Marketing stratergy Flashcards
what does the product life cycle describe?
the different stages a product goes through from its conception to its eventual decline in sales
how many stages are there in the product life cycle?
five
what is the first stage of the product life cycle?
development
what is the second stage of the product life cycle?
introduction
what is the third stage of the product life cycle?
growth
what is the fourth stage of the product life cycle?
maturity
what is the fifth stage of the product life cycle?
decline
what is cash flow?
movement of money in and out of a business over time
what happens during the development stage of a product?
the focus is on designing the product
what usually happens to the business during the development stage?
the product incurs high costs for research, development, market research, and product testing meaning there may be negative cash flow
what is the marketing strategy during the development stage?
focused on creating awareness and generating interest for the product
what happens during the introduction stage?
begins when the product is launches, sales are usually low as it is new to the market and consumers are not very aware of the product
what happens during the growth stage?
the product enters this stage when sales being to increase rapidly
what does the business focus on when entering the growth stage?
shifts to building market share and increasing production to meet the growing demand
what usually happens to the cash flow during the growth stage?
it turns positive as sales revenue increases and costs are spread out over a larger volume of production
what is the marketing strategy during the growth stage?
to differentiate the product from competitors and build brand loyalty
what happens during the maturity stage?
slowing sales growth as the product reaches its peak in terms of market penetration
how are costs reduced in the maturity stage?
through economies of scale and efficient production
what is economies of scale?
when unit costs fall as businesses expand their scale of production
what is the marketing stratergy during the maturity stage?
aims to maintain market share and increase profitability by cutting costs and finding new markets
what happens during the decline stage?
occurs when sales begin to decline as the product becomes obsolete or is replaced
what does the focus of the business shit to when they enter the decline stage?
managing the products decline and reducing costs
what happens to the cash flow in the decline stage?
usually turns negative as sales revenue declines and costs associated with the products decline increase
what is the marketing strategy during the decline stage?
discounting the product, reducing it price to clear inventory, or fining new uses for the product
what is an extension strategy?
techniques used to extend the life of a product beyond its natural lifecycle
what are extension strategies designed to do?
boost sales and maintain profitability for a product that has reached the decline stage
what are the two types of extension strategies?
product-related or promotion-related extension strategies
what does product-related extension strategies involve?
changing or modifying the product to make it more appealing to customers and extend its life cycle
what are the three methods or product-related extension strategies?
product improvements
line extensions
repositioning
what is a example of product improvement?
releasing a new version of its original product
what is an example of line extentions?
introducing a new variant of the original product e.g coco cola and diet coke
what does promotion-related extension strategies involve?
changing the marketing and promotions of the product to extend its life cycle
what are the three ways of promotion-related extension strategies?
changes to advertising
price promotions
sales promotion
what is an example of changes to advertising?
re-creating adverts consistently
what is an example of price promotions?
discounting prices significantly to increase sales and therefore awareness (e.g black friday)
what is an example of sales promotion?
loyalty programs where customers can earn a free product if they buy a certain amount
what is the Boston Matrix/
a tool used by businesses to analyse their product portfolio and make strategic decisions about each product
what are the four categories that the matrix classify their products into?
Cash Cow
Problem Child/Question mark
Star
Dog
what are the four categories for the matrix based on?
their market share and market growth rate
what does categorising the products do for businesses?
they can allocate recourses more effectively, optimising their cash flow and developing marketing strategies that align with the products potential
what is Cash Cow?
products with a high market share in a mature market (the entire market is no longer growing)
what are the benefits of Cash Cow?
they generate significant positive cash flow
what are the drawbacks of cash cow?
they have low growth potential
what are the characteristics of cash cow?
the business invests minimal resources in cash cow as they are seen as stable sources of income
what is the marketing focus for cash cow?
maintaining their market share and profitability
what can cash cow be used for?
to fund the development of new products
what is the Problem child/ question mark?
they have a low market share in - growth market
what does Problem child have the potential to do?
become stars is the company invests in their development
what is the cash flow usually for the problem child?
negative
why is there usually a negative cash flow for the problem child?
as businesses usually invest in problem child products to increase their market share and turn them into stars
what do marketing efforts focus on?
increasing the market share and brand recognition
what is the star?
they have a high market share in a high-growth market
why does the company typically invest in stars?
to maintain or increase their market share
what cash flow does the star generate?
significant positive cash flow and have the potential for growth
what are the marketing efforts focused on?
brand recognition, increasing market share, and maintaining profitability
what should businesses focus on when in the star phase?
maximising their potential
what is the dog?
they have low market share in a low-growth market
why is the dog not a good place to be?
they generate little revenue for the company and have no growth potential
what are the different types of market
mass markets, niche markets, business-to-business, and business-consumer
what is a mass market?
they are characterised by large numbers of customers who have similar needs and wants
what do mass markets focus on?
building brand awareness and appealing to a broad audience
what is a niche market?
characterised by smaller groups of customers with specific needs and wats
what is the marketing strategy for a niche market?
targeting a specific segment of the population and building relationships with them
what is a business to business market?
focuses on selling products to other businesses
what is the emphasis for B2B markets?
building relationships with businesses and demonstrating how your product can help them be more sucessful
what is the business to consumer market?
focusses on selling products/services directly to consumers
what is the emphasis on for a business to consumer (B2C)market?
building brand loyalty and creating positive customer experience
what does developing customer loyalty help a business to do?
grow and be successful in the long term
what does customer loyalty drive?
repeat purchases
why are repeat purchases good for a business?
reduces marketing costs when launching new products
what are three methods to build customer loyalty?
customer service
offering loyalty cards
save schemes
