Theme 1.3.5: Marketing Strategy Flashcards
What is the product life cycle?
The product life cycle is a graph that shows the different stages a product passes through.
Name the stages of the product life cycle
. Development . Introduction . Growth . Maturity . Decline
Development stage impact on cash flow
Negative cash flow because large sums of money is usually spent on research and development during which time no sales are made
Development stage impact on the marketing mix
Limited promotion available to alert retailers and consumers before introduction
Introduction stage impact on cash flow
Still negative due to low initial sales but less than before
Introduction stage impact on the marketing mix
Heavy promotion used to create awareness and increase demand
Growth stage impact on cash flow
Should become positive during this time
Growth stage impact on the marketing mix
Promotion used to increase brand loyalty
Maturity stage impact on cash flow
Sales begin to peak so cash flow should be maximised, average costs will begin to fall
Maturity stage impact on the marketing mix
Promotion begins to ease as brand becomes established, possibly with occasional bursts in promotion to compete against rivals
Decline stage impact on cash flow
Sales will fall however still positive as average costs are still low
Decline stage impact on marketing mix
Little or no promotion, price likely to fall to try keep demand and maintain sales until the product reaches the end of its life
What is an extension strategy?
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
What is the product portfolio?
The range of products that a business produces, sometimes referred to as the product mix.
What is product portfolio analysis?
A method that helps businesses make plans for the future and ensuring long term profits
What is the Boston Matrix?
A method of analysing a company’s products in terms of their market share and growth potential
What are the four stages of the Boston Matrix?
Star
Problem Child a.k.a Question Mark
Cash Cow
Dog
What characterises a product or service as a star?
Stars have significant market share in a fast growing market
What characterises a product or service as a problem child?
Problem children have a small share of a fast growing market, holding potential for growth in the future
What characterises a product or service as a cash cow?
Large share of a slow growing or static market.
What characterises a product or service as a dog
Low share in a Low growth or even declining market
What is a marketing objective?
Longer term marketing goals and targets a business is aiming to achieve
What are marketing strategies?
Methods used to meet the marketing objective
What does a mass marketing strategy aim to do?
Reach a large number of people
Attract buyers from many demographics
What type of product is sold in a mass market?
Standardised products with universal appeal such as toothpaste
What of the 4 p’s is most important in mass marketing?
Price because the market is usually saturated and dynamic so need to win over consumers.
What does a niche marketing strategy aim to do?
Target a specific group of people with certain needs e.g gluten free market
What type of product is sold in a niche market?
Very specific specialist products e.g gluten free pizza
Which of the 4 p’s is most important in niche marketing?
Promotion because it has to be specific to a certain group to be successful
What does a business to business marketing strategy aim to do?
Sell products or services to other businesses e.g Dunder Mifflin in The Office
Which of the 4 p’s is most important in B2B marketing?
Price because they need to be flexible to meet the needs of different businesses with different price demands and supply demands.
What does the business to consumer marketing strategy aim to do?
Sell products directly to the consumer e.g through outlet stores rather than retail stores such as the Cadbury’s store.
Why is Customer Loyalty important?
. Makes it easier to sell products
. Harder and more expensive to gain new customers
. Repeat purchases and recommendations.
How is customer loyalty encouraged?
. Loyalty schemes e.g Loyalty Cards
. Customer service and relations
