Assignment #16 Chapter 16 PDF

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Assignment over Chapter 16 questions...

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1. What is marketing strategy and how companies formulate it? What measures or metrics companies use to assess success when designing and implementing a marketing strategy? A marketing strategy is the plan of action designed to promote and sell a product or service. In order for companies to formulate a marketing strategy, they must know themselves (5Cs) before they know what they want to do next. Companies then consider who they are, who they want to become, if they wish to vary from competitors, etc. The measures and metrics used by companies to access success when designing and implementing a marketing strategy are the company’s profitability, customer or employee satisfaction and the company’s stewardship of the environment. In terms of marketing, the metrics used can be sales, share, average prices, levels of awareness and penetration in trial. All of these measures make up a company’s so-called dashboard. 2. Summarize the main portfolios available. The main portfolios available are Ansoff’s product-market growth mix, the BCG matrix, the general electric model, Porter and strategies, and Treacy and Wiersema strategies. Ansoff’s product-market growth mix is all about sales growth. The questions marketers ask themselves would be: what are the sources of that growth? Can we create new products and attract new customers? This matrix shows the possible product and market combinations: market penetration, market development, product development and diversification. The BCG matrix is concerned about the industry’s growth and the company’s relative growth compared to their competitors in the industry. The cells in this matrix are classified according to the market share in a slow or growing market. A large share in a growing market is called a star, while a small share in a nongrowing market is called a dog, which should be minimized. A strong share in a nongrowing industry is considered a cash cow, which considered very desirable, and a question mark refers to brands that aren’t doing well in an industry that is. Question marks can be transformed into stars through new technologies and entering different markets. The general electric model forces marketing managers to make explicit some judgements about the brand’s performance. This matrix measures two dimensions: market attractiveness and business strength. For both dimensions, strategists fill out two sets of numbers: weights and ratings. When weights and ratings are multiplied, marketers obtain the “Value”, which are summed and plotted in the matrix. Porter and strategies classify strategies: cost leadership, differentiation and focused. Through cost leadership, companies produce goods and services more efficiently than their competition, which may be through easy access to goods, good raw materials, cheap labor, better technology, etc. These savings can be passed to customers through low prices. Differentiation attempts to distinguish their product as unique through excellent customer service, distinctive design, exclusivity and valueadded bundles. The focused approach is very narrow, focusing on one thing that they

do well. This strategy serves niche markets whose customers are very satisfied, loyal and price insensitive. Treacy and Wiersema strategies offers a set of three philosophies: operational excellence, product leadership and customer intimacy. Operational excellence is referred to the ability to deliver products or services smoothly and reliably. Product leadership can be achieved by providing predictably excellent quality or being a market leader in terms of innovation. Customer intimacy involves knowing customer’s full set of needs and trying to offer them a full package of benefits tailored to their desires. This approach is hugely effective online because of data storage and access capabilities. 3. Consider the Treacy and Wiersema strategies for market dominance. Which of them (operational excellence, product leadership, customer intimacy) do you think guides these companies: H.E.B., Home Depot, Starbucks, Best Buy, American Airlines, Bank of America? HEB: HEB is guided by customer intimacy, attempting to create relationships with their customers. They understand the needs of their customers and offer many benefits tailored to their desires. Home Depot: Home Depot is guided by customer intimacy as they attempt to fulfill the individual needs of their customers through their customer service. Starbucks: I believe Starbucks is guided by product leadership. The reason being that Starbucks creates products that are of excellent quality and they would be considered leaders of innovations in their products. Best Buy: Best Buy should be guided by operational excellence. Being that they provide many electronics and high-valued items, they should be providing excellent operations in order to keep customers from fleeing to brand stores, such as Apple, since they sell Apple products. American Airlines: American Airlines is guided by operational excellence. They have used their technologies to deliver their services (flights) smoothly and reliably, which is a necessity in this industry. Bank of America: Bank of America is guided by customer intimacy. They focus on providing great customer service while creating trusting, customized relationships with all their customers. 4. If countries were brands, what metrics do you think these “brands” should monitor each: the U.S., South Korea, Italy, Croatia, Argentina, Venezuela? U.S.: The US should monitor brand awareness. Using this metric, we have the ability to track the company. South Korea: South Korea should monitor the rate of consumer retention. South Korea’s rate is low due to despotism. Due to the ruling of dictatorship, this would affect consumers trust issue. Italy: Italy should consider market spending per customer. Due to weak fundamentals of the country, the market spend per customer is low.

Croatia: Croatia should consider the rate of consumer commitment. Due to active participation of customers in the market, this rate is very high. Argentina: Argentina should consider the rate of spending per customer. Since Argentinians prefer to only buy necessities, consumers are strict on buying which causes a low rate. Venezuela: Venezuela should consider rate of return. Due to certain crises that have locked consumer buying, they would have a low rate of return....