Cmo 4860 Week 1 Study Questions
MKTG 4860 - MARKETING STRATEGY (Spring 2015) - Dr. Alhassan G. Mumuni
EXAM 1 STUDY GUIDE
NOTES:
The exam will consist of about 40 or 50 multiple choice questions.
The exam material is Chapters 1-4; chapter 5 has been moved to the next exam
Chapter 1
1. Know the roles and responsibilities of a CMO and how they differ from those of a traditional marketing manager
a. CMO – Chief marketing officer – Implement and manage marketing budget, reduce costs, prepare the overall marketing strategy, increase revenue, facilitate growth, sales and marketing strategies.
2. Know the components of a business definition
a. A definition of the company from the customer or market perspective
3. Know the components of a business mission
a. A businesses mission …show more content…
stems from three key factors. The company’s values, core purpose and visionary goals. The mission communicates the firm’s ideology and future visions.
4. Know the types and characteristics of business goals/objectives
a. Strategic Goals - Set at the top of an organization and are directly supported in the mission statement.
b. Tactical Goals – Directly related to the strategic goals of the organization. Levels of achievement necessary in the departments.
c.
Operational Goals – Determined at the lowest level of the firm and apply to individual employees or subdivisions in the company.
5. Organizational growth opportunities – what the concept means and what are its components
a. Environmental opportunities – what they are and how they differ from organizational growth opportunities:
i. Unmet or changing customer needs ii. Unsatisfied buyer groups iii. New means or technology for delivering value to prospective buyers
b. Distinctive competencies – their characteristics and importance
i. An organization’s unique strengths or qualities (skills, technology, resources) that make it different than other organizations
c. Industry success requirements – what they are
i. Basic tasks a company needs to perform in order to successfully compete in an industry or market segment. ii. If what must be done is inconsistent with what can be done, an organizational growth opportunity will fail to materialize.
6. SWOT analysis – what it means, what it is used for, and things to consider when evaluating each of the SWOT components
a. Strengths – Weaknesses – Opportunities – Threats
b. Formal framework for identifying organizational growth opportunities
7. Product-market …show more content…
strategies
a. Know the four generic product-market strategies, i.e. market penetration, market development, product development, and diversification
b. Know issues in choosing a product-market strategy
i. Attempt to increase buyer’s usage or consumption ii. Attract buyers from competitors products iii. Stimulate product trials from potential customers
c. Understand how each can be implemented using the marketing mix elements
i. New methods of distribution ii. Modification of the basic offering iii. Change of sales effort or advertising iv. Competitor retaliation potential
8. The marketing plan
a. What it is and why it is important
i. A formal written document that describes the context and scope of an organization’s marketing effort to achieve defined goals or objectives within a specified future time period.
b. Types of marketing plans
i. Business, Product, or Brand focused
c. Know its various components, i.e. what do we expect to find in a marketing plan
i. Executive summary ii. Company background introduction iii. Analysis (SWOT) iv. Marketing goals and objectives – business and marketing
v. Marketing strategy – target market, value prop vi. Financials – budget, costs, performa income, forecast vii. Implementation costs – List of activities, timeline, responsibilities viii. Evaluation and control – performance metrics
Chapter concepts
1. Chief marketing officer (CMO)
2. business definition
3. business mission
4. business goals/objectives
5. organizational growth opportunities
6. environmental opportunities
7. distinctive competencies
8. industry success requirements
9. SWOT
10. market penetration
11. market development
12. product development
13. diversification
14. marketing mix
15. marketing audit
16. marketing plan
Chapter 2
1. Definitions, types, and examples of the following as they relate to marketing costs
a. Fixed costs
i. Expenses that do not fluctuate. No matter how many units are produced, these costs remain the same. (Programmed, committed costs)
b. Variable costs
i. Expenses that are uniform with the number of unit output. As units increase, so do variable costs (COGS, other variable costs)
c. Sunk costs
i. Costs from past expenditures that are typically irrelevant (Last years advertising)
d. Relevant costs
i. Costs expected to occur in the future as a result of current marketing decisions (Opportunity costs)
e. Programmed costs
i. Costs generated from attempting to generate sales (advertising, sales promo, commission)
f. Committed costs
i. Costs required to maintain the organization (rent, administrative, clerical costs)
2. Definitions and calculation of the following:
a. Margin
i. The difference between selling price and costs to produce the product
1. USP - UVC
b. Gross margin
i. Difference between total sales and total cost of goods sold
1. Sales - COGS
c. Net profit margin
i. Gross Margin – Selling expenses – Fixed Expenses
d. Trade margins
i. The markup between retailer, wholesale, manufacturer and consumer ii. (Wholesale$ – Manufacturer$) / Wholesale$
3. Definitions and calculation of the following:
a. Contribution
i. Difference between total sales revenue and total variable costs
b. Contribution margin
i. Contribution expressed as a percent (TSR – TVC) / TS
c. Breakeven volume (in units and dollars), including incorporating profit goals
i. When total revenue = total cost
4. Definition and importance of cannibalization – Important to note that cannibalization is assessed in terms of lost contribution, not sales revenue
a.
5. Definition and calculation of customer lifetime value
a.
6. Components of a proforma income statement
a.
Chapter concepts
1. Fixed costs
2. Variable costs
3. Sunk costs
4. Relevant costs
5. Programmed costs
6. Committed costs
7. Margin
8. Gross margin
9. Net profit margin
10. Trade margins
11. Contribution
12. Contribution margin
13. Breakeven volume
14. Cannibalization
15. Customer lifetime value
16. Proforma income statement
Chapter 3
1. Know the steps in the “DECIDE” framework for marketing decision making
a. D - efine the problem
b. E - numerate the decision factors
c. C - onsider relevant information
d. I - dentify the best alternative
e. D - evelop an implementation plan
f. E - valuate the decision and decision process
2. Know the key considerations during each step
a. Define the problem
i. Objectives of the decision maker ii. Recognition of constraints
b. Enumerate decision factors
i. The controllable and uncontrollable factors
c. Consider relevant information
i. Characteristics of the industry, organization and alternatives
d. Identify the best alternative
i. Match each alternative with the highlighted uncertainties
e. Develop an implementation plan
i. Resource allocation ii. Strategy formulation iii. Strategy implementation
f. Evaluate the decision
i. Was the decision appropriate
3. Know what the following concepts mean, and how they factor into the decision making process:
a. Alternative courses of action and uncertainties
i. Two or more choices to evaluate prior to selecting a course of action
b. Decision trees and payoff tables
i. Payoff table – Each possible event that could occur with each choice of action and the value or payoff for each combination ii. Decision tree – Represents the results of each alternative action
** Skip the part of the chapter on marketing case analysis
Chapter 4
1. Opportunity analysis - Know its definition and the following related activities/concepts:
a. Opportunity identification
i. Identifying new types of classes of buyers
ii.
Uncovering unsatisfied needs
b. Opportunity-organization matching
i. Determines whether an identified opportunity is consistent with the organization’s business ii. Analysis of the SWOT analysis
c. Opportunity evaluation – pay attention to the factors to consider in the two types of evaluation, i.e., qualitative and quantitative evaluation
i. Qualitative - Focuses on the capitalization of a market niche ii. Quantitative - Yields estimate of market sales potential
2. Market structure and market share assessment
a. Know the concept of a “market” as defined in terms of prospective buyers
i.
b. Know your textbook’s concept of “minimarkets” and how this describes the structure of a market
c. Know the concept of “market share” and how its value depends on the specific “market” under consideration.
i.
3. Estimating market size/potential - Know the following market size estimation methods
a. Heuristic method
i.
b. Chain ratio method
i.
4. Sales forecasting
a. Know the difference between sales forecasting and market size estimation
i. The level of sales a single organization expects to achieve based on a chosen market strategy
b. Know how the chain ratio method can be applied to market size
estimation
i. Population*% that drink pop*% drink cherry coke*52 weeks*cola consumed/week*$ of unit
5. Market segmentation and targeting
a. Know the benefits and/or uses of market segmentation
i. Identifies new opportunities for new product development ii. Helps design marketing programs iii. Improves allocation of resources
b. Know the common bases/variables used in segmenting consumer and industrial markets
1. Socioeconomic
2. Psychographic
3. Behavioral
4. Benefits sought
c. Know the common criteria that any identified market segment must satisfy
i. Differentiable ii. Substantial iii. Accessible iv. Measurable
6. Market targeting
a. Know the three issues in market targeting, i.e. where, how, and when to compete
b. Know the difference between differentiated and concentrated segment targeting strategies
i. Differentiated – multiple segments ii. Concentrated – single segment
Chapter concepts
1. Opportunity analysis
2. Market structure
3. Opportunity identification
4. Opportunity-organization matching
5. Opportunity evaluation (qualitative and quantitative evaluation)
6. Market
7. Effective demand
8. Served market
9. Market segmentation
10. Market segment
11. Mass customization
12. “First-to-market”
13. Market sales potential
14. Sales forecast
15. Chain ratio method
USEFUL FORMULAE (Will be provided in the exam)
(1)
UC = USP – UVC
(2)
(3)
(4)
(5)
EXAM 1 STUDY GUIDE
NOTES:
The exam will consist of about 40 or 50 multiple choice questions.
The exam material is Chapters 1-4; chapter 5 has been moved to the next exam
Chapter 1
1. Know the roles and responsibilities of a CMO and how they differ from those of a traditional marketing manager
a. CMO – Chief marketing officer – Implement and manage marketing budget, reduce costs, prepare the overall marketing strategy, increase revenue, facilitate growth, sales and marketing strategies.
2. Know the components of a business definition
a. A definition of the company from the customer or market perspective
3. Know the components of a business mission
a. A businesses mission …show more content…
stems from three key factors. The company’s values, core purpose and visionary goals. The mission communicates the firm’s ideology and future visions.
4. Know the types and characteristics of business goals/objectives
a. Strategic Goals - Set at the top of an organization and are directly supported in the mission statement.
b. Tactical Goals – Directly related to the strategic goals of the organization. Levels of achievement necessary in the departments.
c.
Operational Goals – Determined at the lowest level of the firm and apply to individual employees or subdivisions in the company.
5. Organizational growth opportunities – what the concept means and what are its components
a. Environmental opportunities – what they are and how they differ from organizational growth opportunities:
i. Unmet or changing customer needs ii. Unsatisfied buyer groups iii. New means or technology for delivering value to prospective buyers
b. Distinctive competencies – their characteristics and importance
i. An organization’s unique strengths or qualities (skills, technology, resources) that make it different than other organizations
c. Industry success requirements – what they are
i. Basic tasks a company needs to perform in order to successfully compete in an industry or market segment. ii. If what must be done is inconsistent with what can be done, an organizational growth opportunity will fail to materialize.
6. SWOT analysis – what it means, what it is used for, and things to consider when evaluating each of the SWOT components
a. Strengths – Weaknesses – Opportunities – Threats
b. Formal framework for identifying organizational growth opportunities
7. Product-market …show more content…
strategies
a. Know the four generic product-market strategies, i.e. market penetration, market development, product development, and diversification
b. Know issues in choosing a product-market strategy
i. Attempt to increase buyer’s usage or consumption ii. Attract buyers from competitors products iii. Stimulate product trials from potential customers
c. Understand how each can be implemented using the marketing mix elements
i. New methods of distribution ii. Modification of the basic offering iii. Change of sales effort or advertising iv. Competitor retaliation potential
8. The marketing plan
a. What it is and why it is important
i. A formal written document that describes the context and scope of an organization’s marketing effort to achieve defined goals or objectives within a specified future time period.
b. Types of marketing plans
i. Business, Product, or Brand focused
c. Know its various components, i.e. what do we expect to find in a marketing plan
i. Executive summary ii. Company background introduction iii. Analysis (SWOT) iv. Marketing goals and objectives – business and marketing
v. Marketing strategy – target market, value prop vi. Financials – budget, costs, performa income, forecast vii. Implementation costs – List of activities, timeline, responsibilities viii. Evaluation and control – performance metrics
Chapter concepts
1. Chief marketing officer (CMO)
2. business definition
3. business mission
4. business goals/objectives
5. organizational growth opportunities
6. environmental opportunities
7. distinctive competencies
8. industry success requirements
9. SWOT
10. market penetration
11. market development
12. product development
13. diversification
14. marketing mix
15. marketing audit
16. marketing plan
Chapter 2
1. Definitions, types, and examples of the following as they relate to marketing costs
a. Fixed costs
i. Expenses that do not fluctuate. No matter how many units are produced, these costs remain the same. (Programmed, committed costs)
b. Variable costs
i. Expenses that are uniform with the number of unit output. As units increase, so do variable costs (COGS, other variable costs)
c. Sunk costs
i. Costs from past expenditures that are typically irrelevant (Last years advertising)
d. Relevant costs
i. Costs expected to occur in the future as a result of current marketing decisions (Opportunity costs)
e. Programmed costs
i. Costs generated from attempting to generate sales (advertising, sales promo, commission)
f. Committed costs
i. Costs required to maintain the organization (rent, administrative, clerical costs)
2. Definitions and calculation of the following:
a. Margin
i. The difference between selling price and costs to produce the product
1. USP - UVC
b. Gross margin
i. Difference between total sales and total cost of goods sold
1. Sales - COGS
c. Net profit margin
i. Gross Margin – Selling expenses – Fixed Expenses
d. Trade margins
i. The markup between retailer, wholesale, manufacturer and consumer ii. (Wholesale$ – Manufacturer$) / Wholesale$
3. Definitions and calculation of the following:
a. Contribution
i. Difference between total sales revenue and total variable costs
b. Contribution margin
i. Contribution expressed as a percent (TSR – TVC) / TS
c. Breakeven volume (in units and dollars), including incorporating profit goals
i. When total revenue = total cost
4. Definition and importance of cannibalization – Important to note that cannibalization is assessed in terms of lost contribution, not sales revenue
a.
5. Definition and calculation of customer lifetime value
a.
6. Components of a proforma income statement
a.
Chapter concepts
1. Fixed costs
2. Variable costs
3. Sunk costs
4. Relevant costs
5. Programmed costs
6. Committed costs
7. Margin
8. Gross margin
9. Net profit margin
10. Trade margins
11. Contribution
12. Contribution margin
13. Breakeven volume
14. Cannibalization
15. Customer lifetime value
16. Proforma income statement
Chapter 3
1. Know the steps in the “DECIDE” framework for marketing decision making
a. D - efine the problem
b. E - numerate the decision factors
c. C - onsider relevant information
d. I - dentify the best alternative
e. D - evelop an implementation plan
f. E - valuate the decision and decision process
2. Know the key considerations during each step
a. Define the problem
i. Objectives of the decision maker ii. Recognition of constraints
b. Enumerate decision factors
i. The controllable and uncontrollable factors
c. Consider relevant information
i. Characteristics of the industry, organization and alternatives
d. Identify the best alternative
i. Match each alternative with the highlighted uncertainties
e. Develop an implementation plan
i. Resource allocation ii. Strategy formulation iii. Strategy implementation
f. Evaluate the decision
i. Was the decision appropriate
3. Know what the following concepts mean, and how they factor into the decision making process:
a. Alternative courses of action and uncertainties
i. Two or more choices to evaluate prior to selecting a course of action
b. Decision trees and payoff tables
i. Payoff table – Each possible event that could occur with each choice of action and the value or payoff for each combination ii. Decision tree – Represents the results of each alternative action
** Skip the part of the chapter on marketing case analysis
Chapter 4
1. Opportunity analysis - Know its definition and the following related activities/concepts:
a. Opportunity identification
i. Identifying new types of classes of buyers
ii.
Uncovering unsatisfied needs
b. Opportunity-organization matching
i. Determines whether an identified opportunity is consistent with the organization’s business ii. Analysis of the SWOT analysis
c. Opportunity evaluation – pay attention to the factors to consider in the two types of evaluation, i.e., qualitative and quantitative evaluation
i. Qualitative - Focuses on the capitalization of a market niche ii. Quantitative - Yields estimate of market sales potential
2. Market structure and market share assessment
a. Know the concept of a “market” as defined in terms of prospective buyers
i.
b. Know your textbook’s concept of “minimarkets” and how this describes the structure of a market
c. Know the concept of “market share” and how its value depends on the specific “market” under consideration.
i.
3. Estimating market size/potential - Know the following market size estimation methods
a. Heuristic method
i.
b. Chain ratio method
i.
4. Sales forecasting
a. Know the difference between sales forecasting and market size estimation
i. The level of sales a single organization expects to achieve based on a chosen market strategy
b. Know how the chain ratio method can be applied to market size
estimation
i. Population*% that drink pop*% drink cherry coke*52 weeks*cola consumed/week*$ of unit
5. Market segmentation and targeting
a. Know the benefits and/or uses of market segmentation
i. Identifies new opportunities for new product development ii. Helps design marketing programs iii. Improves allocation of resources
b. Know the common bases/variables used in segmenting consumer and industrial markets
1. Socioeconomic
2. Psychographic
3. Behavioral
4. Benefits sought
c. Know the common criteria that any identified market segment must satisfy
i. Differentiable ii. Substantial iii. Accessible iv. Measurable
6. Market targeting
a. Know the three issues in market targeting, i.e. where, how, and when to compete
b. Know the difference between differentiated and concentrated segment targeting strategies
i. Differentiated – multiple segments ii. Concentrated – single segment
Chapter concepts
1. Opportunity analysis
2. Market structure
3. Opportunity identification
4. Opportunity-organization matching
5. Opportunity evaluation (qualitative and quantitative evaluation)
6. Market
7. Effective demand
8. Served market
9. Market segmentation
10. Market segment
11. Mass customization
12. “First-to-market”
13. Market sales potential
14. Sales forecast
15. Chain ratio method
USEFUL FORMULAE (Will be provided in the exam)
(1)
UC = USP – UVC
(2)
(3)
(4)
(5)