Marketing Strategy Lecture Flashcards

Vocabulary flashcards covering core concepts in Marketing Strategy, including Corporate vs. SBU strategy, the BCG matrix, market growth matrices, marketing orientations, customer perceived value, and customer lifetime value.

Corporate Strategy

The overarching strategic level that determines what businesses an organization should operate in.

Strategic Business Unit (SBU) Strategy

The strategic level concerned with how a firm competes effectively within a specific market or business segment.

Functional Strategy

The strategic level that orchestrates functional areas—such as marketing, finance, human resources, supply chain, and IT—to support SBU objectives.

Marketing Strategy

A strategy addressing a specific target market through a cohesive marketing mix of product, price, promotion, and place.

Rumelt's Strategy and Performance Principle

The principle stating that companies diversifying primarily into areas drawing on common core skills or resources achieve the highest profitability, proving that specialists perform better than generalists.

BCG Portfolio Model

A strategic matrix developed by the Boston Consulting Group that evaluates SBUs and products based on Market Growth Rate and Market Share.

Cash Cow

In the BCG Portfolio Model, an SBU or product with high market share in a low-growth market that generates more cash than it requires.

Star

In the BCG Portfolio Model, a market-leading SBU or product operating within a high-growth market.

Question Mark

In the BCG Portfolio Model, a high-growth, low-market-share SBU or new venture that requires funding to become a Star or faces divestment.

Dog

In the BCG Portfolio Model, an SBU or product with low market share in a slow-growth or non-growing market, often targeted for divestment.

Revenue Market Share

The percentage of industry revenue earned by a firm, calculated as $\frac{\text{Total Revenue for the Firm}}{\text{Total Revenue for the Industry}} = \text{Firm's Market Share}$.

Unit Market Share

The proportion of total industry units sold by a company, calculated as $\frac{\text{Total Units for the Firm}}{\text{Total Units in the Industry}} = \text{Firm's Market Share}$.

Product-Market Expansion Matrix

A growth framework mapping existing and new products against existing and new markets into four strategy quadrants.

Market Penetration

A growth strategy in the Product-Market Expansion Matrix aimed at increasing purchases of existing products among existing customers.

Product Development

A growth strategy in the Product-Market Expansion Matrix that creates new products for existing customers.

Market Development

A growth strategy in the Product-Market Expansion Matrix aimed at attracting new customers to existing products.

Diversification

A growth strategy in the Product-Market Expansion Matrix involving the introduction of new products into new markets.

Ohmae Strategic Triangle (3 Cs)

A strategic decision framework comprising Company, Customer, and Competitor relationships to define differential advantages and value creation.

Customer Perceived Value

The total benefits received (product, service, personnel, image) minus total costs incurred (monetary, time, energy, psychic) by a customer, expressed as $\text{Value} = \text{Benefits} - \text{Costs}$.

Production Orientation

An inside-out marketing philosophy ($1860\text{s}$-$1920\text{s}$) focused on 'How do we make more, for less?' where demand exceeds supply and the cheapest offer wins.

Sales Orientation

An inside-out marketing philosophy ($1920\text{s}$-$1950\text{s}$) focused on 'How do we sell what we made?' characterized by supply exceeding demand and aggressive sales tactics.

Market Orientation

An outside-in marketing philosophy ($1950\text{s}$-$1990\text{s}$) focused on 'What does the customer want?' by centering business decisions around customer needs and market segmentation.

Societal Orientation

A modern marketing philosophy ($1990\text{s}$-Present) that balances customer desires, firm profitability, and long-term societal well-being and sustainability.

Share of Customer

The portion of a customer's total spending in a category captured by a business, often expanded through add-on sales or brand partnerships.

Customer Lifetime Value (CLV)

The economic value a customer brings to a business over the entire duration of their relationship, calculated using the net present value of cash flows.

Customer Acquisition vs. Retention Cost Ratio

The benchmark indicating that acquiring a new customer costs on average $5\times$ ($\$5$) as much as retaining an existing customer ($\$1$).