1.3.5 marketing strategy Flashcards
what is the first segment of the product life cycle?
development
- market research
- high costs, no profit made
- complex and time-consuming
- high failure rate
what is the second segment of the product life cycle
introduction
- slow sales
- heavy promotion (costly)
- decide pricing strategy
* price skimming initial price to cover promotional costs
* penetration pricing encourages sales and get market share
- limited competition if its an innovative product
what is the third segment of the product life cycle?
growth
- competitors have joined the market
- competitive or cost plus pricing
- sales grow fast
- product improved or developed
what is the fourth stage of the product life cycle?
maturity
- at saturation (market reached max growth)
- aren’t many new customers
- products discounted to maintain demand
- reduce supply to avoid surplus
what is the fifth segment of the product life cycle?
decline
- sales fall
- withdraw it from the market
- thin of an extension strategy
what are the different extension strategies?
product development
- improving and redesigning
- special additions
- add value
promotion
- promote in a different way
- new ad campaign
re-branding
- special offers
what is product modification
change the look of a product but not the main idea e.g. cars where they change the design but not the engine
what is a product portfolio
- the collection of all the products and services offered by a company
- this can allow for insights into the sources of company sales and profits
what is the Boston matrix
- a marketing planning tool which helps managers to plan a balanced product portfolio
what are question mark products
- have low market share
- are in high market growth
- lots of potential to become stars if they are managed correctly
- will need lots of investment in marketing and promotion - if they are to succeed
what is a cash cow product
- have high market share
- are in a low growth market
- are good sellers and need little to no new investment
- the product just needs to be ‘milked’ for cash
- need monitoring in case they become dogs
what are star products
- have high market share
- are in a high growth market
- need to maintain their current marketing spend to keep sales high and differentiate from competitors
- should become cash cows in time if managed correctly
what are dog products
- have a low market share
- are in a low growth market
- require no investment as they are in the decline phase of their life-cycle
- business may consider discounting or withdrawing the product
limitations with the boston matrix
- product might not be low or high market share, they could be medium
- high market share does not always lead to high profits, there are high costs also involved with high market share
- many people this matrix is too simple
what is B2B marketing
- stands for business to business marketing. many businesses just deal with each other rather than consumers
- advertising needs to be informative rather than persuasive and ‘clever’
- suppliers need to build up closer and long-term relationships with customers
- focus will be on offering quality products, quality service and focus savings
