Strategic Marketing Management Flashcards

This set of vocabulary flashcards covers Modules 2 of Strategic Marketing Management, including strategic planning processes, environmental scanning, portfolio models like BCG and GE, growth strategies, and marketing control mechanisms.

Strategic plans

Long-term plans developed by managers to guide an organisation's direction.

Tactical plans

Short-term plans developed by managers to execute specific actions.

Strategic planning

The managerial process of creating and maintaining a fit between the organisation’s objectives and resources and the changing market opportunities.

Internal marketing environment

Also called the micro marketing environment, it covers all aspects found inside the organisation such as mission, marketing mix, resources, and culture, which the organisation can control.

External marketing environment

Factors outside the organisation that the company cannot control, divided into the macro and the market environment.

External market environment

A component of the external environment made out of consumers, suppliers, intermediaries, and competitors.

External macro environment

A component of the external environment comprised of the physical, political, economic, and technological environments.

PEST

An acronym standing for Political, Economic, Social, and Technological factors used in environmental scanning.

Mission statement

A statement that defines the organisation and describes its reason for existence, what and whom it represents, and the values for which it stands.

SMART principle

The criteria for setting objectives: Specific, Measurable, Achievable, Realistic and Time bound.

Market segmentation

The process of dividing the total heterogeneous market into smaller homogeneous segments.

Undifferentiated targeting

A targeting strategy where the total market is focused on as a whole.

Concentrated targeting

A targeting strategy that focuses on only one market segment.

Multi-segment targeting

A targeting strategy that focuses on two or more market segments.

Mass targeting

A category of targeting that includes both undifferentiated and multiple-segment targeting.

BCG Matrix model

Also known as the market growth/market share Matrix model, it classifies products into four categories based on profitability and market share.

Star

A market leader with high growth rate and fast-growing market share, usually in the growth phase of the product life cycle.

Problem child

Also called the question mark or WildCat, it has low market share in high growth markets and is typically in the introductory phase.

Cash cow

A product in a low growth market but with a dominant market share, typically in the maturity phase of the product life cycle.

Dog

A product with low growth potential and low market share, typically in the declining stage of the product life cycle.

Build (BCG Strategy)

Giving up short-term profits and using financial resources to achieve the goal of increasing market share.

Hold (BCG Strategy)

Preserving market share for the organisation to take advantage of positive cash flow.

Harvest (BCG Strategy)

Increasing short-term cash returns without too much concern on long-run impact, appropriate for stars or old cash cows.

Divest (BCG Strategy)

Getting rid of products with low market share and low market growth.

GE Matrix

The Market attractiveness/Business position model developed by McKinsey for General Electric to evaluate product portfolios.

Market penetration

Achieving growth with current products in current markets by encouraging existing users to buy more or testing new uses.

Product development

Achieving growth with new products in current markets through improvements, line extensions, or entirely new products.

Market development

Achieving growth with current products in new markets through geographical expansion or attracting new customers.

Diversification

Achieving growth by offering new products in new markets.

Vertical forward integration

A distribution channel system where the manufacturer buys or creates its own retail outlet.

Vertical backward integration

A distribution channel system where the retailer buys the manufacturer, or a manufacturer buys out the supplier of raw materials.

Horizontal integration

A strategy where a firm takes over a competitor to reinforce its position.

Differentiation

Distinguishing products or services physically or psychologically from competitors so customers are willing to pay a premium.

Low cost strategy

Creating a sustainable competitive edge by cutting costs through economies of scale, no-frills products, or low-cost distribution.

Focus strategy

Focusing on only one niche market due to limited capital, resources, or a desire to satisfy a specific segment before expansion.

STP process

The process of Segmenting a market, Targeting, and Positioning.

Marketing implementation

The process by which marketing strategies and plans are turned into marketing actions to fulfill strategic objectives.

Control

The mechanism for evaluating marketing results against planned objectives and taking corrective actions.

Standard

A predetermined norm with which actual marketing performance has to comply.

Input standards

Predetermined norms used for controlling marketing efforts, measured in monetary value and manpower.

Output standards

Predetermined norms used for the control of marketing results, such as sales figures, profits, or market share.

Productivity/efficiency standards

Inputs expressed in terms of related outputs, often presented as percentages or ratios.

Marketing audit

A comprehensive, systematic, periodic evaluation of an organisation's marketing goals, strategies, and performance by an independent evaluator.

Sales analysis

A comprehensive investigation into the composition of an organisation's sales as reflected in the income statement.

Marketing cost analysis

A comprehensive investigation into the entire marketing cost structure appearing in the income statement.