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Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 26 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 26Str k eti ng a te gies

Contemporary Marketing 17th Edition Boone Solutions Manual Download:http://testbanklive.com/download/contemporary-marketing-17th-editionboone-solutions-manual/ Contemporary Marketing 17th Edition Boone Test Bank Download:http://testbanklive.com/download/contemporary-marketing-17th-editionboone-test-bank/ CH APTER 2 STR ATEGI C PL ANNI NG I N CONTEM POR ARY M AR K ETI NG CH AP TER O VERVI EW T oday’s m ark eter s f ace st r at eg ic q uest ions every day . Planning str ateg y is a cr it ical par t of t heir j ob s. T he m ark et place chang es continually in r esponse t o chang es in consum er t astes and expect at ions, t echnolog ical developm ents, com pet it or s ’ act ions, econom ic tr ends, and polit ical and leg al event s, as we ll as pr oduct innovations and pr essur es f r om suppliers and distr ibut or s. Alt houg h t he causes of these chang es of t en lie outside a m ark eter ’s cont rol, ef f ective planning can ant icipat e m any of t hem . For example when t he pr ice of g as and j et f uel soared r ecently, t r avelers opted t o st ay close t o hom e inst ead of enj oying vacat ions t o exotic, f araway places. T his r epr esented an oppor t unit y f or places like O cean Cit y, Maryland, and Branson, Missour i . Any dest inat ion s t hat pr om oted it self t o pot ent ial vacat ioner s wit hin a shor t drive could f ind it self adding up t he prof it s. T his chapter lays a f oundat ion f or analyzing all aspects of m ark eting by dem onstr ating t he im port ance of g at her ing r eliable inf ormation t o cr eat e an ef f ect ive plan. T hese act ivit ies pr ovide a str uctur e f or a fir m t o use it s uniq ue st r engths. Mark eting planning identif ies t he m ark et s a com pany can best serve as we ll as t he m ost appropriat e m ix of approaches t o sat isf y t he cust om ers in t hose m ark et s. W hile t his chapt er f ocuses on planning , in later chapter s t he t ask of m ark et ing research and decision m ak ing will be explored. Changes i n t he Updat ed Editi on T he chapter has been updat ed and r evised , wit h new f eat ur es in several areas: The O pening Vi gnett e and Evolut i on of a Brand discuss Yahoo and it s CEO , Marissa Mayer. Ma yer, t he f ir st f emale eng ineer hir ed at G oog le, t ook t he Yahoo CEO posit ion wit h t he daunt ing challeng e of t urning ar ound t he company af t er several unprof it able year s. O ne of her f ir st init iatives at Yahoo out lined a pla n t o m ak e employees m ore product ive. She has cont inued t o acq uir e sm aller tech companies, specif ically f or t heir eng ineering t alent . One of t he com pany’s im por t ant str ateg ies has g ot involve j umping in t o m obile t echnolog y, a


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 27 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 27Str k eti ng a te gies

posit ion Yahoo has lack ed over t he past f ew year s. Ma yer also has tr ied t o chang e t he org anization’s cult ure —including a cont r oversial policy aboli shing t he f irm ’s long - st anding t elecomm uting policy f or em ployees. Solvi ng an Et hi cal Cont rovers y analyzes t he case of t he New Eng land Pat r iots and one of it s players, Aaron Her nandez, who was charg ed wit h m ur der. During his t hree year s wit h t he t eam , Hernandez g ained m any f ans, who pur chased his Patr iot s j ersey in support of t he t eam. O nce he was char g ed, t he Pat r iots t old f ans t hey could t r ade in t heir Hernandez j erseys f or a dif f erent one, wh ich cost t he t eam m ore t han $250, 000. I t also discusses t he q uest ion “s hould t eam f r anchises disassociate t hem selves f r om a player f acing cr iminal charg es?” T he issue of acting swif t ly t o m aintain a com pany’s brand is also discussed. M arketi ng Success f eatures “ Layawa y Pr og r am s a Big Hit wit h Shoppers” and descr ibes how some nat ional r et ailers have br oug ht back layawa y program s as a way of ent icing custom er s t o pur chase pr oduct s and have t he r et ailers hold t hem unt il consum ers pay t hem on a week ly basis. T his str ateg y is par t icularly successf ul dur ing t he im port ant holiday r etail season. .


27 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des i gni ng C us tom er - O r iented Mar k eting 27Str k eti ng a te gies

Career Readiness provides som e sim ple g uidelines t o m ake a g ood im pression at a j ob. For det ails, r ef er t o ” Succeedin g in Your First ‘Real’ Job. ” Chapter Case 2. 1 Hotels Target M il l enni als w ith New Amenit i es f eat ures how hot els are t r ying t o at tr act Mil lennials who are p oised t o becom e t he larg est consum er g r oup in U. S. hist or y . I t f ocuses on how t he hot els k eep t heir young g uests who lack br and loyalt y i nter est ed. Coll aborat i ve Learni ng Exerci ses ar e pr ovided in several areas r elated to str ateg ic planning and t he m ark eting pr ocess —Planning T hr oug h out t he O rg anization, Def ining t he Org anization ’s Mission and O bj ectives, St r ateg ic Planning , For mulating a Mark et ing Str ateg y, Pr omot ion St r ateg y and Pr icing Str at eg y, T he Mark eting Envir onm ent , and BCG Matr ix. Vi deo Case 2. 2 Synops i s includes an overvie w of st r at eg ic planning and t he m ark eting pr ocess at Nederlander Pr oducing Company and its t heaters in New York Cit y and ot her locat ions.

LECTURE O UTLINE O peni ng Vi gne tte and E vo l utio n of a Br and — Mar is s a May er, Y aho o ’s C EO h as b ig p la ns for th e c om pany in a n ef fort to get it bac k in the f orefr ont of dig ita l a nd mob il e mark et in g. Ch apt er O b je ctiv e 1: Disti n g u ish b etw een strateg ic p lann ing and t act ic al p lan n ing . Ke y T erms : p la nn ing, m ark eting pl ann in g , s tr ate gic p l ann ing , tac tic a l p la nn ing Po w erPo int Bas ic: 5, 6 Po w erPo int E xpan d ed: 5, 6, 7


28 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des i gni ng C us tom er - O r iented Mar k eting 28Str k eti ng a te gies 1. Mar k eting p la nni ng: the ba s is f or s tr ateg y a nd t ac tic s a. Def init ion of pla nn ing : th e p r oc es s of antic ip ati ng f utur e ev ents a nd c ondit io ns and det erm ining the b es t wa y t o ac h ie ve or g ani zat io nal obj ec ti ves Car eer Re ad ines s — As k s tudents t o prov ide few s ugges ti ons o n ho w to mak e a goo d impr es s i on a t th e ir f ir s t r eal job.

b. Pla nn ing is im por tant f or b o th l arge a nd s m all c om pani es c. Mar k eting p la nni ng i. Mar k eting p la nni ng r ef ers t o im plem enting pl ann ing ac tiv it ies de vo ted to ac h ie v i ng m ark eting o bj ec tiv es ii. An im por tant tren d i n m ark etin g p lan ni ng c e nter s on r elat ions h ip m ark eting d. G ood re lat ions h ips with c us tom ers c an arm a f irm with vit al s tr ategic weap ons e. Man y c om panies n o w inc l u de r el ati ons h ip - b ui ldi ng goa ls and s tr ategi es in the ir m ark eting pl ans , m ainta in ing dat aba s es to trac k c us tom er pr ef erenc es 2. Str ate gic p la nni ng vers us t ac tic al pl ann in g a. Str ate gic p la nni ng is d ef in e d as th e pr oc es s of det erm inin g an organ i zati on ’s prim ar y obj e c tives and ado pti ng c o urs es of ac tion that wil l ac h ie ve thes e obj e c tives b. Str ate gic p la nni ng inc l udes all oc ati on of r es our c es , and prov ides lon g- term dir ec tions f or the dec is io n m ak ers

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c. T ac tic al pl ann ing , a c om ple m entar y appro ac h to s tr ate gic pla nni ng, gu ides t he im plem entation of ac ti v iti es s pec i f ied in the s tr ategic p la n d. It ad dres s es s hor ter - term ac tions , f oc us ing on c urr e nt and near - f utur e ac ti vit ies th at n ee d to be c om plete d s o th at large r s tr ategi es c an be im plem ented


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 28 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 28Str k eti ng a te gies

As se ssmen t chec k qu est i o n s 1.1. D ef ine pla nn ing . P lan ni ng is t he proc es s of a ntic i p atin g fu ture ev ents a nd c ondit io ns and of deter mi ni ng th e b es t way to ac hi ev e organ i zati ona l o bj ec tiv es . 1.2. G iv e an ex am ple of s tr ateg ic pl ann in g a nd t ac tic al pla nn ing. T o s urv iv e in a c hall eng in g e nv ir on ment of s oar ing fue l c os ts , s ev eral air l ines hav e d ec id ed t o mer ge as par t of th eir s tr at egic p la nni ng. T ac tic a l inc hluode utt in ging th eplan nu mb ig hts an d sc lev har els g ing enger Ch apt er O b je ctiv e 2: pElan xplsain w cmarket s deifr of f erfl at v ariou in pas an os rg anizs atio n. ex tr a for c hec k ed b agga ge and oth er s erv ic es . Ke y T erms: n one Po w erPo int Bas ic: 7, 8 Po w erPo int E xpan d ed: 8, 9 1. Pla nn ing at dif f erent or ga ni zat ion al le ve ls a. Mana ger s at al l org an i zati o nal le ve ls de vot e s om e T able 2.1 P lan ni ng of their atten tio n to pl ann in g ac t iv iti es at Dif f erent Man ager ial Lev els . W hic h b. T he am ount of tim e s pent o n pl ann in g ac ti v iti es an d th e t mana ger s foc us mos yp es of pla nni ng var y b y or gan i zati ona l l ev el t on bro ad goa ls an d c. T op m anage m ent ( CEO s , CO O s , and f unc ti ona l vic e - pres lon g- term pla nn ing ? ide nts ) W hic h mana ger s foc i. Spe nd m ore of their t im e pl ann ing tha n m iddle - le us mos t on pl an nin g vel an d s uperv is or - le ve l m anagers for day - to- day tas k s ii. Us ual l y, the y f oc us m ore on lo ng- r an ge s tr at egic ? is s ues d. Mid dl e m anage m ent Note: Dis c us s how t i. T end to f oc us on o per at ion al p la nni ng, wh ic h i nc wo c ompan ies lud es c r eating an d im plem enting tac tic al pl ans f or the ir o wn depar tm ents appro ac hed a s im i lar probl em diff erent ii. Sup erv is ors of ten de ve lo p s pec if ic program s to ly , with dif ferent r es m eet goa ls in the ir areas of r es pons ib il it y ults . How d id N int end o a nd Mic r os oft ii i. T o be m os t eff ec tive, th e p l ann ing proc es s inc l c o mpet e aga ins t S udes in put f r om a wid e ran ge of s our c es , inc l ud ing ony ’s em plo ye es , s uppl iers an d c us tom ers Play Stat io n 2 w ith the ir gam ing c ons ol es , As se ssmen t chec k qu est i o n s G ameCu be and Xb ox r es pec tiv ely ? 2.1. H o w d o m ark eting p la n s var y at d if f erent le ve ls of the or g an i zati on? T op mana ger s us ua lly f oc us th e ir pl ann in g ac tiv iti es on lon g - r ange s tr at eg ic i s s ues . I n c ontr as t, m idd le - lev el ma na ger s foc us on op erati ona l p lan nin g, w hic h inc l udes c r eating an d i mp lem ent ing tac tic al pl ans for t he ir own units . Su per v is ors dev e lop s pec ific pr ogr ams t o m eet goa ls in the ir areas of r es p ons ib il ity . Ch apt er O b je ctiv e 3: 2.2. IdenWt if t hit eimsix m arket pl ann ing pproc esns.g? I npu t h yy is porstep tantstoing teth ienput f r oming other s when lan ni Ke y T erm s: m is s ion, m ark etin g s tr ate g y from a v ariety of s o urc es —oth er e mpl oy ees , s up pl iers , or c us tomers — Po w erPo int Bas ic: 9 h el ps ens ure that many i de as are c ons i der e d . Inv olv ing thos e peo pl e i n pla 10 nni, ng Po w erPo int E xpan d ed: 11 c a n a ls o turn the m into adv oc at es for t he p la n.


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 29 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 29Str k eti ng a te gies 1. Steps in t he m ark eting pl an nin g pr oc es s


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 30 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 30Str k eti ng a te gies a. Def ine t he f ir m ’s m is s ion b. Deter m ine orga ni zat io na l o bj ec tiv es c. As s es s r es our c es and e va l uate en vir o nm ental r is k s and oppor t un iti es d. F orm ulate a m ark eting s tr at eg y F igur e 2.1 T he Mar k eting Pl ann ing Pr oc es s . W hic h s tep mig ht b e m ore d iff ic ult than it s e ems ? W hic h s tep do y ou t hink c a n be e as ily ov er look e d?

e. Im plem ent the s tr at eg y thr o ugh opera tin g p lans f. G ather f eedb ac k to m onitor and ada pt s tr ate gi es whe n nec es s ar y 2. Def inin g th e or g an i zati on ’s m iss ion an d o bj ec tiv es a. T he organi za tio na l m is s ion i. T he m is s ion is th e es s ent ia l pur p os e th at dif f erentiat es the organ i zati on f r om other s ii. T he m is s ion s tatem ent s pe c if ies the or g an i zati on ’s ov erall goa ls and op erati ona l s c op e an d pr o vi des g enera l gui del in es f or f utur e m anagem ent ac tion s ii i. Adj us tm ents m ade to t he m is s ion s ta tem ent ref lec ts c hang ing bus i nes s en vir on m ents and m anagem ent phi los op hi es

Note: Cho os e a c o upl e of l oc al and gl oba l organ i zati ons a nd us e their mis s io n s tateme nts as c las s ex amp les

b. T he organi za tio na l o bj ec tiv es i. T he bas ic obj ec ti ves , or go als , i n a f ir m ’s m is s ion s tatem ent gui de t he de vel o pm ent of s uppor tin g m ark eting goa ls and pl ans ii. O bj ec tives s h oul d s tat e s pe c if ic inten tio ns 3. As s es s ing org an i zati ona l r e s our c es and ev alu ati ng en v ir onm ental r is k s and opp ortun iti es a. T his c ons is ts of a n as s es s m ent of an organ i zati on ’s s tr engths , weak nes s es , and a va i lab le oppor t un iti es b. O r gani zat io nal r es our c es in c lude c a pab il it ies of the f ir m ’s produc ti on, m ark eting, f ina nc e, tec h nol og y, a nd em ploye es c. En vir o nm ental ef f ec ts c an em erge both f r om with in t h e organ i zati on and f r om the e x ternal en vir o nm ent

Do adv ert is em ents v iewed as per s ona li ze d by mar k eter s inv ade priv ac y ? Do y o u th ink the p ote nti al of m ob ile adv ertis i ng w il l pr ov ide a c omp etit iv e edg e?

4. F orm ulati ng, im plem enting and m onitor ing a m ark eting s tr ateg y a. A go od m ark eting pl an r e vo lv es arou nd a n ef f ic ient, f le x ible , an d adap tab le m ark eting s tr at e g y b. A m ark eting s tr ate g y is an overa l l, c om pan ywi de progr am f or s elec ti ng a tar g et m ark et and s at is f ying c us t om ers in that m ark et throug h a c aref ul bl en din g of the e lem ents of the m ark etin g m ix — produc t, dis tr i but ion, prom otion , an d pr ic e c. T he s tr ateg y m us t be m onit ored to ens ure tha t obj ec t iv es are bei ng m et


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 31 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 31Str k eti ng a te gies 5. In th e t wo f inal s teps of the pla nni ng proc es s , m ark eters put th e m ark eting s tr ateg y in to ac t io n; th en t h e ym onitor per f orm anc e to ens u r e th at obj ec ti ves are ac hi ev ed 6. Som etim es s tr ategies nee d to b e m odif ied if th e pr od u c t’s or c om pan y’s a c t u a l p e r f o r m a n c e i s n o t i n l i n e

wit h ex pec t ed r es u lts As se ssmen t chec k qu est i o n s 3.1. D is ti ngu is h b et we en a n or ga ni zat io n ’s m is s ion an d its o bj ec ti ves . T h e fir m ’s mis s ion is th e es s en tia l p ur pos e th at d iff erent iat es the c ompany fr om o ther s . Its obj ec tiv es gu id e d ev elo pm ent o f s upp orti ng m ark eti ng obj ec tiv es a nd p la ns . Av on ’s mis s io n is t o b e “the c ompa ny for wo me n. ” O ne of its ob jec tiv es m ig ht b e


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 32 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 32Str k eti ng a te gies

c onv ert al l its pac k ag ing to r ec y c led mat eria ls . 3.2. W hat is the im por tanc e of the f ina l s tep in the m ark eting pl ann in g pr oc es s ? In the f ina l s te p of the mar k et i ng p lan ni ng pr oc es s , man a ger s mon itor per form anc e t o ens ure th at o bj ec tiv es are ac hiev e d. Ch apt er O b je ctiv e 4: De s cribe succ essfu l pl ann in g t o o ls and t ech n iqu e s, i n clud ing Po rt e r ’s F iv e F o rces mo d el, f i rst an d s eco n d mo v er str ateg ie s, SW O T analysis, and t h e s t rateg ic w ind o w. Ke y T erms: Porter ’s Fiv e F orc es , f ir s t m over s tr ateg y, s ec ond m over s tr ateg y, S W OT anal ys is , s tr ate gic wind o w Po w erPo int Bas ic: 1 0- 15 Po w erPo int E xpan d ed: 13 - 19


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 33 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 33Str k eti ng a te gies

Sol v ing an Eth ic al Contr o vers y: Can a T eam Sav e F ac e wi th Its Fans ? As k s tudents what r es pons ib il it ies do prof es s ional s por ts team s and ath let es hav e wh en it c om es to beha v ing eth ic al l y an d prom ot ing a brand .

1. Suc c es s f ul s tr ategi es : to ols and tec hn iqu es a. F our too ls f or m ark eting pla nni ng inc lu de Port er ’s Fi ve F orc es m odel, f ir s t and s ec on d m over s tr ate gi es , SW OT anal ys is , and the s tr ategic win do w b. Al l of thes e pl ann in g s tr ate gies h av e th e g oal of c r eati ng a s us taina bl e c om petiti ve ad van tag e f or a f irm , m eaning that oth er c om panies c a nnot pro vi de t he s am e val ue 2. Porter ’s F iv e For c es a. Porter ’s F iv e For c es is a m ode l wh ic h i de ntif ies f iv e c o m petitive f orc es that inf lue nc e p la nni ng s tr ate gies b. Porter later upd ate d h is m odel to inc lu de t he im pac t of the I nter ne t on th e s tr ate gi es that bus i n es s es us e c. T he y are: i. T he thr eat of ne w en tr ants — is i nf luenc e d b y th e c os t and dif f ic ult y of enter i ng a m ark et. T he Int ernet has r ed uc e d the b arr iers to m ark et entr y in m an y ind us tr ies ii. Barga in ing po wer of bu yers —can i nf luenc e the f irm ’s s tr ateg y as c us tom ers c an eas il y f in d a ltern ate s u ppl ie r s and do pr ic e c om par is ons and s witc h to a b etter s u pp l ier

F igur e 2.2 Port er ’s F ive For c es Mo del . Choos e one of t he forc es and t hi nk of t he way s it rel ates t o a r eal- wor ld m ark eti ng s ituat ion .

ii i. Barga in ing po wer of s upp li ers — is inf lu enc ed b y th e num ber of s uppliers iv. T he thr eat of s ubs ti tute pro duc ts —c an b e e ith er prod u c ts f r om a c om peting f ir m or indus tr y v. Riv alr y am ong c om petitors — al l th e a bo ve f our f ac tors inf lue nc e ri va lr y d. Is s ues s uc h as c os t and dif f erentiat ion or l ac k of diff erenti ati on of produc ts — a lo ng with the In ternet — inf lu enc e t he s tr at e gies t hat c om panies us e to s t and out f r om their c om petitors 3. F ir s t m over and s ec on d m over s tr ate gi es a. A f ir s t m over s tr ateg y ad vo c ates that a c om pan y t hat i s f ir s t to of f er a produc t wi ll be t he lo ng - term m ark et win ner . Bei ng f ir s t m a y als o ref er to enter ing ne w m ark e ts wit h ex is t ing prod u c ts or c r eating s ig nif ic ant in no vat i ons tha t ef f ec tive l y turn an old prod uc t into a n e w o ne b. A s ec ond m over s tr ateg y a dvoc a tes c los e obs er vat ion of the inn ov ati ons of f ir s t m overs and t hen im provin g o n th e m to gain m ark et advanta ge 4. SW OT anal ys is a. SW OT anal ys is he lps p lan ner s c om par e inter na l orga ni zat ion al s tr engths a nd weak nes s es with ex terna l o pport un iti es and t hreats b. “ SW OT ” is an ac r on ym f or s tr engths , w eak nes s es , o p por tun iti es ,


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 34 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 34Str k eti ng a te gies and t hreats c. T his is an im por tant s tr at eg ic pl ann ing F igur e 2.3 SW OT Ana l ys is . T hi nk of a wel l- k nown prod uc t and its pos s i ble weak nes s es an d threats . Th en c o ns ider its s tr engt hs and oppor t un iti es .

too l d. SW OT – s tr engths i. A s et of c ore c om petenc i es — what the orga ni zat io n do es wel l ii. Cor e c om petenc ies ar e c ap abi lit ies t hat c us tom ers val ue and c om petit ors f ind dif f ic ul t to d up lic at e ii i. Matc hi ng an int erna l s tr eng th wi th a n ex tern al op por tu nit y produc es a s itu ati on k no wn as le vera ge e. SW OT – we ak nes s es i. Interna l weak nes s es c r eate e n vir onm enta l thre ats th at c an attac k an orga ni zat ion ’s s tr engt h ii. Pla nn ers m us t antic ipat e c ons tr ain ts whe n i nter n al weak nes s es or lim itati ons p r even t th eir or gan i zati on f r o m tak ing ad va ntag e o f op por t unit ies 5. Str ate gic wind o w a. T he s tr ategic wind o w r ef ers to th e l im ited per iods whe n k e y r equir em ents of a m ark et and th e p artic u lar c om peten c ies of a f irm bes t f it to geth er

Note: An ex am ple of a s tr ategic w in dow: Dur in g th e ex te nde d per io d wh en H P a nd Comp aq s tr ug gl ed t o c ompl ete t he ir mer g er, Del l Co mpu ter aggres s iv e ly c our ted Comp aq ’s larg e c orpor ate c us to mer s tr y ing to lev er age Del l ’s s tr en gths a nd tak e adv a nta ge o f th e c onfus io n c aus e d by the p end in g HP/Co mp aq mer ger .

b. T he vie w thro ugh a s tr ate gi c wind o w s ho ws pl ann ers a wa y to r elate pot ent ia l o pport uni tie s to a f ir m ’s c apabil iti es c. It requ ir es a t hor o ugh ana l ys is of thr ee e lem ents : i. Cur r ent a nd proj ec ted ex ter nal en vir o nm ental c on dit io n s ii. Cur r ent a nd proj ec ted int ernal c om pan y c apa bi lit ies ii i. Ho w, wheth er , a nd when th e f irm c an r ec onc il e env ir onm ental c ond it ions a nd c om pan y c a pab il iti es b y im plem ent ing on e or m ore m ark eting s tr ategi es As se ssmen t chec k qu est i o n s 4.1. Br ief l y ex p la in e ac h of Porter ’s F iv e For c es . P orter ’s F iv e For c es are the threats of pot ent ia l n ew e nt r ants , wh ic h i nc r eas es c om peti tio n i n a mar k et; bar ga in ing pow er of buy ers , whic h c an d epr es s pric es ; bar ga in ing pow er of s uppl iers , wh ic h c an inc r e a s e c os ts or r educ e s e lec ti o n; thre at of s ubs tit ute produc ts , wh ic h c a n l ure c u s tomers to other produc ts ; and riv a lr y am ong c ompet itors , w hic h c a n br i n g ab out pric e w ars or div ert c ompa ni es from t he ir ma in goa ls . 4.2. W hat ar e the ben ef its and dra wb ac k s of a f ir s t m over s tr ate g y ? The be nef it s of a fir s t m ov er s tr ategy inc l ud e c aptur ing the great es t m a r k et s har e an d d ev elo p i ng lon g- term r e lat ions hips w ith c us tomers . D is adv ant ages inc l ude the pos s ib il ity th at c ompan ies t hat f ol low c an l ear n fr o m


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 35 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 35Str k eti ng a te gies m is tak es by f ir s t mov ers . Pr oc ter & G am ble has be en a fir s t m ov er wi th its l ine of Swif fer pr o duc ts .

4.3. W hat ar e the f our c om pone nts of the SW OT analys is ? W hat is a s tr ateg ic wind o w? SW O T analy s is h elps p la nners c om par e int e r nal or gan i zati on al s tr en gth s and w eak nes s es w ith ex ter nal opp ortun it ies an d thr eat s . SW O T is an ac r ony m f or s tr engths , w eak nes s es , o p por tun iti es , a nd t hreats . A s tr ateg ic wi ndow def in es the lim ite d p erio d s whe n th e k e y r equir e men ts of a mar k et and a fir m ’s p artic u lar c ompet enc i es bes t f it t oget her .

Ch apt er O b je ctiv e 5: Iden t if y t h e t w o b asic elem ent s of a ma rket ing strateg y. Ke y T erms : m ark eting m ix , produc t, pr od uc t s tr ateg y, dis tr ib uti on s tr at eg y, pr om otion s tr ateg y, pric in g


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 36 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 36Str k eti ng a te gies s tr ateg y Po w erPo int Bas ic: 1 6, 1 7 Po w erPo int E xpan d ed: 20 - 23 1. Elem ents of a m ark eting s tr ateg y a. An ef f ec tive m ark eting s tr at eg y do es s ever al t hi ngs : i. It reac hes t he r i ght bu yers at th e rig ht t im e Note: As k s tude nts to c ompar e prod uc ts of a c ompany ai med at diff erent t arget mar k ets , i n terms of the m ark eti ng m ix v ariab les . Y ou c o ul d c ons ider auto mob i les , c omput ers , and s mar t phon es as ex a mpl es . F or ins ta nc e, ta bl ets , lapt ops for s tu de nts , and lap tops f or bus in es s c ould be c ompar e d .

ii. It pers ua des th em to bu y th e pr od uc t ii i. It de ve lops a s tr ong r ela tio ns hip wit h th em over tim e b. T he bas ic el em ents of a m ark eting s tr ateg y c o ns is t of two c onc epts : i. the t arget m ark et ii. the m ark eting m ix varia bl es that c om bine to s at is f y the needs of the targ et m ark et 2. T he tar get m ark et a. T he tar get m ark et is a gro u p of c ons um ers toward who m the f irm aim s its m ark eting ef f orts , and u ltim atel y its m erc handi s e b. Div ers it y p la ys an ev er - inc r eas in g rol e i n targ et ing m ark ets i. T he His pan ic po pul ati on in the U nit ed Stat es has s urpas s ed Af r ic an Am eric ans as the larg es t m inor it y g r oup ii. T argeting c o ns um ers in s pec if ic glo bal m ark ets als o r epr es ents a c h al le nge —an d an opp ortun it y 3. Mar k eting m ix varia bl es a. Mar k eting d ec is io ns c an be di vi ded int o f our v aria bl es or s tr ateg ies whic h f orm the tota l pac k age, c al led the m ark eting m ix

Mar k eting Suc c es s — La ya wa y Pr ogr am s a Big Hit wit h Sho ppers

b. T he f our m ark eting m ix vari abl es are pro duc t, dis tr i but i on, prom otion, a nd pr ic in g s tr at egi es c. T he m ark eting m ix c ons is ts of a bl end of thes e f our var iab les to f it the n eeds and pref erenc es of a s pec if ic tar get m ark et 4. Pr oduc t s tr at eg y

F igur e 2.4 El em ents of a Mark eting Str a teg y and I ts En vir onm ental F r am ework . Dis c us s how e ac h s tr ate gy r eac hes , pers u ades , and dev el ops a r elat ions h ip wit h buy ers .

a. T he term produc t m eans m ore tha n a go od, s er vic e, or ide a — it r ef ers to a br oad c onc ep t th at a ls o enc om pas s es the s atis f ac tion of all c o ns um er needs in r el atio n to a g ood , s erv ic e, or ide a b. So pr oduc t s tr at eg y i nv ol ve s m ore than j us t d ec id in g what g oods or s ervic es t he f ir m s hould of f er to c ons um er gr oups c. It als o inc lud es dec is i ons c onc erni ng c us tom er s ervic e , pac k age des ig n, bra nd nam es , trade m ark s , patents , warr a nti es , the lif ec yc le of a pro duc t, pr o du c t pos it ion ing , an d n e w - pro duc t dev el opm ent


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 37 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 37Str k eti ng a te gies 5. Dis tr ibu ti on s tr ate gy a.

ark eters ens ure th at c o ns um ers f ind produc ts i n pr o per q uan tit i es at th e r ight t im e and r i ght pl ac e b. Dis tr ibu ti on d ec is io ns in vo l ve:

T h e c o n c e p t o f d i s t r i b u t i o n s t r a t e g y r e f e r s t o t h e w a y s m

i. Modes of t r ans por tat io n ii. W ar ehous ing ii i. Inv entor y c ontr ol iv. O r der proc es s ing v. Sel ec tio n of m ark eting c ha nne ls inc l ud ing in term ediari es c. T ec hnolog y h as c ont inu al l y ope ned up ne w c h ann els o f dis tr ib uti on in m an y ind us tr i es ( an ex am ple is onl in e s e ll ing) . T he


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 38 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 38Str k eti ng a te gies

Interne t has c a us ed t he big ges t rev ol uti on in dis tr i but io n s inc e t he m ail- order c atal og Note: As k s tude nts for ex amp les of c ompan ies t hat f orme d all ia nc es as a dis tr ib uti on s tr at egy .

6. Pr om otion s tr ate g y a. Pr om otion s tr ate g y r ef ers to the c om m unic ations l ink bet we en s ellers a nd bu yers b. In de ve lo pin g a prom otion s tr ateg y, m ark eter s blend t he vario us elem ents of prom otion to c om m unic ate m os t eff ec tive l y wi th t he ir target m ark ets c. Integr a ted m ark eting c om munic at io n ( IMC) c o ordi nate s al l prom otional ac ti vi ti es s o th at th e c ons um er r ec eives a unif ie d a nd c ons is tent m es s age 7. Pr ic in g s tr ate g y a. Pr ic in g s tr ate g y de als with t he m ethods of s etti ng prof it abl e an d j us tif iable pric es b. It is c los e l y r egu la ted and s ubj ec t to c o ns ider abl e p ubl i c s c r utin y c. O ne f ac tor that inf lu enc es a m ark eter ’s pric ing s tr ate g y is c om petiti on d. A go od pric in g s tr ate g y s ho uld c r ea te va lue f or c us tom ers , bui ld ing and s tr en gth en ing the ir r el a tions h ip wit h a f ir m and i ts produc t s As se ssmen t chec k qu est i o n s

5.1. W hat ar e the t wo c om ponen ts of ever y m ark eting s tr ateg y? T h e bas ic ele ments of a mar k et ing s tr ategy are ( 1) the tar g et m ark et and ( 2) Ch apt er O b je ctiv e 6: the De mar s cribe h emix envv iro k etting arianblmen es .t al c h aract e risti cs t h at in f luen ce str ateg ic d eci sion s . Ke y T erm : r ul e of thr ee 5.2. I den tif y t he f our s tr ate g ic el em ents of the m ark eting m ix . T he mar Po w erPo int Bas ic: 1 8k eti ng mix c ons is ts of pro duc t, d is tr ib u tion , pr o mot ion, an d pr ic e s tr Po w erPo int E xpan d ed: 24ies - 28 ateg .


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 39 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 39Str k eti ng a te gies 1. T he m ark eting e nv ir onm ent a. Mar k eting d ec is io ns are not m ade in a vac u um 2. Mar k eter s m ak e dec is ions abou t tar g et m ark ets and m ark eting m ix vari ab les b y tak ing int o ac c ount the d yn am ic nature of the se f iv e dim ens ions of the m ark et ing en vir o nm ent: a. Com petiti ve f ac tors b. Pol it ic al- l ega l f ac tors c. Ec onom ic f ac tors d. T ec hnolog ic al f ac tors e. Soc ia l- c ult ural f ac tors 3. Som e rec ent tren ds in the m ark eting env ir onm ent: a. Ex pan di ng into f oreign m ark ets b. T ec hnolog y— es pec ia ll y t he Intern et c. Mar k eter s are no w inc r eas i ng ef f orts to get t he ir m es sages to c ons um ers via s m artphone d. T he r ule of thr ee m eans that i n an y ind us tr y, t he t hree s tr onges t, m os t eff ic ient c om panies d om inate bet wee n 7 0 an d 9 0 perc ent of the c om petiti v e m ark et


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 40 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 40Str k eti ng a te gies

e. T he im por tanc e of under s ta ndi ng p r ev ai lin g c ul tura l nor m s is vit al —the dec l in e of bi dd ing f or auc tion item s on e Ba y i s an ex am ple f. T he entir e m ark eting en vir o nm ent pr ovi des a f r am ewor k f or all m ark eting ac tiv it y As se ssmen t chec k qu est i o n s 6.1. W hat ar e the f i ve dim ens ions of th e m ark eting en v ir onm ent? T he fiv e dim ens i ons of the mar k et in g env ir o nm ent are c om pet it iv e, p ol itic a l - le ga l, ec onom ic , tec hno log ic al , a nd s oc ial- c ult ural fac tors . 6.2. H o w is c onc ern o ver t h e nat ural en vir o nm ent af f ecting the oth er d im ens ions ? Conc erns ov er t he n atur a l env ir on men t hav e l ed t o ne w and ti ghter r e gu lat ions o n pol lut ion , wh ic h af fec t th e p oli tic a l - le gal env ir Ch apt er O b je ctiv e 7: onm De sent cribe t h ehmet d ssfo m at a rket ing ts plan n ing includ in whic marhk oeter o rper e. Effor to war d s, us ta in in abgil bu ity are no siness po rt f o lio anal ys is and t h e BCG ma t rix. w s oc ia l - c ult ural fac t ors as wel l b ec aus e c ons umer a war en es s is tur ni Ke y T erms : s tr at egic bus in es s unit ( SBU) , s tars , c as h c ows , ques t ion m ark s , dog s n g i nto c o ns umer prefere nc e. Po w erPo int Bas ic: 1 9- 20 Po w erPo int E xpan d ed: 29 - 35


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 41 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 41Str k eti ng a te gies 1. Meth ods f or m ark eting pla n nin g a. Man y f ir m s have de ve lop ed pla nn ing m ethods t o h elp with m ark eting dec is io ns b. T wo of thes e t yp es of m ethods : th e s tr ateg ic b us ines s unit c onc ept , and t he m ark et s har e/m ark et gro wt h m atrix 2. Bus in es s por tf oli o a na l ys is a. T op m anagers at large f irm s need a m ethod f or s pott in g pr od uc t lin es tha t des er ve m ore in v es tm ent as we ll as l ines t ha t ar en ’t l i vi ng up to ex pec ta tio ns b. Portf oli o a nal ys is a ttem pts to e val uat e pr o duc ts an d de term ine the s tr onges t a nd weak es t c. Str ate gic b us in es s units i. A s tr ate gic b us ines s u nit ( S BU) is a k e y bus i nes s el em ent with in a d iv ers if ied f ir m ii. Eac h SBU has its o wn m anagers , res our c es , o bj ec ti ve s , and c om petitors ii i. Div is io ns , pr o duc ts l ines , or ev en a s ing le prod uc t m a y c ons titut e a s tr at eg ic bus i n es s unit F igur e 2.5 BCG Mar k et Shar e/ Mar k et G r owt h M atrix . T h ink of a pas t or pr es ent produc t or s erv ic e , a wel l- k nown bus in es s , or ev en a broad in dus tr y that mig ht f it i nto eac h

iv. An SBU , a ls o c al le d a c at e gor y, f oc us att ent io n of c om pan y m anagers s o that t he y c an r es pond ef f ec tivel y t o c han g in g c ons um er dem and wit hin l i m ited m ark ets 3. T he BCG m atrix a. T he m ark et s har e/m ark et gr owt h m atrix ( or BCG m atrix ) plac es SBUs in a f our - quadr ant c h art that pl ots m ark et s har e — the per c enta ge of a m ark et that a f ir m c ontr ols —a gai ns t m ark et growt h pote nti al b. T he quadr a nts are lab el ed s tars , c as h c ows , ques t ion mar k s , and dogs c. F ir m s in e ac h of the f our qu adr ant s r e quir e a uni que m ark eting s tr ateg y


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 42 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 42Str k eti ng a te gies quadr ant. d. Stars : i. Stars r epr es e nt u nits with h igh m ark et s har es in hi gh g r owt h m ark ets ii. T he y g en erate c ons id erab l e inc om e, but r equ ir e e ve n m ore c as h to f ina nc e f urther gr o wt h e. Cas h c o ws : i. Cas h c o ws ha ve hi gh m ark et s har es i n l o w- gro wth m ark ets ii. T hes e f irm s f oc us on m aintain ing th is s tatus f or as lo n g as pos s ibl e ii i. T he bus ines s pro duc es s tr ong c as h f lo ws , wh ic h c ou l d be us ed to f inanc e gro wt h of o ther S BUs with hi gh gro wth pote nti al f. Q ues tio n m ark s : i. Q ues tio n m ark s ac hieve lo w m ark et s har es in hi gh gr o wth m ark ets ii. Mar k eter s m us t dec ide whe ther to c o nti nu e s upp orti ng thes e produc ts or b us in es s es as the y r equ ir e m ore in ves tm ent than the c as h the y gen erat e ii i. If a ques ti on m ark c annot b ec om e a s tar, the f ir m s hould p ul l out of th e m ark et and targ e t oth er m ark ets with great er pote nti al g. Dogs : i. Dogs m anage lo w m ark et s har es in l o w- gro wt h m ark ets ii. SBUs her e pr om is e poor f utur e, a nd m ark eter s s hould c ons ider with dra wing f r om thes e m ark ets as quic k l y as pos s ibl e Str ate gic Im plic at ions of Mar k eting i n th e 21s t Cent ur y a. Pla nn ing has b ec om e vita l t o ,m ark eter s as the 21s t c e ntur y s p eeds ahea d with t ec hno lo gic a l a dva nc es b. Mar k eter s need t o p lan c aref ull y, ac c urat el y, a nd quic k l y t o ga in a c om petiti v e ad va nta ge in t o da y’ s g lob al m ark etplac e c. Mar k eter s need t o p lan wh en to ent er a m ark et, dif f erenti ate bet we en a s tar a nd a do g, and t ak e s uitab le ac tio ns As se ssmen t chec k qu est i o n s 7.1. W hat ar e S BUs ? Str at egic b us in es s units ( SBUs ) are k ey bus i nes s un its wi thi n div ers ifi ed fir m s . Eac h SB U has its own man agers , res our c es , ob jec tiv es , and c ompet itors . 7.2. I den tif y t he f our qu adr a nts in the BCG m atrix . T he BCG m atrix l abe ls S BUs s tars , c as h c ows , ques t ion mar k s , and dogs . Stars ar e the produc ts w


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 43 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 43Str k eti ng a te gies ith hi gh m ar k et s har es in hi gh - growt h m ark ets ; c as h c ows c om man d h igh mar k et s h ares in lo w - growth mar k ets ; q ues ti on mar k s ac hiev e lo w mar k et s har es in hi gh - growt h m ark ets ; and dogs m an age on ly low mar k et s har es in low - gro wt h mark ets .

AN SWER S AN D TE AC HI NG NO TES TO CH AP TER EXER CI SES Chapter 2 Assurance o f Learni ng Revi ew 1. St at e whet her each of t he f ollowing illustr at es str ateg ic or t act ical planning:


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 44 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 44Str k eti ng a te gies

a. G lobal aut om ak ers beg in set t ing up m anuf act ur ing plant s in China b. Play N T r ade Video Games a nd Dim ensions Games Cor por at ion m erg e c. T he Cleveland Browns g ive up draf t pick s t o obtain Q B Johnny Manzie l ( “ Johnny Football” ) d. A r eg ional air line looks f or ways t o expand t o ot her m ark ets Answer : a. str ategic planning b. st r at egic planning c. t act ical planning d. t actical planning Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Mark et ing Plan Learning O bj ect ives : 2- 1 T opic: A- head: Mark eting Planning : T he Basis f or Str ateg y and T actics Bloom ’s : Application Dif f icult y: Moderat e 2. I m ag ine you had a chance t o inter view G oog le co -f ounders Larr y Pag e and Serg ey Br in. W hat q uest ions m ig ht you ask each about st r at eg ic planning f or his division and t he f irm overall? Answer: St udent answ ers w ill var y. Quest ions w ill be f ocusedonstrategicplanning.Thefoundersmaybe qui zze d about organi zati on - w ide objectives , f undament al str ategies, long-t erm plans f or exist ing and new products, new business lines , possible plans f or inor ganic growt h , t ot al budget et c. Point value: 1 BUSPRO G : Ref lective t hink ing DI SC: Str ateg y Learning O bj ect ives : 2- 1 T opic: A- head: Mark eting Planning : T he Basis f or Str ateg y and T actics Bloom ’s: Application Dif f icult y: Moderat e 3. W hat is the dif f erence bet ween a f irm ’s m ission and its obj ectives? W hy is it im por t ant t hat bot h ar e conveyed clear l y t o em ployees and t o custom er s? Answer: A f irm ’s m ission is t he essent ial pur pose and philosophy t hat dif f er ent iates it fr om other companies . Adjustm ent s in t his st at ement r ef lect changing business environm ent s and m anagem ent philosophies. A f irm ’s obj ectives ar e its or gani zational goals , including specif ic intent ions t hat guide developm ent of m ar ket ing objectives and plans, of t en st at ed in t he com pany ’s m ission st at ement . These objectives guide developm ent of support ing m arketing objectives and plans. The c onveying of t he m ission and vision clear ly t o t he cust omer s is r equir ed in or der t o dif f er ent iate t hem selves fr om compet it ors. Em ployees need t o know t hem so t hat t hey put t heir eff ort s f or t he r eali zation of t hese objectives. Point value: 1 BUSPRO G : Analyt ic DI SC: Str ateg y Learning O bj ect ives : 2- 3 T opic: A- head: Def ining the Org anization’s Missio n and O bj ect ives


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 45 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 45Str k eti ng a te gies

Bloom ’s: Compr ehension Dif f icult y: Easy 4. O ver which of Por t er ’s Five Forces do consumers have t he g reat est inf luence? O ver which do t hey have t he least ? How m ight t hese f act ors af f ect a f ir m ’s overall m ark eting str ateg y?


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 46 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 46Str k eti ng a te gies

Answer: Consumer s have t he great est influence on t he bar gaining pow er of buyer s and t he t hreat of subst it ut es. Consumer s have t he least influence on t he bar gaining pow er of suppliers. W it h incr eased availabil it y of inform at ion, w hich t ends t o level t he playing f ield, r ivalr y w ill increase am ong compet itors w ho t ry t o diff erent iate t hemselves f r om t he cr ow d . The t op m anagem ent has t o keep t he consum er pref er ences in m ind w hile f or m ulatin g any st r at egy or plans lest t hey shif t their loyalt y t o anot her supplier. Point value: 1 BUSPRO G : Analyt ic DI SC: Str ateg y Learning O bj ect ives : 2- 4 T opic: A- head: Successf ul St r at eg ies: T ools and T echniq ues Bloom ’s: Compr ehension Dif f icult y: Easy 5. W hy is it so im por t ant f or a f ir m t o identif y it s cor e com pet encies? Answer: A com pany ’s st rengths r eflect it s cor e com pet encies —w hat it does well. Core competencies ar e capabilit ies t hat customer s value and com pet it ors f ind diff icult t o duplicate. Matching an inter nal strength w it h an ext ernal opport unit y produces a sit uat ion know n as lever age. To m ake t he m ost of any oppor t unit y, f irm s m ust m ake sure t o t ake advant age of t heir core competencies. Point value: 1 BUSPRO G : Analyt ic DI SC: Str ateg y Learning O bj ect ives: 2- 4 T opic: A- head: Successf ul St r at eg ies: T ools and T echniq ues Bloom ’s: Compr ehension Dif f icult y: Easy 6. How m ight an under standing of diversity help f orm ulate a f irm ’s m ark et ing str ateg y? Answer: The t ar get m arket is an essent ial element of any market ing st r at egy. Diversity plays an ever - increasing r ole in t ar get ing m ar kets. St r at egies t hat f ocus on sat isf ying t he needs of it s m ost pr ominent t arget gr oup ensur e m arketplace success. An u nder st anding of diversity helps f orm ulate str ategies t hat f ocus on groups w it h enor m ous buying pot ent ial. Point value: 1 BUSPRO G : Diversity DI SC: Str ateg y Learning O bj ect ives : 2- 5 T opic: A- head: Elements of a Mark et ing St r at eg y Bloom ’s: Compr ehension Dif f icult y: Easy 7. Suppose you have been hir ed as a m ark eter by an online r etailer, lik e W ayf air or Am azon, t o help develop a new m ark eting m ix. St at e one t hing you would do t o impr ove t he r et ailer’s posit ion t hrough each of t he f our str ateg ic elements: product , distr ibut ion, pr omot ion, and pricing . Answer: Pr oduct: Add m or e var iety by including m ore services


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 47 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 47Str k eti ng a te gies

Dist r ibut ion : St art oper at ions in m ore countr ies, or in m or e cit ies of exist ing countr ies Pr ic ing : Placing t he product com pet it ively in t he m arket w it h t he help of pr ice discounts Pr omot ion: Focus on social m edia m ar keting Point value: 1 BUSPRO G : Ref lective t hink ing DI SC: Str ateg y .


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 48 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 48Str k eti ng a te gies

Learning O bj ect ives : 2- 5 T opic: A- head: Def ining the Org anization’s Missio n and O bj ect ives Bloom ’s: Application Dif f icult y: Moderat e 8. W hat is the r ule of t hree? Suppose you work ed f or a sm all f irm in a larg e industr y — such as a sm all m anuf act urer of f ur nit ure. How m ig ht you actually use t he r ule of t hr ee t o enhance your f ir m ’s posit ion in t he m ark et place? Answer: The r ule of t hr ee m eans t hat in any indust r y, t he t hree st r onges t, m ost eff icient companies dom inat e betw een 70 and 90 per cent of t he m arket. Trying t o ent er t hat kind of m ar ket is dif f icult, especially f or a sm all com pany w it h lim it ed r esour ces. Some st r at egies include low er prices ( gr eater value) or new f eat ur es; or higher levels of cust omer ser vice. Hence, by adding m ore value t o one’s products, off ering exceptional levels of cust om er service , and com pet it ive prices can be a st r at egy t hat can be used t o enhance one ’s f ir m ’s posit ion in t he m ar ketplace. Point value: 1 BUSPRO G : Analyt ic DI SC: Str ateg y Learning O bj ect ives : 2- 6 T opic: A- head: Elements of a Mark et ing St r at eg y Bloom ’s: Compr ehension Dif f icult y: Moderat e 9. W hat is a portf olio analysis? W hat pur pose does it serve f or m arketer s? Answer: The business portf olio analysis evaluat es a com pany’s products and divisions, including st r at egic business unit s (SBUs) in or der t o det ermine w hich business unit s are t he st r ongest and w hich are t he w eakest . Point value: 1 BUSPRO G : Analyt ic DI SC: Str ateg y Learning O bj ect ives : 2- 7 T opic: A- head: Methods f or Mark eting Planning Bloom ’s: Knowledg e Dif f icult y: Easy 10. How does the BCG m atr ix help m ark et er s decide which pr oducts t o of f er? According t o t he m at r ix, wh ich t ypes of product s are m ost desir able, and wh y? Answer: The m arket shar e/m arket gr ow t h m at r ix places t he f irm ’s m arket shar e on one axis and t he m arket ’s growt h pot ent ial on t he ot her axis. The r esult ing f our quadr ant s are labeled: st ars ( high m ar ket shar e, high- growt h m arket), cash cow s ( high m arket shar e, low- growt h market) , question m ar ks ( low m arket shar e, high - gr ow th m ar ket) , and dogs ( low m ar ket shar e, low - grow th m ar ket) . I n high gr ow t h industr ies, st ar s ar e t he m ost desirable, as t hey have a high m ar ket shar e. W hereas, in st able or low gr ow t h industr ies, cash cow s ar e desir able. They have a high m arket shar e and gener at e cash t hat can be used t o f und ot her SBUs of t he f irm t hat has t he pot ent ial f or success. Point value: 1


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 49 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 49Str k eti ng a te gies

BUSPRO G : Analyt ic DI SC: Resear ch Learning O bj ect ives : 2- 7 T opic: A- head: Methods f or Mark eting Planning Bloom ’s: Knowledg e Dif f icult y: Easy


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Project s and Teamw ork Exerci ses 1. Answer: When st udent s choos e a company w hose goods and ser vices are f amiliar t o t hem and cr eat e a m ission st at ement , t hey m ight st art w it h com panies t hey part icularly adm ir e and check t heir w ebsit es f or m ission st at ement ideas. When f orm ulating a m ission st at em ent , t hey should m ake sure t hat t he company’s over all broad objectives are spelled out , it s philosophy is st ated, and it s int ent ions are list ed in a clear - cut and st r aight f or w ar d w ay. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive: 2 - 3 T opic: A- head: Def ining the Org anization’s Missio n and O bj ect ives Bloom ’s: Application Dif f icult y: Moderat e 2. Answer: St udents should f ir st st udy Apple and it s st r at egies t o be leader s in innovat ive pr oducts, and t hen t hey should r esear ch t he pr oduct s of anot her f irm t hat produces eit her a digit al m usic player or a sm art phone t o lear n about it s st r at e gy. They m ust under st and t he benef it s as w ell as t he r isks involved in being a f irst m over . They m ust r esear ch t he sales pr ogr ess of t he second m over f irm s, and present t he f indings . Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive : 2- 3 T opic: A- head: Def ining the Org anization’s Missio n and O bj ect ives Bloom ’s: Application Dif f icult y: Moderat e 3. Answer: St udents ar e expected t o under st and the str ategies of Samsung and Sony. I n cr eat ing m arket ing st r at egies, a f ir m decides t o dir ect it s eff ort s t ow ard a par t icular group of consumer s called a t arget m arket . St udent s w ill need t o narr ow t heir m arket ing st r at egy t o f it cert ain specif ic gr oups of people, keeping in m ind dem ogr aphics, geogr aphical locat ion, lif est yle, et c . The str ategies of Sony and Samsung w ould be diff erent ; hence, st udent s should under st and t he diff erences in t heir appr oach in depth. Such an eff ort w ill help t hem get clarity on t he concept s r elated t o the elements of m arket ing st r at egy. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive: 2 - 3 T opic: A- head: Def ining the Org anization’s Missio n and O bj ect ives Bloom ’s: Application Dif f icult y: Moderat e


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4. Answer: The st udent s should select any indust ry of t heir choice and pr eference f r om t he f our opt ions. They m ust r esear ch t he various com panies in t he industry, batt ling f or a higher m arket shar e. Fr om t he f indings, t he t op t hree com panies t hat have a m arket shar e t ot aling 70- 90 per cent are t o be list ed. Few st udent s can also explain t he r easons f or such domination by t hese big player s of t he industry. Point value: 1 ..


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 52 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 52Str k eti ng a te gies

BUSPRO G : Ref lective Think ing DI SC: Resear ch Learning O bj ect ive : 2- 6 T opic: A- head: Elements of a Mar k et ing St r at eg y Bloom ’s: Application Dif f icult y: Moderat e 5. Answer: St udents m ust select any corporat ion fr om t he f our list ed in t he t ext. Fr om t he available product lines, t hey should select at least 6- 8 and categori ze t hem into st ars, cash cow s, quest ion m arks, and dogs. Their r esear ch should be accurat e enough t o classif y t he product lines into t he f our dist inct categories. St udents can also gr aphically r epr esent t he pr oduct lines in t he f our quadr ant s f or a bet t er r epr esent ation of t heir f indings. There should be a discussion over a f ew product lines t hat m ay f all in m ore t han one categor y. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Resear ch Learning O bj ect ive: 2 - 7 T opic: A- head: Methods f or Mark eting Planning Bloom ’s: Application Dif f icult y: Moderat e Cri ti cal- Thinking Exerci ses 1. Suppose you are a mark eter f or a U. S. m anufactur er of pet supplies. Two t op execut ives have proposed expanding t he company by opening r etail st ores and m arketing pet s on- sit e —puppies, k it t ens, r abbit s, bir ds, f ish, and the lik e. W hat are t he potent ial benef it s and dr awbacks of m ak ing a m ove lik e t his? How wou ld you advise your company t o pr oceed? Answer: A com pany ’s st rengths r eflect it s cor e com pet encies —w hat it does well. They are capabilit ies t hat customer s value and com pet it or s f ind diff icult t o duplicate. St r aying f rom cor e compet encies m ay have pot ent ial r ew ards, such as expanding into more at tr active m ar kets, but is also r isky. O n t he other hand, even if a com pany f ocuses on it s core compet encies, somet im es it needs t o broaden it s off er ings t o m aintain a compet it ive edge . The benef it s could be bet t er r each and coverage. Dr aw backs could be inabilit y of t he com pany to leverage t he decision. A compr ehensive SWO T analy sis can help t he t op m anagement t o t ake t he r ight decision. St udent s’ answ ers m ay vary. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive: 2 - 4 T opic: A- head: Successf ul St r at eg ies: T ools and T echniq ues Bloom ’s: Application Dif f icult y: Moderat e 2. Netf lix has m ade t housands of st r eam ing videos available t o its unlim it ed subscr iber s. How does t his st r at eg y dem onst r at e a st r at eg ic windo w f or t he company? Answer: The view t hrough a st r at egic w indow show s planner s a w ay t o r elate pot ent ial oppor t unit ies t o company capabilit ies. Net f lix is in a unique posit ion because unlike pr evious leader s in t


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 53 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 53Str k eti ng a te gies

he m ovie r ental business, it delivers m ovies and TV series dir ectly t o P Cs via t he I nter net . A new syst em, int r oduced by t he com pany w ill allow t hem t o sidest ep comput ers and deliver m ovies dir ect ly t o t elevision sets. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 54 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 54Str k eti ng a te gies

Learning O bj ect ive: 2 - 4 T opic: A- head: Successf ul St r at eg ies: T ools and T echniq ues Bloom ’s: Application Dif f icult y: Moderat e 3. Choose one of t he f ollowing products and descr ibe howitmay(oralreadyhas)becomevulnerableto subst it ut ion. T hen descr ibe an overall str ateg y —wit h t wo or t hree t actics—f or r educing t his vulner abilit y. a. pr inted copies of per iodicals or books b. T Vs c. greet ing cards d. t r avel ag encies Answer: This exercise asks st udent s f or an opinion but suggest t hat st udents t hink about pr oducts t hey use. Def ending a pr oduct f r om com pet it ion m ight include adding f eat ur es, delight ing custom ers w ith bet t er ser vice, im pr oving product qualit y, or low ering prices. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive: 2 - 4 T opic: A- head: Successf ul St r at eg ies: T ools and T echniq ues Bloom ’s: Application Dif f icult y: Moderat e 4. Resear ch t he websit e of one of t he f ollowing r et ail f irm s t o ident if y it s t arg et m ark et . T hen out line a st r at eg y f or expanding t hat t arg et m ark et. a. For ever 21 b. T arg et c. Penzeys Spices d. Nordstr om e. Chico’s Answer: St udents ar e expect ed t o select any one among t he f ollow ing r etail f ir ms. The t arget gr oups m ust be clear ly def ined, explained, and a str ategy t hat cat er s t o t hose groups m ust be out lined. I deas f or expanding t his t arget m ar ket m ust be f easible, and should be applicable t o t he curr ent envir onm ent. A discu ssion on how t o improve t he of f er ings, and expand t he t ar get m arkets w ill help t he st udent s to under st and t he concept in a bet t er w ay. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive: 2 - 5 T opic: A- head: Elements of a Mark et ing St r at eg y Bloom ’s: Application Dif f icult y: Moderat e 5. Resear ch a com pany such as L.L. Bean or Mo ndelez I nter nat ional (f orm erly Kr af t Foods ) t hat has a num ber of dif f er ent successf ul SBUs. W hat f act ors do you t hink mak e t hese unit s —and t his company— successf ul f r om a m arketing st andpoint?


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Answer: St udent answ ers m ay var y. To evaluat e each of t heir organi zation ’s st r ategic business unit s, st udent s could use t he market shar e/m arket gr ow th m at r ix developed by t he Boston Consult ing G r oup. Discussion could also f ocus on how t he selected company m anages it s SBUs. Point value: 1 BUSPRO G : Ref lective Think ing .


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 56 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 56Str k eti ng a te gies

DI SC: Resear ch Learning O bj ect ive: 2 - 7 T opic: A- head: Methods f or Mark eting Planning Bloom ’s: Application Dif f icult y: Moderat e Et hics Exerci ses A r ecent news st or y r epor t ed a shocker f r om t he Cent ers f or Disease Cont r ol and Pr event ion ( CDC) : bread is t he number - one sour ce of sodium in t he averag e Am erican diet. In f act , m ost people g et twice as m uch sodium f r om bread and r olls as t hey do f r om a bag of salt y snacks lik e chips or pr etzels. I m ag ine t hat you are a mark eter f or a bak ing company whose m ain pr oduct lines ar e br ead and r olls. For year s, your com pany has f ocused on “ hear t - healthy” as a key claim . 1. You have been assig ned t o cr eat e a new st r at eg y and t act ics f or your f irm ’s Facebook pag e. W ould you cont inue t o emphasize t he heart - healt hy m essag e? W ould you r ef er to t he CDC st udy or ig nore it? Answer: The exer cise r aises som e import ant issues and st udent s m ay com e up w it h cont r adict ing opinions . O n one hand, ther e is a r isk of losing market shar e by dropping the “ hear t- healt hy ” m essage . O n t he ot her hand, beat ing compet it ion w ould r equir e att r ac t ing consum ers using innovat ive, honest w ays w hich w ould r equire t aking t he CDC st udy into account . This exercise w ill put t he st udent s in an ethical dilemm a, and give solutions t hat can beat compet it ion in eit her et hical or unet hical w ays. Som e st udent s m ay opt t o ignor e t he st udies t hat have discr epancies in t he r esult s, w her eas, som e m ight f ollow t hem. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive : 2- 1 T opic: A- head: Mark eting Planning : T he Basis f or Str ateg y and T actics Bloom ’s: Application Dif f icult y: Moderat e

2. As you r evie w t he Facebook sit e, you not e t hat pack ag ing f or your company’s bread uses t he words “ heart - healt hy. ” W ould you bring t his t o t he at t ention of t he m arketing group r esponsible f or product pack ag ing ? Or would yo u look f or a way t o obscur e t he pack age desig n online? Def end your answer. Answer: St udents can have dif f er ing opinions f or this question. Some m ight w ant t o br ing t his t o t he att ent ion of t he m arket ing group. Som e m ight w ant t hem t o look past it. The st udent s should just ify t heir solutions and elaborat e the r easons f or t he pricing str ategies used f or t he f ir m ’s f ood item s. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive : 2- 5


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T opic: A- head: Elements of a Mark et ing St r at eg y Bloom ’s: Application Dif f icult y: Moderat e

I nternet Exerci ses 1. Busi ness portf oli o anal ysis. O ccasionally, companies sell par t s of t hemselves t o ot her f ir m s. O ne st ated m ot ive f or such divestitur es is t hat t he sold assets ar e a poor str ateg ic f it f or t he r est of t heir business portf olios. One r ecent example is t he sale of a cont r olling inter est in NBC Universal by G ener al


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 58 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 58Str k eti ng a te gies

Electr ic t o cable g iant Com cast . Using a m aj or search eng ine, r esear ch t he sale of NBC Universal. I n t he cont ext of business po rtf olio analys is, why did G E decide t o sell, and why did Com cast decide t o buy NBC Universal? Answer: St udent answ ers w ill var y. St udent s ar e expected t o visit a f ew websit es t hat provide inform ation onbusinessportfolioanalysis,NBC Universal, G ener al Electr ic, and Comcast. The answ er s m ay include some of t he inform ation that f ollow s. NBC Universal is a m edia com pany — hom e t o a broadcast netw or k, m ovie st udio and a str ing of cable net w or ks —w hich is not a compet ency f or G ener al Electr ic. How ever, Comcast pr ovid es cable t elevision, broadband I nter net, and t elephone service to both r esidential and com m er cial custom ers . It m ay be in a bet t er posit ion t o handle NBC ’s operat ions. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Resear ch Learning O bj ect ive : 2- 7 T opic: A- head: Methods f or Mark eting Planning Bloom ’s: Application Dif f icult y: Moderat e 2. M i ssi on and O bject i ves. Visit t he cor por at e websit e of Under Arm our (www. uabi z. com) . Def ine the f ir m' s m ission and objectives, and discuss how it s brand and activit ies support bot h. Answer: St udent answ ers m ay var y. The m ission st atem ent of Under Armour is “ m ake all at hletes bet t er t hrough passion, design, and t he r elent less pur suit of innovat ion. The f irm ’s objectives can include fast delivery of product s, ef f icient supply chain m anagement, comm itm ent t o creat ing innovat ive pr oducts, and so on. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive : 2- 3 T opic: A- head: Def ining the Org anization’s Missio n and O bj ect ives Bloom ’s: Application Dif f icult y: Moderat e 3. SWO T Anal ysis . Visit t he websit e of an org anization whose g oods and services int erest you — such as Columbia Spor t swear , t he new SEC net work , Expedia, or Ur ban O utf it t er s. Based on your r esear ch, cr eat e a SW OT analysis f or your f irm. O utline your own ideas f or incr easing t he f irm ’s st r engths and r educing it s weak nesses. Answer: St udent answ ers w ill var y according t o the product and industr y they choose. I n a SWO T analysis, t he st r engt hs of a f ir m are typically inter nal and ar e t he cor e com petencies of t he f irm , like eff icient supply chain m anagem ent, just - in-t im e inventor y syst em , and so on . The w eaknesses are inter nal like lack of ef f icient m anagement. The oppor t unit ies are usually ext ernal like t he changing custom er pref erences and t he econom ic sit uat ion. The t hreat s w ould normally include com pet it ors. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive : 2- 4


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T opic: A- head: Successf ul St r at eg ies: T ools and T echniq ues Bloom ’s: Application Dif f icult y: Moderat e

.


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 60 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 60Str k eti ng a te gies

Case 2. 1 Hot els Target M il l enni als w it h New Amenit i es —Q uest i ons for Cri ti cal Thinking 1. Hotel chains see m illennials as cr it ical t o t heir f inancial g r owt h. W hat are som e r easons why? Answer: Millennia ls have become t he t arget m arket f or hot el chains of late. Som e of t he r easons f or t his change in t ar get could be t hat t he m illennials w ield a spending pow er of billions of dollars a year . The evolving t r ends of get aways and having new experiences ha ve t aken t his gener ation by st orm and being equipped w it h t he abilit y t o af f or d luxury, t hey cannot be over looked. W it h recor ds show ing t hat a spending increase of 20 per cent in one r ecent year, hot el chains have no choice but t o shift t heir f ocus. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive : 2- 5 T opic: A- head: Elements of a Mark et ing St r at eg y Bloom ’s: Application Dif f icult y: Moderat e 2. How should t he hot el industr y use social m edia t o connect wit h young er t r avelers? Answer: The social m edia can be used in var ious w ays in or der t o connect w it h young guest s. Hot els, by increasing t heir online presence, can m onit or com plaints or suggest ions that ar e being post ed and t ake t hem into account. These netw orks can be enabled t o f acilit ate tr avel ar r angement s and also be made t o serve as a sour ce f or enquir y or help. Point value: 1 BUSPRO G : Ref lective Think ing DI SC: Str ateg y Learning O bj ect ive : 2- 5 T opic: A- head: Elements of a Mark et ing St r at eg y Bloom ’s: Application Dif f icult y: Moderat e Vi deo Case 2. 2 Nederl ander Produci ng Company Spot li ght s Cust omer Rewards —Q uesti ons f or Cri ti cal Thinking 1. How does t he Audience Rewards prog r am suppor t Nederlander’s overall st r at eg ic plan? Answer: The Audience Rew ards progr am suppor ts Nederlander’s over all st r at egic plan by off ering a w ider r ange of compat ible goods and ser vices designed t o att r act new cust omer s and st r engt hen loyalt y among exist ing cust omers. It also gives Neder lander a single pla t f or m—backed by other s in t he ent ert ainment industr y —t o m arket it s m essages to t ar get ed consum ers. Part nerships w it h lar ge corporat ions such as St ar w ood Hotels and t he m ajor air lines give Neder lander access t o gr eat er r esources and a gr eat er num ber of pot ent ial customer s. 2. I t m ig ht seem as t houg h Nederlander’s f ir st -mover st r at eg y has t he entert ainment r ewards m arket lock ed up. But what st r at eg ies and t act ics could a second -str ateg y m over use t o g ain access t o t heat er custom ers? Answer: A second m ove r could use t he f ollow ing st r at egies and t act ics t o gain access t o t he ent ert ainment r ew ar ds market: ( 1) sur vey Audience Rew ar ds custom er s to learn of any dissat isf act


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 61 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 61Str k eti ng a te gies

ion w it h t he progr am; ( 2) note any w eaknesses in Audience Rew ards and cr eate im pr ovem ent s; ( 3) approach diff erent part ners in t he t r avel and hospit alit y industr y ( such as r estaur ant s, r egional air lines, and even r etailers) ; ( 4) enter a new m ar ket overseas; and ( 5) est ablish a niche such as of f - Br oadw ay or avant - gar de t heater or cater t o a specif ic audience such as m illennials or retirees.


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 62 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 62Str k eti ng a te gies

CO LL ABO R ATI VE LE ARNI NG EXERCI SES Ni che M arketi ng Purpose: T o help st udents under stand t he im port ance of an appropr iate niche m ark et segment Backgr ound: T his exercise is t o help the st udent s under st and how an org anization dir ect ed at a part icular niche m ark et seg m ent has m ore scope Relationship t o T ext : T arget m ark et Est im ated Class T ime: 25 m inutes Mater ials/ Pr eparat ion: Develop a list of niche busines s t ypes f or your student s t o analyze in sm all g r oups. Possibilit ies include a luxury watch store , a diamonds st ore, a luxur y car com pany, et c. Exercise: Pr esent t he class wit h a list of business t ypes. Beg in by brainst orm ing f or a g eneral list of consumer groups t hat can ser ve as niche g r oups. T hen, divide t he st udents into t wo groups. Have each g r oup m at ch a t ype of business pr esent ed to an appr opr iate niche mark et segment. Each st udent g r oup is t o support t heir m apping wit h an arg um ent . As t he discussion proceeds, r emind t he st udents of t he im port ance of having a specif ic niche m ark et seg m ent st r eam lined by ext ensive m ark et r esearch in order t o avoid loss . Q uest ions f or Ref lect ion: How does diversity appl y t o niche m ark et seg m ent s ? How does det erm ining a niche m arket segment inf luence t he f orm ing of a m ark et ing m ix?

Fir st- M over St rat egi es Purpose: T o help st udents g ain insig ht into t he concept of f ir st- m over str ateg y Backgr ound: T his exercise is t o m ak e t he st udents aware of t he r isk s and advant ag es of opt ing t his str ateg y


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 63 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 63Str k eti ng a te gies

Relationship t o T ext : Fir st -m over st r at eg y Est im ated Class T ime: 15 m inutes .


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 64 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 64Str k eti ng a te gies

Mater ials/ Pr eparat ion: None needed Exercise: Pr esent t o t he st udent s a part icular industr y and ask t hem t o come up wit h an idea f or a product t hat is f r esh and unlik e any t hat exist s. Em phasize t hat t he st udent s need t o conj ure a pr oduct t hat has t he pot ent ial t o m ak e t hem a pioneer in the industr y. T hen, have a f ew of t he st udent s present t heir ideas while pointing out t he possible m ark et ing r isks in pur suing t he product in q uest ion. Mak e sure t o remind t hem of t he cr it ical t hink ing t hat is req uir ed when being innovative. Q uest ions f or Ref lect ion: W hat are some of t he possible r isk s of being a f irst -m over in t he m arket? Ar e innovations t o be consider ed t aboo in or der to m aintain m ark et presence?

Pl anning Throughout the Organi zat i on Purpose: T o hig hlig ht a k ey challeng e in g ather ing inf or m ation f or str ateg ic planning Backgr ound: Research clear ly st ates that when your ent ir e organization g ather s and shares inf or mation, t he planningprocessismoreeffectiveandbetter int eg rated into t he org anizational cult ure. But the bestwaytoachievefullemployeepart icipat ion is m uch less clear . T his exercise is designedto helpstudentsexplorepotential approaches t o achieve m ore widespread inf orm ation shar ing . Relationship t o T ext : Planning at Dif f er ent O rganization al Le vels Est im ated Class T ime: About 10 to15 m inut es Pr eparat ion/ Mater ials None needed Exercise: Ask your class why t hey t hink it is so dif f icult t o achieve a f r ee f low of inf orm ation and ideas in m ost com panies. As t hey shar e t heir t houg hts, you m ay want t o point out t hat m oney isn ’t always t he answer; in f act, of f er ing m oney in exchang e for ideas can spawn a count erpr oductive, compet it ive dynam ic among em ployees at all levels. Ir onically, t echnology doesn ’t alwa ys help eit her . Joseph Pr iestley, a pioneer of m odern science, summ ed up a comm on issue by observing , “ T he m ore elaborat e our m eans of comm unication, t he less we com m unicat e. ”


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 65 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 65Str k eti ng a te gies

Af t er a br ief discussion, break your class int o small t eam s and g ive about f ive m inut es t o brainstorm possible solutions. W hen you r econvene as a class, ask each g roup t o shar e t heir best idea ( possibilit ies usually r ang e f r om host ing week ly planning lunches wit h all employees, t o eng ag ing I ntr anet approaches, t o r aising overall pay) . T his of t en leads t o a helpf ul and spontaneous discussion about which m ethod work s best in which situat ion, and why. Q uest ions f or Ref lect ion:


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 66 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 66Str k eti ng a te gies

How does planning connect t o cor por at e cult ure? I s em ployee par t icipat ion lik ely t o become m or e or less im port ant as our economy evolves? W hy?

Defi ning t he O rganization ’ s M i ssi on and O b ject i ves Purpose: T o g ive st udent s a per sonal per spect ive on m ission st at ement s Backgr ound: T his exercise is desig ned t o explore and ar t iculate t heir per sonal “m ission st at ement s. ” T ypicall y it is bot h int erest ing and inspir ing , and helps st udent s under st and how org anizations use t heir m ission st at em ent s t o dif f erent iate t hemselves and t o g uide t heir decision -m ak ing at a m or e visceral leve l. Relationship t o T ext : Def ining t he O rg anization ’s Mission and O bj ect ives Est im ated Class T ime: About 10 m inut es Pr eparat ion/ Mater ials: Each st udent will need paper and a pencil or pen. Exercise: Ask each st udent t o spend a f ew m oment s wr it ing a per sonal m ission st atement f or his or her lif e. For t he discussion t o be ef f ect ive, avoid pr oviding m any cues. Yo u can let t he discussion prog r ess on it s own and inter vene t o provide a direction when st udent s g et st uck. Af t er about f ive m inut es, ask f or volunt eer s t o shar e t heir st at em ents. If no one volunt eers, st ar t by calling on a f ew people who t end t o be art iculate in class. T he r esult s can be stagg ering . And t he d iscussion is t ypicall y spontaneous and livel y—but if not, ask student s t o ident if y sim ilarities and dif f er ences in t heir st atem ent s, possibly across g ender , ag e, hom etown, colleg e m aj or , or ot her dem ogr aphic t r ait s and lif est yle char act eristics. W hat do t heir statem ent s say about et hics, values, and locus of cont r ol? How do t heir per sonal m issions inf luence t heir actions and decisions on a day - to- day basis? You m ay want t o close by calling t heir at t entio n t o t he obvious par allels bet ween per sonal and org anizational m issions. Q uest ions f or Ref lect ion: W hat are t he char act er ist ics of a str ong m ission st atem ent ? ( You m ig ht want t o pr ecede t his q uest ion wit h som e examples of cor por at e m ission st at ement s. Som e p ossibilit ies : Merck —t o preserve and im prove hum an lif e; Mary Kay—t o give unlim it ed oppor t unit ies f or women .)


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 67 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 67Str k eti ng a te gies

Ext end t he exercise by ask ing each st udent t o do a per sonal SW OT analysis, t he log ical next st ep in str ateg ic planning. St rat egi c Pl anning Purpose: T o g ive your st udents hands - on exper ience wit h basic str ateg ic planning f or a very f am iliar ent it y— t hemselves! Backgr ound: .


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 68 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 68Str k eti ng a te gies

At t em pting t o im plement st r at eg ic planning, st udents of t en st r ugg le t o f ind t he balance bet ween an approach t hat ’s t oo narr ow and an appr oach that ’s t oo broad. T his exercise is desig ned t o help st udent s achieve t he r ig ht balance by examining their per sonal str ateg ic plans and zeroing in on bot h wide- r ang e and detailed issues ( while r eceiv ing som e unexpect ed g uidance f r om t heir peer s about t heir car eers). Relationship t o T ext : St r ateg ic Planning Est im ated Class T ime: About 15 m inut es Pr eparat ion/ Mater ials: Each st udent will need paper and a pencil or pen Exercise: Ask st udent s t o wr it e down a brief st r at eg ic m ission st at ement f or t heir career s, look ing at t he f ive - year hor izon. From a prof essional st andpoint , what do t hey aspir e t o be? Collect t he paper s, shuf f le t hem , and r edistr ibut e t hem t o t he class. Ask each st udent t o wr it e a f ive - point st r at eg ic plan f or t he person whose paper he or she r eceived. Each point in t he plan should be no m ore t han a sent ence or t wo. Remind t he class t o be sure t hat all of t heir points are specif ic and m easurable, and m ost im port ant ly, will bring t he st udent closer t o t he overall st r at eg ic g oal. Af t er about t en m inut es, call on a handf ul of st udent s and ask t hem t o shar e t he ir classmat e ’s g oal and t he f ive - st ep plan t hat t hey cr eat ed. Q uest ions f or Ref lect ion: W as it easy or har d t o wr it e t he plan? W hy? W here did t hey have pr oblems? How could a st r at eg ic plan help develop your career ? W hy? How does develop ing a per sonal st r at eg ic plan compare t o developing a business str ateg ic plan?

Form ulat i ng a M arket i ng Str at egy Purpose: T o help st udents explore str ateg ic solutions f or a cont emp or ary m ark et ing issue Backgr ound: Not sur prising ly, f ast -f ood r est aur ant s ar e f eeling under sieg e. Recent st udies ar e hig hlig ht ing healt h hazards acr oss t he U.S. and cit ing r am pant obesit y, child obesit y, the dang ers of tr ans f at s, and m or e . As low- carb diets becam e popular , r et ail sales of f r ench f r ies —a st aple of f ast -f ood r estaur ant s—plumm eted, dr opping 2.9% in 2001, 3.3% in 2002, and 10% in 2003 ( www. wh ybiotech. com) . From a PR per spect ive, the document ary Super Size Me f anned t he f lam es. T his exercise is desig ned t o help st udents explore pot ent ial solutions — and et hical im plications—f or this st rateg ic challeng e f r om t he f ast -f ood indust r y perspect ive.


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 69 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 69Str k eti ng a te gies

Relationship t o T ext : For m ulating, I m plem ent ing, and Monit oring a Mark et ing Str ateg y Est im ated Class T ime: About 20 t o 25 m inut es Pr eparat ion/ Mater ials:


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 70 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 70Str k eti ng a te gies

You m ay want t o copy t he backg r ound and t he case situat ion f or each st udent . Exercise: Divide your class int o small g r oups and shar e wit h t hem t he f ollowing case. Sit uat ion : You and your t eamm at es ar e par tner s in t he owner ship of a m edium - sized f ast -f ood chain in t he Mid west. You own 41 out lets, m ost of t hem in sm all t owns. T he m ainst ay of your m enu is ham burg er s and French f r ies, alt houg h you also of f er a couple of sandwiches, chips, sof t serve ice cr e am , and sodas. Your m ost im por tant cust om ers are m en ag ed 18 - 34 (t hey account f or about 20 per cent of your custom ers and about 5 5 per cent of your sales), but since r est aur ant opt ions are lim it ed in m ost of t he t owns wher e you operat e, you serve custom er s a cr oss a wide dem og r aphic r ang e. Sales in t he past t wo year s have been dropping at an acceler ating r ate . You have t o m eet wit h your par t ner s t o discuss pot ent ial solutions. G ive your class about 10 m inut es t o br ainstor m opt ions. Encourag e t hem t o consider a ll t he possibilit ies including doing not hing ( “T his will all blo w over ….” ). T hen, dir ect each g r oup t o choose t heir best opt ion, and t o ident if y t he potent ial r isk s and benef it s (e.g. , if t hey m ade chang es t o att r act new custom er s, will t hey alienate t hei r cur r ent custom ers?) . Reconvene as a class, and ask each g r oup t o r epor t brief ly to t heir peers. W hich solution does t he class lik e best ? W hy? Q uest ions f or Ref lect ion: W hat addit ional inf orm ation do you need t o f or m ulate t he best solution? W hat are t he ethical implications of each choice? Should your per sonal per spect ive play a r ole in your st r at eg ic decision m ak ing ? W hy or why not ? ( You m ay want t o pr ef ace t his q uest ion by ask ing how m any of your st udent s eat f ast f ood m ore t han once a week . )

Promoti on St rat egy and Pri ci ng St rat egy Purpose: T o explore t he r elationship bet ween t he pr omot ional and pr icing st r at eg ies Backgr ound: Clear ly, all element s of the m ark eting m ix are interr elated , so t his exercise is desig ned t o hig hlig ht t he link s bet ween pr om otion and pr icing Relationship t o T ext : Pr omot ion Str ateg y and Pr icing St r at eg y Est im ated Class T ime: About 15 m inut es Pr eparat ion/ Mater ials: Each st udent needs t o have unlined paper and a pencil or pen Exercise*: Br eak your class into small g r oups. Ask each group t o choose a g ood or a service t hat t hey all k now and lik e, and t o cr eate t wo ads f or t hat product: one t hat f ocuses on price, t he ot


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 71 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 71Str k eti ng a te gies

.

her on t he f eat ur es and benef it s of the product itself . (T hey can do pr int, r adio, T V , or I nter net ads, as long as bot h ads are desig ned f or t he sam e m edia.) . Let t hem k now upf r ont t hat t hey’ll need t o pr esent t heir ads t o t he class. W hen t he t eam s present t heir ads, conduct a q uick vote t o see which ad t he class lik ed bett er f or each pr oduct . Keep a t ally on t he board showing each of t he product s and t he winning t ype of ad. Result s will vary sig nif icant ly based on t he pr oduct categ ories ( and, of cour se, t he cr eat ivit y of the st udent s). Follow- up discussion can be inter est ing, surpr ising, and


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 72 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 72Str k eti ng a te gies

f un. W hat t ype of ads work ed best , and why? Ho w did t he product categ or y and pr ice af f ect t he prom ot ional str ateg y? Does t he broader m arket ref lect t he f indings of t he class? W hy or why not ? Q uest ions f or Ref lect ion: W hat f act ors should a com pany consider when develop ing t hei r pr icing str at eg ies? W hat about t heir prom ot ional st r at eg ies? W hy? *T his exercise was adapted f r om t he t ext.

The M arketi ng Envi ronment Purpose: T o hig hlig ht t he im port ance of t he m ark et ing envir onm ent Backgr ound: T his q uick, discussion- based exercise is desig ned t o help st udent s bett er under st and t he im pact of t he ext ernal envir onment on m ark eting decisions Relationship t o T ext : T he Mark eting Envir onm ent Est im ated Class T ime: About 10 m inut es Mater ials/ Pr eparat ion: None needed Exercise: Choose a br anded pr oduct t hat your st udent s seem t o all k now and enj oy. Hig her - end product s, such as an Apple iPod or a Burt on snowboard seem t o work especially wel l f or t his exercise. G uide your st udents in a discussion of how each element of t he ext ernal e nvir onm ent — compet it ive, polit ical- legal, econom ic, t echnolog ical, and social - cult ural—could inf luence t he success of t heir product over t he next f ive year s. Encourag e t hem t o consider f actor s beyond t he obvious ( e.g ., t he em erg ing developm ent of year -round snow- m ak ers, or vi r t ual r ealit y snowboarding g ames). As you develop your list , you m ay want t o also r emind t hem t hat a m ark et er cannot cont r ol the ext ernal envir onm ent, but he or she m ust r espond t o it ef f ect ively. Q uest ions f or Ref lect ion: W hich element of t he m ark eting envir onm ent is most im port ant ? W hy? W ould t he answer be dif f erent f or dif f erent pr oduct cat eg ories? W hich element s have t he m ost im pact on a m arketer ’s day-to- day decision - m ak ing ? W hich element s are lik ely t o g ener ate surpr ises? ( You m ay want t o point out how m any companies were surpr ised by t he bur st ing of t he “ dot - com ” bubble in t he 1990s.)


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 73 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 73Str k eti ng a te gies

W hat are ef f ective ways t o m onit or t he m ark et ing envir onm ent on an ong oing basis?

BCG M at ri x Purpose: T o help st udents g ain a fuller under st anding of t he BCG m at r ix as a planning t ool


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 74 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 74Str k eti ng a te gies

Backgr ound: W hile t he concept of t he BCG m atr ix is st r aig htf orward, m any st udent s have tr ouble under st anding how it applies t o act ual sit uat ions as an investm ent t ool. This exercise is desig ned t o f oster a deeper unde rst anding t hr oug h a hands - on case st udy approach. Relationship t o T ext : BCG Matr ix Est im ated Class T ime: About 25 m inut es Mater ials/ Pr eparat ion: None needed Exercise: Announce t o your class that t hey wi ll do a case study on t he t alent ag ency business ( which m ost of t hem f ind m or e g lamorous and excit ing t han it reall y is) . Beg in by br ainstorm ing a list of m ovie st ars, celebr it ies, and entert ainer s. E ncour ag e t he class t o include a wide variet y, f r om cur r ent box off ice dr aws, t o over - t he- hill t alent s, t o em erging st ars. T hen, divide yo ur st udent s into sm all g roups and t ell t hem t hat each group r epr esent s a sm all t alent ag ency. T heir list includes t he st ars t hat you list ed on t he board. G ive t hem each a hypot het ical $10 m illio n t o invest in m ark et ing t he per sonalit ies in t heir st able of st ars, and dir ect t hem t o use t he BCG Matr ix t o m ak e t heir investm ent choices. Ask each g r oup t o present t heir allocat ion and r ationale in t er ms of t he m atr ix. You will probabl y f ind t hat t hey were t em pted t o invest big dollars in t heir “ cash cows, � wh ich m ak es f or an interesting discussion. Q uest ions f or Ref lect ion: W hat are t he str eng t hs and weak nesses of t he BCG Matr ix as a st r at eg ic planning t ool? W hat k ind of inf or m at ion do you need in or der t o use t his t ool m ost ef f ect ively?


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar 75 Part 1 Des i gni ng C us tom er - O r iented Mar k eting 75Str k eti ng a te gies

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