1.3.5 Marketing Strategy

Question 1

What is a Marketing Strategy?

Answer 1

The methods used by a business to achieve their marketing objectives

Question 2

What are the 5 Stages in The Product Life Cycle?

In order

Answer 2

• Development
• Introduction
• Growth
• Maturity
• Decline

Question 3

Describe the product Development?

in life cycle

Answer 3

PRODUCT is DESIGNED and MARKET RESEARCH is analysed to produce a product which will satisfy customer needs
cash flow at this point, this is a very EXPENSIVE PHASE, product isn’t making any revenue and therefore no profit

Question 4

Describe the Introduction phase?

Answer 4

involve HIGH COSTS in research and development and the product may have been test marketed before launching, so PROFIT may be NEGATIVE
SALES will be LOW as customers may not be aware of the products

Question 5

Describe Growth phase

Answer 5

• products are enjoying RAPID GROWTH in SALES and PROFITS
• customers are aware of the product and DEMAND is HIGH
• business may advertise the product to take advantage of the high demand

Question 6

Describe Maturity phase

Answer 6

• products face intense competition now all the producers have joined the market
• market is starting to be saturated
• SALES are HIGH but PROFITS are STARTING TO FALL
• products have to be discounted to keep SALES HIGH

Question 7

Describe Decline phase

Answer 7

• products may be limited in production
• PROFITS and SALES have FALLEN and the PRODUCT may be WITHDRAWN from SALE
• the business may decide to heavily DISCOUNT to get any last sales before the product because OBSOLETE

Question 8

What do Extension Strategies do?

Answer 8

they extend the lifecycle of a product rather than withdrawing

Question 9

What are 5 Extension Strategies?

Answer 9

1) Updating packaging
2) Adding more or different features
3) Changing target market
4) Advertising
5) Price Reduction

Question 10

What is a Product Portfolio?

Answer 10

The collection of all the products and services offered by a company

Question 11

What is Boston Matrix?

Answer 11

A marketing planning tool which helps managers to plan for a balanced product portfolio
- looks at Market Share and Market Growth

Question 12

What are the 4 Boston Matrix?

Answer 12

Star
Question Mark
Cash Cow
Dog

Question 13

What is a Star?

also market share & market growth

Answer 13

HIGH Market Share
HIGH Market Growth
Star products need to maintain their current marketing spend to keep sales high
Stars should become cash cows in time

Question 14

What is a Question Mark?

Answer 14

LOW Market Share
HIGH Market Growth
Product have lots of potential to become stars if they are managed correctly
Need lots of investment in marketing and promotion - if they’re to succeed

Question 15

What is a Cash Cow?

Answer 15

HIGH Market Share
LOW Market Growth
Products are good sellers and need little or no new investment
Cash Cows need monitoring in case they become dogs

Question 16

What is Dog?

Answer 16

LOW Market Share
LOW Growth Market
Products require no investment as they’re in the DECLINE PHASE of their LIFECYCLE
The product may have become obsolete or replaced
The business may consider discounting or withdrawing the product

Question 17

What are 2 Uses of Boston Matrix?

Answer 17

-

-

Question 18

What are 3 Limitations of Boston Matrix?

Answer 18

• products may not be low or high market share they could be medium
• high market share DOESN’T ALWAYS lead to high profits, these are high costs also involved with high market share
• many people argue this matrix is TOO SIMPLE