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Chapter 2

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Ryerson University
MKT 100
Joanne Mc Neish

Chapter Two: Developing a Marketing Plan and Marketing Strategies September 12, 2012 Key Terms Control Phase: The part of the strategic marketing planning process when managers evaluate the performance of the marketing strategy and take any necessary corrective actions. Customer Excellence: Involves a focus on retaining loyal customers and excellent customer service. Diversification Strategy: A growth strategy whereby a firm introduces a new product or service to a market segment that is does not currently serve. Downsizing: Existing markets, reducing product portfolios, or closing certain businesses or store or plant locations. Implementation Phase: Where marketing managers identify and evaluate different opportunities by engaging in a process known as segmentation, targeting, and positioning. They then develop and implement the marketing mix by using the 4 Ps. Locational Excellence: Involves a focus on a good physical location and Internet presence. Market Development Strategy: A growth strategy that employs the existing marketing offering to reach new market segments, whether domestic or international or segments not currently served by the firm. Market Growth Rate: The annual rate of growth of the specific market in which the product competes. Market Penetration Strategy: A growth strategy that employs the existing marketing mix and focuses the firm’s effort on existing customers. Market Positioning: Involves the process of defining the marketing mix variables so that target customers have a clear, distinct, desirable understanding of what the product does or represents in comparison with competing products. Market Segment: A group of consumers who respond similarly to a firm’s marketing efforts. Market Segmentation: The process of dividing the market into distinct groups of customers where each individual group has similar needs, wants, or characteristics – who therefore might appreciate products/services geared for them. Marketing Planning Process: A set of steps a marketer goes through to develop a marketing plan. Marketing Strategy: Identifies a firm’s target market(s), a related marketing mix – the four Ps, and the bases upon which the firm plans to build a sustainable competitive advantage. Mission Statement: A broad description of a firm’s objectives and the scope of activities it plans to undertake; attempts to answer two main questions: What type of business is it? What does it need to do to accomplish its goals and objectives? Operational Excellence: Involves a focus on efficient operations and excellent supply chain management. Planning Phase: Where marketing executives and other top managers define the mission and objectives of the business, and evaluate the situation by assessing how various players, both inside and outside the organization, affect the firm’s potential for success. Product Development Strategy: A growth strategy that offers a new product or service to a firm’s current target market. Product Excellence: Involves a focus on achieving high-quality products and effective branding and positioning. Product Line: A group of products that consumers may use together or perceive as similar in some way. Relative Market Share: A measure of the product’s strength in a particular market, defined as the sales of the focal product divided by the sales achieved by the largest firm in the industry. Situation Analysis: Is the second step in a marketing plan; uses a SWOT analysis that assesses both the internal and external environment. STP: The processes of segmentation, targeting, and positioning that firms use to identify and evaluate opportunities for increasing sales and profits. Strategic Business Unit (SBU): A division of the company that can be managed somewhat independently from other divisions since it markets a specific set of products to a clearly defined group of customers. Sustainable Competitive Advantage: Something the firm can persistently do better than its competitors that is not easily copied and thus can be maintained over a long period of time. Target Marketing/Targeting: The process of evaluating the attractiveness of various segments and then deciding which to pursue as a market. Levels of Strategic Planning in Corporations - Strategic planning in most organizations occurs on two levels: 1. Corporate (done by top management and focuses on overall long-term direction of the entire company) 2. Functional - Large companies that operate several business lines may see each of their strategic business units develop strategic plans for their products and markets. - SBU is a division of the company that can be managed somewhat independently from other divisions since it markets a specific set of products to a clearly defined group of customers (e.g. Disney’s units: media, parks, studio, consumer products) Levels of Planning Scope Duration Strategic Focus Corporate Entire firm Long term (5 Define the planning years) company’s mission, set company’s goals, and establish the business portfolio Strategic business Single SBU within Medium to long- Set goals and unit the firm term (3 to 5 years) establish portfolio (SBU)/Division of products and planning markets for the business unit Functional Product portfolio, Short-term to Develop marketing planning (e.g. single product, medium term (1-3 plans for specific marketing brand of market years) products, brands planning) or markets The Marketing Plan - A marketing plan is a written document composed of an analysis of the current marketing situation, opportunities, and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, a
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