Theme 1.3.5: Marketing Strategy

Question 1

What is the product life cycle?

Answer 1

The product life cycle is a graph that shows the different stages a product passes through.

Question 2

Name the stages of the product life cycle

Answer 2

. Development
. Introduction
. Growth
. Maturity
. Decline

Question 3

Development stage impact on cash flow

Answer 3

Negative cash flow because large sums of money is usually spent on research and development during which time no sales are made

Question 4

Development stage impact on the marketing mix

Answer 4

Limited promotion available to alert retailers and consumers before introduction

Question 5

Introduction stage impact on cash flow

Answer 5

Still negative due to low initial sales but less than before

Question 6

Introduction stage impact on the marketing mix

Answer 6

Heavy promotion used to create awareness and increase demand

Question 7

Growth stage impact on cash flow

Answer 7

Should become positive during this time

Question 8

Growth stage impact on the marketing mix

Answer 8

Promotion used to increase brand loyalty

Question 9

Maturity stage impact on cash flow

Answer 9

Sales begin to peak so cash flow should be maximised, average costs will begin to fall

Question 10

Maturity stage impact on the marketing mix

Answer 10

Promotion begins to ease as brand becomes established, possibly with occasional bursts in promotion to compete against rivals

Question 11

Decline stage impact on cash flow

Answer 11

Sales will fall however still positive as average costs are still low

Question 12

Decline stage impact on marketing mix

Answer 12

Little or no promotion, price likely to fall to try keep demand and maintain sales until the product reaches the end of its life

Question 13

What is an extension strategy?

Answer 13

Method used when sales are slowing to increase sales by either re-launching the product with a new image, aesthetic or function or by promoting it at a new market using fresh promotional strategies such as re-positioning, repackaging or re-branding

Question 14

What is the product portfolio?

Answer 14

The range of products that a business produces, sometimes referred to as the product mix.

Question 15

What is product portfolio analysis?

Answer 15

A method that helps businesses make plans for the future and ensuring long term profits

Question 16

What is the Boston Matrix?

Answer 16

A method of analysing a company’s products in terms of their market share and growth potential

Question 17

What are the four stages of the Boston Matrix?

Answer 17

Star
Problem Child a.k.a Question Mark
Cash Cow
Dog

Question 18

What characterises a product or service as a star?

Answer 18

Stars have significant market share in a fast growing market

Question 19

What characterises a product or service as a problem child?

Answer 19

Problem children have a small share of a fast growing market, holding potential for growth in the future

Question 20

What characterises a product or service as a cash cow?

Answer 20

Large share of a slow growing or static market.

Question 21

What characterises a product or service as a dog

Answer 21

Low share in a Low growth or even declining market

Question 22

What is a marketing objective?

Answer 22

Longer term marketing goals and targets a business is aiming to achieve

Question 23

What are marketing strategies?

Answer 23

Methods used to meet the marketing objective

Question 24

What does a mass marketing strategy aim to do?

Answer 24

Reach a large number of people

Attract buyers from many demographics

Question 25

What type of product is sold in a mass market?

Answer 25

Standardised products with universal appeal such as toothpaste

Question 26

What of the 4 p's is most important in mass marketing?

Answer 26

Price because the market is usually saturated and dynamic so need to win over consumers.

Question 27

What does a niche marketing strategy aim to do?

Answer 27

Target a specific group of people with certain needs e.g gluten free market

Question 28

What type of product is sold in a niche market?

Answer 28

Very specific specialist products e.g gluten free pizza

Question 29

Which of the 4 p's is most important in niche marketing?

Answer 29

Promotion because it has to be specific to a certain group to be successful

Question 30

What does a business to business marketing strategy aim to do?

Answer 30

Sell products or services to other businesses e.g Dunder Mifflin in The Office

Question 31

Which of the 4 p's is most important in B2B marketing?

Answer 31

Price because they need to be flexible to meet the needs of different businesses with different price demands and supply demands.

Question 32

What does the business to consumer marketing strategy aim to do?

Answer 32

Sell products directly to the consumer e.g through outlet stores rather than retail stores such as the Cadbury's store.

Question 33

Why is Customer Loyalty important?

Answer 33

. Makes it easier to sell products . Harder and more expensive to gain new customers . Repeat purchases and recommendations.

Question 34

How is customer loyalty encouraged?

Answer 34

. Loyalty schemes e.g Loyalty Cards | . Customer service and relations