-
Explain how marketing managers allocate their limited resources. (LO1)
- Marketing managers use the strategic marketing process and marketing information, such as marketing plans, sales reports, and action memos, to effectively allocate their scarce resources to exploit the competitive advantages of their products
- Marketers may use techniques like sales response functions or market share (share point) analysis to help them assess what the market's response will be to additional marketing efforts
-
Describe two marketing planning frameworks: Porter's generic business strategies and synergy analysis. (LO2)
- Porter identifies four generic business strategies that firms can adopt:
- Cost leadership strategy: focuses on reducing expenses to lower product prices while targeting many market segments
- Differentiation strategy: requires products to have significant points of difference to charge a premium price while targeting many market segments
- Cost focus strategy: involves controlling costs to lower prices of products targeting only a few market segments
- Differentiation focus strategy: requires products to have significant points of difference to reach one or only a few market segments
- Synergy analysis framework: focuses on two kinds of synergies:
- Marketing synergies (efficiencies): run horizontally across the row of the various products offered by the firm to a single market segment
- R&D - manufacturing synergies: run vertically down a column of the various market segments targeted for a given product or product class
- This results in five alternative combinations: market-product concentration, market specialization, product specialization, selective specialization, full coverage
-
Synergy combinations
- market-product concentration: firm benefits from focus on a single product line and market segment; loses opportunities for significant synergies in both marketing and R&D-manufacturing
- market specialization: firm gains marketing synergy through providing a complete product line for the specific market segment; R&D-manufacturing has the difficulty of developing and producing different products
- product specialization: firm gains R&D-manufacturing synergy through producing only a one product; gaining market distribution in different geographic areas will be costly
- selective specialization: firm doesn't get either marketing or R&D-manufacturing synergies because of the uniqueness of the market-product combinations
- full coverage: firm has maximum potential synergies in both marketing and R&D-manufacturing; might get spread too thin because of resource requirements needed to reach all market-product combinations
|
|
