Chapter 1 Marketing

Front 1

Boston Consulting Group
growth-market share matrix

stars, cash cows, ??, dogs

Back 1

A portfolio analysis model developed by the Boston Consulting Group that assesses the potential of a product (or strategic business unit - SBU) to generate cash

Stars - are SBU's with products that have a dominant market share in high-growth markets

Cash cows - have a dominant market share in a low-growth potential market

??? - question marks are SBU's with low market share in fast growth markets - they are questionable as management must decide whether to apply resources to the product or SBU (product development? better promotion? better distribution?) or to sell it off

Dogs - SBU's with a small market share of a slow-growth market. They are businesses that offer specialized products in limited markets that are not likely to grow quickly. CEO's often sell off dogs to other companies that may bundle them into a product line and breath new life into the dog. Or perhaps the dog will live on without product development or promotions. The problem is that it can be expensive to keep dogs on the payroll-they may get retired.

Front 2

Business planning

Back 2

the general ongoing process of making decisions that guide the firm both in the short term (operational planning) and long term (tactical and strategic planning).

Front 3

Business plan

Back 3

A formal document that includes the decisions that guide the entire organization. Can include all levels of management focus, strategic, tactical, and operational. Normally each functional department cerates their own plan which is approved by top mgmt`

Front 4

Business portfolio

Back 4

The group of different products or brands owned by an organization and characterized by different income generating and growth capabilities. The portfolio concept was borrowed from finance.

Front 5

External environment

Back 5

The uncontrollable elements outside an organization that may affect its performance either positively or negatively. For example macroeconomic forces, demographic changes, and population migration changes.

Front 6

Functional planning`

Back 6

A decision process that concentrates on developing strategic, tactical, and detailed operational plans for one functional department (ex: HR, IT, Legal, etc.).

Front 7

Growth strategies

market penetration strategies

market development strategies

product development strategies

diversification strategies

Back 7

Here are four strategies to increase sales growth.

Market penetration - seek to increase sales of existing products to existing target or geographic market that is already being served - just sell more product! - by using different packaging or price incentives, increasing the distribution outlets.

Market development - introduce existing products to new geographic markets or new target markets

Product development - growth strategies that focus on selling new products in currently served markets.

Diversification strategies - selling new products into new markets to achieve growth. Often a firm tailors their product line when they take it to new geographic markets.

Front 8

Internal environment

Back 8

The controllable elements inside an organization, including its people, its facilities, and how it does things that influence the operations of the organization.

Front 9

Marketing plan (one example
of a functional plan)

Back 9

A written document that describes the marketing environment, outlines the marketing strategy (5-year plan) and objectives, current tactical (1-year plan), and operational (daily/weekly) plans. It also identifies who will be responsible for carrying out each part of the plan

Front 10

Mission statement

Back 10

A formal paragraph in an organization's strategic plan that describes the overall purpose of the organization and what it intends to achieve in terms of its customers, products, and resources.

Front 11

Operational planning

Back 11

A business process that focuses on developing detailed plans for day-to-day activities that carry out an organization's functional plans (the plans for each functional department such as manufacturing, engineering, IT, etc.)

Front 12

Operational plans

Back 12

Written directions that focus on the day-to-day execution of the, for example, marketing plan. These include detailed directions for the specific activities to be carried out, who will be responsible for them, and time lines for accomplishing the tasks.

Front 13

Portfolio analysis

Back 13

A management tool for evaluating a firm's business mix (like financiers evaluating a portfolio of assets like stocks and bonds) and assessing the potential of an organization's strategic business units. BCG model is just one way to implement this.

Front 14

Return on Marketing Investment (ROMI)

Back 14

metric which measures how an investment in marketing has an impact on the firm's success, financial and otherwise

Front 15

Situational analysis

Back 15

An assessment of a firm's internal and external environments.

Front 16

Strategic business units

Back 16

Individual sections within the firm that operate like separate businesses, with each having its own mission, business objectives, resources, managers, and competitors. Ex: Disney theme parks, Disney cruises, Disney movies, etc.

Front 17

Strategic planning

Back 17

A managerial decision process that matches an organization's resources and capabilities to its marketing opportunities for long-term growth and survival. Strategic plans are extensive and are also codified down to the mission statement.

Front 18

SWOT analysis

Back 18

An analysis of an organization's strengths and weaknesses, and the opportunities and threats in its external environment. Smart businesspeople regularly perform this analysis on their own portfolios and career