1.3.5 Marketing Strategy Flashcards
What is marketing?
The management process of identifying, anticipating and satisfying consumer demands for point
What is the product life cycle?
A theoretical model which describes the stages a product goes through over its life measured on time v sales
R&D stage
High cost
No sales
Very low brand awareness
Introduction stage
High levels of promotional activity
High levels of competition
Low sales
Negative cash flow
Growth stage
Sales increase
Increase market share
High brand awareness
Positive cash flow
Maturity stage
Peak sales but slowly decline
High brand value
High demand
Decline stage
Demand decrease
Brand recognition falls
Low levels of innovation
Sales fall
Extension stage
Tries to maximise profit
Covers all cost
Initiative to raise sales
Reasons why products enter the decline stage
- Technological advance
- Changes in consumer tastes and behaviour
- Increased competition
- Failure to innovate and develop the product
Ways of extending the product life cycle
Improve quality Promoting Fit social trends like being sustainable Lower price Develop new market segment
Benefits to product life cycle
Forecast future sales trends
Helps with market targeting and positioning
Help analyse and manage the product portfolio
Weaknesses of product life cycle
The shape and duration of the cycle varies from product to product
Strategic decisions can change the life cycle
Difficult to recognise exactly where a product is in its life cycle
What is the boston matrix?
A marketing portfolio analysis tool that illustrates the performance of a company’s products based on levels of market share and market growth
Benefits of boston matrix
A useful tool for analysing product portfolio and informing future decisions
Identify product portfolio and spot any gaps
Negatives of Boston matrix
Focus on market share and market growth ignores issues such as developing a sustainable competitive advantage
Only a snapshot
