Chapter 2 - Developing Successful Organizational and Marketing Strategy

Organization

A legal entity of people who share a common mission

For-Profit Organization

A privately owned business firm serving customers to earn a profit to survive.

Profit

Money left over after total expenses are subtracted from total revenues; reward for risk.

Nonprofit Organization

A nongovernmental organization focused on operational efficiency or client satisfaction rather than profit.

Strategy

An organization's long-term course of action designed to deliver a unique customer experience while achieving goals.

Corporate Level

The highest organizational tier where top management (CEO, CMO, Board) directs overall strategy.

Strategic Business Unit (SBU)

A subsidiary or division marketing a set of related offerings to a clearly defined target market.

Functional Level

The department tier (Marketing, R&D, Finance) where specialists carry out operations.

Cross-Functional Team

A group of people from different departments mutually accountable for achieving a shared goal.

Core Values

Fundamental, passionate, and enduring principles that guide conduct over time.

Mission / Vision

A statement of an organization's function in society, specifying its target customers, markets, and offerings.

Organizational Culture

The set of values, ideas, attitudes, and behavioral norms shared across an organization.

Marketing Myopia

Defining a business or market scope too narrowly (e.g., viewing railroads as trains rather than transportation).

Market Share

The ratio of a firm's sales revenue to total industry sales revenue, including the firm itself.

Core Competencies

A firm's special capabilities, skills, and technologies that provide value and competitive edge.

Competitive Advantage

A unique strength relative to competitors providing superior returns (in quality, time, cost, or innovation).

Business Portfolio Analysis (BCG)

An analytical framework evaluating SBUs by Market Growth Rate and Relative Market Share.

Stars (BCG Matrix)

High market growth rate and high relative market share; require cash to sustain rapid growth.

Cash Cows (BCG Matrix)

Low market growth rate and high relative market share; produce surplus cash for other SBUs.

Question Marks (BCG Matrix)

High market growth rate and low relative market share; require significant cash injections.

Dogs (BCG Matrix)

Low market growth rate and low relative market share; generate low returns and may be dropped.

Market Penetration

Increasing sales of current products in existing/current markets.

Market Development

Selling existing/current products into new target markets or regions.

Product Development

Introducing new products into existing/current target markets.

Diversification

Introducing new products into completely new markets (highest risk).

Strategic Marketing Process

The three-phase approach (Planning, Implementation, Evaluation) to allocate marketing mix resources.

SWOT Analysis

Evaluation of internal Strengths & Weaknesses and external Opportunities & Threats.

Market Segmentation

Aggregating prospective buyers into groups with common needs that respond similarly to marketing actions.

Points of Difference

Product characteristics that make an offering superior to competitive alternatives.

Marketing Tactics

Detailed day-to-day operational decisions and actions for each 4P marketing mix element.

Government Agency

A federal, state, or city unit that provides a specific public service to constituents.