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///BUSINESS GOALS OR OBJECTIVES = Convert the mission into tangible actions and results to be achieved by a

specified time frame , Are divided into three categories: 1production objectives,=Manufacturing and service capacity n
Product and service quality
2financial objectives, =Return on investment,Return on sales,Shareholder wealth,Profit,Cash flow/3marketing
objectives=Market share,Sales volume,Profit,Marketing productivity,Customer satisfaction,Customer value
creation,Customer lifetime value
///SWOT analysis is a formal framework for identifying and framing organizational growth opportunities.
Questions to ask after a SWOT analysis: Which strengths represent distinctive competencies?, Which weaknesses
disqualify the organization from pursuing certain opportunities?, Does a pattern emerge from the SWOT?
//FORMULATING PRODUCT-MARKET STRATEGIES=A product-market strategy involves selecting specific markets
and profitably reaching them through an integrated program called a marketing mix./Market Penetration Strategy= A
market-penetration strategy dictates that an organization seeks to gain greater dominance in a market in which it already
has an offering (existing offerings existing markets).
Market Penetration Strategy Involves= Increasing present buyers usage or consumption rates of the offering, Attracting
buyers of competing offerings, Stimulating product trial among potential ,customers// Market Penetration Strategy
Considerations= Examine market growth, Assess competitive reaction, Analyze the capacity of the market to increase
usage or consumption rates and the availability of new buyers
2Market Development Strategy= A market-development strategy dictates that an organization introduce its existing
offerings to markets other than those it is currently serving (existing offerings new markets). Market Development
Strategy Involves Adjusting the marketing mix, such as: Modifying the basic product offering, Using different
distribution outlets, Changing the sales effort or advertising Analyzing competitors strengths, weaknesses, and potential
for retaliation /Identifying the number, motivation, and buying patterns of new buyers
3New Offering Development Strategy= A product- (new offering-) development strategy dictates that an organization
create new offerings existing markets.It involves Product innovation= Developing totally new offerings/ Product
Augmentation=Enhancing the value to customers of existing offerings through bundling or improving functional
performance/Product Line Extension= Adding different features, sizes, etc. to broaden the existing line
New Offering Development Strategy Factors=1The market size and volume needed for profitability 2 The magnitude and
timing of competitors responses 3 The impact of the new product on the sales of existing offerings (cannibalism) 4 The
capacity of the organization to deliver the offerings to the market(s) 5 The presence of significant points of difference
4Diversification Strategy=A diversification strategy involves the development or acquisition of offerings new to the
organization and the introduction of those offerings to publics not previously served by the organization(new offerings
new markets)./Consideration=1 Many firms have adopted this strategy to take advantage of growth opportunities 2. Is
very risky because both the offerings and markets served are new to the organization 3. Can be successful if the
organization applies its distinctive competencies to reaching new markets with new offerings
Chp2=Variable Costs=Are expenses that are uniform per unit of output within a relevant time period (budget year)/
Fluctuate in direct proportion to the number of units produced /Are divided into two categories: Cost of Goods
Sold=Materials, labor, and factory overhead tied directly to production, Other Variable Costs=Variable expenses not tied
to production but with volume, such as sales commissions, discounts, etc. Fixed Costs=Are costs that do not fluctuate
with output volume within a budget year/ On a per-unit basis, decrease as the number of units over which they are
allocated increase/Remain unchanged regardless of the number of units produced Are divided into two categories:
/Programmed Costs=Those marketing costs that generate sales, such as advertising, sales promotion, salesforce salaries,
etc. /Committed Costs=Those costs that maintain the organization, such as rent, administrative/clerical salaries, etc.
Variable/Fixed Costs=Some costs have both a variable and fixed component. Example: Selling Expenses=Fixed
component: Salary, Variable component: Commissions or bonus
///Break-Even Analysis=Identifies the unit or dollar sales volume at which an organization neither makes a profit nor
incurs a loss /Break-even is shown by this equation: Total Revenue=totl variable cost+total fixed cost /Break-even
requires the following info: An estimate of unit variable costs, An estimate of the relevant total dollar fixed costs to
produce and market the offering unit, The selling price for each offering unit
///Operating leverage refers to the extent to which fixed costs and variable costs are used in the production and marketing
of products and services /HighOperatingLeverage=High total fixed costs relative to total variable costs
/LowOperatingLeverage=Low total fixed costs relative to total variable costs ...The higher the operating leverage, the
faster total profits will rise or fall once sales volume rises or falls below break-even volume
//Step 1: Define the Problem=Problem definition framework includes: Objectives, Constraints, Success Measures
Step 2: 1Enumerate the Decision Factors=Two decision factors to be enumerated and related to each other: Alternative
Courses of Action which Controllable by the decision maker such as the marketing mix 2Uncertainties which
Uncontrollable factors that the manager cannot influence Step 3: Consider Relevant Information=Relevant information
consists of information that relates to the alternatives identified by the manager as being likely to affect future events.
Includes characteristics of the following: industry, competitors, consumer, Organization (competitive strengths and
position), alternatives //Identifying relevant information is difficult:1There is often too much info and
viewpoints2Determining what does and does not matter is a skill learned through experience3Dont consider everything
as factual info4Sometimes relevant info must be created/A manager has performed a situation analysis when steps 1
through 3 are completed
//Step 4: Identify the Best Alternative=Decision analysis:1Matches each alternative with the uncertainties in the
environment, Assigns a quantitative value to the outcome associated with each match/Uses a decision tree and a payoff
table to show the relationship among alternatives, uncertainties, and potential outcomes /A payoff table: Displays the
alternatives, uncertainties, and outcomes facing a firm/Includes managements determination of the probability of an
uncertaintys occurrence Decision analysis is important because it: Is a fundamental tool for considering
what if situations/Forces the manager to quantify outcomes associated with specific actions/Is useful in a variety of
settings/Can be used in determining the value of perfect information
//Step 5: Develop a Plan for Implementing=the Chosen Alternative: An implementation plan involves:1Allocating
marketing, financial, and manufacturing resources2The time needed to develop a marketing plan
//Step 6: Evaluate the Decision and the Decision Process: With respect to the decision itself, ask:1Was a decision made?
2Was the decision proper given the situation?= Insufficient information present? Failure to consider and interpret relevant
information? Logical assumptions made regarding data gaps? Ask 5 questions of the decision-making process:1Was the
problem defined adequately?2Were all the pertinent alternatives and uncertainties identified? Were the assumptions
realistic?3Was all the relevant information considered?4Was an appropriate course of action recommended? Was the
logic consistent? Was any important piece of information overlooked?5How can the recommendation be implemented?
///Class Discussion=Case preparation requires 4-5 hours=Bring notes to class=Carefully listen to the viewpoints of other
students during the discussion of the case=Prepare a short summary of the case after discussing it in class
//Written Report=Be carefully organized and grammatically correct=Has three major sections:Strategic problem and issue
identification,Analysis and evaluation,/Recommendations=Opportunity analysis consists of three interrelated activities:
Opportunity Identification,Opportunities arise from:,Identifying new types of buyers,Uncovering unsatisfied needs of
buyers,Creating new ways or means for satisfying buyer needs/Opportunity analysis focuses on finding markets that an
organization can profitably serve/Opportunity-Organization Matching=Determines whether an identified market
opportunity is consistent with the definition of the firms business, mission statement, and distinctive competencies
Assesses strengths and weaknesses via a SWOT
Identifies the success requirements=Rejects those that do not conform to a firms character even if they offer sizable sales
and profit=Opportunity Evaluation=Qualitative=Matches the attractiveness of an opportunity with the potential for
uncovering a market niche, which depends on:Competitive activity,Buyer requirements,Market demand,Supplier
sources,Environmental forces,Organizational capabilities
Quantitative Consists of:Market sales potential estimates.Sales forecasts.Budgets
Market Segmentation= A technique that involves breaking down or building up of potential buyers into groups, which are
called market segments=Each segment possesses a homogeneous characteristicthat relates to its purchasing behavior and
response to a marketing program Cannot be all things to all people/Information technology and flexible manufacturing
and service delivery systems can create segments of one//Requirements for Effective Market Segmentation=Need to
answer six buyer-related questions:Who are they?What do they to buy?How do they want to buy?When do they
want to buy?Where do they want to buy?Why do they want to buy?
/Variables: measureable, differentiable, accessible, substantial
MARKET TARGETING=Where to Compete?= 1Question focuses on which market segments should be chosen for
marketing efforts 2Market targeting (or target marketing) is the specification of the segment(s) the organization wishes to
pursue/How to Compete?=1Question focuses on how many market segments the organization will pursue and the
marketing strategies to employ. Two market targeting approaches are: Differentiated
/Marketing n Concentrated Marketing=Differentiated Marketing=Simultaneously pursues several different market
segments with a unique marketing strategy for each segment. Managers multiple products across multiple market
segments, which increases marketing-related expenditures=Concentrated Marketing= Focuses on a single market
segment, sometimes marketing one product to one segment, More commonly, offers one or more product lines
to a single market segment, Provides operating economies, Limits growth opportunities if the segment size declines