1.3.5 Flashcards
What is product life cycle?
Different stages a product goes through from its launch to decline in sales.
What are 5 stages in Product Life Cycle?
Development
Introduction
Growth
Maturity
Decline
What is the development stage in Product Life Cycle?
Focusing on designing and developing the products
What is one drawback of developement stage?
Cash flow is negative due to investments without generating profit.
What is the introduction stage in Product Life Cycle?
The time period the product is launched and customers are introduced.
What is one implication of the introduction stage?
Cash flow is negative due to high marketing costs.
What is the growth stage?
When the product experiences a big increase in sales.
What are 2 reason the gorwth stage not last forever?
End of technological use
Saturated market
Why is marketing used in growth stage?
Differentiate product from rivals.
What is the maturity stage?
When sales begin to slow down.
What is the decline stage?
Sales begin to decline eventually stopping completely.
What are extention strategies?
Techniques used by the business to extend the products life cycle.
What are the 2 choices a business has too choose from after decline stage?
Let the sales gradually decline and withdraw it from market.
Resuscitate the product and boost sales.
What are extention strategies used for?
Boost sales after the decline stage.
What are two extension strategies?
Product related
Promotion related
What is product realted extention strategies?
Changing or modifying the product to make it more appealing to customers.
2 ways of product related extensions?
Product improvements
Line extensions
What is product improvements relating too?
Releasing a new version of the product with improvements.
What does line extensions refer too?
New variants of original product.
What are 3 promotion related strategies?
Advertising
Price promotion
Sales promotion
Where does everything go in within the boston matrix?
Top left- stars
Top Right - Question marks
Bottom Left - Cash Cow
Bottom Right - Dogs
What is the boston matrix?
Tool used by businesses to analyse their product portfolio and make strategic decisions about each.
One benefit of using the boston matrix?
Allocate resources more effectively.
What is
Hope
Stage in PLC
2 positives of
Cash Cow?
Hope - ‘Milk the cash cow for as long as possible’
Stage in PLC - Maturity
2 positives-
Significant positive cash flow
Invest minimal resources but strong source of income
What can profits from cash cows be used for?
Re invest into Question marks and stars
to achieve more cash cows
What is the situation and impact of cash cows?
Situation - High market share, Low Market growth
Impact - Extremely good sales, leading to high profits
What is the situation and impact of Question Marks?
Situation - Low market share High Market growth
Impact - Requires Large investment, due to low MS
What is
Hope
Stage in PLC
2 negative of
Question Marks?
Hope - Move to the star stage
Stage in PLC - introduction stage
2 Negatives -
Negative cash flow
Investment may lead to no growth
What is the situation and impact of stars?
Situation - High market share High Market growth
Impact - High marketing costs, to stay relevant
What is
Hope
Stage in PLC
1 negative & positive
of
Stars ?
Hope - Become a cash cow and milk it
Stage in PLC - growth stage
1 negative & positive
significant positive cash flow
High marketing costs
What is the situation and impact of dogs?
Situation - Low market share Low Market growth
Impact - Little revenue, no growth potential
What is
Hope
Stage in PLC
1 negative & positive
of
dogs?
Hope - To move away or extend life cycle
Stage in PLC - Decline
1 negative & positive
You can use it as a loss leader for stars
Little to no revenue
What is mass Marketing strategy?
Target a large audience to focus on building brand awareness
What are 2 methods of Mass Marketting?
Tv
Radio
What is Niche Marketting?
Targeting a specific market segment to target specific groups of people.
Why may you use Niche Marketting?
Building relationships with customers.
What is B2B?
Selling products to different businesses.
Why is B2B marketing used?
Building relationships demonstrating how your products will help them.
What is the aim for B2C?
Build brand loyalty and creating positive customer experince.
What is customer loyalty?
repeated sales that a business experiences.
1 Positive of customer loyalty
Reduction in marketing costs
3 ways to improve customer loyalty
Customer service
Loyalty cards
Saver schemes
What is a saver scheme?
Discounts of pricing
What are loyalty cards?
Cards which offer rewards for frequent purchases.
What is customer service?
Positive customer service means that customers are likely to return.
