Module 3 Flashcards
Marketing mix (7Ps)
Product Price Place Promotion Physical evidence People Process
Life Cycle
Start up Growth Shakeout Maturity Decline
Characteristics of Start up stage
High unit costs
High overhead costs
Low sales volume
Few businesses in the industry with low levels of competition
Low price sensitivity among customers, more focus on uniqueness as a basis for competition
High prices
Low profit
Characteristics of growth stage
Decreasing cost due to economies of scale
Significant increases in sales volume due to products gaining in popularity
Increasing levels of competition
Competition often still based around differentiation, with leading brands emerging
Falling prices
Growing profit
Characteristics of shakeout stage
Transitional stage - there is still sales growth, but this growth has slowed significantly
Market leaders: Strong market share, allowing significant economies of scale Strong brand Falling prices Growing profits
Other businesses l: Weak market share Weaker brand Falling prices Falling profits May exit market through sale or business or insolvency
Characteristics of maturity stage
Where the industry has been long established or ‘mainstream’ and its products/ services are taken for granted.
Characteristics:
Costs low due to economies of scale and relatively low development costs
Maximum sales volumes and so product variations or discounts/rebates may be required to encourage sales
Customers primary focus is cost
High profits for market leaders with dominant brands
Continuing consolidation through mergers and acquisitions
Decline stage
Product/service is experiencing falling demand. Sales often fall as a result of substitute products or services with superior performance or lower price
Characteristics:
Decreasing costs
Decreasing sales volumes
Market saturation
Intense pressure on prices due to market saturation and perception of product/services as inferior
Falling profits
Continuing market exit due to falling profits and strategic refocusing on market for substitutes
Industry Barriers
Capital Differentiation Advertising Switching costs Distribution channels Supply channels Intellectual property Taxes Laws and regulations Retaliation
