chapter 2

• Harvard’s Michael Porter proposed the value chain as a tool for identifying ways to create more customer value
• The value chain involves bringing materials into the business, converting materials into final products, and shipping out final products
• Support activities in the value chain include:

  • Gathering and acting upon information about the market
  • Researching, developing, and launching new high-quality offerings quickly and within budget
  • Defining target markets and prospecting for new customers
  • Building deeper understanding, relationships, and offerings to individual customers
• Many companies today have partnered with specific suppliers and distributors to create a superior value delivery network, also called a supply chain
• Corporate management's first course of action should be a review of opportunities for improving existing businesses
• A marketing plan is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives
• The marketing plan should open with a table of contents and brief summary for senior management of the main goals and recommendations
• The marketing manager defines the mission, marketing and financial objectives, and needs the market offering is intended to satisfy as well as its competitive positioning
• Financial projections in a marketing plan include a sales forecast, an expense forecast, and a break-even analysis
• The last section of a marketing plan outlines the controls for monitoring and adjusting the implementation of the plan
• The value chain is a tool for identifying key activities that create value and costs in a specific business
• Holistic marketing maximizes value exploration by understanding the relationships between the customer’s cognitive space, the company’s competence space, and the collaborator’s resource space
• Corporate strategy establishes the framework within which the divisions and business units prepare their strategic plans
• Market-oriented strategic planning is the managerial process of developing and maintaining a viable fit between the organization’s objectives, skills, and resources and its changing market opportunities
• Harvard’s Michael Porter proposed the value chain as a tool for identifying ways to create more customer value
• The value chain involves bringing materials into the business, converting materials into final products, and shipping out final products
• Support activities in the value chain include:

  • Procurement
  • Technology development
  • Human resource management
  • Firm infrastructure
• The market-sensing process involves all the activities in gathering and acting upon information about the market
• The new-offering realization process includes all the activities in researching, developing, and launching new high-quality offerings quickly and within budget
• The customer acquisition process involves all the activities in defining target markets and prospecting for new customers
• The customer relationship management process includes all the activities in building deeper understanding, relationships, and offerings to individual customers
• The fulfillment management process includes all the activities in receiving and approving orders, shipping the goods on time, and collecting payment
• Many companies have partnered with specific suppliers and distributors to create a superior value delivery network, also called a supply chain
• Value creation is how a company efficiently creates more promising new value offerings
• Value delivery is how a company uses its capabilities and infrastructure to deliver the new value offerings more efficiently
• Corporate management’s first course of action should be a review of opportunities for improving existing businesses
• A business can increase sales and profits through backward, forward, or horizontal integration within its industry
• Value exploration is how a company identifies new value opportunities
• The marketing plan lays out the target markets and the firm’s value proposition, based on an analysis of the best market opportunities
• The tactical marketing plan specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service
• Diversification growth makes sense when good opportunities exist outside the present businesses—the industry is highly attractive and the company has the right mix of business strengths to succeed
• Corporate culture includes the shared experiences, stories, beliefs, and norms that characterize an organization
• A marketing opportunity is an area of buyer need and interest that a company has a high probability of profitably satisfying
• An environmental threat is a challenge posed by an unfavorable trend or development that, in the absence of defensive marketing action, would lead to lower sales or profit
• Once the company has performed a SWOT analysis, it can proceed to goal formulation, developing specific goals for the planning period
• Goals indicate what a business unit wants to achieve; strategy is a game plan for getting there
• Firms work to achieve the lowest production and distribution costs so they can underprice competitors and win market share
• The business concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market
• The business focuses on one or more narrow market segments, gets to know them intimately, and pursues either cost leadership or differentiation within the target segment
• Holistic marketing maximizes value exploration by understanding the relationships between the customer’s cognitive space, the company’s competence space, and the collaborator’s resource space