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60 Cards in this Set

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Different Organizations- Kinds, Levels, and Teams
Kinds: Business firms and nonprofit organizations

Levels: corporate, business unit, functional (should be tied together)
a. business firm

b. nonprofit organization
a. a privately owned organization that serves its customers in order to earn a profit

b. a nongovernmental organization that serves its customers but does not have profit as an organizational goal.
Profit
the reward to a business for the risk it undertakes in offering a product for sale ; the money left over after total expenses are subtracted from total revenues
Corporate level
where top management directs overall strategy for the entire organization. Creates value for the firm.

*SBUs(Strategic business units)- a portfolio of businesses (like P&G)
Business Unit
an organization that markets a set of related products to a clearly defined group of customers
Business Unit Level
the level at which business unit managers set the direction for their products and markets to exploit value-creating opportunities.

strategic direction is more specific here.
Functional Level
where groups of specialists actually create value for an organization (ie. marketing, research and development, and other specialized activities)

*department= specialized functions

This is where most of the organization's work gets done.
Cross-Functional Teams
a small number of people from different departments in an organization who are mutually accountable to a common set of performance goals

There may be conflict b/w departments.
Strategy Issues in Organizations
Business, Mission, and Organizational Culture, and Goals
1)business Strategy

(actually goes more with Mission)
purpose: accomplish something for someone

Guideline: understand the people served by the business and the value they receive.
BROAD definition is necessary!
EX. Disney is in "Entertainment" NOT "Theme Park" Business
2)Mission (book vs. NOTES)
a statement of the organization's scope, often identifying it's customers, markets, products, technology and values.

(NOTES) A clear statement of the markets in which the firm competes and seeks to deliver customer value
3)Organizational Culture
a set of values, ideas, and attitudes, that is learned and shared among the members of an organization

Mergers may = colission of cultures
Stakeholders
people who are effected by what the company does and how it performs.

EX. Employees, Owners, board members, suppliers, distributors, etc.

must communicate mission to them
4) Goals/ Objectives
convert the mission into targeted levels of performance to be achieved, often by a specific time
*need to be measurable!

A targeted level of performance set in advance of the actual work to be performed
Goals:

a. Profit

b. Sales
a. firm seeks to get as high a functional return on investment- profit- as possible

b. maintain or increase sales level
Goals/Objectives:

c. Market Share

*Relative market share (NOTES)
c. the ratio of sales revenues of the firm to the total sales revenue of all firms in the industry.

*Firm's raw market share divided by market share of largest competitor

increasing market share may require sacrificing profit/sales
Other Objectives not in NOTES
d.quality
e.customer satisfaction
f.employee welfare
g.social responsibility
Strategy

*Situation Analysis is included here in BOOK
Where are we now?- ID customers, competencies, and competitors
SWOT analysis

Where do we want to go? (Growth?) use business portfolio analysis and market-product analysis
A)Customers
SEGMENTATION
TARGETING
POSITIONING

Strategic decisions must be customer-focused and provide genuine value and benefits to present and prospective customers
B)Competencies
an organization's special capabilities, including skills, technologies, and resources that distinguish it from other organizations.

"What do we do best?"
*NOTES: Core Competiencies
Special Capabilities resulting from personnel, resources, or functional units, that determine the means of achieving SUSTAINABLE COMPETITIVE ADVANTAGE and, ultimately, marketplace success.

EX. FedEX= Logistics
EX. Wal- Mart= Low cost logistics

*more ABSOLUTE than SCA
Competitive Advantage (book)

Sustainable Competitive Advantage (NOTES)
a unique strength relative to competitors, often based on quality, time, cost or innovation. SUSTAINABLE!!
*Competencies translate into SCA

EX. FedEX- Logistics=> Reliable overnight delivery
EX. Walmart- Low cost logistics=> Everyday low prices
Quality
those features and characteristics of a product that influence its ability to satisfy customer needs.

Strategy= Total Quality Management
Benchmarking
discovering how others do something better than your own firm so you can imitate or leapfrog competition

a method of improving quality or reducing new product cycles

*doesn't have to be same industry
C) Competitors
continuous assessment is needed of both who competitors are and how they are changing

-Market Share Analysis

*intertype competition/ competitve parity budgeting
Growth Strategies/Setting Corporate Goals:

Business Portfolio Analysis

(GROWTH-SHARE Matrix stuff in NOTES)
uses quantified performance measures and growth targets to analyze a firm's business units as though they were a collection of separate investments

*created by Boston Consulting Group
Growth-Share Matrix:

MARKET GROWTH RATE
vertical axis- market growth rate; the annual rate of growth of the specific market or industry in which given strategic business is competing

divided by 10%
ABOVE (>10%)= high growth market

BELOW (<10%)= low growth market
Growth-Share Matrix:

RELATIVE MARKET SHARE
horizontal axis- relative market share; the sales of the SBU divided by the largest firm in the industry

Divided by 1X:
ABOVE 1X- Largest share of the market
BELOW 1x- Low share of the market
Question Marks/Problem Children
LOW SHARE(<1x)/ HIGH GROWTH MARKET(>10%)
This is where products usually start out. It is a (?) because we don't know if it will be successful.
*Require large cash injections to maintain and increase market share
Stars
HIGH SHARE (>1x)/ HIGH-GROWTH MARKET(>10%)
question marks hopefully become Stars.
Good position for firms
Cash Cows
HIGH R.MARKET SHARE(>1x)/ LOW GROWTH MARKET (<10%)
SBUs that typically generate large amounts of cash/ profits. Stars become Cash Cows when their market growth slows down.

Profits generates from Cash Cows are used to invest in new SBUs(current Question marks)
"Success Sequence" in NOTES
Question mark-> Star-> Cash cow

money from cash cow is also reinvested back into question marks
Dogs
LOW R.MARKET SHARE(<1x)/ LOW GROWTH MARKET (<10%)
Although they may generate enough cash to sustain themselves, they do not hold the promise of ever becoming real winners of the firm
"Failure Sequence"
-Question marks never achieve market dominance
-Market slows down and moves to a dog
Market-Product Analysis

Was part of positioning discussion on previous test
For any product there is both a current market (existing customers) and a new market (potential customers), and there is a current product and a new product.

Part of Objective/Strategy Formulation: Where do we want to go?
market penetration

market development
a.increasing sales of present products in existing markets
Ex. Selling MORE B&J to Americans

b.selling existing products in new markets
EX. Selling Ben & Jerry's in Mexico for first time
product development

Diversification
c.a marketing strategy of selling new products to existing markets
EX. Selling new Ben&Jerry's shirts to existing American Market

d.developing new products and selling them in new markets
EX. Selling B&J clothes to new market in Mexico
***Strategic Marketing Process

Marketing Strategy Formulation in NOTES
An organization allocates it's marketing mix resources to reach it's target markets: Phases of planning, implementation, control
1) How do we allocate our resources?
2) How do we convert plans into actions?
3) What are our results?
Marketing Plan
a road map for marketing activities of an organization for a specified future period of time.

*formal, written document
Planning Phase (book steps)
1) Situation Analysis
2) market-product focus and goal setting
3) marketing program
Situation (SWOT) Analysis
Taking stock of where the form or product has been recently, where it is now, and where it is headed in terms of the organization's plans and the external factors and trends affecting it.
-ID trends in industry
-Analyze competitors
-Analyze firm itself
-Research present and prospective customers
SWOT analysis
acronym describing an organization's appraisal of its internal Strengths, Weaknesses, Opportunities, and Threats.
Can be done at any level in organization.

*Goal: translate results of the analysis into into specific actions that can help the firm grow and succeed
SWOT Factors and goals:

A)Strengths

B)Weaknesses
A) Internal to the firm/ Favorable= something we do well
Goal: Build on a strength

B) Internal to the firm/ Unfavorable
Goal: Correct a weakness
SWOT Factors and goals:

C) Opportunities

D) Threats
C) EXternal to the firm/ Favorable
Goal: Exploit/take advantage of opps.

D) EXternal to the firm/ Unfavorable
Goal: Avoid a disaster-laden threat
Market Segmentation
aggregating prospective buyers into groups, or segments that 1) have common needs and 2) will respond similarly to a marketing action
Product/Market Segments cont.
- Set marketing and product goals

- Select target markets

- Find *points of difference

- Position the product in consumer's mind
Points of difference
those characteristics of the product that make it superior to competitive substitutes

kind of like sust. competitive advantage, but for a product

EX. Bud light- all beers are low carb., choose on taste
Marketing Program
"HOW" of the Strategic Marketing Program

Product, Price, Promotion, Place
a)Product

b)Price
a)Product strategy:
Features, Brand name, Packaging, Service, Warranty

b)Price: List price, discounts, allowances, credit, payment
*no effect on long term market share growth
c)promotion

d) Place
c) Advertising, Personal Selling, Sales Promo, PR, Direct Marketing

d) Outlets, Channels, Coverage, Transport, Stock
*no effect on long term market share growth
Implementation

Steps in Implementation
carrying out the plan that emerges from the planning phase
- Obtain resources

- Design marketing organization

- Develop schedules

- Execute marketing program
Marketing Strategy
Means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it

Both the end sought (target market) and the means (program)
Marketing Tactics
detailed day-to-day operational decisions essential to the overall success of marketing strategies
ie. writing adds and setting prices
Control Phase of SMP
keeping the program moving in the direction set for it

1) compare results with goals
2) act on deviations
planning gap
the difference between the projection of the path to reach to reach a new goal and the projection of the path of the results
*graph
Actions for deviations
Exploiting a positive deviation

Correcting a negative deviation
Grow (Notes)
strategy to expand the market share we capture.

In competitive parity budgeting we need to remember to use the 1.5 rule to determine the new share of voice we want in the market
Maintain
don't want to expand our market share, just maintain it

Maintenance requires that our share of voice equals our market share
Harvest
strategy where we stop investing in a product and let it erode over time.

EX. Coors stopped investing in low-carb beer
Divest
strategy where we pull the product off of the market completely.

Getting rid of the brand!
Dont distribute, just kill it or sell it