Marketing Strategy Lecture Flashcards

Comprehensive vocabulary flashcards covering corporate strategy levels, the BCG portfolio model, the product-market expansion matrix, customer perceived value, historical marketing orientations, and profitability drivers.

Corporate Strategy

The overarching organizational strategy that answers the fundamental question: 'What businesses should we be in?'

Strategic Business Unit (SBU) Strategy

The level of strategy that addresses the question: 'How do we compete effectively in a given business?'

Functional Strategy

The operational level of strategy determining how functional areas—such as Marketing, Finance, HR, Supply Chain, and IT—orchestrate their mix to deliver value to a target market segment.

Specialization Performance Principle (Rumelt)

The finding by Richard Rumelt showing that the highest levels of profitability are exhibited by companies diversifying into areas drawing on common core skills or resources ('Specialists perform better than generalists').

BCG Portfolio Model

A strategic framework developed by the Boston Consulting Group that quantifies performance measures and growth targets of SBUs or products based on Market Growth Rate and Market Share.

Cash Cow

A category in the BCG Portfolio Model characterized by high market share and low market growth rate; it generates more cash than it needs to maintain its position.

Star

A category in the BCG Portfolio Model characterized by high market share and high market growth rate, requiring high investment for rapid growth and expansion.

Question Mark

A category in the BCG Portfolio Model characterized by low market share in a high-growth market, representing risky new ventures that require cash to become stars or face divestment.

Dog

A category in the BCG Portfolio Model characterized by low market share and low or no market growth rate, which firms typically consider for divestment.

Revenue Market Share

The proportion of total industry revenue captured by a specific firm, calculated as: $\text{Firm's Market Share (Revenue)} = \frac{\text{Total Revenue for the Firm}}{\text{Total Revenue for the Industry}}$

Unit Market Share

The proportion of total industry volume in units accounted for by a specific firm, calculated as: $\text{Firm's Market Share (Units)} = \frac{\text{Total Units for the Firm}}{\text{Total Units for the Industry}}$

Market Penetration

A growth strategy in the Product-Market Expansion Matrix focused on increasing sales of existing products to existing customers.

Product Development

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

Market Development

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

Diversification

A growth strategy in the Product-Market Expansion Matrix that involves introducing new products into new markets.

Marketing Strategy

The plan that addresses a specific target market with a cohesive marketing mix of product, price, promotion, and place to deliver value.

Strategic Triangle (Ohmae)

A strategic model developed by Kenichi Ohmae analyzing the key dynamic relationships among Company, Competitors, and Customers.

Customer Perceived Value

The total perceived evaluation of a product calculated as total customer benefits (product, service, personnel, image) minus total customer costs (monetary, time, energy, psychic): $\text{Customer Perceived Value} = \text{Total Customer Benefit} - \text{Total Customer Cost}$

Production Orientation

A business era (1860s–1920s) focused on efficiency and cost reduction ('How do we make more, for less?') when demand outstripped supply.

Sales Orientation

A business era (1920s–1950s) focused on aggressive selling and promotion ('How do we sell what we made?') when supply exceeded demand.

Market Orientation

An outside-in business era (1950s–1990s) centered on determining customer needs and preferences ('What does the customer want?') prior to manufacturing.

Societal Orientation

A modern business era (1990s–Today) that balances customer desires, company profitability, and long-term public interest and environmental sustainability.

Share of Customer

The percentage of a customer's total purchases in a product category that a single firm captures compared to its competitors.

Customer Acquisition

A driver of profitability focused on identifying and securing high-value new customers at a cost lower than the value they bring.

Customer Retention

A driver of profitability focused on eliminating root causes of defection and building loyalty to maintain existing long-term customer relationships.

Customer Lifetime Value (CLV)

The economic net present value of the cash flows attributed to a customer relationship over their entire tenure with the company.