Selecting Marketing Strategies Flashcards
What is Porters Matrix?
Analyses low cost v differentiation.
Works on the premise that there is no middle ground.
Businesses should focus on one market and stick with it.
Explain porters matrix in a table
Lowest cost. Highest differentiation
Niche market. | Focused cost. Focused
leadership. Differentiation
What are marketing strategies?
How the business will go about achieving its marketing objectives.
Explain “low cost” in porters matrix
Porter states that a low cost strategy can be successful in either mass or niche markets.
In mass markets: cost leadership
In niche markets: Focused cost leadership
A business with the lowest costs can charge the lowest prices or keep profit margins wide with high prices.
Explain “differentiation” in porters matrix
Porter states that a strategy of differentiation can be successful in either a mass or a niche market.
Mass market: differentiation
Niche market: Focused differentiation
Differentiation is offering a product or service that stands out from the competition.
What is Ansoff’s Matrix?
Looks at the degree of risk and potential for reward from different strategic options.
As a firm moves away from what it knows best, the degree of risk increases.
However trying to sell more of an existing product in an existing market is unlikely to bring about substantial growth opportunities.
Explain Ansoff’s matrix in a table.
Existing products. New products
Existing. Market penetration. Product development
Markets
———————————————————
New Market development Diversification
Markets
Explain “Market penetration” in Ansoff’s matrix.
Trying to sell more of an existing product to an existing market.
Low risk but limited potential for reward.
Explain “Market development” in Ansoff’s matrix
Attracting new customers to buy and existing product.
Risk associated with lack of knowledge of customers.
Explain “Product development” in Ansoff’s matrix.
Selling new and better products to existing customers.
Risk comes from not knowing the products, high R&D costs and competitors reactions.
Explain “Diversification” in Ansoff’s matrix.
Selling new products to new markets.
High risk strategy as both market and product are unknown.
But also greatest for potential reward.
What four assessments can be made about the effectiveness of marketing strategies?
Did it help achieve marketing objectives?
Has it contributed towards corporate objectives?
What has been the impact on other functional objectives?
How have decisions impacted stakeholders?
