Mkt Analysis And Strategies

Question 1

What is pdt portfolio?

Answer 1

The range of products offered by the biz, comprising all the products which an org has, the different categories of pdts, diff pdt lines and the individual pdt itself

Question 2

What are the benefits of product portfolio?

Answer 2

1. Pdt development -> variety -> meet the diff tastes and preferences -> sales increase
2. Diversify -> spread risks -> less chances of failure e.g. dog -> high risk

Question 3

What is cash cow?

Answer 3

• High mkt share and Low mkt growth
• most established pdt
• carry out milking by redirecting the positive cash flow and invest in other pdts

Question 4

What is problem child?

Answer 4

• high mkt growth and Low mkt share
• could be a newly-established pdt
• carry out building by redirecting the cash flow from cash cow to pay for the high promotion costs for it to be established

Question 5

What is dog?

Answer 5

• Low mkt growth and Low mkt share
• carry out divesting by discontinuing the pdt but need to consider the impacts of such decisions on employees, and whether the freed up capacity could be used for other pdts

Question 6

What is star?

Answer 6

• high mkt share and high mkt growth
• successful pdt in a growing mkt
• carry out holding which is to continue support for these pdts so that they continue to maintain the good mkt position

Question 7

What are the usefulness of BCG matrix?

Answer 7

1. Analyse the performance and position of the existing pdt portfolio -> Ensure a balanced pdt portfolio (diverse and varied) -> boost the effectiveness of future mkting strategies as the biz is able to foresee whether there is high/Low performance and how to improve if there is Low performance
2. Planning of actions -> allocate resources e.g. less to dog or more to stars and problem child -> increase the efficiency of future mkting strategies and effective allocation of resources
3. Planning the introduction of new pdts

Question 8

What are the limitations of BCG matrix?

Answer 8

1. Only a planning tool and critics have pointed out its is simplifying a complex set of factors that determine the success of a pdt
2. Need to consider external factors such as tastes and preferences that may vary, technological advancements and changing economic conditions + decisions by competitors

Question 9

What is mkt penetration?

Answer 9

• aim is to achieve higher mkt share in existing markets with existing pdts
• least risky as there are lesser unknowns, since the mkt remains and pdt remains the same
• common methods of mkt penetration includes price reduction, increased promotion or a wider availability in distribution

Question 10

What is pdt development?

Answer 10

• refers to the development and sale of new pdts , or development of existing pdts in existing markets
• often involves investments in R&D, so that new innovative pdts can be produced -> create a new brand identity for the biz

Question 11

What is mkt development?

Answer 11

• refers to the strategy of selling existing pdts in new mkts
• could be in the form of exporting gds to an overseas mkt or selling to a new mkt segment, such as selling to the consumer mkt when a biz originally sells to the biz market
• likely to be successful when the biz can benefit from eos from increased output or when the new market the biz ventures into is not too different from its existing one

Question 12

What is diversification?

Answer 12

• is the process of selling different, unrelated gds or svcs in new mkt
• most risky as it involves new challenges in both mkts and products
• however, a biz can consider this strategy if the high risk is balanced out by high profits , the opportunity to gain mkt share in a new growing industry or spreading overall risk by venturing into different industries

Question 13

What are the benefits of using ansoff matrix?

Answer 13

• identifies the options that the biz can expand into, and helps managers to analyse the degree of risk associated with each one -> managers can then use decision-making techniques to consider the costs, potential profits and risks associated with each option

Question 14

What are the limitations of using ansoff matrix?

Answer 14

• only considers two main factors: products and markets
• other factors such as external environment (PESTLE) would need to be considered as well, in order to paint a more complete picture
• also does not provide or suggest detailed marketing strategies or options, eg does not inform the mkting manager which mkt or country to venture into, and which existing pdts produced by the biz to use