Marketing exam - From seneca college PDF

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Ch. 3- Strategic Planning for Competitive Advantage Strategic Planning: The managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities. 

Goal of Strategic Planning: long-run profitability and growth

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Complex set of activities that occur at three levels: Corporate, Business, Marketing

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Requires long-term commitments of resources

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A good strategic plan can help protect and grow the firms’ resources

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A strategic error can threaten a firm’s survival

Strategic marketing management addresses 2 questions: 1. What is the organization’s main activity at a particular time? 2. How will the organization reach its goals?

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Strategic decisions affect an organization’s long-run course, its allocation of resources, and ultimately its financial success.

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Decisions that an organization makes at the operational and business levels directly link to and flow from the strategic decisions made at the highest level within the organization.

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In contrast, operational decisions probably won’t have a big impact on the long-run profitability of the company.

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Formulate strategies to enhance the competitiveness of the businesses within the SBU.

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A properly defined SBU should have a distinct mission and specific target market, control over its resources, its own competitors, and plans independent of the other SBU’s in the organization.  (SBU) Strategic Business Unit: A subgroup of a single business or a collection of related businesses within the larger organization.

 Strategic Decision vs. Tactical Decision 

Wider in scope and long-term in orientation

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Narrower in scope and is short term

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Decisions are made at all three levels

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Decisions are limited to the implementation of the marketing plans

Corporate Planning: Decisions as to when, where, how, and against whom to compete 

Defines the mission

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Guides business and marketing planning

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“What business are we in?”

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Establishes boundaries for subsequent decisions

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Business Planning Formulate strategies to enhance the competitiveness of the businesses within the SBU

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Business Mission may suffer from: –

Marketing Myopia: Defining the business by the goods and services offered vs. the benefits consumers are seeking. When mission statements are stated too narrowly.

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Too Broad: All things to all people with no focus!

How do companies go about planning strategic marketing? A Marketing Plan

What is a Marketing Plan? 

Planning is the process of anticipating future events and determining strategies to achieve organizational objectives in the future

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Marketing Planning: involves designing activities relating to marketing objectives and the changing marketing environment o The basis for all marketing strategies and decisions o Outlines issues such as product lines, distribution channels, marketing communications, and pricing. o A written document that acts as a guidebook of marketing activities for the marketing manager

While discussing this exhibit, pay particular attention to the differences in strategic versus tactical decisions—strategic decisions are wider in scope and longer term, while tactical decisions are narrower and shorter term. Also note that short term versus long term is very much dependent on the industry that you are competing in.

Ch.5- Marketing Research Marketing Research is about gathering information about customers, their needs, and the marketplace in which they operate.  The challenge can be great, as that marketplace is constantly changing, and customers are not always clear (whether intentionally or not) about what their needs are or how they would like them satisfied. The Role of Market Research  Marketing should be used to bring clarity to unknown aspects of the marketplace

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o to better understand the connections between marketing actions and consumer needs It is used to help make decisions but it is not the only basis for a decision Three Functional Roles

“Marketing research is the function that links the consumer, customer, and public to the marketer through information—information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.” The Marketing Research Process (Exhibit 5.1) 1. Identify the problem 2. Design the research 3. Collect the data 4. Analyze the data 5. Present the report 6. Provide follow-up

Step 1: Identify the problem  the most important stage in the process  “garbage in, garbage out” o Must differentiate between a management decision and a research problem o What should be done about the slow sales? Vs. What factors go into a consumer’s decision to buy?  The integrity of the output (results) is dependent on the integrity of the input (the problem).  Marketing research objective o The specific information needed to solve a research issue o Developed as a series of questions that decision makers need to know to make a marketing decision o Guide the overall approach necessary to meet the objectives and answer the research question Step 2: Design the Research  This stage is about deciding on the type of study that will be conducted and the tools and techniques that will be used to gather and analyze the collected data.  How to answer the questions and achieve the objectives  Create a road map

Step 3: Collect the Data

Sources of Secondary Data

Primary Data

Now that the research design has been chosen it is time to collect the data. Need to decide what mix of primary and secondary data will be collected.  Secondary data—data already collected for another purpose; highly unlikely to solve the problem  Primary data—data collected for the researcher’s particular problem o Data collected for the purposes of solving the particular issue under investigation o Qualitative research is best used when a researcher still needs to clear up aspects of the research problem or requires a better understanding of a research situation; when a researcher wants specific numbers and the ability to analyze the data to provide statistical conclusions. Qualitative Data Collection Methods Depth Interviews  One to one  Costly  Time consuming Focus Groups  Small groups of people with different characteristics  Guided discussions  Focus groups are a popular technique with companies, as the format and discussion are often engaging and entertaining for clients watching the proceedings from behind the one-way mirror. But focus groups should never be confused with quantitative data collection methods like surveys. The unstructured nature of focus group discussions allows for very few conclusive statements. The

opinions, no matter how passionately presented in a focus group session, are still those of only a handful of people. Quantitative Data Collection Methods  Survey Research 

In-Home Personal Interviews

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Mail Intercept Interviews

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Telephone Interviews

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Mail Surveys

Questionnaire Design

An open-ended question encourages an answer phrased in the respondent’s own words. Researchers receive a rich array of information that is based on the respondent’s frame of reference. A closed-ended question asks the respondent to make a selection from a limited list of responses. A scaled-response question is a closed-ended question designed to measure the intensity of a respondent’s answer.  Good questions address each of the previously set research objectives and they must be clear and concise with the avoidance of ambiguous language.

Observation research depends on watching what people do. Specifically, it is the systematic process of recording the behavioural patterns of people, objects, and occurrences with or without questioning them. Ethnographic Research: The study of human behaviour in its natural context  observation  physical setting

Experiments: Causal method of research to collect primary data  one or more variables is altered  observe the impact of the altered variables on another—generally sales  laboratory or field Specifying the Sampling Procedure Once the researchers decide how they will collect primary data, their next step is to select the sampling procedures to use.  A firm can seldom interview or take a census of all possible users of a new product. Therefore, a firm must select a sample of the group to be interviewed.  The most popular descriptive technique for gathering primary data is survey research, in which a researcher interacts with people to obtain facts, opinions, and attitudes.  Although in-home personal interviews often provide high-quality information, they tend to be very expensive.  The mall intercept interview is conducted in the common area of a shopping mall or in a market research office within the mall.  Telephone interviews cost less than personal interviews, but the cost is rapidly increasing because of respondents’ refusals to participate.  Mail surveys have several benefits: relatively low cost, elimination of interviewers and field supervisors, centralized control, and actual or promised anonymity for respondents (which may draw more candid responses). A disadvantage is that mail questionnaires usually produce low response rates because certain elements of the population tend to respond more than others.

Types of Errors Measurement error occurs when the information desired by the researcher differs from the information provided by the measurement process. Sampling error occurs when a sample does not represent the target population. Frame error, another type of sampling error, arises when the sample drawn from a population differs from the target population. Random error occurs when the selected sample is an imperfect representation of the overall population. Random error represents how accurately the chosen sample’s true average (mean) value reflects the population’s true average (mean) value.

Step 4: Analyze the Data Interpret and draw conclusions from the data  One-way frequency counts o Generally, the first step  Cross-tabulations o One answer in relation to another  More sophisticated statistical analysis  Of these three techniques, one-way frequency counts are the simplest. One-way frequency tables simply record the responses to a question. Step 5: Present the Report

Step 6: Follow Up Whether an internal or external firm—key to ensure that the questions are answered

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Was sufficient decision-making information provided? What could have been done to make the report more useful to management?

Impact of Technology  Online surveys o Rapid development, real-time reporting o Dramatically reduced costs o Improved respondent participation o Ability to contact difficult to reach  Online research panels  Online focus groups  Marketing research must keep up with technology to meet the needs of both those looking to conduct research and those who would be the subjects of such research. There are two main areas in which technology and marketing research have combined: online and mobile devices. Internet Market Research

Mobile Marketing Research  Consumers use their phones to research products, seek out information and make purchases, so… o market research conducted on consumers’ mobile devices  However, this interaction has created concerns over privacy and security of information, prompting the European Society for Opinions and Market Research (ESOMAR) to create a comprehensive set of guidelines relating to mobile marketing research. It has been predicted that smartphone marketing research will become commonplace in developed nations around the world. Social Media Marketing Research

The Rise of Big Data How to deliver information from the areas of new technology?

When to Conduct Market Research? 

The first step in the process is key to success o Understand the problem  Be willing to admit you don’t have the answers  Competitive intelligence can create a more efficient and effective company

“Research is creating new knowledge.” Online Materials- Competitive Analysis Direct and Indirect Competition 

Direct competitors are those branded or product-based competitors that have created direct substitutes to what a company is offering.

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Generic competitors often compete directly but often without the features and benefits provided by direct competitors.

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Indirect competition focuses more on satisfying the customer’s needs rather than competing with a direct substitute.

Framework 1. Identification  Current Competitors

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Potential Competitors

2. Characteristics: Effectiveness and Competitiveness A list of these metrics could include:  Firm size  Sales and profit values  Growth rates  Profitability  Strategies and objectives  Target markets 3. Assessment  Competitor Strengths & Weaknesses  Gathering Competitive Intelligence: o Annual Reports o Trade Shows o News Releases o Website o Analyst Reports o Ex-employees o Common Suppliers 4. Capabilities  Competitor’s marketing capabilities 5. Response  Competitor Actions  Strong knowledge of current marketing environment  Outcome: Strategy Profile Competing Products Analysis  Product Positioning  USP Using the Analysis  Competitor Actions  Target Markets  Opportunities  Success

CHAPTER8-MARKETSEGMENTATI ON,TARGETI NG,ANDPOSI TI ONI NG LO1-WhatMar ketSegment at i onmeans •I nv ol v esaggr egat i ngpr ospec t i v ebuy er si nt ogr oups ,orsegment st hat( 1)hav e commonneedsand( 2)wi l l r es pondsi mi l ar l yt oamar k et i ngact i on. •Ther ef or eMar ketSegment sar et her el at i v el yhomogeneousgr oupsofpr os pect i v e buy er st hatr es ul tf r om t hemar k etsegment at i onpr oces s .

-Eachmar k etsegmentcons i st sofpeopl ewhoar er el at i v el ysi mi l art oeac hot her i nt er msofcons umpt i onbehav i our •Di ffer entmar k etsegment shav ecaus edfir mst ousePr oductDi ffer ent i at i on,a s t r at egyt hati nv ol vesafir m usi ngdi ffer entmar k et i ngmi xact i v i t i es ,suc haspr oduct f eat ur esandadv er t i si ng,t ohel pcons umer sper cei v et hepr oductasbei ngdi ffer ent f r om andbet t ert hancompet i ngpr oduct s • Mar k etsegment at i onl i nk sneedst oact i ons •AMar ket Pr oductGr i d:I saf r amewor kt or el at et hemar k etsegment sofpot ent i al buy er st ot het hepr oduct soffer edorpot ent i al mar k et i ngac t i onsbyt hefir m •3spec i ficsi t uat i onst hati l l us t r at edeffec t i v euseofmar k etsegment at i on: 1.OnePr oductandMul t i pl eMar k etSegment s 2.Mul t i pl esPr oduct sandMul t i pl esMar k etSegment s 3.Segment sofOne:Masscus t omi z at i on LO2+3-STEPSI NSEGMENTI NG ANDTARGETI NG MARKETS STEP1.Gr ouppot ent i albuy er si nt os egment s Cr i t er i at ousei nFor mi ngt heSegment s: •Pot ent i alf ori ncr eas edpr ofi t •Si mi l ar i t yofneedsofpot ent i al buy er swi t hi nt hesegment •Di ffer encesofneedsofbuy samongsegment s •Pot ent i alofamar k et i ngact i ont or eachasegment •Si mpl i ci t yandcos tofass i gni ngpot ent i al buy er st osegment s

Wayst oSegmentConsumerMar ket s:

•Geogr aphi csegment at i on-r egi on,ci t y ,densi t y ,cl i mat e,popul at i on •Demogr aphi c-Age,gender ,f ami l ys i z e,i ncome,mar i t al st at us ,bi r t her a,l i f est age, educ at i on,occupat i on,r ace,homeowner s hi p

•Psychogr aphi c -Per s onal i t yorl i f es t yl e •Behavi our al -Benefi t ssought ,userst at us ,usager at e:quant i t yconsumeror pat r onage-st or evi s i t s-dur i ngas peci ficper i od STEP2.Gr ouppr oduct st obesol di ncat egor i es LO4-STEP3.Devel opaMar ket Pr oductGr i dandEst i mat eSi zeofMar ket s Fi gur e96 STEP4.Sel ec tTar getMar k et s 5Cr i t er i at ousei nac t ual l ysel ec t i ngt het ar getsegment s: 1.Mar k etSi z e 1.Expec t edGr owt h 2.Compet i t i v ePosi t i on 3.Cos tofReachi ngt heSegment 4.Compat i bi l i t ywi t ht heOr gani z at i on’ sObj ect i v esandRes our ces STEP5.Tak eMar k et i ngAct i onst oReac hTar getMar k et s •Wher eandwhatt oadv er t i s et or eac hspeci fi cmar k etsegment s LO5-POSI TI ONI NG THEPRODUCT Pr oductPosi t i oni ngr ef er st ot hepl aceanoffer i ngocc upi esi ncons umer s ’mi ndson i mpor t antat t r i but esr el at i v et ocompet i t i v epr oduct s. Pr oductReposi t i oni ngi nv ol v eschai ni ngt hepl ac eanoffer i ngoccupi esi na cons umer ’ smi ndsr el at i v et ocompet i t i v epr oduct s . 2Mai nAppr oachest oPosi t i oni nganew Pr oduct :

1.Headt oheadPosi t i oni ngwhi c hi nv ol v escompet i ngdi r ect l ywi t hcompet i t or son s i mi l arpr oductat t r i but esi nt hesamet ar getmar k et 5.Di ffer ent i at i onPos i t i oni ngi nv ol v esseeki ngal esscompet i t i v e,smal l ermar k etni c he i nwhi c ht ol ocat eabr and,us ual l yst r es si ngt heuni queas pect soft hepr oduct Per cept ualMaps:Ameansofdi spl ay i ngorgr aphi ngi nt wodi mens i onst hel ocat i onof pr oduct sorbr andsi nt hemi ndsofcons umer st oenabl eamangert oseehow cons umer sper cei v ecompet i ngpr oduct sorbr andsr el at i v et oi t sownandt hent ak e mar k et i ngact i ons . Todet er mi net hepr oductposi t i oni nt hehear t sormi ndsofc ust omer s ,compani est ak e 4st eps : 1.I dent i f yt hei mpor t antat t r i but esf orapr oductorbr andcl as s 2.Di s cov erhowt ar getcus t omer sr at ecompet i ngpr oduct sorbr andswi t hr es pectt o t hes eat t r i but es 3.Di s cov erwher et hecompany ’ spr oductorbr andi sont heseat t r i but esi nt hehear t s andmi ndsofpot ent i al cus t omer s 4.I fnec ess ar y ,r eposi t i ont hecompany ’ spr oductorbr andi nt hehear t sandmi ndsof pot ent i al c ust omer s LO6-SALESFORECASTI NG TECHNI QUES Mar ket( I ndust r y)Pot ent i al :Ref er st ot hemaxi mum t ot alsal esofapr oductbyal l fir ms t oasegmentdur i ngaspec i fiedt i meper i odunderspec i fiedenv i r onment al condi t i ons andmar k et i ngeffor t soft hefir ms . Sal es( Company)For ecast :Thet ot alsal esofapr oductt hatafir m expec t st osel l dur i ngaspec i fiedt i meper i odunders peci fiedenvi r onment alcondi t i onsandi t sown mar k et i ngeffor t s . Thr eemai nsal esf or ecas t i ngt echni quesar eof t enused: 1.J udgment soft hedec i si onmak er 5.Sur v ey sofknowl edgeabl egr oups 6.St at i st i cal met hods...