The marketing strategy: Product

Question 1

Product life cycle

Answer 1

A theoretical model which describes the stages that a product goes through over time

Question 2

Product life cycle

Answer 2

development, introduction, growth, maturity, and decline

Question 3

development

Answer 3

• Refining and testing of the product.
• creating a launch strategy

Question 4

Introduction

Answer 4

• building product awareness and reaching your target market
• ## focused on building product awareness

Question 5

Growth

Answer 5

• consumers have embraced and are buying your product
• involves getting the attention of consumers to create a brand presence (but less heavy advertising)
• cash flow will improve
• competitors become interested
• higher distribution of the product
• changes to the product may be made

Question 6

Maturity

Answer 6

• sales start to level off
• weaker rivals will leave the market
• competitive pricing may be adopted
• cash flow is likely to be positive
• ## further improvements to the product may be made

Question 7

Decline

Answer 7

• Product is outdated
• Generally price will lower (some may increase price as products become limited)
• Distribution may be limited to a smaller number of stores
• Decline may be due to tech advances, state of the economy & fashion changes

Question 8

Product extension of PLS

Answer 8

• Advertising (try to a get a new audience or remind current audience )
• Price reduction (more attractive to customers )
• Adding value (add new feature to the product)
• Explore new markets (sell the product into more geographical areas / different target audience )
• New packaging (brighten up old packaging / make more attractive subtle changes)

Question 9

Product Positioning Chart

Answer 9

Product positioning is plotting a grid where each product sits on scales based on two important features of a market

Question 10

Product Positioning Chart key points

Answer 10

• Help a business identify a gap in the market
• the business must make sure that it is a worthwhile gap that they have found
• sometimes, a position with many products in may be the position to launch a product because it shows that there is a high demand for the product

Question 11

Product portfolio

Answer 11

The collection of products that a business produces is known as its portfolio

Question 12

The Boston matrix

Answer 12

A business with a variety of products may use the Boston matrix, they will arrange them into the for different categories (question marks, dogs, cash cows, stars) which then makes it easier to allocate their investment accordingly

Question 13

Stars

Answer 13

• High growth products where they are competing in markets where they are strong in comparison to their competitors.
• need heavy investment to maintain growth

Question 14

Cash cows

Answer 14

• Low-growth products with a high market share.
• they’re mature successful products with relatively little need for investment
• need to be managed for continued profit

Question 15

Question Marks

Answer 15

• Products with low market share opperating in high growth markets
• it shows they have potential, but may need substantial investment to grow market share

Question 16

Dogs

Answer 16

• products that have low market share share in unattractive low growth markets
• they may generate enough cash to break even but are rarely with investing in

Question 17

the Boston matrix is useful because…

Answer 17

… it can be used for analysing a product portfolio and then decisions can be made based on important indicators. E.g.
- investment in particular stars
- reduce investment in particular cash cows

Question 18

QUESTION: evaluate the usefulness o businesses such as apple using the Boston matrix model to allocate investment for its products (15)

Answer 18

Useful because:
- can identify stars to invest in
- can identify cash cows to reduce investment in
- can identify which question marks to invest in as which to “dump”

Limited because:
- it doesn’t show a amount that needs to be invested in each one
- doesn’t specify which products are being invested in
- it doesn’t show the investment time period and how it’s being financed e.g. retained profit loans etc
- doesn’t show hidden costs of dropping a product

Question 19

Value analysis

Answer 19

There are 3 aspects to value analysis drawn as a triangle with one on each tip:

• function (what it does)
• aesthetics (how it looks)
• cost of production ( Value added will increase if input costs are decreased)

Question 20

Ansoff’s Matrix

Answer 20

A model which determines its product and marketing strategy

Question 21

Market penetration

Answer 21

• Maintain / increase the market share of current products

Question 22

Market development

Answer 22

Existing products into new markets

Question 23

Diversification

Answer 23

New products into new markets

Question 24

Product development

Answer 24

New products into existing markets