MKTG 14e – Chapter 2: Strategic Planning for Competitive Advantage

Flashcards cover key terms, models, definitions, and processes from Chapter 2, enabling students to review strategic planning, SBUs, strategic alternatives, marketing plans, and related elements.

What is strategic planning in marketing?

The managerial process of creating and maintaining a fit between an organization’s objectives and resources and its evolving market opportunities.

What is the primary goal of strategic planning?

Long-run profitability and growth.

Which two questions does strategic marketing management seek to answer?

1) What is the organization’s main activity at a particular time? 2) How will it reach its goals?

Define a Strategic Business Unit (SBU).

A subgroup of a single business or related businesses that has a distinct mission, target market, competitors, resources, and plans independent of other SBUs.

List three widely used tools for managing the strategic direction of a firm’s portfolio.

1) Ansoff’s Strategic Opportunity Matrix 2) Boston Consulting Group (BCG) Portfolio Matrix 3) General Electric (GE) Model.

What are the four growth options in Ansoff’s Opportunity Matrix?

Market penetration, market development, product development, and diversification.

Describe the market penetration strategy.

Increasing market share among existing customers with existing products.

Describe the market development strategy.

Attracting new customers to existing products.

Describe the product development strategy.

Creating new products for present markets.

Describe the diversification strategy.

Introducing new products into new markets to increase sales.

What does the Innovation Matrix illustrate?

How a firm can move from core innovation through adjacent and transformational innovation based on its capabilities.

Name the four SBU categories in the BCG Portfolio Matrix.

Star, Cash Cow, Problem Child (Question Mark), and Dog.

What is a ‘Star’ in the BCG Matrix?

An SBU that is a fast-growing market leader.

What is a ‘Cash Cow’ in the BCG Matrix?

An SBU that generates more cash than it needs to maintain its market share.

What is a ‘Problem Child’ (Question Mark) in the BCG Matrix?

An SBU with rapid growth but poor profit margins.

What is a ‘Dog’ in the BCG Matrix?

An SBU with low growth potential and a small market share.

After classifying SBUs, what four basic strategies can managers pursue?

Build, Hold, Harvest, or Divest.

Which two dimensions form the basis of the General Electric Model?

Market attractiveness and company strength.

Define planning in a marketing context.

The process of anticipating future events and determining strategies to achieve organizational objectives in the future.

Define marketing planning.

Designing activities related to marketing objectives and the changing marketing environment.

What is a marketing plan?

A written document that acts as a guidebook of marketing activities for the marketing manager.

Give two reasons for writing a marketing plan.

1) Aligns employees and managers toward common goals. 2) Serves as a reference for evaluating future activities.

What is a mission statement?

A firm’s statement of its business based on customer benefits sought and environmental analysis.

Explain marketing myopia.

Defining a business in terms of goods and services rather than the benefits customers seek.

What is a SWOT analysis?

Identifying internal strengths and weaknesses and examining external opportunities and threats.

Define environmental scanning.

Collecting and interpreting information about external forces that may affect the organization’s future.

What is competitive advantage?

Unique features of a company and its products perceived by the target market as superior to the competition.

List the three basic types of competitive advantage.

Cost, product/service differentiation, and niche.

What is a cost competitive advantage?

Being the low-cost competitor in an industry while maintaining satisfactory profit margins.

What do experience curves show?

Predictable cost declines as a firm gains experience with a product.

Define product/service differentiation competitive advantage.

Offering something unique and valuable beyond a lower price.

Define niche competitive advantage.

Effectively serving a small, specialized segment of the market.

What is a sustainable competitive advantage?

An advantage that cannot be copied by the competition.

What is a marketing objective?

A statement of what is to be accomplished through marketing activities.

List four characteristics of good marketing objectives.

Realistic, measurable, time-specific, and compared to a benchmark.

Define marketing strategy.

Selecting and describing target markets and developing a marketing mix to satisfy them.

What is a target market?

A group of people or organizations for which a marketing mix is designed to meet their needs.

What is Market Opportunity Analysis (MOA)?

Estimating the size and sales potential of market segments and assessing key competitors.

Name the four elements of the marketing mix.

Product, Place (distribution), Promotion, and Price.

In the marketing mix, what does ‘product’ encompass beyond the physical item?

Package, warranty, after-sale service, brand name, company image, and value.

What is the role of distribution (‘place’) strategy?

Making products available when and where customers want them.

What is the role of promotion in the marketing mix?

Informing, educating, persuading, and reminding target markets about product benefits.

Why is price considered the most flexible of the four Ps?

Because prices can be raised or lowered more quickly than other marketing mix variables can be changed.

Define implementation in marketing planning.

Turning a marketing plan into action assignments and ensuring their execution.

What three requirements are key to effective implementation?

Delegating authority, setting time frames, and allocating resources.

Define evaluation in the marketing control process.

Gauging the extent to which marketing objectives have been achieved during a specified period.

List four common reasons for failing to meet a marketing objective.

Unrealistic objectives, inappropriate strategies, poor implementation, or environmental changes.

What is control in marketing planning?

Mechanisms for evaluating results against objectives and correcting actions within budget guidelines.

Define a marketing audit.

A thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization.

Name the four characteristics of an effective marketing audit.

Comprehensive, independent, systematic, and periodic.

After a marketing audit, what three postaudit tasks should be completed?

Profile weaknesses and strengths, communicate the audit’s role, and assign accountability for implementing recommendations.