Making marketing decisions: using the marketing mix Flashcards
7p’s
Product: the good or service that the customer buys
Price: how much the customer pays for the product
Place: how the product is distributed to the customer
Promotion: how the customer is found & persuaded to buy
People: the people who make contact with customers in delivering the product
Process: the systems and processes that deliver a product to a customer
Physical: the elements of the physical environment the customer experiences
Boston Matrix
The Boston Matrix is a model which helps businesses analyse their portfolio of businesses and brands. The Boston Matrix is a popular tool used in marketing and business strategy.
Boston Matrix - Stars
high growth products competing in markets where they are strong compared with the competition. Often Stars need heavy investment to sustain growth. Eventually growth will slow and, assuming they keep their market share, Stars will become Cash Cows
Boston Matrix - Cash Cows
low-growth products with a high market share. These are mature, successful products with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars
Boston Matrix - Dogs
products that have a low market share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in. Dogs are usually sold or closed.
Boston Matrix - Question Marks
products with low market share operating in high growth markets. This suggests that they have potential, but may need substantial investment to grow market share at the expense of larger competitors. Management have to think hard about “Question Marks” - which ones should they invest in? Which ones should they allow to fail or shrink?
Product Life Cycle Stages
Research & development - researching and developing a product before it is made available for sale in the market
Introduction – launching the product into the market
Growth – when sales are increasing at their fastest rate
Maturity – sales are near their highest, but the rate of growth is slowing down, e.g. new competitors in market or saturation
Decline – final stage of the cycle, when sales begin to fall
Extension Strategies
Advertising – try to gain a new audience or remind the current audience
Price reduction – more attractive to customers
Adding value – add new features to the current product, e.g. improving the specifications on a smartphone
Explore new markets – selling the product into new geographical areas or creating a version targeted at different segments
New packaging – brightening up old packaging or subtle changes
