1.3.5 Marketing strategy

Question 1

what is the first segment of the product life cycle?

Answer 1

Development
* market research
*high costs, no profit made
*complex & time- consuming
* high failure rate

Question 2

what is the second segment of the product life cycle?

Answer 2

Introduction
*slow sales
*heavy promotion (costly)
*decide pricing strategy
- price skimming initial price make cover promotional costs
- penetration pricing encourage sales & get market share
*limited competition if its a innovative product

Question 3

what is the third segment of the product life cycle?

Answer 3

Growth
*competitors have joined the market
*competitive or cost plus pricing
* sales grow fast
*product improved or developed

Question 4

what is the fourth segment of the product life cycle?

Answer 4

Maturity
*at saturation (market reached max growth)
*aren’t many new customers
*products discounted to maintain demand
* reduce supply to avoid surplus

Question 5

what is the fifth segment of the product life cycle?

Answer 5

Decline
*sales fall
*withdraw it from the market
*think of an extension strategy

Question 6

what are the different extension strategies?

Answer 6

product development
* improving & redesigning
* special additions
* add value

Promotion
* promote in a different way
* new ad campaign
* re-branding
*special offers

Question 7

what is the product line extension?

Answer 7

• related products
  *similar characteristics, uses and target customers (eg. cherry coke)

Question 8

what is the Boston Matrix ?

Answer 8

*type of Portfolio analysis
* assess the position of a product in a business portfolio
* determines the correct marketing strategy

Question 9

stars?

Answer 9

*high market growth
*high market share
* growth stage
*cost- plus or competitive pricing
* invest heavily to stay competitive