1.3.5 Marketing strategy

Question 1

Product lifecycle

Answer 1

A model showing the lifespan of a product from launch to being taken off the market.

Question 2

Importance of a product lifecycle

Answer 2

• Can be used to aid decision making.
• Allows business to understand how each stage influences marketing mix/plan.
• Model is flexible and can be used over different time spans.

Question 3

Disadvantages of a product lifecycle

Answer 3

• Doesn’t explain why things happen.
• Overly simplistic.
• Products may not always follow model.

Question 4

Stages of a product lifecycle

Answer 4

Launch, growth, maturity, decline.

Question 5

Extension strategy

Answer 5

Ways in which a business modifies a product to appeal to more customers and maintain sales in maturity.

Question 6

Examples of extension strategies

Answer 6

Change image
Name
Packaging
Size
Advert
Moderated product/flavour
Target new segment

Question 7

Product portfolio

Answer 7

The range of products that a business sells.

Question 8

Boston Matrix

Answer 8

A tool to analyse a product’s market share and market growth within a market.

Question 9

High market growth, high market share

Answer 9

Rising star – Holding
* High sales revenue, fierce competition.
* Needs heavy promotion/improvement.
* Growth

Question 10

High market growth, low market share

Answer 10

Problem child/question mark – Building
* Low sales revenue, fierce competition.
* Needs heavy promotion/R&D.
* Launch

Question 11

Low market growth, high market share

Answer 11

Cash cow – Milking
* High sales revenue, less threat from competition.
* Little promotion needed.
* Maturity.

Question 12

Low market growth, low market share

Answer 12

Dog – Divesting
* Poor profits.
* Get rid of them or improve them.
* Decline.

Question 13

Advantages of the Boston Matrix

Answer 13

• Identifies where each product is positioned in the market.
• Assess when is the right time to launch new products/withdraw products.

Question 14

Disadvantages of the Boston Matrix

Answer 14

• Only looks at market share and growth to assess strengths and weaknesses of products.
• Subjective about where a product sits.
• Doesn’t consider costs – high market share doesn’t always mean high profits.
• Current market share information tells us very little about prospects for the future.