1.3.5 Marketing Strategies Flashcards
Definition of market strategy
Methods to achieve marketing objectives.
What are the 5 stages of the Product Life Cycle?
- Development
- Introduction
- Growth
- Maturity
- Decline
Development phase
- design and market research
- expensive
- high risk as product might not be successful
Introduction phase
- high costs in R&D
- low sales as customers are unaware of the product
- advertising
Growth phase
- rapid growth in sales and profit
- demand is high as customers are aware
- advertise to take advantage of high demand
Maturity phase
- intense competition
- market starts to be saturated
- high sales but profits start to fall
- products have to be discounted to maintain high sales
Decline phase
- limited in production
- profits and sales decrease
Ways to extend the lifecycle of a product?
- Update packaging
- Add features
- Change target audience
- Advertising
- Price reduction
Definition of product portfolio
Collection of all products/services offered by a company
What are the 4 parts of the Boston Matrix?
- Stars
- Cash cows
- Question marks
- Dogs
Characteristics of star products
- High market growth and relatively high market share.
- Likely to be profitable, but business needs to invest to cope with growing market and sales.
- Net cash flow will be nearly 0 because investment spending leads to outflows.
Characteristics of cash cows
- High market share but in a low growth market.
- Likely to be profitable, but there’s a low chance of increasing sales.
- Strong net cash flow.
Characteristics of question marks
- Low market share but in a high growth market.
- Problem for the business as it’s unclear what should be done with the product.
- Won’t be profitable.
Characteristics of dogs
- Low market share and in low growth market.
- Require no investment as they’re in decline phase
- May become obsolete or replaced
- Business may discontinue/withdraw product
Uses of the Boston Matrix
• to manage their product portfolios
Limitations of the Boston Matrix
- products may not be in a high or low market share, could be medium
- high market share doesn’t always lead to high profits
Marketing strategies to be used in a mass market
- product differentiation
- price
- promotion (advertising)
- place/location
Marketing strategies to be used in a niche market
- products must have specialist need
- charge premium prices
- promotion/advertising is more targeted
- more likely to use internet
Why is customer loyalty important?
It ensures a repeat purchase.
How can a business maintain customer loyalty?
- discounts
- loyalty cards
- saver schemes
- good customer service
