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Marketing strategy 1.3.5
Terms in this set (36)
What's the definition of the Boston Matrix?
A 2x2 matrix model that analyses a product portfolio according to the growth rate of the market and the relative market share of products within the market.
What's the definition of Extension strategies?
Methods used to prolong the life of a product.
What's the definition of Marketing strategy?
A set of plans that aim to achieve a specific marketing objective.
What's the definition of product lines?
A group of products that are very similar
What's the definition of product portfolio?
The collection of products a business is currently marketing.
What's the definition of marketing?
The management process of identifying, anticipating and satisfying consumer demands for profit.
The product life cycle shows the different stages that a product passes through over time and what else does is show in relation to sales?
The sales that can be expected at each stage.
The second element in the product life cycle is introduction what does this involve and what are costs like and why?
Product/service is launched onto the market. Costs will be high as lots of money is invested in a marketing campaign and invested in developing strategies to encourage trial purchase.
The third element in the product life cycle is growth what does this involve and what are costs like and why?
Product/service is enjoying high and rapid growth in sales and profits, could gain economies of scales. Costs are reduced as less money is needed to be invested in trying to obtain trial purchases. Main focus of cost spending is on marketing to ensure sales remain as high as possible.
The fourth element in the product life cycle is maturity, what does this involve and what are costs like and why?
Products face intense competition as all the producers have joined the market. Sales and profits will be at its highest as most sales come in this phase and costs at lowest as the marketing becomes less important as the product is well known.
The fifth (final) element in the product life cycle is decline, what does this involve?
Product sales reduce and the product becomes less well known. Production of the product is reduced or may cease altogether.
Do all products and services go through each stage of the product life cycle?
There are two general approaches to extension strategies, what are these?
Product adjustment and promotion
One approach to extension strategies is product adjustment, name example of how this would be undertaken.
Updating (quite common for technical products and certain types of consumer durable), add value to products by making improvements, extend the product range (add new flavours etc) and changing the packaging.
One approach to extension strategies is promotion, name examples of how this would be undertaken.
Finding new markets for products, finding new uses for products, encourage more frequent use and an investment in a sizable advertisement campaign.
Product life cycle analysis shows businesses that sales of products eventually decline. A well organised business with one or more products will attempt to do what?
Phase out old products and introduce new ones.
In the boston matrix products are categorized according to what two criteria?
Market growth and relative market share
The first element in the product life cycle is introduction, what does this involve?
Product is a concept, products has been though through but not produced. Lots of R and D takes place to produce prototypes, these are rigorously tested to ensure safety and fit for purpose. Lots of market research is undertaken to see if there's a need and how best to design the product to appeal in particular groups of consumers.
The first stage of the boston matrix is the problem child or ? what does a product in this section enjoy and what else is involved?
Enjoys high market growth but low market share. Product may just have been launched and is building customer loyalty, products should receive investment while their market share builds.
The second stage of the boston matrix is the rising star, what does a product in this stage have and what else is involved?
High market share and growth. Product in the growth phase of product life cycle. Production of this product should remain consistent while profits are harvested.
The third stage of the boston matrix is the cash cow, products in this stage are reaching what and what else is involved?
Reaching maturity of their product life cycle, still have customer loyalty. Products should be produced until sales start to decline. Often ideal location for a product and profits from this can be used to fund new product development to start new product life cycles.
The fourth stage of the boston matrix is the dog, products in this stage face what and what else in involved?
Face declining sales in declining markets, products may be in decline phase of product life cycle. Products that are failures can damage reputation of business.
One problem for firms when planning their product portfolios is that its very difficult to tell what stage of the life cycle a product is at and there's no standard life time for products. A useful technique for allowing firms to analyse product portfolios is what?
The boston matrix
What's a strategy?
The plan of the medium to long-term actions required to achieve the company goals or targets.
What things make up the best marketing strategies?
Fitting with company objectives, customer requirements and actions of competitors are the best marketing strategies.
Are marketing strategies company specific?
Yes- different marketing strategies that reflect individual circumstances of the business.
Marketing strategies in mass markets involve what?
Large quantities produced mean lower average costs means EOS, meaning higher profits, media used will be TV, radio newspapers and other mass media, products can be marketed for consumers all over the world in the same way and mass market caters for almost everyone.
Marketing strategies in niche markets involve what?
Media used like specialist magazines, products designed for specific purposes, inelastic demand means higher prices can be charged.
What type of advertising and transactions does B2B marketing typically involve?
Advertising is informative rather than persuasive and large transactions often on an order/invoice system
The focus of B2B marketing is what and suppliers need to build what type of relationship with customers?
On offering a quality product and service and a close relationship.
In B2C marketing are they looking to build up a long-term relationship with supplier?
No, more of one of purchases such as sofas
In B2C marketing, consumers want a variety of what for convenience?
Distribution channels for convenience.
One way to develop customer loyalty is through loyalty cards, how are these a benefit to a business?
Encourage repeat business and allow access to data about buying behaviour.
Short-term marketing may be about shifting products, what's long-term marketing usually about?
Usually about creating the right image to appeal to the right market
One way to develop customer loyalty is through customer service why?
Customers are more likely to return to a business if they receive high quality customer service.
One way to develop customer loyalty is through communication how?
In a mass market may involve using national advertising campaigns to tell customers about new products.
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