Unformatted text preview: se market share among existing customers. Kraft Foods
using heavy promotional expenditures in the form of aggressive advertising and cents-off
coupons for Maxwell House coffee. MARKET DEVELOPMENT––attracting new customers to
existing products. McDonald’s opening restaurants in Russia, China, and Italy; colleges and
universities expanding to executive development and continuing education. PRODUCT
DEVELOPMENT––creating new products for present markets. Brooks Brothers has introduced a
line of poplin suits with polyester fibers that move moisture away from the body.
DIVERSIFICATION––introducing new products into new markets. LTV entering the monorail
business; Sony’s acquisition of Columbia Pictures; Coca-Cola manufacturing water treatment
KEY: CB&E Model Strategy OBJ: 02-6 TOP: AACSB MSC: BLOOMS Synthesis 10. List the four basic strategies used once an organization has identified its strategic business units
in terms of the portfolio matrix. Describe when each is used.
Four basic strategies are used to allocate future resources for a company’s strategic business units
(SBUs). (1) Build is used when an organization has identified an SBU it believes has the
potential to be a star. Most likely, the SBU has been identified as a problem child. (2) Hold is
used when the SBU has been identified as a very successful cash cow. (3) Harvest is used with
all SBU classifications except stars. The basic goal with this strategy is to increase short-term
cash return. (4) Divest means to get rid of SBUs with low market share. Divestment strategy may
be used with either dogs or problem children (also called question marks).
KEY: CB&E Model Strategy OBJ: 02-6 TOP: AACSB MSC: BLOOMS Synthesis 11. An essential part of marketing strategy is target market strategy. Selection of target market(s)
drives marketing objectives and selection of the marketing mix (the four Ps). What are the three
general strategies for selecting target markets?
The strategies are to:
appeal to the entire market with a single
concentrate on only one segment of the
appeal to multiple market segments using
multiple marketing mixes
Communication REF: 24 OBJ: 02-7 TOP: AACSB KEY: CB&E Model Strategy MSC: BLOOMS Synthesis 12. The marketing mix refers to a unique blend of marketing variables known as the four Ps. Name
and briefly describe each of the 4 Ps.
PRODUCT. The firm’s product offerings are the heart of the marketing mix. The Product P
includes packaging, warranties, after-sale servicing, branding, company image, and other
components in addition to the physical unit. PLACE (or DISTRIBUTION). Distribution
strategies make products available when and where customers want them. Physical distribution
(storing and transportation logistics) is also part of the Place P.PROMOTION. Promotion includes
advertising, public relations, sales promotion, and personal selli...
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- Fall '13
- Marketing, AACSB Reflective, CB&E Model Strategy, CB&E Model