Principles of Marketing Lecture 2 Flashcards

Vocabulary flashcards based on Lecture 2 focusing on strategic planning, portfolio management, marketing strategy elements, and SWOT analysis.

Strategic planning

The process of developing and maintaining a strategic fit between the organization’s goals and capabilities, and its changing marketing opportunities.

Mission statement

The organization’s purpose; what it wants to accomplish in the larger environment.

Business portfolio

The collection of businesses and products that make up the company.

Portfolio analysis

A major activity in strategic planning whereby management evaluates the products and businesses that make up the company.

Strategic business units (SBUs)

Units that can be a company division, a product line within a division, or a single product or brand.

Stars

High-growth, high-share businesses or products requiring heavy investment to finance rapid growth; they will eventually turn into cash cows.

Cash cows

Low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share.

Question marks

Low-share business units in high-growth markets requiring a lot of cash to hold their share.

Dogs

Low-growth, low-share businesses and products.

Market penetration

A growth strategy focused on increasing sales of existing products to existing market segments.

Product development

A growth strategy offering modified or new products to existing market segments.

Market development

A growth strategy that identifies and develops new market segments for existing company products.

Diversification

A growth strategy through starting up or acquiring businesses outside the company’s current products and markets.

Value chain

A series of departments that carry out value creating activities to design, produce, market, deliver, and support a firm’s products.

Value delivery network

Made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve performance of the entire system.

Marketing strategy

The marketing logic by which the company hopes to create customer value and achieve profitable customer relationships.

Market segmentation

The division of a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate products or marketing mixes.

Market segment

A group of consumers who respond in a similar way to a given set of marketing efforts.

Market targeting

The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.

Market positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Differentiation

The process that begins the positioning process to create superior customer value.

Marketing mix

The set of controllable, tactical marketing tools—product, price, place, and promotion (the four Ps)—that the firm blends to produce the response it wants in the target market.

SWOT Analysis

An overall evaluation of the company’s Strengths (S), Weaknesses (W), Opportunities (O), and Threats (T).

Strengths

Internal capabilities that may help a company reach its objectives.

Weaknesses

Internal limitations that may interfere with a company's ability to achieve its objectives.

Opportunities

External factors that the company may be able to exploit to its advantage.

Threats

Current and emerging external factors that may challenge the company's performance.

Marketing Implementation

Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives; it addresses who, where, when, and how.

Return on Marketing Investment (Marketing ROI)

$$\frac{\text{Net return from a marketing investment}}{\text{Costs of the marketing investment}}$$