1.3.5 marketing strategy Flashcards
what is a marketing strategy
a plan of action designed to promote and sell a product or service.
what is the product life cycle
a management tool that evaluates a product’s journey from development to withdrawal from the market
what are the
5 phases of the product life cycle
development, introduction, growth, maturity and decline
what does the development phase involve
it involves designing and creating a product through intense market research to make it
what is the introduction phase
when a completed product is introduced to a market
what will a business experience during the introduction phase
high market growth and low market share
what pricing strategies are common during the introduction phase
most commonly used are skimming and penetration but any pricing stragegy is used during this phase depending on the product
what is the growth phase
when a product is now fully in the market and is experiencing very high sales, the business will have high profits during this period.
what pricing strategies are commonly used in the growth phase of a product
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
during what phase will a business experience high economies of scale
the growth phase
what is the maturity phase
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
what will a business experience during the maturity phase
high market share and low growth
what pricing strategies are best during the maturity phase
-predatory pricing can be used to drive out most competition
-competitive pricing
what does business cash flow look like during the development stage
negative cash flow as alot of money is spent on research and development, while the product is not making any sales
what does business cash flow look like during the introduction stage
still negative as there is still low sales
what does business cash flow look like during the growth stage
mostly always positive as business will experience EOS and there will be high sales and market growth
what does business cash flow look like during the maturity stage
Sales begin to peak so cash flow should be maximised, average costs will begin to fall
what does business cash flow look like during the decline stage
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.
what is the decline stage
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.
