Applied Strategic Marketing > Exam Prep > Flashcards

Exam Prep Flashcards

(58 cards)

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1
Q

Strategy Control & Evaluation are key components of strategic marketing process

A

Ongoing process of measuring & processing appropriate formulated strategy & effectiveness of its implementation

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2
Q

Strategic Control tools

A

Strategic Control - continuous monitoring, review & update of strategy
Operational Control - track performance against standards & deviation
Marketing Audit - periodic, comprehensive & systematic checklists

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3
Q

Operational control requires

A
  1. Set performance standards
  2. Measure actual performance
  3. Evaluate deviations
  4. Take necessary corrective action
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4
Q

Low-cost strategy as competitive strategy ( cost - leadership strategy)

A

Reduce manufacturing costs to lower customer price; based on interplay between cost, profit margins & market share with 2 alternatives:

  • lower margin/ higher market share
  • lower costs/ higher margins
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5
Q

Cost drivers determine cost of given activity through

A
  • Economies of scale
  • No-frills products/services
  • Low-cost distribution
  • Location cost advantage
  • Institutional factors
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6
Q

Pitfalls of low-cost strategy

A
  • concentrating only on manufacturing costs
  • ignoring purchasing/procurement functions
  • overlooking smaller activities
  • failure to exploit linkages
  • contradictory cost reduction exercises
  • entry of low-cost competitors
  • reduced flexibility
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7
Q

Strategies during decline phase of product life cycle

A
  • Divest & Liquidate - quit the industry
  • Hold or maintenance - maintain investment at minimum
  • Harvesting - maximize cash flow reducing investment & costs
  • Niche - identify markets with sustainability
  • Be a profitable survivor - invest in purchase other competitors
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8
Q

Attractiveness of declining markets

A
  • Conditions of demand - depend on rate of decline
  • Exit barriers - the higher the exit barrier the less attractive the industry
  • Intensity of future competitive rivalry - if rivalry intensity is high it may not justify remaining in market
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9
Q

Relationship Marketing

A

Interactions within a networks of relationship as establishment, maintenance & enhancement of relationships with customers & other players

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10
Q

Benefits of relationship building for organization

A
  • Getting to know customer better
  • Creating value
  • Customer retention
  • Improve customer loyalty
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11
Q

Characteristics of relationships

A
  • longevity ( commitment)
  • trust
  • collaboration
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12
Q

Four actions to build relationships with customers

A
  • Operating efficiency
  • Offering excellency
  • Customer development
  • Relationship development
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13
Q

Framework of Marketing Plan

A 
Executive summary
Situation analysis
Swot analysis
Issues that plan should address
Marketing goals & objectives
Market strategy
Marketing strategy 
Sales forecast, budgets e financial indicators 
Action plans for each strategy
Appendices...
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14
Q

Pre-emptive strategy

A

Actions of a pioneer organization which establishes sustainable competitive advantage through being first in market

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15
Q

Requirements of pre-emotive move

A

Innovation
Commitment of substantial resources
Assumption that competitor struggle to copy or compete

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16
Q

Sources of pre-emptive opportunities

A 
Supply systems
Product opportunities
Operations systems
Customer opportunities
Distribution & service systems
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17
Q

Advantages of pre-emptive strategies

A

Image & reputation
Early entry builds experience
Customer loyalty
Absolute cost advantage

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18
Q

Disadvantages of pre-emptive move

A

Competition
Costs
Timing on the market
Technological change

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19
Q

Follower strategy

A

Organization beaten by pre-emptive mover or chooses to let another org. take the lead

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20
Q

Advantages of follower strategy

A

Exploit competitors positioning mistakes
Exploit competitors product mistakes
Technological flexibility
Exploit competitor resources limitations

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21
Q

Focus strategy

A

Sustainable competitive advantage by occupying niche with limited product range

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22
Q

2 methods of Focus Strategy

A

Low-cost focus - organization must find buyer segment whose needs are less costly to meet (low-cost airlines)
Differentiation focus - specific buyer segment wants unique product attributes (computer applications)

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23
Q

Ways to achieve focus strategy

A

Focus on the product life
Target specific market segment
Choose limited geographical area
Target low-share competitors

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24
Q

Advantages of Focus strategy

Study These Flashcards
A

Avoid distraction or dilution of strategy
Make an impact with limited resources
Provide positioning device - product line
Bypass competitor assets & skills

25
Sustainability of Focus strategy
Porter identified 3 factors: - Sustainability against targeted competitors - Sustainability against imitators - Sustainability against segment substitution
26
Conditions to make Focus strategy attractive
- Profitability - Growth potential - Size - Resources - Protection
27
Aeker's model of brand equity
- Brand awareness - Brand loyalty - Perceived quality - Brand associations - Other proprietary assets
28
Brand awareness is measured by
Recognition Recall Top-of-mind Domination
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Brand loyalty
Reduces marketing costs as is less costly to retain customer than to attract new customers
30
Perceived quality
Relationship between customer perceived benefit & its actual cost
31
Brand association
Positive attitudes & feelings towards a brand
32
Keller's brand equity pyramid
Brand identity - who are you? ( SALIENCE) Brand meaning - what are you? ( MEANING) performance & imagery Brand response - what about you? What do I feel about you? ( RESPONSE) Judgements & Feelings Brand relationships - what about you and me? (RELATIONSHIP) Resonance
33
Porter's 5 force model of competitive forces
- Threat of new entrants / competitors - Threat of substitutes - Bargaining power of buyers - Bargaining power of suppliers - Rivalry between competitors
34
Threat of new entrants
``` Economies of scale Cost advantage Cost of switching Limited access to distribution channels Government policy Product differentiation Strong brand identity Likelihood of retaliation from competitors ```
35
Threat of substitutes
``` Willingness of buyer to substitute Price & performance Advantages over traditional products Cost of switching Image/ identity of substitutes ```
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Bargaining power of buyers
Few dominant buyers & many sellers in industry Products are standardized Buyers threaten to integrate backward into industry Industry is not key suppliers to buyers
37
Rivalry between direct competitors
Industry costs Switching costs Product differences
38
To secure competitive advantage over rivalry, companies must:
Select price, added features, choice of distribution channel, exploit supplier relationships
39
Market Analysis
``` Actual & potential market size Market growth Market profitability Cost structure Distribution system Market trends & developments Key success factors ```
40
Market growth - market share mix is based on
Share of the market | Growth rate of the market
41
BCG matrix
Stars - high market share in high growth market Cash cows - high market share in low growth Question marks - low market share in high growth market Dogs - low market share in low growth market
42
BCG strategies
Build - company invest to increase market share Hold - company invest enough to keep position Harvest - company reduce investment to maximize cash-flow & profit Divest - company phase out or sell business
43
Porter's strategy model
Competitive scope - broad or narrow | Competitive advantage - cost or differentiation
44
Cost leadership
Operate at lower cost than competitors to be competitive; when value for money is important; increase market share & apply low-cost strategy
45
Differentiation
Offering product or service different from competitors; unique product offer; high prices high investment return
46
Focus
Most intense; focus segment to achieve cost advantage or differentiation; high customer loyalty
47
Strategies in Growth phase of PLC
- Growth in existing product markets - Growth through product development - Growth through market development - Growth through diversification
48
Growth in existing markets
- growth through increasing market share - growth through increasing quantity of usage - growth through increasing frequency of usage
49
Growth through product development
- development of new product features - development of new generation products - development of new products for existing markets
50
Growth through market development
Looking for new markets to sell existing products - expand geographically ( locally, regionally, nationally or internationally )
51
Growth through diversification
- Related diversification - org. acquires another organization with similar products & services which contributes to synergy & economies of scale - Unrelated diversification - expansion into unrelated fields, risky expansion
52
Define marketing
Process of creating, distributing, promoting, pricing goods & services & ideas to satisfy exchange relationships with customers
53
Components of marketing strategy
``` Market segment strategy Position strategy Product strategy Price strategy Distribution strategy Promotion strategy ```
54
Forward segmentation
Classifies customers on the basis of personal characteristics - demographic, geographic & psychographic
55
Backward segmentation
Identifies groups of customers who demonstrate different behavior towards products & brands trough: - cluster analysis - statistical tools to cluster customers into groups - perceptual maps - construct maps of costumer perceptions
56
Five steps of segmentation research process
- Gather raw data from customers - Interpret raw data in terms of customer needs - Organize needs hierarchy of primary & secondary needs - Establish relative importance of needs - Reflect on results & process
57
Identifying customer segments
Homogeneity/Heterogeneity - customers response to offer should be homogeneous but segments response should be heterogeneous Size - segments large enough to justify marketing effort Measurable/identifiable - customers should be identifiable & described in unique needs & characteristics Accessible - segment must be accessible via marketing distribution & communication
58
Attractiveness of potential segments
- Segment size & growth possibilities - Attractiveness & potential profitability - Resources & skills of organization - Compatibility with organization's objectives - Cost of reaching target market
Applied Strategic Marketing
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