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Key points of chapter 1

Marketing Strategy (MGMKT 839)

Critical point 1: Marketing is a philosophy! The type of a philosophy a firm believes in determines its whole strategy. If a firm has a marketing philosophy (it does not necessarily have to) it can be either external or internal oriented. An external oriented marketing philosophy is characterized by a concentration on the environment in which the firm acts. In the limelight of the long-term strategy is the customer with his needs. Basically, the firm is keen on selling products that the customer wants to buy, in other words, it wants to offer a problems solution the customer is searching for. The firm observes its target audience at every time, adapts to the audiences changing needs and invests in new opportunities. Additionally, the firm monitors carefully its broader environment in terms of competitors and related markets to assure both offering a higher customer value than the competitors do and discovering opportunities for investing in new markets. In contrast a firm with an internal oriented marketing philosophy focuses on internal issues such as products, services or processes. Offering the firms target audience value does not rank first. Examples of internal orientations are Operations Orientation (focus on cost-reduction), Sales Orientation (focus on short-term sales volume), Finance Orientation (focus on short-term profits) or Technology Orientation (focus on research, development and engineering). Test question 1: A firms marketing philosophy reveals the focus on either the customers needs and wants or on the firms own issues. Which of the following philosophy focuses on the customer? Answers and feedback to question 1: a) b) c) d) e) Operations Orientation Sales Orientation External Orientation Technology Orientation Internal Orientation

The correct answer is b). Answer is to be found on pages 14 - 15.

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Key points of chapter 1

Marketing Strategy (MGMKT 839)

Critical point 2: A marketing strategys success relies on the thorough treatment of the marketings 6 imperatives, also known as the marketings mandatory must-dos. The 6 imperatives describe the rudimentary and absolutely necessary activities that have to be handled meticulously in order to succeed in a firms marketing job. The first 3 imperatives include basic strategic tasks like determination and recommendation of target markets to address, identifying market segments and setting strategic marketing directions and positions. Imperatives 4 - 6 concerns the implementation and application of the marketing strategy which includes the tasks of designing the market offer, communication the new strategy within the company and assuring mandatory support from other functions and finally realizing and monitoring the strategy. Test question 2: The popular marketing triumvirate consists of three important activities in order to create a marketing strategy. Which three activities (that are also part of the 6 imperatives) is talk of? Answers and feedback to question 2: a) b) c) d) e) PAP pricing, advertising, placing PTC pricing, timing, communicating STP segmentation, targeting, positioning IMC implementing, monitoring, controlling None of the above mentioned

The correct answer is c). Answer is to be found on page 17.

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Key points of chapter 1

Marketing Strategy (MGMKT 839)

Critical point 3: Closely intertwining of customer value and shareholder value. Test question 3: A firms offered customer value and shareholder value are intertwined closely. Please explain the meaning of the term customer value and them show its close relationship to a firms shareholder value. Answers and feedback to question 3: A firm delivers a customer value when it satisfies the customers needs, meaning it provides a solution for a customers problem. To reach that goal a firm has to complete the following tasks carefully: identifying new opportunities in the broader firms environment, figuring out the customers needs, obtaining a clear overview about the firms competition, developing appealing products or services that are a problem solver for the customer and the communication of the problem solving ability to potential customers. The better a firm completes these tasks, the higher the customer value. And the higher the customer value, the better is the firms ability to attract, retain and grow customers. When the own customer value is higher than the one of the competitors, the customers are likely to believe in the products and services of the firm and thus buy the firms products. That means that the customers provide revenue and cash flows that inevitably will increase the shareholder value as well. Answer is to be found on pages 12 - 14.

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