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Business Theme 1 > 1.3.5 Marketing Strategy > Flashcards

1.3.5 Marketing Strategy Flashcards

1
Q

what are the 5 stages of the product life cycle

A
  1. development
  2. introduction
  3. growth
  4. maturity
  5. decline
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2
Q

what is the development phase of the product life cycle

A

involves research and development and marketing
costs are high and there are no sales to cover the costs
this results in a high fail rate

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3
Q

what is the introduction phase of the product life cycle

A
  • product is launched
  • promotion is heavy, businesses must ensure they have the capacity for the demand that this creates
  • price skimming may be used here to cover the costs of the development phase
  • alternatively price penetration can be used to encourage sales
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4
Q

what is the growth phase of the product life cycle

A
  • sales grow rapidly from new and repeated customers
  • competitors may be attracted to the market
  • promotion has to differentiate the product
  • product may be improved or developed
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5
Q

what is the maturity phase of the product life cycle

A
  • sales hit a peak
  • profitability hits a peak as fixed costs of development are paid off
  • saturation is reached, sales drop, and prices may be lowered to stimulate demand
  • not many new customers
  • competition is high
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6
Q

what is the decline phase of the product life cycle?

A
  • product doesn’t appeal to customers anymore
  • sales fall rapidly
  • product may be withdrawn or sold to another company
  • decline isn’t inevitable, quality products with a great design can sell for decades
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7
Q

what are extension strategies?

A
  • an effort to boost sales when they are declining
    -this could be done through promotion or product development
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8
Q

what is a product line

A
  • consists of related products that share similar characteristics, uses or target customers
  • e.g. nestle produces kitkat’s but in many forms, the two-finger KitKat, 4 finger and KitKat chunky
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9
Q

what is a product portfolio

A
  • contains a variety of different products are different stages in the product life cycle
  • e.g. nestles product portfolio consists of KitKat, Nescafe, and Shredded Wheat
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10
Q

what is the Boston matrix?

A
  • model used for product portfolio analysis
  • compares market growth with market share
  • puts products into categories: stars, cash cows, question marks and dogs
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11
Q

What are the characteristics of a star in the Boston matrix

A
  • high market share and high market growth
  • in growth and a profitable stage
  • promotion key to maintain market share
  • must keep up with growing demand
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12
Q

What are the characteristics of a cash cow in the Boston matrix

A
  • have high market share and low market growth
  • they are in the maturity phase of the product life cycle
  • they don’t require much investment as the brand is well known and EOS has been produced
  • very profitable
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13
Q

What are the characteristics of a question mark in the Boston matrix

A
  • products that have high market growth and low market share
  • all new products lie here
  • they aren’t profitable yet, they could succeed or fail
  • they require heavy marketing to stand a chance
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14
Q

What are the characteristics of a dog in the Boston matrix

A
  • Have low market share and low market growth
  • if still profitable the business will harvest profit for the short term
  • if no longer making profit the product may be sold
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15
Q

How can the Boston matrix be used

A
  • shows how a business products are positioned in the market
  • helps a business make decisions
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16
Q

What is a mass marketing strategy

A
  • products/services that appeal to the whole market
  • creating mass appeal with strong branding and promotion, this is important as mass markets tend to be highly competitive
17
Q

when operating in a niche market what marketing strategies would be used

A
  • creating a product that is differentiated or unique compared to what’s available in the mass market
  • USP’s are essential
  • requires more specialised market research on the specific target market
  • establishing brand loyalty and adding value (important as there is less demand than in the mass market)
18
Q

What is B2B marketing

A
  • The sale of products or services from one business to another
  • takes a more informative approach to marketing
  • strong emphasis on building a long-term relationship between the two businesses
  • needs to understand the clients specific needs as usually involves large sales with high stakes
19
Q

What is B2C marketing

A
  • The sale of a business’ product or service to a consumer
  • takes a more emotional approach to marketing
  • often uses media like TV and radio
20
Q

How can customer loyalty be achieved

A
  • positive customer service
  • after sales service for problems or enquiries about the product
  • loyalty cards, help tie a consumer to a service or retailer
  • saver schemes, e.g. tescos club card

Business Theme 1 (20 decks)

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