Welcome to Created for Marketing, 7th Ed., by Lamb, Hair and McDaniel South-Western/Thomson Learning Chapter 2 - Strategic Planning for Competitive Advantage

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Created for Marketing, 7th Ed.,by Lamb, Hair and McDaniel

South-Western/Thomson LearningChapter 2 - Strategic Planning for Competitive

Advantage

Created by John T. Drea, Western Illinois University

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SBUStrategies

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Who Wants to Be a Marketer? Round 1

Chapter 2 – Strategic Planning

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Basic Terms - 100 points

• Answer: They are the 4 P’s of marketing.

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• Answer: They are the 4 P’s of marketing.

• Question: What are product, promotion, price, and

place (distribution)?

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• Answer: It is the term used to describe the managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities.



• Answer: It is the term used to describe the managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities.

• Question: What is strategic planning?



• Answer: It is the term used to describe the process of anticipating future events and determining strategies to achieve organizational objectives in the future.



• Answer: It is the term used to describe the process of anticipating future events and determining strategies to achieve organizational objectives in the future.

• Question: What is planning?


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Basic Terms - Open Challenge

• Answer: This term describes an organization’s long-term vision, based on a careful analysis of benefits sought by its customers and an analysis of environmental conditions. It is also the first part of an organization’s marketing plan.


Basic Terms - Open Challenge• Answer: This term describes an organization’s

long-term vision, based on a careful analysis of benefits sought by its customers and an analysis of environmental conditions. It is also the first part of an organization’s marketing plan.

• Question: What is a mission statement? (or business mission)


Basic terms - 500 points

• Answer: This term, often known by its three letter abbreviation, is a subgroup of a single business (or a collection of related businesses in a large organization.)


Basic terms - 500 points

• Answer: This term, often known by its three letter abbreviation, is a subgroup of a single business (or a collection of related businesses in a large organization.)

• Question: What is a strategic business unit (SBU)?


Sources of Competitive Advantage - 100 points

• Answer: This curve shows that costs decline at a predictable rate as experience with a product increases.



• Answer: This curve shows that costs decline at a predictable rate as experience with a product increases.

• Question: What is an experience curve?



• Answer: This category of competitive advantage exists when a firm provides something unique that is valued by customer beyond simply offering a low price. (ex: a strong dealer network for Caterpillar Corp.)



• Answer: This category of competitive advantage exists when a firm provides something unique that is valued by customer beyond simply offering a low price. (ex: a strong dealer network for Caterpillar Corp.)

• Question: What is a competitive advantage?


• Answer: An example of this type of competitive advantage can be found at DuPont, where technicians created a process for producing titanium dioxide which gives DuPont a 20% cost advantage over its competitors.



• Answer: An example of this type of competitive advantage can be found at DuPont, where technicians created a process for producing titanium dioxide which gives DuPont a 20% cost advantage over its competitors.

• Question: What is a cost competitive advantage?



• Answer: This means of creating a competitive advantage is defined as the features of a product or service that signal value to a customer. For example, a foil package may connote luxury to a customer.



• Answer: This means of creating a competitive advantage is defined as the features of a product or service that signal value to a customer. For example, a foil package may connote luxury to a customer.

• Question: What are value impressions?



• Answer: This type of competitive advantage is created/achieved when a firm targets and effectively serves a small segment of the market. It may be the only viable option for a small company with limited resources potentially facing large competitors.



• Answer: This type of competitive advantage is created/achieved when a firm targets and effectively serves a small segment of the market. It may be the only viable option for a small company with limited resources potentially facing large competitors.

• Question: What is a niche competitive advantage?



SBU Strategies - 100 points (build, hold, harvest, or divest)

• Answer: This strategy is most suitable for SBUs with low shares in low growth markets.



• Answer: This strategy is most suitable for SBUs with low shares in low growth markets.

• Question: What is divest?



• Answer: This strategy would be most appropriate if the SBU is a very successful cash cow. This is done to keep the market share and continue the positive cash flow.



• Answer: This strategy would be most appropriate if the SBU is a very successful cash cow. This is done to keep the market share and continue the positive cash flow.

• Question: What is hold?



• Answer: This strategy is appropriate when an SBU is a “problem child” but has the potential to become a “star.” An example would be P & Gs handling of the Pringles brand in the 1990s.



• Answer: This strategy is appropriate when an SBU is a “problem child” but has the potential to become a “star.” An example would be P & Gs handling of the Pringles brand in the 1990s.

• Question: What is build?



• Answer: This strategy is commonly associated with “problem children” and “dogs” where a company has a low share and is unlikely to be able to improve its position. An example would be P & G’s handling of Cincaprin, a coated aspirin.



• Answer: This strategy is commonly associated with “problem children” and “dogs” where a company has a low share and is unlikely to be able to improve its position. An example would be P & G’s handling of Cincaprin, a coated aspirin.

• Question: What is divest?



• Answer: This strategy may be appropriate for “dogs,” “cash cows,” or “problem children.” The basic goal is to increase the short-term cash return without too much concern for the long-run impact.



• Answer: This strategy may be appropriate for “dogs,” “cash cows,” or “problem children.” The basic goal is to increase the short-term cash return without too much concern for the long-run impact.

• Question: What is harvest?


Strategic Alternatives - 100 points (market penetration, market development, product development, diversification)

• Answer: An example of this strategy is when Burger King advertises to current customers, encouraging them to eat at Burger King more frequently.



• Answer: An example of this strategy is when Burger King advertises to current customers, encouraging them to eat at Burger King more frequently.

• Question: What is a market penetration strategy?



• Answer: An example of this strategy would be a hair styling salon, which had formerly targeted women, begins to offer a new product line (e.g., clothing) for men.



• Answer: An example of this strategy would be a hair styling salon, which had formerly targeted women, begins to offer a new product line (e.g., clothing) for men.

• Question: What is a diversification strategy?



• Answer: An example of this type of strategy would be when Coca-Cola introduced a new product (Fruitopia) to its existing markets.



• Answer: An example of this type of strategy would be when Coca-Cola introduced a new product (Fruitopia) to its existing markets.

• Question: What is a product development strategy?



• Answer: An example of this strategy is McDonald’s entry into China with its current product mix.



• Answer: An example of this strategy is McDonald’s entry into China with its current product mix.

• Question: What is a market development strategy?



• Answer: Marketers who follow this strategy frequently do so because they are confident that they understand the needs of their existing markets. They know what customers like/dislike about current products and their unmet needs.



• Answer: Marketers who follow this strategy frequently do so because they are confident that they understand the needs of their existing markets. They know what customers like/dislike about current products and their unmet needs.

• Question: What is a product development strategy?


Choose Wisely - 100 points (answer/questions about selecting strategic alternatives)

• Answer: Developed by the Boston Consulting Group, this approach to evaluating strategic alternatives uses relative market share and market growth rate. (click for chart)

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Relative Market Share



• Answer: Developed by the Boston Consulting Group, this approach to evaluating strategic alternatives uses relative market share and market growth rate. (click for chart)

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Question: What is a portfolio matrix?



• Answer: It is the portfolio matrix term to describe a strategic business unit that has a high market growth rate and high market share dominance. (click for chart)

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• Answer: It is the portfolio matrix term to describe a strategic business unit that has a high market growth rate and high market share dominance. (click for chart)

Question: What is a star?


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• Answer: It is the portfolio matrix term to describe a strategic business unit that has a low market growth rate and high market share dominance. (click for chart)

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• Answer: It is the portfolio matrix term to describe a strategic business unit that has a low market growth rate and high market share dominance. (click for chart)

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Question: What is a cash cow?



• Answer: It is the portfolio matrix term to describe a strategic business unit that has a low market growth rate and low market share dominance. (click for chart)

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• Answer: It is the portfolio matrix term to describe a strategic business unit that has a low market growth rate and low market share dominance. (click for chart)

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Question: What is a dog?



• Answer: It is the portfolio matrix term to describe a strategic business unit that has a high market growth rate and low market share dominance. (click for chart)

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• Answer: It is the portfolio matrix term to describe a strategic business unit that has a high market growth rate and low market share dominance. (click for chart)

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Question: What is a problem child or (question mark)?


What’sWhat’sthethe

Plan?Plan?

CompetitiveCompetitiveAdvantageAdvantage

Of theOf thefollowing...following... PotpourriPotpourri

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Who Wants to Be a Marketer? Round 2

Chapter 2 – Strategic Planning

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SWOTSWOT

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What’s the Plan? - 100 points (answers/questions concerning writing/implementing plans)

• Answer: It is a written document that acts as a guidebook of marketing activities for the marketing manager.



• Answer: It is a written document that acts as a guidebook of marketing activities for the marketing manager.

• Question: What is a marketing plan?



• Answer: It is a statement of what is to be accomplished through marketing activities.



• Answer: It is a statement of what is to be accomplished through marketing activities.

• Question: What is a marketing objective?



• Answer: This one-word term involves evaluating marketing results in light of goals and correcting actions that do not help achieve stated goals.



• Answer: This one-word term involves evaluating marketing results in light of goals and correcting actions that do not help achieve stated goals.

• Question: What is control?



• Answer: Defining your business too narrowly.



• Answer: Defining your business too narrowly.

• Question: What is a marketing myopia?



• Answer: Described as “the broadest control device,” it is a thorough, systematic, periodic evaluation of the goals, strategies, structure, and performance of the marketing organization.



• Answer: Described as “the broadest control device,” it is a thorough, systematic, periodic evaluation of the goals, strategies, structure, and performance of the marketing organization.

• Question: What is a marketing audit?


SWOT - 100 points

• Answer: It is what S.W.O.T stands for.


SWOT - 100 points

• Answer: It is what S.W.O.T stands for.

• Question: What is strengths, weaknesses, opportunities,

and threats?


SWOT - 200 points

• Answer: It is where a SWOT analysis is typically located in the marketing plan.


SWOT - 200 points

• Answer: It is where a SWOT analysis is typically located in the marketing plan.

• Question: What is the situation analysis?


SWOT - 300 points

• Answer: Marketing managers do this when examining external opportunities and threats. It is defined as the collection and interpretation of information about the external environment that may affect the future of the organization or its plans.


SWOT - 300 points

• Answer: Marketing managers do this when examining external opportunities and threats. It is defined as the collection and interpretation of information about the external environment that may affect the future of the organization or its plans.

• Question: What is environmental scanning?


SWOT - 400 points

• Answer: These primarily focus on a study of the internal environment surrounding an organization.


SWOT - 400 points

• Answer: These primarily focus on a study of the internal environment surrounding an organization.

• Question: What are strengths and weaknesses?


SWOT - 500 points

• Answer: These primarily focus on a study of the external environment surrounding an organization.


SWOT - 500 points

• Answer: These primarily focus on a study of the external environment surrounding an organization.

• Question: What are opportunities and threats?


Of the following… - 100 points

• Answer: Of the following, it is the one that is NOT one of the 4 Ps of marketing.– Product– Price– Promotion– Production– Place



• Answer: Of the following, it is the one that is NOT one of the 4 Ps of marketing.– Product– Price– Promotion– Production– Place

• Question: What is production?



• Answer: Of the following, it is BCG portfolio matrix term which describes rapid growth but poor profit margins.– Dog– Cash cow– Star– Problem child


Of the following… - 200 points• Answer: Of the following, it is BCG

portfolio matrix term which describes rapid growth but poor profit margins.– Dog– Cash cow– Star– Problem child

• Question: What is a problem child?



• Answer: Of the following, it is the term that describes pursuing new markets with existing products.– Market penetration– Market development– Product development– Diversification



• Answer: Of the following, it is the term that describes pursuing new markets with existing products.– Market penetration– Market development– Product development– Diversification

• Question: What is market development?



• Answer: Of the following, it is the strategy a company will likely follow if they believe a SBU has the potential to become a “star.”– build– hold– harvest– divest



• Answer: Of the following, it is the strategy a company will likely follow if they believe a SBU has the potential to become a “star.”– build– hold– harvest– divest

• Question: What is build?


Of the following… - 500 points• Answer: Of the following statements by three

different businesses, the one that is most closely associated with marketing myopia.– “We are in the transportation business.– “We are in the compact disc manufacturing business.”– “We are in the entertainment business.


Of the following… - 500 points• Answer: Of the following statements by three

different businesses, the one that is most closely associated with marketing myopia.– “We are in the transportation business.– “We are in the compact disc manufacturing business.”– “We are in the entertainment business.

• Question: What is we are in the compact disc manufacturing business.


Competitive Advantage - 100 points

• Answer: Between “increase” or “decrease,” it is direction that the experience curve suggests that unit costs should go over time.



• Answer: Between “increase” or “decrease,” it is direction that the experience curve suggests that unit costs should go over time.

• Question: What is decrease?



• Answer: It is defined as the set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition.



• Answer: It is defined as the set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition.

• Question: What is a competitive advantage?



• Answer: The disassembling of a product to gain clues to the manufacturing process.



• Answer: The disassembling of a product to gain clues to the manufacturing process.

• Question: What is an reverse engineering?



• Answer: Example of companies which possess this category of competitive advantage are:– Nieman Marcus (retail)– Caterpillar (strong dealer network)– Maytag (product reliability)– Federal Express (service)



• Answer: Example of companies which possess this category of competitive advantage are:– Nieman Marcus (retail)– Caterpillar (strong dealer network)– Maytag (product reliability)– Federal Express (service)

• Question: What is a differential competitive advantage?


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Go to the Open Challenge

Question!

Competitive Advantage - Open Challenge

• Answer: Of the following, the one that is NOT a source of a cost differential advantage.– Experience Curve– Reengineering– Value Impressions


Competitive Advantage - Open Challenge

• Answer: Of the following, the one that is NOT a source of a cost differential advantage.– Experience Curve– Reengineering– Value Impressions

• Question: What is/are value impressions?


Potpourri - 100 points

• Answer: Also known as the “4 Ps of marketing,” this term refers to a unique blend of product, distribution, promotion, and pricing strategies to produce mutually satisfying exchanges with a target market.



• Answer: Also known as the “4 Ps of marketing,” this term refers to a unique blend of product, distribution, promotion, and pricing strategies to produce mutually satisfying exchanges with a target market.

• Question: What is the marketing mix?



• Answer: This term describes a strategy of selling the same products to new markets of customers.



• Answer: This term describes a strategy of selling the same products to new markets of customers.

• Question: What is market development?



• Answer: This “statement” should focus on the market(s) and organization wants to serve and should answer two fundamental questions of an organization: “What business are we in?” and “Where are we going?”



• Answer: This “statement” should focus on the market(s) and organization wants to serve and should answer two fundamental questions of an organization: “What business are we in?” and “Where are we going?”

• Question: What is the mission statement?



• Answer: This term refers to a description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in each of those segments.



• Answer: This term refers to a description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in each of those segments.

• Question: What is a marketing opportunity analysis?



• Answer: It is a term which describes a business that is defined in terms of goods and services, rather than in terms of the benefits consumers seek.



• Answer: It is a term which describes a business that is defined in terms of goods and services, rather than in terms of the benefits consumers seek.

• Question: What is marketing myopia?


And now, it’s time for

Directions:•Get two pieces of paper.•On one piece, write your team’s wager.•Use the other piece of paper to write the “question” for the final challenge “answer.”

Click here for the Final Challenge Answer

Final Challenge!

• Answer: Perhaps the most critical element in successful strategic planning.


Final Challenge!

• Answer: Perhaps the most critical element in successful strategic planning.

• Question: What is the top management support?

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Welcome to Created for Marketing, 7th Ed., by Lamb, Hair and McDaniel South-Western/Thomson Learning Chapter 2 - Strategic Planning for Competitive Advantage