Principles of Marketing - Chapter 2

Mission statement

A statement of 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

The process by which management evaluates the products and businesses that make up the company.

Growth-share matrix

A portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market share.

Product/market expansion grid

A portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification.

Problems with Matrix Approaches

-Difficulty in defining SBUs and measuring market share and growth

-Time consuming

-Expensive

-Focus on current businesses, not future planning

Market penetration

Company growth by increasing sales of current products to current market segments without changing the product.

Market development

Company growth by identifying and developing new market segments for current company products.

Product development

Company growth by offering modified or new products to current market segments.

Diversification

Company growth through starting up or acquiring businesses outside the company's current products and markets.

Value chain

The series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products.

Value delivery network

The network made up of the company, its suppliers, its distributors, and, ultimately, its customers who partner with each other to improve the 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

Dividing a market into distinct groups of buyers who have different needs,

characteristics, or behaviors, and who might require separate products or marketing programs.

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.

Positioning

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

Differentiation

Actually differentiating the market offering to create superior customer value.

Marketing mix

The set of tactical marketing tools— product, price, place, and promotion— 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) (internal), weaknesses (W) (internal), opportunities (O) (external), and threats (T) (external).

Marketing implementation

Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives.

Return on marketing investment (Or marketing ROI)

The net return from a marketing investment divided by the costs of the marketing investment.