Module 8: Industry and Markets Flashcards
What are the 7Ps of the marketing mix?
Product Price- prepared to pay Place- access Promotion- comms Physical Evidence- confidence People Process
What is marketing defined as?
The management process responsible for identifying, anticipating and satisfying customer requirements profitability
What are the stages of the product life cycle?
Start up Growth Shakeout Maturity Decline
Understanding the life cycle stage of an industry helps entrepreneur assess commercial opportunity by?
Assess likely viability of entering into industry in question
Develop strategy for competing with existing businesses in that industry
Why may industries not display cyclical behaviours?
Technological substitution
Changing customer tastes and preferences
May be shorter term cycles as subject to continual improvements
Characteristics of the start up stage?
High unit costs High overhead costs Low sales volume Few businesses, low competition Low price sensitivity High prices Low profit
What is the start up stage?
Industry is new, products/services will be innovative with few consumers aware of their benefits
What is the growth stage?
Industry becomes more established with returning customers and growth in new customers
Characteristics of the growth stage may include?
Decreasing costs due to economies of scale
Significant increases in sales volume
Increasing levels of competition
Competition often based around differentiation
Falling prices
Growing profit
What is the shakeout stage?
Transitional stage- still sales growth but has slowed
Several businesses will have entered at the growth stage but at the shakeout stage it becomes clear some have lost the race
Characteristics of the shakeout stage for market leaders?
Strong market share, significant economies of scale
Strong brand
Falling prices
Growing profits
May seek to protect or further extend market share and economies of scale
Characteristics of shakeout stage for other businesses?
Weak market share, difficult to achieve EoS
Weaker brand
Falling prices
Falling profits
May exit market through sale of business or insolvency
What is the maturity stage?
Where industry has been long established or ‘mainstream’ and its taken for granted
Demand is satisfied and customer preferences are established, difficult to improve market share
Characteristics of the maturity stage?
Costs low due to economies of scale and low development costs
Max sales volume and so variations and discounts may be required
Customers primary focus is cost so cost cutting measures sought
High profits for market leaders
Continuing consolidation through M and As
What is decline stage?
Decline stage where product/service is experiencing falling demand.
Sales often fall as a result of substitute products or services with superior performance or lower price
