forest products marketing exam II

scientific method

aim to increase prediction and control over phenomena; description, explanation, prediction, control

goal of scientific method in marketing

to gain competitive advantage

marketing plan

management instrument used to explain, adjust, guide, and coordinate all marketing activities and people

necessity of a marketing plan

as conceptual simulation, as an implementation guide; can be compared to actual outcomes

model

abstract picture of real world phenomenon, structural framework for planning; see four Ps

four ps

product, place, price, promotion

the marketing environment

company's context or external environment; best seen through a PEST analysis

PEST analysis

Political/legal, Economic, Sociocultural, Technological

macroenvironment

analyzed by econometric instruments; demand, supply, PEST analysis

microenvironment

behaviors of 'players'; competitors, customers, distribution systems

integrated model of marketing planning (IMMP)

hierarchical structure; begins with SBU objectives at the top which help determine marketing strategies, structures, functions, and action plans

marketing strategy

decisions a company makes regarding products, customers, geographical areas, core competencies

goal of marketing strategy

to pursue sustainable competitive advantage by combining all four strategic decisions

marketing structures

systems within a company that allow marketing to be implemented in its various functions

examples of marketing structures

management systems, company organization, information and planning systems, contact channels, and physical distribution channels

marketing functions

on-the-ground techniques for practical marketing

examples of marketing functions

communication (promotion, advertising, personal selling, direct marketing, etc), customer support (pre- and post-sale), pricing, product development, physical distribution

action plan

quantitative objectives and means for a particular planning periods (year, quarter, etc)

action plan breakdown

targets (what the company aims to accomplish), methods (how to accomplish the aim), money (resources to fund the activities), schedule (timeframe within which to work)

markets of the future

local markets will grow global, customer needs will be more diverse, larger and more global companies, information environment will be transparent, global, and fast changing, stakeholder will increasingly demand social and environmental responsibility

IMMP caveats

market environments change, companies must adapt to change, market environment informs marketing planning

demand

the quantity of a good/service customers are willing to buy at a certain price in a certain market at a certain time

demand curve

usually downward sloping; the higher the price, the lower the demand

supply

the quantity of goods and services producers are willing to sell at a certain price in a certain market at a certain time

supply curve

usually upward sloping; the higher the price, the higher quantity the producer wants to sell

equilibrium

where the quantity demanded is equal to the quantity supply; where both curves met

elastic demand

when the price drops, the total revenue for the seller increases, raising or lowering the price has a big impact on how much the customer buys; products with many substitutes, more horizontal line

inelastic demand

when the price drops, the total revenue for the seller decreases, raising or lowering the price has a small impact on how much the customer buys; products with few substitutes, more vertical line

competition

rivalry among sellers where each seller tries to increase sales, profits, and market share by varying the marketing mix; pure competition, oligopoly, monopolistic competition, monopoly

pure competition

products nearly homogenous, many buyers and sellers, small market share, easy market entry, elastic demand, producers are price takers; ex hardwood lumber

oligopoly

products nearly homogenous, few sellers, large market share, hard market entry, kinked demand (elastic and inelastic), stable prices (price leader); ex softwood plywood

monopolistic competition

products heterogenous but some substitutes, few to many sellers, large or small market share, easy market entry, price setters; ex kitchen cabinets

monopoly

unique products, one seller, restricted market entry, price setters; ex trex (wood polymer decking)

primary information

information collected specifically for the problem at hand; surveys and interviews

secondary information

information developed from data that have already been collected by others; statistics, directories, research reports, marketing and trade journals, etc

SWOT analysis

method of organizing and analyzing information to assess market positions

SWOT analysis breakdown

interior factors: strengths and weaknesses

exterior factors: opportunities and threats

strategy

adjuster between company and environment; implemented by structures and functions

strategic management

consists of strategic thinking (higher order thinking) and strategic planning (operationalization of those ideas)

strategic positioning

matrix of current/new products relative to current/new markets

market penetration

current product, current market

market development

current product, new market

product development

new product, current market

diversification

new product, new market

levels of strategy

corporate, divisional (only in large companies), SBU, marketing (functional)

corporate strategy

definition of corporate mission, definition of business units and areas, portfolio planning

define corporate mission

mission, vision, and values (ethical, responsive, and profit)

mission

what business are we in

wision

where are we today and were are we aiming for tomorrow

values

what we believe is good or important

ethical values

benefits to environment, society, and employees

responsive values

benefits to customers

profit values

benefits to the owners or stockholders

strategic business unit (SBU)

basic company unit for which business and marketing strategies are created, positions itself in one or more strategic business area (product, customer, market area, core competencies)

portfolio planning

the process of evaluating a company's business units, give managers the information needed to appropriately allocate resources among SBUs

BCG matrix

a means of evaluating strategic business units on the basis of business growth rates and share of the market

cash cows

low growth, high market share

dogs

low growth, low market share

question mark

high growth, low market share

stars

high growth, high market share

GE portfolio matrix

a means of evaluating strategic business units on the basis of market attractiveness and strategic position; location of SBU suggests where company should invest or divest

major acquisition or minor joint venture

high attractiveness, weak position

organic growth or minor acquisition to round off partner

high attractiveness, strong position

divest

low attractiveness, weak position

maximize cash generation

low attractiveness, strong position

business strategy

production and market strategy

customer oriented companies

market strategic planning done first, dominating business strategic planning

porters three generic competitive strategies

cost leadership, differentiation, and focus

cost leadership

reduce price and practice tight cost control; efficient facilities, production focused, little r&d expenditures

differentiation

create product that is perceived as unique; cost reduction NOT primary goal, market oriented

focus

concentrates on a niche buyer group or geographical market as opposed to industry wide; specific to target segment, market oriented

total product

the object plus the array of services connected to it

levels of product

core product, generic product, expected product, augmented product, potential product

consideration of quality

product quality considered a given, high quality considered a minimum for market participation

product life cycle

introduction, growth, maturity, decline

product differentiation

making a product different in a way that the customer values can create competitive advantage

pure commodities

fungible, no difference among producers; competition is primarily on price

pure specialties

unique to the producer, compete primarily on total product

product branding

identifies one sellers goods/services from those of another, distinguish products, show origin, guarantee quality; is used for firm as a whole, called trade name

commodity product strategy

products that meet basic overall industry standards and are not adapted or specialize in any way

special product strategy

products that have been adapted to fit the specific needs of an individua; sector

custom-made product strategy

products that have been specifically developed to meet the individual needs of a customer

as many customer groups as possible

unselective strategy; typical for commodity products, no known end users, sold through intermediaries

few, well specified segments

more selective strategy; identifies few markets to serve, targets specific segments but not end users

custom made product strategy

most selective strategy; custom made products, targets specific end users

customer strategies

as many groups as possible, few, well specifies, custom made

strategic accounts

(big) customers with highest value to the company

production orientation

focuses on the SBU at the starting point

customer orientation

focuses on the strategic accounts

identifying most important customers

revenue or profit, future business potential, learning value, reference value, strategic value

market segmentation

the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

customer profitability analysis

matrix of customer profitability and strategy alignment

retain

target, profitable

transform

target, unprofitable

monitor

non-target, profitable

replace

non-target, unprofitable

geographical strategy

as many countries/regions as possible (unselective) vs few, well specified counties or regions (selective)

core competencies

capabilities that serve as a source of competitive advantage for a firm over its rivals

ingredients of sustainable competitive advantage

appropriately allocated resources, fit between products and customer relationships through customer satisfaction

examples of marketing structures

management systems (relationship management approaches, information technology, supply chain management systems), organizational structure, planning systems, marketing channels