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This chapter begins with the learning outcome summaries, followed by a set of lesson plans for you to use
to deliver the content in Chapter 2. Lecture (for large sections) on page 4
• Company Clips (video) on page 6
• Group Work (for smaller sections) on page 8
Review and Assignments begin on page 9
Review questions
Application questions
Application exercise
Ethics exercise
Video assignment
Case assignment
Great Ideas for Teaching Marketing from faculty around the country begin on page 20
1 2
- Define strategic business units (SBUs)
Each SBU should have these characteristics: a distinct mission and a specific target market; control over resources;
its own competitors; a single business; plans independent from other SBUs in the organization. Each SBU has its
own rate of return on investment, growth potential, and associated risks, and requires its own strategies and funding.
3
-3 Identify strategic alternatives and know a basic outline for a marketing plan
Ansoff’s opportunity matrix presents four options to help management develop strategic alternatives: market
penetration, market development, product development, and diversification. In selecting a strategic alternative,
managers may use a portfolio matrix, which classifies strategic business units as stars, cash cows, problem children
(or question marks), and dogs, depending on their present or projected growth and market share. Alternatively, the
GE model suggests that companies determine strategic alternatives based on the comparisons between business
position and market attractiveness. A marketing plan should define the business mission, perform a situation
analysis, define objectives, delineate a target market, and establish components of the marketing mix. Other
elements that may be included in a plan are budgets, implementation timetables, required marketing research efforts,
or elements of advanced strategic planning.
1
-5 Describe the components of a situation analysis
In the situation (or SWOT) analysis, the firm should identify its internal strengths (S) and weaknesses (W) and also
examine external opportunities (O) and threats (T). When examining external opportunities and threats, marketing
managers must analyze aspects of the marketing environment in a process called environmental scanning. The six
macroenvironmental forces studied most often are social, demographic, economic, technological, political and legal,
and competitive.
2
-6 Identify sources of competitive advantage
There are three types of competitive advantage: cost, product/service differentiation, and niche. Sources of cost
competitive advantage include experience curves, efficient labor, no frills goods and services, government subsidies,
product design, reengineering, production innovations, and new methods of service delivery. A product/service
differentiation competitive advantage exists when a firm provides something unique that is valuable to buyers beyond
just low price. Niche competitive advantages come from targeting unique segments with specific needs and wants.
The goal of all these sources of competitive advantage is to be sustainable.
3
-7 Explain the criteria for stating good marketing objectives
Objectives should be realistic, measurable, time specific, and compared to a benchmark. They must also be consistent
and indicate the priorities of the organization. Good marketing objectives communicate marketing management
philosophies, provide management direction, motivate employees, force executives to think clearly, and form a basis
for control.
2
these market segments is performed. After the market segments are described, one or more may be targeted by the
firm.
1
-8 Discuss target market strategies
2-11 Identify several techniques that help make strategic planning effective
First, management must realize that strategic planning is an ongoing process and not a once-a-year exercise. Second,
good strategic planning involves a high level of creativity. The last requirement is top management’s support and
participation.
TERMS
LO4 Develop an appropriate business mission statement 20: Defining the Business Mission
21: Defining the Business Mission
2-4 Defining the Business Mission
LO5 Describe the components of a situation analysis 22: Conducting a Situation Analysis
23: SWOT Analysis
2-5 Conducting a Situation Analysis 24: Components of a SWOT Analysis
25: Environmental Scanning
LO9 Describe the elements of the marketing mix 41: The Marketing Mix
42: The Marketing Mix is…
2-9 The Marketing Mix 43: Marketing Mix: The “Four Ps”
44: Marketing Mix: The “Four Ps”
Chapter 2 ♦ Strategic Planning for Competitive Advantage 5
45: Marketing Mix: The “Four Ps”
LO10 Explain why implementation, evaluation, and control of 47: Following Up the Marketing Plan
the marketing plan are necessary 48: Following Up the Marketing Plan
49: Post-audit Tasks
2-10 Following Up on the Marketing Plan
LO11 Identify several techniques that help make strategic 50: Effective Strategic Planning
planning effective 51: Techniques for Effective Strategic Planning
52: Chapter 2 Video
2-11 Effective Strategic Planning
Suggested Homework:
• This instructor manual contains assignments on the Nederlander Organization video and the Disney case.
• The chapter prep card for each chapter contains numerous questions that can be assigned or used as the basis for
longer investigations into marketing.
Company Clips
Segment Summary: The Nederlander Organization
The Nederlander Organization is a global theatre management company that backs productions, rents, and manages
Broadway style theatres. In this video, major managers discuss the strategic decisions behind the development of a
separate company to manage a loyalty program for theatre-goers. This company, Audience Rewards, allows a number
of theatre management companies to pursue strategic growth and other market opportunities.
These teaching notes combine activities that you can assign students to prepare before class, that you can do in class
before watching the video, that you can do in class while watching the video, and that you can assign students to
complete as assignments after watching the video.
During the viewing portion of the teaching notes, stop the video periodically where appropriate to ask students the
questions or perform the activities listed on the grid. You may even want to give the students the questions before
starting the video and have them think about the answer while viewing the segment. That way, students will be engaged
in active rather than passive viewing.
To offer a more complete Broadway experience by incentivizing customers to go to theatre more, spend more
money, and try out more art by recognizing and rewarding them across various markets and theatres.
2. Describe an element that makes up a competitive advantage for Audience Rewards. Is it sustainable?
The element that contributes to Audience Reward’s competitive advantage is the partnership with several major
theatre houses, production companies, and other arts venues. By being able to have the backing of more than just
one set of theatres, more points can be earned and more tickets redeemed. This also applies to the major partners
such as Delta Airlines, which extends the Audience Rewards market. It is likely that this is a sustainable
The Nederlander Organization’s market strategy is driven by the fact that they have a very high income
demographic that interests large companies (such as Delta Airlines) to determine ways they can partner with
Nederlander to reach that demographic. Nederlander Organization relies on providing its productions companies
that rent the theatres great promotion technology through Audience rewards.
In most cases, group activities should be completed after some chapter content has been covered, probably in the
second or third session of the chapter coverage. (See the “Lesson Plan for Lecture” above.) For the “Class Activity:
Marketing Strategy Analysis, ” divide the class into small groups of four or five people and provide the information
and the questions asked by the class activity, as described later in this chapter.
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