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MKTG 2 Notes - Chapter 2 Notes Developing Successful...

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Chapter 2 Notes Developing Successful Marketing and Corporate Strategies 1. A business firm is a privately owned organization that serves its customers in order to earn a profit. a. Profit: the reward to a business firm for the risk it undertakes in offering a product for sale. 2. A non-profit organization is a nongovernmental organization that serves its customers but does not have profit as an organizational goal. 3. Levels in Organizations and How Marketing Links to Them 4. The corporate level is where top management directs overall strategy for the entire organization. a. Creates value for shareholders of the firm. 5. The business unit level is where business unit managers set the direction for individual products and markets. 6. Each business unit has marketing and other specialized activities (finance, R&D, human resources) at the functional level. a. Where groups of specialists actually create value for the organization. b. The name of a department generally refers to its specialized function (marketing or information systems). 7. A firm’s SBU often starts as question marks and go counterclockwise to become stars, cash cows, and dogs. 8. The primary strength of business portfolio analysis lies in forcing a firm to place each of its SBUs in the growth-share matrix, which in turn suggests which SBUs will be cash producers and cash users in the future. Weaknesses are that it is often difficult to get the needed information and to incorporate competitive information into business portfolio analysis. 9. Market-Product Analysis 10. Current market: consists of existing customers. 11. New market: consisting of potential customers. 12. Current product: what they are now using 13. New Product: something they might use if it were developed. 14. Market penetration: a marketing strategy of increasing sales of present products in existing markets. 15. Market development: a marketing strategy of selling existing products to new markets (moving Ben & Jerry’s to Africa). 16. Product development: selling new products to existing markets. 17. Diversification: developing new products and selling them in new markets. 18. The Strategic Marketing Process
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19. Strategic Marketing Process: approach whereby an organization allocates its marketing mix resources to reach its target markets.
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