Marketing Strategy & Planning Review

Marketing Strategy & Planning Review - Chapter 1...

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Chapter 1- Strategic Marketing Framework Porter’s Five Forces Model o What does it do? Let’s you answer questions about industry profitability o What are the five forces? 1. Suppliers 2. Buyers 3. New entrants 4. Substitutes 5. Competitors What are they? Economies of scale : The cost per unit decreases with an increase in the quantity of goods produced Experience Curve : unit costs decreasing as firms learn to perform an activity better over time What is the difference? -Experience curve- costs declining over time -Economies of scale- costs declining with the quantity of goods produced ~Cost Advantage- Both experience curve and economies of scale are important Mission Statements/Corporate Objectives Mission statements: describe the customer orientation or business philosophy To deliver superior quality products and services for our customers and communities through leadership, innovation, and partnerships” We try harder’ ‘Vision is the engine that drives our enterprise’ Corporate objectives: state the overall goals to be achieved in financial terms Increase shareholder value by 10% by the end of December 2007 . Characteristics of well-written objectives: 1. Lists a quantified standard of performance 2. Designates a clear time frame 3. States goal in measurable terms 4. Should be challenging but realistic Market penetration and market development What is the difference between the two? Market Penetration : targeting the company’s existing customers Market Development : customers in existing targeted segments & targeting new segments Competitive advantage : the basis on which customers will choose your product over the competitors’ Characteristics of competitive advantage: 1. CA should generate customer value 2. Increased value must be perceived by the consumer 3. CA should be difficult to copy Cost based versus Differentiation How to achieve cost based and differentiation advantages?
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Cost-Based Competitive Advantage : one way to attain the low-cost position is by simply being the largest producer and taking advantage of economies of scale. Another way is to take advantage of the experience curve. As a product is produced over time, companies learn how to make it better and more efficient through changes in the production process, etc. A product that has greater sales has the most flexibility for using price as a differential advantage. Differentiation Advantage : to develop an observable difference that is valued by the target customers. It usually implies higher costs but a concomitant higher prices, and often higher margins. May allow you to charge a higher price than the competition or simply just survive. Examples of mass customization
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This note was uploaded on 02/08/2011 for the course MKTG 465 taught by Professor Kalaignanam during the Fall '10 term at South Carolina.

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Marketing Strategy & Planning Review - Chapter 1...

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