Principles of Marketing 3.0–Tanner InstructorManual
Instructor’s Manual Principles of Marketing 3.0
JeffTannerandMaryAnneRaymond
Chapter 2 Strategic Planning
THE VALUE PROPOSITION:QUESTIONS TO CONSIDER
1. Whatisavalueproposition?
2. Youareinterviewingforaninternship.Createavaluepropositionfor yourselfthatyoumayuseasyourthirty-second“elevatorspeech”to getthecompanyinterestedinhiringyouortalkingtoyoumore.
I. Discussion Questions
A.COMPONENTS OF THE STRATEGIC PLANNING PROCESS
1. What factors in the external environment affect automobile manufacturers in the United States?
Possibleanswersinclude:
a. Foreigncarmanufacturers’reputationsforhighqualityproducts.
b. Numberandqualityofsuppliers.
c. Environmentalregulationsgoverninggasmileageandpollution controls.
d. Currenteconomiccrisisandeconomicuncertainty.
e. Trendstowardmoreeco-friendlycompactautomobiles.
2. What are some examples of Walmart’s strengths?
Possibleanswersinclude:
a. Sheersizeofoperations,allowingformassivebuyingpower.
b. StrongbusinessfoundationcreatedbySamWalton.
c. Strategicplacementofstores
d. Reputationforlowprices
3. Suppose you work for a major hotel chain. Using Porter’s five forces model, explain what you need to consider with regard to each force Threat of Substitute Products –thelikelihoodthatyourcustomerswillstay atacomparablehotel,thepricesofotherhotels,thecostsofswitchingto anotherhotelchain,thecomparablequalityandamenitiesofotherhotels, andthegeographicalavailabilityofcompetition.
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Principles of Marketing 3.0–Tanner InstructorManual
Threat of New Entrants –thebarrierstoentrythatexisttoprevent competition,thecapitalrequirementsnecessaryandtheeconomic conditionsneededforentry,customerbrandloyaltyandlevelofbrand differentiation,availabilityofdistributionchains,governmentregulations, retaliationofincumbents.
Intensity of Competitive Rivalry –theaggressivenessofyourcompetition. Bargaining Power Of Customers –numberofbuyerscomparedtonumber ofhotels,brandloyalty,pricesensitivity.
Bargaining Power Of Suppliers –availabilityofsuppliers,costsof switchingfromonesuppliertoanother,supplierproductdifferentiation,and inthecaseofemployees,solidarityoflabor.
B.DEVELOPING ORGANIZATIONAL OBJECTIVES AND FORMULATING STRATEGIES
1. How do product development strategies differ from marketing development strategies?
Productdevelopmentstrategiesfocusondevelopingnewproductsfor existingcustomers,whereasmarketdevelopmentstrategiesseektoacquire newcustomersforexistingproducts.
2. Explain why some strategies work for some companies but not others.
Answerswillvary.Studentsshouldrecognizethatthereareavarietyof factorssuchasacompany’sabilitytoeffectivelyimplementastrategy,target customers’preferences,qualityandquantityofcompetition,economic conditions,etc.
3. What factors do firms entering foreign markets need to consider?
Firmshavetoconsiderthelevelofrisktheyarewillingtotake,theamountof initialinvestmenttheycansafelypursue,thelevelofcontroltheywantover theproduction,distributionandmarketingoftheirproduct,andtheoverall levelofcommitmenttotheexpansion.
4. How do franchising and licensing strategies differ?
Licensinggivesthecompanylesscontrolovertheproduction,distribution, andmarketingofthefinalproductandraisesthepossibilityofthelicensee “stealing”theproductionprocessandopeningitsownbusiness.Franchising offerstheopportunityforamoreinterdependentrelationshipwherethe companyhasmorecontroloverthefranchisee’sactivities.Thefranchisor oftenactsasupplierforthefranchisee’srawmaterials,andcontrolsthe advertisingandbrandrecognition.
©Tanner&Raymond2016,publishedbyFlatWorldKnowledge
C.WHERE STRATEGIC PLANNING OCCURS WITHIN FIRMS
1. What different levels of planning can organizations utilize?
Corporate level plans –topexecutivesdevelopstrategicplansforthe companyasawhole.
Business level plans -Strategicbusinessunits(divisionsofacompanythat havetheirownbusinessorproductlinewithinthecompany)developtheir ownstrategiesforadvancingtheirownbusinessorproduct.
Functional level plans –functionalareasordepartmentssuchas accounting,finance,marketing,etc.,maydeveloptheirownstrategicplans.
2. Give an example and explain how a corporation that wants to help protect the environment can do so at its corporate, business, and functional levels.
PepsiCohascommitteditselftoachievingbusinessandfinancialsuccess whileleavingapositiveimprintonsociety.TosupportPepsiCo’soverall competitivestrategy,allthreebusinessunitsmustdevelopstrategicplansto profitablyproduceproductswhiledemonstratingtheyarecommittedto societyandtheenvironment.Atthefunctional(marketing)level,toincrease PepsiCo’sprofits,employeesareresponsiblefordifferentproductsor productcategoriessuchasbeveragesorfoodsthatmightfocuson developinghealthierproductsandmakingtheirpackagingmore environmentallyfriendlysothatthecompanycapturesmoremarketshare.
D.STRATEGIC PORTFOLIO PLANNING APPROACHES
1. How would you classify a product that has a low market share in a growing market?
TheproductisprobablyaquestionmarkorproblemchildusingtheBCG matrix.
2. What does it mean to hold market share?
Companiesholdingmarketshareinvestonlywhattheyhavetomaintainthe product’smarketposition.
3. What factors are used as the basis for analyzing businesses and brands using the BCG and the GE approaches?
TheBCGmatrixusestheSBU’smarketgrowthrate(howfasttheunitis growingcomparedtotheindustry)anditsrelativemarketshare(theunit’s shareofthemarket).TheGEapproachusesthestrengthsofthebusinessand theattractivenessoftheindustry(high,medium,low).
II. Practice Questions
1. Explain how a marketing objective differs from a marketing strategy. How are they related?
Raymond2016,
Principles of Marketing 3.0–Tanner InstructorManual
Amarketingobjectiveisthegoalthecompanywantstoachieveandshould berealisticandmeasurable.Themarketingstrategydescribestheactivities andbehaviorsthecompanywillengageintoreachthemarketingobjective.
2. Explain how an organization like McDonald’s can use franchising to create value for the brand.
Oneofthemostcommonmarketentrymethodsemployedbyservicefirmsis franchising.FranchisingallowsMcDonald’stocatertoconsumerdemands dependingonlocationswhileatthesametimeprovidingconsistentquality andmanyconsistentmenuitems. Thefranchiseealsobenefitsfrom McDonald’sadvertisingaswellastheGoldenArches.Forexample,themenu offeredatafranchiseintheU.S.candifferfromtheoneofferedinacountry likeIndia.Formorereference–http://www.franchisedirect.com/foodfranchises/themarketinggeniusbehind mcdonaldsfranchisesuccess/14/25
3. How has PepsiCo employed a product development strategy?
Acompanymayintroducedifferentvariationstoanexistingproduct,suchas newflavors,colors,orsizes.
4. Discuss how conducting a SWOT (strengths, weaknesses, opportunities, threats) analysis helps a firm (or an individual) develop a strategic plan.
Companiesidentifytheirstrengthsandanyopportunitiesthatmayexistin theexternalenvironmentandthen,developastrategicplanthatcapitalizes onthesefactors.Similarly,weaknessesandthreats,whenidentified,canbe anticipatedandminimizedtoacertaindegree.
5. Describe the value propositions the social networking sites YouTube and Facebook offer Web users.
YouTubeandFacebookprovideplacesforsocialinterfaceandrecognition. Theygivepeopleaforumforself-promotion,interaction,andentertainment.
©Tanner&Raymond2016,publishedbyFlatWorldKnowledge