1.3.5 marketing strategy

Question 1

what is a marketing strategy

Answer 1

a plan of action designed to promote and sell a product or service.

Question 2

what is the product life cycle

Answer 2

a management tool that evaluates a product’s journey from development to withdrawal from the market

Question 3

what are the
5 phases of the product life cycle

Answer 3

development, introduction, growth, maturity and decline

Question 4

what does the development phase involve

Answer 4

it involves designing and creating a product through intense market research to make it

Question 5

what is the introduction phase

Answer 5

when a completed product is introduced to a market

Question 6

what will a business experience during the introduction phase

Answer 6

high market growth and low market share

Question 7

what pricing strategies are common during the introduction phase

Answer 7

most commonly used are skimming and penetration but any pricing stragegy is used during this phase depending on the product

Question 8

what is the growth phase

Answer 8

when a product is now fully in the market and is experiencing very high sales, the business will have high profits during this period.

Question 9

what pricing strategies are commonly used in the growth phase of a product

Answer 9

competitive
-the business will experience economies of scale so businesses with a skimming pricing strategy can now reduce prices to competitors
-businesses with penetration pricing strategies will have higher demand so are able to raise prices to that of competitors

Question 10

during what phase will a business experience high economies of scale

Answer 10

the growth phase

Question 11

what is the maturity phase

Answer 11

when sales begin to slow and competition is very high, usually because other businesses have seen how profitable the product has been during the growth phase

Question 12

what will a business experience during the maturity phase

Answer 12

high market share and low growth

Question 13

what pricing strategies are best during the maturity phase

Answer 13

-predatory pricing can be used to drive out most competition
-competitive pricing

Question 14

what does business cash flow look like during the development stage

Answer 14

negative cash flow as alot of money is spent on research and development, while the product is not making any sales

Question 15

what does business cash flow look like during the introduction stage

Answer 15

still negative as there is still low sales

Question 16

what does business cash flow look like during the growth stage

Answer 16

mostly always positive as business will experience EOS and there will be high sales and market growth

Question 17

what does business cash flow look like during the maturity stage

Answer 17

Sales begin to peak so cash flow should be maximised, average costs will begin to fall

Question 18

what does business cash flow look like during the decline stage

Answer 18

costs are still low, however sales will begin to fall. cash flow may become negative if the business trys to extend the lifecycle of the product and it fail.

Question 19

what is the decline stage

Answer 19

where a product sales start to fall, demand decreases, the product usually becomes obsolete and has been replaced by other products or competition is too high, forcing it out the market.