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66 Cards in this Set

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The Marketing Process cont.
Planning, Implementation, and Control Phases of the Strategic Marketing Process
Exploiting Strategic Competitive Advantage
1) Finding and using what works for the organization and its industry.

2) Allocating resources effectively
"What really works" for Superior Performance
Strategy, Execution, Culture, Structure

Need all four!
* Flawless execution of one or two is more important than which ones are chosen
a) Strategy

b) Execution
a) devise and maintain a clearly stated, focused strategy
EX. Costco strategy

b) develop and maintain flawless operational execution
EX. Toyota design
c) Culture

d) Structure
c) develop and maintain a performance-oriented culture
EX. Smuckers: #1 company to work for

d)Build and maintain a fast, flexible, flat organization:
1. give the authority to make quick decisions and
2. use a small number of people who can talk to anyone in the organization to solve a problem.
Allocating Market Resources:


*Sales Response Function
relates the expense of marketing effort to the marketing results obtained
Maximizing Incremental Revenue Minus Incremental Cost
Allocate production, marketing, and financial resources to the markets and products that where the excess of incremental revenues over incremental costs is GREATEST
*graph in book S-shaped curve

increase marketing effort= increase sales
Resource allocation- Sales Response Function
EX. increase marketing effort one million dollars for new product. which is the better year?

YR. 1- Increase Marketing = Increase sales revenue from 30->50= 20 million
20:1

YR2. Increase= Sales rev. goes from 70->73= 3M
3:1
*Choose year one
NOTES- Resource Allocation in Practice

SHARE POINT ANALYSIS
Builds on discussion of the 1.5 rule in competitive parity budgeting

Use Share Point Analysis to discuss how marketers are going to set their goals/ objectives for the next operating period
Share Point
percentage points of market share.

used as the basis of comparison to allocate market resources effectively for different product lines w/in the same firm
*share point analysis
Goal:
Not- "10% market share" but, "10 more share points"
Share Point Analysis steps:

NOTES!! Hard calculations!
1) Estimate the Industry Sales
2) Compute sales revenue per share point
3) Estimate Firm's Market share
4) Compute the Gross Margin per Share Point
*book adds a step to look at cannibalization effects
Gross Margin
GM= Sales Revenue- COGS

Also called the "Contribution" to covering selling, administrative, and other expenses
Strategic Marketing Process
converting marketing information into marketing actions

Planning, Implementation, Control
Planning Phase:
Mostly in CH. 2

Long Range vs. Annual Plans
the _____ marketing plan covers marketing activities over a period of two to five years in the future.
LONG-RANGE

The _____ marketing plan, which is highly structured and detailed, is usually developed by a product manager and begins with marketing research and ends after 48 weeks with the approval of the general manager.
ANNUAL
Marketing Planning Frameworks:

Definition: Generic Business Strategy
a strategy that can be adopted by any firm regardless of the product or industry involved to achieve strategic competitive advantage.

-low cost producer or differentiate
-broad or narrow target
1) Cost Leadership Strategy
LOW COST/BROAD TARGET
-reduce costs and focus on a large target segments.

EX. securing raw materials from a low-cost supplier (like Wal-Mart did)
2) Differentiation Strategy
BROAD TARGET/DIFFERENTIATE
requires products to have significant points of difference in product offerings, brand image, higher quality, advanced technology, or superior service to charge a higher price while targeting a large array of market segments
3) Cost Focus Strategy
LOW COST/ NARROW TARGET
involves controlling expenses, and in turn, lowering product prices targeted at a narrow range of market segments

EX. Office Max
4) Differentiation Focus Strategy
DIFFERENTIATION/NARROW TARGET
requires that products have significant points of difference to target one or only a few market segments

EX. Volkswagen "nostalgia" segment
Profit Enhancement
1) Increase revenues
2) decrease costs
3) both

1)Market Penetration, Product development, Market Development, Diversification
2) economies of scale, other ways of reducing costs
Market- Product Synergies:

a. Market-Product Concentration

b. Market Specialization
Marketing Synergy or R&D synergy
a. Firm benefits from *focus on a single product line and market segment
-loses synergies in R&D and marketing.

b. Gain Marketing synergy through providing a *complete product line, but R&D Manufacturing have difficulty developing & producing two new products
c. Product Specialization

d. Selective Specailization

e. Full coverage
a.Firm gains R&D manufacturing synergy through economies of scale, but distributing in different geographical areas is costly.

d. no synergies b/c of uniqueness of the product-market combination.

e. maximum potential synergy, but may be spread too thin
Guidelines for an Effective Marketing Plan
1) set measurable, achievable goals. time table!
2) use a base of facts and valid assumptions. not guesses!
3) utilize simple, but clear and specific plans
4) have complete and feasable plans
5) make plans controllable and flexible
Problems w/Planning:
1) plans based on poor assumptions
2) plans lose sight of consumer needs
3) too much time on data collection and writing plans "Paralysis by Analysis"
4) managers not involved enough
Balancing Values and Value in SMP process:

a. value-based planning

b. value-driven strategies
a. combines marketing planning ideas and financial planning techniques to assess how much a division or strategic business unit contributes to the price of a company's stock. More Value= return>cost

b. incorporate concerns for ethics, integrity, employee health and safety, and environmental safeguards with more common corporate values.
Implementation Phase of SMP
-Implementation is becoming much more important
Planning or Implementation Problem? (Book/Notes)
When a marketing plan fails, is it due to a poor plan or poor implementation? is it both?
-good firms do both well!
NOTES:
-If you are in a hole, stop digging!
EX. Dell- good plan, bad execution
EX. Wal-Mart online: bad plan and execution
EX. Bud Select- bad product but not changing anything
Improving Implementation (In Book and Notes

a. Communicate
a. COMMUNICATE goals and means of achieving them:
- from top to bottom of organization
- feedback from bottom to top
b. Leadership (Champion)

Definition: Product or Program Champion
*someone who is able and willing to cut red tape and move the program forward. Usually has ability to see big-picture and specific details.

EX. Pat Ferrah at Home Depot: Wild man merchandising officer- cut the high costs H.D. was paying for merchandise
c. Reward Performance
c. Reward those employees that are doing a good job at implementing programs.
EX. Hotel mystery shoppers- do well and entered into a drawing
EX. Seaworld Mystery Guests

*give extra cash or a pat on the back
d. Schedule Tasks

Schedule Precise Tasks, Responsibilities and Deadlines
*NOTES: PERT (Program, Evaluation and Review Technique) Analysis to find "critical path"

Book: people need to know the tasks that they are responsible for and the deadlines for completing them
Action Item List
an aid in implementing a marketing plan consisting three columns:
1) the task, 2) the person responsible for completing that task and 3) the date to finish the task
program schedules
show the relationship through time of the various program tasks
1) ID main tasks, 2) determine time required to complete tasks, 3) arrange activities to meet the deadline 4) assign responsibilities
ghantt chart
a graphical representation of a program schedule
e. Take action and avoid Paralysis By Analysis

"Just Do It" (Notes)
"paralysis by analysis"= the tendency to overanalyze a problem instead of taking action

Perfectionists finish last, so get 90% perfection and let the marketplace fine-tune
EX. Wooden- Go get started. Do something!
EX. Visticon: TEST, LEARN, AND GO!
f. Seek Feedback

(Foster Open Communication to Surface Problems)
1) Internal Feedback- getting feedback form within the organization(employees). These are the people on the front lines doin the implementation!

2)External Feedback- Get feedback from customers through watching and listening, or systematically through surveys, etc.
Organization for Marketing
how line vs. staff positions and divisional groupings interact to form a cohesive organization

the role of the marketing or product manager
Line Positions
have the authority and responsibility to issue orders to the people who report to them

EX. Senior Marketing Manager can issue orders to Product Managers
Staff Positions
have the authority and responsibility to advise people in line positions but cannot issue direct orders to them

EX. "Director" of Marketing research or "Director" of Sales
Product Line grouping
organization where a unit is responsible for specific product offerings

EX. Dinner Products or Baked goods
Functional Groupings
organizational groupings- ie. manufacturing, marketing, and finance-that represent the different departments or business activities within the firm
Geographical groupings
method of organizational grouping where sales territories are subdivided according to geographical location
Market-Based groupings
methods of organizing a company that utilize specific customer segments, such as the banking, health care, or manufacturing segments.

*matrix organization= market based + product line
category manager
have profit and loss responsibility for the entire product line
product manager
plans, implements and controls the annual annual and long-range plans for the products for which he/she is responsible.
Step 3: Control phase of SMP
compare results with planned goals for the marketing program to take necessary corrective actions
-measure results, marketing audit, corrective action
management by exception
Task of marketing manager:
identifying results that deviate from plans to diagnose their causes and take new actions
- performance can be better or worse than expected
A.Measuring Results
- The goals set up in the objective phase should have been measurable, to compare to actual results
- specific procedures should be available for monitoring measures of performance
- measure financial ( ie sales and revenue) and non financial (customer satisfaction, time-to-market, and sales force motivation)
B.Taking Corrective Action
Deviations result from processes used to specify goals and or changes in the marketplace
- Try to go on the offensive and correct: new goals
Sales Analysis
using a firms sales records to compare actual results with sales goals and identifying areas of strength and weakness
Sales Component Analysis
traces sales revenues to their sources, such as specific products, sales territories, or customers.
IE. Product characteristics:
size, color, package size
EX. Geographical Region: sales territory, city, state, region
Profitability Analysis
a tool for controlling marketing programs using the profit attributable to the firm's products, customer groups, sales territories, channels of distribution, and promotions

- leads to decisions to expand, maintain, reduce, or eliminate specific products, customer groups, channels, or promotions
- 80/20 rule: find common characteristics among the 20% of consumers who add most to profit. Reduce exposure to customers that are not in this group.
ROI Marketing
the application of modern measurement technologies and contemporary organizational design to understand, quantify, and optimize marketing spending.
- used with profitability analysis

EX. use computer data to see how much coupon contributes to profit
The marketing manager would use sales component analysis to:
trace sales revenues to their sources such as specific products, sales territories, or customers.
NOT: 1)allocate resources that balance incremental returns of an action against incremental costs. 2)spotlight the behavior of controllable costs and indicate the contribution to profit of a specific marketing factor.
sales response function relates the _______ , and the form of the function is usually _______
expense of marketing effort to the marketing results obtained; S-shaped.
Bill wants to expand his market share by three share points. Total industry sales are $120 million; M.E. Inc. sales are $30 million with a gross margin of $1.2 million. The total industry marketing expenditures are $4 million; M.E.'s current marketing budget is $1 million. What is the amount of the gain/loss? Should they do it?
$36,000 loss; M.E. Inc. may or may not want to make this investment depending on their strategic goals.

One “share of voice point” costs $4,000,000 / 100 = $40,000 Market Share is $30mil / $120mil = 25% or 25 share points Gross Margin per share point is $1.2 Mil / 25 = $48,000; “1.5 rule” we need to spend enough for 4.5 share points in order to gain 3. Total Cost is $40,000 x 4.5 = $180,000 Total Gain is $48,000 x 3 = $144,000 Therefore the total loss is $36,000.
17 months
earliest Cafe Pepsi can hit the market is in:
Penny's Pizza Corporation requires that all its senior managers take time off from work to attend a semi-annual seminar to improve their management skills, increase knowledge of the pizza industry, concentrate on physical fitness, and increase sensitivity to their employees. This best describes which habit of highly effective people?
Sharpen the Saw
After being overwhelmed throughout college, Jenna read Seven Habits of Highly Effective People by Steven Covey. She discovered that if she learned to say "no" to the many little demands in life that made her inefficient, she could say "yes" to the actions that would lead her to becoming truly effective. What habit of the seven that Covey introduces does this fall under?
Habit 3 - "Put first things first"
Her job is to fulfill customer orders and answer any questions that the customer may have. In order to ensure the best service possible, Lighthouse Point Lanterns makes test phone calls to their customer service representatives and rates their ability to correctly answer customer calls. If Leslie properly handles 80% of the test calls, she will receive a 20% bonus in her next pay check. This is an example of:
Rewarding Performance
Juicetastic grows all their own oranges and ship them out of their centrally-located distributorship in Orlando. Since they sell their orange juice only in Florida, they are able to charge a lower price than their competitors as a result of their extremely low shipping costs. Their source of competitive advantage is _____.
Cost focus
Question From Speech 2: What is it that student can not expect when they go into the workforce?
Entitlement to work/life balance
Question on the three types of news value:

There is an article about tax preparation that was written in early April, what kind of news value does this article have?
Timeliness...the article was written in early April in prep. for tax season.

Not Newsworthiness or interest to readers
The Mystique of Personality: (motivating factors in the cult of personality)
1. Fame- individuals draw public attention due to their accomplishments or position. A position or title like the US President.
2. Notoriety- even people who commit major crimes or involved unfavorably in spectacular trials are treated as celebs.
3. Self- Glorification- like The Donald. Personal need to be in the spotlight
4. Repair of a bad image- work to create a positive image for a person who has been cast in a negative light.
5. Desire for Money- once a critical mass of news coverage occurs, that celebrity’s value rises in the marketplace.
6. **Psychological Factors- Wish fulfillment, Hero worship/yearning, Vicarious sense of belonging ( mainly with sports teams- become “our team”), Desire for Entertainment – celebrities bring variety and excitement to our daily lives
Conducting a personality campaign
1. Interview the Client- points of interest- interesting and newsworthy facts about the person’s life, activities and beliefs ; develop the persons personality into story angles

2. Prepare a Bio Kit- a) a biography
b) pictures-**cheesecake photos like those of Marilyn Monroe that are provocative
c) additional background items ( fact sheet)
Conducting a personality campaign
3. Simultaneous Placement- like Brad Pitt and Angelina Jolie; they are both hot, both doing movies

4. Public Appearances-Arrange for them to appear frequently in public places; a) Retrospectives (Happy Days and Seinfeld) re-release movies, TV shows that are older b) We want people to get back together (Sex and the City)

5. Engineer an Award- cost money, but can increase popularity

6. Engineer a Nickname/Label- “Air Jordan”, “Old Blue Eyes”, “The Boss”, “J.Lo”

7. Record Results- determine effectiveness of the campaign. Clips of appearances.