Marketing_Exam1_StudyGuide

Marketing_Exam1_StudyGuide - Chapter 2: Marketing Planning...

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Chapter 2: Marketing Planning Strategic planning : is the process of determining an organization’s primary objectives, allocating funds, and the initiating actions designed to achieve those objectives. It focuses on the big picture of which industries are central to a firm’s business (provide long-term direction for its decision makers) Tactical planning: is the process of defining implementation activities that the firm must carry out to achieve its objectives. (it addresses shorter-term actions that focus on current and near-future activities) After the strategy is set, operational managers devise method to achieve the larger goals. Planning at different organizational levels: Top management: (board of directors, chief executive/operating/financial officer) spends more time in engaging in strategic planning (organization-wide objectives, long-term plans, total budget) Middle management: (general sales manager, team leader, director of marketing research) focus on tactical planning (quarterly and semiannual plans, business unit budgets, divisional policies) Supervisory management: (regional sales manager, supervisor) focus most on operational planning (daily and weekly plans, departmental rules Steps in the Marketing planning process: 1. Define the organization’s mission and objectives (mission: essential purpose that differentiates one company from others). This mission statement specifies organization’s overall goals and provides guideline for future management actions. 2. Assessing organizational resources and evaluating environmental risks and opportunities: assess organization’s strengths, weaknesses, and take advantage of available marketing opportunities. 3. Formulating, implementing, and monitoring a marketing strategy Porter’s Five Forces: the model that identifies 5 competitive forces that influence planning strategies: 1. Potential of new entrants: are sometimes blocked by the cost or difficulty of entering a market. The internet reduces barriers to entry. It helps to increase competition in a market 2. Bargaining power of buyers: if customers have high leverage, they can greatly influence a firm’s strategy. It can depress prices 3. Bargaining power of suppliers: the number of suppliers available to a manufacturer or retailer affects their bargaining power. If a company has only one supplier => that supplier has significant bargaining power. It can increase cost or reduce selection. 4. Threat of substitute products which can lure customers to other products 5. Rivalry among competitors: 4 previous forces influence this force. Internet blurs differences among competitors (competitors try to differentiate themselves from the crowd). It helps to bring about price wars and divert companies from their main goals. First mover strategy:
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Marketing_Exam1_StudyGuide - Chapter 2: Marketing Planning...

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