoning: Unlike traditional market research, discovering insights often requires an open-minded exploration where data is analyzed without preconceived notions, allowing unexpected findings to emerge. Characteristics of Good Insights: Insights should be fresh, relevant, enduring, and capable of inspiring actionable ideas. Customer Value Chain: This subtopic explores how customers extract value from a product across the entire lifecycle, from purchasing to using and disposing of it. Understanding this helps companies identify opportunities for enhancing the customer experience. 4. Data Collection Methods for Customer Insights (Page 15–16) Several methods for gathering customer insights are outlined in this section: Total Immersion: A method where company executives interact directly with customers to understand their experiences, bringing consumer issues to the forefront and helping identify business opportunities. Depth Interviews and Laddering: In-depth interviews help explore consumer behaviors, needs, and motivations, while laddering further refines the insights by digging deeper into the consumer’s thought process. Projective Techniques: Using tools like word association or imagery to reveal hidden consumer attitudes and feelings about brands or products. Ethnography: Observing consumers in their natural environments to understand how they use products, what emotions they experience, and what improvements can be made. This method is especially useful for gaining deep, context-rich insights. 5. Lead Users and Online Communities (Page 16) Lead users are highly knowledgeable customers who often drive innovation by solving problems before the broader market becomes aware of them. Lead Users in Innovation: The report notes that many innovations, especially in technical fields like semiconductors and scientific instruments, originate from lead users rather than product developers. Online Communities: Consumers gather in online forums to share experiences and discuss product improvements. Companies can leverage these communities for feedback and new product ideas. 6. Consumer Behavior and Decision-Making Process (Pages 16–17) The report covers the consumer decision-making process, which includes several stages that consumers go through before making a purchase: Problem Recognition: Consumers identify a gap between their current state and their desired state. This gap prompts them to search for solutions, often based on Maslow’s hierarchy of needs (physiological, safety, social, esteem, and self-actualization).  Information Search and Evaluation of Alternatives: Consumers collect information about possible solutions and compare alternatives based on factors like quality, price, and brand reputation. Post-Purchase Behavior: After the purchase, consumers evaluate whether the product met their expectations. Businesses need to focus on this stage to build long-term relationships and ensure customer satisfaction. 7. Stages in the Buying Process and Sales Funnel (Pages 17–18) The buying process is detailed in this section, explaining how companies purchase products and services. Straight Rebuys: Routine purchases of familiar products from the same supplier with minimal involvement. Modified Rebuys: Adjustments to previous purchases, either in product specifications, quantity, or supplier. New Tasks: Completely new and often complex purchases that involve multiple stakeholders and higher risks. Sales Funnel: This model categorizes potential customers based on their proximity to making a purchase, starting from leads (potential customers) to actual buyers. 8. Competitor Analysis and Strategic Planning (Page 19) This section stresses the importance of understanding competitors to develop effective strategies. Portfolio Analysis: Companies assess their products based on their strength in the market and the attractiveness of the market, which helps in prioritizing where to invest or withdraw resources. Growth Strategy: Businesses must analyze their competitors’ growth strategies to understand whether they are focusing on market penetration, product development, market development, or diversification. 9. Corporate Vision and Mission (Page 20) A clear and inspiring vision and mission is essential for guiding a company’s long-term strategy. Core Purpose: This describes why the company exists and serves as a motivational force for employees and stakeholders. Core Values: These are the beliefs and principles that guide the company's actions and decision-making processes. Visionary Goal: This goal pushes the company to strive for exceptional achievements, often aligning business objectives with broader social or industry-wide impact. 10. Organizational Buyer Behavior and Buy Centers (Pages 20–21) The report explains how organizational buying is more complex and structured than consumer buying.  Buy Centers: A framework of roles involved in organizational purchasing decisions, including initiators, influencers, deciders, buyers, and users. Each plays a key role in influencing the purchase outcome. Personal Selling: Sales teams act as consultants, focusing on building long-term relationships with organizational buyers rather than focusing solely on transactions. 11. Corporate Strategy and Resource Allocation (Pages 22–23) At the corporate level, strategic management involves setting a clear vision, allocating resources, and managing linkages among business units to create synergy and long-term growth. Corporate Synergies: The report emphasizes the importance of exploiting synergies between business units to enhance efficiency and growth. Business-Level Strategy: This strategy focuses on how a business competes in its market, addressing the who (customers), where (geographic markets), what (needs), how (methods), and why (business model) of competition. 12. Marketing Tactics and Competitive Moves (Page 23) The final part of the competitor analysis examines marketing tactics, such as positioning, product decisions, pricing, and communication strategies. This section helps businesses anticipate their competitors' next moves and prepare appropriate responses.