3.5 - Marketing Strategies

Question 1

What does the product life cycle show?

Answer 1

It shows the sales of a product over time.

Question 2

Why is the product life cycle important?

Answer 2

It helps businesses plan marketing strategies and has implications for cash flow.

Question 3

What are the stages of the product life cycle?

Answer 3

Development, Introduction, Growth, Maturity, and Decline.

Question 4

What happens in the development stage?

Answer 4

1. Research and development (R&D) develops the product.
2. The marketing department conducts market research.
3. High costs and no sales occur at this stage.

Question 5

Why is there a high failure rate in the development stage?

Answer 5

There is often not enough demand, or the business can’t make the product cheaply enough to make a profit.

Question 6

What happens during the introduction stage?

Answer 6

1. The product is launched into one or more markets.
2. Businesses promote the product heavily to build sales and awareness.
3. Prices may be high (price skimming) or low (penetration pricing).

Question 7

What are the challenges of the introduction stage?

Answer 7

High costs due to promotional spending.
Slow sales growth.
Few outlets may sell the product.
Competition may be limited if the product is innovative

Question 8

What happens during the growth stage?

Answer 8

Sales grow rapidly.
New customers and repeat customers emerge.
Competitors may be attracted.
Products are often improved or targeted at different segments.
Businesses expand distribution to more outlets.

Question 9

What happens during the maturity stage?

Answer 9

Sales reach a peak, and fixed development costs have been paid.
Market saturation occurs, causing sales growth to slow or drop.
Businesses may reduce prices or spend more on promotion to maintain sales.

Question 10

Why is competition fierce in the maturity stage?

Answer 10

Many competitors are vying for market share as growth slows.

Question 11

What happens during the decline stage?

Answer 11

Sales fall rapidly, and profits decrease.
Businesses may cut costs or withdraw the product.
Decline is inevitable for most products due to obsolescence or changing consumer tastes.

Question 12

What are extension strategies?

Answer 12

Methods to prolong the sales of a product, such as:
Improving or redesigning the product.
Changing the packaging.
Running new promotional campaigns.

Question 13

What is a product line?

Answer 13

A set of related products (e.g., different types of KitKat).

Question 14

Why do businesses need a product portfolio?

Answer 14

To ensure a variety of products at different life cycle stages, so the business remains profitable even if one product fails.

Question 15

What does the Boston Matrix show?

Answer 15

It shows market growth and market share of products.

Question 16

What are the four categories in the Boston Matrix?

Answer 16

Stars: High market share, high growth (profitable).

Cash Cows: High market share, low growth (steady income).

Question Marks: Low market share, high growth (uncertain future).

Dogs: Low market share, low growth (usually phased out).

Question 17

How do businesses use the Boston Matrix?

Answer 17

To assess the position of products in the market.
To decide which products to invest in or discontinue.

Question 18

What is a mass marketing strategy?

Answer 18

It appeals to the whole market instead of individual market segments.

Question 19

What is essential for a product in a mass market?

Answer 19

1. The product needs to have mass appeal, showing its unique selling points (USPs).
2. Promotion should clearly differentiate the product from competitors.

Question 20

How can businesses compete in mass markets?

Answer 20

1. Use expensive advertising campaigns to maintain brand awareness.
2. Run promotional activities like discounts or BOGOF (Buy One Get One Free) offers.
3. Provide customer loyalty cards and saver schemes to encourage repeat purchases.

Question 21

What is a niche marketing strategy?

Answer 21

A strategy focused on a small, specific segment of the market with unique needs.

Question 22

What are the advantages of niche marketing?

Answer 22

Businesses can better understand customer needs and tailor products.
It avoids direct competition with mass-market businesses.

Question 23

Why is pricing higher in niche markets?

Answer 23

Niche products are often highly specialized, and customers are willing to pay a premium for them.

Question 24

What challenges do businesses face in niche markets?

Answer 24

They have smaller budgets and need cost-effective ways of raising awareness.

Question 25

What is the difference between B2B and B2C marketing?

Answer 25

B2B (Business to Business): Focuses on selling products to other businesses. It emphasizes logic, efficiency, and long-term relationships.

B2C (Business to Consumer): Targets individual consumers and uses emotional appeals to influence buying decisions.

Question 26

What is a key challenge in B2B marketing?

Answer 26

Decision-making processes are more complex and involve multiple stakeholders.

Question 27

Why is customer service vital in both B2B and B2C marketing?

Answer 27

In B2B, it builds trust and loyalty over time.

In B2C, good service ensures repeat purchases and customer satisfaction.

Question 28

Why is customer loyalty important?

Answer 28

Loyal customers make repeated purchases and help businesses maintain stable revenue.

Question 29

How can businesses encourage customer loyalty?

Answer 29

Provide excellent customer service before and after sales.
Use loyalty cards and saver schemes to reward repeat purchases.
Create personalized customer experiences to make them feel valued.

Question 30

What role does strong customer service play?

Answer 30

It builds trust and ensures customers are satisfied with their purchase, encouraging them to return.

Question 31

What are loyalty cards?

Answer 31

Cards that reward customers for their purchases by offering points, discounts, or free items.

Question 32

How do saver schemes promote loyalty?

Answer 32

By allowing customers to accumulate points that can be redeemed for rewards, such as discounts or vouchers.

Question 33

What is an example of a saver scheme?

Answer 33

Tesco’s Clubcard, where points can be redeemed for money off purchases or leisure activities like holidays.